Charities (Protection and Social Investment) Bill [HL]

Lord Hope of Craighead Excerpts

Wednesday 10th June 2015 Lords Chamber

[Lord Hope of Craighead (CB)]

My Lords, I, too, wish to congratulate the Minister on his excellent maiden speech and to say how very much I look forward to working with him, along with others who have participated in this Bill so far, as it goes through the House.

As has been mentioned, I have a particular interest in the Bill, as I had the privilege of chairing the Joint Committee which carried out the process of pre-legislative scrutiny during the last few months of the last Parliament. It was plain to us all from the outset that we would have to operate within an unusually tight timescale. I am not sure whether it was necessary to go quite as fast as Usain Bolt but we necessarily had to put our skates on to get through the business in time. The draft Bill was not published until 22 October last year and our committee was not fully constituted until the beginning of November. Nevertheless, we were able to complete our work and submit our report by the end of February.

I wish to pay tribute to the various people from each House, both Members and supporting staff, who made this possible. Every member of my committee played a full part in its work, in our taking of evidence and in our deliberations afterwards. I had particular reason to value the insight and knowledge that some of them brought to bear on our discussions. We took evidence in each of the six weeks that elapsed between our starting work in mid-November and the start of the Recess. There was a further week in January when Parliament resumed, and we completed our deliberations in the middle of the following month. I think we all felt, by the end, that we had achieved what was asked of us. I am by no means saying that we answered every point; wider debate in this House will obviously give rise to much more informed discussion than we were able to bring to bear. But as we said in our report, pre-legislative scrutiny of the kind that we were carrying out, which brings interested parties into the legislative process at an early stage, is a wholly welcome development. It is hard to think of a sector better suited for that kind of exercise than the charity sector, which has so many people all round the country interested in it.

I hope that by our work we have shown what can be achieved, even at relatively short notice, and that we will see more of this kind of process being used in future. Of course, all this would not have been possible without the outstanding support that we received throughout from our clerk, Duncan Sagar, ably supported in his turn by Matthew Korris and Claire Morley. I should mention also Nicole Mason and Jessica Mulley, and Stephanie Biden, who was our special adviser. It was on the shoulders of Duncan Sagar and his team that much of the heavy work rested and we could not have been better looked after or better served.

We appreciated also from the outset the importance of giving as many people and as wide a range of bodies within the sector as possible an opportunity to be heard. I am grateful to all the witnesses who came to give evidence to us orally and to the many more who gave evidence to us in writing. Among the bodies on whose behalf evidence was given were the Charity Commission itself, the National Council for Voluntary Organisations, the Charity Law Association, the Wales Council for Voluntary Action, the Muslim Charities Forum, Unlock, and Bond. The full list of all witnesses is set out at the end of our report. It was a very wide-ranging exercise and, by the end, we were very well informed.

The purpose of the Bill, as the noble Lord has explained, is to improve the powers that are given by statute to the Charity Commission as regulator. The aim is to strengthen the public’s trust in that process, and to enable the commission itself to root out abuse where it can be found and to protect charities from those deemed unfit to be charity trustees or senior managers. As the noble Lord made clear, the process of drafting the legislation did not come out of the blue. It was prompted in part by a series of requests from the Charity Commission itself for new powers to enable it to perform its functions more effectively, and by some well-directed criticism of its operations by the National Audit Office and others. Then there were several reviews, including the notable review carried out under the outstandingly able chairmanship of the noble Lord, Lord Hodgson of Astley Abbots, which drew attention to the need for new and strengthened powers. Our task as a committee was to scrutinise the Bill’s proposals in the light of the evidence which we received—it was an evidence-based exercise—to see that these proposals measured up to the challenges and, if they did not, to consider the respects in which they might be improved. We did the task we were asked to do and made a number of recommendations. We were, broadly speaking, encouraged by the way the last Government responded to them in March just before they went out of office.

However, for many of us, there was a very big question mark at that point as to what was going to happen and what was going to be done to the work that we had done. Our hope was that the draft Bill would not be forgotten when a new Government returned after the general election. The Charity Commission also made it clear that it was keen that these new and strengthened powers should be given to it as early as possible. So the fact that the Bill has been brought forward as quickly in the legislative programme as it has been is especially welcome, and I thank all those behind the scenes who have made this possible.

