Charities Bill [HL] Report 21:38:00 Clause 12: Power to borrow from
permanent endowment Amendment 1 Moved by 1: Clause 12, page 13,
line 37, at end insert— “(4) In section 348 (regulations subject to
affirmative procedure etc)—(a) in subsection (1), after paragraph
(c) insert—“(d) regulations under section 285(3) (power to amend
period or multiplier specified);”;(b) in subsection (2), for “or
(c)” substitute “, (c),...Request free
trial
Charities Bill [HL]
Report
21:38:00
Clause 12: Power to borrow from permanent endowment
Amendment 1
Moved by
1: Clause 12, page 13, line 37, at end insert—
“(4) In section 348 (regulations subject to affirmative procedure
etc)—(a) in subsection (1), after paragraph (c) insert—“(d)
regulations under section 285(3) (power to amend period or
multiplier specified);”;(b) in subsection (2), for “or (c)”
substitute “, (c), (d)”.”Member’s explanatory statement
This amendment provides for the power to make regulations added
by Clause 12 to be subject to affirmative resolution
procedure.
The Parliamentary Under-Secretary of State, Department for
Digital, Culture, Media and Sport ( of Whitley Bay) (Con)
My Lords, I rise to speak to Amendment 1 in my name. As this was
a Law Commission Bill, scrutinised through the Special Public
Bill process, I thank the noble Lords who sat on the Special
Public Bill Committee which examined it, chaired ably by the
noble and learned Lord, . It consisted of my noble
friends , , and , the noble Lord,
, and the noble
Baronesses, Lady Goudie and Lady Barker, and was ably assisted by
our clerk, Alasdair Love. I thank them and all those who gave
evidence to the committee.
Amendment 1 responds to an amendment tabled by the noble and
learned Lord, , in Committee. I am grateful
to him for his suggested amendment, and for the time that I have
had to consider the policy behind it. The Government accept that
the two thresholds in Clause 12—to vary the proportion of
permanent endowment which may be borrowed, and the period over
which such borrowing must be repaid—are of a different nature
from the other financial thresholds contained in the Bill. Those
other financial thresholds are concerned with monetary sums. They
set the level at which it is appropriate for trustees to make
their decision independently, or for the Charity Commission to
oversee that decision. We maintain that in relation to the powers
to vary those financial thresholds, and thus change where that
balance is to be struck, the negative resolution procedure
provides a proportionate level of parliamentary scrutiny.
However, Clause 12 does not indicate where regulatory
intervention is required in the same way. It does not set out
monetary sums. Instead, it places a percentage limit on how much
a charity can borrow from its permanent endowment and specifies
the period over which such borrowing must be repaid. Therefore,
any variation of these thresholds has a slightly different
implication. The financial thresholds elsewhere in the Bill can
be adjusted to reflect changes in the value of money. By
contrast, any amendment of the Clause 12 thresholds would not be
about changes in the value of money.
We have carefully considered the various arguments regarding the
right level of parliamentary scrutiny in relation to these
powers, including the fifth report of the Delegated Powers and
Regulatory Reform Committee of your Lordships’ House. We have
been persuaded that it is appropriate for an additional level of
parliamentary scrutiny to be put in place for any future changes
made to the thresholds in Clause 12. Amendment 1 would therefore
require any variation of the maximum proportion of permanent
endowment from which a charity may borrow, and the period over
which any such borrowing must be repaid, to be subject to the
affirmative resolution procedure rather than the negative
procedure. We consider that this amendment will help to maintain
the balance between protecting donors’ funds and wishes and
providing flexibility for trustees to make the best use of
opportunities to fulfil their charitable purposes.
As a result of this change to Clause 12, it is also necessary to
make consequential amendments to Clause 39 of the Bill. I will
briefly explain these amendments. Amendment 1 inserts subsection
(1)(d) into Section 348 of the Charities Act 2011 to confirm that
any amendment to the delegated powers in Clause 12 is subject to
the affirmative resolution procedure. Later in the Bill, Clause
39 makes other amendments to Section 348 of the Charities Act
2011. The Clause 12 amendment to Section 348 means that the
wording in Clause 39 needs to be rearranged. Amendments 5, 6 and
7 are consequential amendments to change references to
subsections in Section 348 to accommodate Amendment 1. I beg to
move.
(Lab)
My Lords, we support these government amendments. The Minister
has explained them very clearly. I have nothing to add. He is
just following up on recommendations in the fifth report of the
Delegated Powers and Regulatory Reform Committee.
