Official Report of the Grand Committee on the Charities Bill [H.L.]

HL Deb 03 February 2005 vol 669 cc1-56GC

(First Day)

Thursday, 3 February 2005.

The Committee met at quarter past three of the clock.

[The Deputy Chairman of Committees (Lord Ampthill) in the Chair.]

The Deputy Chairman of Committees (Lord Ampthill)

Before I put the Question that the Title be postponed, I remind the Committee of two points of procedure. Noble Lords will speak standing, and the House has agreed that there shall be no Divisions in Grand Committee. Unless, therefore, an amendment is likely to be agreed to, it should be withdrawn.

If there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

Title postponed.

Clause 1 [Meaning of "charity"]:

On Question, Whether Clause 1 shall stand part of the Bill?

Lord Hodgson of Astley Abbotts

As we begin the Committee stage, I declare several interests relating to the charitable sector, all of which are recorded in the register of the House.

Winding up the Second Reading debate on the Bill for the Government, the noble Lord, Lord Bassam of Brighton, said: I cannot remember a time when legislation that the Government have brought forward has attracted so much support from so many corners of your Lordships' House".—[Official Report, 20/1/05; col. 958.] He was right. There was almost unanimous support in principle for the purposes behind the Bill. However, I have been surprised by the volume of representations that we have received about the implications of the details of the Bill. Accordingly, as can be seen from the Marshalled List, we have felt it necessary to table a substantial number of amendments. Although we shall raise several important points of principle, many of the amendments are, at least in the first instance, probing amendments.

The charitable sector is anxious for explanation and clarification of government thinking on what lies behind the Bill. We therefore want to offer the Minister the chance to put that thinking on the record, so that the sector can appreciate the detail of what is proposed for it. In order to make the process as effective, constructive and quick as possible, we have been happy to indicate in advance our areas of concern, so that the Minister can address them directly in his reply.

Wedged as I am between the Minister, backed by the heavy artillery of the Bill team, and the noble Lord, Lord Phillips of Sudbury, with his expert and extensive knowledge of charities and charity law, I offer only a layman's view. Opposing the Question that the clause stand part is one of our probing tactics.

As we have already indicated to the Minister through the Bill team, we want an opportunity to explore how, the Government think, the charity law regime in England and Wales will mesh with that in Scotland. We are concerned with aligning the legislation, rather than redrafting or removing the clause. We have a concern about the lack of congruity between charity law in England and Wales and that in Scotland and, potentially, that in Northern Ireland. The consequences of any discrepancy could be considerable, so I am opposing the Question to find out from the Minister what potential discontinuities have been identified and what discussion and action have taken place to bring charity law throughout the United Kingdom into line.

At Second Reading, the Minister's colleague, the noble Baroness, Lady Scotland of Asthal, dismissed concerns about compatibility in charity law. She said: Continued co-operation between the Executive and the UK Government, and the Charity Commission and its Scottish counterpart OSCR, will aim to ensure that in key areas—such as the definition of charity—the two Bills are fully compatible. Charity law is also devolved in Northern Ireland, and it is likely that there will be reforms there too, although proposals are in the early stages".—[Official Report, 20/1/05; col. 884.] I am not sure that that is accurate. We understand that the draft legislation on charity in Scotland contains a definition of "public benefit". That causes complications in several ways. As we have already made clear, we do not wish to see a definition of "public benefit" put into the Bill, but the fact that the Scottish Bill has differing provisions—particularly one concerning such an important issue as the definition of "public benefit"—must be of concern to us.

Clause 8 of the Charities and Trustee Investment (Scotland) Bill is entitled "Public benefit". It reads as follows: (1) No particular purpose is, for the purposes of establishing whether the charity test has been met, to be presumed to be for the public benefit". So far, so good. We understand the removal of presumption. It continues: (2) In determining whether a body provides or intends to provide public benefit, regard must be had to— (a) how any—

1. (i) benefit is gained or is likely to be gained by members of the body or any other persons (other than as members of the public), and
2. (ii) disbenefit is incurred or likely to be incurred by the public, in consequence of the body exercising its functions compares with the benefit gained or likely to be gained by the public in that consequence, and

(b) where benefit is, or is likely to be, provided to a section of the public only, whether any condition on obtaining that benefit is unduly restrictive".

