Charities (Protection and Social Investment) Bill [Lords]

Matt Hancock Excerpts

Tuesday 26th January 2016 Commons Chamber

[Mr Speaker]

I can now inform the House of my decision about certification. For the purposes of Standing Order No. 83L(2), I have certified that the Charities (Protection and Social Investment) Bill [Lords] relates exclusively to England and Wales on matters within devolved legislative competence, as defined in Standing Order No. 83J. Copies of my certificate are available in the Vote Office. Under Standing Order No. 83M, a consent motion is therefore required for the Bill to proceed. Does the Minister intend to move the consent motion?

[The Minister for the Cabinet Office and Paymaster General (Matthew Hancock)]

Formally.

[Mr Speaker]

Even a nod from a Whip would suffice, but instead we have the full throttle of ministerial words. The House is greatly privileged and the occasion, I feel sure, will not be forgotten.

The House forthwith resolved itself into the Legislative Grand Committee (England and Wales) (Standing Order No. 83M).

[Natascha Engel in the Chair]

--- Later in debate ---

[Sir Edward Leigh (Gainsborough) (Con)]

I can reassure the hon. Member for North Down (Lady Hermon) that the Procedure Committee, of which I am a member, is looking at what is happening with this procedure and will report back to the House. It shall be noted that these are matters of great interest, but recently when I have sat in on consent motions for these sorts of debates under English votes for English laws, I have noted that nothing is said at all. It is incumbent on us to draw up procedures that actually make a difference and have a purpose. The problem with EVEL is that, because the Conservative Government have an overall majority, no Bill will be changed one iota in this Parliament as a result of EVEL. Because all the other parties are opposed to EVEL, if the Conservative party does not have a majority after the next general election, the procedure could be abolished in an afternoon. The Committee will be looking at these procedures very carefully and—of course, I cannot speak for its other members—will want to be reassured that the procedures under EVEL are actually changing something.

[Matthew Hancock]

I will respond briefly to the comments of the hon. Member for North Down (Lady Hermon). She asked why the Bill has been designated as an England and Wales Bill, and that is because it relates in its entirety to England and Wales. On her point about a charity that covers the whole United Kingdom—it hardly behoves me to reiterate, passionately and fulsomely, the Government’s support for the United Kingdom, which we share—regulation of the activities of charities in Northern Ireland is devolved. I cannot speak to, and I do not have responsibility for, the activities of the Charity Commission for Northern Ireland, which regulates the activities of charities in Northern Ireland. Likewise, this section of the debate ensures that there is consent for this legislation among the MPs whose constituencies will be covered by it. The reason I did not speak at the start of this procedure is that, given that the Bill is so clearly restricted to activities that take place in England and Wales, it is plain and obvious that it is therefore an English and Welsh Bill for these purposes.

[Lady Hermon]

I am grateful to the Minister for allowing me to intervene. I want to make the point—I am sorry to repeat myself—that we have legislation going through the House today that will give increased powers to the Charity Commission based in England. However, were the Charity Commission based in England to take action against a national charity of which my constituents are members and supporters and to which they are contributors and donors, my constituents would be directly affected by its actions in relation to that particular charity. Am not I therefore entitled, as of right, to represent the views of my constituents in this House?

[Matthew Hancock]

Of course the hon. Lady is entitled to represent the views of her constituents, which is precisely what she has been doing in the stages of the Bill, but it is also right that English and Welsh MPs can have their say on the Bill. I point out that were her constituents involved in a similar way in a charity that was headquartered in France, Germany, America or anywhere else in the world, that charity would of course be regulated by its home regulator in the same way as a charity based in England. It is a consequence of the devolution of charities law, and the actions of support for and regulation of charities, to Northern Ireland that this is an issue not for Northern Ireland but for England and Wales, and therefore, under the EVEL procedures, this is self-evidently an England and Wales Bill.

[Lady Hermon]

I do not want this to become a one-way conversation, but I have to say that I do not think the people of Northern Ireland would be flattered to be compared to France. I have listened studiously to Government Front Benchers reassuring the House that theirs is a one nation Government. I invite the Minister to come to Northern Ireland and meet those who have contributed to charities in Northern Ireland. He can explain to them face to face why, given that the Government claim to be a one nation Government, Northern Ireland MPs in some cases do not count—apart from Sinn Fein Members, of course.

[Matthew Hancock]

It is self-evident that if the issues in the Bill relate to England and Wales, as they do, the Bill should, in the view of the Government, be certified as an England and Wales Bill. It is a consequence of devolution that those representing England and Wales should be able to have their vote on a Bill that relates only to England and Wales.

To respond to the point made by my hon. Friend the Member for Gainsborough (Sir Edward Leigh), I should say that it is inconceivable that anybody would unwind these provisions in any future Parliament, given that they protect English and Welsh voters from having legislation imposed on them without the will of the majority of Members with constituencies in England and Wales. The reaction of those who could then be overruled by others who had their own devolved Assemblies and Parliaments would be quite savage.

