HC Deb 12 March 1958 vol 584 cc476-500

5.45 p.m.

Sir Lionel Heald (Chertsey)

I beg to move, in page 1, line 12, to leave out "public benefit" and to insert: benefit of the community or an appreciably important class or section of the community".

Mr. Deputy-Speaker (Sir Charles MacAndrew)

I think that it would be convenient to take with this Amendment the Amendment in the name of the hon. Member for Norwich. South (Mr. Rippon), in page 2, line 7, at the end to insert: or of some appreciably important section of the community".

The Attorney-General (Sir Reginald Manningham-Buller)

The Amendments raise two distinct points, Mr. Deputy-Speaker. I should have thought that it would be much more convenient to the House if they were dealt with separately.

Mr. Deputy-Speaker

I am in the hands of the House. I am merely given my instructions. If the House wishes to discuss the Amendments separately, so be it.

Sir Hugh Lucas-Tooth (Hendon, South)

On a point of order. Will you indicate the Amendments which you are going to call, Mr. Deputy-Speaker? There seems to be some overlapping.

Mr. Deputy-Speaker

I propose to call the Amendment in the name of the hon. Member for Hendon, South (Sir H. Lucas-Tooth), in page 2, line 5, after "circumstances", to insert: other than the circumstance of their employment by a particular employer". I understand that the hon. Member for Norwich, South does not propose to move the Amendment in page 3, line 4, to leave out from "time" to "so" and to insert: before the seventh day of December, nineteen hundred and fifty-seven".

Sir L. Heald

The House will remember that in Committee our discussions were slightly curtailed because there was some misunderstanding as to the length of time which the proceedings were likely to occupy. Some very important matters were due to be taken next, and we were very glad to defer consideration of the point covered by the Amendment. We had in mind that we should be giving the Government an opportunity to consider the points raised by several hon. Members, and we thought that that would facilitate matters.

Unfortunately, any expectations that we might have had that there would be opportunity for discussion and consultation have come to nothing. We have not been given the opportunity of having any discussion. That is a pity, and it may be one reason why we have to deal with the two Amendments separately. If there had been an opportunity for discussion we might have been able to clarify matters. I make those preliminary observations not by way of complaint, but rather of regret that it results in slightly lengthening our proceedings, because it will be necessary to give a little preliminary explanation of the basis and object of the Amendment.

If I read the proviso it will simplify matters. It reads: Provided that nothing in this section shall be taken to derogate from the principle that a trust or institution to be charitable must he for the public benefit. That is a very broad statement of a principle that has been adopted in matters concerned with charity. On the other hand, in recent years difficulties have arisen in interpreting the words "for the public benefit," and in the most recent case—the very case that is being dealt with to some extent in the Bill, namely, the so-called Baddeley case—there was much discussion of that principle.

What is quite clear is that in that case it was fully recognised that the expression for the public benefit "had caused a good deal of difficulty and complication over many years, and that in itself it might be regarded as not sufficiently explicit. Lord Simonds, when giving the leading opinion in the case, referred specifically to the case of Williams Trustees and the Inland Revenue Commissioners, for which he had been responsible himself to a case called Goodman and the Saltash Corporation, which was a good deal earlier and, finally, to Verge v. Somerville, in which Lord Wrenbury, delivering the judgment of the Judicial Committee, made certain observations on the point. Lord Wrenbury said that To be a charity a trust must be for the benefit of the community or of an appreciably important class of the community. That was a very important addition, because over the years there had been a great deal of argument—some of which was directed to the extent to which any class or section of the community could be the subject of a trust in the sort of circumstances with which we are concerned in relation to this Bill—that it must be for the public at large or the public as a whole. It is quite clear that it was the view of Lord Wrenbury that it was desirable to be more explicit on that point. The first reason why I ask that the words of the Amendment should be inserted in the Bill is that it is, according to the modern view and the highest authority, the proper way to state the principle. It is the way it is stated by Lord Wrenbury, by Lord Simonds in his judgment, and by Lord Reid who, in spite of that, arrived at exactly the opposite conclusion.

First, we suggest that we should make clear that Parliament is adopting the view which has been taken in these very important opinions. It is the fact, as we know—some of us from experience—that if Parliament pronounces on a matter of this kind and does not use the latest language used by the House of Lords, but, instead, uses language which appears in some earlier cases, the ground is open for ingenious persons afterwards to argue that this was intended to change matters, and intended to enact the law not as laid down in that case, but on some earlier principle.

That is why, in this case, we are concerned when we come to the next question. Here, I hope that I shall not offend, in view of what you said just now, Mr. Deputy-Speaker, and despite the objection of my right hon. and learned Friend. You, Mr. Deputy-Speaker appreciated, and I am sure you have considered this matter very carefully—we know your great knowledge of these legal subjects—that it was not really possible to explain this Amendment without going over the page into the further wording of the Clause. Perhaps, therefore, I may ask the House to look for a moment or two at page 2 of the Bill. There, we find that there is this provision which it is necessary to satisfy in order to meet the requirements of social welfare. First, the facilities have to be provided …with the object of improving the conditions of life for the persons for whom the facilities are primarily intended. There may be a discussion about that later, but for the moment we will take it for granted. Then, either one of two things have to be satisfied; first, those persons have need of such facilities as aforesaid by reason of their youth, age, infirmity or disablement, poverty or social and economic circumstances; or, on the other hand, the facilities are to be available to the members or female members of the public at large. The question in the minds of everyone concerned with these cases is in relation to the first of the two things which I have just read out. To what extent may these persons belong to a class or section or sub-division of the public rather than being all the people in the country who answer that particular description?

