§ Order for Second Reading read.
§ 4.18 p.m.
§ The Secretary of State for the Home Department (Mr. R. A. Butler)
I beg to move, That the Bill be now read a Second time.
Mr. Speaker, I have it in command from Her Majesty to acquaint the House that she has been graciously pleased to place Her prerogative and interests at the disposal of Parliament so far as they are affected by this Bill. I shall be indicating later where these arise.
In preparing and introducing the Charities Bill, I have taken pride, with my hon. and right hon. Friends, that after a century of social progress this is the second great legislative step in our history to assist the resources of charity and to enable them to play their proper part in contributing to the well-being of the nation. The last occasion was just over 100 years ago. Then it was the strongly prevailing tide of reform of the 1850s which carried into law the Charitable Trusts Acts of 1853 and 1855, which I would describe as the first great legislative step to assist the adaptation of charity. The historical background then was the Industrial Revolution and the agricultural revolution. For the first time in our history, large movements of population had taken place.
If we look at Clapham's history we find him referring toa situation that had probably not existed before in a great country at any time in the world's history.Between 1801 and 1831 alone, the population rose from 11 million to 16,500,000 and by 1851 half the population was urban. So it was against this background that the previous big legislative step was taken. As will be seen in a few moments, it is to meet a new social situation that the law of charity has to be revised in our day.
At that time, charity law could not keep pace with the revolutionary changes taking place in the country. Between 1818 and 1837 Royal Commissioners carried out a monumental survey of all known charities and their condition, and their reports disclosed in many places 409 a lamentable picture of decay and loss. Those Acts of 100 years ago established the Charity Commissioners to advise, protect and assist trustees, and to undertake the variety of duties which have come to be associated with them. In 1860—just 100 years ago—the Commissioners were given additional powers to exercise the High Court's powers to make cy-prés schemes—matters to which I shall be referring later—to transfer property and to remove and appoint trustees.
But the statute law relating to charity is very much older than the nineteenth century, and it is a measure of the task confronting the draftsman of this new Bill that the clearances affected by the Fifth Schedule go back to Henry VIII's time, the first part of the Seventh Schedule to Elizabeth I, and the mortain repeals to Edward I. It is my hope that as a result of these clearances the Bill will go far to simplify that part of charity law that rests on statute.
No doubt all those who are lawyers and wish to take part in the debate will realise that this statute law must be read in the context of the case law and constitutional law making up the corpus of jurisprudence that regulates the application of private property to purposes beneficial to the community. For that is what charity law is about—rights over private property devoted to public purposes.
In the long sequence of the history of charity there are many chapters, and the Church and the Crown have had a considerable part to play. We find as early as Piers Plowman a list of works which rich merchants were enjoined to undertake for the good of their souls; and these examples reappear in the list of typical works of charity given in the Statute of Charitable Uses of 1601. The Church and the Crown have taken important parts in the practice and administration of charity. In the middle ages the Church laid stress on giving by the rich for the benefit of the poor as a Christian duty and means of salvation. Indeed, the Church undertook to distribute benefits on behalf of those who could not do so in person because they had left this world for another.
Clearly, some oversight was required to secure the carrying out of undertakings of this kind; there was always the risk, for example, that the monastery 410 or other distributing organisation might think that a better use could be found for the money, and the ecclesiastical courts, therefore, had jurisdiction to enforce the intention of the founder.
In Tudor times the State took over from the Church the enforcement of the founder's intentions, there being no individuals with rights under a charitable trust who could do so, and, therefore, the Crown, as pater patriae undertook to enforce in the courts, at the suit of the Attorney-General, any trust of property that was charitable. The Crown, while approving of almsgiving, could not tolerate—and here we come to mortmain—that land should be permanently tied up in this way. Land was held on feudal tenure by lords on whose support the king relied in war.
Where there was no adult male, the Crown profited by the revenues during minority or wardship, and substantial sums were levied on succession by the heirs. The law of mortmain therefore prohibited land being devised to a corporation without licence from the Crown, the penalty being forfeiture. This prohibition, with ancillary provisions, has survived to this day. The law of mortmain is thus tied up with the law of charity, and that is why it has not been possible hitherto to get rid of this anachronism in the law of property without the legislative adjustment of charity law which I am now undertaking, and in respect of which I signified Her Majesty's pleasure at the opening of my speech. Thus it will be seen that the Crown is closely concerned with charity, both as regards its prerogative and its rights under the law of mortmain.
There is great social significance in the steps we are proposing to take in this Bill. A century ago the problem could be stated thus: the way of life and distribution of the population have changed; how can the resources intended for them by past generations be adjusted to the new needs? Today, our problem in the social sphere runs more as follows: the basic needs of the people are met by the people acting through the Government; what is left for individuals, past or present, to do for them?
This was the fundamental question— historically an entirely novel one—which was raised by Lord Beveridge in his 411 book "Voluntary Action", and was referred by the Government of 1950 to a Committee presided over by Lord Nathan. Here, I would like to express our gratitude to Lord Nathan and the members of his committee for the classical work they performed in this sphere. I hope that they will accept the gratitude of the House and those interested in the Bill. It will be seen that while we have not agreed with every point in the Nathan Report, we have followed, in general, the lines they recommended to us.
There is a convenient summary of the principles enunciated in the Nathan Report in paragraph 723, which the Government wholeheartedly adopt. We differed in some respects from the Nathan Committee, however, in the application of these principles: and our policy was set out in the White Paper on Charitable Trusts, 1955, and is embodied in the Bill before the House. The whole series of Charitable Trusts Acts, 1853 to 1939, and the Mortmain and Charitable Uses Acts have gone, together with a host of other statutes, in the Fifth and Seventh Schedules, which have ceased to have effect or have been overtaken by Acts not confined to charities. What remains valuable has been re-enacted.
The Bill goes a long way to meet the recommendations of the Nathan Committee that the statute law should be incorporated in a single intelligible Statute. Besides the numerous adjustments of the machinery of charity law to which I have referred, the Bill makes four major reforms directed to the social realities of today. In the order in which they come in the Bill, Clause 1, read with the First Schedule, will reconstitute the Charity Commission with a Minister—the Home Secretary of the day—having a strictly limited responsibility to Parliament, not for their decisions but for their effective running of a public service.
Clauses 4 and 5 deal with the establishment of a public central register of charities. Clauses 10, 11 and 12 are intended to establish a statutory foundation for voluntary co-operation between charity and the statutory welfare services on a basis of equality and partnership. Clause 13 will extend and specify the conditions which must be satisfied before the 412 purposes of a charitable trust can be altered by a cy-pres scheme, to which I referred in my short historical introduction and thus make it much easier for charity to adjust itself to the rapidly changing needs of today.
Turning, therefore, to my first point— Clause 1, the reconstitution of the Charity Commission—I emphasise that one fundamental object of the Bill is to maintain the freedom of charity from political pressure in the future as in the past, and to reconcile this with the need for adequate relations with the services which are supported by public funds and for which Ministers are responsible.
I have given much thought to the proper balance between ministerial responsibility for the Commissioners, and the maintenance of their independence as, in part, a quasi-judicial body. My proposal is that as Home Secretary I, or whoever holds the post of Home Secretary, shall be responsible for appointment and removal of the Commissioners, who will be senior civil servants; I shall not control their activities, but would receive an annual report from them and lay it before Parliament. I will make regulations and other Statutory Instruments affecting their work and will be responsible for the Vote, and, therefore, answerable to Parliament for that.
I might mention in passing that the task so ably performed by my hon. Friend the Member for Putney (Sir H. Linstead) of piloting through the House an annual quota of Parliamentary schemes involving amendments of the private or public Acts regulating individual charities, would, in future, fall to me, or one of my hon. or right hon. Friends. We thank him and hope that we may have the benefit of his support in this Measure which, to that extent, has one major defect in that it cannot for the moment carry him along with us.
It is my intention to see that the Charity Commission is re-equipped for its new tasks. It will be strengthened by the addition of an administrative element—not, indeed, to administer policy laid down by the Government, but to help to bring its work into relation with the services administered by other Departments.
For the first time, too, the Statute in Clause 1 (3) will set out explicitly the 413 general functions of the Commissioners, to encourage good administration, to advise and assist charity trustees, and to investigate and check abuses. These functions have been performed in practice for many years, but now, in stating them in terms, we hope to consolidate the relationship with trustees that the Commissioners have sought to establish.
It is another part of the Bill's foundation that the trustees remain wholly and solely responsible for the administration of a charity: the Commissioners have no power to administer it themselves. So much for Clause 1 and the attendant Schedule.
The second major innovation to which I referred is the establishment of the central register of charities, which is dealt with in Clauses 4 and 5. This should enable social workers, potential beneficiaries and benefactors to discover what charities exist, their purposes and beneficial area, their approximate income and address for correspondence, and would also serve as a permanent record to ensure that charities in the future do not, like so many in the past, become forgotten and disappear. We were warned about this by the great review between 1818 and 1837. Secondly, it is necessary to ensure that anything recorded is, in fact, and in law a charity. It is a grave defect of the present law that there is no authority, short of the Chancery Division, which can determine whether an undertaking is a charity at law or not.
The third main feature of the Bill is contained in Clauses 10, 11 and 12, which establish a statutory foundation for the future co-operation and partnership of charity trustees and local authorities. Here, let me stress that the Bill confers no compulsory powers on local authorities whatever. On the contrary, it emphasises and encourages the voluntary nature of co-operation.
Looking at this more closely, first, under Clause 10, a county or borough council that is willing to maintain for public inspection an index of the charities with benefits wholly or mainly intended for its area, will, on request, be supplied with copies of relevant entries in the central index. The whole purpose of Clauses 10 to 12 is to place local authorities and charities on a footing of equality, not of subordination.
414 Clause 11 has been modified to make it clear that a local authority is not empowered to carry out an inquiry into the working of a single charity; that is the province of the Charity Commissioners. The local authority's function is to take the lead in arranging a conference where trustees and representatives of local authority services can, if they wish, sit down together and review the work they are all doing as a whole, so as to eliminate overlapping and enable the best use to be made of charitable resources. That is one of the main problems of today, and one of the main objects which the Bill sets out to secure.
Clause 12 is intended to place beyond doubt the power of local authorities to arrange for mutual co-operation with charities working in the same field, and, in the interests of beneficiaries, to exchange information, including that obtained by welfare workers in the course of their official duties. Such co-operation already exists in many fields, for instance, as regards my own sphere of influence, in co-ordinating case work on children neglected in their own homes; and this Clause is intended to set the seal of Parliamentary approval upon the principle.
I should like to make it crystal clear that there is no possibility of the destruction of a local charity. It is not intended that there should be a general sweeping up of small local charities into omnibus funds. On the contrary, the Bill provides means whereby the trustees can more easily adapt the charity to changing circumstances and so enable it to continue a useful life in accordance with the intentions of the founder.
I now come to the fourth general point. Clause 13 makes less stringent the conditions which must be satisfied before the law can sanction the alteration of a trust to take account of changed circumstances; and the Third Schedule enables adjustments to be made to the beneficial areas of parochial charities within the limits of the neighbouring parish or parishes where shifting population or other changes make it advisable for the working of the charity. That should adapt this to modern times but the emphasis remains on the sole responsibility of the trustees for the administration of the charity and for initiating any changes in its application.
415 Clause 13 is thus intended to make it easier for charity to adapt itself to new situations by obtaining a cy-pres scheme. It will no longer be necessary to establish that it is impossible to carry out the founder's wishes. Instead, the Clause sets out a series of conditions short of failure, which if satisfied would make it probable that a reasonable man would have disposed of his property for some purpose or in some way otherwise defined.
This does not mean that trustees are at liberty to do something else merely because they think it would be a better idea than the founder's; on the contrary, the founder's intentions continue to be the principle which guides any different application of his application of his property.
These, then, are the four cornerstones of the Bill—the remodelling of a century-old machine, the establishment of exact knowledge about what charities exist, the statutory basis for co-operation between charity and statutory services, and, finally, the amendment of the law of cy-pres to make it easier for charities to adapt themselves to changing conditions.
I am conscious that there may be many other details of the Bill which may be considered in its passage through the House. But today I am painting with a broad brush. Our record of voluntary service is unrivalled in the world. We are so used to it, perhaps, that we do not value it for the rare and extraordinary heritage it is. Now is the moment to recognise the truly public services of charity, to accord it its due place in partnership with the statutory services, and to assist them to go forward in harmony together, each making the best use of its available resources and enhancing and developing its special virtues.
In commending the Bill to the House, I must say that its proposals have been discussed with the principal representatives of organised charity. I understand that representatives of the great trusts, the City companies, the National Council of Social Service, representing a very wide range of voluntary service, the Churches, and other important bodies have expressed themselves as generally satisfied with the Bill.
My right hon. Friend the Lord Chancellor has consulted the Chancery 416 judges, and some amendments have been made to give effect to their advice in another place. There, too, it has undergone a searching examination of legal and technical details; and undertakings have been given on behalf of the Government regarding the content of certain amending and excepting regulations as regards registration and land transactions which I have pleasure now in reaffirming.
I have some reason to feel, therefore, that this Bill commands a very general measure of acceptance. I hope that hon. Members will turn their minds to it and try to improve it, but realising that we are taking part in a small pageant of English history in relation to charity law and the practice and use of charity. I confidently commend this charter of charity to the House.
§ 4.41 p.m.
§ Sir Lynn Ungoed-Thomas (Leicester, North-East)
In the first place, I associate hon. Members on this side of the House with the gratitude expressed by the Home Secretary to Lord Nathan and his Committee for the work which they put into the Report which is the foundation of the Bill. That Committee was set up by the Labour Government in 1950 to report on changes necessary to enable the maximum benefit to the community to be derived from charitable trusts. It is in view of the present condition of charitable trusts that we have the recommendations in the Report, and it is with the purposes of that Committee in mind and upon its Report that the Bill is founded.
The present conditions with which we are concerned are generally that there are vast charitable assets in the country and that in too many cases it is not known where the charity is, who the trustees are, or what the charity is for. Over too wide a range, charities are unknown, unco-ordinated and often competitive. Overall, in a very large area of charitable work, the position is little short of chaotic.
On top of that, as the Home Secretary indicated, there has been superimposed the Welfare State, so that we also have the problem of the Welfare State making a good deal of what was formerly charitable work superfluous or redundant. We therefore have the problem of fitting in charities first with other charities and, 417 secondly, with that large section of what was formerly charitable work which is now undertaken by the Welfare State.
The Lime has come for a general review of the charity position, because it is time to move from what has hitherto been the negative attitude of preventing abuses in particular charities and dealing with particular charities separately to the much more positive attitude of administering the great field of charity as a whole, to the greater advantage of the community. That is the purpose of the Bill.
In doing that, there are dangers. The great problem which the Bill has to meet is that of co-ordinating and systematising charities and State welfare, bearing in mind and securing two absolutely vital conditions. The first of those conditions is that by systematising we should not systematise the voluntary spirit itself out of existence. The second point about which we are vitally concerned is that we should not subject charities to political purposes, nor use charity as an alibi to relieve the Government of a responsibility for obligations which Parliament has itself accepted. Charity should not be used indirectly either for relief of taxation or for relief of rates.
Nor should charities be used for investigations which would properly be the subject of Government responsibility. The true scope of charity, as is seen from the Nathan Report, is, first, to pioneer new fields of development in charitable work, including, if need be, acting against the Government itself, and, secondly, to fill the gaps in the social services. It is with those purposes and those considerations as completely fundamental that we approach the Bill.
I come to the Bill itself. As on previous occasions I have made some somewhat severe remarks about drafting, I must now indulge myself in the pleasure of most warmly congratulating the draftsman of the Bill. I am in the happy position of not knowing which of my friends among the Parliamentary draftsmen has in fact drafted it, but whoever it was is responsible for a masterly performance. The task was enormous, as the Home Secretary indicated. The draftsman has reduced all this mass of legislation to what the Home Secretary, in his capacity as a layman, described as a single, intelligible Statute. Indeed, it is a layman's dream of what a legal document should be.
418 In our view, the substance of the Bill is generally admirable, but we are concerned with specific points. I can most profitably indicate the points with which we are concerned, and it may help to let the Government know what our general attitude is towards various aspects of the Bill, since that might save considerable time at later stages.