That drafting on the concept of public benefit is considerably more restrictive than that which exists in English charity law or, indeed, is proposed in the Bill. That, of course, in England leaves definitions to developments in the common law rather than being frozen in statutes. Differing definitions between the two countries will, of course, result in different practices, which will in turn cause conflict, which is undesirable for the sector as a whole.

Without positive alignment, there could be negative repercussions on several fronts, in particular for university funding, medical funding and for the military service charities, all of which cross national boundaries. For example, the three branches of the armed services recruit from the four nations of the United Kingdom. To have separate legislation covering Scottish and Northern Irish makes no sense when one is dealing with the Armed Forces of the Crown as an entity.

The Minister will be aware of the concerns that the service charities have—the non-public service funds—because they will have to register with the Charity Commission under the Bill. We shall debate the desirability of that when we come to Amendment No. 114. but, for the time being, which national charity authority, for example, will be responsible for the regulation of a service charity of an RAF squadron serving in Scotland or a UK Army battalion serving in Northern Ireland?

A further case in point is the restriction that prevents Scottish and Northern Irish units from investing in the Army Common Investment Fund, a charity registered in England and Wales. To allow such local differences to persist causes confusion and resentment. Surely, a common regulatory system should apply to the Armed Forces charities, irrespective of unit identity or location, in the same way, for example, as the Army Act applies across the whole structure of the Army.

Similar concerns arise with medical research charities. Maintaining our medical research base is important to the future of UK plc, and three different regulatory regimes could make the processing of charitable gifts complicated.

Much the same applies to universities. The Scottish Higher Education Funding Council regulates in Scotland, the Higher Education Funding Council for Wales in Wales, and the one for England regulates in England. With different regimes and different regulatory procedures, the solicitation of charitable gifts or donations from alumni who may well live in one of the other countries could face the same complications as the medical research charities.

The Minister—and perhaps the noble Lord, Lord Phillips—may say that it was always thus: that Scottish charity law has always been different from that of England and Wales. That may be so, but an important change will take place as a result of the passage of this and the Scottish Bill. Some may characterise the present charity regime on both sides of the border as being based on benign neglect, but that will not be the case in the future. If the Bill is to achieve its strategic objectives, public confidence, public accountability and transparency, the Charity Commission and, no doubt, its Scottish counterpart will have to be hands-on and proactive in their roles. This will highlight any inconsistencies and force the addressing of potential difficulties to cross-border charities of the type I have just described.

I look forward to hearing from the Minister how he believes these problems can be avoided and/or resolved.

Lord Wedderburn of Charlton

This is purely a matter of convenience, and I apologise to my noble friend. I gave notice to my noble friend Lady Scotland that, in order not to complicate the Marshalled List with unnecessary amendments, I wanted to ask why in Clause 1, the word "Clause" appears and not "Act". I have no doubt that my noble friend has passed the request on. If she has not, I apologise. but this may be the only convenient moment to ask that question without moving an unnecessary probing amendment.

Lord Bassam of Brighton

I have got the postcard and will deal with the query in turn. Before I get stuck into the meat of the discussion, I shall thank the noble Lord, Lord Hodgson, for the way in which he opened the sitting. We want to have a constructive Committee stage, and I welcome the probative approach that has been adopted. I hope that our deliberations will have constructive outcomes. I thank all noble Lords who have tabled amendments. They are useful, and it helps us explain, or try to explain, exactly where we are coming from with the detail. It presages a constructive consideration of the Bill. I shall endeavour to approach it in that way, as will my noble friend Lady Scotland when she appears at other sittings.

As the noble Lord, Lord Hodgson of Astley Abbotts, said, this is new territory, in that we are trying to provide clarity to the legislation and ensure greater understanding and transparency. As is obvious, Clause 1 provides, for the first time, a general statutory definition of "charity". It is a clear definition: it sets out that a charity is an institution which, is established for charitable purposes only and is within the High Court's jurisdiction. The definition excludes institutions outside England and Wales from the scope of charity, since the jurisdiction of the High Court extends only to England and Wales.