There are especially two divisions of people with whom we are concerned, one is geographical and the other religious. If one looks at the Baddeley case, in which, in the House of Lords, there was a diametrically opposite view taken by two of the learned Law Lords—with two of them making no contribution at all to the discussion and another deliberately abstaining from expressing any opinion—on this point there was a conflict of opinion. Both the learned Law Lords appeared to be agreed about the geographical section, that is to say, the inhabitants, provided that they otherwise satisfied the provisions as it is now proposed to be enacted. The geographical section was permissible, but regarding the religious section Lord Simonds said it was not and Lord Reid said it was.

The first thing we want to know is: what is the position under this Bill? The reason why I have referred to the part in page 2 of the Bill is that there is always the overriding provision, which is the one to which my Amendment is directed, that is to say in Clause 1, where the proviso says: Provided that nothing in this section shall be taken to derogate from the principle… If nothing is to derogate from the principle, how do we stand at the moment? Is it assumed that the principle is that geographical and religious sections may both be in, or that they are both out, or that one is in and one out? Those of us who are interested in some of these recreational charities which are necessarily confined to sections, fear that there is real danger of the Bill being construed in such a way as to cut down what we think should be the extent of the class which is permissible.

I think that this has been said before, but perhaps it has not been emphasised sufficiently. It is found, in practice, that those persons who are minded to make charities of this kind frequently prefer not to make them available to all the people all over the country who have the particular disability or whatever it may be, but to benefit a particular locality. Often it is the area where they live. We should like to be clear about that.

The other question relates to the religious aspect of the matter. There is a strong view held by people concerned with these charitable matters that if Parliament is not careful about what it is doing there is a real danger of excluding those religious sections in circumstances where it is widely held that they ought to be retained.

This Amendment may be regarded by some of my hon. Friends as not going far enough. I am putting it forward, I do not say as a "peace offering" because I do not know that there is occasion for anything of that kind. That is what we were hoping to do when we thought we might have a chance to discuss the matter, but never mind about that now. I am putting it forward in the hope that the Government may be prepared to say, We are not going so far as to lay down specifically in this Bill what section or class may be regarded as sufficiently proper and comprehensive for this charitable purpose. But we are at any rate going to take the House and the country into our confidence and say that we want to make it quite clear that we are not intending to alter the law as it probably stands at present."

I hope that it will not be considered disrespectful to talk about the law as it "probably" stands at present. But when, on this difficult question of a class or section, the score in the House of Lords is one all, with three not voting at all. I do not think that anyone would regard it as disrespectful if one is not certain about what the law is and what would happen next time; and there is something to be said for Parliament making the law clearer.

I see that the hon. Member for Wigan (Mr. R. Williams) is thinking about the words "trade union" and that I am being rather a black leg "over this question. But, fortunately, there are some who regard this from a broader point of view and it seems desirable that we should not encourage the people concerned to rush into fresh litigation which will come to the House of Lords all over again this time in order to decide a point that last time was left open.

6.0 p.m.

I therefore hope that the Amendment will be regarded as reasonable. I put it forward to elicit from my right hon. and learned Friend who is in charge of the Bill the position at the moment and the effect of the proviso. Can we be satisfied that the proviso preserves the position of the geographical and religious sections when it is read in conjunction with the complicated provisions which follow?

This legislation is unusual. In Clause 1 (1) we have a provision that something shall be deemed always to have been charitable. on certain conditions. Subsection (2) says: The requirement of the foregoing subsection that the facilities are provided in the interests of social welfare shall not be treated as satisfied unless Then follows a condition in paragraph (a). In paragraph (b) is a further limitation, divided into halves. It is about as complicated a way of making a statement about the law as one could devise. I respectfully suggest that it is desirable, having gone through that rather complicated process, that lawyers who deal with these matters should have, at the end, some idea of the net result. I doubt very much whether they will have it from the Bill as it stands.

I do not profess to more than a small knowledge of this subject, but I feel considerable doubt whether the geographical and religious sections are safeguarded as they ought to be. Other hon. Members know very much more about the subject than I do. The Bill as it is at present could be used by supporters of Lord Simonds's view as saying that it is intended to validate what he said, but it could also be used by the supporters of Lord Reid to show that it is intended to support what he said. Is that a satisfactory position for our legislation?