Before doing so, I want to refer to one subject which has been the cause of considerable debate in another place, in the country and in the legal profession. That is the subject of the definition of charity. Personally, I am most strongly and firmly opposed to there being any definition of charity in the Bill, and I am very glad that no definition has been given. A definition must be either by enumeration, which is utterly impossible and which would quickly be out of date, or in general terms. If it is a definition in general terms, do we want it narrower or wider than it is at present? We should immediately land ourselves in a most hostile argument about the definition we want. Some would want it more flexible and some more precise, and we should merely land ourselves again in the same difficulties of application as we have had in applying the law of charity in the past.
The one possibly acceptable suggestion has been that we should cut out the Statute of Elizabeth, which to some extent could be regarded as being a definition of charity. If that were done, it would leave the law of charity very much as it stands and we should therefore be legislating merely for the sake of legislating. If it did affect the law of charity, I do not know, and I challenge anybody else to say that he knows, what the effect on the law would be. It would mean more work for lawyers. Thus, it can be seen that my opposition to definition is not from any trade unionist point of view. One point which is often made about definition is that the nexus of employment should be included in charity. I would be personally opposed to that being included in a definition of charity. Among other things, it seems to me that it would make even wider the present opportunity for Income Tax evasion.
The first substantial proposal to which I want to refer is that concerned with the register. Essentially, this is a 419 Committee Bill and I am afraid that I must deal with these matters separately under their different headings. Of course we welcome the proposal for the register. It is an essential first step to reducing order out of the present chaotic position of charities. I will indicate various aspects about the register with which we are concerned.
I understand that it is calculated that about 150,000 charities will be registered. Will there be an adequate staff for that purpose? I understand that an administrative staff is to be added to the Charity Commissioners. What we are concerned about is that the registration should be treated as an entirely separate function, separately provided for and not interfering with the present work of the Charity Commissioners, who are at present under-staffed and who will have considerable additional work to do. It is utterly useless to put forward a Bill of this kind without providing the proper staff to work it. We might as well not have the Bill at all.
Nor is it any good having the cheeseparing attitude which some people have adopted towards the Bill, saying that we must be extremely careful not to have any kind of reasonable increase in staff in the Charity Commissioners' offices. Of course we must have an increase in staff. That does not mean to say that it is not beneficial to the country to spend money on increasing staff to provide a more efficient administration of charity, for, after all, that is the whole purpose of the Bill. The purpose of the Bill is defeated if there is not a proper staff to operate it.
We should like some information about what is to be registered. At the moment, it is left entirely to the Commissioners to decide. Obviously the name and address of the charity and the trustees will have to be registered, as will the primary purpose of the charity. Equally, or nearly as important, we should have the secondary and subsidiary purposes registered. Is there, however, to be no indication of the size of the fund? It would be most helpful to have that. What other particulars is it contemplated will be included in the register?
There are to be a number of exemptions from the register. We agree with the Government that institutions such as the British Museum and the universities, 420 which are mentioned in the Second Schedule, should be excluded. Equally obviously, very insignificant charities should be excluded. However, we come to the very much more difficult problem of religious charities, and I should like to spend some little time dealing with that subject.
Religious charities are in an exceptional position. In the first place, they are extremely resentful, and rightly resentful, and jealous of any State interference. After all, what makes them religious charities is an act of faith on their part. Their very nature is completely different from government, and I can well understand that those charities and the people responsible for them would consider Government interference in religious charities as utterly intolerable.
These charities are denominational only, of their very nature. Of their very nature, they are well known to those within the denomination—or can easily be ascertained—unlike many other charities. They are in a peculiar position in that way. In a way which does not apply to many other charities, their trustees are either controlled by the central denominational organisation, or, if there is no central denominational organisation, are controlled by and subject to the criticism of the local congregation.
In religious charities, therefore, we have charities whose voluntary spirit, to put it that way, is of a particularly precious and delicate nature. They are organised in such a way that they are known and their trustees are responsible to people who know what they are doing. They are in a position altogether different from that of trusts, such as those raising money for tuberculosis research or something of that kind, admirable charities in themselves but without the checks which religious charities provide. Such charities are utterly different creatures from religious charities.
There is, therefore, a very weak case for the registration of religious charities. The Government have rightly excluded any registered place of worship and any institution administered by the Church Commissioners. They have stated that they are giving consideration to exceptions for the working funds of churches and a large number of small religious funds which are of denominational interest only. I do not know how far that goes.
421 I have dwelt a little on religious charities because of their extreme importance, to make clear to the Government our position in principle in approaching the religious charity problem, and also to probe the Government on the nature of the consideration which they are at present giving to religious charities.
Will chapels, church halls, Sunday schools and ancillary buildings, manses and caretakers' houses, general working funds of churches and subsidiary organisations such as Sunday schools and choirs, and young people's organisations, be exempt from registration? How far does the Government's consideration of exclusion from registration go at present? We should be grateful for an indication of the Government's attitude on this. Further, will the exemption apply not only to registration but also to the obligation to render annual accounts under Clause 8? If not, why not?
Such exceptions as are to be made, apart from those already mentioned in the Act, are to be made by regulation. I fail to understand why these exceptions should not be included in the Bill. We are dealing with the exclusion of a class of charity, of necessity, by definition, not by enumeration. If it is a matter of exclusion by definition, it is a matter of exclusion on principle. If it is a question of principle, it is a principle which should be embodied in the Bill.
Various charities and classes of charities have been exempted in the Bill as it stands. The real reason for considering making further exemptions by regulation is not that they should not be in the Bill, but that the Government have been dilatory about dealing with the exclusion of the charities whose exclusion they are now considering, and therefore it will be more convenient for them as administrators to deal with them by regulation rather than by amendment to the Bill. That is not the way to treat Parliament. They should be included in the Bill. In due course we shall press that whatever the Government eventually decide should be excluded should be stated in the Bill, rather than being dealt with by regulation.
The fourth point on registration is the presumption that a charity when on the register shall be conclusively presumed to be a charity. We welcome the pro- 422 posal, because it makes the position of the charity whilst on the register, and the consequences of its being a charity, completely certain and not subject to being upset. A charity can be crossed off the register if it is shown that it should not have been registered at all. Perhaps the Solicitor-General will confirm my impression that the effect is that, as long as the charity is on the register, for Income Tax purposes it remains exempt for the period when it is on the register and there can be no retrospective operation by reason of the charity being taken off the register subsequently. That is a very sensible provision which will be very widely welcomed by charities.
As a corollary of that, it is essential that there should be what is contemplated by the Bill, namely, an exchange of information between the Inland Revenue and the Charity Commissioners with a view to arriving at an agreed list for inclusion in the register of charities.
I come to the local authority's index. We should be grateful if the Solicitor-General would give us a little more information about that. From the wording of the Bill it does not appear to be limited to charities in the central register. It looks as though the index might go wider than the central register. We should be grateful for some information on whether this is intended.
If it is to be wider than the central register, I suppose local authorities will obtain their information not only from the central register but from other sources, too. Will the particulars to be included in the index be the same particulars as in the central register? Will it be a duplicate of the central register? What exactly will it be? It is described merely as "index" and not as a local register in itself. Exactly what functions will it perform, and how will it perform them?
I come to the provisions dealing with the administration of charities. Generally, we approve of the Commissioners' powers about accounts, inquiries and so on. I want to come straight away to what has been perhaps the most difficult and controversial Clause, namely, Clause 28, covering restrictions on dealing with charity property. It is clearly advisable to have these restrictions where there is otherwise no adequate check on trustees. 423 We not only accept that but support it. However, it does not seem to us advisable just to substitute the business discretion of the Commissioners for that of the trustees. If that is done, it is apt to sap the independence of charities, and this is the kind of thing which is felt particularly by the religious bodies. As the Nathan Committee said in paragraph 196:It is, after all, the essence of voluntary action that it should act in accordance with its own judgment.Cases nave been trotted out in which, owing to the intervention of the Charity Commissioners in religious charities, more money has been obtained for land than would otherwise have been obtained. I do not in the least gainsay those instances. The chances are that such cases are bound to have occurred. What we have not been told is the number of cases in which there have been losses because of the delay caused by this form of administration. What is vital is not this material aspect, but that State interference is being superimposed on a religious body in administering its own body of religious assets. Why? Why should not those who form themselves into a religious body or join a religious body administer their own assets in their own way? If they do not make the best business judgment, it is a matter for them.
We are very much in danger here of impinging upon a spirit of independence and freedom of religion which is incomparably more precious than obtaining a little more money for a little land. The national organisations, such as the Boy Scouts and living Churches through their denominations, provide a check on their own trustees. They are in a peculiar position in that respect. There are beneficiaries, in exactly the same way as in a private trust, who can call the trustees to account.
We welcome the Government's indication that they are considering the position again. They have given certain undertakings, but I do not know how far those undertakings go. I do not know how limited they are. In the case of such national organisations as the Boy Scouts and the Lifeboat Institution, I understand that there will be no interference under Clause 28 with transactions in respect of local premises pro- 424 vided from the general expendable funds of the national charitable organisation.
Exactly what are the limits of that undertaking? Does it mean merely that, if local premises for Boy Scouts are bought out of local income of the central Boy Scouts organisation, they can be resold because it will be treated as income only? Does it mean that, if bought out of capital from the national organisation or capital or income of the local organisation, they will not come within the exemption? Exactly what is its operation? Perhaps the Solicitor-General will be in a position to clarify that later.
Undertakings were given about places of worship. Do these exceptions, referring to denominations, apply to land forming part of a permanent endowment, as they appear to apply to them, on the face of it, or are they meant also to be limited to land bought out of income, as appears to be the case with such organisations as the Boy Scouts and the Lifeboat Institution?
It is again proposed that these exceptions should be in regulations. Exactly the same remarks as I made about excepting by regulations from registration apply to excepting by regulations from Clause 28.
There is also a proposal about common investment fund schemes. We welcome this wholeheartedly. It means that we will have more expert advice available for charities. I also welcome the Government's decision that there is to be no distinction between the list of charity investments and the list of other trust fund investments. That is a very wise decision.
Cy-pres is another topic bristling with difficulties. The expansion of cy-pres is a vital part of the Bill to enable better use to be made of charitable funds, for example by amalgamation between charities. The whole purpose of the Bill would be largely defeated if this section of the Government's proposals were omitted. We welcome the proposals to extend the area as the Home Secretary indicated, and we welcome the ability to change the purpose of a charity after forty years.
One particular difficulty is caused by that subsection which, for purposes of cy-pres, preserves what we call the 425 requirement of general charitable intention. In other words, where a gift is given for a particular purpose, as happened, for instance, in the case of the Gillingham disaster and in the case of several colliery disasters about which I know certain of my hon. Friends are deeply concerned, it is given only for the relief of distress among those affected. Subscriptions are made, and then, if for some reason the distress is met in other ways, there may be a surplus in the fund or the whole of the fund cannot be applied to the purpose intended. The result is that something must be done with the money.
Unless the courts can find that there is a general charitable intention, that is to say, an intention to benefit charity as such generally over and above the intention to benefit the particular people affected by the disaster, the money cannot be devoted to other similar charitable purposes. It has to be returned to the subscribers, if they can be found. The subscribers may have given small sums of money. Expense might be incurred in trying to find them. If they cannot be found, as so often happens, the money is paid into court and there lies dormant, not being applied to charitable purposes at all.
It has been proposed that, in those cases, the money should be applied cy-pres to some similar charitable purpose. I appreciate the difficulty that substantial sums may have been contributed for the particular purpose of relieving distress among those injured by, for instance, a colliery disaster and for no other purpose at all. If substantial sums are provided in that way, quite clearly it is unjust to apply the money cy-pres. But I do not understand at all why another course could not be adopted. General advertisement should be quite sufficient because, in all these cases, the public take a great interest before subscriptions come in; all the facts and circumstances are known and all the newspapers keep up with them. Why should there not be a general advertisement, as is done in the case of executors under the present law? If a general advertisement were put out stating that subscribers who wished their money to be returned should apply for the return within a certain time and, 426 failing that, it would be applied cy-pres, that would surely be sufficient. I do not understand why that could not be done.
It seems to me that that would be much the fairest way of dealing with such contributions, because one would, in that way, in all the circumstances, come as nearly as one possibly could to the intention of those who gave the money. Now, on the other hand, the money is not even returned to those who subscribed unless, of course, they are found and take it. It simply lies in court. I commend the suggestion to the Government for their consideration. We shall certainly bring something forward on those lines in Committee. It would, of course, apply to all those sums of money which at present lie dormant in court. Why should they not be applied cy-pres in exactly the same way as in the case of future contributions?
The last point I wish to make about administration touches another aspect of charity which bristles with difficulties, namely, the imperfect trust. Where property is given to charitable and non-charitable objects in such a way that the whole can be applied to the non-charitable objects, the gift has none of the legal advantages of charity. There is, for instance, the well-known case of a gift not merely to charitable purposes but to charitable or benevolent purposes. The charitable purposes, of course, are charitable, but the benevolent purposes go far wider than charity and, therefore, are not exclusively charitable.
Where there is a gift for charitable or benevolent purposes, the whole of it might be applied to benevolent purposes only. Since it might be applied to benevolent purposes only, it need not be applied to charitable purposes and, therefore, it is not a charitable gift at all. Again, the difficulty created here is being considered by the Government.
I appreciate and agree with the strong objections which have been made to the whole gift being treated as charitable. It seems to me to be utterly contrary to the testator's or donor's intention to treat the whole gift as charitable when, in fact, his intention was to give not only to charitable purposes but to benevolent purposes also. I agree so far. My suggestion is that, where charitable purposes are expressly mentioned with other purposes, then the gift should be treated 427 as divided proportionately between all the purposes.
For instance, if there is a gift to charitable or benevolent purposes, half of it should be treated as having been given to charitable purposes and half of it should be treated as having been given to benevolent purposes. The half given to benevolent purposes would be subject to the ordinary rules of law applicable to non-charitable gifts. The half given to charitable purposes would be subject to the rules of law applicable to charitable purposes—the far more favourable rules for preserving the effectiveness of gifts which apply in such cases.
That appears to me to approach far more nearly to carrying out the intention of the donor. It is ridiculous that the whole gift should fail. The objections to the whole of the gift failing are precisely analogous to and the very counterpart of the objections to the whole of the gift going to charity. It seems to me that the only proper solution is to treat the gift as being given proportionately between the different purposes specifically mentioned. If only one purpose is mentioned, such as a benevolent purpose, which might include charitable purposes but might include non-charitable purposes, it should be treated as a non-charitable gift because in such a case it is far more difficult to say that the testator has shown a charitable intention than in the case of a gift to charitable or benevolent purposes. My proposal is, therefore, very limited. I hope that the Government will consider it. In my view, it comes most nearly to effecting a just solution in what are admittedly difficult circumstances.
I come to the Commissioners themselves who are fixed with the responsibility of administering the Bill. The composition of the Commissioners is obviously a matter to be decided in the light of the work they do, so let us consider that. They are to make and keep the register. They axe a scheme-making body. They are the people who, in making schemes, are responsible for amalgamations of charities and the better use of charitable funds. That is essentially a matter requiring business knowledge and a wide knowledge of the workings of charities. 428 Thirdly, the Charity Commissioners provide advice and assistance, certainly on law but, in addition, on accounts generally and the administration of charities from the business point of view. Lastly, they are concerned with investigating and checking abuses.
The Commissioners have to carry on their work in the light of the general purposes of the Bill. As I said earlier, the general purpose and effect of the Bill will be to shift the emphasis from the negative and the legal functions of the Commissioners to positive and administrative functions extending over the organisation of charity as a whole. What this work demands, therefore—not exclusively, but predominantly—is a wide and diverse experience; business experience, experience of charity, and a wide social outlook.
We should, therefore, expect a fairly strong body of Commissioners, satisfying these requirements. Instead, we have three, of whom two are to be lawyers. We completely fail to understand why, contrary to the recommendations of the Nathan Report, the Commissioners are to be so limited in numbers and in composition. I should like an explanation from the Government why, contrary to these recommendations in the Nathan Report, they have made these two decisions, the one as to numbers and the other as to composition.
To some extent, this defect in the Bill —because it is a defect—can be met by an advisory body, but I must confess that I do not like advisory bodies. I like bodies which have effective executive power. One then gets responsible decisions and one knows that the work is effective, because the members of the body take a greater interest in it. An advisory body is a very poor also-ran.
Nevertheless, if the Government are to proceed on this small, narrow composition, it would be better to have an advisory body than to have nothing at all. We know that that can be done by administrative action outside the Bill altogether but, before we finish this Second Reading debate, we should like to hear from the Government an explanation of their decision about the Commissioners and their attitude towards the advisory body.
