European Council
Wendy Morton Excerpts(8 years ago)
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The Prime Minister
As regards Eurojust, Europol and the European arrest warrant, those will be matters for the negotiations, but I have made it very clear that we want to retain our security co-operation, not just on counter-terrorism matters but on matters relating to crime.
Wendy Morton (Aldridge-Brownhills) (Con)
When we triggered article 50, it was very clear that a new immigration regime would be required. Does my right hon. Friend agree that it was therefore entirely sensible and appropriate to discuss the cut-off date with the EU Commission?
The Prime Minister
I absolutely agree with my hon. Friend. New immigration rules will be brought in in the UK for those people who move from the EU to the UK after we have left. It is entirely right and sensible that, in part of the negotiations, we discuss the cut-off date for EU citizens who are here.
Debate on the Address
Wendy Morton Excerpts(8 years ago)
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The Prime Minister
No, I am not going to do so. I am conscious that I have taken a significant number of interventions, and I shall make progress so that other Members can rise to speak.
I have said that we will protect rights and protect people at work as we leave the European Union—and, indeed, as we see changes in the employment structure in our economy. What we will not do is follow the economic prescriptions of the Labour party. There is absolutely nothing fair about punitive tax rises that lead to fewer jobs, lower wages and higher prices for ordinary working families. There is nothing fair about racking up debts for our children and grandchildren to pay. The only Government people can trust to build a stronger and fairer economy is a Conservative Government.
I have mentioned a fairer society. I want Britain to be a genuine great meritocracy, where everyone has a fair chance to go as far as their talent and hard work will take them. That is about ensuring that everybody plays by the same rules, that every child has access to a good school place, and that the right technical education is there. The measures in the Queen’s Speech will help to do that, but they will also deal with some of the injustices in our society.
The draft domestic violence and abuse legislation will provide a statutory definition of this hideous crime and ensure that robust protective orders are available and that victims get the justice they deserve. I hope that this measure will be able to command support across the whole House. Many in this House have for many years championed the cause of dealing with domestic violence, and I hope that they will be able to join us in supporting this legislation.
Wendy Morton (Aldridge-Brownhills) (Con)
As the Prime Minister is very aware, victims of domestic violence are the direct victims but also the oft-forgotten indirect victims such as children. Can she reassure us that steps will be taken to support those indirect victims too?
The Prime Minister
My hon. Friend makes a very fair point. One of the problems over the years has been that all too often people have looked at the immediate victim or survivor of domestic violence and forgotten, for example, that it is not just a question of whether children have not seen something happening; they know what is happening and are affected by it. We will be looking at that issue.
Oral Answers to Questions
Wendy Morton Excerpts(8 years, 2 months ago)
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Hywel Williams (Arfon) (PC)
Wendy Morton (Aldridge-Brownhills) (Con)
Mrs Sheryll Murray (South East Cornwall) (Con)
Guto Bebb
The hon. Gentleman again highlights the negativity that surrounds the issue, but it is a negativity that I do not recognise, that is not recognised by businesses in Wales and that is certainly not highlighted by the investment decisions made by businesses in Wales. Businesses in Wales are investing and are looking to a global future. We will secure the greatest possible access to European markets, although we are also looking to global trade deals that will ensure Wales is part of global growth as well as maintaining European markets.
Wendy Morton
Wales has huge potential in terms of exporting and trading opportunities, and the Department for International Trade is an important tool for companies in Wales that are looking to expand overseas. How are the Minister and his Department ensuring that Wales is central to the work of the Department for International Trade?
Guto Bebb
The Department for International Trade is a crucial component of the way in which we support Welsh businesses, and the Wales Office is working closely with that Department. We had an export conference in Cardiff on 6 March, which was extremely well attended, and the opportunities available to Welsh businesses, both within the European Union and globally, were highlighted. That meeting was a huge success.