I gather that my hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth) is rather nervous about the matter from another point of view. He thinks that this may be opening a door to some kind of works trust. Efforts have been made to erect charities for employees of particular businesses. I imagine that he does not think that it ought to be done. It is rather surprising that he seems to have come to the point of view that this provision widens the doorway to some extent for them. With such knowledge as I have had access to. I think that the effect is to narrow the access. Is it right that we should leave our legislation in this state?

My modest proposal is that we should, first, get the thing right by putting into the Bill the basic principle which is now accepted in relation to charities, and not the one which has been superseded by it. It is regarded by a number of people as possible to be read in conjunction with other parts of the Bill, to produce either a widening or a narrowing effect. We shall have to come back to this matter on later Amendments. I do not want to occupy time upon it now.

I apologise for having trespassed on my hon. Friend's ground to some extent. There is nothing inconsistent in my Amendment with other Amendments. It is the first stage of a process of clarification.

Mr. Charles Fletcher-Cooke (Darwen)

I wish to second the Amendment. I understand that on the Report stage an Amendment needs a seconder.

Mr. Deputy-Speaker

If it is not moved by a Privy Councillor.

Mr. Fletcher-Cooke

In that case I beg to support the Amendment.

I imagine that the Attorney-General's objection will be that the Bill was never intended to do more than reverse the first point in the Baddeley case, and not to deal with the doubts raised in the second part of the two speeches in another place, to which my right hon. and learned Friend has referred. That being the religious objection, all that the Bill seeks is to preserve that doubt in whatever state it was left when the Baddeley case left the Lords. It is a greaty pity that the oportunity was not taken to resolve that doubt.

I assume that it is not suggested that the doubt has been resolved by the Bill. If that is the suggestion, we should like to know in what sense it has been resolved; in favour of Lord Simonds, or of Lord Reid? It must be common ground that the Bill preserves the doubt, and I would ask my right hon. and learned Friend whether that is a good thing to do when we go to the trouble to bring in legislation dealing with charities. It is an extraordinarily timid approach.

People want to know which of these two views is right, and here is a great chance to tell them. Yet, for some reason or other, the opportunity is not taken; the Government have flinched. There may be very good reasons for the flinching, but we have not yet heard them. It is not as though this were a simple Bill. It is complicated, and it needs to be, because the Government's motive -it is a very fine one—is to preserve as charities a few specified organisations which they and we feel should be privileged. They are the Women's Institutes and the Missions to Seamen. Around that desire they have woven a most complicated web of words and produced a complicated Bill. Why, then, do they not go a stage further and resolve the doubt about the geographical and religious limitations? The case of the Mayor of Saltash has caused all sorts of problems in the minds of judges dealing with charities for many years. The state of the law on charities, as has been recognised all round, is still complicated, obscure and ambiguous. It seems a thousand pities that the opportunity has not been taken to make a little clearance in the jungle.

The Attorney-General (Sir Reginald Manningham-Buller)

My right hon. and learned Friend the Member for Chertsey (Sir L. Heald) began by complaining that there had been no consultation with him and no opportunity for discussion with him about the Bill since it passed the Committee stage. I think it only right to say that neither in the course of the Committee stage nor at any time thereafter have any requests been received from him or his hon. Friends for any discussion about the Bill. I should also say that if he had made any such request I, or my hon. and learned Friend, would have been only too glad to discuss the matter with him. In fact, the matter he has raised today was debated twice in the course of the Committee stage and answered from this Dispatch Box.

Having listened to my right hon. and learned Friend and to my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke) I cannot help feeling that perhaps more consideration might have been given both to what was said in explaining the Bill on Second Reading and in the course of the Committee stage. My hon. Friend the Member for Darwen said that the Bill was to reverse the decision in the Baddeley case. I had hoped we had made it clear that that was not the intention or the desire in the Bill. The Baddeley decision stands. It is not being reversed. If any other case comes before the courts on all fours with the Baddeley case, the case will be decided in the light of that decision in the House of Lords. I hope I have made that clear.

The Bill seeks to ensure that those charities which were regarded as charities before the Baddeley decision shall remain charities despite the doubts cast on their particular trust deeds by the decision in the Baddeley case with regard to the terms dealing with recreation in that trust. We have made that clear more than once. That is a limited objective, but, as my hon. Friend said, it is a difficult one to achieve as a matter of drafting. We believe that we have achieved it; we have given it most careful and prolonged consideration. It has been considered from that point of view also in another place.

It is easy for persons familiar with the law of charity to point out many matters in relation to that law which are not very clearly resolved, about which different views may be taken, about which disputes and indeed, litigation, may occur. They have chosen to fasten only on one point in the law of charity, which was dealt with to some extent in the opinions given in the House of Lords in that case, and not on the many others. I should say to my right hon. and learned Friend and my hon. Friend that we are not seeking to do more in this Bill than to try to make it clear that those charities which, if I may use the expression, were put in peril by the Baddeley decision in regard to recreation, will remain charities after the Bill becomes an Act.

6.15 p.m.

As my right hon. and learned Friend is aware, there were many worthy charities, many worthy institutions—I think my right hon. and learned Friend mentioned a number on Second Reading—which have always been regarded as charitable in law and which everyone would agree ought to enjoy the benefits which the law allows to charities. That is what the Bill is intended to deal with.

