Charities (Protection and Social Investment) Bill [HL]

Baroness Hayter of Kentish Town Excerpts

Tuesday 2nd February 2016 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I thank the Minister for that very fast canter—it was almost a gallop. We on this side of the House continue to welcome the Bill, especially with the changes, some of which were made in your Lordships’ House and some by the Government in the Commons, most of which we applaud. The Bill strengthens the power of the Charity Commission and gives charities the power to make social investments which provide both a financial and social return. Importantly, in what we termed Olive’s law, in memory of that poppy seller, it now improves the regulation of fundraising by charities.

I want to make just three points as we bid this Bill farewell. The first is, unsurprisingly, on Commons Amendment 2, which overturns your Lordships’ vote by 257 to 174 to repeat what is, as the Minister said, current case law so that charities could not be,

“compelled to use or dispose of their assets in a way which is inconsistent with their charitable purposes”.

We feared then, and still fear now, that forcing housing associations to sell their properties to sitting tenants, where this is not allowed for in their charitable purposes, will fall foul of charity law. We will not seek to reinsert this clause today, but we tell the Government, and indeed the Charity Commission, that we will be watching to make sure that, as this part of the Housing and Planning Bill is implemented, it does not force trustees to breach either their trust deed or charity law.

The greatest wickedness, of course, is the selling off of the family silver, forcing councils to sell off their best council houses to fund £100,000 subsidies, not to housing associations but to the lucky few tenants who, within a few years, will be able to sell off that house and pocket the £100,000. We have yet to understand which part of charity law, or indeed general fairness, this meets.

Secondly, I turn to the Charity Commission’s regulation of charities and the increased powers in the Bill. Given that the lobbying Act restricts what charities can do in the way of campaigning and that, as we learned last week, the Department for Education is to stop “civil society”—usually charities—intervening on issues such as fair admissions, we see such restrictions on charities challenging government as part of a piece, alongside other attempts to curtail any opposition, whether from this House, through freedom of information or from other political parties.

The Government rejected our amendments to add the Charity Commission’s own guidelines to the Bill on charities having the right to campaign, thus leaving discretion on this with the Charity Commission. We will therefore look to the Charity Commission, in exercising its new powers, to enhance charities’ abilities to achieve their charitable objectives in the best way possible. We urge the commission to pay rather more attention to poor practice—for example with Kids Company, where it failed to grasp the extent of the financial mismanagement—rather than seeking to crack down on the legitimate activities of charities.

Thirdly, I turn to the Government’s amendment on fundraising, which we warmly endorse and which arose partly from our amendments in this House. I know the Minister had much sympathy with the approach then and tabled some of his own amendments on Report, which we were happy to support. We withdrew ours when the Government set up the Etherington inquiry. Even better, Sir Stuart and his three wise Peers reported in record time, and the Government adopted all their recommendations. Not stopping even to draw breath, they then appointed the noble Lord, Lord Grade, to chair a reinforced fundraising regulator.

Last week, as the Minister said, the Public Administration and Constitutional Affairs Committee, in its report, The 2015 Charity Fundraising Controversy, reiterated that this really is,

“the last chance for self-regulation”.

It commented:

“It would be a sad and inexcusable failure of charities to govern their own behaviour, should statutory regulation became necessary”.

We concur with that judgment as clearly as the Government. We also congratulate the Government on meanwhile tabling Amendment 6 in the Commons, which backs the new regulator and, vitally, includes that backstop reserve power for the Charity Commission should self-regulation fail. I congratulate both the Minister and his colleague in the Commons, Rob Wilson, on their fast footwork and firmness of purpose on this.

Finally, I thank the Minister, his Bill team and the Charity Commission for their help and hard work throughout this process. I add my thanks to those of the Minister to my noble friend Lady Pitkeathley and the noble Lords, Lord Leigh of Hurley and Lord Wallace of Saltaire, who sat on the Etherington committee. I also thank my noble friend Lord Watson for his input, and our legislative office colleague, Molly Critchley, for steering us calmly and expertly through the process.

[Lord Grade of Yarmouth (Con)]

My Lords, I thank both Front Benches for the warmth of their greeting to me as the chairman-designate of this new fundraising regulator. I hope that the depth, sincerity and warmth of their kind remarks bear no relation to the level of lethal poison in the chalice that I have inherited. I join the thanks expressed to the noble Lords, Lord Leigh and Lord Wallace, and the noble Baroness, Lady Pitkeathley, for the incredible work that they put into the Etherington review, which has been so unanimously welcomed.

It might help the House if I gave a short update on where we have got to in the fast-track creation of the new regulator. The show is on the road: the chief executive has been appointed and began work on 4 January. Within four weeks, we now have an office, generously provided by the Charities Aid Foundation, and six staff. Appointments to the board will be announced in the next few weeks, and we will also need to put in place a standards committee and, to hear and resolve complaints, an adjudication committee.

I do not think I underestimate the task ahead if we are to deliver on our intention to be fully operational in the early summer, but we are on track at the moment. At the point of handover from the Fundraising Standards Board, we will take ownership of the code of guidance from the Institute of Fundraising, and the rule book on street and door-to-door collections from the Public Fundraising Association. We are working very closely with both organisations, and I welcome their endorsement of the new regulatory arrangements. At handover, the arrangements for registration—obviously, we want as many charities as possible to sign up to the fundraising regulator, although that will not stop us from investigating those which may not sign up—and for levy payments by the larger fundraising charities will need to be in place.

Our proposals for the fundraising preference service will also be ready. The working group developing those proposals, serviced by the NCVO on our behalf, is already well under way. Let me emphasise that until the point of handover, the 2,000 member charities of the Fundraising Standards Board will need to continue to support that organisation, financially and otherwise, while it retains responsibility for fundraising regulation, until we are absolutely ready to go. We and the Fundraising Standards Board are committed to a seamless transition, which is essential if the purposes of the Bill are to be realised, and we want to inherit its experience and learn from what has worked well.

There is general acceptance, however, that the Fundraising Standards Board was somewhat under -resourced. We will have the levy resources necessary to do the job. We will be independent, with ownership of the code of guidance, and we will not hesitate to apply sanctions where appropriate. We will liaise closely with the Charity Commission, taking full account of its revised fundraising guidance for trustees and, if all else fails, referring to it contentious cases that may breach the guidance.

The Etherington review, the Fundraising Standards Board’s excellent but deeply worrying report on the sad, sad case of Olive Cooke and the recent report from the Public Administration and Constitutional Affairs Committee in the other House have all demonstrated serious shortcomings in the fundraising practices of many larger fundraising charities. That is why this Bill is such an important and timely contribution. The public’s very negative view of this was confirmed last week in the YouGov poll published by the Information Commissioner’s Office.

The British public are as generous as anybody on this earth when it comes to putting their hands in their pockets to help those in need. However, charities cannot take that generosity for granted. There have been serious breaches in terms of the ethical way in which fundraising practices have begun to grow up in this country. We must take steps, which this Bill provides with the creation of this fundraising regulator, to make sure that that generosity is not taken for granted. The fundraising regulator now has a responsibility to the general public and, for the future of charities, to donors and potential donors, not least when they are vulnerable, to ensure that they are protected from undue pressure and unacceptable fundraising practices. That protection will be our first priority and these amendments and the Bill will, we hope, go a long way to ensuring that the public are protected and their generosity not taken for granted.