[Simon Hoare (North Dorset) (Con)]

On a point of order, Madam Chairman. Like my hon. Friend the Member for Gainsborough (Sir Edward Leigh), I am a member of the Procedure Committee. We were very clear in our deliberations that Mr Speaker would make a ruling as to whether legislation fell within these protocols or not, but that he would not be expected or required to give the raison d’être as to why he made the ruling.

I may be out of order, Madam Chairman, in raising this as a point of order, but having listened to this exchange, I feel somewhat as if the authority of the Chair, and the decision that Mr Speaker has taken, is now being challenged. Critically, that seems to be undermining what we thought was an important principle —namely, that the authority of the Chair should be such that neither a challenge to nor an explanation of his or her ruling would be required or expected.

[The Second Deputy Chairman of Ways and Means (Natascha Engel)]

I thank the hon. Gentleman for that point of order. I remind the House that we are discussing the consent motion, rather than the rights and wrongs of EVEL. I have allowed the debate—it has been a rather two-way exchange—to go on a little because we are right at the beginning of the EVEL process; this is certainly my first time in the Chair during a Legislative Grand Committee, and it is only the third time that this has happened. However, as the hon. Gentleman said, the Procedure Committee is looking at the EVEL process in the round. The hon. Member for North Down (Lady Hermon) should really make a submission to that Committee. It would be good if we could now move on to discuss the consent motion or put the question.

[Matthew Hancock]

All I would say is that the decision on the consent motion is, quite rightly, Mr Speaker’s.

[The Second Deputy Chairman]

I remind hon. Members that if there is a Division on the consent motion, only Members representing constituencies in England and Wales may vote. That extends to expressing an opinion by calling out aye or no when the question is put.

Question put and agreed to.

--- Later in debate ---

[Matthew Hancock]

I beg to move, That the Bill be now read the Third time.

Charities are at the very heart of our society and have held that important place for many generations. The vast majority of charities are run well by selfless people whose motivation is to help others. By way of example, I was struck by the incredible way that charities and the local community mobilised after the devastating floods that took place in Cumbria in December. Cumbria Community Foundation set up a flood relief fund to help all those affected. The fund has already raised well over £4 million, alongside Government contributions. It has involved hundreds of local charities, voluntary organisations, businesses and individuals raising funds to support the appeal. National Citizen Service graduates in Carlisle have helped renovate a local youth club damaged by the floods. We owe a great debt to such charities and the volunteers who freely give their time to make a difference. We celebrate the work of this example just as we celebrate our hospices, universities, housing associations, community fundraisers, global research institutes, and the many, many other charities, from the most local to those with worldwide reach. We salute their effort, their time and their generosity, and the joy that they give in the service of others.

This Bill will help to protect that vast majority of charities from the tiny minority that would seek to abuse the benefits of charitable status and risk undermining the public’s trust on which charities as a whole rely.

[Lady Hermon]

I am genuinely grateful to the Minister for allowing me to intervene on him again. In the light of the fact that he has emphasised on a number of occasions that responsibility for charities is a devolved matter in Northern Ireland, and given the changes introduced by this legislation, will he kindly confirm that, if he has not already done so, he will make it a top priority to get on the telephone to his counterpart in the Northern Ireland Assembly to say, “Right, this is what we’ve done at Westminster—perhaps you should think of making these changes in Northern Ireland.”

[Matthew Hancock]

Absolutely—we will certainly make contact with the Northern Ireland Assembly to ensure that we can have exactly that communication, not least because the Bill will support charities that want to engage in social investment, which many can benefit from. It provides a new way for charities to maximise the impact of their investments.

The Bill will also better support regulation of practices for fundraising, which have been found wanting. We all know of and support charities that, week in, week out, do brilliant work in our constituencies. I want to ensure that the regulatory framework for charities continues to support charities like these while supporting the work of the Charity Commission in robustly bearing down on the few bad apples. This Bill will do just that. I will touch on some of the things that I hope, through its passage, we will be able to deliver.

Extending trustee disqualification will better protect charities from individuals who present a known risk. Like many Members during the passage of the Bill, I struggle to conceive how it could ever have been considered appropriate for a convicted terrorist or money launderer, for example, to be involved in running a charity. These changes are long overdue. However, I agree with my right hon. and learned Friend the Member for Harborough (Sir Edward Garnier) that, in extending disqualification, we must take extra care not to undermine the vital work done by charities involved in the rehabilitation of offenders. I am confident that the waiver process will allow those who have changed their ways a route back into charity trusteeship or senior management. I hope that the commitments given by my hon. Friend the Minister for Civil Society will provide a degree of further reassurance.

When the National Audit Office reviewed the Charity Commission and reported on it in 2013, it recommended that the Government look at gaps and weaknesses in the regulator’s powers. We have done so, and the Bill addresses those gaps and weaknesses. We should however be clear that the Bill provides only one element of the change that is needed.