My right hon. and learned Friend asked on the Committee stage, and I think again today, what would happen if the Baddeley question was raised again. The answer is that the case would have exactly the same result.

I would remind the House that the Government announced three years ago their intention of preserving the existing case law on charity. That being our intention, I come to the reason for the proviso to subsection (1). It was thought advisable ex abundanti cautela to insert that provision expressly preserving the existing law, for, whatever doubts there may- be about particular aspects of the law on charity, I should have thought that there is no doubt whatsoever about the proposition that all charities must be for the public benefit. The reason for this proviso, which I have explained before, is that if we did not have it subsection (1) might comprehend a number of institutions which are not now regarded as charitable and which never have been. It has been inserted ex abundanti cautela and we regard it as necessary that those words should remain.

The Amendment proposes that those words should be left out. I cannot advise the House to take that course. My right hon. and learned Friend moved that in the place of those words should be inserted the words: benefit of the community or an appreciably important class or section of the community". He said that was part of a process of clarification. I beg leave to disagree with him about that. I should not have thought that a court which found any real difficulty in deciding whether a particular trust was for the public benefit would find it so much easier to decide that a trust was for the benefit of the community or an appreciable important class or section of the community '' The real answer to my right hon. and learned Friend is that it was this very test which he proposes should be made statutory which was being applied by the learned judges he has quoted as giving dissenting judgments in the Baddeley case. As my right hon. and learned Friend pointed out, the test he proposes is already laid down by the highest courts in the land and all the differing judges applied that test expressly or by implication.

I have said that the test my right hon. and learned Friend proposes is the right test, but it is only one test. He has referred to observations by Law Lords on the matter, but I am sure he would agree that language which is appropriate in one context may not be appropriate in another, and language which may be appropriate, and indeed precise, in a judgment delivered in court may be inapt and vague in an Act of Parliament.

I do not think that those Law Lords referred to by my right hon. and learned Friend were seeking to give an exhaustive definition of public benefit. After all, the question is not one solely of the class of beneficiaries of a trust. The test of "public benefit" as it has been applied by the courts over the years, excludes, on the ground that it is not public, anything in the nature of private profit, if the House were to accept the Amendment and put in the proposed words instead of the words "public benefit" that test would be eliminated. I say to my right hon. and learned Friend that I doubt very much whether it would be possible to provide a more useful definition of what is comprehended by an important class or section of the community. Each case must depend upon its particular facts.

I must resist the Amendment, which would, I believe, have the effect of considerably broadening the scope of Clause 1 (1) and enabling institutions to come within the ambit of that Clause which could not with all the proper tests applied be regarded as institutions for the public benefit.

My right hon. and learned Friend made some reference to various kinds of charities. All I can say to him about that is that it is our view that those charities which were charities before Baddeley and in relation to which doubts have been created by the decision in that case will as a result of the Bill be able to continue to enjoy the status of charities. I can assure him that this is a Bill which has been very carefully considered over a long period of time. He has stressed the necessity for Parliament being very careful about what it is doing. I entirely agree, and it is in that spirit, and because of the need of being very careful in this field, that I ask the House to reject the Amendment.

Sir L. Heald

I am much obliged to my right hon. and learned Friend for making his decision so clear. The decision he has made clear is that in no circumstances is he prepared to consider any possibility of any amendment of this Bill, although whether that is a view that commends itself to the House is not for me to say. However, I feel that there is one thing I ought to say. I am very——

Mr. Speaker

I called the right hon. and learned Gentleman because I thought that he was going to take a certain course with this Amendment. He is not entitled, except by leave of the House, to make a second speech on a Bill which has been through Committee of the whole House.

Sir L. Heald

I am very sorry, Mr. Speaker. However, my right hon. and learned Friend did say something about there having been no consultation and my having made complaint about it, and I thought that it was right that I should make the position clear. I ask the leave of the House to do that, and I am sure the House will accord it to me, because it would be very unfortunate if any misunderstanding took place, above all between my right hon. and learned Friend and myself, I hope I may say.

I am sure that there is misunderstanding about that. I know that my right hon. and learned Friend has been away at Geneva on very important business. While he was away we did say to my hon. and learned Friend the Joint Under-Secretary of State for the Home Department, sitting next to my right hon. and learned Friend, that we should like to have a discussion with him about the matter, and we were very hopeful there was going to be one. I was informed yesterday afternoon that my right hon. and learned Friend had returned from Geneva and that he did not think that any discussion would be of any value.

So far as I am personally concerned. I should like to make it clear that what I said was not by way of complaint but merely a statement of what is the actual fact, that I think it was rather a pity that, owing to a misunderstanding, we did not get the chance of discussing it. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Sir H. Lucas-Tooth

I beg to move, in page 2, line 5, after "circumstances", to insert: other than the circumstance of their employment by a particular employer". The purpose of this Amendment is to ensure that the Bill does not open the door to abuse; or perhaps I should say to undesirable use. I think it will be agreed by everyone that proper facilities for recreation ought to be put on the same footing as, for example, education. Indeed, the two are so closely linked together that most people have thought that they went together, and that led to the Baddeley case.

