Charities (Protection and Social Investment) Bill [Lords]

Martin Docherty-Hughes Excerpts

Tuesday 26th January 2016 Commons Chamber

[Anna Turley]

My hon. Friend makes an extremely important point about the strength of feeling in the sector.

[Martin John Docherty (West Dunbartonshire) (SNP)]

I share the concerns of the hon. Member for Clwyd South (Susan Elan Jones). Does the hon. Member for Redcar (Anna Turley) agree that the gagging Act would have limited even the calls for the creation of the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly, which were led by the Church of Scotland, which is a registered charity in Scotland? Without new clause 3, it will not be possible to have an impact like the one that the Scottish Parliament has had on the so-called unwritten constitution of the United Kingdom.

[Anna Turley]

The hon. Gentleman makes an important point and I thank him for that contribution. I will make some progress, because I am conscious that many Members want to speak.

Not only should charities have the right to campaign, but they are often best placed to provide important insights that can inform and improve policy making. They are often the ones on the frontline who see the gaps in provision, the duplication of services and the inefficiency and waste, and who spot the best ways of solving or, better still, preventing problems. Many charities can make a bigger impact with their limited resources through campaigning than through service delivery alone.

Campaigning often saves taxpayers money in the long term, as issues can be addressed at their roots, rather than in the aftermath, which can be costly. For example, as I just mentioned, many charities provide fantastic care for patients with long-term conditions such as cancer, but is it not better for them to push for more effective treatment, more awareness of the symptoms and more support for diagnosis through campaigning? So much of that happens as a result of good policy making by politicians. That is why charities must seek to shape it.

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[Mark Field]

As a matter of fact, I believe it was called Kids Company, not kids society. She was an individual who had worked with a number of politicians. There are issues that I am sure should rightly be addressed by Select Committees and others about what precisely happened in regard to Kids Company.

I was about to take the House on a short journey from this Chamber to the site in Tothill Street where the Harris Westminster Sixth Form centre stands. Since its foundation in 2014, this academy has been the focus of substantial collaboration and co-operation with Westminster School, one of the oldest foundations in this country, which is even closer at hand in the curtilage of Westminster Abbey. That co-operation includes teaching classes with small intakes in subjects such as Latin, Greek and German. For over a decade, the school has routinely offered science outreach and summer school partnerships to several local maintained schools.

As the local MP for the past 15 years and an erstwhile president of the St Andrew’s youth club, the oldest youth club, on Old Pye Street, I know it has played a massively important role in the local community. Many people live in social housing, so the club was a magnet for young boys and girls—initially just boys in the 1860s, but girls in more recent times—not just from the immediate Westminster area, but from further-flung places south of the river, too. I was well aware that when the club lost funding from the local authority, it was Westminster School that stepped into the breach, providing cash and gym apparatus. I suspect that scores of other local charitable organisations could tell similar stories about the time, money and equipment quietly donated by the Great School, which has been an integral part of the local fabric since 1179.

Charitable status, as Members have pointed out, rightly depends on what the charity in question is established to do, rather than on a Charity Commissioner’s subjective analysis of public benefit. Here I agree with much of the thrust of what was said by Opposition Members. While we all appreciate that charitable status confers financial and reputational benefits, I strongly believe that the Charity Commission is not the appropriate means of prescribing how independent schools or other organisations should satisfy the public benefit test.

Indeed, it appears that for party political reasons, independent schools, rather than other charitable bodies, are in the sights not just of many MPs—dare I say, particularly on the Opposition side—but of leading lights in the Charity Commission. Surely a more sensible approach, one that avoids any accusation of political and particularly party political bias, would be to work on some non-statutory guidance to these organisations about the anticipated nature of their public benefit engagement.

We should also recognise that many independent schools do not have the capacity or the financial resources to sponsor academies—some lack the playing fields, drama, arts and music facilities, commonly assumed to be the norm in private schools. In truth, there is still plenty of co-operation and sharing going on between independent and nearby maintained schools—a healthy, informal co-operation, which stands to be undermined by any proposal to define levels of contribution or to extend the public benefit, as we have understood it in the past. It is worth saying that it takes two to tango: there is little that independent schools can do if the state sector head at the nearby school refuses an offer to work together. It is surely invidious to place burdens of the sort proposed if the independent school in question does not have the ability to achieve the Charity Commissioners’ objectives.

