Charities (Protection and Social Investment) Bill [ Lords ] (Fifth sitting)

Rob Wilson Excerpts

Thursday 7th January 2016 Public Bill Committees

[The Minister for Civil Society (Mr Rob Wilson)]

I beg to move, That the clause be read a Second time.

May I begin by congratulating you, Mr Hamilton, on your promotion to a shadow foreign affairs post? I know that you will put your enormous experience to good use on behalf of your party.

Most people will be familiar with the issues surrounding charitable fundraising by large charities that surfaced last summer, and which I referred to in some detail in relation to clause 14. As I said, I accepted Sir Stuart Etherington’s recommendation to give charities a final chance to make the self-regulation of fundraising work. The new system has my complete support, and the public are eager to see improved fundraising and signs that charities are listening to and acting on their concerns. It is now up to the sector to make the improved system of self-regulation work in a timely and effective manner, and I will keep a close eye on the progress being made.

Charities rely on the generous charitable giving and voluntary work of the British public and so need to deliver on the public’s expectations. Otherwise, we must be prepared to step in and act. I do not want to have to do that, but I want to be prepared in case it becomes necessary. Public trust and confidence in charities has already been rocked because of the poor practice uncovered last summer. In a survey last year, only 48% of people—less than half—said that they trusted charities. A more recent survey found that 76% of the public wanted tougher regulation of charity fundraising. We cannot allow further damage to public trust, which is why it is imperative that we have the right tools to act if it becomes clear that the new system is not sufficiently supported by charities. For that reason, I propose an amendment, through new clause 7, to the existing reserve powers in the Charities Act 1992. This will act as a safeguard should self-regulation fail.

Proposed new section 64B of the 1992 Act will extend existing powers in relation to fundraising regulation to compel charities to comply with the requirements and guidance imposed by the fundraising regulator. It will also allow the Government to require charities to be registered with a body for the purpose of regulating charitable fundraising. Under this provision, Ministers will have the discretion to mandate with the regulation of charity fundraising any body whose principal function appears to be in line with that purpose. The provision makes it clear that that may not be a body maintained out of money provided by Parliament. That will be the case with the new fundraising regulator currently being established by Lord Grade of Yarmouth, the interim chair, and Stephen Dunmore, the interim chief executive, which will be funded by the sector itself.

Most of the largest charities have already committed to registering with the new body once it is established, and I am sure that any charity showing initiative and commitment in that way will be a welcome sign to both the public and Parliament. However, should any charities be found to be dragging their heels, this power could be used to compel them to register with the fundraising regulator. It could be used as a first statutory step should charities prove insufficiently proactive in their support of the new self-regulatory system.

Self-regulation will not work if charities decide to wait and see what the finished system looks like before pledging their support. It would be starved of both the necessary mandate and the financial resources even to begin its work. This power will therefore be a vital safeguard to ensure that self-regulation is given a proper chance to succeed. If needed, the power would further act as an early warning sign to charities, flagging it up to them that they are falling behind the expectations that the public, Parliament and the Government have of what is necessary to make self-regulation work. I would challenge any fundraising charities and, in particular, large, sector-leading charities that did not sign up to the new self-regulator to consider their obligation to safeguard the public and their trust in charities more generally. It would certainly be a poor reflection on what is largely a dedicated, compassionate and well-run sector if the Government were forced to invoke this power. However, I will not hesitate to do so if that becomes necessary.

The new clause also introduces proposed new section 64C into the 1992 Act. The new section extends the existing reserve power to regulate fundraising, to enable the Government to confer the function of regulating charitable fundraising on the Charity Commission. That is a significant power, which would change fundraising regulation completely.

[Tom Tugendhat (Tonbridge and Malling) (Con)]

For clarity, may I ask a brief question on the Minister’s slightly earlier point, which he has just moved on from? Is it only charities that will have to opt in, or will other organisations have to?

[Mr Wilson]

I thank my hon. Friend for raising that really important question. Charities—particularly education charities—rely on the special relationship they have with their membership. The data protection legislation that has just been passed in Europe means that all sectors will need to move to an opt-in system in the next 18 to 24 months. That means that any organisation will require unambiguous and affirmative consent before being able to process any individual’s data. Workarounds such as assumed consent or pre-ticked boxes will simply no longer be good enough. A change is therefore coming, and it will affect all sectors, not simply the one we are discussing.

[Peter Kyle (Hove) (Lab)]

The Minister has repeatedly asserted in his opening speech that charities need to heal the wounds resulting from the challenges they faced last year and from the public dismay that greeted some of what happened. However, would it not be more honest to acknowledge that the Government also played a role in undermining public confidence in charities last year? Will he take this opportunity to reaffirm that the Cabinet Office will no longer put millions of pounds in funds into charities that are trading insolvently—something that greatly undermined public confidence in not only one charity, but the Government themselves?

[Mr Wilson]

That really is a very strange point to make. What we saw over last summer was a number of large charities clearly targeting vulnerable and elderly people in the most immoral way and on a scale we had not seen before. The Government had no role in making that happen or even allowing it to happen. Since we discovered the scale of what was going on, we have acted extraordinarily swiftly. We have set up a new single regulatory body in a very short time, given it the powers to be successful and made sure it is funded sufficiently. We have got the sector’s backing, and a whole series of other things are now happening to make sure that that body is up and working so that the sector does not make the terrible mistakes it has made in the past.

It is also important to recognise that it is a small number of large charities that have let the whole sector down and that, by and large, small charities have had nothing to do with this. We are therefore having to focus on a fairly narrow section of the sector, but that work is important, because we have seen the figures for those who trust charities go down to below half the population—it was previously much higher—and that has had an impact on how people feel about donating to charities. A lot of the work that the Government have done over the past five or six years has been about building the idea that people should give of their time and money to volunteering and charities, and that has been a big success for the Government.