The Home Secretary has given an explanation of his functions, but we are 429 concerned about the question of responsibility in Parliament and the answering of Parliamentary Questions. I do not know how far the operation of the Bill can be probed by Parliamentary Question, or exactly what the attitude of the Minister is towards it. The recommendation of the Nathan Committee was that, in the first place, the Lord Chancellor should be responsible for charities; failing the Lord Chancellor, the Lord President; and only thirdly the Home Secretary.
We should like to know why it was eventually decided that the Home Secretary should be the Minister responsible. There are arguments both one way and the other, we know, but particularly in view of the Nathan Committee's recommendation—and, in fact, as I understand it, the opposition of the Home Office itself before that Committee to taking on this charity work—we should like to be told what decided the Government to allocate this responsibility to the Home Office.
The Bill is very welcome, and we agree with its general principles. It is, of course, full of Committee points, but I hope that in the course of this debate we shall be able to clarify the position to some extent, so that in Committee we shall know a little better what the Government have in mind. We may thus be able to reduce what might, I am afraid, in any case be a rather prolonged Committee stage.
§ 5.24 p.m.
§ Mr. John Morrison (Salisbury)
Having served for a few years as Parliamentary spokesman for the Charity Commissioners, I am happy to have the chance to mention one or two things. Both my right hon. Friend the Home Secretary and the hon. and learned Gentleman the Member for Leicester, North-East (Sir L. Ungoed-Thomas) have paid tribute to those who work on the Charity Commission, and I, too, should like to add my congratulations and to thank them for the work that they have done so very well during very many years. I believe that it is now 108 years since the Commission was set up.
It was originally established to enable small charities that had to go to law to get some matter straightened out to avoid the cost of expensive litigation, and I believe that the Commission has done 430 a good job in providing free advice for the many and varied charities. There has so far been only one very small note of criticism of the Charity Commissioners' work as a whole. That was made by the hon. and learned Gentleman, who said that it took rather a long time to deal with questions of the sale of land. It is true to say that the Commission does take a long time in some matters, particularly when a scheme has to be drawn up, but the very fact that it has to take a long time has been a safeguard, and ensures that all interests and all interested parties have their points of view registered—
§ Sir L. Ungoed-Thomas
I should like to make it completely clear that I do not in the least criticise the Charity Commissioners. On the contrary, I have the greatest admiration for their work. I think that they work admirably, despite the difficulties caused by great shortages of staff.
§ Mr. Morrison
I am sorry. I misunderstood the hon. and learned Gentleman. That means, then, that in the debate so far there has been no criticism at all of the Charity Commission set-up. That is very gratifying, but, at the risk of being rather critical, if the Commission is going along very well as a concern, I cannot help asking my right hon. Friend, "Was your journey really necessary?"
We have heard a great deal about the Nathan Report, and I fully appreciate that the Government had to take into account the Report of a Committee of distinguished men, and that commitments may have been made in respect of that Report when it was under discussion in another place. Nevertheless, both my right hon. Friend and the hon. and learned Gentleman have stated that the work at present goes on very well.
Something has been said about the registration of all the charities. The hon. and learned Gentleman quite rightly said that the Commissioners are a bit short of staff, and thought that the Commission would inevitably need more staff. I am told that that is definitely the case, and that the minimum cost of the additional staff would be about £10,000 a year. That is another £10,000 a year on the plate of the taxpayer.
Charity is the most important thing in the land. It is extremely important 431 that people who wish to give money, either during their lifetime or by means of their wills, should not be discouraged from doing so. Charity is often a vital need for the less fortunate members of the community as a whole, although, by legislation, we try to improve their lot. We do not want to do anything that will frighten off the person who is, or might be, charitably inclined to give or bequeath money to a good cause.
That brings me to a point that I do not think was touched on in the debate in another place. I am not a man of law, but I think that I am right in saying that by the First Schedule the Home Secretary, who will have Parliamentary guidance of the Charity Commission from the date of the enactment of this Measure, appoints a Chief Commissioner who, in cases of disagreement, will have a casting or, if need be, a second vote.
As I see it, that means that the Home Office really takes entire charge of the Charity Commission from now on. I hope that I am wrong, but if that is so, it brings all the charities inevitably into the sphere of a Ministry that must be political. The Charity Commission has, as a whole, kept out of politics for 108 years, and it would be a great tragedy if people were deterred from giving money to good causes by fear of politics entering into this sphere.
Then, again, there is a reference to local authorities and further discussions with them. I have great faith in the work of local authorities of all sorts and some of my family partake in the duties of local councillors in one way or another. But if one were signing a will and deciding whether a sum of money might be given to a worthy cause which had been one's lifelong interest, I wonder whether one would be encouraged to give an extra £25 if the local council was to see that it was registered forthwith and might have powers of discretion with the trustees appointed for that good cause. I hope that this matter will be cleared up.
I hope that the Bill does good for the cause of charity, but I hope, also, that before it becomes an Act it will be made quite clear that it will be the policy to exclude politics completely as far as possible, provided that there is some Parliamentary contact with the Commissioners and the House.
§ 5.31 p.m.
§ Mr. Ede (South Shields)
I join with my hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas) in giving a general welcome to the Bill, but I make, in the main, the same kind of reservations as he does. I do not intend to detain the House very long and I do not imagine that hon. Members will want me or anyone else, after my hon. and learned Friend's analysis, to go in great detail into our objections to certain parts of the Measure. But I want to speak on behalf of the Nonconformist Churches, because they regard some of the possible working out of the Bill as being almost a denial of the claim which, for 300 years, they have made in the social and religious life of the country.
We object to uniformity. There was a time when there were various Acts on the Statute Book which excluded us from citizenship because we declined to accept the Act of 1662. I apologise to the right hon. Gentleman the Home Secretary for having to make this point in front of him, because when he and I were meeting various religious and civic bodies during the campaign for the Education Act, 1944, it was generally left to me to explain to some of my Nonconformist brethren exactly what Nonconformity was and is.
To mention my own denomination, down to 1813 people were not allowed by law to be Unitarians. Indeed, one of the Measures with which this Bill is concerned arises from the fact that the House of Lords held that one could not leave an endowment to a body whose members were put outside the law in that way. We have a rather historic objection to being registered and to our funds being subject to examination. On 11th June I have to give an address on the 250th anniversary of a church of my denomination. It was built with one entrance and two exits so that when the justices of the peace came to see who was speaking and who was attending they could only get in one way, but the congregation could depart by two. That sounds very amusing in these days, but there were days when people met only in defiance of the law, and that historic tradition still remains.
I hope that what my hon. and learned Friend the Member for Leicester, North-East asked for about the registration of 433 these causes and their inclusion in the register may be met, because the safeguards with regard to the way in which the trust is administered and its funds dealt with are ample and should satisfy the House after experience of 250 years or more during which we have maintained our independent position in the country.
One Measure which the Bill will repeal is the Nonconformist Chapels Act, 1844, which brought to an end a most bitter controversy, mainly within Nonconformity itself—because once one becomes a Nonconformist it is so easy to nonconform with the people one has just joined. I hold in my hand the presentation copy of the debates on what is here called the Dissenting Chapels Bill, which is the Measure to be repealed. The whole of the debates in both Houses are here recorded, the Division lists, and the petitions which were presented for and against the Bill. Let it be quite certain that no voluntary body will do such a thing with regard to either this Bill or the Bill with which I have been just recently associated with the Joint Undersecretary of State for the Home Department—the Betting and Gaming Bill. Not even the bookmakers will go to that expense in connection with that Measure.
The Nonconformist Chapels Act represented a solution to one of these difficulties about the right of property of voluntary Nonconformist bodies and it secured for my own denomination the title to several of its most historic meeting houses. The way in which it is to be repealed is rather curious. I see that the Joint Under-Secretary of State for the Home Department has a copy of the Bill before him and he will see that in the third column of the Fifth Schedule there are words which are just the kind of thing that terrifies a layman when he starts reading this Measure.
My hon. and learned Friend the Member for Leicester, North-West praised the Bill as one which a layman could understand and follow. I ask him to consider the lines in the third column to which I have referred, with the exception which they make and which seems to open up all the difficulties which, not the Solicitor-General, but the layman fears when he is trying to find out exactly what things mean.
434 Generally speaking, considerable promises have been made in another place about what will be done to the Measure in this House in connection with the various points with which the Nonconformist Churches are concerned. I was glad to hear the right hon. Gentleman the Home Secretary say that an effort will be made to redeem those pledges in this House. But those who have read the debates in another place, while very grateful for the way in which their points were met by the Lord Chancellor, wish to make it quite plain that they expect some considerable concessions on the points which are still outstanding.
I hope that this will be possible, because there are very considerable misgivings about some of these points. After all, if we take the independent Churches, that is, those that have not any very strong central denominational organisation to control and help them, we find that the secretaries and treasurers of these Churches are very often people of no great educational qualifications and background, and the compilation of the annual returns and forms that might be required, I understand, as the Bill stands at present, could present them with very great difficulties. A good many people might find themselves in various forms of jeopardy, not from any malice, but from their inability to cope in the precise way demanded by the Commissioners with the requirements as to such statements.
The Baptist and Congregational Churches have taken a very notable part in the negotiations, and I wish, on behalf of the other Nonconformist bodies, to pay a special tribute to the zeal they have displayed. I understand that there was to be a meeting at the Home Office between them and certain people in the Home Office who are interested in the promotion of this Measure, but that it has not yet taken place. I think that it is a pity that it should have been postponed. I hope that when this matter comes up for consideration there will be no doubt on the part of the Secretary of State and those who advise him as to the importance which the nonconforming Churches of this country attach to the issues that are raised by the Bill.
I join my plea with that of my hon. and learned Friend that the course 435 which he asks to be followed shall be followed in this matter, and from my knowledge of the right hon. Gentleman the Home Secretary, and of his zeal to promote religious unity—not uniformity, but religious unity—in the country, I hope that he will see that the points which I have ventured to put forward receive the most sympathetic consideration in any such discussions as I have just mentioned.
§ 5.43 p.m.
§ Sir Hugh Lucas-Tooth (Hendon, South)
I join in welcoming this Measure. As has been said, it is not purely a technical and administrative matter but one which involves some large changes of policy—and of policy which goes to the root of our social ideas.
When we have changes in ideas, they are always important, even though their immediate implications cannot very easily be foreseen. Our educational, our medical and our social institutions were largely originated and developed as a result of charitable activities. These institutions and the responsibility for their maintenance has been very largely taken over by the taxpayer, and it is, of course, that fact which creates a need for this Bill. It is because of that fact that we have this large and somewhat complex Bill today.
That fact seems to me to pose two general questions, one of which has already been canvassed in the debate. Are the charitable funds in existence, those given in the past, well used, and what is the best way to see to their use in the future? There is a second question, which is this: should people now be encouraged to give their money by charitable gifts, in view of the fact that so many of these activities have been taken over by the State? My answer to that second question is definitely in the affirmative.
The hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) spoke of the need for pioneering new fields of social endeavour, and I thought that a very happy phrase, but there is another aspect of it. I can remember an old lady who had always given 10 per cent. of her gross income for charitable purposes throughout her life. With the coming of war and heavy 436 increases of taxation, though she was a wealthy old lady, it became impossible for her to continue this custom, and this upset her a very great deal. I mention that only because I think it important that people should recognise that they have a personal responsibility in these matters. It is this sense of personal responsibility, not only for our immediate relatives but for the welfare of the community as a whole, which has made our social services in this country better, I believe, than those of any other country in the world. If we do anything to cut at the root of that, we shall be doing very grave damage.
The two questions are fairly closely related—the use of charitable funds and the provision of new funds—because unless funds which have been given in the past are seen not only to be well used but to be used for the purposes which their founders intended, we shall not find new funds forthcoming. A nice balance is therefore needed between, on the one hand, maintaining the original purposes for which funds were given and, on the other hand, promoting the most effective use to which funds which may have been given many years ago can be put at the present time.
I think that, on the whole, the balance which this Bill puts before the House is not very far wrong. It seems to me that it deals with the matter in about the right way. I regard Clause 1 and the First Schedule to the Bill—that is to say, the provisions which deal with the new constitution of the Charity Commission—as being much the most important part of the Bill. My right hon. Friend the Home Secretary, in the course of his remarks, referred to Clause 1 (3), and I agree that the most important words are those which refer to the functions of the Commissioners as being—promoting the effective use of charitable resources by encouraging the development of better methods of administration, by giving charity trustees information or advice on any matter affecting the charity and by investigating and checking abuses.I do not think that the purpose of this Bill could have been more happily expressed.
In my opinion, and it is not shared by some of my hon. Friends here, the existing constitution of the Charity Commission is not altogether satisfactory. In saying that, I do not wish in any way 437 whatsoever to criticise the present members of the Commission. If the two archangels held these offices, they would not be able to make a good job of it with the Commission as at present constituted.
The Department is exceedingly small. I suspect that it is one of the smallest in the country. What is more, it is unconnected with any other Department of State. The two Commissioners have to be barristers. At present they cannot even be solicitors. In the ordinary way they enter the Department fairly early in their lives, without necessarily having had very wide administrative or business experience. They stay in that Department for the rest of their lives and leave at retiring age on a pension. It is obvious, first, that in such a Department there is no movement; it is a dead end, and when someone gets in there he cannot get out. Secondly, there is literally no promotion worth talking about. Whatever the functions of such a body, I do not believe that one with that constitution could work satisfactorily.
The Bill proposes a third Commissioner, and it also proposes that this third Commissioner can be a layman and that all three Commissioners shall be appointed by the Home Secretary of the day. When these appointments are made—they will not be made in a revolutionary way but from time to time, the first immediately on the Bill coming into effect and the others later—I hope that my right hon. Friend will ensure that the third Commissioner is a layman. I also hope that he will pursue a policy of ensuring that this Department is no longer a dead end. In other words, I hope that he will take people out of the Home Office and appoint them to serve on this body for a certain length of time, possibly a long time, but not on the basis that they have to stay there until they either die or retire. I believe that if my right hon. Friend follows such a policy, he will have exactly the body which will do the job we want the new Commissioners to do.
I notice a paragraph in the First Schedule which has not been referred to in the debate. Paragraph 1 (5) gives the Home Secretary power to appoint two additional Commissioners to meet 438 temporary needs. I do not know how the word "temporary" will be interpreted, but I imagine that there might easily be a considerable temporary need at an early stage of the operation of the new scheme. For my own part, I will promise not to worry my right hon. Friend to bring any such temporary appointment to an end prematurely.
May I say a word about Clause 13, which deals with changes in the cy-pres. I am sure it is right to encourage the modification of the objects of a charitable trust in appropriate circumstances. I know that there are charity trustees who want to go too far. I have often come across trustees of a charity who think that their ideas are much better than those of the founder, and they have to be restrained. On the other hand, I know, too, that there are many charity trustees, perhaps the majority, whose only idea is complete stagnation. They never think in terms of doing the best with their money and their attitude to their trust is completely perfunctory. Perhaps it is an exaggeration to say "the majority", but there is a considerable number of such trustees, and something must be done about them.
I am glad that the Bill permits a change in the objects of charitable trusts in a wider range of cases than is at present permissible. That is good in itself, but it is not enough to deal with the situation. I will trouble the House with a personal instance because one can deal only in personal instances, since few people have means of knowing cases other than those which come to them in a personal way.
I was once connected with a charity. Its objects were somewhat narrow and its permitted method of attaining those objects was narrower still. It was doing a good job but it was exceedingly inefficient in doing so, and I was shocked by the amount of money which we were spending for what we were achieving. I am certain that if the founder had been alive he would have been equally shocked. This was a long time ago and therefore has no reference to present individuals.
I went to the Charity Commission and I had more cold water poured over me in a short period in my life than I had ever had before. I was not deterred by that, and I went to see the then Junior 439 Chancery Counsel to the Treasury, generally known as the Attorney's devil, a learned gentleman who subsequently became a very distinguished judge in another place. He poured even more cold water over me. I was not deterred by this. I was satisfied that we were not doing our job and I advised my co-trustees that we should go ahead, notwithstanding all this cold water. We got out a scheme and put it before the court, which approved it.