I shall not detain the House. We are having an interesting debate, and in truth I share some of the concerns expressed by Opposition Members that part of this legislation purports to solve problems that many charitable organisations and independent schools in particular have by their own efforts done much over the years to alleviate. Indeed, some of what is set out in the Bill betrays worrying assumptions that underlie an outdated sense of “groupthink” that besets the Charity Commission. I very much hope that, in its wisdom, the House will today reject some of the amendments, particularly new clauses 2 and 3 if they are pressed to the vote. Failing that, I trust that the Government Whips will achieve the same ends.

[Martin John Docherty (West Dunbartonshire) (SNP)]

It is an honour to speak in the debate. I hope not to detain the House too long. Let me first congratulate the right hon. Member for Cities of London and Westminster (Mark Field) on mentioning the late noble King James VI, given that the only charitable organisation that still exists from his reign is, of course, ScotsCare—based here in London and doing fantastic work.

Concerns have been raised in Scotland about the possible impact of this Bill because of the myriad issues it raises relating to the governance of charities across these islands. I am sure that these concerns will be shared by Northern Ireland Members, too. The right hon. Gentleman mentioned the burgeoning budgets of the Charity Commission for England and Wales, but between 2007 and 2015, its budget was cut by 48%, so let us scotch that myth straightaway.

No one should be in any doubt that in the space of the last 18 months civic society has been rocked by the recommendations of the Etherington report, and this crisis of trustee leadership that has brought us to this very point. To be clear, the level of trustee oversight in national organisations leaves a sour taste in the mouth—not just of those in this Chamber, but more importantly of those who have volunteered as trustees in the majority of charities across these islands.

It is telling that the organisations that have caused the most concern are the so-called national charities with well kent faces that have been held in high regard. What is the impact on the organisations so far investigated? It is limited, yet the impact on the majority of small charity trustees has been profound. They find themselves labelled in the mire of mismanagement, which has led us to this point, as they have been sullied by the bad practice and lack of due care.

Some may say that these small and medium-sized organisations will not be impacted by this legislation, yet we fail to recognise the profound impact this period will have on their ability to recruit, retain and develop their volunteer trustees. It is commendable that many Members in this Chamber are themselves trustees. The Minister for Civil Society, who is no longer in his place, noted that point, and I commend him for it. However, merely being an MP should not qualify someone to be a trustee through default of their position, as it were.

I am sure that the Members to whom I have referred are well versed in their areas of interest—notably the issue of ex-offenders, about which they have spoken eloquently today—but I am also sure that some Members, especially those who were elected at the most recent general election, were asked at the time of their election whether they wished to join various charities as trustees or directors merely on the basis of their predecessors’ having undertaken such a role. I believe that that in itself exposes a misguided approach to trustee recruitment, although it must be said that it is taken by only a small number of charitable bodies, and appears to have been adopted mainly by the larger organisations.

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[Mr Wilson]

The hon. Lady makes her case strongly, and it is absolutely right that she should do so here in the UK Parliament. I hope that she will also make her case strongly to the devolved Administration, which many people in Northern Ireland wanted, and got as a result of the actions of subsequent Governments.

New clause 4 would fundamentally change the division of responsibilities between the new fundraising regulator and the Charity Commission. If we were to propose that the commission hold public hearings on matters of charitable fundraising, this would effectively amount to a form of statutory regulation. The commission does not believe that it currently has the resources effectively to exercise the power to hold hearings on fundraising, as suggested in the new clause. It can, in theory, already hold hearings in relation to statutory inquiries under section 46 of the Charities Act 2011, but it does not do so because it would not be an effective means of undertaking its casework. Unlike with other powers in the Bill, the commission does not ask for this ability.

I understand that my hon. Friend the Member for Harwich and North Essex may have intended in new clause 4 to offer to witnesses giving evidence to the Charity Commission in public hearings on charity fundraising the protection of not having their evidence used against them in other proceedings, rather than legal professional privilege. Legal professional privilege protects the lawyer-client relationship and is not what I think he is looking to achieve. However, the proposed hearings would be proceedings undertaken by the commission, not proceedings in Parliament, so parliamentary privilege would not be appropriate, either. The reserve power to regulate fundraising in section 64A of the Charities Act 1992 is a power to make secondary legislation that is necessary or desirable or in connection with regulating charity fundraising. If the commission were to assume statutory responsibility for the regulation of fundraising and this included holding public hearings, we would need to consider, at that point, what protection for witnesses would fall within the scope of the power.