[Peter Kyle]

I am grateful to the Minister for giving way again. He spoke with great passion about solving the problems that a small number of charities faced, and indeed created, with some of their fundraising practices last year. However, he also quoted figures for the damage done to the voluntary sector’s reputation, and I invited him to face up to the fact that the Government also played a role in damaging the sector’s reputation last year by overriding officials’ recommendations not to put more money into Kids Company. In doing so, the Government put millions of pounds into a charity that was trading insolvently, creating a national scandal that was reported throughout the media, which damaged the sector itself. Yes, the voluntary sector needs to own up to its challenges, but will the Government take a lead? Will the Minister say that the Government will no longer fund charities that are trading insolvently?

[Mr Wilson]

Look, there are at least three separate investigations into what happened at Kids Company, two of which are due to report by the end of this month, I think. It is important that we all wait to see what those reports say. If lessons can be learned, the Government will certainly learn them and do what we can to ensure that such things do not happen again, but to pre-empt that in this Committee would be wrong.

I was talking about the change in the nature of fundraising regulation if we had to invoke this power. It would no longer be governed by a self-regulatory system; instead, the Government would be able to invoke statutory regulation by mandating the Charity Commission with that task. Were that function to be passed to the commission, clearly it would require additional funding or would charge fees under section 19 of the Charities Act 2011.

I hope that I will never feel compelled to use this power, as it would mean that the self-regulatory system had failed. More importantly, it would mean that large charities had failed to put their house in order. However, the seriousness of the abuse in the past year or so and the impact it has had on public trust in charities has made it clear that a robust backstop is needed to ensure that the public feel that they can give with confidence and to prevent the same sorts of scandals being repeated.

[Mr Alan Mak (Havant) (Con)]

One area of charitable practice that helped to undermine confidence in the sector is the behaviour of so-called chuggers—charity collectors who collect direct debits on behalf of charities. Can the Minister assure the Committee that the new regulatory system will clamp down on such bad practices and increase confidence in the sector by way of regulation?

[Mr Wilson]

I thank my hon. Friend for raising an issue of great public interest. Many people have raised such concerns in recent years. Personally, I am not convinced that that method of fundraising is beneficial to the sector’s reputation. Many people dislike being approached in the street or on their doorstep. On the other hand, I appreciate that it represents an important source of income for the sector, and it would be churlish not to acknowledge that there have been some improvement in the regulation of face-to-face fundraising—it is known as that, rather than chugging—in recent years. It was highlighted as a problem as far back as 2012 by Lord Hodgson’s report. However, I expect that the new fundraising regulator will pay very close attention to chugging. Charities and the new regulator need to ensure that it is done respectfully and responsibly, and that the methods used to solicit donations are not the next big scandal waiting to happen.

Let me return to section 64C, if that is not too geeky for the Committee, which sends a clear signal about the Government’s intention for better regulation of fundraising in the future in one way or another. The charity sector feels compelled to ensure that that is achieved through the Etherington system, rather than statutory regulation. I think that everybody here wants fundraising to be better regulated in future to ensure that it protects the vulnerable, is not governed by vested interests and does not allow free riders to abuse the system. The new clause provides a robust back-up to the system of self-regulation currently being implemented. It will also act as a deterrent to those who are still in denial about the seriousness of the issues that the sector faces.

In some ways, it is odd that I hope that I and my successors will never have to invoke the reserve powers to regulate fundraising. Ultimately, whether or not that happens is in the hands of the charities themselves, which need to ensure that the self-regulation of fundraising works in the public interest. I hope hon. Members will agree with me and back this important new clause, which will help safeguard the future of fundraising and the reputation of charities in the long term.

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[Anna Turley]

I beg to move, That the clause be read a Second time.

The new clause would enshrine in legislation the right of charities to undertake political campaigning activity. We are clear that this is a direct attempt to challenge the unfair and poorly applied Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014—the gagging Act, as it is commonly known.

Campaigning is an important part of democracy and civil society. One of the fundamental principles of a thriving and healthy democracy is that individuals and organisations can speak out about the issues they care about. Charities, in particular, have a long-established role in educating and informing the public, campaigning and securing positive social change throughout our history and, crucially, holding the state to account. It is the sign of a mature and confident democracy that we allow dissent and ensure that we have wide-ranging and representative public debate. Charities not only have the right to campaign, but are often best placed to provide important insights that can inform and improve policy making. They are so often the ones on the frontline seeing the gaps in provision, the duplication of services, inefficiency and waste, and indeed spotting the best ways of solving problems.

Many charities can often 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 having to address their costly aftermath. For example, is it better to care for victims of crime in the aftermath of an event or to help prevent crimes in the first place? It is good to help care for patients with long-term conditions such as cancer, but is it not better to push for more effective treatments, awareness of symptoms and support for diagnosis?

[Mr Wilson]

Will the hon. Lady explain how the legislation stops such things happening at present? I have seen nothing to suggest that that is the case.

[Anna Turley]

I thank the Minister for his intervention but, as I will say, the sector has made it clear that it feels stifled, particularly in the lead up to general elections, when there are serious debates about the future of Government policy. That is what this new clause seeks to prevent.

The lobbying rules affect charities because of their non-partisan campaigning activity. Organisations can campaign for changes to law or policy where such a change would support their charitable objectives. Although under charity law campaigning cannot be the continuing or sole activity of a charity, it is an entirely legitimate activity for charities to pursue. Under the current rules of the Political Parties, Elections and Referendums Act 2000, some of that activity is already regulated by the Electoral Commission when an organisation has been deemed to produce election material. For many charities and voluntary organisations, raising awareness of the issues affecting the people and causes they support is a routine and important part of their work and central to their charitable objectives.