The law does not allow private persons or companies to make educational trusts in favour of particular classes of people such as relatives and employees. In that way they could escape certain kinds of taxation and otherwise put themselves in a favourable position for purposes which would not be either in the eye of the law or in the eye of the layman strictly charitable. I fear that this Bill as at present drafted may have that effect in regard to these particular trusts, the recreational trusts.

Let me read the operative words of Clause 1: …it shall be…charitable to provide…facilities for recreation…if the facilities are provided in the interests of social welfare". Those are the operative words, and if they stood alone I think it is quite clear that trusts of the kind which I have suggested could be created under the Bill. The remaining words of the Clause all limit and cut down these opening words. The question which worries me is whether they cut them down sufficiently. There is a proviso, which we have just been discussing, to the effect that a trust…to be charitable must be for the public benefit. But we find set up by the words I first read and the words in the proviso that there is some antithesis between the expression "social welfare", on the one hand, and the expression public benefit", on the other, and for my part I find it rather difficult to understand just what the difference between those expressions is in ordinary reading, or what is intended in accordance with the meaning of the Bill.

The expression "public benefit" itself is simply not defined in the Bill. It appears once and is left there. The expression "social welfare" is defined. Clause 1 (2) defines the expression in accordance with two tests. The first test is contained in subsection (2, a), which says that the facilities must be for improvement in the conditions of life of the persons concerned.

I think that everyone will agree that that is reasonable and proper, and no Amendment has been put down to the words. In subsection (2, b) one, and one only, of a number of conditions must be fulfilled. I call the attention of the House to the fact that under this paragraph the conditions are alternative to one another, and one only has to be fulfilled.

There is only one of those conditions relative to my Amendment, and that is the one which says that the persons concerned must have need of such facilities…by reason of their…social and economic circumstances. The expression "social and economic circumstances" is fairly easily understood. It is not more precisely defined, but I think that it would be generally agreed that, normally speaking, it refers to the kind of employment of the people concerned. Indeed, I find it rather difficult to think of any other circumstances which can be said to be simultaneously social and economic.

6.30 p.m.

It is right to encourage the provision of playing fields and similar facilities for the members of a particular trade. I do not think that anybody would object to the formation of recreational trusts of this kind for sailors, miners and similar classes of the community. But it is another thing to do so for a particular business. In such a case the firm may contribute out of its earnings to the maintenance of recreational facilities and it may be able to charge this against its profits and thus escape certain taxation.

If so, that should be done in accordance with the general law relating to taxation and not by means of a charitable trust. I think it wrong that a large and wealthy business may be enabled by such a Bill as this to create trusts of a kind which would enable it to take advantage of the Bill to give its own employees especially favourable treatment.

That is the situation which the Amendment is designed to meet. I listened to what the Attorney-General said on the last Amendment and it is not improbable that the answer which I shall receive is that the point is taken care of by the proviso to subsection (1). In referring to that proviso, however, the right hon. and learned Gentleman said candidly that it was inserted, to use his own expression, ex abundanti cautela. In other words, it is not intended to be operative. It is merely there to show that the ordinary rules of the law would apply. As my right hon. and learned Friend the Member for Chertsey (Sir L. Heald) said in his argument, the law in connection with classes of persons who benefit is left entirely open.

If that had been the point on which the decision in the Baddeley case had turned, the probability is that the decision would have been the other way round. One cannot be sure, but the Attorney-General indicated clearly that the Bill was not intended to deal with that point in any way. The position seems at least to be open to doubt that the Bill will enable individuals and businesses to take advantage of its provisions to set up recreational trusts for the particular advantages of their own employees. If there is any question of that, then I think it ought not to be left open to doubt but ought to be cleared up by some such Amendment as this.

Mr. Philip Bell (Bolton, East)

I beg to second the Amendment.

The purpose of the Amendment is to make sure that athletics clubs belonging to large industries or nationalised industries, for instance, are not treated as charities. I can see that my hon. and learned Friend the Joint Under-Secretary of State is writing the answer down, and it is, "Never mind about that; look at the proviso which says that it must be for public benefit, and if the recreational facilities are available only to a class of people it would not be for the public benefit."

So far so good, but we must go a little further. Let us look at subsection (3). It starts with these words, "Subject to the said requirement…" What is "the said requirement"? It is The requirement of the foregoing subsection that the facilities are provided in the interests of social welfare". Subject to that, therefore, subsection (1)—not the proviso to subsection (1), because that is in a different paragraph—applies.

It is not limited to some people, because the next words are "in particular". This possibly means that the words, freed from the proviso, apply to the provision of facilities at village halls, community centres and women's institutes… I submit that it is a possible interpretation that subsection (3) has not introduced the proviso at all and that once we overcome the hurdle of social welfare it is not necessary for us to comply with the proviso.