Oral Answers to Questions
Wendy Morton Excerpts(8 years, 3 months ago)
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Ben Gummer
I profoundly apologise to the hon. Lady if we have not responded in time. It is very important to me that we respond courteously and quickly to Members, and I shall chase up the matter immediately and make sure that she gets a proper response.
Wendy Morton (Aldridge-Brownhills) (Con)
Ben Gummer
It is worth remembering that it was Margaret Thatcher who made it possible for local councils to conduct their hearings in public, which is something that we now take for granted. That is why we need to continue this if we are to reinforce the relationship between citizens and the public bodies that serve them.
Record Copies of Acts
Wendy Morton Excerpts(9 years, 2 months ago)
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Wendy Morton (Aldridge-Brownhills) (Con)
I rise to support my hon. Friend the Member for North Wiltshire (Mr Gray), who has been fighting the good fight to maintain the 1,000-year tradition of using vellum for the printing and preservation of Acts of Parliament. I confess that I have a vested interest: I successfully took a private Member’s Bill through this place and it became an Act of Parliament. However, you will be pleased to hear, Mr Speaker, that there will be no jokes about Peter Pan and Wendy this evening.
When I first came to this place, I was—I often still am—bemused by its many traditions, but they are an integral part of everything that makes this place the mother of all Parliaments. The use of vellum is one such tradition. In a world of fast-moving technology, which we have heard about this afternoon, and of improvements in printing and processing techniques, and document storage, I agree that it is only right to review the practices for printing record copies of public Acts. Some might call me a dinosaur, but I do not think that there is anything wrong with holding on to a tradition of history.
Printing on vellum is a long-standing tradition. Record copies of public Acts have been printed on vellum since 1849. Vellum is far more durable than paper, even archival paper. Without vellum, as we have heard, we would not have Magna Carta, the Domesday Book, the Lindisfarne documents or many other important historical documents.
Time is pressing, so I will conclude my comments there, except to add that the anticipated savings do not justify a departure from this long-standing tradition. Although the world is, indeed, changing, it is important that we do not lose some of our great traditions, so we should not let the use of vellum simply die out.
Panama Papers
Wendy Morton Excerpts(9 years, 3 months ago)
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The Prime Minister
The Chancellor’s family firm is exactly the sort of manufacturing small firm we want to encourage in our country. For many years, I gather, it has not been making a profit, but I am glad that the company is doing well and now paying a dividend—that is something we should welcome. Its tax matters are entirely a matter between the company and the Inland Revenue, and that is the way it should be.
Wendy Morton (Aldridge-Brownhills) (Con)
I join other Conservative Members in welcoming the Prime Minister’s statement this afternoon. When he meets world leaders in London this May for the first global anti-corruption summit, will he press them to agree actions to expose corruption, wherever it exists?
The Prime Minister
It is good that we are having this summit. As I am writing in a document that will be released before the summit, no country, no politician—no one—can claim that they have a perfect and unblemished record in this regard; all countries are battling against these problems, as we did in the House of Commons with the problems of expenses and all the rest of it. However, I want to encourage people, and the Prime Minister of Afghanistan and the President of Nigeria are contributing, and they are admitting that their countries are rife with corruption and it needs to be dealt with. The problem is that, if nobody actually stands up and talks about these issues and sets out the action plans for delivering on these issues, nothing will get done.
Charities (Protection and Social Investment) Bill [Lords]
Wendy Morton Excerpts(9 years, 5 months ago)
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Anna Turley
My hon. Friend is absolutely right. As she has ably demonstrated, charities have a long-established role in educating, informing the public, campaigning and securing positive social change throughout our history.
Wendy Morton (Aldridge-Brownhills) (Con)
Use of such terms can seem a little bizarre, but does the hon. Lady not agree that charities can already make representations, including to us as Members of this place? One of the big things about charities is that they have a special ethos that drives their work and activities. I therefore cannot understand why we should support new clause 3.