Amendment 1 agreed.
Amendment 2
Moved by
2: After Clause 36, insert the following new Clause—
“References to the Tribunal
(1) In section 325 of the Charities Act 2011, in subsection (2),
for “with the consent of the Attorney General” substitute “where
the Commission has given the Attorney General 28 days’ notice of
its intention to make such a reference”.(2) In section 326 of the
Charities Act 2011, in subsection (1), at the end insert
“provided the Attorney General has given the Commission 28 days’
notice of his or her intention to make such a
reference”.”Member’s explanatory statement
This amendment implements the Law Commission’s recommendations
that the Charity Commission should not be required to obtain the
consent of the Attorney General before making a reference to the
Tribunal and vice versa.
(Con)
My Lords, the hour is late—later than any of us would wish it to
be. In the famous phrase of Mr Jeremy Clarkson, it is time to put
the pedal to the metal. Before I do, I thank the noble Lord,
, and the noble
Baroness, Lady Barker, for their putting their names to this
amendment. The noble Baroness has tested positive for Covid and
cannot be here tonight. I am sure that I speak for the whole
House in wishing her a very speedy recovery.
The only other preliminary remark I wish to make is addressed to
the Minister, who has struggled mightily to find a way through
this particular problem. However, I am afraid that he has been
impaled—as I have—on what I can only describe as the obduracy and
inflexibility of the Attorney-General’s Office. With that—to
horse!
21:45:00
When I undertook the review of the Charities Act for the
Government 10 years ago, it was brought home to me that there was
a fundamental flaw at the top of the regulatory structure. This
comes about because under Section 325 of that Act, the Charity
Commission, the sector’s regulator, cannot—and I mean
cannot—approach the charity tribunal for a ruling on a point of
law unless it has first obtained the permission of the
Attorney-General. This has a number of serious consequences,
which were brought out to me in evidence I gathered for my
review.
First, there is not a clear chain of responsibility and command:
an important issue in regulating a sector as diverse as the
charity sector. Secondly, this divergence of control can
undermine the authority of the commission and prevent it
obtaining clarity in the development of charity law. Thirdly, and
most unattractively, there is a possibility that rich, powerful
and well-connected charities will think it possible to take on
the commission in the hope that the Attorney-General will provide
cover for them later. Those were the points made in favour of
sorting this out.
However, there was a contrary point, which was that the
commission should not be permitted to go running off to the
tribunal too frequently. Therefore, when I made my
recommendation, I said that while the veto of the
Attorney-General should go, the Charity Commission had to inform
the Attorney-General and join the Attorney-General in any case it
wished to take to the tribunal. Therefore the veto went, but in
no way could the Attorney-General be blindsided.
Although my report was well received by the Government and by the
sector, this recommendation was rejected. However, the Government
passed the report to the Law Commission and asked it to consult
on whether it could form the basis of a Bill. The Law Commission
did so and produced a report, and the Bill tonight is largely the
result of that consultation. The Law Commission also produced a
report, and in recommendation 43 of that report it supported the
conclusion that I had reached. It produced—very much more
elegantly—wording to cover this particular point, and it is that
wording which forms the basis of Amendment 2 tonight. It is not
my wording—it is the Law Commission’s wording.
However, the Government again rejected the Law Commission’s
recommendation. What were the reasons for the Government not to
accept its recommendation? First, they said that the
Attorney-General’s consent was
“an important element in the system”—
but they did not say quite how it was important. The second
argument is that the Attorney-General’s consent assists him in
fulfilling his duties to protect charitable interests. I would
argue that the Attorney-General has a role in protecting all the
law, including charity law, but that if he intervenes in
charitable law, this unilateral power may serve not to protect
charity law but to risk confusing it.
The final plank of the Government’s argument is that this is very
rarely used—it has been used only three times—and therefore it
does not really matter about the Attorney-General because it is
such a rare occurrence. The reality is that a matter that gets to
the Charity Tribunal must be one of the most sensitive, important
and critical issues of charity law, and therefore the role of the
Attorney-General remains highly relevant. So I ask the House to
hold in its mind briefly the basis for my in-principle objection
to this. I now turn to how this power has been used in
practice.
