§ 11.57 a.m.
§ Mr. Malcolm Rifkind (Edinburgh, Pentlands)To initiate a debate on the Charity Commission some 21 hours after the House has begun its present Sitting may be considered by some to be somewhat uncharitable, and I apologise for that, but I think that the Minister and the House will be aware of the very great interest in this matter. She will be aware, as the House will, that there is on the Order Paper an early-day motion relating to this matter which has been signed by over 320 hon. Members—an almost unprecedented event. The Minister will be aware of the great interest outside the House in the powers of the Charity Commission.
Let me make clear from the beginning that I do not wish to launch any general attack on the Charity Commission. It does an enormously good job and is responsible for some 115,000 charities. In general, it does a service which is of credit to it and of great benefit to the country. I will concentrate my inevitably short remarks on the particular powers of the Charity Commission, not in regard to registering new charities but in regard to existing charities throughout the United Kingdom.
My first point is that, under the present legislation, the Charity Commission has the power entirely at its own discretion to deregister an existing charity or to take other administrative action which can have substantial consequences for that charity. Of course, one appreciates that when the Charity Commission is considering a new applicant for registration, it is only right and proper that the onus should be on the applicant to prove its charitable status, but at the moment the Charity Commission has total discretion, by administrative act of its own making, to deregister an existing charity, and in effect to remove its charitable status. This can sometimes take place in relation to a charity which might have had charitable status for over 150 years, and it is clearly a very worrying matter indeed.
705 This is an important matter, and although there is an appeal to the High Court from a decision of the Charity Commission, this is not a very satisfactory solution, because the onus is upon the institution which has in effect lost its charitable status. It can sometimes be a very expensive matter for it to pursue, and I know of at least one charity which was unable to pursue the matter in the High Court because it did not have the funds to make that possible.
In addition, it can sometimes be a matter of one or two years or even longer before the High Court is in a position to judge whether the Charity Commission is correct, and this is a very unfortunate state of affairs.
These problems refer to all charitable institutions, but I point out to the Minister that there is a particular problem in regard to Churches and other religious institutions, because in my view it is even more unfortunate that their charitable status should, in effect, be endangered by the administrative decision of the Charity Commission.
I say that they are a special case, because the Minister will be aware that in regard to religious organisations there is a presumption that their purposes or their doctrines are not contrary to public policy and therefore that their charitable status should not be endangered. Indeed, the Charity Commission, in a letter of 10th May 1977, stated as follows:
It is not disputed that there is a presumption that trusts established for purposes of a religious nature are for the public benefit.Although the Charity Commission does not dispute that, under existing legislation it is clear that that presumption can be overturned simply because the Commission itself believes that a religious organisation, a Church or any charitable institution, no longer has objectives consistent with public policy and therefore no longer deserves the advantages of charitable status.It is particularly unfortunate, therefore, that Churches and religious organisations which have this presumption of entitlement to charitable status should face the possibility of losing their status overnight through administrative decision of the Commission and that only if they are prepared to incur the expense and delay of an appeal to the High 706 Court, can they hope to have the decision overturned.
Section 6 of the 1960 Act enables the Commissioners to institute inquiries, where they think appropriate for an unlimited range of purposes. Normally, the use of this section has been limited to cases where the Commissioners have reason to believe that there has been some financial abuse or technical impropriety in the administration of a trust. In one case, however, and in one case only, the section has been used to appoint a person to initiate a full inquiry into whether the doctrines and beliefs of a religious sect are or are not contrary to public policy. As a result of the report which was presented, certain administrative decisions were taken by the Commissioners.
Section 6 has wide scope. I will not go into the details of the case concerned, because it is possible that certain matters are sub judice and it would not be appropriate. However, it is well known that the group to whom I refer are the Exclusive Brethren, who have been in this position as a consequence of the existing use of the application of section 6.
The time has come to consider whether it is appropriate that section 6 should be used to initiate inquiries for the purpose of investigating the religious beliefs and the acceptability of religious doctrines of particular groups. If that is necessary in the public interest, it should be the courts or Parliament which are responsible and it should not be left to the administrative decision of the Charity Commissioners.