Anna Turley
It is quite clear that the charitable sector felt that the 2014 Act prevented them from being able to pursue exactly the aims that the hon. Lady sets out. We in this House share many things in common with the charitable sector, not least the effort to build a better society, so it is absolutely right that we should work together in partnership to build better policy making and to shape the kind of society that she cares about. Our new clause has not come out of thin air. We are reacting to a very bad piece of legislation, about which the sector feels extremely strongly. We want to continue to protect the sector.
Anna Turley
I completely share my hon. Friend’s view and am grateful for his supportive intervention.
Charities themselves have set out their concerns, including the fact that the scope of the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 is very broad. They are concerned that the legitimate day-to-day activities of charities and voluntary organisations that engage with public policy will be caught by the rules and that a number of regulated charities, voluntary organisations and other groups will be substantially affected. They feel that the Act is incredibly complex and unclear, and that it will be difficult for charities and other voluntary groups to understand whether any of their activities will be caught, giving rise to the risk that campaigning activity will be discouraged.
Charities also feel that the 2014 Act gives substantial discretion to the Electoral Commission, creating an unnecessary and burdensome regulatory regime and possibly leaving charities, voluntary organisations and the Electoral Commission open to legal challenge. The legal opinion provided to the National Council for Voluntary Organisations by election law experts suggested that the rules were so complex and unclear that they were
“likely to have a chilling effect on freedom of expression, putting small organisations and their trustees and directors in fear of criminal penalty if they speak out on matters of public interest and concern”.
The 2014 Act stopped charities campaigning—they say so themselves—and caused unnecessary cost and confusion, according to a report by the Commission on Civil Society and Democratic Engagement, which looked at its effect on last year’s general election. Drawing on evidence from UK charities and campaign groups, the commission found that charities were faced with confusion about
“the ambiguity of the definition of regulated activity.”
The commission states that as a result of that,
“many activities aimed at raising awareness and generating discussion ahead of the election have not taken place.”
A representative of the World Wide Fund for Nature told the commission:
“I think the Act has created an atmosphere of caution within parts of our sector. It has also wasted time in terms of analysis of it, explaining it to Trustees, staff etc. It is not…a piece of legislation we need.”
Greenpeace told the commission:
“We were meant to be participating in a huge cross-NGO campaign, but all apart from a couple of the organisations ended up not campaigning during the general election period leaving us with not enough partners to run the campaign.”
The Salvation Army stated:
“As we are not traditionally a campaigning charity we were not in danger of exceeding the top limit. However, we were wary of supporting causes that could be considered coalition campaigning because we felt the administrative cost would be excessive and we couldn’t control the level of spending.”
The Commission on Civil Society and Democratic Engagement also found that voluntary groups undertaking Government contracts regularly faced threats to remain silent on key Government policies. Many neglect to speak out on issues that are plaguing society, for fear of losing funding or inviting other unwelcome sanctions.
Anna Turley
I am afraid that I am nearly at the end of my speech, so I will finish.
The lobbying legislation looks to many in the sector too much like another deliberate and shameless act by a Government who are too scared to debate their record or to be open to scrutiny and challenge. The health of our democracy depends on people’s right to campaign on the issues they care about. The 2014 Act was an attack on our democracy. It limits the rights of charities to fight for important causes. It has left expert organisations that have a vital contribution to make to public debate unsure whether they are allowed to speak out. We seek to protect the right of charities to have a loud and respected voice in our democracy. I commend new clause 3 to the House.
Wendy Morton
I join the hon. Member for Clwyd South (Susan Elan Jones) in thanking the many charities that do fantastic work and that we often speak about in this place. We all have many examples that we have often shared with each other.
I welcome the Bill, and it is a privilege to speak today, having spoken on Second Reading and served, with other Members, as the Bill passed through Committee. I believe that it strengthens the powers of the Charity Commission and that those powers are welcome. It will strengthen and improve the relationship between the Charity Commission, charities, trustees and, importantly, the public. The Bill is, indeed, called the Charities (Protection and Social Investment) Bill.