One of the first references was about private schools. The House
will readily understand the difficulties that surround charitable
status, public benefit and fee paying. It was always rumoured,
and has now been confirmed, that in this case the
Attorney-General asked the Charity Commission if there were any
questions that it wished to be asked at the tribunal. The
commission sent in a list of questions but, extraordinarily, the
Attorney-General did not ensure that all these were asked. I ask
myself whether this is a way that the Attorney-General is showing
proper support for the charity regulator and helping to obtain
clarity in charity law.
The second case is that of the Royal Albert Hall. It is one of
our great public institutions and home to many important events
in our cultural and other calendar, such as the last night of the
Proms and the Festival of Remembrance, familiar to all Members of
your Lordships’ House. It is a charity built by subscription in
Victorian times. The subscribers received, in response to their
money, seats in perpetuity to concerts in the hall. Since clearly
not every subscriber will want to go to every concert every
night, they arranged a system for the seats to be resold through
the Royal Albert Hall box office with a 10% handling charge—face
value less 10%. That is known as the TRS or ticket return
scheme.
A few years ago, the seat-holders decided that there was a more
profitable way of doing this and that they could sell their seats
not through the Royal Albert Hall box office but through
third-party websites. In Committee, I explained that tickets for
an Eric Clapton concert in May 2022 with a face value of £175
were selling for £1,185. If your taste is for the Beach Boys, a
ticket for the concert on 24 June next year with a face value of
£85 is selling tonight on viagogo for £185. And so on.
As a result, this has become pretty profitable. It is alleged
that pre-pandemic—I will come back to the pandemic in a
minute—seats were earning between £10,000 and £20,000 a year and
changing hands for £150,000 each. I need to make it very clear
that I have no objection to seat-holders seeking to make the best
use of their private property. The right to enjoy private
property is a cornerstone of a civil society. Seat-holders take a
risk when they buy their seats. I do not suppose that being a
seat-holder in the Albert Hall in the last couple of years has
been particularly profitable, although I have to tell that House
that the hall did get a £20 million repayable loan from the
Culture Recovery Fund which will have helped it deal with the
short-term liquidity problems.
However, as I said a moment ago, the Royal Albert Hall is a
charity and is governed by a board of trustees. There are 25 of
them and 19 are elected by the seat-holders—so 75% of the
governing body that decides ultimately which seats should be
reserved for seat-holders, and which should be let go, are
seat-holders themselves. There must be a concern that the more
profitable events will be reserved for seat-holders and the less
attractive ones handed back. It was on this very narrow point
that the Charity Commission approached the Attorney-General for
permission to go to a tribunal. It was not that you should not be
able to be a seat-holder but that, if you were a seat-holder and
a trustee, there was at least a possibility of a conflict of
interest which should be decided by the tribunal.
The original application on this was made over four years ago in
August 2017. During the intervening period, at six-monthly
intervals, I have probed with Parliamentary Questions to no
avail. That is how it lasted until Second Reading in the summer,
when I drew attention to this issue and subsequently tabled this
amendment. Then, quite suddenly, the walls of Jericho fell down.
The Attorney-General made up her mind—only she did not. She made
up her mind not to make up her mind. She decided to refuse the
Charity Commission permission to go to the tribunal, and did so
on the sole grounds that it “would not be in the public
interest”; no more, no less. So, after four years, she kicked the
legs from under the Charity Commission and gave no reason for so
doing. That is an extraordinary situation for the Charity
Commission—the sector regulator—to find itself in.
It has been suggested to me that, in pursuing this matter
tonight, I may undermine the position of the Law Commission and
bring its legalistic procedure into disrepute—first, on the
grounds that Law Commission Bills are not amended. Well, they are
amended; I served on a Law Commission Bill—an insurance Bill—when
the noble Lord, , who is not in his place
tonight, moved and carried an amendment. Secondly, there are the
grounds that new material should not be introduced to the Bill.
My amendment is not new material; it is a Law Commission
amendment in a Law Commission Bill, word for word what the Law
Commission suggested.
Thirdly, it was suggested to me that I should not have been
surprised that the Attorney-General would give no reason for her
decision beyond “not in the public interest” because law officers
never give details of their advice. There are a number of very
noble and learned Lords in the House tonight. I understand that,
had it been advice, it would of course have been covered by
privilege—but it was not advice, it was intervention. She chose
to intervene in this case; if she chooses to intervene in the way
that the charity sector is regulated, she owes to the regulator,
the sector and, indeed, society an explanation of the reasons for
her decision. The Law Commission’s work and procedures have a
deservedly high reputation in modernising and clarifying our law.