It was an excellent scheme, not altogether unlike that suggested in Clause 12. We are now working it in combination with the London County Council, to the satisfaction of everybody. In that case we had substantial funds and one of the trustees happened to be a Chancery barrister, so we were able to do something. I am certain that there are many small charities in this country, and possibly some larger ones, too, where there is a great deal of waste simply because what should be done is not done.
I welcome the enlarged powers given by Clause 13, but I ask my right hon. and learned Friend, who is to reply to the debate, what is intended by subsection (5), which declares that—a trust for charitable purposes places a trustee under a duty …in effect, to obtain a scheme of cy-pres in an appropriate case. That is a difficult duty. It is not always easy for the court to decide, and the trustee may be in some difficulty. Supposing he does not take action, what is the sanction? I would imagine that could possibly be a breach of trust. If that is so, the sanction will be severe, because it would mean that the trustees might become liable for all the income they had misspent in the meantime. I should like my right hon. and learned Friend to clarify that point.
Turning to the register, on the whole I am glad that the Government have decided to have a register of charities. I appreciate what has been said by the right hon. Member for South Shields (Mr. Ede) and the hon. and learned Member for Leicester, North-East about religious establishments, and it may well be that they should be treated in a different way from other charities. I am sure, however, that more knowledge of charities and their funds is required. As I have said, I think there is a consider- 440 able waste of money which is held on charitable trusts but is not applied for any very useful purpose.
I appreciate, too, that purely ephemeral charities should not be included in the register, but I have difficulty in understanding what the Government intend to except from the register under paragraph (4, c) of Clause 4, which states:any charity not having any permanent endowment, nor any income from property amounting to more than fifteen pounds a year, nor the use and occupation of any land;These seem to me to be three separate classes of charity. The first is any charity not having any permanent endowment whatever; the second is any charity not having any income from property amounting to more than £15 a year; and the third is any charity not having the use or occupation of any land.
It seems to me that those are to be read disjunctively, but it is not at all clear how they are to be read. If they are to be read conjunctively they will hardly be any exception. If they are to be read disjunctively, there is a conflict between the first and the second. In any event, I should like to know the meaning of "use and occupation … of land" in this context. Does it mean mere right or permission to use a hall, or what does it mean? I hope that my hon. and learned Friend will explain this.
The other provisions of the Bill seem to me to be excellent and, indeed, overdue. The appointment of an Official Trustee for Charities must be quite un-controversial and most useful. Nobody will quarrel with the abolition of mortmain—at least, I hope not—and the power to establish common investment schemes seems to me to be common sense and quite unobjectionable. This is a good Bill which proceeds on the right lines. It will require a good deal of scrutiny in Committee. In the meantime, however, I hope that it will receive a unanimous Second Reading.
§ 6.2 p.m.
§ Mr. Harold Neal (Bolsover)
It is with trepidation that I participate in a debate which might be regarded as the special preserve of those right hop. and hon. Members who are skilled in the study and practice of the law. Indeed, if I 441 were making a speech merely for the record, I would select a less complicated subject and one that was more familiar to the rôle I customarily occupy in the House.
My intervention, however, must not be regarded as a serious challenge to anything contained in the admirable speech of the Home Secretary or even that of my hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas), who, in their lucid examination of the case, said everything that could be said about the intentions of the Bill.
My only point of disagreement with my hon. and learned Friend the Member for Leicester, North-East arose in the course of his tribute to the Parliamentary draftsmen. Whenever these fallible gentlemen produce what my hon. and learned Friend described as a layman's dream, although it will increase the degree of unemployment in the legal profession, I cheer more loudly than either my hon. and learned Friend or his colleagues. That day, however, has not yet arrived. I join my hon. and learned Friend in welcoming the Bill and accepting that it is a tidying-up Measure which is long overdue. I am sure that it will find general approval on both sides of the House.
A singular advantage of our Parliamentary democracy is that there is always somebody awaiting the opportunity and the appropriate moment to modernise ancient enactments and to suggest such alterations as will make them capable of twentieth century application. The Bill is an outstanding instance of this. Much of its content is obviously necessary and desirable—for instance, registration. This will tend to stop abuses which have been known to exist. The local authority index will provide for public consumption information which in the past has been exceedingly difficult to obtain.
Without detaining the House unnecessarily, however, I wish to come to my main point, which concerns the inadequacy of Clause 13. I do this in no mood of self-assurance. I address my remarks particularly to the Solicitor-General in the shape of an inquiry, and I trust that what I am about to say will be accepted in the spirit in which it is said.
442 In the presence of experts, I hesitate to give my definition of cy-pres, especially in view of the varying opinions that were expressed on the subject by the legal luminaries of another place. To the layman, however, it seems that the doctrine of cy-pres in the Bill may be adequate in cases where there is mutual agreement to alter the objects of a charity. I have in mind cases in which this is not, perhaps, possible.
My only difference with the Home Secretary arises from his statement that there will be no clearing-up of little charities. In many parts of the country, there are ancient charities whose disbursements are so rare and so trivial as to be ineffective. I know of charities which are entitled by their trust to distribute two yards of flannel, one florin's worth of flour and a few shillings at Christmas. These might better be amalgamated to make disbursements to the recipients more in keeping with modern money values. I hope that Clause 13 is not too tightly drawn to prevent this being accomplished.
I wish to draw attention especially to the case of colliery disaster funds, in which cases the object of charity might advantageously be altered. When a colliery disaster occurs, considerable public sympathy is always aroused and huge funds are raised as a result of the spontaneous generosity of the public. From time to time, exaggerated calculations have been made about the amounts of funds lying idle that were originally raised for this purpose.
I have never subscribed to that view. From time to time, however, the Ministry of Power has collected information on the subject and has issued a White Paper giving details. The last White Paper, Cmd. 8101, was issued by the Ministry of Fuel and Power in December, 1950. At that date, the total number of colliery disaster funds was 64. Twelve had been exhausted since the last inquiry, 24 expected no surplus, 11 had no information about surplus and five had surpluses realised and no dependants. At that date, according to the White Paper, the total of the balances was £912,613 and the total number of dependants was only 1,376. The total surpluses realised were £24,155.
The National Union of Mineworkers, upon whose national executive I happen 443 to serve, is specially interested in the fate of these funds. It will be remembered that the coal industry Social Welfare Organisation, which was set up under the miners' welfare Acts, is the responsible charity which deals with general charity for the coal industry as a whole. It is representative of both sides of the industry. This organisation has under its care 500 paraplegics who are the victims of industrial accidents, men who spend their complete existence in invalid wheelchairs. In addition, there are 6,000 permanently disabled men connected with the coal industry, representing 1 per cent. of the total labour force.
It would be an act of grace and mercy if these unexpended funds, when the intentions of their trusts had been realised, could be utilised and devoted to the national charity—the coal industry Social Welfare Organisation—which has the care of these victims of the industry. This would give widespread pleasure to all who are devoted to the care of these victims. If, later, the Solicitor-General consents to a widening of Clause 13 to make these funds available to lighten the lot of these men who are so bravely facing a hopeless future, it would give general pleasure throughout our coalfields.
§ 6.12 p.m.
§ Mr. Charles Fletcher-Cooke (Darwen)
We all listened with great pleasure to the moving plea of the hon. Member for Bolsover (Mr. Neal). I, too, would like to see Clause 13—if, indeed, it needs widening—widened to take account of his plea. If it needs widening, it should be reconsidered possibly on the lines suggested by the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas), namely, to permit of advertisement to those who subscribe asking whether they object to the diversion of the funds to the sort of purposes that the hon. and learned Member has in mind.
The hon. Member for Bolsover is one of the few laymen who have taken part in this debate. I am surprised that none of them has objected to the Bill on the ground that it omits a definition of "charity". The hon. and learned Member for Leicester, North-East put forward clearly the professional view on this matter. We rather like our old lace scattered about the old reports and statutes. Indeed, wiser heads than mine, or even 444 that of the hon. and learned Member, were hotly opposed in another place to any attempt at a definition.
To a certain extent, however, it is a confession of failure on the part of lawyers and of draftsmen that in a Bill that seeks to sweep up so much of the law relating to charity we cannot even consolidate a definition which otherwise has to be searched for through many books and many leaves of many authorities. It may be that we could do so, or, possibly, it is better to leave it alone. I am surprised, however, that during this debate the lawyers have been allowed to get away with that neglect.
Otherwise, the Bill has been welcomed as striking the right balance between the need to protect and to inform the public about what is going on with charities and charitable funds but, in the same way, not to harass trustees or voluntary workers or, indeed, potential donors. This is a difficult balance to strike. If we harass the trustees too much—I wonder whether the obligations to furnish accounts might not in many cases be too much of a harassment—it may be found that the great voluntary effort which we have all praised so much this afternoon may begin to crack up because trustees simply will not undertake these burdensome obligations. I am keen that not only charitable trustees but private trustees should continue.
The other day, I had a little brush with my hon. and learned Friend the Solicitor-General about trustees' costs. I wonder whether it is generally realised what a lot of work trustees do and how often their only reward is to find themselves in the witness box. Mr. Agustine Birrell, in a series of rather brilliant lectures to the Council of Legal Education about seventy years ago, described a trustee who found himself in the witness box in these terms. He was talking of a gentleman from an agricultural locality:There he stands ignorant for certain, pigheaded very likely, quarrelsome possibly, but honest, palpably honest and perspiring. He is charged with losses occasioned by his disregard of the strict language of a will he never understood, or for not having properly controlled the actions of his co-trustee, the principal attorney of his market town. It may be necessary to ruin such a man, to sell his horses and his cows, his gig and his carts, and to drive him from his own home, but it cannot be done without a qualm.445 We hope that nowadays provisions for relieving trustees are sufficiently well-known and well-used to prevent that from happening. But at the same time there is no doubt that this Bill puts on the trustees of charities some new and very onerous duties. That is why I say that I think the Bill went to the limit in striking a balance between the harassing of trustees and the protection of the public. I am quite sure, as was said by my hon. Friend the Member for Salisbury (Mr. J. Morrison), that if we were to impose on them another harassment, namely, more compulsory powers to local authorities in this matter, that would prove to be the straw which broke the camel's back, and I congratulate the Government on resisting that temptation.
The Charity Commissioners have been given new and very onerous duties. I think their powers of advice are widened by the terms of Clause 23. In another place, the Lord Chancellor said he hoped that those powers would be much used. So do I, and so I think they will be. Certainly, now that it has been brought to my attention, in future when anyone asks me for advice on a voluntary basis for some local charity I shall be able to say, "But my dear fellow, the Charity Commissioners are the people to do that work." That will be a great easing of my spirit.
Not only advice but auditing powers, disciplinary powers and, above all, the register will, I believe, result in far more work than is indicated by the Bill. I am surprised, because I think it a little misleading, that one reads in the Explanatory and Financial Memorandum on page iv:No reliable estimate at this stage can be made of the additional cost under Clause 43 of implementing the provisions of the Bill, but it is not thought likely to be large.If we are to have a register which is to be of any use and in which we may have to register hundreds of thousands of charities—because that is the sort of figure which is being cast round—it seems to me bound to be an expensive operation. If we are to provide the Commissioners with their staff for undertaking all these new duties, auditing, disciplinary schemes, scheme-making powers and so on, I have no doubt that, while the expense will not be large in national terms, it will be infinitely larger than anything we have thought of in the past 446 as being the correct amount of public money to spend in charity work. I make this slight criticism, because it seems to me to be misleading if we think that we shall be able to get away with this cheaply.
I have mentioned the disciplinary powers, and I think it quite right, although new, that trustees can be removed by the Charity Commissioners not only for misconduct but also for incompetence. Indeed, I would go a little further. I am not sure why in Clause 19 (2) the power in that instance is restricted to a conviction of felony.The Commissioners may also remove a charity trustee by order made of their own motion … where the trustee has been convicted of felony, or is a bankrupt or a corporation in liquidation, or is incapable of acting by reason of mental disorder …etc. Why only a felony? A great many crimes in the modern calendar of very great seriousness are only misdemeanours, and it seems to me that this is importing an ancient distinction which is really not right.
§ Mr. Philip Bell (Bolton, East)
I rarely find myself in disagreement with my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke), but the Clause 19 provisions involve two trials, one in secret by the Commissioners in which they may remove a trustee for mismanagement or breach of trust. That seems to me a most unfair provision.
§ Mr. Fletcher-Cooke
If we think that the Charity Commissioners should have the power at all to remove trustees, and I do think that, it seems to me quite wrong to swallow the felony and strain at the gnat of misdemeanour—or whatever the right metaphor may be.
I would agree with my hon. and learned Friend to this extent, that from my reading of the Bill it seems to me that there is no appeal as of right, which strikes me as being a fundamental omission. Clause 17 (11) statesProvided that no appeal shall be brought under this subsection except with a certificate of the Commissioners that it is a proper case of an appeal or with the leave of one of the judges of the High Court attached to the Chancery Division.That, coupled with Clause 19 (5), seems to me to indicate that when a trustee is removed in these circumstances by the Commissioners he has no appeal as of right.
§ Mr. Philip Bell
The words are,Where the Commissioners are satisfied".It is not that the person in fact misconducted himself or mismanaged, but that the Commissioners think he did. There may be no appeal from that; in fact there is no appeal at all.
§ Mr. Fletcher-Cooke
I am obliged for the increased support, although I am not absolutely convinced that I am right, or that my hon. and learned Friend is right.
§ The Solicitor-General (Sir Jocelyn Simon)
In case there should be a misunderstanding about this, I think that both my hon. and learned Friends should look at Clause 19 (7).
§ Mr. Fletcher-Cooke
Does my hon. and learned Friend mean by that intervention that there is an appeal as of right?
§ Mr. Fletcher-Cooke
I am obliged for that assurance. In that case, a great deal of my objection to that power goes. There must be an appeal as of right in this question, and if that is so, I am obliged for the assurance.
I know that there is only a limited amount of time for this debate and that other hon. Members are anxious to speak. I will conclude, therefore, on this note. To my mind, it is vital that in a modern State the community should at least know what voluntary organisations are doing and that at least it should have the power to check abuses. Of all the great voluntary organisations in this country, most have now imposed upon them a code of conduct with powers of auditing, powers of compulsory registration and equivalent powers of investigation in cases of suspected misconduct. That is true of companies, of corporations, friendly societies and building societies. It is now to be true of charities.
Now there is only one form of voluntary organisation of importance which is immune from this process, and that is the trade union. I ask hon. Members to consider whether that exceptional position can continue in the face of the quite proper provisions that this House insists on making for all the other forms of great voluntary organisations in the country.
§ 6.25 p.m.
§ Mr. Tudor Watkins (Brecon and Radnor)
I am sorry that I cannot follow the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) into the legal aspects of the Bill. I am grateful that he mentioned what was said a few years ago about the responsibilities of trustees. I must declare my interest as a trustee of a Welsh Baptist chapel and I now wonder whether I should have been persuaded to undertake that responsibility.
I welcome the speeches which have been made both from the Government Front Bench and from the Opposition Front Bench. During the Easter Recess I did a considerable amount of research work into the reports of charities from 1818 until 1837. I found that in one of the counties I represent, Breconshire, there are 133 charities. In Radnorshire there are 126, and 75 of these are concerned with poor people. Having made these researches and listened to the debate today, and having read the Nathan Report and the reports of speeches in another place, I have reached some conclusions. One is that there appears to be a lack of knowledge of local charities, both parochial and ecclesiastical, in quite a number of rural parishes. There is a great deal of apathy and indifference among young people about some of these old charities. As has been said, some of the charities are completely out of date and difficult to administer.
There is a great deal of indifference among some trustees about submitting annual reports and among parish councils and parish meetings about insisting on these statements. There is a great deal of indifference also about appointing people to fill vacancies among the true trustees. I found that when appointments are made some of the people appointed have nothing to do with the locality but the appointment is considered a great honour by someone outside. I do not approve of that kind of thing.
I welcome the Bill, and I am glad that the machinery for administering the charity law is being brought up to date. The law is being simplified, although I confess that I do not understand many of the Clauses. I wish to pay tribute to the Charity Commissioners. Ever since 449 I have been a Member of this House I have had many personal dealings with them. I cannot accept the criticism that there are long delays over correspondence. I found that that applies to the Ministry of Education's schemes more than to anything else. In fact, I consider that the Commissioners are doing a good job, and I am glad that they are to continue with their good work. I join in the plea for a greater number of Commissioners, and I would go further and ask that there should be one authority to deal with all the schemes. I also welcome the idea of a central register of charities.