In a letter leading up to the general election last year, more than 160 signatories from the charitable sector, including Save the Children, the Salvation Army, Oxfam, Greenpeace, Age UK and Amnesty International, said that the legislation should be scrapped and that it is having a “chilling effect” on charities’ work.

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[Anna Turley]

I thank the hon. Gentleman for raising that suggestion. I wonder whether he would have had the same concerns had that been done for his political party. Surely consultation is a positive thing. If a charity’s aims and objectives are welcomed and taken forward by a political party, it is surely right for it to welcome that success for its charitable objectives and its efforts to have influence, shape policy and change society. That is something to be welcomed, and the hon. Gentleman is on a difficult line with that.

[Mr Wilson]

Is the hon. Lady really arguing that it is okay for a charity to email its members and ask them to attend a party political launch event? Can I just be clear on that?

[Anna Turley]

I think that is perfectly acceptable, if people want to go to any party political event and offer their views. They may go to it and disagree with the party and challenge it. As far as I am concerned, we are in danger of separating politics from the realities of campaigning and policy making. Politics has to be open and accessible and must not exist in a vacuum. Many people are deeply involved in politics, from councillors and MPs to activists; there is not a small box for people to sit in because they are in one category but not another.

--- Later in debate ---

[Wes Streeting]

I am simply citing the representations I have had from my old colleagues at the National Union of Students about the impacts of the gagging law. It is important to put that forward. I was the head of a charity at not one but two general elections. First, I was president of my university’s students union back in 2004, where our “Get out the vote” campaign in Cambridge undoubtedly contributed to the loss of an excellent Labour MP, in the form of Anne Campbell—she had abstained on the Second Reading of the Higher Education Act 2004, which I am sure contributed to that. Secondly, during the 2010 general election, I was president of the NUS.

At that time, charities were well constrained from party political activity and endorsing political parties, and there is unlikely to be a single charity campaigner in the country who cannot cite CC9 of the Charity Commission’s guidance chapter and verse, which is clear about the restrictions on charities in party political campaigning. The gagging law passed in the previous Parliament was a solution in need of a problem. There were no previous problems; it was just that the Liberal Democrats got scared of the consequences. Alas, even the gagging law could not save them.

Finally, on the general attitude to the voluntary sector’s political representation and campaigning, too many Members of Parliament seem to be happy to turn up and have photographs with guide dogs at party conferences, pop along to their local Barnardo’s outreach and have photographs with service users and be there for photographs, leaflets and press releases, yet when it comes to being confronted with the consequences of the decisions this place has made under successive Governments, they do not like the hard truths.

We need to think about the voluntary sector’s reach and its broad focus on speaking up for and serving the most disadvantaged in our society—people who do not know how to find their way into the corridors of power. Incidentally, those in the sector are not like the many commercial organisations that have also had significant amounts of public money, but which can none the less exercise their muscle in Committees, in the corridors in this place and on the Floor of the House. These are charities that speak up for some of the most dispossessed and disadvantaged in our society, and when they say that the gagging law has had a chilling effect, it is incumbent on us to listen and to take this simple, uncontroversial measure to ensure that every charity knows that they are empowered to make political representations to speak truth to power on behalf of their beneficiaries.

[Mr Wilson]

Let me begin by putting things right and congratulating the hon. Member for Cardiff Central on her promotion to shadow Justice Minister, which is something I should have said earlier. My heartiest congratulations to her. Things have warmed up a bit in the Committee this morning. I am glad to see that pulses are racing and faces are reddening: that is a good sign for healthy debate in Parliament.

I happily repeat for the Committee’s benefit what I said in our first sitting, as well as many other times in public: I support charities’ right to speak up for their beneficiaries, whether I, as the Minister with responsibility, or the Government like it or not. I cannot be clearer than that. Charity law already permits charities to undertake non-party political campaigning that furthers the charity’s purposes and that the trustees consider to be an effective use of its resources. That can legitimately involve campaigning to change the law or a policy, and non-party political campaigning to support such a change. That is absolutely clear. Charities must not support a particular political party. That is established by case law. It is defined widely, and it includes a charity promoting a political party event to its members. A charity cannot be used as a vehicle for the expression of the political views of its trustees or staff members.

Perhaps the hon. Member for Redcar got mixed up in what she was trying to say earlier, but she has the chance to put it right. It is clear that what she was suggesting is outside the law. If the Badger Trust were promoting an event for all political parties, that would be different, but promoting one party above another is clearly outside the rules and the definitions.

[Wes Streeting]

Is the Minister seriously saying that there are not charities up and down the country that have put on events hosting senior politicians of all parties and invited beneficiaries? Is he saying that charities should not do that?

[Mr Wilson]

It is astonishing how easily the hon. Gentleman gets the wrong end of the stick. I was clear that it is permitted if it is all parties, not one party. He said that that those charities invite Members of all parties to events, and that is the important distinction. If, as the Badger Trust did, a charity emailed its members to invite them to one political party’s event, that would be considered a very close association with one political party. If it did the same for all political parties, as the hon. Gentleman said without understanding the implications of that, that would be okay.

[Wes Streeting]

I cannot speak with authority about that specific case, but with the notable exception of big set-piece events, such as the Citizens UK events that were attended by the party leaders, we do not seriously expect the Prime Minister to turn up to an event hosted by a national charity and find people such as Natalie Bennett, Nigel Farage and all sorts of other people who will never have his job standing alongside him being given equal weight. Which other random parties should appear with the Prime Minister at charity events?

[Mr Wilson]

I think we are straying into the realms of electoral law rather than charity law, and I am sure you do not want us to stray too far in that direction. The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 applies to all third-party organisations campaigning for a particular electoral outcome. It does not specifically target charities or prevent them from campaigning to further their charitable purposes. The Charity Commission’s guidance CC9 makes that absolutely clear.