For me, the Bill is about achieving a balance between scrutiny and accountability and trust, responsibility and respect, particularly in the wake of the handful of sad, and often tragic, stories that emerged during the course of last year, one of which has already been mentioned, the collapse of Kids Company.
I am, however, a firm believer that this must be proportionate, as I said on Second Reading. I think of some of the small charities in my constituency, such as Rosie’s Helping Hands, the Aldridge youth theatre—we often do not think of it as a charity, but it is—and, on our doorstep, St Giles hospice. Such charities are often led by the local community and by local people. Local people contribute their time, effort and energies as well as their money, and they give something back to the local community.
I want to speak against some of the amendments, particularly new clause 3 on the power to make representations and amendment 8 on warnings, which I will deal with first. The Bill is at its heart about transparency and restoring trust in the eyes of the public. That is why I feel that the power for the Charity Commission to place on record where warnings have been given is important, and that is why I will vote against amendment 8.
New clause 3 is about the power to make representations, which we have had a lively debate on in Committee and again today. We should remind ourselves of the following two points. First, deliberate abuse of charities has been found to occur only very rarely. The vast majority of charities do good work and are reputable organisations; we must never forget that. We must also remember that charities can, and do, make representations already, often very successfully. As I have said before, all of us as Members of Parliament receive representations from many charities during the course of our work. But there is a difference between non-political campaigning to raise awareness of a particular issue, even if the aim is to change policy or legislation, and what is being proposed in this new clause. I firmly believe this Bill is about strengthening the public’s trust in charities, and for me the idea of enshrining in legislation through this new clause the right to undertake political campaigning activity completely undermines that.
Wendy Morton
I am normally very generous in giving way, but I have almost come to the end of my speech, so I will conclude.
New clause 3 risks moving what is fundamentally the apolitical activity of a charity to something that becomes completely politicised, and that goes against the grain.
Charities (Protection and Social Investment) Bill [ Lords ] (Fifth sitting)
Wendy Morton Excerpts(9 years, 6 months ago)
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Anna Turley
I am going to make some progress; I am sorry. We are going to run out of time.
As I said in response to the comments of the hon. Member for Tonbridge and Malling, charities’ fears have been realised. The Act did stop charities from campaigning—they say so themselves—and caused unnecessary cost and confusion, according to a report by the Commission on Civil Society and Democratic Engagement, which looked into its effect on last year’s general election. Drawing on evidence from UK charities and campaign groups, the commission found that charities were faced with confusion about the
“ambiguity of the definition of regulated activity”.
As a result of that, the commission says,
“many activities aimed at raising awareness and generating discussion ahead of the election have not taken place”.
A representative of the World Wildlife Fund told the commission:
“I think the Act has created an atmosphere of caution within parts of our sector. It has also wasted time in terms of analysis of it, explaining it to trustees, staff etc. It is not…a piece of legislation we need.”
An anonymous large non-governmental organisation told the commission:
“The Act meant we didn’t undertake some of the activities we planned. Also, joint campaigning was tough as many organisations were very nervous about the Act and (therefore) watered down their activities, meaning our ability to campaign in the run-up to the election was severely hampered.”
Greenpeace told the commission that it had intended to participate in a “cross-NGO campaign”, but that all but a couple of organisations ended up not participating due to the general election period, leaving Greenpeace without enough partners to run the campaign. The Salvation Army said that although it was not traditionally a campaigning charity and therefore not in danger of exceeding the top limit, it was still wary of supporting causes that
“could be considered coalition campaigning because we felt the administrative cost would be excessive and we couldn’t control the level of spending”.
The report stated that 12.5% of the organisations surveyed reported taking no part in coalition campaigning because of the Act, while a further 12.5% substantially reduced and 31% slightly reduced their involvement in coalition campaigning. The commission also stated that it had seen
“no evidence to substantiate the claim that the Lobbying Act was needed to avert undue influence on elections”.