I am concerned about the working funds of chapels, and, for example, the funds of women's sewing guilds and young people's guilds. I do not want the Commissioners to suggest that people should be baptised in the river instead of inside a building because of the extra cost. I do not want that kind of interference by the Charity Commissioners, and I wish to ensure that chapels which receive a small income from endowments are not affected by the provisions in this Bill.
Some chapels in my constituency have been taken over by the Service Departments and have been compensated. They still maintain graveyards. Will their funds come under the jurisdiction of the Charity Commissioners? I should like a reply from the learned Solicitor-General, although I do not expect it today. I wonder whether the Solicitor-General can tell me whether the reference to the Church of England in Clause 44 relates only to England, or does it include Wales, as was the case in the old legislation? What is the position? What is the position, under the Welsh Church Acts of 1914, of the money invested in county councils for the administration of charitable purposes? That is very important.
I welcome the local registration referred to in Clauses 10 and 11. I wonder why those schemes which have an annual income of less than £15 are not to be placed on the central register. Will they be expected to register locally? If they have to be registered locally, I hope that the provisions will be watertight. Since I came to this House I have had experience of the Radnorshire County Council retaining the income of 450 a local charity for sixty years for educational purposes whereas the wording of the endowment was for Presteigne Grammar School. After good work by Mr. W. H. Howse and my Question in the House in 1954, that school received more than £100, which the education authority had collared for sixty years.
I want to find out whether, after these charities are registered locally, county councils will be so keen to look after the money. I ask the Home Office and the Charity Commissioners to persuade all charities outside the definition of £15 to be registered locally. In that way local people will have the opportunity to learn what is in these charities. Will the Commissioners send the list to local councils or will this be a purely local option? If the names are not registered locally, then I take it that they will not be entitled to claim Income Tax relief. There is, therefore, some inducement.
If that is so, a progressive county council would be only too glad to publish a list of all the schemes, so that everyone would know about them. I have a copy of a scheme of about twenty charities in a town in my constituency. The author was Mr. W. H. Howse. and the people have benefited a great deal because of its publication. About eighteen to twenty charities have been listed. Some of them are now united under one trust, which is a great advantage, and it is bringing in an income of £400 a year. That was done on the initiative of one person, and if local authorities could do similar work they would be doing a great deal to help.
No obligation is placed on the Commissioners to ask anyone to publish details of charities. They have said so to a constituent of mine. That is wrong. Most ancient charities in Wales were written on tablets inside or outside the church. If our forefathers thought fit to publish these charities on tablets, surely, in our modern society, we could do something to publish them. This should at least be suggested by the Home Office and the Charity Commissioners.
I welcome the reforms and the changes which can be made in the purposes of charities. In my researches I have learned some very interesting things. In Battle parish, outside Brecon, in 1573 there was a charity which provided for the payment of twelve pence towards 451 glazing the great window of the chapel. That is wholly out of date. In Llandefalle in 1748, £5 annually was provided for payment to forty poor parishioners after divine service. At one period, so the Commissioners report, this was distributed in a public house. Naturally the Charity Commissioners commanded that it should go back to the divine service and be redistributed there. Those responsible came back and said that they would give it out in flannel and calico.
It is interesting to note that that charity asked that forty poor persons should receive the money. I doubt whether there are four poor persons in that parish. Due to good legislation by both Governments, they are mostly farmers and do very well in the locality.
In Llanelly parish in Breconshire there was an endowment for the preaching of ten sermons in Welsh. Nearly all the people in that parish are English-speaking, and it is ridiculous to expect that to be carried out. In Llanbedr, another parish, in 1728 it was requested that poor girls under the age of fifteen should be given a Bible, Prayer Book and a book called "The Whole Duty of Man." It was never given. I doubt whether anyone knows that book today. Nowadays youngsters well know what the facts of life are; they know far more than I knew at their age.
In the neighbouring county of Radnor there are eight charities requiring sermons to be delivered. There is an instruction to the trustees that if a parson refuses to lecture or preach on certain subjects mentioned, he is to forfeit his 10s. fee and the poor are to get it. I suggest that the poor could choose difficult subjects and thus get more money. There are other quaint suggestions. One provided for a sum to be paid to "decayed housekeepers." I have never heard that description before.
The Home Office and the Charity Commissioners should consider what can be done. They are to give encouragement to the merging of local charities which are not the responsibility of Churches. I welcome that. I should like this merging to be confined to given areas or to functions within charities. That can be done. In that way there would be economy and the funds could be invested, as is provided in the Bill, for very good purposes.
452 The liaison in such a united charity would avoid a great deal of duplication. If there are parochial charities as well as ecclesiastical charities, there should be liaison between them so that they do not duplicate payments. The Charity Commissioners ought to ensure good liaison between them.
What action will the Commissioners take if a review is asked for and the trustees are being criticised? The trustees themselves may be the cause of the inquiry. They may not be administering the charity properly. If the local authority asks for a review, is it likely that the trustees will allow it? That provision in the Bill ought to be strengthened. There should be an obligation for inquiry and review.
The House will welcome the changes regarding donors' wishes. The new power for the Commissioners to safeguard charity property is excellent. I can quote instances of very low rents being derived from very good land in Presteigne, while for worse land about four or five miles away 30s. an acre more in rent is being received by the endowment. This is because the rents have not been reviewed. That is the kind of thing against which the charities should be safeguarded by the Commissioners.
I welcome the provision in Clause 31 that there should be insistence on the obligation to keep accounts. Apart from parish councils, who else can inspect the accounts? The Charity Commissioners have been courteous enough to provide me with statements of accounts when asked. It should not be left to a Member of Parliament to have to ask for these accounts. Provision should be made that those accounts are made available.
I also welcome the proposal in respect of audits. I do so because I came across an instance in which there was an endowment, the total income from which was £167, and the clerk was paid £12 10s. to administer the endowment. I was told that part of the £12 10s. was afterwards paid to a very deserving organisation. I was wondering why the salaries of or payments to some of these clerks are deliberately inflated in order to obtain funds in another way. That is a very drastic statement to make, but 453 I make it in the hope that the Charity Commissioners will watch the funds of trusts.
I have no objection to auditors being appointed under the Bill, but in rural parishes how are auditors to be found? If chapels, churches or similar organisations do not have to get these very learned and educated people to audit accounts, why should charities? Friendly Societies, sports organisations and trade unions do this work with local people.
I am glad to have the opportunity to welcome the Bill. I am certain that it will give a great deal of encouragement to those of us interested in local charities. My researches during the Easter Recess have given me a great deal of knowledge of social conditions of many years ago. It is for us, as custodians of charities, to ensure that there are safeguards which can be properly administered in future.
§ 6.43 p.m.
§ Mr. Philip Bell (Bolton, East)
Coming in in my accustomed place as almost last man, I shall not be expected to make many runs but just take a few swipes. A good deal has been adequately said about the Bill, and I will not weary the House by repeating it. I was very gratified to hear about trusts for religious establishments being given special consideration and possibly not being registered.
That is a difficult point. It is the full turn of the wheel. Without going into religious history, perhaps I might say that some people believe that one of the causes of the Reformation was that there was not proper supervision of the property in the hands of Churches which was supposed to be allocated to poor people. It is not without interest to observe that from both sides of the House and from all denominations it has been suggested that in these days the religious organisations can be trusted to administer their affairs without the necessity of registration.
I have some points to make which might be properly reserved for the Committee stage and which were taken up by the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas). I am not sure that a fund set up, as it could be, for a particular type of poor person, although it should be 454 open to inspection by the persons who were the objects of the charity, should be open to the inspection of the world in general. There is a necessity to limit publicity.
The particular point that I have in mind concerns Clause 19. I have never understood the overlapping of the jurisdiction between the Charity Commissioners and the courts of law. On the whole, being a lawyer, I prefer justice to be administered, for a reasonable fee, in the law courts. I do not like ordinary tribunals which sit under their own procedure, quietly and inoffensively, no doubt, but very powerfully. I should have to be convinced that this serious matter should be dealt with otherwise than in the courts.
Clause 19 is dangerous and I hope that my hon. and learned Friend will give it careful attention. A matter of principle is concerned here. Woolly-headed and perhaps not altogether successful trustees may find under Clause 19 that, unknown to themselves, they have been under scrutiny, and that, without knowing the result of the scrutiny, they have been removed by the Commissioners. Before a man's position is attacked he must know what is wrong, what he is charged with and for what he is responsible. Clause 19 does not provide for that. What it states is:Where the Commissioners are satisfied as the result of an inquiry instituted by them under section six of this Act…Clause 6 provides for a roving inquiry It states:The Commissioners may … institute inquiries with regard to charities …They can take evidence on oath. Everyone concerned may think that the inquiry is into something to do with the charity. But then the trustee may suddenly find, after the inquiry is over, not that the Commissioners have considered whether this ought to be done, whether that ought not to be done or whether a certain thing should be improved, but that it was he who was on trial, not the Charity. Thereafter, Clause 19 comes into operation.
Clause 19 (1, a) refers to "misconduct or mismanagement". What constitutes misconduct or mismanagement is in the discretion of the Commissioners. It is true, as one of my hon. Friends has pointed out, that there can be an appeal of sorts. He referred to subsection (7), 455 which makes reference to subsections (10) and (11) of the Bill. All is well until we look back to Clause 17 and discover that there is not an absolute right of appeal at all. There is only a right of appeal provided the Charity Commissioners against whom one is appealing agree, or, alternatively, the court agrees to the appeal. In practice, it is difficult to go to a court and ask for leave to appeal without telling the whole story and trying to get the appeal on its feet.
The difficulty does not end there. There has always been the difficulty in the past—the Liversedge case was an example—of appealing against the exercise of a discretionary power. It seems to me that there is a discretion in the Commissioners to say, "We thought, rightly or wrongly, on the evidence before us that there has been misconduct and mismanagement." It was in the Commissioners' discretion to decide that and there can only be appeal on whether the particular remedy which they suggested should or should not be implemented.
It does not even stop there. There has been the trial of an unhappy trustee who did not know that it was a trial but suddenly found that he was being tried. He finds that he is removed as trustee, and this so encourages everyone concerned that they say, "We had better go to the Chancery Court on a breach of trust". I think that the removal of a trustee is very serious and should only be done through the courts. The trustee should be answerable only to the courts.
I join in welcoming the Bill and the general principle of it. There are some points which I think that it is better should be reserved for comment in Committee. I find difficulty in understanding why information should be communicated not only to the Commissioners of Inland Revenue, but to any Government Department. I cannot understand why everybody should be told all about the accounts concerned and the information collected, although I can understand why the Commissioners and local authorities, for rating purposes, should know. These perhaps are Committee points, but they are, nevertheless, substantial.
I would say one other thing to the hon. and learned Member for Leicester, North-East. He talked about cy-pres and gave as an example the Gillmgham disaster. It was found that more money 456 had been subscribed to that fund than was required and the question arose of what was to be done with the surplus money. The hon. and learned Gentleman suggested that this should be advertised and that if anyone wanted his money back and did not apply for it he should not have it back. The trouble would be that some people would not remember whether they had made a subscription or not, or to what fund they had given it. I think that that would be rather an ineffective way of doing it.
I appreciate the principle behind the suggestion. But surely the proper way of proceeding would be for the trustees to say that they want a fund to look after the people concerned in the disaster and that if there is any surplus it should be left to the promoters to expend it on local charity. When there is a surplus of money and the people from whom it came cannot be identified, it does not go back to them. It would be wrong to put an advertisement in a newspaper saying, "You can have it back if you want it". It is a question of bona vacantia.
In making any Amendments or suggestions for this purpose, we have to anticipate what a man himself would do. I think that any man who goes to a bazaar or a whist drive in aid of an emergency fund would say, if it were suggested that there might be more money subscribed than was needed, "Give it to some other charity." I think that we should work on that basis and that any funds subscribed by unidentified subscribers should go to another charity. This could be done with the consent of the Charity Commissioners. I do not believe in any of this advertising stuff. I think that the man who goes to an ordinary whist drive never expects to see his half-crown back, whether enough money is subscribed or not. I suggest to my hon. and learned Friend that something of that sort might be squeezed into the Bill because it is always an awkward business to pay back money, under whatever head, when it is not claimed.
Subject to these points, I think that there are great possibilities in the Bill. I hope that my slog to leg on Clause 19 will not be caught the first time, but will be considered carefully by my hon. and learned Friend the Solicitor-General.
§ 6.54 p.m.
§ Mr. Donald Wade (Huddersfield, West)
Those responsible for drafing this Bill have undoubtedly performed a very formidable task. They and all those who have helped to bring the Bill to its present stage are to be congratulated on their work. If I have any doubts to express or any criticisms to make, I do not wish them to be regarded as in any way belittling the value of the work of those who have attempted to consolidate a very complex body of law.
In introducing the Bill in another place, the Lord Chancellor referred to a Motion moved there as long ago as 1949, by Viscount Samuel, in which he called attention to the need for encouragement of voluntary action to promote social progress. He also referred to the book written by Lord Beveridge to which the Home Secretary has referred today, and more than one reference has been made today to the valuable work of Lord Nathan.
I believe that there will always be opportunities for voluntary effort—there will always be scope for charity in its widest sense, but circumstances change. The very meaning of the word "charity" charges. Similarly, I think that the main functions of voluntary bodies tend to be modified with the passage of time. This has been very noticeable over the last hundred years. I would say that a hundred years ago charity primarily meant providing financial aid for those who were poor and in need, whereas today the trend is towards personal service.
I should like to pay tribute to the many voluntary social service bodies in this country. They are not, and will not be, superseded by the State. Their services are complementary to anything that the State may do. Very often these voluntary bodies are pioneers. It is, therefore, important that we should not define charity too narrowly and that the creation of new charities should not be restricted by too limited a definition. I intended to make some observations on the subject of the definition of charity, but because of the lack of time I will refrain from doing so, except to say that, like many lawyers very much more distinguished than myself, I failed in my attempt to provide a satisfactory definition of charity.
458 One must, therefore, rely on case law coupled with the Acts already on the Statute Book. There is this consolidation, that case law tends to reflect the changes in the climate of opinion and that sometimes there is less time-lag in case law, which is gradually built up, than in changes brought about by amendments to Statutes.
I ask whether the Bill will create a new rigidity. Is there a danger that under this process of registration the extension of charitable objects and the introduction of new charities will be restricted? I am anxious to be assured on that point. I should also like to know how this new procedure will work and, in particular, the relationship between the Inland Revenue and the Charity Commissioners.
Presumably, when charities are registered there will be some consultation between the Charity Commissioners and the Inland Revenue. Will the Inland Revenue be consulted on every charity which requests registration, or will that only apply to new charities? Will this lead to a rigidity perhaps due to the rather legalistic point of view of the Charity Commissioners themselves, or to the influence of Inland Revenue? Will that lead to delays and will the staff be adequate?
These are some of the matters that concern me a little when perusing the Bill. Much may depend on the exemptions and exceptions. I think that under that heading I can put what I want to say more simply in the form of a few questions. First, what is the permanent endowment referred to in Clause 4 (4, c)? I know that there is a definition in Clause 45, which refers back to Clause 44, but perhaps my legal mind is not sufficiently clear about it.
I am the trustee of two charities, one with very wide objects and the other with the power to give aid to elderly people. In both cases we have power to resort to capital. The first charity was set up by an order of the court. It has been running for twenty years and is likely to last for at least another twenty years, but ultimately the capital may be used up, because there is power for it to be used up. Does it follow that this is not a permanent endowment? Secondly, will the draft regulations be made known before the Bill completes its 459 Committee stage? That is very important, especially in respect of denominational charities. Thirdly, will the regulations relate both to registration and the furnishing of accounts as well as to dealings with property?
An important question of principle is involved. Nonconformists have very strong views on this matter, which they have expressed to me. I know that the Government are endeavouring to be helpful, but the question arises whether a chapel and various denominational charities should be registered. I would prefer to see this question dealt with in the Bill rather than by regulations, but if the exemptions are to be made by way of regulations it is important that we should see the draft regulations before the Bill has passed through the House. The regulations which will exempt various denominational bodies will be in the nature of Clauses, as one would expect to find them in a Bill. If we do not see the regulations until the Bill has passed through the House we shall be in the position of being asked to approve a Bill before we have seen all its Clauses.