Even where the Commissioners have not sought to deregister an existing charity or to remove entirely, so far as they can, the charitable status of a group, they can take administrative decisions with serious financial and administrative effects on the institution concerned. I understand that those powers are used under section 18 of the 1960 Act and that, in the case of the Exclusive Brethren, the Commissioners have used their powers to say that they will not approve further or new schemes for the arrangement of various trusts of that organisation.
Clearly, whether in this case or in any other, where those powers are used there can be serious consequences. Although in theory the charitable status of the organisation may not be removed by 707 the application of these administrative powers, in practice the same effect may be achieved because great doubts will be raised in the public mind whether those organisations or religious groups continue to deserve charitable status and their tax position will clearly come under much more scrutiny.
I am not questioning whether there may be situations in which existing charities deserve to lose their charitable status and the consequent benefits. What I am questioning is whether it is appropriate that existing charities, which may have had undisputed charitable status for over 100 years, should lose it, either in so many words or, in effect, through the administrative decision of the Commissioners, with the onus then upon the charity to get a ruling from the High Court.
It is much more appropriate to think in terms of the early-day motion, signed by over half the Members of this House, which suggests:
the powers of the Charity Commission should be altered so that the charitable status of religious bodies and churches cannot be removed by the Commission, or be treated by the Commission as if it had been removed, unless or until the said religious bodies or churches have been found to have objects or practices inconsistent with charitable status by a court of law.That seems a reasonable proposition—that existing charities should be allowed to continue with all the advantages of a charitable institution at least until a court or Parliament has ruled otherwise.I hope that the Government will urgently consider a matter which has caused enormous concern among many people, both in religious groups and on a wider front. I hope that the Minister will take the large number of signatures to the early-day motion as an important indication of the feeling in all parts of the House about important changes which may be required to this aspect of our law.
§ Mr. Harry Gourlay (Kircaldy)Before the hon. Member sits down, would he agree that one of the most glaring anomalies in the operation of the Charities Act is Gordonstoun School in Scotland, which is regarded as a charity, whereas the average old-age pensioners' branch in Scotland has to pay tax because it is not regarded as a charity?
§ Mr. RifkindThat is not relevant, with respect, to what I was saying. If the hon. Gentleman does not mind, I will not seek to answer his question.
§ 12.7 p.m.
§ The Under-Secretary of State for the Home Department (Dr. Shirley Summerskill)In replying to the matters raised by the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) concerning the Charity Commission and its powers, I should like to begin with a brief explanation of the status of the Charity Commissioners and their existing powers.
The Charity Commissioners have the duty of maintaining a register of charities, and the inclusion of an institution in that register is for all other purposes conclusive proof that the institution is a charity. In deciding whether an institution qualifies for inclusion in the register the Commissioners are acting judicially, and their decisions are subject to appeal to the High Court. Neither my right hon. Friend the Home Secretary nor any other Minister has any responsibility for the Commissioners' decisions, or any power to intervene in the taking of those decisions. The questions which the Commissioners have to determine, in deciding whether to register a body as a charity, are questions of fact and of law, not questions of policy.
A decision that a body qualifies for registration means simply that, on the information before the Commissioners, that body appears to fulfil the conditions required by law for charitable status. If subsequently the Commissioners receive information indicating that a body included in the register no longer fulfils those conditions, they have power to remove it from the register, under a procedure which ensures fairness to all parties concerned.
A decision by the Commissioners to enter an institution on the register is not in any way a seal of official approval. It is generally held to be one of the virtues of our society that voluntary associations and other institutions are free to exist and flourish without requiring official approval. All that registration as a charity implies is that the body so registered is established and operated for purposes which are charitable purposes under the law of England and Wales.
What, then, are the criteria for registration as a charity? There have been many 709 attempts to find a definition of a charity that could be enacted in statutory form but, despite the efforts of the lawyers, no one has yet devised a satisfactory one. The present legal meaning of "charity" is based partly on the preamble to the Charitable Uses Act 1601, which lists examples of purposes which were considered charitable in the time of Queen Elizabeth I, and partly on the judicial exegesis of this list in a long line of cases decided by the courts since then.
The Chancery Division of the High Court decides in doubtful cases what is a charitable purpose and Lord Macnaghten in a famous case in 1891—Commissioners of Income Tax v Peinsel—classified charitable purposes under the four main heads. These were the relief of poverty, the advancement of education, the advancement of religion and other purposes beneficial to the community. This method of definition provides a considerable degree of flexibility, and enables the frontiers of charity to change in response to changing social needs.