I am afraid the lobbying legislation looks to many in the sector too much like a deliberate and shameless act by a Government scared to debate their record or to be open to scrutiny and challenge by the third sector. A Government who seek a big society and a strong civil society must not be afraid of one of the most fundamental aspects of such a society: freedom of speech and to hold the Government of the day to account.
Wendy Morton (Aldridge-Brownhills) (Con)
I am grateful to the hon. Lady for giving way, because she has taken a lot of interventions. We need to remind ourselves that charities already make representations to Government on behalf of the public and of the many valuable causes that people promote and hold dear. Does she not agree that the new clause would risk fundamentally undermining that very relationship of trust, which we are seeking to strengthen in the Bill? Charities often value their independence from Government and politics.
Anna Turley
I disagreed with everything until the hon. Lady’s last point. Charities totally value their independence. Previous legislation has sought to stifle their independence and to prevent proper challenge and scrutiny of Government in the build-up to an election, but the new clause seeks to protect that.
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.
Charities (Protection and Social Investment) Bill [ Lords ] (Second sitting)
Wendy Morton Excerpts(9 years, 7 months ago)
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Mr Wilson
I will certainly ask the Charity Commission to make sure that the hon. Gentleman has those figures; I hope that that will happen by the end of my comments, but if not, it will be straight after. [Interruption.] That is quite impressive—I thank my officials. I can tell the hon. Gentleman that there will be one or two such occasions a year.
The new power in clause 7, which I admit is quite a straightforward power, will enable the Charity Commission, in the context of a statutory inquiry, to act to transfer any remaining assets of the charity under inquiry to another charity with the same charitable purposes, something the commission can already do under its existing powers, and then—this is the new provision—direct that the empty shell of the charity be wound up, which it cannot currently do. This power will be rarely used by the Charity Commission. The commission estimates it will be exercised on only one or two occasions each year, as I have just said, and it is subject to a range of safeguards.
The power to direct winding up will only be available in the context of a statutory inquiry and where the commission is satisfied that there is misconduct, mismanagement or risk to charity property. The commission must be satisfied that the charity does not operate or that its charitable purposes could be more effectively promoted if it were to cease to operate and that the exercise of this power is
“expedient in the public interest.”
As I have said several times, all the Charity Commission’s powers must be exercised in line with the commission’s duty in section 16 of the Charities Act 2011, which requires the commission to have regard to the principles of best regulatory practice, including the principles by which regulatory activities should be proportionate, accountable, consistent, transparent and targeted only at cases in which action is needed. So there is a high bar for the commission to make the case for winding up following an inquiry.
The commission is required to publish details of a proposed winding-up order and to invite representations from any interested party. The commission must take into account any representations it receives before making the order to direct winding up. In most cases, the commission will be expected to allow 60 days for the making of representations before it can make the order. It can shorten that period when it considers it necessary to make the order sooner to prevent or reduce misconduct or mismanagement, or to protect the charity’s property or property that may come to the charity. An order directing the winding up of a charity can be appealed to the tribunal by its recipient and the charity’s members, so ensuring proper judicial oversight.
The clause will enable the commission to direct the charity’s trustees, officers or employees to take action to wind up that charity. The commission itself cannot wind the charity up, as that would involve the commission acting in the administration of the charity—something that it is prohibited from doing by law. The Joint Committee welcomed the proposed winding-up power, saying:
“We are persuaded that the power to direct the trustees of a charity to wind it up in certain circumstances and transfer resources elsewhere would only be used in rare circumstances and that, in such circumstances, the Charity Commission would use it sparingly, given its significance. We therefore support the inclusion of clause 6 of the draft Bill”—
as it was then—
“subject to an amendment setting out the publication scheme for a notice of intention to direct the winding up of a charity.”
We amended the draft Bill to include the requirement to publish a notice and consider representations, as recommended by the Joint Committee.