The Hodgson review, which is under way and will report in the next couple of months, will look at all those issues and consider in detail all the representations that are made to it. I think the Opposition should have waited for the review to see the detail of the representations made and whether there is evidence that things are going wrong and that the so-called chilling effect is taking place.

There is no bar to charities or student unions holding husting events, provided they do so in a balanced, even-handed way that furthers the charity’s purposes. Like many other Members, I am sure, I attended the student union debate in my constituency. I am very surprised that any student union was worried about putting on an even-handed debate, open to all parties.

The Charity Commission’s guidance is clear and comprehensive. Unlike primary legislation, guidance can be relatively easily updated, with proper consultation to ensure that it reflects current case law and other developments, such as the rise of social media. In recent years, there have been cases where charities, inevitably, have strayed on to the edges in what they are doing in social media. The guidance on that is obviously fairly new, and it is important that it is there.

I would say simply that the new clause is unnecessary, unless the hon. Member for Redcar and her colleagues are arguing that charities should be able to engage in party politics, in which case I very strongly object. What we heard about the Badger Trust emailing its members asking them to go to a single party political event and sort of supporting the manifesto elements that had been introduced would fall into the category of party political activity. We should keep charities and party politics completely separate. Where charities engage in non-party political activity, they should take extra care to protect their independence and to ensure that they do not give the impression of being politically partisan in any way, and that is the category that would apply with regard to the Badger Trust.

It is right that we have an independent regulator in the form of the Charity Commission to investigate concerns where charities may have overstepped the mark of what is acceptable, and some have done that in social media in the last couple of years. Where the dividing line between charitable and political becomes blurred and charities come to be seen as politically biased or aligned with a particular party, there is a real risk of public trust and confidence in charities being degraded. One of the charities’ strengths is their independence and their ability to stand outside politics, and I would really hate to see that undermined by the new clause.

[Louise Haigh (Sheffield, Heeley) (Lab)]

In the last Parliament, before I was an MP, I had a little back and forth with a charity known as the New Schools Network, which was set up by a former special adviser to the present Secretary of State for Justice deliberately to implement Government education policy on free schools. To me, there is a clear clash there between charitable status and implementing a particular political party’s policy stance, but this Government have made no effort to address that. Given that that was a clear breach and that the Charity Commission actually had to investigate the charity in question, I do not feel that the Minister’s point about making sure that charities are separate from party political activity stands.

[Mr Wilson]

As far as I am aware, there was no finding of any inappropriate party political activity against the New Schools Network. People can make complaints about all sorts of things, but whether those are found to have any evidential base is quite another thing. There are lots of examples of think-thanks and other organisations that are charities that want to put forward new ideas in the educational sphere, and as long as they have an educational purpose and they stay outside party politics, there is absolutely no reason why they should not do that. Just because, in the early days of the new free school network, the Labour party opposed free schools, that does not mean that that particular organisation did not have the right to exist. The fact that the Labour party did not like what it was saying is neither here nor there; it had a right to express its views freely, as I and others here—[Interruption.] As long as they are not party political—I have made that absolutely clear.

[Louise Haigh]

But it is party political.

[Mr Wilson]

The New Schools Network is not a party political organisation. I think that that is best left there.

[Peter Kyle]

The Minister talks about the importance of independence and the fact that beneficiaries need to see charities being independent-minded. They absolutely do, but does he not accept that to be independent, charities need to be able to choose the terms on which they engage with public policy? It is interesting that the hon. Member for Worthing West (Sir Peter Bottomley), who sits on the Government Benches, has invited Donald Trump to his constituency because he thinks it will be an important statement of free speech in our country. Is it not strange that we live in a world where Donald Trump and billionaires are invited here to demonstrate the principle of freedom of speech, while we are discussing charities’ freedom of speech being inhibited in the run-up to a general election, when the voices of the disempowered are needed the most?

[Mr Wilson]

I simply do not agree with the hon. Gentleman’s characterisation of the law as it stands, because charities can and do campaign on policy and political issues today. Members of my party are particularly charitable people, although they are not charities themselves, and if, on the basis of promoting freedom of speech, they want to invite people to come and speak in their constituency, they should be free to do so.

[Tom Tugendhat]

Speakers on both sides of the Committee have been extremely generous in giving way, so I will be as brief as I can. Will the Minister identify that there is a difference between executing Government policy, such as free schools, and lobbying to achieve political party aims? They are two separate things. Will he also identify that there is a difference between freedom of speech for individuals, which we all enjoy in these islands, thank God, and have done for many hundreds of years, and the freedom of organisations that receive taxpayers’ money—money taken by force, I remind the Committee —to lobby in a different way? The two are necessarily different.

[Mr Wilson]

My hon. Friend makes the points powerfully. He has returned a number of times to a point that is relevant and of huge public interest: charities should not use Government funding for political activity. That should be clear from the terms and conditions attached to any Government funding of a particular charity. For political activity, charities can use other funding, such as voluntary donations or earned income from trading. I understand what he says, and I have set out clearly the Government’s view .

[Peter Kyle]

The hon. Member for Tonbridge and Malling makes an important point. Empowered individuals absolutely have the right to speak for themselves, as does any citizen of this country. The problem we have is that some citizens in this country do not have the ability to be heard or to voice their concerns—the disempowered people, who are often hidden away from general discussion and from public policy. That is why civil society organisations need the power to speak vocally on behalf of the people who do not represent themselves equally in a democracy. Does the Minister not agree?

[Mr Wilson]

Once again, I am surprised at the hon. Gentleman’s question. At the outset, I said clearly that charities should be able to speak truth to power. That is absolutely fine—

[Peter Kyle]

Not during an election.

[Mr Wilson]

Whatever time of year it is. The hon. Gentleman singles out elections. We have Lord Hodgson looking at this. The Charity Commission has looked at the incidents that took place during elections. So far, I have seen no evidence of any chilling effect, and I await Lord Hodgson’s report to support the hon. Gentleman’s case.