If the action of one Back-Bench Committee Peer should cause the
Government to throw out and abandon the whole procedure, then
matters have reached a pretty pass.
But enough of this—to summarise: the present position as regards
the relationship between the Attorney-General and the Charity
Commission is wrong in principle, and has proved flawed in
practice. The change that I put before the House tonight is
supported overwhelmingly by the sector, by trade bodies such as
the NCVO and by academic opinion. With due deference to my noble
friend on the Front Bench, the government arguments against this
change are threadbare. I beg to move.
(CB)
My Lords, I support this amendment. In view of the hour, as well
as the great clarity of the explanation given by the noble Lord,
Lord Hodgson, in moving it, I can be brief. The Charity
Commission is an expert body. It is perfectly placed to form its
own view on all the matters identified in Section 325(1)(a) and
(b) of the Charities Act 2011. The curiosity is that,
notwithstanding that rather basic fact, Section 325(2) permits
the commission to make a reference to the tribunal on these
matters, or any of them, only with the consent of the
Attorney-General.
I have two points. First, it seems to me rather wasteful for the
Attorney-General, in effect, to have oversight—indeed
control—over the decision-making of another expert body. That is
especially the case here because the subject matter of Section
325 is very far removed from the traditional territory that we
associate with the office of the Attorney-General—the
criminal-law side of which will be familiar to all Members of
your Lordships’ House. Secondly, I find it surprising that the
Attorney-General should wish to retain this power at the margin
of the regular diet of the office. One might imagine that the
Attorney-General has many other very important matters to be
thinking about, without the need to second-guess the
deliberations of the commission.
22:00:00
(Lab)
My Lords, I am very pleased to follow the noble Lord, , in supporting the noble
Lord, Lord Hodgson. I have played no part in the Bill, but, when
I saw the amendment and the background to it, I thought that it
was worth supporting at whatever time, as it were. I am not
bothered about what time it is; if we worried about the time, we
would never get any legislation done.
I am not a lawyer, and it is almost 50 years since I was a PPS in
the law officers’ department. I remember that, when I went there,
it was explained to me what law officers did and did not do and
how they were different from other Ministers. In this case, it
seems to me—again, as a non-lawyer—that the Attorney-General is
operating as a supervising Minister, not a law officer. That is a
completely different function.
I have not checked, but, if I remember rightly, the Charity
Commission is nominally still a department. It is not some quango
that is too big or a body that is of no significance; it is one
of, I think, 21 non-ministerial departments. I do not know how
many other regulators that we think are doing their job on behalf
of the public and Parliament are actually hemmed in by this kind
of power. Twice I have put forward proposals for a Select
Committee on regulators, because no one looks at regulators
systematically in Parliament to check that what they do is what
is says on the tin and to see what the difficulties are. We wait
for the odd scandal to come, and then there is a Select
Committee—that is not good enough.
With this one, the fact of the matter is that the
Attorney-General is not, and cannot operate as, a law officer. It
is the role of a supervisor. I have been in six government
departments: I know the difference between a Minister supervising
an external body, developing its own policy, and coming up
against the law officers. There is a difference, and in this case
it is absolutely clear that the Attorney-General is not operating
in the formal structure as a law officer.
If it is the Law Commission, we are used to hearing the other
place say, “Oh, don’t bother about that. It’ll get nodded
through. We can trust it. It’ll have done all the homework”. You
do not do the time, simply because that is what the Law
Commission is there to do. I cannot see any damage to it from
this. This is a Law Commission Bill, and, as the noble Lord, Lord
Hodgson, said, he has used its report to construct the amendment.
There has got to be a better reason. It is no good the
Attorney-General hiding behind the law officer role when she is
not performing that role. That bears some scrutiny, but of course
we cannot do that in this place; it will require someone in the
other place.
My final point is on the regulators, which we have to trust.
There are a lot of regulatory bodies. The top 20 or 30 regulators
look after billions of pounds of other bodies’ expenditure.
Parliament delegates that role to those regulators.
The Charity Commission is a regulator; it is an awkward one, in
the sense that the uniformity of charities is crazy. There are
some 180,000 charities and the top 2% or so are probably dealing
with half the money—there are loads of tiny charities which do
not get a look in. When you get something such as the example of
the Royal Albert Hall, raised by the noble Lord, Lord Hodgson,
and which I am aware of from previous debates, you cannot ignore
it. It is not right for Parliament or the regulator to ignore
that—it is a failure of public duty. Therefore, the Minister will
need to have better reasons than those given in the past for
opposing this.