Let me give the Committee an example of where this power could be used. The commission has information suggesting that one of only two trustees was acting while disqualified. The finances were being grossly misrepresented, funds were being misappropriated and the commission had been given false or misleading information. It reported its concerns to the police, highlighting potential criminal offences. The disqualified trustee left the charity, leaving only one trustee, who was unable to explain the position. The remaining trustee was potentially vulnerable and had not been privy to the disqualified trustee’s actions. The commission found that the charity had been used for years to personally benefit the disqualified trustee, who was later convicted and imprisoned for theft. It had applied only nominal amounts for its charitable purposes. The commission decided to remove the charity from the register, as it was not operating, but the remaining trustee did not take action to wind up the charity. The commission does not have the power to force the trustee to do so and cannot do so itself. In such cases, the use of the proposed power would clarify the position, provide for the proper application of assets and ensure that the charity could not later restart operations with a risk of further abuse. Although its use will not be common, I hope the Committee will agree that this will be a useful tool in the Charity Commission’s armoury.
Mr Wilson
Clause 8 should be fairly uncontroversial and, although I do not want to pre-empt the Committee, a fairly short one for us to consider. The clause amends an existing Charity Commission power in section 85 of the Charities Act 2011, which allows the commission to direct the application of charity funds or property when the person holding it is unwilling to apply the property for the charity’s purposes and the commission considers it necessary or desirable to make the order to secure the proper application of the charity’s property.
The purpose of the clause is to extend the power and enable the commission to make an effective direction in cases where the person holding the charity property may be willing but unable to apply the charitable property. The most commons example of this problem is considered to be where financial institutions, such as banks, hold a charity’s property but are unable to comply with a commission direction to transfer that property because to do so without the consent of authorised account signatories would result in a breach of their contract with the charity for which the bank could be held liable.
For example, a number of charities subject to a class inquiry ceased to operate but funds remained in their bank accounts. The commission’s powers relating to dormant accounts could not be used until a certain time had elapsed and there was a risk that the remaining funds could be misapplied by individuals on the mandate. Before the commission could use the power as currently worded, it had to establish that a number of banks were unwilling to apply the funds without an order of the commission. The banks were willing to apply the funds but were unable because of their contractual obligations to the account signatories. Amending section 85 to include “unable” as well as “unwilling” would allow the situation to be resolved swiftly and satisfactorily and the charitable funds to be properly applied for their charitable purposes.
Wendy Morton
I am grateful to the Minister for sharing with us some examples of what the Bill will mean in practice, as he did in our discussion of the previous clause. Does he agree that the clause includes some sensible and proportionate measures that, in the round, are all part of helping to restore the trust that charities have in the public domain?
Mr Wilson
My hon. Friend makes a very good point. The clause is partly about restoring trust. It is also about making the Charity Commission work better and more efficiently and focus its funds on the areas where it can really make a difference—day in, day out. She is absolutely right.
Other barriers may make a person unable to comply with a commission direction of this type, such as restrictions in the charity’s governing document, which may prevent otherwise willing trustees or members from complying with this type of commission order because they are legally unable to do so. The Joint Committee recommended that we consider the inclusion of some form of statutory protection for a financial institution in cases where compliance with the direction from the commission in those circumstances might constitute a breach of its contract with a charity. The clause seeks to remove any obstacles by allowing the commission’s direction to overcome a contractual obligation owed to a charity.
Importantly, clause 8 continues to provide the specific, statutory protection for a financial institution—or, for that matter, any person holding the charitable property—in cases where compliance with the commission’s direction in those circumstances might constitute a breach of its contract with the charity. It is always important to consider the practical application of legislation and the clause will help the Charity Commission make use of the existing power more effectively.
Charities (Protection and Social Investment) Bill [ Lords ] (First sitting)
Wendy Morton Excerpts(9 years, 7 months ago)
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Wendy Morton (Aldridge-Brownhills) (Con)
It is a pleasure not only to serve under your chairmanship, Mrs Main, but to serve on the Committee and to support the Bill, which is both welcome and necessary. I want to speak both about clause 1 and in general support of the Bill.