My hon. and learned Friend will probably tell me that he does not agree and that the proviso is included. He may say, "The proviso is included. You need not worry; works clubs would not qualify because the proviso is introduced." He may say, "When we say 'subsection (1) of this Section applies', we mean subsection (1) including the proviso to subsection (1)." If that be true, then the works club will be excluded.

It is a matter of some doubt whether that is true, but let us suppose that my hon. and learned Friend is right. What are the consequences to be considered? The consequences must be that Catholic boys clubs would be excluded, because they would be limited to a section of the public and would not be for the public benefit. Equally, a Methodist reading club would be excluded. The reading and the athletics would meet the requirements in these cases, but we have some authority for saying that if the recreation is limited to a section of the people—Catholics—or if the reading is limited to another section—Methodists—then the facilities would not comply with the law. There is some support for that, because village halls, community centres and women's institutes have a link which is merely geographical and is not, for instance, religious.

I think that my hon. and learned Friend is on the horns of a dilemma, because if subsections (2) and (3) as they stand are sufficient to exclude what I call works clubs, then they also exclude some other clubs. I think that this point should be made clear. In an effort to have it made clear, I associate myself with the Amendment.

The Joint Under-Secretary of State for the Home Department (Mr. David Renton)

I entirely agree with the motives of my hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth) in moving the Amendment, but I do not fully agree, for reasons which I shall explain, with the second motive expressed by my hon. and learned Friend the Member for Bolton, East (Mr. Philip Bell).

Having expressed my agreement to that extent with the first motive put forward, I can assure my hon. Friends that the Amendment is not necessary in order to achieve their object. Fortunately, my argument has been anticipated by both my hon. Friends. I must, however, go through the relevant portions of the Bill in order to emphasise that what they anticipated to be the position is in fact the position.

It is the case that the proviso to subsection (1) retains that important part of the law of charitable trusts that a trust must be to the public benefit in order to be charitable. My hon. and learned Friend the Member for Bolton, East said that a difficulty may arise in subsection (3), because he said that when subsection (3) refers to subsection (1) it may not refer to the proviso to that subsection. The answer is that when a proviso is contained in a subsection it is part of the subsection, and a later reference to the subsection must be deemed to include reference to the proviso too. There is not the slightest doubt that Clause 1 (3) must be read in the light of the whole of subsection (1), and therefore the public benefit test applies.

There are two principal reasons why my hon. Friend's Amendment is not necessary. The first is that the public benefit test is undoubtedly retained for this Bill as a whole, because, as my hon. Friend rightly said, the principal operative provision of the Bill is in subsection (1), and by retaining the public benefit test there, we retain that part of the law of charity which has already been clearly decided in establishing and defining public benefit.

I could give a long disquisition to the House on the way in which the courts have applied the public benefit test to charitable trusts, but I will shorten the matter by saying that it is a variable test. When particularly needy classes are made beneficiaries of a charitable trust, a much smaller section of the population and a much smaller number of people are deemed capable of benefiting from a valid charitable trust. When, on the other hand, the trust is intended not so much to benefit a particularly needy class, but merely to fulfil a particular charitable purpose, a much broader section of the public is required in order to satisfy the public benefit test.

The courts, in applying that very general proposition, which I hope I have not over-simplified, have considered this specific point made by my hon. Friend the Member for Hendon, South relating to an attempt by a particular employer or a particular company to establish an educational trust, the beneficiaries of which would be merely the children of its own employees. That was so in the case of Oppenheim v. Tobacco Securities Trust, and it was held in that case that, though the group of persons indicated was pretty numerous, the nexus between them was employment by a particular employer or group of employers. Therefore, the trust did not satisfy the public benefit test, and therefore it was not charitable.

There is that clear and unchallenged decision of the law, and, indeed, if I recollect correctly, that case was decided by the House of Lords. By saving the law of public benefit we have saved that decision of the House of Lords, and, therefore, if anybody tried to take advantage of the words in the Bill "social and economic circumstances" to establish such a trust, they would be certain to fail. Doubts have been expressed on several matters in the Bill, but that is not a matter which admits of doubt, and I hope my hon. Friends will go with me thus far.

There is another reason why, in order to achieve my hon. Friend's objective, his Amendment is not necessary. It overlaps to some extent the first reason which I have just given. It is that these words "social and economic circumstances" will have to be construed by the courts for their meaning, and I am advised that, even taking these words alone and omitting the various other criteria which will have to be applied in order to satisfy the public benefit test or the social welfare test, it is most unlikely that any court would hold that a trust in favour of the employees and the children of employees of a particular employer would be said to be justified by raising the "social and economic circumstances" of the people concerned.

6.45 p.m.

Therefore, for these two reasons, I am able to assure my hon. Friend that his Amendment is not necessary. May I, however, add that I am very glad that he has raised the matter, in order that I can clarify the position. I think that the only other point which I should perhaps mention is that a very fair comment was made by my hon. and learned Friend the Member for Bolton, East when he said that the Government had acted ex abundanti cautela in putting in the proviso to subsection (1), and when he suggested that if we can act in that way, why should not that be done. I would say to him that the fact that we have acted ex abundanti cautela by putting in the proviso makes it unnecessary for the House also to act ex abundanti cautela in regard to my hon. Friend's Amendment.

