Charities (Protection and Social Investment) Bill [Lords]

Debate between Mark Field and Rob Wilson

Tuesday 26th January 2016 Commons Chamber

[Mark Field]

Given my earlier contribution, the Minister may recognise that I am slightly concerned about the notion of the Charity Commission having a view at all. Surely the important things are what Parliament has to say and the establishment of the objectives of any particular charity. We should all have concern about the notion of the Charity Commission imposing its will over the objectives of a charity.

[Mr Wilson]

My right hon. Friend need not worry about the Charity Commission imposing its will on charities; there are many safeguards, including the referral to a charity tribunal, to make sure that that does not happen. Ultimately, the Charity Commission relies on the support of the sector itself to make sure that it can function properly.

The commission already publishes details of its non-inquiry compliance cases when it is in the public interest to do so, and it does that without a specific statutory power. When the regulator has to intervene and issue an official warning, it is right that that should be placed in the public domain, although it should be made clear that when the issue that gave rise to the warning has been addressed, it should be archived after a period. The commission has a published policy on how it reports on its regulatory work, and it is available on gov.uk. The commission would need to update the page with regard to official warnings, so that there would be a clear policy. Charities can and do make representations to the commission about the publication of particular information.

Amendments 8 and 10 would undermine the increased transparency and public accountability of official warnings, turning them into an ineffective tool without real impact. Amendment 11 seeks to limit the Charity Commission’s ability to issue a warning, so that it could do so only after a minimum notice period of 14 days. On the surface, that would ensure that, in all cases, the trustees had sufficient time to consider the notice of intention to issue a warning and co-ordinate any representations that they might wish to make.

I am sympathetic to the aim of ensuring proper notice, but I believe that that should be addressed in the Charity Commission guidance. It is already clear that if the Charity Commission decides to issue a warning, it must give notice of its intention to the charity and the trustees. The warning power may be appropriate in some circumstances when the commission needs the flexibility to act more quickly than 14 days. Following debate in Committee, the Charity Commission has recognised the concerns raised and it has reassured me that it will normally apply a minimum notice period of 14 days. That will be made clear in its forthcoming guidance, which will be published ahead of these powers coming into effect.

Finally, I believe that the changes proposed by amendment 12 are unnecessary as they aim to remedy a problem that does not exist in the current draft form of clause 1. It is already clear that any remedial action that the Charity Commission may suggest in response to a warning does not amount to a direction. The Government have been consistently clear that the commission could not use the official warning power to direct charities, and I am happy to reiterate that position again for the record. What the power does enable the commission to do is provide advice and guidance to the charity on how it can remedy a breach that has been identified in the warning. This gives the offer of support to a charity so that issues can be resolved in a timely and adequate manner. It will also help charities to understand in more detail what processes or actions led to the issuing of a warning and what type of conduct could avoid this in future. I hope that I have laid out in detail to the House and to the hon. Member for Redcar why I do not support her amendments to clause 1.

I turn to Government amendment 2, which relates to clause 1. Previously, the power to issue a statutory warning did not include a provision that would specifically enable the Charity Commission to vary or withdraw an official warning once it had been issued. Amendment 2 rectifies that. Withdrawal could be necessary if it came to light that the warning should not have been issued in the first place or, in some cases, where the charity has addressed the issues set out in the warning. The power to vary a warning would likewise enable the commission to do so where the issue has been partly addressed by the charity, if the commission considered that to be appropriate. This is a sensible amendment and I commend it to the House.

Amendment (a) is unnecessary, because where the Charity Commission does withdraw a warning it will, as a matter of policy, set out the reasons for doing so when it notifies the recipient of the warning and publicises the withdrawal. I am sympathetic to the aim of the second part of the amendment, but do not support it. There could be a host of reasons why a warning is withdrawn, and some of them may warrant the details remaining on the public record for a period of time. The inclusion of this amendment could lead to unintended consequences that are detrimental to charities and to the commission. If a warning is withdrawn, there may still be press articles or other information referring to it, but if a member of the public then went to the register of charities, as the official source of information, they would find no mention of it there. In some cases, it may be better to keep a record of the warning there but explain that it has been withdrawn. The commission has already said that it would address these matters in guidance, which is the right place to consider them in detail. On that basis, I see no need for amendment (a).