It is actually quite easy as a Minister at the Dispatch Box when
you have an open and shut case such as this. I fully admit that I
did it only twice in eight years when I was on that Bench in this
House, but you can report back to the boss in the department:
“Well, they were all against me; we were going to lose; it uses
Government time; it was easier to accept the amendment because it
was overwhelmingly agreed to”. You can do that, and if they are
cheesed off with it, they can alter it down in the other place,
because it is an open and shut case. So I invite the Minister to
try it out; it can work. You can accept an amendment at the
Dispatch Box on the strength of the debate and survive as a
Minister, and the amendment can strengthen the Bill. That is what
we are here to do.
(LD)
My Lords, we on the Liberal Democrat Benches fully support this
amendment in the name of the noble Lord, Lord Hodgson. When I
heard the story of the Albert Hall that he outlined, there was
only one thing I could say: “Land of Hope and Glory”. It seems to
me that there is no justification for the way in which the
Attorney-General acted in this case, without giving any proper
reason. I did a bit of research to see what the published
response of the Government was to the report of the Law
Commission. No satisfactory reason for the need for the consent
of the Attorney-General was given.
Because of the time, I will not delay your Lordships any longer,
but it seems that the noble Lord, Lord Hodgson, should be
congratulated, not only on this amendment but on all the work
that he has done in this field and the report that he brought
forward.
(Lab)
My Lords, the view of the Labour Party, the official Opposition,
is that we will abstain if this amendment is put to a
Division.
I heard the speeches of the noble Lord, Lord Hodgson, at Second
Reading, in Committee and on Report. He makes a very strong case,
which he has made again today. As my noble friend said, the traditional way that
both Houses deal with Law Commission Bills is to essentially nod
them through. That was, and is, the agreement between the usual
channels regarding this Bill as well. However, the best that I
can do for the noble Lord, Lord Hodgson, is to abstain, because
there is merit in the underlying preceding agreement which the
usual channels have had. That is the reason I take a different
view from the noble Lord, Lord Thomas, who has expressed his
support for the amendment.
We on these Benches will be abstaining. I will leave it to the
Minister to make his own case.
of Whitley Bay (Con)
I thank my noble friend for tabling
this amendment and for outlining the case again. Before I respond
to it, I certainly associate myself with the comments of the
noble Lord, , that my noble
friend should be congratulated on all his work in this field. The
Bill we are debating tonight is in very large part the result of
his long-standing interest and considerable work in reviewing
charity law.
On this issue, we have from the outset been at odds: where my
noble friend sees obduracy, I see consistency. The noble Lord,
, is absolutely right: we can
amend these Bills, even in the Law Commission procedure—we have
just made some amendments in the previous group—but what is
important is that we proceed on the basis of consensus and avoid
areas of political disagreement. On this, the Government have
been clear from the outset that we were not minded to accept the
single recommendation from the Law Commission; and my noble
friend has been equally consistent that he thought it was an
important one. But we have made clear throughout the passage of
the Bill our position on the role of the Attorney-General and the
value placed on the Attorney-General’s oversight of references to
the tribunal.
With respect to the noble Lord, , and his advice that I take
this away: I have taken it away and discussed it with the
Attorney-General and her office on numerous occasions through the
passage of the Bill so far, and I have had some helpful
discussions with my noble friend, the noble and learned Lord,
, who is the chairman of the
Special Public Bill Committee, and others, but our position
remains as my noble friend Lord Hodgson knows it. Let me explain
why that is.
Section 326 of the Charities Act 2011 provides the
Attorney-General with the power to refer to the Charity Tribunal
any question involving
“the operation of charity law in any respect, or … the
application of charity law to a particular state of affairs.”
The Charity Commission has an equivalent power to make a
reference to the tribunal where the question has arisen in
connection with the exercise by the commission of any of its
functions, but only with the consent of the Attorney-General
under Section 325(3). These rights were considered by Parliament
during the passage of the Charities Act 2006, which now appear in
the consolidated 2011 Act, and it was agreed that this provision
was necessary. The Attorney-General has an historic duty, on
behalf of the Crown, to protect charitable interests in England
and Wales. The Attorney-General’s consent for references to the
charity tribunal is an important element in the system of checks
and balances which should not be removed.