The current definition of charitable purposes has been re-examined in recent years, first by the Expenditure Committee in a report presented in 1975 and then by the committee on charity law and voluntary organisations, which was set up by the National Council of Social Service under Lord Goodman's chairmanship, and whose report was published in December 1976.
Both committees expressed a wish to see the boundaries of the definition more tightly drawn in order to exclude those fringe religious bodies which they regarded as harmful. As part of our general consideration of the two reports we are examining urgently the scope for introducing such a limitation. Any redefinition would, of course, require legislation, which we are not permited to discuss now.
The hon. Member has also gone into some detail about the scheme-making powers of the Charity Commissioners under section 18 of the Charities Act. This is a quasi-judicial function which enables the Commissioners to exercise powers concurrent with those of the High Court. It was never envisaged, however, that the Commissioners would usurp the entire powers of the court, and subsection (9) specifically provides that the 710 Commissioners shall not exercise their jurisdiction in a matter which is particularly contentious, or which, because of special questions of fact or law, the Commissioner consider should be decided by the court.
I come now to the points which the hon. Member has raised about particular religious bodies. He referred to the problems encountered by the sect known as the Exclusive Brethren since the major division of the sect, which dates from about 1970, between supporters and opponents of its former leader, James Taylor junior. The Charity Commissioners have taken great trouble to try to sort out these problems so far as they affected the sect's charitable status and the ownership of trust property.
In 1974 the Commissioners appointed Mr. Hugh Elvett Francis QC to conduct an inquiry under the Charities Act into the doctrines and practices of the Exclusive Brethren. Mr. Francis submitted a report in 1976 recommending that, pending a decision by the courts, the Commissioners should not register any meeting house of the sect which had adopted the doctrine of "separation from evil" as practised by the followers of James Taylor junior. The Charity Commissioners, however, after considering representations made on behalf of the proTaylorite group, decided that in the present uncertain state of the law, to which I referred earlier, and in view of legal proceedings then pending, it would not be right for them to adopt Mr. Francis's recommendation. I emphasise to hon. Members who signed the early-day motion that the Charity Commisisoners had not acted to remove charitable status from any of the trusts mentioned but have said that the questions are so special that the courts, not the Commissioners, must decide. In the meantime, the Commissioners are preserving the status quo. The proceedings which were pending in 1976 subsequently lapsed, but have now been renewed. The issues are thus sub judice and I ought not to comment on them any further.
I am sure that the Charity Commissioners will have noted what the hon. Member has said about the way in which they carry out their functions. He can see from what I have said that the existing powers of the Commission are far more limited than is generally supposed.
§ Mr. Walter Harrison (Treasurer of Her Majesty's Household)rose in his place, and claimed to move, That the Question be now put.
§ Question put, That the Question be now put:
§ The House proceeded to a Division—
§ Question accordingly agreed to.
§ Question, That the Bill be now read a Second time, put accordingly and agreed to.
§ Bill read a Second time and committed to a Committee of the whole House; immediately considered in Committee; reported, without amendment.
712§ Mr. Ivan Lawrence (Burton)(seated and covered): On a point of order—
§ Mr. Deputy Speaker (Mr Oscar Murton)Order. No point of order arises on the closure.
§ The House having divided: Ayes 139, Noes 5.