Attempting to put into statute a provision of case law risks changing the boundaries of what is permitted. It just is not feasible to encapsulate all the nuances of case law in a simple single statutory provision. We have already explored those risks in the context of clause 9 and the protection of charity assets, and it would be no different here.

It is not clear whether new clause 2 would permit charities to support political parties, for example, by allowing charities to undertake political campaigning without defining exactly what that means. Given our earlier conversation about the Badger Trust, I think even the hon. Member for Redcar is not clear about what constitutes political campaigning and what does not. The new clause is just one example of where a well meaning attempt to codify case law in a statutory provision can go badly wrong, resulting in potentially significant unintended consequences.

There is also a risk that the new clause would permit charities to overstep the current mark in another way: under the law as it stands, charities cannot engage in campaigning to such an extent that it calls into question their charitable status. If the only thing the organisation does is non-party political campaigning, one would question whether it is an organisation with political rather than charitable purposes. That is already encompassed in case law, but it is not clear to me whether new clause 2 would encompass that restriction, potentially opening up charitable status to political organisations. That would clearly damage public trust in charities, which I am sure the hon. Lady does not intend.

[Tom Tugendhat]

Forgive me for intervening once more, but on that point, does the Minister believe that it would be wise for charities to identify how much they spend on their core activity and how much on campaigning?

[Mr Wilson]

My hon. Friend raises a question of enormous public interest. Only last year the Charity Commission looked at whether charities should be required to submit details of their campaigning spend as part of their annual return process, details of which would have been published on the register of charities. The commission concluded that such a requirement would create a significant amount of work for charities and decided not to include that in the annual return for 2015. However, the commission did note the huge level of public interest in the issue and said it would look at the matter again. I welcome that and encourage the commission to keep the matter under review. I hope that clearly answers my hon. Friend’s question.

Even in the unlikely event that the boundaries of law were not shifted by an attempt at statutory definition, one would still expect legal challenges to test whether the law had in fact changed, by design or otherwise. There is further risk in putting this in the Bill since it would risk politicising charities’ right to campaign. Ministers, rather than the independent regulator and the courts, would be responsible for the provision, which could leave it open to political interference over time.

I hope the Committee will agree that one advantage of case law provision is that it is in the hands of an independent regulator and the courts and is not subject to ministerial intervention. As I said, my noble Friend Lord Hodgson of Astley Abbotts is currently reviewing evidence of the impact of 2014 Act on charities and other organisations in the run-up to the election. I understand his report is expected reasonably soon, and I look forward to seeing the findings and whether there are lessons to be learned.

I also point the Committee to the Charity Commission’s recent publication of the cases it investigated in the run-up to the 2015 general election. From looking at those cases, one gets a good impression of the independent regulator properly exercising its regulatory role in this area in a very proportionate way.

I hope that I have given the reassurances that Opposition Members seek about charities’ right to speak out for their beneficiaries, while cautioning against the dangers of statutory provision, and hope they will not press the new clause.

[Anna Turley]

I thank the Minister for his explanation, although he has not convinced us—he will be surprised to hear that. We will not press the new clause to a vote now because we want to return to it on Report. I am sure hon. Members look forward, as I do, to further discussion on the Floor of the House.

I was struck by the Minister’s passionate defence of the independence of the charitable sector and his desire to protect it from the overbearing oppression of political campaigning forced on it by the new clause. I would love to know how many charities begged and pleaded with the previous Government to bring in the gagging Bill to protect them from overbearing political parties forcing them to campaign. In fact, the feeling from the sector was quite the opposite: they were asking for independence from being gagged and being told they could not. I fundamentally disagree with the Minister’s claim that he is trying to protect the sector’s independence. Its independence to speak with its true voice and commitment is what the new clause is about.

I hope I am not naïve in saying this, but for me the basis of politics is to try to make a difference and to find solutions to problems. So many of the aims and objectives that we in this room all share are completely concurrent with those of the charitable sector, so it is inevitable that on many of the issues we try to address and change, charities will feel just as strongly and passionately as we do. They will try to influence us because we are in a position of power to make decisions.

[Mr Wilson]

I would appreciate it if the hon. Lady gave me three quick evidence-based examples of charities being stopped from pursuing issues on behalf of their beneficiaries. I hope that her party has given examples to Lord Hodgson to show where that has already happened. It would help me and other Conservative Members to understand.

[Anna Turley]

I gave examples during my speech. I will be happy to resurrect them on Third reading and to submit them. Going back to the point about the independence of student unions, a university in my area cancelled a hustings because it was extremely cautious. It had sought expensive legal advice and did not proceed because it was not sure that it was sufficiently meeting its charitable status in the number of people and different parties it was inviting. That is a clear example from my constituency.

The 2014 Act is a classic incumbency piece of legislation from a political party that has gone far from its roots and become immersed and entrenched in Government, pulling up the drawbridge and becoming separate from the ideals that drive politicians and the sector. I believe that it is incumbent on all political parties, but particularly in Opposition, to listen right through to the day of a general election to the challenges that civil society sets out to us, its problems with the policies we make and how it exposes to us the challenges facing society. We do not have all the answers, but it is important that, as I said, right up to the day of a general election we continue to listen. That Act had, as the sector has identified, a clear effect on its ability to do that.

[Anna Turley]

I thank my hon. Friend because she is absolutely right. Every political party comes into Government with the best ideals—we heard from the coalition that they would be the most open, transparent and accountable Government ever. Suddenly the fear sets in, and when they start to hear from the public things they do not like it is easy to pull up the drawbridge. We are seeing that with a range of measures from the Government.

Turning briefly to badgers—we have heard a lot about them today; I am very fond of them. I have not seen the email, but despite what Government Members have said, I am still struggling to understand the issue—[Interruption.] The Minister sighs in despair. I will try to explain and perhaps he will show some tolerance for those of us who are struggling to keep up.