Mr. Philip Bell

Would my hon. and learned Friend confirm or deny that, for instance, a Catholic boys' club or a Methodist reading room would be free to be treated as "social welfare"?

Mr. Renton

I hope my hon. and learned Friend will not be angry with me, but I purposely did not deal with the matter, because, although you, Mr. Speaker, have not ruled my hon. and learned Friend out of order, there did not seem to be any justification on this Amendment for dealing with religious charities, because the Amendment deals with the circumstances of employees of a particular employer.

Sir H. Lucas-Tooth

I am grateful to my hon. and learned Friend for that explanation. I think it will be noted with interest outside the House, and, in these circumstances, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Geoffrey Rippon (Norwich, South)

I beg to move, in page 2, line 7, at the end to insert: or of some appreciably important section of the community". We had some discussion on this subsection during the Committee stage of the Bill, and, to some extent, we have covered the ground in the debate on my right hon. and learned Friend's Amendment which was taken earlier. However, it is at the express wish of my right hon. and learned Friend the Attorney-General that this is being taken separately, and, indeed, it may be considered to raise a slightly different point.

As we left the matter in Committee, we seemed to have come to the conclusion that unless one is a juvenile, senile or a person incapacitated, one cannot participate in the benefits of a recreational charity without women. We left unanswered in Committee two further questions. First, from how wide an area must the women be drawn? Secondly, can they be limited to one particular denomination? It all depends on the interpretation of the phrase "public at large", which is not the same thing as "for the public benefit", with which we have been dealing, and which is a phrase more commonly known and understood.

We are bound, I think, to revert to the trouble that this Bill—which, in spite of all the arguments which have been adduced by my hon. and learned Friends in favour of not altering one single comma in it, still has much to commend it—only deals with one of the two main points of difficulty raised in the Baddeley case. I accept what my right hon. and learned Friend the Attorney-General said about the Baddeley case—that the decision is not, in fact, reversed—but the Explanatory Memorandum to the Bill says that the object of the Bill is to remove doubts about governing instruments which often contain terms similar to those considered in the Baddeley case. It is, therefore, a little surprising to hear the view advanced that, in spite of the Bill, the decision in the Baddeley case would still be the same in future.

We are left in some doubt as to what the effect of the Bill really is. However, we are all hoping that it clears up the existing doubt about what is or is not a recreational charity. What it does not do is to help us in defining what is a sufficient section of the public to satisfy the test of public benefit for the purposes of a recreational charitable trust. We have already heard, and I shall not cover the ground again, of the differences of opinion in the Baddeley case, to which my right hon. and learned Friend the Member for Chertsey (Sir L. Heald) has referred.

Whether or not the Baddeley decision is reversed by this Bill, or whatever effect the Bill has upon that decision, it is certainly unknown what the decision in that case would have been had the issue simply been what did or did not constitute a sufficient class of the community. That really is the point on which, even at this late stage, we hope to be given some assurance. I am sure, and so, I think, are many other hon. Members, that my right hon. and learned Friend the Member for Chertsey is quite right when he says that there are many people today who feel that it might not be safe for them to do what they want to do, namely, to leave their money to, say, Methodists in Norwich for the purposes of what would otherwise be a valid recreational charity.

Indeed, the whole point that is raised by this Amendment is that the position may, perhaps, be worse under the Bill than it was before. It is true that in the Baddeley case, what was being considered was a restricted class within a restricted area—Methodists, or potential Methodists in the area of West Ham or Leyton—and it has always been assumed that, in spite of the differences of opinion in the Baddeley case, there would not be much difficulty about a gift for all the inhabitants of Norwich, without restriction of class. The geographical area would be sufficient. Equally, there might be no difficulty about a trust for all the Methodists in England, because, there, the area would be wider.

It has been felt, however, that this phrase "public at large", unqualified, might have some restrictive effect and might tend, as my right hon. and learned Friend indicated, to support the opinion of Lord Simonds. But even if it does not, but supports, rather, the opinion of Lord Reid, let us be told. In a recent case under Section 8 of the Rating and Valuation (Miscellaneous Provisions) Act, 1955, it was held that the miners of Derbyshire constituted a sufficient class to satisfy the test of social welfare for the purposes of that Act. But I suggest that the miners of Derbyshire are not the "public at large", and would not satisfy the test contained in this Bill. That must be clear, otherwise there would be no need for the special provision in Clause 2 to validate miners' welfare trusts.

That raises the question: if miners in Derbyshire are out, are Methodists in Norwich also out? It might well be the wish of the House that people should feel as free in future as in the past to give money for what would otherwise constitute a valid recreational trust within the terms of this Bill. To add, as the Amendment suggests, the phrase: or some appreciably important section of the community". which is the well-known, and widely quoted phrase of Lord Wrenbury, would, at least, preserve the status quo, as was urged so eloquently by my right hon. Friend the Member for Chertsey earlier in the debate.