As has been mentioned, charities do fantastic things across the country, both nationally and locally. We regularly hear of examples of their inspirational work. In my speech on Second Reading, I made reference to the great north run and I am always struck by the general public’s generosity and support for charities. I am sure we can all cite good examples from our constituencies of the work of charities and trustees. Small charities play a huge role in our local communities, providing vital services over and above those offered by the public sector. These small organisations, like larger charities, often make a big difference to the lives of individuals and their families.
Trust and confidence are vital in the charity world. Sadly, the high-profile charity crises that make it into the newspapers and on to TV can damage trust in charities. It is therefore important that we do all that we can to maintain and strengthen that trust.
Wes Streeting
The most high-profile case that is on all our minds is of course that of Kids Company. Given the heavy interaction between Kids Company, the civil service and Government Ministers at the highest levels, at what point does the hon. Lady imagine that the Charity Commission might have issued a warning notice if Ministers failed to spot the problem?
Wendy Morton
Kids Company is one of the charities that sadly did make it in to the newspapers and on to our TV screens and it has been debated in the House. It is an example of why the public’s trust is so vital. The Bill demonstrates the importance of having an effective charity regulator and strengthening the powers of the Charity Commission to protect charities from abuse. Clause 1 focuses in particular on trusts and trustees and the issue of warnings. That is the right and appropriate thing to do. We will move later to the additional powers to spend and to remove trustees. In doing so, it is important that we recognise that deliberate wrongdoing is rare. It may be unlikely that the new powers are used many times, but let us hope that they are not.
Tom Tugendhat
My hon. Friend is making a powerful case. Does she agree that having the powers on the statute book is part of the persuasion that allows them not to be used?
Wendy Morton
Absolutely. I was about to say that it is important that we have the powers to protect and safeguard charities and their reputations and to maintain the trust of the public, on whose generosity they depend. That also helps trustees, who usually do their job out of the goodness of their hearts, often for a cause that is close to their hearts. They deserve that trust, respect and support.
It is understandable that the mention of additional powers can raise concerns. It is important to ensure that smaller charities are not disproportionately affected. I do not believe they will be, but that is something to be mindful of. It is equally important to reassure the public that charities are more accountable and, in particular, that large charities are transparent about their fundraising and their activities.
In conclusion, in our drive to maintain and strengthen public trust in charities, we should be mindful that the Bill is helping, not hindering. I therefore support it and hope that clause 1 will stand part of the Bill.
Mr Wilson
It is a great pleasure to serve under your chairmanship, Mrs Main. This is a Bill on which there is a great deal of consensus across the House. I think we all accept that the regulatory powers of the Charity Commission needed to be brought up to date, to support the regulator in tackling cases of abuse in charities.
The Bill has already been through significant scrutiny. The previous Government first published their proposals for public consultation just over two years ago, in December 2013. Those followed criticism of the Charity Commission’s powers by the National Audit Office and were based on proposals put forward by the commission itself. There was broad support for the measures from charities, particularly small ones, although some measures received mixed reactions from charities and their representative bodies.
The proposals were refined as a result of consultation and a draft Bill was published in October 2014. The draft Bill was subjected to extensive pre-legislative scrutiny by the Joint Committee on the Draft Protection of Charities Bill, ably chaired by Lord Hope of Craighead, a former deputy president of the Supreme Court. I pay tribute to its detailed scrutiny, which led to a number of improvements and refinements being made. We should also note that the Bill has already been considered in detail in the other place, in a largely collaborative and consensual way. That, too, led to sensible refinements to the Bill. I very much hope that we can continue working together in that spirit of cross-party consensus on most aspects of the Bill for the benefit of the Charity Commission and the public.