I am aware of the concerns that have been expressed over the possibility that there will be some inconsistency or incompatibility in UK charity legislation as it develops in the different jurisdictions. The noble Lord anticipated part of my response and yes, it was ever thus. Legislation on the regulation of charities is devolved to the Scottish Parliament and to the Northern Ireland Assembly. Even before devolution, each of those territories had its own body of charity law, different from that applying in England and Wales. Any legislation in either territory will, quite properly, be designed to reflect priorities there. That is part of the beauty of the devolutionary approach.

The noble Lord referred, quite rightly, to the Scottish Executive and the introduction of the Charities and Trustee Investment (Scotland) Bill. It was introduced in the Scottish Parliament on 15 November last year with the explicit purpose of reforming charity law. Its considerations will run in parallel with ours. I suspect that it will probably take rather longer to complete its legislation than we will, but one cannot precisely anticipate the future.

There has been a high level of co-operation between the Executive and the UK Government, with the aim and purpose of ensuring that, in the key areas where there is a common interest in consistency, the two pieces of legislation are entirely consistent. In our discussions with the Scottish Executive, we have had particular regard to the definition of charity and the consequences for English and Welsh charities that operate in Scotland of being required to register with the Office of the Scottish Charity Regulator, as these are two areas in which most concerns have, understandably, been raised.

Of course, an overarching view will be developed in the UK committee of charity regulators, including the Charity Commission for England and Wales and the Office of the Scottish Charity Regulator, to ensure co-operation where appropriate between regulators and consistency of regulatory approach.

I appreciate the argument that it would be counterproductive for the definition of charity in England and Wales to be substantially different from that in Scotland. We will endeavour to ensure close liaison with our Scottish counterparts, with the aim of mitigating that risk. However, as I said, it is ultimately for this Parliament and the Scottish Parliament to determine what is appropriate in our particular circumstances. The noble Lord referred in particular to public benefit. The public benefit provision in Scotland does not affect England and Wales. The definition in Scotland is intended to be explanatory, not to change the law, and it is likely to be compatible with our definition. The Scottish principles will be reflected in the guidance. Charity activities, such as fund raising, are regulated according to where they take place, not according to the charity's seat of establishment.

The concerns expressed are quite proper. We must trust the devolutionary approach to work well. It has worked well thus far, and I see no profound difficulties with it, although I see where the noble Lord is coming from in his argument. There will be that overarching regulatory committee, which will enable the jurisdictions better to understand where they are. We intend at all stages to ensure that we work in close co-operation and harmony with the other jurisdictions where there will necessarily be some rubbing up against them and potential for conflict.

I am very grateful to the noble Lord, Lord Wedderburn, for his point. Although we received his short missive only today, it has caused a flurry of activity that has led us to conclude that we ought carefully to consider his point and hold discussions with parliamentary counsel to ensure that we have got it right.

3.30 p.m.

Lord Phillips of Sudbury

I think that the Minister said about the status of public benefit that Scottish legislation was as it is in Clause 4; namely, providing guidance only. That is not how I read it. Clause 8 of the Scottish Bill does not talk about guidance; it gives a definition of public benefit—admittedly an extraordinarily broad and unhelpful one—which lends credence to what the noble Lord, Lord Hodgson of Astley Abbots, said. In a very different way to Clause 4, it concentrates on the disbenefits of an institution compared with its benefits. That is the way in which they choose to deal with it. I make that point only because I think that it is of some interest, although otherwise I broadly agree with what the Minister said.

Lord Bassam of Brighton

I thought that I had said that the Scottish principles would be reflected in the guidance that we publish here.

Lord Phillips of Sudbury

I misunderstood.

Lord Bassam of Brighton

Perhaps the noble Lord misheard, but that is what I said.