If a charity has aims and objectives such as saving badgers, it might write to all political parties setting out what it would like to see in their manifestos, setting out its aims, ambitions and aspirations. One of those political parties might write back saying, “Fantastic; we love badgers too. We want to put that in our manifesto and to have an event to launch it. We want it to be part of our rural ambitions.” Would it not be understandable if that charity engaged with that political party, attended events, and discussed, debated and challenged that manifesto to promote its cause?

[Mr Wilson]

indicated dissent.

[Anna Turley]

The Minister shakes his head, but I do not know why that is unacceptable. I admit that I do not know the individual case, so I cannot comment on the specifics, but judging by what has been set out, I do not have a fundamental problem with a charity that emails its members to advise them to go to a political event. It could advise them to go to three party events—if another party had accepted its views on badgers, it would have done the same thing with that party. This is about putting badgers first—badgers before politics.

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[Anna Turley]

Please do. To go back to the hon. Gentleman’s point, I am delighted for his sake—if not for ours—that so many of his constituents voted Conservative, but if many of them care passionately about badgers and see such measures in the Labour manifesto and not the Conservative manifesto, surely they can challenge that party’s views, because views can be changed. There will always be things that a political party stands for that we will disagree with—I am sure that many of us on both sides of the Committee feel that. Things are not set in stone and this measure does not seem inflexible and against the grain. I am happy to explore that case in more detail, but I remain to be convinced.

[Mr Wilson]

In the spirit of co-operation that we have had in the Committee, perhaps I can help the hon. Lady. The Charity Commission will send her a copy of its report on the Badger Trust so that she can see the details of the case. I hope that will help inform her for Third Reading and Report.

[Anna Turley]

I very much appreciate that, but, on the principle set out, I do not see an explicit problem with a charity emailing its members about attending a meeting of a political party. That is my baseline, but I look forward to hearing more about that case, because I cannot make a decision without seeing all the details.

I want to make another comparison. Many charities attend political party conferences to lobby, influence and try to shape political thinking. Many of them will say, “Actually, we can’t afford to go to every party conference,” so they may go to only one, whether that of the party in government or in opposition or the party that most shares its views on whatever its issue of the day is—I will not say badgers again. Is it at odds with its political neutrality if it attends just one party conference to try to influence and shape thinking? Those are difficult issues for charities to think about.

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[Anna Turley]

I am sure that Members will be sick of my voice today, not the Minister’s! I rise to speak in support of new clause 3 and, for ease, I will also speak to all the new clauses in the group. New clause 3 would ensure that independent schools that wish to benefit from charitable status engage actively with local communities and state schools with a view to sharing resources and facilities. Again, I must pay tribute to the noble lords in the other place who supported the new clauses, particularly Lord Moynihan, sports Minister under Margaret Thatcher and chairman of the British Olympic Association between 2005 and 2012. For that reason, I was surprised to hear the new clauses criticised as “prejudiced and outdated” by the Secretary of State for Education in the media last night.

The vast majority of independent schools in this country—more than 2,000—benefit from charitable status, meaning that independent schools are effectively publicly subsidised by taxpayers whose children do not attend such schools to the tune of £700 million a year in the form of charitable rate relief. Charitable status for private schools may have made sense when many were established prior to the introduction of compulsory education. Many of them were set up to educate “poor and indigent boys”. Harrow, for example, was set up as a grammar school by instinct of charity to educate the needy, but the world has changed.

Seventy years ago, after the Education Act 1944, Conservative Education Minister Rab Butler reflected:

“The public schools are saved and must now be made to do their bit.”

I argue that that bit has not been sufficiently done. Sadly, despite the fantastic work taking place in many of our state schools and the strong investment and reform programme put in place under the previous Labour Government, which transformed state school achievement, the reality is that the gap is still too broad.

Independent schools remain one of the most significant bulwarks of social inequality in this country and continue to entrench privilege and hamper social mobility. Young people from independent schools, who make up 7% of their age group, take up nearly 50% of the places at Oxford and Cambridge, with the subsequent statistical likelihood of earning more and being more likely to be in professional employment within six months. Within the professions, 71% of senior judges, 62% of our senior armed forces and 55% of civil service departmental heads attended independent schools, compared with just 7% of the population.

[Mr Wilson]

I want to be clear about the case that the hon. Lady is making. It is certainly not in the new clause, but is she saying that she is an opponent of independent schools and that they should be abolished? It would be helpful to understand that.

[Anna Turley]

I appreciate the Minister’s intervention. I am a realist and a pragmatist in all things. I recognise the huge contribution made to this country by many independent schools, faith schools and other schools that would not necessarily be my first choice for my children. I am not advocating their abolition, but rather that they should deliver over and above what they currently do and justify taxpayers’ money supporting them through their charitable status.

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[Jo Churchill]

That is not actually the case. With the extension of provision to two-year-olds and three and four-year-olds, there will be considerably more than I was granted.

After many years as a school governor at a high-achieving secondary school in the state system and a primary school for those with special educational needs, I believe that independent schools have to abide by the obligations placed on them, and the Charity Commission is there to do a job. To prescribe their behaviour further is not only unnecessary but may well force small specialist schools out of existence due to the red tape and cost of administration. It is nothing to do with what they deliver.

These proposed new clauses are ill considered and should be rejected. They will not give any of us what we all desire, which is an excellent education for all our children, so they become well rounded individuals who can contribute to society and have an equal chance of doing what they wish.

[Mr Wilson]

I start by congratulating my hon. Friend on her excellent speech, which was clearly based on an enormous amount of personal knowledge. I also thank all Members of the Committee for their contributions over the past four or five sittings. We have had an excellent Committee stage, where we have given the Bill a rigorous check on what it should and should not do. I look forward to Third Reading and Report.