My noble friend says the Government have not made clear what
specifically the Attorney-General’s role is. It is part of the
Attorney-General’s role to assess whether a referral to the
tribunal is in the interests of the public. This oversight also
provides a second pair of eyes in ensuring that the costs
associated with such a referral are not put on charities or on
the public unnecessarily. So the Attorney-General works alongside
the Charity Commission and provides a second opinion on referrals
to the tribunal.
While this particular consent function is narrowly drawn, it is
only one tool in a wider portfolio for performing her
constitutional role as defender of charitable interests in the
wider public interest. The Attorney-General’s wider role means
that she has a unique perspective and is able to take into
account considerations of societal issues and the wider
repercussions for charities. In recent years, we have had
Attorneys-General in both your Lordships’ House and another
place. As such, the Attorney-General’s oversight reaches beyond
charity law and regulation.
It should be remembered that the reference procedure is a unique
declaratory power which enables the Charity Commission and the
Attorney-General to seek rulings on what might be hypothetical
questions. Outside this procedure, hypothetical questions are
rarely entertained by the courts, for good reason. It is
therefore right and proper that a public interest consideration
is applied in the exercise of this unusual procedure. The value
of the Attorney-General’s unique perspective has been recognised
and commented on by the courts.
With this in mind, the Government oppose my noble friend’s
Amendment 2, which would do away with the Attorney-General’s
consent function altogether. We believe that by removing this
mechanism completely, an important part of the Attorney-General’s
oversight of charity law would be lost. So my noble friend will
not be surprised to hear me say again that I am afraid we still
disagree on this issue, as we did at the outset, and I would hope
that he may yet withdraw his amendment.
It is important to note how rare these cases are. The Charity
Commission and the Attorney-General have worked together on two
references that the Attorney-General has made to the tribunal
since the 2006 provisions were put in place, and there has been
only one reference that the Charity Commission has sought the
Attorney-General’s consent to pursue, which the Attorney-General,
as my noble friend outlined, refused to give earlier this year.
That is the context we find ourselves in for this debate.
22:15:00
(LD)
Is it not the case that, if the amendment were to pass, the
Attorney-General would have the power to intervene at any stage
in the public interest if the public interest became involved? I
do not see why she has to give her consent before the reference
to the tribunal can be made.
of Whitley Bay (Con)
That consent function, my Lords, is something the Government
consider important; it is part of the assessment of whether it is
in the public interest for the reference to the tribunal to
begin, with all the costs and time that it would involve. That is
part of the reason why the Government cannot accept my noble
friend’s amendment.
While supporting the Attorney-General’s role, we are also aware
of concerns raised by noble Lords regarding the time taken for
the Attorney-General to make a decision on whether to grant
consent in the particular case to which my noble friend referred.
His amendment is grouped with Amendment 4 in the name of the
noble and learned Lord, , which provides that the
Attorney-General must make her decision on an application for a
reference to the tribunal within 60 days, otherwise consent would
be deemed to be given. His amendment also requires that the
Attorney-General publish a comprehensive statement explaining the
reasons for any refusal of consent.
Regrettably, however, the noble and learned Lord’s amendment does
not acknowledge that there may be good reasons beyond the
Attorney-General’s control that require additional time in her
decision-making. There may be times, for instance, when a case
requires further information to be submitted, either by an
individual charity or the Charity Commission, to enable the
Attorney-General to make a fully informed decision. There may be
mediation under way between parties involved which needs to
conclude before a decision can be made, or a case could be
particularly complex and require further investigation and
deliberation. Given how complex these rare cases normally are, a
strict 60-day time limit following which consent is automatically
given would amount to the effective removal of the
Attorney-General’s consent function by the back door. I have
outlined the reasons why we do not agree that the consent
function should be removed. Doing it in that way would also be
inappropriate.
It is regrettable that a decision on whether to grant consent to
a reference in the case involving the Royal Albert Hall took so
long, but one complex case does not justify a change in the law.
I thank once again my noble friend Lord Hodgson and the noble and
learned Lord, , for his Amendment 4.
(Lab)
I just want to be clear about this. I fully take on board the
point that it is one case, but the Attorney-General is in a
different position to other Ministers. With other Ministers, we
can get access to their diaries, what meetings they have had, so
we can see who has lobbied them. How do we know who, if anybody,
lobbied the Attorney-General during that period of nearly four
years? How do we know that, with the Attorney-General being
unlike other Ministers?
of Whitley Bay (Con)
My Lords, the Attorney-General is a Member of Parliament.