Lord Shutt of Greetland

I have here the Explanatory Notes to the Scotland Bill, which describe foreign charities as those registered outside Scotland and having only a relatively minor operation in Scotland—sending out newsletters, and so on. That would therefore not involve registration in Scotland. If the charity has an office in Scotland, that is rather different.

I hope that the Minister will find that there is sufficient fraternity between England and Wales and Scotland so that arrangements can be made. For example, what is the position with accounts? Will there have to he a separate set of Scottish accounts sent to Scotland, or is it just a matter of another postage stamp—that the charity registered in England and Wales with an office in Scotland also has to send its accounts to the registry in Scotland? Such practical things need sorting out.

Lord Bassam of Brighton

The answer to the noble Lord's question is probably "No". Clearly such things will need to be reflected on, and advice will need to be given on them in the guidance that operates for both sets of legislation. It is helpful to raise those practical issues here, but those things can be carefully explained and taken account of.

Lord Hodgson of Astley Abbotts

Can I ask the Minister about one word that he used? In reply to the noble Lord, Lord Phillips, about the notes about the public benefit, he referred to the guidance that "we" publish. Did he mean "we", or did he mean the Charity Commission?

Lord Bassam of Brighton

The Charity Commission.

Lord Hodgson of Astley Abbotts

That is important. What concerns is very much is that the Charity Commission and "we"—as the Minister has it—are two different things. One of concerns later on will be that the two may become commingled, now and in future.

Clause 1 agreed to.

Lord Goodhart

moved Amendment No. 1: After Clause 1, insert the following new clause— "TRUST FOR PURPOSES WHICH CEASE TO BE CHARITABLE

1. (1) This section applies to a trust for purposes which, immediately before the coming into force of this Part, were exclusively charitable but which have ceased to be exclusively charitable as a consequence of the coming into force of this Part.
2. (2) A trust to which this section applies shall continue to be a valid trust for the purposes mentioned in subsection (I).
3. (3) If a trust to which this section applies comes to an end or its assets can no longer be applied for the purposes mentioned in subsection (1) the assets of the trust shall be applied for purposes which are exclusively charitable."

The noble Lord said: I should make it clear to start with that, in moving the amendment, I speak for myself, not for my party. So far as I know, there is no party line on the somewhat technical subject of the amendment, and my noble friends may or may not agree with me on the subject—although I note that the firm of Bates, Wells and Braithwaite, of which my noble friend Lord Phillips of Sudbury is a member, raised concerns about the subject of the amendment in its evidence to the Joint Committee on the draft Bill.

Clause 3(2) removes the presumption that charities for the advancement of education or religion necessarily benefit the public. As a consequence, it is likely that some existing charities will fail the public benefit test and cease to be charities. That was the view of the Joint Committee, which said, in paragraph 103 of its report: It is a possible consequence of the Charity Commission carrying out checks on the public benefit requirement that a small number of institutions will lose charitable status". What will happen to those institutions? The answer provided by the Bill is that we do not know.

The Joint Committee said in a recommendation in paragraph 105 of its report: We recommend that the real Bill include provisions to clarify the effect of the loss of charitable status on the assets of a charity. The Government should consider whether the Bill should contain provisions enabling the Charity Commission to agree that trustees in such circumstances can elect to retain their assets and continue to run the organisation, as a not-for-profit organisation without charitable status, for the original purposes". The Government unfortunately did not accept that recommendation. In their reply to the report from the Joint Committee, in paragraph 9. they said: The Government does not accept this recommendation. The Charity Commission's publication. Maintenance of an Accurate Register, explains the effect of the loss of charitable status under the current law, which we believe provides an adequate basis for determining what happens to the assets of an organisation that ceases to be a charity. We do not in any case believe that changes to the current rules should be contemplated without an extensive public consultation on the matter, since any change could have a significant effect on the rights and expectations of anyone who donates money or other assets to charity".