I agree that we should do more to promote stronger partnerships between independent and state schools. Where I differ from Opposition Members is in how we go about that. We should recognise that many strong partnerships already exist, as my hon. Friend and other hon. Members have said, and they are growing in number and impact.

Before I go into detail, I want to clear up a point the hon. Member for Redcar made about Lord Moynihan’s views. Lord Moynihan actually agreed with us that encouraging charities to do more to share facilities was a better approach than legislating to force them to do so. That ought to be on record so as to make clear Lord Moynihan’s views.

[Peter Kyle]

When I was an adviser at the Cabinet Office I had the benefit of working on the 2006 Charities Bill, later the Charities Act 2006, which brought in the public benefit test. We discussed public schools then and considered drafting and implementing an amendment not dissimilar to the new clauses at that stage of legislation. At that point, we had representations from independent schools, which strongly said that they would improve community relations and that self-regulation and actions from within the sector would deliver demonstrable change. Can the Minister tell the Committee the degree by which the sector has improved in the intervening years and whether that will extend further without the need for legislation?

[Mr Wilson]

I thank the hon. Gentleman for that point. I will come to it later in my speech, rather than deal with it up front.

There are both principled and practical reasons why legislating to force charitable independent schools to do more is wrong and could be counterproductive. Let me start with the principled argument against these new clauses. Public benefit is a requirement at the centre of the definition of a charity. All charities, regardless of their size or charitable purpose, must exist for public benefit. Public benefit itself is not defined in statute, but has a meaning given by a body of case law that has been built up over several hundred years, which sets out clear principles but gives the definition the flexibility needed to deal with a wide range of types of charities. The way in which a charity demonstrates its public benefit and the extent to which it does so is for its trustees to decide, taking into account the circumstances of the charity and other relevant factors. It is not for the Charity Commission to interfere unless charities fail to meet the requirement.

An Upper Tribunal ruling in 2011 set the parameters for charitable independent schools. Public benefit must be real and not tokenistic, but beyond that it is not for the Charity Commission to dictate to schools the type or amount of public benefit they provide. That should be a matter for the trustees of the charity, who must take into account the charity’s circumstances.

There is a wide range of ways in which charitable independent schools can and do provide benefits, including academic partnerships with state schools, sharing sporting or other facilities and expertise, and providing bursaries and other financial assistance to those who cannot afford the fees. There is also the important indirect benefit of relieving the taxpayer of the cost of educating 7% of the nation’s children. It is for the trustees to determine the way in which their charity provides a public benefit. The law places the decision on which approach or combination of approaches the charity takes in the hands of the charity’s trustees.

It would be wrong to single out one type of charity in legislation and stipulate one particular type and the extent of public benefit that it must provide. No other type of charity is treated in that way, and it would set a very dangerous precedent. What would be next? Religious charities, overseas aid charities or campaigning charities? Once the precedent has been set, the risk is that the temptation to interfere would be too great for some to resist, and specific legislative requirements could creep in over the years for different types of charities. If unchecked, there is a real danger that over time charities would be opened up to significantly increased state interference—whether or not politically motivated—which could seriously undermine the charity sector’s independence. In this Committee, all parties have sought to protect the independence of charities and trustees.

[Anna Turley]

On the point about setting a precedent, the difference is that independent schools provide a service over and above state provision. There is statutory universal provision, but people choose to go in over and above that and send their children to independent schools. We should question the right of those schools to receive taxpayers’ money. It is a unique situation in education, so we cannot simply say that it would set a precedent.

[Mr Wilson]

As I said, parents pay for education at independent schools, which relieves a huge burden on the state. It is very easy to dismiss the fact that private schools provide more than 500,000 places, but as I said to the hon. Lady earlier in our proceedings, abolishing independent schools would immediately create the huge problem for the state of how to educate those children.

[Anna Turley]

There is a short-sighted financial view about the cost of educating children and the saving to the state sector of educating children in the independent sector. We are dismissing some of the value that those children, their parents and families would put back into the state system, were they to be educated there. One should not see children simply as a financial burden on the state; they will contribute greatly to the state system.

[Mr Wilson]

I worry that the hon. Lady, along with a number of Opposition Members, has a mindset that the independent sector is better than the state sector. That might have been true under a previous Labour Government, but state schools have improved enormously under this Government. It is important to make the point that independent schools do not necessarily offer a better, more advantageous education for our young people than state schools any more. That view is being degraded year by year by the reforms and protected investment that we have put into our education system. It is very sad that the Opposition do not recognise or welcome that.

[Anna Turley]

May I take the Minister up on that point? He has made a sweeping statement that is not the case. He does a disservice to the reforms made by the Labour Government under the Building Schools for the Future programme—since cancelled—following 18 years of neglect that left many schools with leaking roofs. He does a disservice to our record. Why does the Minister think people send their children to independent schools, if there is no difference from the state sector? What is it that they are paying for?

[Mr Wilson]

There are many different reasons why people send their children to independent schools. I would not like to intrude on the decisions that families make up and down the country for the good of their children. Some may base the decision on distance, if they live in a rural area and the school is close.

[Anna Turley]

They do it for advantage.

[Mr Wilson]

If the hon. Lady is painting the situation as simply one of privilege, she is straying into territory she should not stray into. Many independent schools offer bursaries and many other ways to ensure that people who cannot afford to send their children are able to do so. We might want to pick up on that debate outside the Committee.

What is currently meant by public benefit has been determined by the courts over several hundred years. While not perfect, the current case law definition has served us well and we start interfering with it at our peril. In addition to our principled objection to these proposed changes, there are practical reasons why we do not support them. Over recent years, many independent schools have embarked on successful partnership projects with local state schools. Those have arisen from local needs and reflect good relationships between head teachers in the state and independent sectors. Forcing schools into particular types of partnership will not work in the long term and could undermine much of the good work that has already been done.