Previously, they have been Members of your Lordships’ House; the
current Attorney-General is a Member of another place. She is
therefore subject to the same parliamentary scrutiny and the
methods available to Members in another place to ask her those
questions. This is a reflection of her particular role, but she
is not a remote person; she is a Member of Parliament who can be
asked questions. She makes her view known, as she has in this
case, but we do not think that this case alone should warrant a
change in the law.
(LD)
Does the Attorney-General claim the same prevention of disclosing
that there is when she gives advice to the Government for when
she gives or refuses consent under this provision? If it is
different, why has she not given more reasons for it in the case
of the Albert Hall?
of Whitley Bay (Con)
My Lords, no, I do not think that the Attorney-General claims
client confidentiality in the same way. Her role overseeing
charity law is part of her function as parens patriae. However,
we think that it is important to maintain the consent function.
As I have said, she is a Member of Parliament, so these questions
could be posed to her.
The Attorney-General has set out her reasons why she does not
think it would be in the public interest for reference to be
made. Noble Lords may disagree with that, and they may ask her
about that, but I reiterate that I do not think that one case,
however long or complex it may be, should warrant a change in the
law. It is for that reason that I hope my noble friend may yet
withdraw his amendment.
(Con)
My Lords, this has, as ever, been an interesting debate and I am
very grateful to the noble Lords, , and , for their support
and, indeed, to the noble Lord, Lord Ponsonby, for the half-loaf
that he offered. I am very grateful for that as well.
I do not propose to go on about this. My noble friend has talked
about the oversight of charity law. I think we have seen what has
been happening with the oversight of charity law. The noble and
learned Lord, , produced quite an elegant
half-loaf of a 60-day limit and a requirement to explain because
the Attorney-General is performing a declaratory, not an
advisory, role, which we discussed. The Attorney-General cannot
even make that move to help a past Master of the Rolls with his
elegant diplomatic solution.
It is late. Let us finish. If your Lordships support my
amendment, you are voting for transparency, clarity and sunshine.
If you vote against it, I am afraid you are voting for obscurity,
obfuscation and concern that charity law may not be developing as
even-handedly as it should. I have now been on this case for 10
years. I owe it to all the people who have been to talk to me,
who say that this needs to be sorted out, that on this occasion I
wish to test the opinion of the House.
Division 3
14/12/2021 22:22:00
Division on Amendment 2
Ayes: 18
Noes: 81
Amendment 2 disagreed.
22:34:00
Amendments 3 and 4 not moved.
Clause 39: “Connected person”: power to amend
Amendments 5 to 7
Moved by
5: Clause 39, page 29, line 20, leave out “(c)” and insert “(d)
(inserted by section 12)”
Member’s explanatory statement
This amendment is consequential upon the amendment of Clause 12
in the name of of Whitley Bay.
6: Clause 39, page 29, line 21, leave out “(d)” and insert
“(e)”
Member’s explanatory statement
This amendment is consequential upon the amendment of Clause 12
in the name of of Whitley Bay.
7: Clause 39, page 29, line 23, leave out “for “or (c)”
substitute “, (c) or (d)”” and insert “after “(d)” (inserted by
section 12) insert “or (e)””
Member’s explanatory statement
This amendment is consequential upon the amendment of Clause 12
in the name of of Whitley Bay.
Amendments 5 to 7 agreed.
Schedule 2: Minor and consequential amendments
Amendment 8
Moved by
8: Schedule 2, page 35, line 3, in column 1, leave out “under
section 226”
Member’s explanatory statement
This amendment removes an unnecessary reference to section 226 of
the Charities Act 2011.
of Whitley Bay (Con)
Amendments 8 to 12 are in my name. I shall outline them as
briskly as I can, and I think it makes sense for me to speak to
them in reverse order.
Amendment 12 is a concessionary amendment, responding to the
amendment tabled by the noble and learned Lord, , in Committee on 18
November. He highlighted an issue that had arisen during the
Committee’s evidence-gathering: that the Bill, as currently
drafted, does not offer the right to appeal Charity Commission
decisions made under new Sections 280A and 67A that the Bill
would insert into the Charities Act 2011. Having had time to
consider the policy and implications that lay behind his
amendment, I am happy now to bring forward this government
amendment by way of concession.