My hon. Friend’s new clause 5 would prematurely task the commission with becoming the primary regulator for fundraising activities. The Government have provided for this already, but through the stronger reserve powers we introduced in Committee. We would also risk undermining public confidence, if self-regulation were to fail while under the oversight of the commission, particularly if the solution to that failure was statutory regulation by the commission. We would also need to do a lot more detailed thinking about whether, and if so how, witnesses could or should be protected by an equivalent to parliamentary privilege, which is what I think he might have been seeking with the new clause.

However, I completely agree with the finding of the Select Committee on Public Administration and Constitutional Affairs that

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

Perhaps I can reassure hon. Members that, under the reserve powers in the Bill, it would be possible for the Charity Commission to be given statutory responsibility for the regulation of fundraising, but to deliver that through a third party such as the fundraising regulator. New section 64C(2) of the Charities Act 1992, as introduced by clause 14, already specifically enables that.

[Martin John Docherty]

I am sure the Minister recognises the comments that the hon. Member for North Down (Lady Hermon) made in relation to Northern Ireland, which I also raised during the general debate in relation to fundraising. This legislation should not impact on the right of the Scottish Parliament to legislate on fundraising for charities. Will the Minister reiterate that here on the Floor of the House?

[Mr Wilson]

The representatives for Scotland were at the fundraising summit recently. This is a devolved matter, and it is up to them what rules they set for Scotland. They do not have to follow; this is an England and Wales Bill, which does not affect Scotland. It is therefore up to the Scottish regulator how they wish to proceed.

I maintain that it is important to keep a clear division between statutory and self-regulatory powers to ensure better regulation of fundraising. The best way to achieve that is to support the new fundraising regulator and, if it should fail, make a decisive and clear move to statutory regulation. Should self-regulation fail, the Government will not hesitate to intervene, which could include tasking the Charity Commission with the regulation of fundraising. However, we think it is too soon to commit the Charity Commission to an enhanced statutory role in fundraising, so I hope my hon. Friend the Member for Harwich and North Essex will understand why I do not support his new clauses 4 and 5.

Let me turn finally to Government amendments 6 and 7. It would not be fair to ask the taxpayer to carry the cost of fundraising regulation if it is the result of a failure by charities to protect the public from their own poor practices. Government amendments 6 and 7 would therefore enable the fundraising regulator or the Charity Commission to charge fees to those it regulates for that purpose. Many of the charities signed up to and paying for the old system of self-regulation were those that followed best practice, and there was a problem of free riders. To guard against that risk, the Etherington review suggested that any charity with fundraising expenditure beyond a certain level should be subject to a levy, requiring the large and medium-sized fundraising charities to pay for regulation.

Should the Government need to compel charities to register with the charity fundraising regulator, it is important that the fundraising regulator is able to levy fees for registration. That is exactly what amendment 6 would enable. Government amendment 7 deals with fees, should the reserve power be exercised for the Charity Commission to regulate fundraising. It would ensure that regulations could provide for the Charity Commission to charge fees across the range of bodies that it would regulate as the fundraising regulator.

I hope my explanations suffice to convince hon. Members that these amendments are an important part of the backstop to self-regulation and will help to ensure the effective regulation of fundraising in future, but I would of course be happy to provide more detailed responses. The main point is that I hope that these amendments are not needed and that charities will support the new, tougher self-regulatory system being established under the leadership of my noble Friend Lord Grade of Yarmouth. I commend these Government amendments to the House.

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[Martin John Docherty]

I am delighted to sum up briefly on behalf of the SNP. I hope that the hon. Member for North Down (Lady Hermon) will agree with some of what I say.

I am grateful to the Minister for clarifying the situation of fundraising in Scotland, but it still does not go to the heart of the matter, which is that the Bill impacts on charitable and civic society across these islands. I heard much about how it adds to Britain’s voluntary sector, yet it is an English and Welsh-only Bill. There is much to commend in the Bill, but let us be clear: when it comes to Scotland, it will be for the Scottish Parliament alone to legislate on these matters, as was confirmed by the Minister.

I will finish on volunteering and trusteeships. I hope that the Bill improves the situation of volunteering, which the hon. Member for Erewash (Maggie Throup) talked about, because levels of volunteering are going down. Even since the Olympic games, there have been subtle drops in levels of volunteering across all age ranges, not only in England and Wales but on the rest of these islands. We must seek to remove barriers, not just to trusteeships but to volunteering itself. I hope that the Bill is not a barrier to volunteering and that people will see trusteeships as a volunteering opportunity. At the moment, that is not happening.