Legislation is not needed to make those partnerships happen. They are already happening and are growing in number. In answer to the earlier question from the hon. Member for Hove, according to the Independent Schools Council, 93% of its member schools—1,073—are already involved in partnerships with state schools. Of those, more than 900 are involved in sporting partnerships, more than 600 in music partnerships, almost 600 in academic partnerships, about 400 in drama partnerships and more than 200 in governance partnerships.

As my hon. Friend the Member for Bury St Edmunds said, when people think of independent schools they often think of the largest and most well known, but the reality is very different. More than half have fewer than 300 pupils, and in many cases they might have more limited resources than the local state school. For example, some may not have any sports facilities to share with local state schools. It would seem odd to legislate for something that some schools simply might not meaningfully be able to do. The measures proposed focus on sports, music, drama, arts and careers and higher education advice. They omit perhaps the most important category of partnership between independent and state sectors: academic partnerships.

Let me give an award-winning example. King Edward’s School in Birmingham aims to improve teaching and learning for pupils in local state junior schools across the city. Its outreach programme has doubled in size in each of the past three years so that the school is now in contact with more than 11,000 state-educated children and more than 450 teachers from 130 different junior schools. More than 50 members of staff and 300 pupils from the school are involved, and activities have included a city-wide maths competition entered by teams from 110 state primaries, which has proved so successful that it now hopes to run annually.

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[Wendy Morton]

I am grateful to the Minister for sharing those examples with us because they really show the breadth of partnerships that have evolved over time in different communities across the country. Does he therefore agree that the new clause would be so prescriptive—such a one-size-fits-all approach—that it would stop that really good way of working at a community level? I was brought up in an area where there was one school; the nearest school was probably about 15 miles away and there was no independent school. People like me would never have benefited from such a clause.

[Mr Wilson]

My hon. Friend makes her case powerfully. I would not seek to add anything because I agree with her. She is absolutely correct.

It is not just the largest schools with the most resources that are engaging in such partnerships. Belmont Preparatory School near Dorking has, for over a decade, provided facilities and resources for a local community pre-school music education group to meet twice a week, enabling early years children and their parents to enjoy music making and to form links between the local community and the school.

In order to show that strong partnerships already exist, the Independent Schools Council has created and is managing a “Schools Together” website that launches this month. I hope that everyone will have the chance to look at it. As well as showcasing existing examples of best practice, the website will act as a vehicle for the development of new partnerships between the independent and state sectors, enabling schools to register their interest in developing a partnership. So far, more than 175 schools have registered and reported on more than 400 partnership projects. I encourage the Committee, particularly Opposition Members, to review the growing number of projects on the website and support the development of new partnerships in their constituencies.

The ISC will undertake a census of all partnership activities and will promote partnerships among its member schools. The Charity Commission has updated its guidance on ways that trustees of charitable independent schools can ensure they run their charities for public benefit.

[Anna Turley]

We discussed earlier today what happens when self-regulation fails. Does the Minister have in mind a framework of what improvement he would like from the sector? At what point will he intervene or look for some kind of back-up powers, as we discussed today, to try to ensure that further activity is made?

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[Mr Wilson]

As the hon. Lady knows from the contributions made in the Lords, an agreement was reached on what independent schools will be doing. That agreement will need time to bed in, to ensure that it can progress in an orderly way. We have no intention of introducing any back-up powers, for the reasons I have stated; in principle and in practice, the hon. Lady’s proposals simply would not work. I expect independent schools to do more through partnerships, as I said at the start of my speech.

The updated guidance encourages trustees of charitable schools to comment on their individual approaches to public benefit in sport, drama, music and other arts in their annual report, and the guidance includes new examples of sharing sporting facilities. The commission also gives new examples relating to the sharing of sports, arts and music facilities in its example of a good trustees’ annual report. The ISC has disseminated new guidance to its member schools.

The commission has committed to follow up with a research project that will begin in 2017, when enough time will have elapsed to assess the impact of the new “Schools Together” initiative and the updated guidance provided by the commission. That research will draw upon data from charitable schools’ annual reports, as well as aggregated data that the ISC collects through its annual report. The terms of reference will be developed by the commission with input from the ISC, and a report of the research will be published in 2017, which will enable us to get a much clearer picture of the extent of existing and new partnership activities between the independent and state sectors.

I have been encouraged by the willingness of the ISC and its member schools to engage constructively in this debate, and I expect that many people will be surprised by the volume of partnership activity that is already taking place between the independent and state sectors but that has perhaps gone unreported in the past. The ISC is keen to showcase best practice and to encourage more such partnerships, and it has shown its commitment through its actions. An inflexible legislative solution is the wrong approach and could damage the good will that exists in the independent sector. The best partnerships are not forced but evolve through local needs and provide mutual benefits. We should welcome the ongoing work to nudge and encourage such partnerships, but we should not make them a legal requirement.

To recap, there are several good arguments, both in principle and in practice, for not pursuing these new clauses. I therefore hope that hon. Members will decide not to press the new clause further.

[Anna Turley]

The Minister has been extremely generous with his time in responding to all our interventions, so I will not delay the Committee much further. I will just make a small point in conclusion. I appreciate that there are many examples of good partnership, which is to be encouraged, but words such as “nudge” and “encourage” are a little disappointing. Given that schools receive a financial rebate from the taxpayer, taxpayers have a right to expect some benefit from those schools. The pace has been positively glacial, so I am not convinced by the Minister’s arguments. However, we will not press the new clause to a vote today, but we may well reconsider it on Third Reading. We are not convinced that there has been sufficient progress that anything other than a statutory power will do anything to compel independent schools to justify the money they get back from the British taxpayer.

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Bill, as amended, to be reported.