Mr. Philip Bell

I think that I was misunderstood earlier by my hon. and learned Friend. I was not asking about religious charities. I am not talking about whether——

Mr. Speaker

Order. Does the hon. and learned Member second the Amendment?

Mr. Bell

Yes, indeed, and I am glad to use the opportunity of saying that: …some appreciably important section of the community was the point I was trying to get at.

In order that I may not be misunderstood, let me give a specific example. Is the Bolton Catholic Boys' Club, which provides football, boxing, chess, ping-pong, and the like, to be a charity? If public benefit requires it to be not merely for a locality but to be open to everybody, that club may not qualify, because, from the Baddeley case, we know what grave doubts there are on the point.

We know that if there is a locality, and that within it the charity is cut down to Methodists, it loses whatever benefit it might have had. What I am afraid of here is that unless words such as those suggested in the Amendment are used, some denominational athletic ventures will be cut out because of the reference to public benefit. The example I have given is not a religious charity. Boxing is the same sport, whether undertaken by Methodists or Catholics.

Mr. Renton

My hon. Friend the Member for Norwich, South (Mr. Rippon), in a speech for which I am grateful, seemed to be attempting to achieve two perfectly consistent purposes. One was to probe, in order that we could elucidate the term "public at large", and the other was to try, somehow, to modify the meaning and effect of sub-paragraph (ii) of Clause 1 (2, b) by adding the words: or of some appreciably important section of the community In his opening remarks my hon. Friend referred again to the Baddeley case, and pointed out, if I understood him correctly, that he was anxious to see that trusts of the kind held not to be valid charities in the Baddeley case would be held to be valid charities in future. He will, I am sure, correct me if I have not understood him. To answer him on that part, perhaps the safest and clearest thing for me to do would be to repeat, if I may, something that I said on Second Reading. I then said: Our policy, therefore, is not to enlarge the definition of charity or to make new classes of trusts charitable, or to admit to the field the particular type of trust which was rejected by the House of Lords in the Baddeley case. Our policy is to distinguish from that type of trust those which have in the past been regarded as charitable and ought to be restored unequivocably to that position. However hard I had burnt the midnight oil, I do not think that I could have distilled the essence of the Bill more than I did in that Second Reading speech. I would ask my hon. Friend to bear that statement in mind.

My hon. and learned Friend the Member for Bolton, East, rather by the same token, invites me to say whether or not the Bolton Boxing Boys' Club is a charity——

Mr. Bell


Mr. Renton

I have not had the great advantage of seeing the trust instrument, but, again, I think that my best answer to my hon. and learned Friend is to quote again from the same speech that I made on Second Reading. I said: There is one thing which I must stress before explaining the Bill to the House. The question whether a particular trust will be charitable under the Bill can only be decided by a court when construing a particular trust instrument."—[OFFICIAL REPORT, 11th February, 1958; Vol. 582, c. 320–1.] I am not going to be so foolish, without seeing the trust instrument, as to attempt to answer my hon. and learned Friend's question.

7.0 p.m.

Coming to the question of the meaning of the words "public at large", as has been pointed out before, we have not defined social welfare, but we have laid down several conditions precedent before any facilities can be said to be provided in respect of social welfare. We say that always the facilities must have the object of improving the conditions of life of the persons for whom they are primarily intended. We say that either those persons must have need of the facilities, for various reasons which are stated, or that they must be available to the members or female members of the public at large. I agree with my hon. Friend the Member for Norwich, South when he says that the expression, "the public at large" has not the same kind of meaning as the expression "public benefit" which is so well known in the law of charity. This will, of course, be for the courts to interpret in future. The most accurate and succinct definition which I can give to my hon. Friend is to say that facilities will be for the benefit of the public at large if they are available to the inhabitants of a locality, of a town or village or group of villages. Of course, they will probably not be for the benefit of the public at large if they are for the benefit merely of the inhabitants, say, of one street.

My hon. Friend the Member for Norwich, South made a suggestion for removing a doubt, if there is a doubt. We do not think that there is a doubt to be removed, but my hon. Friend's suggestion, if I may say so with respect, would certainly be a very dangerous way of rectifying the matter. His Amendment would be far reaching in its effect and would have the result that, irrespective of the need of the beneficiaries, a narrow section of the community could benefit from a trust providing it with recreational facilities. That section could benefit merely so long as it was considered to be an important section of the community. It would not even have to be a substantial section numerically, and we should, in fact, be making sectional welfare the test instead of social welfare. The conception of charity would be thus extended beyond all previous definitions, which is the very thing we are anxious not to do in this limited operation.

All kinds of examples come to mind of what might be considered an important section of the community—trade union leaders, lords lieutenants, doctors, the Welsh in London—thereby overruling the case of Williams. We do not know where the courts would draw the line between "important" and "unimportant". I am sure that lawyers would be considered an unimportant section any way.

For those reasons, we cannot accept the Amendment, but, in so far as it was a probing Amendment, I hope that my hon. Friends will accept my explanation.

Mr. Rippon

In view of that explanation, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Bill read the Third time and passed, with an Amendment.