711| Division No. 3221 | AYES | 12.14 p.m. |
| Archer, Rt Hon Peter | Garrett, W. E. (Wallsend) | Park, George |
| Armstrong, Ernest | George, Bruce | Parker, John |
| Atkinson, Norman (H'gey, Tott'ham) | Golding, John | Pendry, Tom |
| Barnett, Guy (Greenwich) | Gourlay, Harry | Perry, Ernest |
| Barnett, Rt Hon Joel (Heywood) | Graham, Ted | Phipps, Dr Colin |
| Beith, A. J. | Hamilton, James (Bothwell) | Prescott, John |
| Benn, Rt Hon Anthony Wedgwood | Hamilton, W. W. (Central Fife) | Price, C. (Lewisham W) |
| Bishop, Rt Hon Edward | Harrison, Rt Hon Walter | Price, William (Rugby) |
| Blenkinsop, Arthur | Hattersley, Rt Hon Roy | Rees, Rt Hon Merlyn (Leeds S) |
| Boardman, H. | Hayman, Mrs Helene | Rifkind, Malcolm |
| Booth, Rt Hon Albert | Healey, Rt Hon Denis | Robinson, Geoffrey |
| Bottomley, Rt Hon Arthur | Henderson, Douglas | Rodgers, George (Chorley) |
| Brown, Ronald (Hackney S) | Horam, John | Rodgers, Rt Hon William (Stockton) |
| Buchanan, Richard | Hunter, Adam | Rooker, J. W. |
| Butler, Mrs Joyce (Wood Green) | Jackson, Miss Margaret (Lincoln) | Ross, Stephen (Isle of Wight) |
| Callaghan, Rt Hon J. (Cardiff SE) | Jager, Mrs Lena | Rowlands, Ted |
| Callaghan, Jim (Middleton & P) | John, Brynmor | Ryman, John |
| Carlisle, Mark | Johnson, James (Hull West) | Sever, John |
| Carmichael, Neil | Johnston, Russell (Inverness) | Shore, Rt Hon Peter |
| Carter-Jones, Lewis | Judd, Frank | Silkin, Rt Hon John (Deptford) |
| Cocks, Rt Hon Michael (Bristol S) | Kaufman, Rt Hon Gerald | Sinclair, Sir George |
| Cohen, Stanley | Kelley, Richard | Spearing, Nigel |
| Concannon, Rt Hon John | Knight, Mrs Jill | Steel, Rt Hon David |
| Conlan, Bernard | Lamond, James | Strang, Gavin |
| Cook, Robin F. (Edin C) | Lever, Rt Hon Harold | Summerskill, Hon Dr Shirley |
| Crawshaw, Richard | Lewis, Ron (Carlisle) | Taylor, Mrs Ann (Bolton W) |
| Crowther, Stan (Rotherham) | Litterick, Tom | Tilley, John |
| Cryer, Bob | Lomas, Kenneth | Tinn, James |
| Cunningham, Dr J. (Whiteh) | McElhone, Frank | Torney, Tom |
| Dalyell, Tam | MacFarquhar. Roderick | Varley, Rt Hon Eric G. |
| Davis, Clinton (Hackney C) | McKay, Allen (Penistone) | Wainwright, Edwin (Deanne V) |
| Deakins, Eric | Magee, Bryan | Wainwright, Richard (Coine V) |
| Dell, Rt Hon Edmund | Mallalieu, J. P. W. | Ward, Michael |
| Dormand, J. D. | Mason, Rt Hon Roy | Watkins, David |
| Douglas-Mann, Bruce | Millan, Rt Hon Bruce | Weetch, Ken |
| Duffy, A. E. P. | Molloy, William | Wellbeloved, James |
| Eadie, Alex | Morris, Alfred (Wythenshawe) | Whitehead, Phillip |
| Edwards, Nicholas (Pembroke) | Morris, Rt Hon J. (Aberavon) | William, Rt Hon Alan (Swansea W) |
| Edwards, Robert (Wolv SE) | Morton, George | Williams, Sir Thomas (Warrington) |
| Ellis, John (Brigg & Scun) | Moyle, Rt Hon Roland | Wilson, Rt Hon Sir Harold (Huyton) |
| English, Michael | Mulley, Rt Hon Frederick | Wise, Mrs Audrey |
| Ewing, Harry (Stirling) | Murray, Rt Hon Ronald King | Woof, Robert |
| Fitt, Gerard (Belfast W) | Newton, Tony | Young, David (Bolton E) |
| Fletcher, Ted (Darlington) | Noble, Mike | |
| Foot, Rt Hon Michael | Oakes, Gordon | TELLERS FOR THE AYES: |
| Ford, Ben | Orme, Rt Hon Stanley | Mr. Donald Coleman and |
| Fowler, Gerald (The Wrekin) | Owen, Rt Hon Dr David | Mr. Joseph Dean. |
| Fry, Peter | Palmer, Arthur |
| NOES | ||
| Carson, John | Neubert, Michael | TELLERS FOR THE NOES: |
| Craig, Rt Hon W. (Belfast E) | Ross, William (Londonderry) | Mr. Robin Hodgson and |
| Lawrence, Ivan | Mr. Peter Bottomley. |
§ Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 93 (Consolidated Fund Bills) and agreed to.
§ Bill accordingly read the Third time and passed.