The Government agree that appeal rights should exist in respect
of Charity Commission decisions to withhold consent under new
Section 280A. New Section 280A replaces existing powers under
Sections 267 to 280 of the Charities Act 2011 for certain types
of unincorporated charities to transfer property and alter their
purposes. Two of these existing powers, under Sections 268 and
275, carry the right to appeal a Charity Commission decision to
withhold consent. It is appropriate, therefore, that an appeal
right is afforded to decisions under new Section 280A where
Charity Commission consent is withheld. This would create an
appeal right that is as close as possible to the appeal rights
connected to those sections that will be repealed and
replaced.
The Government acknowledge that affording the right to appeal
Charity Commission decisions to withhold consent under new
Section 280A, and not to extend that appeal right to cover
decisions to give consent, is not exactly matched to the
equivalent appeal rights given to charitable companies and
charitable incorporated organisations under Sections 198 and 226
of the Charities Act 2011. It is, however, consistent with the
existing appeal rights under Sections 268 and 275 of the 2011
Act.
These types of amendments that require Charity Commission consent
for unincorporated charities under new Section 280A are wider
than for charitable companies and charitable incorporated
organisations. It is important also to note that the new power
under new Section 280A is broader than the existing powers for
unincorporated charities. The right to appeal Charity Commission
decisions to withhold consent under new Section 280A will
therefore be a slightly broader appeal right than at present.
There is operational concern that any wider broadening of appeal
rights to cover both the giving and withholding of consent would
not be proportionate for the tribunal and the Charity Commission.
In a similar vein, this concern is echoed in the suggestion to
introduce what would be a completely new right to appeal Charity
Commission decisions under new Section 67A, which allows trustees
to apply funds from a failed or surplus fund-raising appeal for
new purposes. Where those funds exceed £1,000, Charity Commission
consent is required.
Decisions regarding the use of funds from a failed fundraising
appeal can often involve internal disputes within a charity, and
these cases are generally low-risk for the sector at large but
can be contentious for individuals. There will often be one party
left disgruntled with whatever decision the Charity Commission
makes. Opening up new appeal rights in respect of these decisions
is expected to invite a disproportionate administrative burden on
the Charity Commission and the tribunal, given the types of
issues usually at stake in such decisions. The context of a
charity using funds from a failed appeal for different purposes
is also a narrower decision to be taken by trustees and is less
likely to have the same impact as a charity changing its general
purposes.
Sections 280A and 67A should not, therefore, be treated in the
same way. A judicial review is considered the most appropriate
route to challenge a Charity Commission decision under Section
67A. Amendment 12 therefore inserts the right to appeal Charity
Commission decisions under new Section 280A, where consent is
withheld, into Schedule 6 to the Charities Act 2011. It does this
by inserting paragraph 8(c) into Schedule 2 to the Bill.
Amendments 9, 10 and 11 shift some wording around in order to
accommodate Amendment 12. Without these very minor changes,
Amendment 12 would not make sense.
Finally, I speak to Amendment 8. In reviewing the Bill to draft
these concessionary amendments, it was noticed that paragraph 2
of Schedule 2 refers to “Section 226” twice, unnecessarily. In
the interests of avoiding using unnecessary words—which is a good
lesson for this hour of night—this amendment removes those
superfluous words from the Bill. This is purely a drafting change
for tidying-up purposes.
I hope noble Lords will agree that this amendment and the
consequential amendments which accompany it are appropriate and
necessary for the reasons I have set out. I beg to move.
Amendment 8 agreed.
Amendments 9 to 12
Moved by
9: Schedule 2, page 35, line 25, leave out “omit”
Member’s explanatory statement
This amendment is consequential upon the amendment in the name of
of Whitley Bay at page 35,
line 29.
10: Schedule 2, page 35, line 26, at beginning insert “omit”
Member’s explanatory statement
This amendment is consequential upon the amendment in the name of
of Whitley Bay at page 35,
line 29.
11: Schedule 2, page 35, line 28, at beginning insert “omit”
Member’s explanatory statement
This amendment is consequential upon the amendment in the name of
of Whitley Bay at page 35,
line 29.
12: Schedule 2, page 35, line 29, at end insert—
“(c) after that entry insert—
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|“Decision of the Commission to withhold consent under section
280A(7) in relation to an amendment of the trusts of an
unincorporated charity.|The persons are—(a) the charity trustees
of the charity, and (b) any other person who is or may be
affected by the decision.|Power to quash the decision and (if
appropriate) remit the matter to the Commission.”|
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Member’s explanatory statementThis amendment would enable an
appeal to the Tribunal in respect of a decision of the Charity
Commission to withhold consent under section 280A(7), as inserted
by Clause 3.
Amendments 9 to 12 agreed.
|