The hon. Member for Ilford North (Wes Streeting) expressed concern that official warnings should not be used to force people to follow good practice. I agree. The explanatory notes make this clear, saying:

“Failure to follow good practice could not automatically be considered to constitute misconduct or mismanagement.”

I hope that helps the hon. Gentleman.

I now turn to the disqualification powers in clauses 9 and 10. Government amendments 3 and 4 are relatively modest, but we consider them to be necessary to ensure the proper operation of clauses 9 and 10. Clause 9 extends the effect of automatic disqualification to the most senior executive roles in a charity—that of chief executive officer and, where there is one, chief finance officer. In our discussions with the Charity Commission on this provision and how it would operate in practice, it became clear that there was a risk that a person employed by a charity who did not exercise any management function could be caught by the clause as it stands. This may be the case in a small charity that employs only one or two operational staff who may report directly to the board but do not perform management functions since those are fulfilled by the trustees. In those circumstances, the employee ought not to be caught by the disqualification provision as they are not involved in the management of the charity. Our amendment 3 ensures that this will be tightened up through drafting. Government amendment 4 makes exactly the same provision in relation to the power of the Charity Commission to disqualify under clause 10. I hope that hon. Members agree that these are sensible provisions to add to the Bill.

I am extremely grateful to my right hon. and learned Friend the Member for Harborough (Sir Edward Garnier) for tabling his amendment as it gives me the chance to provide some reassurance on the record. He is a strong supporter of and advocate for charities involved in the rehabilitation of ex-offenders, which is an extremely commendable cause. Charities and the voluntary sector play a significant role in the support and rehabilitation of ex-offenders, and we should recognise and encourage their important contribution to reducing reoffending and helping former offenders to reintegrate into society.

I want to ensure that the Bill’s provisions do not have an undue impact on that very important work.

The disqualification provisions are important. Although the existing system has worked well, it needed to be updated. The Bill seeks to extend the disqualification provisions as an important way of protecting charities from individuals who might seek to abuse their position of trust, whether for personal financial gain, to abuse beneficiaries or for some other purpose.

--- Later in debate ---

[Mr Wilson]

I thank my right hon. and learned Friend for those kind words. We will certainly work very closely with those organisations.

Amendment 13 seeks to empower the Charity Commission to disqualify several trustees in cases of collective failure. In Committee, I explained that the Charity Commission already has the power to act in such circumstances and, indeed, has done so in cases relating to systemic governance issues. There is no reason why the Charity Commission could not take action against all the trustees of a charity where it was appropriate, proportionate and in accordance with the principles of best regulatory practice to do so. For that reason, I do not support amendment 13.

Amendment 14 would give the Charity Commission the job of consulting on and publishing guidance on how it assesses “unfitness” in relation to the power to disqualify, as set out in clause 10. We discussed a similar amendment in Committee and, although I agree with its intended effect, I do not believe that it is necessary. When the Bill was introduced in the other place, the Charity Commission published a well-received document setting out its initial thoughts on how it would exercise the disqualification power. The document highlights the broad categories that the commission would consider, namely honesty and integrity, competence and credibility. It gives various examples of the sorts of specific conduct that it would take into account. I explained a number of those examples in Committee and do not propose to repeat them today.

The Charity Commission has further committed to develop and consult on its initial thinking in draft guidance on how it would operate the power to disqualify. All of that will happen before the power to disqualify is commenced. As with any commission guidance, it will be kept under regular review to reflect changes in legislation or tribunal findings. On that basis, I do not see that amendment 14 is necessary.

Amendment 15 was previously proposed in Committee by the hon. Member for Redcar. The Charity Commission already considers only conduct that is “relevant and serious”. If it were to take account of other conduct, I would expect any resulting disqualification order to be thrown out by the charity tribunal on appeal. Besides that, the amendment should not be passed because the inclusion of the words “relevant and serious” in condition F would pose potential unintended consequences.

Including those words in the disqualification power could cast doubt on all the Commission’s other powers that do not contain them. The exercise of those other powers, such as the power to remove a charity trustee or the power to direct a charity, already depends on conduct that is both relevant and serious, even though those words are not included in the criteria for exercising the powers. I do not want there to be the risk that the other powers could be interpreted as not requiring relevant or serious conduct in order to be exercised. Although I understand and sympathise with the aims of amendment 15, I hope the House will understand why I do not believe that it is necessary and how it could inadvertently reduce the bar for the exercise of the commission’s other powers, which I would not support.

