Paul Flynn
Main Page: Paul Flynn (Labour - Newport West)Public Administration Committee Report (Charity Commission)
Paul Flynn Excerpts
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I beg to move,
That this House has considered the matter of the publication of the Third Report of the Public Administration Select Committee, The role of the Charity Commission and “public benefit”: Post-legislative scrutiny of the Charities Act 2006, HC 76.
I am grateful to the Backbench Business Committee for the opportunity to launch the Public Administration Committee’s third report of this Session. This is, in many ways, one of the Committee’s most important reports. The charitable sector is at the heart of British society, involving millions of people and with £9.3 billion received in donations last year. About 25 new applications for charitable status are received by the Charity Commission every working day.
The first UK charity was established in the year 597: the King's school, Canterbury, which still thrives today. The regulation of charities in England and Wales started under Queen Elizabeth I, with the 1601 Statute of Charitable Uses, which set out the first definition of a charity in English law and the purposes for which a charity could be established. The definition of a charity has remained largely unchanged from that time. Page 8 of our report carries a useful timeline of the development of charity law since then.
The subject of the Committee’s inquiry was the Charities Act 2006. Our inquiry followed the Government’s own review of the Act, carried out by Lord Hodgson of Astley Abbotts. I hope the House will join me in thanking my noble Friend for his valuable and meticulous work.
The Committee’s inquiry came at a challenging time for the Charity Commission. Its budget is being reduced by 33% in real terms over five years. The Charity Commission has also become involved in some protracted legal battles. It lost a case with the Independent Schools Council and its decision last year to decline an application for charitable status from the Preston Down Trust, part of what is called the Plymouth Brethren Christian Church or, formerly, the Exclusive Brethren—
Paul Flynn
On a point of order, Madam Deputy Speaker. The hon. Gentleman said that he will give way at the end of his remarks. I understand that the debate is time limited, so can he give us some idea of when he is likely to finish? I am the only other member of the Committee in the Chamber and I profoundly disagree with this very poor report. If I am to be gagged and not allowed to speak by the Chair—
Madam Deputy Speaker (Dawn Primarolo)
Order. I am sure that that is not the intention, Mr Flynn. Under this procedure, Mr Jenkin can take up to 20 minutes to present his report but he will take interventions as he is going along.
Madam Deputy Speaker
I think we should interpret his remarks, as I did, to mean that he wanted to finish the point he was making before he took an intervention. I am sure that that was what you meant, Mr Jenkin, was it not?
Mr Jenkin
The Cabinet Office must consider how to prioritise what is expected of the Charity Commission, so that it can function with its reduced budget. That must enable it to renew its focus on regulation as its core task. The commission is not resourced, for example,
“to promote the effective use of charitable resources”
or, for that matter, to oversee a reappraisal of what is meant by “public benefit”; nor is it ever likely to be.
PASC’s report also makes recommendations on the issue of chugging—that is, the face-to-face fundraising whereby many feel pressured by chuggers.
Mr Jenkin
I will give way to the hon. Gentleman in a moment.
The chair of the Charity Commission, William Shawcross, described chugging as
“a blight on the charitable sector”.
Self-regulation has failed so far to address that. The case for statutory regulation of fundraising is compelling, but what about the cost, whether to the taxpayer or to charities themselves? Self-regulation has made some progress, but we recommend that it is placed on notice and reviewed in five years’ time.
Lord Hodgson proposed a rise in the threshold for compulsory registration with the Charity Commission to £25,000 a year to reduce red tape for smaller charities. We rejected that on the basis of the overwhelming majority of the evidence we received.
We also recommended against any relaxation of the rules on political campaigning by charities. Moreover, charities should publish their spending on campaigning and political activity to boost transparency. That is relevant to the question of lobbying, which Parliament is shortly to consider.
As for the question whether public funds should be used by charities involved with political campaigns, again transparency is the answer. Ministers should inform Parliament whenever a decision is made to provide Government support by direct grant to a charity that is involved in political campaigning.
Earlier this week, the Public Accounts Committee reported on the case of the Cup Trust and the specific issue of sham charities and tax avoidance. We welcome its report and the Charity Commission should learn from that scandal. We question whether the commission’s legal advice was too cautious and whether they should have acted more boldly. If the commission feels that it lacks necessary powers, it should tell us. Generally, however, the abuse of charitable status to obtain tax relief is intolerable and should be uncovered by Her Majesty’s Revenue and Customs and the Charity Commission working more closely together.
Paul Flynn
The report does nothing to add to the reputation of this House. It is an atrocious report and it is a bad reflection on our systems that the Chairman of the Committee can take up the entire time devoted to its consideration.