Before moving to clause 1 and the amendments on official warnings, I want to make three more general points. First, I repeat what I said on Second Reading: the vast majority of charities are run well by decent, honest people who selflessly want to do good for the benefit of others. When considering these powers, it is important to remind ourselves that they will help to protect public trust and confidence in charities generally and will target only the minority involved in abuse.
Secondly, I want to place on record my thanks to the staff and the leadership at the Charity Commission, who are transforming the commission into a modern, proactive, risk-based regulator and who will use the new powers in a targeted and proportionate way. I was pleased to see that, when the National Audit Office returned to the commission just a few months after publishing its report, it found that it had made “good, early progress” against all its recommendations. That progress is down to the effective leadership and hard work of everyone at the commission.
The third point is an overarching one relating to the Charity Commission’s duty to act in line with the principles of better regulation, human rights and equalities duties, some of which have already been raised. These all require the commission to carefully consider a number of factors when exercising its powers. The duty is set out in section 16(4) of the Charities Act 2011:
“In performing its functions the Commission must, so far as relevant, have regard to the principles of best regulatory practice (including the principles under which regulatory activities should be proportionate, accountable, consistent, transparent and targeted only at cases in which action is needed).”
The Charity Commission also has a published risk framework that explains this regulatory approach to protecting the public’s interest in charity and how it assesses risks and manages its resources. The commission’s risk framework sets out the criteria it uses to determine whether it should open a statutory inquiry and where it is likely to use its temporary and/or permanent powers. In assessing regulatory issues that come to its attention by whatever means, the commission needs to be as sure as it can that the facts are correct and that it does not act on a false or unproven premise. It relies on information as evidence in its case work when making decisions.
The commission also has to act fairly and needs to be able to explain its actions to trustees and those directly affected by its decisions when it exercises legal powers. The commission may be called to justify its actions by the first-tier tribunal for charities or by the court. In doing so, the commission needs to show that its action has been taken on the basis that relevant issues have been properly considered. In assessing information and deciding to use it, it is important that the commission acts fairly and consistently in line with the principles set out in its guidance. The commission also considers its decision-making, as it is bound to, in accordance with the relevant statutory duties, namely those relating to the best regulatory practice, proportionality, human rights, the Equality Act 2010 and wider public law considerations.
I will now turn to clause 1 before responding to amendment 2. I will also try to respond to all the issues that hon. Members have raised during the wider debate on clause 1. The clause gives the Charity Commission an important new power to issue an official warning. This is one of the most important new powers in the Bill and is considered to be a normal power in the toolbox of modern regulators. It is already a staple tool of other regulators, such as the Care Quality Commission, the Financial Conduct Authority, the Pensions Regulator and the Solicitors Regulation Authority, to name a few.
An official warning could be issued to a charity trustee or to the charity itself where the Charity Commission considers there to have been a breach of trust or duty or other misconduct or mismanagement. The power would enable the Charity Commission to publish a warning, which it has said it would do in most cases. The commission has also said that it would not publish all warnings. The decision to publish would be in line with its current policy on publishing the announcement of statutory inquiries, which depends on whether publication is in the public interest. The Charity Commission would not publish an official warning if it considered that it would not be in the public interest to do so.
The Charity Commission does not expect to use the power too often. It is hard to put a precise number on it, but the commission estimates that it would be in the dozens of warnings each year, rather than the hundreds. Let me give two examples of when the Charity Commission might consider issuing an official warning—let us remember that these are low-level activities. One example is when a charity is consistently a little late in submitting its accounts. An official warning would remind the trustees of the seriousness of their non-compliance. We recognise that this is already a criminal offence, but it is rarely investigated or prosecuted as such. An official warning would be a much more proportionate response to encourage trustees to rectify the position.
The second example is when a charity makes unauthorised payments to a connected company or payments that benefit a trustee. If the size of the sums involved meant that it would be disproportionate for the Charity Commission to take firmer action, it could issue an official warning on future conduct. As one would expect, the power is subject to a number of important safeguards.