Amendment 5 is another relatively modest Government amendment that was suggested to us by rehabilitation charities. As I said in relation to the amendment tabled by my right hon. and learned Friend the Member for Harborough, we are keen to work with rehabilitation charities to ensure that the Bill does not undermine their important work.

To make a disqualification order against a person, the Charity Commission will have to meet one of six conditions, from A through to F, alongside a number of other things. Condition B is that the individual has been convicted outside the UK of an offence against a charity or involving the administration of a charity which, had it happened in the UK, would have automatically disqualified the individual. As it stands, the commission can take into account only an overseas conviction that is not spent under the law of the territory where the conviction took place. It was pointed out to me that it would be fairer and more proportionate if the limitation related to the UK rehabilitation period for an equivalent UK sentence, rather than the rehabilitation period of the overseas jurisdiction. I agree that that would be more proportionate, and amendment 5 makes the necessary change.

My right hon. Friend the Member for Cities of London and Westminster (Mark Field) ingeniously managed to speak about independent schools. He made an important point about the variety of ways in which independent schools provide public benefit. There is not one single way to achieve public benefit and the Charity Commission would certainly not direct any independent school that there was.

New clause 2, proposed by the hon. Member for Redcar, represents an attempt to reinsert a provision that the Government removed in Committee. Let me explain why the Government oppose it. It was described by several peers in the other place as sending a signal of opposition to the Government’s plans to legislate to extend the right to buy to tenants of housing associations. That message has been received, considered and responded to. Extending the right to buy to tenants of housing associations is a manifesto pledge on which the Government were elected and are committed to deliver. It will mean that up to 1.3 million more families in England get the chance to own their own home while at the same time ensuring the replacement of housing stock.

We listened to the concerns raised. Rather than legislating to implement the policy, we reached a voluntary agreement with housing associations which will implement the policy while protecting the independence of housing associations.

[Mark Field]

It is important that the Minister reflects that that was a manifesto commitment—even some of us on the Government Benches had concerns about it, but it was a manifesto commitment. It was rightly brought up in the Housing and Planning Bill, and it is disrespectful to the House, and a dangerous precedent, when one Bill is used to undermine another Bill that is part and parcel of a manifesto commitment. That also happened in the previous Parliament on the boundary changes, when a measure in an entirely different bit of legislation was used to oppose that policy. The House of Lords is abusing its position if it thinks it can do that in that form.

[Mr Wilson]

I am sure the noble Lords along the corridor will have listened carefully to my right hon. Friend. I hope the Bill will not be altered further as a result of his very strong words.

Grammar Schools

Debate between Mark Field and Rob Wilson

Tuesday 8th November 2011 Westminster Hall

[Mr Rob Wilson (Reading East) (Con)]

I congratulate my hon. Friend the Member for Dartford (Gareth Johnson) on securing this extremely important debate. His commitment to grammar schools is well known. I note that he is a distinguished alumnus of Dartford grammar school, along with Sir Mick Jagger.

Reading school, in my constituency, can boast my hon. Friends the Members for Cities of London and Westminster (Mark Field) and for North East Hertfordshire (Oliver Heald) as Old Redingensians. While not easily described as rock stars, they have equally made their mark in the world of politics.

[Mark Field]

My hon. Friend has missed out the black sheep of the family: the right hon. Member for Oxford East (Mr Smith) was also an alumnus of Reading school. Despite the disadvantage of a grammar school education, he still managed to go to Oxford and become a Cabinet Minister, although in a Labour Government.

[Mr Rob Wilson]

That is an excellent intervention. I recall that his hairstyle back in those days was very much like a rock star’s.

As a keen supporter of grammar schools, I have campaigned vigorously to protect them in my constituency, and I am delighted to contribute to the debate today. Grammars have played a significant part in the important role of social mobility. Through selection, grammars offer our most academic young people and constituents across the country excellent educational opportunities. Academic selection in secondary education is often the focus of rigorous debate, and we are getting a flavour of that this morning. Some have argued that grammar schools are an impediment to social mobility, but that view is profoundly wrong. Our 160-odd grammar schools continue to offer fantastic opportunities to gifted pupils from more disadvantaged backgrounds, thus unlocking all the potential that an academically rigorous education can provide.