Let me take the hon. Gentleman back to the point about the situation with independent public schools. It was hoped that the 2006 Act would change the unfairness whereby Eton and Harrow get a handout from taxpayers whereas ordinary schools in poor areas do not. The Act tried to change that, but a perverse decision taken by the law stated that the status of a charity depends on what it was established for, not on what it does. Two charities—one in Wales that exists to give petticoats to fallen women and another that exists to give education to the orphans of the Napoleonic wars—are more important than the fact that ordinary schools are deprived of charity status whereas public schools for the rich and privileged continue to enjoy that status and the related handouts.
Mr Jenkin
I am grateful to the hon. Gentleman for his intervention, because he demonstrates the diversity of view on the question of the charitable status of independent schools. That shows why that matter should be decided by this House and Parliament, rather than simply being passed to the Charity Commission to determine. It is too controversial and we should not be delegating legislative functions to an executive body.
Mr Jenkin
I am grateful to my hon. Friend for that question, because we were presented by my noble Friend Lord Hodgson with a recommendation that it should be made much easier for trustees to be paid officials. I have to say that there was a strong reaction against that proposal, which has a bearing on the point my hon. Friend raises because the whole point about charities is that trustees are not paid. There may be quite highly paid executives in charities, but the job of a trustee is not to benefit financially from being a trustee. There are exceptions, but the Charity Commission has to approve them. I believe my hon. Friend is suggesting that the commission should be prepared to withdraw that consent in the event of a person offering to do the job for nothing. I invite the commission to consider that matter, which we may revisit in a future inquiry.
Paul Flynn
Following the remark by the hon. Member for Wellingborough (Mr Bone) that a number of Christian denominations have been under pressure from the Charity Commission, will the Chair of the Committee remind the House that 1,176 Christian and other religious associations were awarded charity status, but only one tiny and oppressive sect was turned down, and that was Hales Exclusive Brethren? Is it not appropriate to remind the House that we were subjected to the most intensive lobbying on this matter? Two million pounds was spent and I was personally approached—face to face—more than 50 times, including at my party conference. Around every corner in this House, there were members of that very unpleasant sect waiting to accost us. The Committee made a point about the control of bodies that lobby in that way. It was not about religion or charitable status; it was about money.
Mr Jenkin
That is certainly correct. There has been widespread fear among many colleagues that the case presages a crackdown on religious groups by the Charity Commission. I believe the consistent message in our report is that we believe that too much has been laid at the door of the commission to determine. If Parliament wishes to legislate to provide additional restrictions against religious organisations, it is for Parliament to do that, but there is established case law, which I quoted earlier, that should determine whether or not a religious organisation becomes a charity. It is unfortunate that that particular case became so adversarial. It has to be said that the charity tribunal has not reduced the costs of litigation as was hoped, and there is scope to improve the practices of the commission in handling such disputes, so that vast amounts of the time and resources of the commission and charities, or potential charities, is not absorbed in paying lawyers to argue about how many angels there are on the head of a pin.
Paul Flynn
Does the hon. Gentleman agree that that particular sect has been involved in lobbying in other countries—including paying politicians, although I am not saying that that has happened here—and that the resulting disquiet among other religious groups was entirely because of the propaganda of Hales Exclusive Brethren? This is not a religion; it is a very nasty sect that treats its members very badly. We had people giving evidence in this House that they were threatened with losing their job, their home or their mortgage because they bought the wrong computer—not the one that Exclusive Brethren have, which, rather like what happens in North Korea, can only pick up the group’s website. This is an exceptional group of people, and the Charity Commission took no action that was disreputable or wrong. The commission did the right thing in identifying that group and allowing 1,176 other religious groups to have charitable status.
Mr Jenkin
I am sure the whole House has heard the hon. Gentleman’s strong opinions on that matter. He will know that the Committee as a whole declined to express a definitive view on the matter on the advice of the Attorney-General. My understanding is that we all agreed that such matters would be best settled by Parliament laying down more clearly the meaning of public benefit or by returning to the previous position in which it was left to the courts to decide, rather than by requiring the Charity Commission to produce guidance on the meaning of public benefit, which has been the source of much dispute.
If there are no more interventions—I should be happy to give way to either Front Bencher—I will conclude by stating our belief that the implementation of our recommendations is essential to restore and to maintain public trust in charities and in the Charity Commission, which in turn is essential to promote the good work done by charitable organisations in communities across the country. I hope that the House will join me in thanking the charity commissioners and everyone who works for the commission. They are dealing with a vast work load with diminishing resources—like much of the public sector, they have had to suffer extensive redundancies, with more to come—and we rely on their devoted service. We should thank them for everything they do for charities in this country.
Question put and agreed to.