The Charity Commission was established in 1853 to take on a number of the court’s functions in relation to charities. At the time, misconduct in charities was a source of public concern, and that led to the founding of the commission. If we fast-forward 150 years, we can see that the Charity Commission’s role is in many ways much the same—focused on ensuring public confidence in charities.

We all want strong, effective, independent regulation of charities. The Charity Commission is making great strides towards that under the strong, clear-eyed and sure-footed leadership of its chairman, William Shawcross, and chief executive, Paula Sussex. They are driving the transformation of the commission into a modern, effective and efficient regulator. However, such a change can happen only with the full commitment and support of the charity commission’s staff, and I pay tribute to them for their hard work, which too often goes unrecognised.

The extensions to the commission’s powers in the Bill have been carefully thought through. Following public consultation, pre-legislative scrutiny and the Bill’s passage through the other House and this place, we have a much-improved Bill. As a result, the commission will be equipped with the tools that it needs to tackle serious misconduct and mismanagement in charities, and to do so effectively and efficiently. I am also reassured by the range of safeguards that accompany the powers, some of which have resulted from consultation and scrutiny.

It is important to stress that most charities will not experience any direct impact from the new powers in the Bill, because most charities are, quite rightly, never on the receiving end of the Charity Commission’s powers. However, ensuring that the regulator can act quickly and effectively against serious abuse will support public trust and confidence in all charities.

On public trust and confidence, I now turn to fundraising. It is clear to me that poor fundraising practices had the potential to undermine public trust and confidence in charities. Sadly, there is already evidence of reduced trust. We acted quickly by commissioning the Etherington review last summer. I am very grateful to Sir Stuart and the cross-party panel of peers who supported him. Sir Stuart recognised the serious risk to public trust in the charity sector generally, and the need for change in the fundraising practices of some charities. His review marks a watershed moment.

I welcome the support from Labour Members for our measures on fundraising. This is something on which we all agree there is a need for change. It really is the last chance for self-regulation. Under the leadership of Lord Grade of Yarmouth, it will have every chance. I very much hope that all across the charity sector are willing and able to embrace that. I do not want to have to resort to statutory regulation, but we will if we must. We now have the reserve powers to do so in case they are needed.

I welcome the important contribution on fundraising published yesterday by the Public Administration and Constitutional Affairs Committee, under the chairmanship of my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), who has followed the proceedings on the Bill closely. We will need to consider carefully the report and recommendations before responding fully, but we completely agree with the central finding that it would be a sad and inexcusable failure of charities to govern their own behaviour should statutory regulation become necessary.

On the new social investment power, the Bill will help charities that want to get involved in this exciting new area of finance for charities. We are committed to growing social investment as a sustainable source of finance for charities and other social ventures. The UK is a world leader in this respect, and the social investment power will help charities to play a bigger role.

I am pleased that there is a review provision in the Bill. After three years, it will enable Parliament to look back at the provisions and their impact. I hope that that will be a happy occasion.

The Bill and the improvements it will bring would not have been possible without a huge amount of hard work by many people. I particularly pay tribute to my hon. Friend the Minister for Civil Society and my noble Friend Lord Bridges of Headley for their sterling work in piloting the Bill through. Charity law can be fiendishly complex; they have not only grasped such complexities, but clearly and succinctly explained them to Members of both Houses. They have met a wide range of stakeholders to discuss all aspects of the Bill, and they have introduced amendments to improve it. I also thank my officials from the Cabinet Office and the Charity Commission who have supported the Bill’s passage.

I thank my hon. Friend the Member for St Albans (Mrs Main) and the hon. Member for Leeds North East (Fabian Hamilton) for their chairmanship of the Public Bill Committee. I thank the hon. Member for Redcar (Anna Turley), the noble Baroness Hayter of Kentish Town and Opposition Members for their broad support for the Bill. It would be fair to say that we have not agreed on everything, although the rows have tended to be about things that are not in the Bill. We have the shared aim of protecting charities and ensuring that the Charity Commission has the right powers independently and effectively to regulate charities. The debates have generally been constructive and positive and are, in my view, an example of the House at its best.

Particular recognition should go to the Joint Committee on the Draft Protection of Charities Bill, which undertook pre-legislative scrutiny under the wise chairmanship of my noble and learned Friend Lord Hope of Craighead. Its pre-legislative scrutiny resulted in a number of improvements before the Bill was introduced. I thank the Law Commission for drawing up the new social investment power. Its expertise was important in getting the detail right. I give enormous thanks to all others who have contributed in any way.

Finally, I thank my noble Friend Lord Hodgson of Astley Abbotts, whose prescient 2012 review of the Charities Act 2006 identified many of the weaknesses in fundraising self-regulation that are being addressed both through the Bill and the implementation of the Etherington review more broadly. That work four years ago showed the path that we have followed and that I hope the House will approve today.

The Bill has had broad support through the long process of consultation and scrutiny. We have listened and acted when we have heard ideas to strengthen it and add additional safeguards. The Bill will support and protect the strong, independent charity sector that is so important to our way of life in Britain, and I commend it to the House.