Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Lord Bishop of Oxford Excerpts

Monday 16th December 2013 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, the noble Baroness has given us a sobering picture of the future of US political funding. Before that, we heard from my noble friend Lord Phillips, who, as ever, is a passionate advocate and has a lifetime of experience in charity law. He and I have had many debates on this issue. One therefore has to listen with care to his explanation and how he places his case, particularly when it is supported by some experienced and heavyweight voices from the Liberal Democrat Benches.

However, I hope that he will forgive me if I say that I am not convinced—at least, not yet convinced—that charities should be exempted from the Bill. I accept the seductive simplicity of his argument, but I think that it is based on an ideal world that I fear no longer exists, if it ever did. In part, the noble Baroness, Lady Mallalieu, put her finger on it when she said that charities have a special status in the eyes of the public. They get it not just because of tax but because the charity number is seen to be something that carries with it a stamp of quality, and therefore charities have something that is not granted to people who do not go through the Charity Commission hoop.

I see two major challenges to what the noble Lord proposed. One is the role of the Charity Commission itself, first of all at an operational level. We have said that there are 160,000 registered charities and there are probably another 160,000 unregistered charities: that is a third of a million charities. The noble Lord made reference to this in his opening remarks. The commission therefore faces a huge operational challenge just to deal with basic charity law, and to hold charities to account in the most basic way. When he says that the Charity Commission has very rarely asked trustees to put their hands in their pockets, I accept that. Is that because nothing is going wrong or because the commission does not know what is going wrong? That is one of the issues we have to address; so there is an operational problem.

Then there is a strategic challenge to the commission. The commission is an organisation that is under a huge strain. Some noble Lords will have seen the National Audit Office’s report, which had some disobliging things to say about the way the Charity Commission operated. It faces considerable problems in respect of the public benefit test, the aftermath of the independent schools test and the Plymouth Brethren case, which is now before it. It has had problems with links to Her Majesty’s Revenue and Customs, the Cup Trust and other tax-avoidance measures. It has also had a 40% cut in its budget. I ask my noble friend whether it is a practical proposition to ask the commission to take on another huge area and start to drill down on 335,000 charities to find out whether they are complying in a way that is, as the noble Baroness said, fair across the piece.

The noble Lord might say to me, “Of course it should have additional resources”. If it were an ideal world, that might be possible, but it is hard to argue that the Government should devote additional resources to providing the Charity Commission with the ability to enforce electoral law when the Electoral Commission already specialises in it and is up to date with all the arrangements of the way that matters are proceeding—as opposed to the Charity Commission, for which it would be one of about 10 major tasks it would have to carry out. That is my concern about the way the structure would work in real life.

My second concern is really the point made by the noble and learned Lord, Lord Hardie: the nitty-gritty point of the loophole. I fear that it will attract those who wish to push the envelope. The noble Baroness, Lady Williams of Crosby, said that she thought the envelope was being pushed—and I am sure it is. In my review of charities, Members of the other place said to me, “Some charities are really getting into what we are doing as Members of Parliament”. There is a sort of concern that charities are doing things that get very close to the role of a Member of Parliament in representing his or her constituents. This amendment will open the way to the more adventurous and to the outliers who choose to become charities, because it will be seen as a way to minimise the regulatory burden and to evade some of the issues that we have just been discussing as part of this Bill.

It is the outliers who will most likely damage the sector’s reputation. The sector has historically had a very high reputation with the public, but this reputation is not immutable. We think now of the Cup Trust, as I mentioned. That has undoubtedly made members of the public consider charities and their role. We subsequently had a very public row about the payment of chief executives and senior staff of charities, and how that is commensurate with charitable status. I am not making any comment upon it; I am saying that the charitable sector has considerable challenges to answer if it is not to see some leeching away of the enormously strong public reputation it has historically enjoyed.

If we were to accept the noble Lord’s amendment—seductively simple and attractive though it is—we would run the risk of putting a burden on the Charity Commission that it will not be able to fulfil, and giving it tasks that it will find very difficult. The result could be that we will have difficulties, problems and issues with the public that, after the next general elections and elections thereafter, will be seen to rebound on the charity sector. We need to make sure that does not happen, because, as the noble Lord said, it is such a precious jewel in our crown. It provides a way for so many of our fellow citizens to put something back, to create something and to connect with their fellow members of society. It would be a tragedy to lose that. That is why I fear I cannot support the noble Lord’s amendment tonight.

[Lord Harries of Pentregarth (CB)]

The commission did not support taking charities out, for the reasons put so fluently and eloquently by the noble Baroness, Lady Mallalieu. I will not add to what she said, but I want to respond briefly to points made by the noble Baroness, Lady Williams, and the noble Lord, Lord Phillips.

We are debating constituency limits in a separate set of amendments, so I will respond to that issue then. The noble Baroness has unrivalled experience and knowledge of the American system and the British system, and I do not doubt for a moment what is happening in America. But we have not yet been presented with any real evidence that it is happening in England. The precautionary principle is quite right: we have to beware what might happen. But we also have to make sure that our reaction is not disproportionate.

[Baroness Williams of Crosby]

There is already some evidence that American Crossroads, which is Karl Rove’s non-profit organisation—non-profit and non-political—has among other things financed young Britons to come to Republican gatherings where they are given instruction in the kinds of things that the Republicans and the Tea Party believe, at those organisations’ expense.

[Lord Harries of Pentregarth]

I absolutely agree that it is right to take precautionary steps, but I am sure that the noble Baroness would also agree that we must ensure that they are not disproportionate. The main complaint at the moment by charities and other campaigning groups is that this legislation is grossly disproportionate in the way that it bears upon them—I see the noble Baroness nodding her head.

I also have the utmost respect for the noble Lord, Lord Phillips, who is the leading charity lawyer in the country. But I have to agree with the points made by the noble Lord, Lord Hodgson. Perhaps I can approach the argument from another way. I carefully read CC9, which is the Charity Commission guidance. I also read the additional guidance that it provides for election campaigns. It makes it quite clear that charities are allowed to politically campaign. That is absolutely crystal clear. But as the noble Lord made abundantly clear, it is not always easy to draw a distinction between political campaigning in general and political campaigning that might be interpreted as supporting a particular party.

The noble Lord drew his hand across and said that there was a kind of hazy line. Does that not lead to the conclusion that the noble Lord, Lord Hodgson, made: namely, that if charities were taken out, they would have to have their own separate regime, employ extra staff, and keep in day-by-day contact with the Electoral Commission to make sure that their guidance agreed with the guidance of the commission? Would that not be a waste of resources? If charities are in fact in the same position as other groups, would it not be better for them all to be under the same regime?

I absolutely agree that there is a major difference and that charities cannot have political campaigning as their prime purpose. That is absolutely right. If the suggestion of the noble and learned Lord, Lord Hardie, about the definition of political expenses were accepted, of course charities could come out—but as long as they are allowed to politically campaign, that campaigning could be interpreted as supporting a political party or candidate.

[Lord Phillips of Sudbury]

Does the noble and right reverend Lord not agree that it is one thing politically to campaign—which is what charities can do—but another to do that in a partisan way? They cannot do that. That is a huge and fundamental difference between them and non-charitable NGOs.

[Lord Harries of Pentregarth]

I could not agree more, but as the noble Lord made clear, the difference between the two is sometimes a bit hazy and judgments have to be made as to when a particular charity has gone over the line.