Far from impeding social mobility, our grammar schools encapsulate the driving principle of aspiration and ambition. The Prime Minister has said, when staving off class-based attacks from the left about his educational background, “It matters not where you come from, but where you are going.” Grammar schools reflect that ethos. They are precisely about where someone is going, not where they are from. They provide a ladder of opportunity, and I fail to see how that is an impediment, as some have described.

If we take social mobility seriously, as I do, it is fundamentally important that our grammar schools are safeguarded and that threats to their future are taken seriously, but those who wish to threaten and destroy our grammar schools do not rest. Their commitment to vandalising some of the best schools that state education provides continues undiminished, as I recently found in Reading.

Reading is on the front line of the battle to protect our grammar schools. Reading East is fortunate to have two excellent grammar schools: Reading school, which I have already mentioned, and Kendrick school, which is a girls’ grammar school. Both schools feature at the top of the nation’s league tables for educational attainment, a fact of which I am enormously proud. Despite their excellence, Reading’s grammar schools find themselves firmly fixed in the crosshairs of those who seek to kick away the ladder of opportunity that they offer by removing their ability to select pupils. This year, a mere 10 Reading residents formed an anonymous group to put a petition together to trigger a ballot to end grammar school education in Reading.

Without wishing to suck this debate into the realm of legal complexities, the law pertaining to a ballot was confusing and flawed, because the grammars had converted to academy status, as they had been encouraged to do by the Government. A lack of synergy was exposed between annex E of the academy funding agreements and the provisions of the School Standards and Framework Act 1998, the legislation that sets out the regulations pertaining to grammar school ballots. The confusion focused on the 20% petition threshold of local people eligible to vote in the ballot—namely, parents at feeder primary schools.

It is also worth noting that the ballot itself, should it have gone ahead, was undemocratic, because it comprised only parents from primary feeder schools and not the parents of pupils currently in grammar schools. Why should parents of children attending a grammar school be disfranchised in decisions about the school’s future, as parents and their children will be affected by the outcome of any ballot?

Is it right that 10 faceless people can cause huge instability at local schools that have served the people of Reading so well for so long? Recently, when those faceless individuals started that ballot process, it caused huge problems. How does a school cope with a threat to its future? The uncertainty it causes for staff, parents and pupils is significant. Enormous effort and expense have to go into administering the ballot and putting the case for the school, taking time away from the important teaching effort that has to go on. It was both wrong and unfair, and it should never have been allowed to happen.

In short, the episode in Reading exposed a gaping democratic deficit whereby a tiny, unrepresentative part of Reading’s community managed to unsettle two schools along with their staff, pupils and parents. Because of the disruption and potential expense to our grammar schools, I hope that the Minister will look at the initial trigger point for initiating such a ballot, which should surely be well above 10 anonymous people. Working closely with Reading school’s head teacher, Mr John Weeds, we lobbied Ministers in the Department for Education. As a result, we have an undertaking from the Minister that amendments will be made to the funding agreement, which I hope will achieve greater clarity.

For now, the threat to Reading’s grammar schools has been temporarily beaten back, but it could return at any time. If they wish, the same 10 people in Reading could return with their protest year after year, and the Government must change the rules so that, if a ballot attempt fails one year, it cannot be constantly repeated. Such a strategy could become a device for destabilising grammar schools all over the country, and I would have grave concerns for the remaining grammar schools in England should it be repeated elsewhere. In defending the few grammar schools that we have left, it seems that the price of their retention will be constant vigilance, unless the Government make significant and necessary changes to the legislation. I am therefore encouraged to see that so many determined hon. Members are participating in this important debate.

To remove grammar schools would be to remove a specialist part of our state education system that seeks to maximise a pupil’s academic potential. Critics of grammar schools—usually, although not exclusively, from the left—say that those who do not pass the selection criteria for a grammar school education will in some way be left behind by the system. That argument, however, is flawed. Not every pupil is academic in orientation, but that does not mean that their potential should be left unfulfilled. Too often, our state education system has let down technically gifted as well as academically gifted pupils, and we need schools that reflect the abilities of all pupils.

That is why I am delighted that university technical colleges are growing in number and strength, and last week I joined Lord Baker of Dorking in celebrating and promoting the success of such colleges at a parliamentary reception with rest of the UTC community—a community which now looks more like a movement. By departing from a one-size-fits-all approach to education, both types of school serve the interests of social mobility. It is about being holistic, serving pupils in the system and reflecting their needs accordingly. Our grammar schools do precisely that, and they deserve our unwavering support.