I have to mention these details because we have not seen the regulations and we shall not have an opportunity of raising this matter in Committee unless we do see them, or the point can be incorporated in the Bill. I am aware of the undertaking given by the Lord Chancellor, which has been reaffirmed by the Home Secretary. In connection with the sale of chapel property without the necessity of obtaining the consent of the Charity Commissioners, reference was made to church premises and manses, and I should like to know whether that definition will include Sunday schools and caretakers' houses which do not adjoin the chapel premises.
There are many questions of that nature which come to one's mind when one examines the statement made by the Lord Chancellor in another place. For example, will the exemption apply to registration and to the statement of accounts as well as to relief from the need for obtaining the consent of the Charity Commission to sell? I assume that if exemption is granted it will be in respect of all three matters.
Will a distinction be made between the larger denominations, which are able to 460 negotiate with the Home Secretary, and smaller bodies that have not negotiated and may be in a less favourable position? Finally, are the Government satisfied that there will not be undue delay when consent has to be obtained from the Charity Commission?
I should like to know how the procedure will work out. I have had twenty years' experience in dealing with the Charity Commission on behalf of various charities, including a denominational charity, and I have always found its officials extremely polite, courteous and helpful. It has always been well worth while to see them whenever any difficulty has arisen. But there have undoubtedly been delays, and sometimes exasperation has resulted. Some of the worst delays occurred after the war, when the Charity Commission was trying to catch up with its work, but they still occur, and are sometimes exasperating.
In some cases sales fall through. The prospective purchaser may go to his solicitor and be told that under this procedure he must sign a contract subject to the consent of the Charity Commission. The Commission will then advertise for higher terms, which may take a long time. It may result in the charity getting a better price in the end, but it may also result in the prospective purchaser saying, "I am not going to have anything to do with that kind of procedure" and refusing to sign the contract. The only remedy is to ensure that these applications for consent to sell are dealt with as expeditiously as possible.
I could say much more on the Bill, because I have had some experience of working with the Commissioners on behalf of various charities, but I have detained the House sufficiently long and I would merely end by saying that the Bill deserves a Second Reading.
§ 7.6 p.m.
§ Sir Robert Grimston (Westbury)
I want to draw attention to a comparatively narrow point. During the course of the debate misgivings have been expressed by my hon. Friend the Member for Salisbury (Mr. J. Morrison) and the right hon. Member for South Shields (Mr. Ede) with regard to the powers to be given to local authorities. I have a point to raise in connection with that matter, although I approach it from a rather different point of view.
461 Clause 10 refers to the index of local charities to be made by local authorities, and Clause 11 refers to a limited right of reviewing local charities. The local authorities so empowered at present are county councils, county borough councils and non-county boroughs, and I wish to put in a plea for the inclusion of urban district councils.
I do so for two reasons. First, in the last sixty years parity of functions discharged by non-county boroughs and urban district councils has been maintained, with two exceptions. The first is the Ancient Monuments Act, 1913, but in that case an undertaking has been given by the Minister of Works that when there is a possibility of legislation on the matter this point will be considered, and the other is the road traffic legislation. In 1956, the discrepancy was observed too late, and it was not possible to do anything under the 1960 Measure because that was a consolidating Measure.
But there is another reason, which is rather more important. The Urban District Councils' Association recently sent out a questionnaire to all the authorities coming under its care, and from the replies received from 256 of those authorities it was found that there are no less than 64 within whose districts one or more charities exist, the constitution of the Governing body of which either consists wholly of the members of the council or empowers the council to appoint or nominate the whole of its membership to constitute the governing body. In those circumstances, it seems unreasonable to exclude urban district councils from the provisions of Clauses 10, 11 and 12, when non-county boroughs are included.
When this matter was brought up in another place the Minister who was in charge of the Bill gave an undertaking that it would be looked at again. I ask my hon. and learned Friend the Solicitor-General to confirm that that will be done. I do not want at this stage to delay the House any longer on the merits of the case, but I hope that I have said enough to show that there is a good case for this point being made in connection with the urban district councils.
§ 7.10 p.m.
§ Mr. Tom Brown (Ince)
I compliment the Home Secretary on the lucid and intelligent way in which he introduced the Bill, and also on his brevity. His 462 brevity was an example to all Front Bench and back bench speakers, and I welcome the manner in which he introduced the Bill. He did it without wasting much time and without wasting any words.
I was glad to hear the Home Secretary say that the Bill does not seek to destroy small local charities. That is very important, particularly for the small charities prevailing in the mining villages. I have had the opportunity of administering a charity for over fifty years. I know that if I had any trouble under the Bill I should have great difficulty in getting out of it, but the Home Secretary's statement has assured me that that will not be the case, and I am delighted to learn that that is so.
The Bill goes a long way towards meeting the modern needs of our rapidly growing and changing society. That is what the Home Secretary said in his introductory remarks, but when I look through the Fifth and Sixth Schedules I find that the change has not been so very rapid because it goes back many years and suddenly, by the committees and other things that come into our Parliamentary scheme, it has come forth with great velocity since 1939.
The Bill is not perfect and nobody has as yet professed that it is. Perhaps I may quote George Bernard Shaw, who said:When you find a perfect man you will find a perfect nuisance.When we find a perfect Bill, we will find a perfect nuisance, but the Bill is one to which we can make some alterations in Committee. As my hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas) said, the Bill can be improved, and we shall have an opportunity of putting down Amendments which in our opinion will improve the Bill and make it meet with the approval of ordinary folk outside.
I want to follow the line adopted by my hon. Friend the Member for Bolsover (Mr. Neal). I entered the debate with some trepidation because 90 per cent. of the hon. and right hon. Members who have spoken are members of the legal profession, and I hesitate to enter into the realm of the legal luminaries. However, I want to put a point of view which for some time has troubled people in the mining industry.
463 I refer now to the many colliery accident funds which have been collected following terrible disasters in the mines. I live in the midst of areas in which there have been disasters, as does my hon. Friend the Member for Bolsover. I live in the little village in which I was born, and north, east, south and west of my village there have been terrible explosions and calamities, and it is only natural that in the mining villages there have been outbursts of sympathy and large sums of money have been gathered for the relief of the distress caused by mining explosions.
Those funds have not been exhausted. There are still surpluses. So much so that within the last few years there has been a growing desire in the mining villages and among the mining fraternity for something to be done with those surpluses. According to the White Paper, Cmd. 8101, which was issued in December, 1950, one fund goes back to 1863, and there is still a surplus lying dormant which ought to be utilised for the purpose of a worthy cause in the coalfields. I hope, therefore, that the Home Secretary and the learned Solicitor-General will be prepared to accept an Amendment from this side of the House to get that remedied.
I have been looking through the records of what has been done during the last few years. I find that the desire expressed on behalf of people anxious to utilise the surpluses has been expressed in White Papers. No subject has given rise to so many White Papers as the funds which have accumulated after explosions. There have been four in recent years and there was one last year. We can, therefore, conclude that the demand for something to be done with the surplus funds which have accumulated after the needs of the dependants have been met has been such as to warrant the preparation of five White Papers. There was Command Paper No. 359 in the Session of 1893-94. There was Command Paper No. 155 in July, 1925. There was Command Paper No. 5167 in April, 1936, and Command Paper No. 8101 issued in December, 1950, ten years ago, from which my hon. Friend the Member for Bolsover quoted.
Those White Papers represent considerable evidence of the desire of the people living in the mining areas for 464 something to be done with the funds that were left after meeting the needs of the dependants of those lost in mining disasters. I mention these White Papers because I want to get them on record.
In the debate which took place in another place there was the White Paper to which I have referred, No. 9538, issued on 13th May last year. That, again, was an indication of the desire that these surpluses should be used for some purpose.
Let us examine the problem from the point of view of the National Union of Mineworkers. At meetings of their executive committees and lodges they have expressed a desire for something to be done with the surpluses which have accumulated. At its annual conference, in 1929, a special resolution was passed that representation be made to the appropriate authority for a centralisation of all surplus explosion funds. That was thirty-one years ago, yet we are still as far off as ever from achieving the object we want.
This debate, therefore, gives us an opportunity to ventilate the desire which has been expressed over the years that these funds should be put to some good use. They cannot, of course, be used for the benefit of the people for whom they were raised, because those people are dead, but they could be used, as my hon. Friend the Member for Bolsover said, to help our permanently injured miners, of whom there are more than 6,000. They can be used for the 500 or 600 paraplegic miners now condemned to a life in a wheel chair.
I mention those two causes to show that this is not a trivial thing, but a very important matter. The surpluses, amounting now to over £300,000, that have accumulated since 1863 would enable us to do a tremendous amount of good work for the mining fraternity.
We have a number of other worthy causes that are crying out for help, but if we could use the surpluses from the manifestations of swift sympathy when there has been an explosion in the mine we could do much to help these men who have been crippled in the pit or disabled by industrial disease. When we consider the Bill in Committee, I hope that the Home Secretary will not throw overboard the Amendments which will be tabled by us to this end, because we 465 now have an opportunity to realise a desire that has been with us over a long period.
There has not been a White Paper dealing with these surpluses since that of 1950, so that we do not know what the exact sum now is, but the total surpluses remaining in mining disaster funds in 1950 amounted to £912,000.
In passing, I would ask the Home Office to enlist the assistance of the Ministry of Power, because that Department is charged with the responsibility of announcing the surpluses through the medium of a White Paper. It would be a good thing to have a more up-to-date White Paper which would provide us with a clearer picture. I am told that 19 funds have gone out of commission since 1936—they are no longer "live" funds, but there are still 64 "live" funds in the coal fields. The National Union of Mineworkers has asked us to do all that we can to ensure that the Bill deals with this vexed question of surpluses, so that they may be devoted to the benefit not of the dependants of the victims of colliery disasters, but of those men who, in their daily round and common task, have suffered very serious accidents, and of their dependants.
The money could be used for that worthy cause, and I hope that the Home Secretary will respond to our not unreasonable request that the scope of the Bill shall be broadened. We now have an opportunity, not often afforded to us, to be charitable to those who have met with misfortune by way of injury or industrial disease. I ask the Government to give an undertaking that they will be prepared at least so to broaden the Bill—I can assure them that ours will be a reasonable Amendment—as to embrace the unfortunate men who are now asking for something to be done for them. I hope that the Government will respond to my appeal.
§ 7.26 p.m.
§ Mr. Graham Page (Crosby)
The hon. Member for Ince (Mr. T. Brown) has made a human and a humane contribution to what has otherwise been a legalistic debate. I hope that I shall not return too much to the legalistic side but if I do, it will not be through lack of appreciation of what the hon. Gentleman has said.
466 While my right hon. Friend the Home Secretary was telling the House, in admirable words, of the intentions behind the Bill, I rather wondered whether I had brought the right Measure with me, because the intentions he expressed seemed to be so far from the actual wording of the Bill. He said, for example, that the fundamental object was to keep the Commissioners independent of politics.
As I understand their present position, the Commissioners are appointed by Royal Warrant under the hand of the Sovereign, on the recommendation of the Prime Minister for life si bene gesserunt, that is, subject to good behaviour. They are in the position of judges. They are appointed in a judicial capacity. They have no political master. Their Vote comes direct from the Treasury. That is their present position, and I should have thought that it was a position that anyone should hold who has to carry out judicial functions.
We see their new position when we refer to paragraph 1 (3) of the First Schedule, which says that… the chief commissioner and the other commissioners shall be appointed by the Secretary of State, and shall be deemed for all purposes to be employed in the civil service of the Crown.Therefore, in future, instead of holding office directly by Royal Warrant during good behaviour, they become civil servants, with the Home Secretary as their political master, and I assume that their Vote will be included in the Home Office Vote.
That means that their independent judicial status is to be destroyed, yet their judicial functions are to remain. When we turn to Clause 17 we see that the judicial functions are well prefaced by the words that… the Commissioners may by order exercise the same jurisdiction and powers as are exercisable by the High Court in charity proceedings …The subsection then proceeds to set out certain judicial functions, including such matters as… establishing a scheme … appointing, discharging or removing a charity trustee or trustee for a charity, or removing an officer or servant … vesting or transferring property,…and so on.
467 Clause 19 gives them powers to remove trustees and to appoint other persons as trustees; to invest property; to direct banks and other persons to transfer securities, and the like. Many judicial functions are set out, and there is no appeal except on a certificate of the Commissioners themselves, or by leave of the court—and as one knows, in practice, that form of appeal is extremely difficult to exercise. There is no real right of appeal. One has to proceed almost by way of another case, as it were, to get an order of a High Court granting leave to appeal.
I quite appreciate that the whole purpose of the Bill is to tidy up the position of charities, to produce efficiency in charitable trusts, and to ensure their proper administration, but, for that purpose, is it essential to destroy the present judicial status of the Commissioners? One could carry out all the other provisions of the Bill without taking that particular step, which is a serious breach of a principle that is almost sacrosanct in our constitution—that a person exercising judicial functions shall be independent of political control, shall not be a civil servant appointed or dismissed by the Home Secretary, relying on the Home Office Vote for his salary, and so on.
Perhaps I may give an example of what I fear. Take the endowment fund of a teaching hospital. If some future Home Secretary were to decide, as a political decision, that the endowment fund of a teaching hospital should be used in aid of National Health funds, and that it was tidier to have all the funds under one umbrella, by Clause 17 (6) all he has to do is to call before him his civil servants, the Charity Commissioners, and say to them, "Ask me for a reference under Clause 17 (6), a reference to yourselves, to produce a scheme of this sort." The result might well be the virtual confiscation of the endowment fund of the hospital.
I do not think that this sort of "Big Brother" stuff is exaggerated. Indeed, there is also in the Bill what I would call "Little Brother" stuff, as a result of local authority powers to review—
§ The Solicitor-General
May I ask my hon. Friend to make quite plain whether he thinks that the High Court would fall in with those political manœuvres?
§ Mr. Page
With all respect to my hon. and learned Friend, I cannot see how the High Court could interfere. Under Clause 17 (6) the Charity Commissioners have power to set out a scheme if they are satisfied that the charity trustees ought in the interests of the charity to have applied for a scheme. If the Commissioners are satisfied that the trustees ought to do something, who is the High Court to say that the Commissioners are not satisfied?
It is not a question of whether a scheme is good, bad or indifferent. An appeal can go to the High Court only on the grounds that the Commissioners have not satisfied themselves that a scheme ought to have been asked for. I stand to be corrected by my hon. and learned Friend, but that is how I read subsection (6).
I was about to refer to the local authority reviews, because I see further danger there. Again, I appreciate that a local authority would often like to tidy up the small charities in its area that are not being run efficiently. But suppose that a local authority has an old people's home of its own, and there is another one run under private charity, how very much tidier to run them both from the town hall—the old people's services nicely and neatly administered.
So the local authority decides to review the old people's welfare services in its area and, as a result, makes a recommendation to the Charity Commissioners. If a future Home Secretary were so minded, he would see that his Charity Commissioners—his civil servants— approved such a scheme.
If that is a possibility, is it not all the more important that the final decision should be a judicial one and that the Charity Commissioners should remain free from control by a political master? There is no necessity for the position of the Charity Commissioners to be altered in order to get all the other benefits of the Bill.
I ask my hon. and learned Friend to look at this subject again with a view to seeing whether he can leave the Charity Commissioners in a judicial capacity— not as civil servants of the Home Office, but free from the Home Office to make decisions over and above any political 469 decision Under the Bill political decisions are possible, and it is quite within the powers of the Bill for a Minister to oblige the Charity Commissioners in future to make decisions which are political, when they should be in a judicial capacity making judicial decisions.
§ 7.36 p.m.
§ Mr. Eric Fletcher (Islington, East)
The whole House will agree that we have had a most valuable debate, covering a very wide field. Like every other speaker, I very much welcome the introduction of the Bill by the Home Secretary, subject to reservations on a few points of detail, some of which I hope to have an opportunity to mention, although on the whole it will be more useful if, instead of using time on Second Reading by dealing with Committee points, I indicate my general approach to the problems dealt with in the Bill.
I should like, first, as so many other speakers have done, to pay my tribute to Lord Nathan and his colleagues for having produced such a masterly Report, which I found both admirably written and a mine of valuable information. I should like to pay tribute, too, as my hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas) and others have done, to the admirable way in which the Bill is drafted. It could not have been an easy subject to tackle, because the existing law on charities, both the Statute law and the case law, is a veritable jungle. Much of it is unintelligible, much of it is out of date and a great deal is a dead letter.
