Charities (Protection and Social Investment) Bill [ Lords ] (Third sitting)

Jeremy Lefroy Excerpts

Tuesday 5th January 2016 Public Bill Committees

[Mr Wilson]

I have not had any direct conversations with the Department for Education, but my officials are in contact with that Department regularly across a number of these areas. I would be slightly surprised if that had not been discussed at some point, but the commission will be looking at all these things and taking them into account—[Interruption.] Ah, a note has appeared on my desk. Apparently, there is no conflict with other regulators’ powers and practices, so I hope that reassures the hon. Gentleman.

[Jeremy Lefroy (Stafford) (Con)]

I am very reassured by all these safeguards. If we come across cases where it seems that the tribunal is regularly in conflict with the decisions of the Charity Commission, will the Government then look at that to see whether there are problems in the interpretation by the Charity Commission or the tribunal about what constitutes good grounds for disqualification?

[Mr Wilson]

That certainly has not happened to date—there has not been a conflict between the decisions of the charity tribunal and the Charity Commission—and I do not expect it to happen, because the Charity Commission works on the basis of the trust placed in it by the charitable sector. If the Charity Commission is regularly getting decisions wrong, that will have an impact on its status within the sector. The Charity Commission does all that it can to avoid a downgrade in its status. I hope that reassures my hon. Friend that the Charity Commission would always act in the sector’s best interests, in terms of proportionality and section 16 of the Charities Act 2011, which I have constantly mentioned, and that it would always try to get its decisions right, so that it does not come into regular conflict with the charity tribunal.

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[Mr Wilson]

Once again I find that I have a great deal of sympathy with the intention behind the amendment, but once again I do not think it is necessary, and I believe it could have unintended consequences.

Let me explain first why I do not think the amendment is necessary. I agree that the commission should only consider conduct that is “relevant and serious”; in fact, so does the commission itself. The commission has said that under clause 11, it would provide the individual involved with an explanation identifying the conduct in question and why it thought that conduct met condition F. If the commission took account of conduct that was not relevant to the person’s ability to act as a charity trustee or senior manager, I would expect that any such disqualification order would be thrown out by the charity tribunal on appeal. As I have just discussed with my hon. Friend the Member for Stafford, the Charity Commission would not want that to happen on a regular basis.

As I have said many times, the commission would need to act in line with the duty set out in section 16(4) of the 2011 Act, under which its regulatory activities

“should be proportionate, accountable, consistent, transparent and targeted only at cases in which action is needed”.

As a public body, the commission would also have to consider general human rights and equality duties.

The commission’s draft paper on its initial thoughts about how it would exercise its disqualification power provides some useful guidance. The commission recognises that condition F is widely drawn, but it gives examples of the types of conduct that it could take into account. For instance, if the conduct in question was by a trustee of a charity, it could consider whether it was misconduct or mismanagement, and whether it would put the charity’s property or reputation at undue risk. It could also take into account misconduct in another position of trust and responsibility; convictions relevant to the charity’s purposes, for example a conviction for animal cruelty by a trustee of an animal welfare charity; regulatory breaches that have been penalised by another authority, for example legal breaches on tax matters; a finding of misconduct by a professional body or regulator; or an adverse finding by a charity self-regulatory body or umbrella body.

I think the Committee will agree that those examples show the sorts of conduct that the regulator should consider. Whatever the conduct, which must be both relevant and serious, the commission would also have to meet the other two limbs of the test for disqualification: first, that the person is unfit to serve as a charity trustee; and, secondly, that making the disqualification order is in the public interest to protect public trust and confidence in charities. Under the disqualification power in clause 11, the commission would already need to consider conduct that was both relevant and serious.

[Jeremy Lefroy]

The Minister has already been helpful, but I would just like to get some clarification from him. Would somebody who has not yet served as a trustee of a charity be liable to be placed on the disqualification register, so that they would not be able to serve as a trustee of a charity, or does the register apply only to people who are already trustees or who have served as trustees? In other words, will the clause prevent people from becoming trustees in the future, or will it only apply to people who are either trustees now or who have been trustees in the past?

[Mr Wilson]

I think the answer to that question is “possibly”, and I would like to take some advice before I give a fuller answer. Hopefully I can get that advice fairly quickly, while I am going through the second half of my response.

I turn to the potential unintended consequence of including the words “relevant and serious” in condition F in clause 11, namely that it would cast doubt on other commission powers for which those words do not exist. At the moment, the exercise of other powers, such as the power to remove a charity trustee, depends on conduct that is both relevant and serious, even though those words are not included in the criteria for exercising the relevant powers.

I am very sympathetic to the aims of amendment 6, and hopefully, I can manage to answer the question that my hon. Friend the Member for Stafford asked. [Interruption.] Ah, yes. That is good news. The order could apply to people who are not trustees, but it would depend on the individual’s conduct. My original answer was right—“possibly”—but my hon. Friend asked a sensible and important question, and I will write to him in detail about it.

[Jeremy Lefroy]

I am most grateful for that. I am concerned that the provision will potentially give the commission an excuse for trawling to discover all sorts of people who commit offences and allow it to say, “Let’s get them disqualified as trustees, even though they have no desire to become a trustee.” That would cause a great deal of unnecessary work.

[Mr Wilson]

I see and understand the point that my hon. Friend makes. The best way for me to deal with it, as we have a period of time before Report in which we can consider the matter further, is to write to him in detail. If people were able to conduct trawling, as he calls it, that would be a worrying scenario.

I hope the Committee will understand why I believe the amendment is not necessary and could be counterproductive. I hope that the hon. Member for Redcar will withdraw it.