As William Shawcross, the chairman of the Charity Commission, said in his response to the Bill’s mention in the Queen’s Speech, it is a vital piece of legislation from the commission’s perspective if it is to have the powers that it needs to stop individuals from abusing charities. His enthusiasm for the Bill is beyond question, as is the commission’s desire to make best use of these powers alongside those that it already has to police the sector. I think I can say that it is plain, from the evidence which we received, that the commission has turned a corner since he took over the chairmanship. Under his leadership, the performance of the commission has improved significantly. It is in that encouraging context that this Bill should be viewed.

The inclusion of a power to make social investments, which was not before us when we looked at the draft Bill, is much to be welcomed too. As it stands, the Bill is not just about regulating; it is about enabling, too. It is no doubt particularly encouraging to the Law Commission, which does so much valuable work in seeking to find ways of improving our legislation, to see one of its proposals brought forward so quickly.

There are a few points arising from our report that, as chairman, I should mention. First, there is a need for a balance to be struck between too little and too much. It is tempting for legislators, when giving powers to regulators, to set those powers about with condition after condition in an attempt to eliminate any risk that they might not be properly and fairly exercised—yes, there should of course be safeguards, but there must be a balance. There may come a point where the restrictions on the exercise of the power and the hoops that must be jumped through before they can be exercised are so many as to make it impracticable or too cumbersome for those powers to be used at all when they are most needed. As the Bill now stands, the balance has been struck in the right place. I hope that the Minister will bear this in mind as we move through the remaining stages of its passage through this House. I was encouraged by what he said in this respect in his opening speech.

It is worth mentioning, too, that the commission itself has to balance the way it performs its regulatory functions against the need to increase public trust and confidence in charities generally. The Bill does not say anything about the pastoral element of its work, which enables it to encourage and assist charities in what they do. However, the fact is that these two objectives—the one I just mentioned and the regulatory function—are linked to each other. The best way to increase public trust in charities is to ensure that they are properly and scrupulously regulated by an efficient and properly funded regulator. Exercise of the powers that are dealt with in this Bill are likely to affect only a very few charities, but the fact that they are designed so that they are capable of being used when needed should serve to increase public confidence in the sector generally.

Secondly, there is a need to think very carefully about the way that legislation designed to counter terrorism may inhibit the work of charities operating abroad in areas controlled by organisations that are on the proscribed list. We heard evidence—I found it very compelling, as did others on my committee—from the Muslim Charities Forum about the problems these charities face in getting aid through in view of the risk of arrest and prosecution that their workers face when they return home. We recognised that a lot of arguments must be gone through in dealing with this problem. We say in our report that we realise that this Bill is not the right vehicle for revisiting legislation about combating terrorism generally. However, here is a very serious issue that we should not lose sight of if we are to retain the support in the battle against terrorism of all sections of our community, including those charities I mentioned whose work is much to be commended in the field of dealing with Muslim people in our country.

Lastly, there are some matters that we hoped might be addressed in the Explanatory Notes but are not there and some points of detailed drafting where our recommendations have not been entirely reflected in the Bill as it now stands. The speeches so far have made it clear that we are now at a stage where there can be a wider debate about the way the Bill is drafted and the points that are in it and are not, which we could not engage in during our work as a Joint Committee. This is not the time to go into detail, particularly as, from the committee, there are no issues of principle with the Bill. However, there are some points where we feel greater clarity is needed.

On the drafting, our concern was simply to find the best way of expressing things in language that is fit for purpose and that everyone can understand. We drew attention to the use of the word “privy”, which is still there in the Bill. That word, apart from use in jest, has largely dropped out of common use and surely it is possible to find a more modern way of making the same point. Then “unwilling” appears in one clause. That does not easily accommodate people who, when asked by the commission to do something, say, “Yes, we are entirely willing to do that but do not have the power to do so and therefore are unable to do it”. “Unwilling” does not entirely encompass inability and it may be right to look again at that use of language as well.

Of course, we can return to these and other points in Committee. For the time being, it is sufficient to say that I am happy to welcome this Bill and support the Motion that it be given a Second Reading.