I have no doubt, therefore, that the Government were right to adopt the suggestion of the Nathan Committee, to make a clean sweep of all the existing legislation on the subject and to intro-duct a brand-new Bill. It is high time that that was done. Although, as the Home Secretary pointed out, the concept of charity is very ancient in our history, in the last century or so there have been such changes in the whole structure of our society as to make a review of the content and structure of charitable legislation very necessary to accord with modern conditions.
Two outstanding changes have occurred since the famous Statute of Charitable Uses was introduced in the reign of Elizabeth I. The most notable change has been brought about in the last fifty 470 years or so by the gradual growth of what is now generally referred to as the Welfare State. This to a large extent has rendered obsolete causes for which in the past a great many charitable trusts were endowed.
It would, however, be a mistake to suppose that the recent activities of the State in the sphere of social welfare have in any way removed the necessity for persons who are charitably and benevolently disposed to fill the very considerable gaps which are left by State action.
Reference has been made to Lord Beveridge's book, but it is worth while to remind the House of the passage quoted in the Nathan Committee's Report, in which Lord Beveridge said:In a totalitarian society all action outside the citizen's home, and it may be much that goes on there, is directed and controlled by the State. By contrast, vigour and abundance of Voluntary Action outside one's home, individually and in association with other citizens, for bettering one's own life and that of one's fellows, are the distinguishing marks of a free society.I hope that that will continue to be the case in our country.
Although the State has rendered largely unnecessary what was done in previous centuries by Charitable Trusts for the relief of poverty, the provision of health and hospital services, and the relief of the aged, one other object of charitable endowment, namely the advancement of religion, has not had, and is not likely to have, any direct assistance from the State. It will therefore always be likely to remain a deserving and active candidate for charitable endowments and voluntary support. Moreover, any of us having association with the activities of voluntary societies, whether in localities or centrally, know that there is still a great deal of fruitful work to be done in many social fields by voluntary societies throughout the country.
One of the valuable features of the Bill is that for the first time statutory recognition is given to the conception of co-operation between the work of local authorities and that of voluntary charitable organisations. For that, and for other reasons, I welcome those parts of the Bill providing for the institution of a register. In the past one of the difficulties has been to ascertain exactly what charities existed. For example, I 471 have no precise knowledge of the charities existing in my own borough of Islington. I know of some which do valuable work, but I have no exhaustive list of existing charities in the Borough, nor is there one at the town hall. I know that there are some centuries-old charities in Islington which are still applied for purposes which have become archaic. There is, for example, one charity founded some two hundred years ago for the purpose of the maintenance and upkeep of the highways in the borough. The town clerk regularly receives £200 or £300 a year from this source, which now, of course, merely goes in relief of the rates.
It is inconceivable that that kind of application by the trustees of the income year after year carries out either the spirit or the intention of the donor of the charity instituted two hundred years ago. I am therefore convinced that the introduction in the Bill of the provisions widening the scope of the cy-pres doctrine is most valuable and most necessary. I hope the widest use will be made of it. Up and down the country there must be hundreds, if not thousands, of charities in which the trustees, after perhaps paying themselves some remuneration and incurring some administrative expenses, devote the income from the charity merely in relief of the ratepayer or the taxpayer. In so doing, they are not relieving the poorer sections of the community. They are relieving the wealthier sections of the community. It is a travesty to think that these operations should still continue, because they cannot by any stretch of the imagination carry out the intention of the donor.
I am not sure—we can examine this in Committee—whether the provisions extending the cy-pres doctrine, or, to put it more technically, extending the conditions which must exist before the court or the Commissioners can apply the cy-pres doctrine, go as far as the recommendations of the Nathan Committee. If they do not, I hope that Amendments will be introduced to ensure that they go as far as possible.
Here I want to support the eloquent speech made by my hon. Friend the Member for Ince (Mr. T. Brown) and others, urging that opportunity should be taken in this Bill to introduce new 472 Clauses for the purpose of validating trusts the object of which has failed. It is not enough to extend the cy-pres doctrine, as the Bill does. There is an overwhelming case for seizing this opportunity—because we may not have another opportunity to deal with this legislation for a long time—to deal with numerous funds collected for some specific purposes, such as the Gillingham disaster a few years ago and the colliery disasters to which my hon. Friend the Member for Ince referred. As a result of those collections, about £1 million, subscribed by numerous people for the relief of a particular charity, is found to be no longer necessary for that specific purpose, but it cannot be applied to any other charitable purpose unless we have legislation for that purpose.
The Government should accept a new provision in the Bill laying down that, where funds have been subscribed for some charitable purpose, and that purpose has failed or been satisfied, it should be assumed that the donors had a general charitable intention. Then, if an excess of contributions results after the specific requirements of the disaster have been fulfilled, the surplus revenue should be applied for some other charitable purpose approved by the Commissioners.
It may well be that theoretically the donors of such charities have a right to ask for their subscriptions back, but that is much more a theoretical than a practical point. My belief is that most people who make a subscription to charity for one purpose or another are anxious that their subscription should be devoted to some charitable object. If it is thought necessary to meet the technical point, it could be met, first, by an advertisement enabling donors to apply, and, secondly, by a provision in an Act of Parliament that if, following an advertisement, donors have not applied after a specific interval of time, they shall be presumed to have intended that their subscriptions should be non-returnable to them and should be devoted to another charitable object to be approved by the Commissioners.
I should like to say a few words about the scope of the register. I am convinced of its necessity, because without it we shall not have knowledge of the existence of charities. It seems to me a great flaw and a great gap in our social 473 arrangements that people who are interested in knowing what charities exist in their localities at the moment have no means of such knowledge.
The other significant change that has occurred over the last century is the increased privilege enjoyed by all charities under our system of taxation. It is very important to bear that in mind, because charities are privileged bodies in more ways than one. They have always enjoyed freedom from the rule against perpetuities; and the benefit of being declared a charity even though the terms of their creation were not particularly precise, and they have always had certain modified rights of changing their objects under the cy-pres doctrine. But, in addition, during recent years of high taxation, all charities have had the great privilege resulting from the fact that the whole of their investments are free of Income Tax. I suppose that it is this feature of modern legislation which justifies and entitles the State to take a greater interest in the way in which charities are administered.
Although there is no need to remind the Solicitor-General, the House might be reminded that there have been from time to time criticism as to whether it is right that charities should continue to enjoy this freedom from taxation. As the Solicitor-General will remember, this was one of the subjects considered by the Royal Commission on the Taxation of Profits and Income, which reported in June, 1955, after the Nathan Committee had reported, and which devoted several pages of its final Report to considering whether charities should continue to have the benefit of tax exemption.
The Report quoted a statement made by the Board of Inland Revenue at that time estimating that the present annual cost of this exemption amounts to some £35 million of tax. It is therefore relevant in considering the law on charities to remember that to quite a substantial extent the Revenue contributes to the income of all existing charities. It is curious to observe—I read this in a newspaper the other day—that practically the only people now who ever complain of a reduction in Income Tax are the trustees of charities, because the immediate effect of any such reduction is to reduce the income of charities. But that is a small price to pay for the inestimable benefit which they receive.
474 It is worth while remembering that there was a Minority Report of two members of the Commission against the retention of this abstention from taxation which charities enjoy. The two dissentient members of the Commission doubted, for example, whether, when the standard rate of Income Tax was 10s. in the £, it was right that the State should be an equal partner in a trust established to promote annual chess tournaments with prizes open to young men resident in the City of Portsmouth.
I am in favour of the existing exemption, and I raise this matter because I am disturbed by the Clause in the Bill which gives the Commissioners of Inland Revenue certain statutory rights in connection with the designation of charity. As I understand it, Clause 9 has to be read in conjunction with Clauses 4 and 5. It is to be conclusively presumed in future that any institution which is put on the register is a charity. It is also provided that interested persons, including the Commissioners of Inland Revenue, can apply to the Charity Commissioners for the removal of a charity from the register.
Hitherto, certainly in the case of most new charities, care has always been taken to ascertain from the Commissioners of Inland Revenue whether a particular institution would or would not be regarded as a charity. I hope that we shall be told whether it is intended that all existing charities which have had their status as a charity recognised up to date by the Commissioners of Inland Revenue will be registered by the Charity Commissioners without any further interference by the Commissioners of Inland Revenue, or whether it is contemplated that the Commissioners of Inland Revenue will again have to vet the status of every charity which now has to apply for registration under Clause 4.
It certainly would be alarming if it were thought that because of this new legislation trustees of a charity could be involved in legislation at the instance of the Commissioners of Inland Revenue. I hope that some settled practice will result whereby there will be no risk of either existing charities or new charities having to become involved in contentious legislation with the Commissioners of Inland Revenue about their designation as a charity.
475 The other great advantage of the register, of course, is that it will enable local authorities to know which charities exist in their localities. When they have this information I hope that there will be abundant scope for the preparation of new schemes, so that a number of charities whose objects have today become obsolete are regrouped and used for modern up-to-date beneficial purposes.
Next, I hope that the Solicitor-General will be able to give us a little more definite information about the charities which are to be exempt from registration. This matter was not left in a very clear or definite state as a result of the debates in another place. The first point to observe is that all religious charities are in a position different from that of other charities because in the case of any religious endowment, whether for the Church of England, any Nonconformist body or any religious or quasi-religious body, there are already in existence beneficiaries, locally and very often centrally, who have an interest in seeing that the funds of that particular charity are properly administered. There is, therefore, not the same necessity for investigation and review of religious charities as there is of other charities, where there are no designated beneficiaries to protest if their rights are disregarded.
I am quite convinced from my own knowledge that the provisions in the Bill, wide as I think they are—and we may have to see whether in some cases they are not too wide—are necessary to deal with the relatively small number of cases in which charitable trustees abuse their powers. I am quite prepared to believe that in the overwhelming majority of cases the trustees of charitable trusts are perfectly honest, but I have in my own experience come across trusts which could with advantage be investigated, if only to ensure a more efficient administration of their affairs.
The next question which we have to consider is whether, to use the words of the hon. Baronet the Member for Hendon, South (Sir H. Lucas-Tooth), the Bill holds a right balance between two objectives which we all have in mind. First of all, there is the necessity of doing nothing to interfere with 476 the legitimate freedom and independence of trustees, coupled with which is the natural desire to encourage those charitably inclined to continue to make charitable endowments. That objective has to be balanced with the other objective which I recognise, namely, that of ensuring an improvement in the administration of a number of trusts up and down the country which are capable of being better managed than they are today.
To secure these twin objectives—and I am not at the moment convinced that the provisions of the Bill are ideally designed to achieve them—we have to consider both Clause 1, which gives certain powers to the Home Secretary—and I leave for further consideration the point raised by my hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas) as to whether the Home Secretary is the most appropriate Minister for this purpose— and the provision in the First Schedule for the constitution of the Commission.
My own fear is that the Commission, constituted as it is under the Bill and subject to the direction of the Home Secretary, with three Commissioners, all civil servants, occupying rather a dead-end position in the Civil Service, will be too bureaucratic. I foresee, particularly if they are to have a largely increased staff, a danger of bureaucratic —not political—interference by the Commissioners with the freedom, judgment and independence which I think trustees ought to have. Therefore, for my part, I should have much preferred the kind of Commission which the Nathan Committee recommended.
I am not, of course, inclined to the suggestion that it should be a Commission of nine part-time Commissioners. For myself, I would ask the Government to consider whether it might not be more appropriate that there should be added to the three whole-time Civil Service Commissioners one or two independent part-time Commissioners drawn from fields in which they have had a wider experience, not only of the world and of commerce, but preferably also of the administration of charities. It would not be difficult to find, from the large number of people who are engaged in administering some of the well-known large trusts in this country, one or two people who 477 are well equipped to augment this Commission, and who could, I should have thought, be persuaded to give part-time services.
In this connection, I hope that the Solicitor-General, when he replies, will clarify what is intended in the Bill with regard to the political responsibility of the Home Secretary. As I read it, by making the Home Secretary responsible, Members of Parliament will in future— I am not at the moment saying whether I think this is a good thing or a bad thing, because there are arguments both ways—be able to put down Questions on the Order Paper to the Home Secretary with regard to the administration of all charities affected by the Bill. The Home Secretary, as I understand it, will be able to be questioned whether he has given directions to the Commissioners about this and that, and why the Commissioners, who, after all, are appointed by him and are subject to his direction, have or have not investigated a particular charity, or have not registered some other body which hon. Members think ought to qualify for registration.
I therefore want first to make sure that this is also the Government's conception, so that if it is, we can examine what we want. First of all, may we be clear as to whether it is the Government's conception that, as a result of this Bill, in future the whole field of charitable administration by the Commission under the direction of the Home Secretary will become subject to Parliamentary Questions? I should have thought that it would, because even under our present system we have the experience of Questions being put to the Parliamentary Member of the existing Commission, and the administrative provisions envisaged in this Bill go a great deal further than that.
I do not want to deal with points which can better be raised in Committee, but I should like to endorse the point made by the hon. Member for Crosby (Mr. Graham Page) about Clause 19. As I read Clause 19, it confers judicial powers of a penal, or at any rate quasi-penal, nature on the Commissioners, enabling them to impose pretty drastic sanctions against trustees for misconduct and mismanagement. I think that it is right that they should have these powers, and 478 I think that the mere existence of these powers will have a salutary and deterrent effect on trustees who in the past may have been remiss in the discharge of their duties. I am bound to say, however, that I am shocked to find that there is no appeal as of right from these Commissioners, who are civil servants under the political direction of the Home Secretary, to any body. That seems to me to be contrary to the conception of natural justice to which we are accustomed. As the Bill stands, trustees have only a right of appeal if they obtain leave either from the Commissioners or from a Chancery Judge.
No one would want to put into the Bill provisions which might encourage trustees to spend trust funds in litigation. That would not be a desirable thing to do, but, nevertheless, I think that trustees ought not to be exposed to the risk of being condemned for at any rate quasi-criminal conduct without a right of appeal. If there were any danger of trustees using the right of appeal frivolously, I should have thought that it was a matter in which the courts could adequately restrain by using their wide discretion as to costs.
After making those general observations, I should like to conclude by saying that it seems to me that, desirable as this Bill is, it still leaves somewhat vague and uncertain the method in which the Commission will in the future exercise its powers of investigation. I think that the success of this Bill will depend very much upon the wisdom and restraint exercised by the Commissioners, and I assume that it will be their objective always to continue to obtain the co-operation of trustees, whose primary duty it will still be to administer the trusts under their charge.
§ 8.10 p.m.
§ The Solicitor-General (Sir Jocelyn Simon)
I am very grateful indeed, as is my right hon. Friend, for the reception which has been given to this Bill and for the very valuable debate we have had upon it.
Hon. and learned Members who are particularly versed in this branch of the law have contributed to our debate, also a number of solicitors who have had constant professional duties to perform in connection with trusts. One contribution was made by 479 a former Home Secretary, and another by a former Under-Secretary of State for the Home Department, who was in his previous career a Chancery lawyer. There was another contribution by my hon. Friend the Member for Salisbury (Mr. J. Morrison), who was earlier a parliamentary Charity Commissioner, and finally by the two hon. Gentlemen opposite who spoke with personal knowledge of the problems of the miners' welfare funds.
So it has been an exceptionally valuable and, if I may say so without impertinence, well-informed debate. If I do not advert to all the points of detail which have been raised, it will not imply that we shall not consider them carefully and with an open mind before the Committee stage of the Bill.
As the hon. Gentleman the Member for Islington, East (Mr. E. Fletcher) has pointed out, the Bill is important, not only because it comes as a consolidation of the law after 100 years or so, but because it is in the new and unprecedented situation whereby many of the traditional objects of charity have been largely overtaken by the provision of statutory welfare services. In those circumstances, feeling as we do that nevertheless charities have still a vital part to play in the community, we have the duty of trying to reconcile the part they have still to play along with the provision of the statutory welfare services.
This Bill does four things. In the first place it completely overhauls, for the first time in our history, the statute law regarding charities. It modernises the legal machinery and re-organises the Charity Commission to deal with the new situation to which I have referred. Secondly, by establishing a central register, it enables anybody concerned with public welfare to know what charities exist. Thirdly, it declares the basis for co-operation with the local services to which I have referred. Fourthly, it makes it easier for a charity to adapt itself to the rapidly changing situations of today by relaxing the conditions which have to be satisfied before a trust can be altered—in other words, the application of the cy-près doctrine.
The first general matter that has been raised is (the constitution of the Commis- 480 sion itself. I want to make plain at the very outset of my speech that my right hon. Friend has no intention of any political interference with the Charity Commission. The members of the Charity Commission will not be civil servants of the Home Office, in the words of one hon. Member. They will be civil servants, but in their day by day work they are independent of the Secretary of State. They are just as independent as the members of the Civil Service Commission, who, after all, are also civil servants. We are used in our constitution to giving powers to a body as to which, although a Minister may be answerable in Parliament for their efficiency, he denies himself the power to interfere in their day by day decisions. The discretion that is given to members of the Commission is theirs and not that of the Secretary of State.
Therefore it follows, in answer to the hon. Member for Islington, East, that although the Home Secretary will be answerable for the Commissioners in this House by Parliamentary Question and Answer and other means, he will be responsible only for their efficiency. He will not be responsible for their decisions in relation to particular charities, because it is their discretion and not his. In so far as they are answerable for the exercise of their discretion, they are answerable to the courts, because an appeal lies from their decisions to the courts and not to the Home Secretary.
Again we are used to that kind of relationship. It exists already to a great extent in a branch of the Civil Service which is far more administrative than the proposed Commissioners. By a self-denying ordinance the House of Commons does not probe Treasury Ministers in relation to the tax affairs of any individual in the community. This is an a fortiori case, because the Commissioners will be exercising a judicial discretion for which they are answerable to the courts.
Then, as to the actual constitution of the Commission, the hon. Member for Hendon, South (Sir H. Lucas-Tooth) asked whether it was the intention of my right hon. Friend to appoint a layman as the third Commissioner. It is his intention so to do. I believe that when we have the two legal members and one lay member we shall have the kind of 481 Commission which is capable of fulfilling the tasks that this Bill lays upon it. The job of the Commissioners, as I have said, is partly judicial, but it is also partly administrative, and the Commissioners will also partly act in an advisory capacity. In other words, the qualities that will be looked for are not only judicial, but those we find in a family solicitor, able to give advice to the trustees in relation to all the manifold problems thrown up in the exercise of the trust.
I do not think that there is a need to re-orientate the Commissioners so that they are primarily a business body. After all, the Charity Commissioners themselves are already responsible for the handling of very large funds. I am told that the Official Trustee, who will be superseded by the Custodian Trustee, already has £140 million of funds for which he is responsible. Therefore, the Charity Commissioners are already used to the handling of large sums of money. Hon. Members will have noticed that in Clause 21 (6) the Custodian Trustee has power to call on the advice of investment experts.
In addition, the fact that there are only three trustees does not preclude the employment of staff with whatever qualifications and experience is necessary. Therefore I say, particularly to my hon. Friends the Members for Salisbury and Crosby (Mr. Graham Page), who expressed some disquiet as to whether the Commissioners would be mere agents of the Home Office, that both by their constitution and by the intention of my right hon. Friend I believe that those misgivings are not justified nor will they be in any way translated into reality.
§ Mr. J. Morrison
If an hon. Member has a problem and has to take it to a Minister, it is bound to be more political than if he takes it to a back bencher, as at present.
§ The Solicitor-General
If my hon. Friend is referring to the Parliamentary Charity Commissioners, my own feeling is that there is still the avenue of approach through a Minister. The Minister will, however, to a certain extent, be acting as a postbox in relation to the Charity Commissioners in that it is their discretion which is in question and not a Ministerial discretion.
482 Again, it is very much like the attitude of a Treasury Minister when a question of the taxation of an individual is concerned. Although the Treasury Minister is approachable by any hon. Member, he would not dream of giving directions to the Commissioners of Inland Revenue as to how they should exercise their duties in relation to any individual. This is an even stronger case, because it is very largely a judicial discretion which is given to the Charity Commissioners.
The hon. and learned Member and his hon. Friend the Member for Islington, East asked why we had decided upon the Home Secretary and not the Lord Chancellor. The main reason was that we felt that when it was a question of answerability for the efficiency of a public Department it was better to have the Home Secretary, who is in this House, rather than the Lord Chancellor in another place. In any case, the Home Secretary seems constitutionally the right person because, as Secretary of State, he is in a sense the residuary legatee of all Government functions. I hope that I have dealt with all the points concerning the Commission.
The only hon. Member who raised the question of an advisory body was the hon. and learned Member for Leicester, North-East, who expressed no particular love for such a body. It is a matter on which my right hon. Friend still has an open mind, but it does not appear from today's debate that there is any strong feeling that there should be an advisory committee to assist the Commission. It is, however, a matter on which we have not closed our minds.
§ The Solicitor-General
It is probably a subject to which we should return again when we have examined the composition of the Commission more fully in Committee, which, I imagine, is what the hon. and learned Member has in mind.
The next main subject, which has not stirred any strong feeling today, is the question of a statutory definition of charity. I agree with my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) that it is to some 483 extent a confession or failure on the part of lawyers if we fail to get a definition. On the other hand, it seemed to me that the reasons given by the hon. and learned Member for Leicester, North-East were conclusive. In the absence of a heavensent definition which we can see on the Order Paper and examine critically, my feeling is that the whole thing is better left to case law, as at present, for the reasons given by the hon. Member for Islington, East. If my hon. and learned Friend the Member for Darwen should turn out to be the channel of the divine inspiration, that would be both appropriate and welcome.
The hon. Member for Huddersfield, West (Mr. Wade), who has expressed his apologies that he cannot still be here, thought that registration might effect a new rigidity in the definition. I did not follow how that should be so. It will still be open to the courts to say what is a charity, and it will merely follow from that that the particular body will then be placed on the register. The fact that various charities are registered and appear on the register should give no more rigidity to the law than the existing body of precedent.
One of the main topics which has been discussed is the question of registration. The proposal for registration of charities has been universally welcomed. It was a central feature of the Nathan Committee's proposals, and it will be extremely valuable when it comes to setting charities into the context of the statutory welfare services that are now performed by the State and by local authorities.
The hon. and learned Member for Leicester, North-East asked what information would appear on the register. The register that we envisage will be a card index, on which will appear the particulars of the functions of a trust including, unless they are voluminous, the subsidiary functions to which the hon. and learned Member expressly referred. It will also include the approximate annual income of the trust and a reference to any land that it holds. There will be a cross-reference to the deed of trust, which will be filed elsewhere in the premises of the Charity Commissioners and available for inspection.
484 I was asked, particularly by the hon. and learned Member and by the hon. Member for Huddersfield, West, about the exemptions and whether the exemption under Clause 4 (4) would extend to the obligation to render an annual return. The answer is that it will. The hon. and learned Member, although he was alone in this, was anxious to see the exemptions expressed in the Bill rather than in regulations. Our own feeling is that that would be quite inappropriate.
There may be many of these bodies and one wants to particularise them. Undoubtedly, in some cases, we will be able to signify a whole class of charities —far example, charities whose trust is set out in a model deed of one class or another, like so many of the trusts for Scouts and Girl Guides. There will, however, be many other cases where one will want to refer to the particular charity or to a certain part of it. Since a great deal of this is for the guidance of conveyancers and, therefore, one will want to go into fair detail, we think it far better that the exemptions should be set out in regulations.
It follows from that, in answer to a question by the hon. Member for Huddersfield, West, that so far as I can see the House will not have an opportunity of seeing the draft regulations before the Bill is considered in Committee.
§ Sir L. Ungoed-Thomas
I appreciate the desirability of the provision for regulations for dealing with marginal cases which would be suitable for enumeration by regulation rather than in the Bill. My concern was about including in the Bill national organisations such as the Boy Scouts, the Royal National Lifeboat Institution and religious organisations, about which undertakings for further consideration have been given. These organisations fall within certain classifications. Their exclusion would depend upon the decision of principle and, therefore, they are eminently suitable for inclusion in the Bill.
§ The Solicitor-General
With respect, I do not think it is as simple as that. I repeat our undertaking to consider the question and the scope of their exemption with all the bodies enumerated by the hon. and learned Gentleman.
485 In answer to the right hon. Member for South Shields (Mr. Ede), I can say that we shall consider sympathetically the position of the nonconformist churches and, indeed, all the religious bodies. But, even then, there is the position that trustees may change and trust deeds may alter. In that case, it seems to be preferable that there shall be a power to specify the exempt trusts by regulation rather than in the Bill itself, where we should be required to make amendment by Act of Parliament. No doubt that is a matter which we can discuss further during the Committee stage, but as at present advised it seems to me preferable that we should deal with the matter by regulation.
§ Mr. Fletcher
Will the Minister deal with the important point raised by the hon. Member for Crosby (Mr. Graham Page) regarding the interpretation of Clause 4 (4, c) and whether these words are to be read conjunctively or disjunctively?
§ The Solicitor-General
I think it was referred to by my hon. Friend the Member for Hendon, South. I was coming to that point.
In relation to the point raised by the right hon. Member for South Shields regarding the Nonconformists Chapels Act, 1844, I think there is a conclusive answer which perhaps we might consider in detail in Committee. The short answer is that in our view that Act has entirely served its purpose.
§ The Solicitor-General
I should be very surprised if it were necessary to resolve any reasonable doubts. The right hon. Gentleman was good enough to give me notice of his perturbation about the repeal of this Act. I have looked into it again, but, as I say, I am satisfied that it can be safely repealed. But we can return to this matter during the Committee stage discussion.
My hon. Friend the Member for Hendon, South asked about our interpretation of Clause 4 (4) (c). In my view, it is to be read in this way that a charity is not required to be registered either if it has not a permanent endowment which is defined in Clause 43 (3) or any income from property amounting to more than 486 £15 or if it does not have the use or occupation of any land. In other words, if it has a permanent endowment it must register, if it has an income from property amounting to more than £15 it must register, or if it occupies or uses any land it must register. If it has an income it will be registered already with the Commissioners of Inland Revenue for the purpose of tax exemption. If it has a permanent endowment or pays Income Tax or rates it must register.
§ Mr. Fletcher
Does that mean that a charity with an endowment of say, £400, producing an income of under £15 a year must register?
§ The Solicitor-General
If it has an endowment at all it must register, that is a permanent endowment as defined in the later Clause to which I referred.
The hon. Member for Huddersfield, West raised the question of the power to draw on capital and asked whether that would involve a permanent endowment. The answer is that if there is power to draw on capital without qualification that is not a permanent endowment; but apart from that, it would be a permanent endowment.
The hon. Member for Islington, East asked a very important question about Clause 4 in relation to Clause 9, regarding the position of existing charities which already enjoy Inland Revenue exemption. This exemption is not permanent; it depends upon the Commissioners of Inland Revenue being satisfied from year to year that the body is a charity. I should not think that there is any reason for apprehension on the part of a charity which enjoys an existing exemption. But, under Clause 9 (1), we provide for an interchange of information between the Inland Revenue Commissioners and the Charity Commissioners, and indeed the local authority for rating purposes, so there will be one conclusive register to determine for the time being the charitable status of the institution.
I wish to emphasise again in relation to the question put by the hon. Member for Islington, East that the fact that a body is not registered is not conclusive evidence that it is not a charity. It applies only the other way round. I was asked whether there was any retrospective operation on removal from the register. The answer is that there is 487 not. It is conclusively presumed to have been a charity at any time while it was on the register.
I now come to the relations with the local authorities. Again I think that the position that the Bill sets out has been generally approved. It is a position of co-operation. In all cases it rests on the discretion of the trustees whether they should give the information to the local authorities. The hon. and learned Gentleman asks what is the relation between the central register and the local authority index. The local authority index can, as he surmised, go beyond the central register. In so far as it does, it depends on the co-operation of, and the voluntary information vouchsafed by, the local charity. The details will be the same as those on the card in the card index in so far as they are supplied by the Commissioners.
My hon. Friend the Member for Westbury (Sir R. Grimston) asked about urban district councils. We have considered this carefully since the matter was discussed in another place. Our present view is that there are not sufficient charities with which an urban district council would be concerned to justify including them, and that the Bill should stand as it is. No doubt we shall have an opportunity of discussing that further.
One minor point was referred to by the hon. Member for Brecon and Radnor (Mr. Watkins) in relation to Clause 8 (3). It does not lay, as he implied, any obligation on the trustees of local charities to have their accounts audited by the distinguished members of the bodies set out in Clause 8 (3). Those are the classes of accountants which can be called in by the Commissioners when they feel it their duty to have the accounts audited.
I now come to the point made by my hon. and learned Friend the Member for Darwen, by my hon. and learned Friend the Member for Bolton, East (Mr. Philip Bell) and by my hon. Friend the Member for Crosby, in relation to Clauses 17 and 19—in other words, the right to appeal. The purpose of Clause 19, which is a new provision and, I think, on the whole approved by the House, is this: under the existing law the only action that has been open to the Commissioners after holding an inquiry is to 488 report the case to the Attorney-General. But it may well happen that in the interval between the discovery of some misfeasance and the launching of Chancery proceedings the charity assets suffer some further loss.
That danger was recognised in the War Charities Act and in another Act relating to disabled persons, charities in 1948. Therefore, Clause 19 (1) gives the Commissioners power to act on their own motion. There is, however, an appeal from their decision. There is an appeal either with leave of the Commissioners or with leave of a judge of the High Court attached to the Chancery Division.
I cannot regard that latter as being in any way a restricted appeal, any more than is an appeal with leave of the Appeal Committee of the House of Lords. It does mean that whereas at the moment there is no appeal except with leave of the Commissioners, any charity trustee who is affronted at a decision of the Commissioners can now himself go to a judge of the Chancery Division and get leave to appeal.
I do not myself read Clause 17 in the way in which it was read by my hon. and learned Friend the Member for Bolton, East and by my hon. Friend the Member for Crosby. I do not think that it would be any answer for the Commissioners to say "We were satisfied and therefore the High Court has no power to review our decision." The phrases "if a judge is satisfied" or "if a body is satisfied" apply where the facts on which a decision has been made—in fact the whole decision—are reviewable by a court of law. It seems to me that a plain reading of Clause 17 allows an appeal to the Chancery Division with the leave of one of the judges of that division, in which the charity trustees will have a chance of showing that the decision of the Commissioners was a wrong one under Clause 17 (6). It therefore seems to me that my hon. Friend was really seeing ghosts when he saw that particular provision as a chance of taking over charitable funds for the purpose of the National Health Service.
The final matter on which I wish to say something is about the doctrine of cy-pres. I will not go into that in any detail today, because this is a matter which we would like to consider further. 489 There is a great deal in the point urged by a number of hon. Members that we ought to try and see that gifts given for specific charitable purposes, which fail in such similar circumstances to the Gillingham bus disaster case, can be applied cy-pres. On the other hand, it is very important that we should preserve the right of identifiable subscribers who may make quite substantial gifts and who may regard as unwarranted any appropriation of their gifts for a charitable purpose different from that for which they subscribed. But we will try to give due weight to both of those considerations.
I now come to the question of the validation of imperfect gifts for charity. The hon. Member for Islington, East proposed one test, my hon. and learned Friend the Member for Bolton, East proposed another, and the hon. and learned Member for Leicester, North-East proposed that where charitable purposes were expressed with other purposes the gift should be divided proportionately. It seemed to me that he was seeking to emulate the methods as well as the wisdom of Solomon. We will, however, consider that suggestion.
I now come to the specific point raised by the hon. Members for Bolsover (Mr. Neal) and Ince (Mr. T. Brown) in speeches which obviously moved the House. If the fund is capable of being applied cy-pres, Clause 13, which is an extension of the existing position, will make it easier to satisfy the conditions necessary before a cy-pres scheme can be made. But, from other points of view, the question is intimately bound up with the proposed new Clause which I have promised to consider and to which I have referred; that, we trust, will make it easier for gifts limited to a particular purpose which has failed to be applied for other charitable purposes. Perhaps we can return to that point in Committee. Many other points have been raised, but perhaps the House will permit us to return to them in Committee.
The Collect for the Sunday before Lent speaks of "that most excellent gift of Charity" as "the very bond of peace and of all virtues". The Bill deals with the implementation of some of the noblest impulses of the human heart. Over the centuries, the people of this 490 country have responded fully to the words of the Psalmist:Blessed be the man that provideth for the sick and needy".The great accumulation of property that has resulted has naturally required the sanction and safeguard of the law but in the course of time, as we have been reminded today, the law has become defective and obscure, difficult to find and interpret and, above all, unresponsive to the new social developments. As a result, although charity may begin at home, all too often it ends in the law courts.
The Bill provides an up-to-date, luminous and compendious legislative instrument within which this country's beneficence can continue to operate, and as such I commend it to the House.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 83 (Committal of Bills).