Unfortunately, the Charity Commission's publication, Maintenance of an Accurate Register, does not explain the effect of the loss of charitable status, because it says that in an important manner it is open to question—that the law is uncertain. That being so, it seems to me that the publication does not, as the Government say that it does, provide an adequate basis for determining what happens to the assets of an organisation that ceases to be a charity. I am aware of the problem primarily because some years ago, in the 1980s, I advised a number of independent schools about the consequence of the loss of charitable status in the course of my practice at the Bar.

I am not convinced that the Charity Commission document, Maintenance of an Accurate Register of Charities, is correct. I am afraid that I will have to go into some rather technical law here. Technically, there are two categories of charity: there are charities that are set up under a trust and charities that are set up as a corporate body. The consequence of the loss of charitable status may be different depending on which of those two categories applies.

Where a charity is set up as a trust, it is clear that the loss of charitable status brings that trust to an end. That is because of a technical rule of English trust law that a trust for purposes as opposed to a trust for the benefit of persons can exist only if those purposes are charitable. It does not matter, therefore, that the purposes as set out in the trust could still be carried out in practice, even if they were no longer charitable. The trust automatically comes to an end, and the assets of the trust must be reapplied for other charitable purposes.

Most charities that are operating charities, as opposed to grant-giving charities are now, I believe, set up as corporate bodies, usually as companies limited by guarantee. There are various reasons for that. Most important, perhaps, is the need to give the trustees benefit of limited liability. So schools, hospitals and so on are mostly now set up as incorporated charities. When I advised on that issue, there were still a number of charitable schools that were operating as trusts. There was also a hybrid form where the school assets were held on trust, but the trustee of those trusts was a corporate body.

The position of an incorporated body whose purpose is a charity is, in my view, different. In law, as it stands now, it appears to hold its property beneficially and not as trustees for charitable purposes. But the law is unclear on that. Paragraph 36 of the Charity Commission document, to which reference has already been made, states: The corporate property of a charitable company is not in general held on trust. Informed by the results of the public consultation, we have arrived at a tentative conclusion on the consequences for property held by a charitable company when the objects of the company no longer appear to be exclusively charitable because of a change in social circumstances and values. The conclusion is tentative because as yet, neither the Courts nor ourselves have had a case in which there has been a need to reach a decision on the issues relevant in these circumstances. There may, of course, never be such a case". Paragraph 37 continues: Our conclusion, which is explained in detail at Annex E, leans in favour of the imposition of a constructive charitable trust on the beneficially owned corporate property of a company which finds itself in this position".

I would come to a different conclusion on that, which would be that the property of the company continues to be held for the purposes set out in the company's memorandum and articles and that the company simply ceases to be a charity, but continues to conduct its previous activities. I would rely, among other reasons, on the fact that Section 64 of the Charities Act 1993 provides that if a charitable corporation changes its objects and adopts new objects which are not wholly charitable, the existing assets must be ring-fenced and applied to the previous objects. Section 64 does not apply where the company's existing objects remain unchanged but cease to be charitable. The inference from that is that the company can continue to apply all its assets for those purposes.

There is also a question whether depriving an incorporated charity of the property which it owns beneficially and imposing a trust on it for significantly different purposes would be compatible with Article 1 of the First Protocol to the European Convention on Human Rights. But it is riot necessary to go into the details, and I am certainly not intending to bore the Committee with the contents of Annex E because the Charity Commission and I would agree that the law is uncertain. So I regret that the Government have introduced a Bill without spelling out the consequences of a tighter application of the public benefit rule, although I see the political attractions of not having to take that decision.

3.45 p.m.

Therefore, the purpose of the amendment is to try to persuade the Government that there is a need to provide an answer to this uncertainty and to suggest what that answer should be. The answer, I suggest, is broadly that suggested by the Joint Committee; that is, that trusts whose objects cease to be charitable—of course, this would apply also to charitable corporations—should be allowed to continue to carry out their existing purposes. It would be necessary to override the current rule that there can be no trusts for purposes unless they are charitable, but I see no great problem in doing that.

If an independent school loses charitable status because it fails to satisfy the test of public benefit, it is of course absolutely right and proper that it should lose the tax benefits that go with that status. That is a step which I would not only accept but welcome. If it can continue as a charity with relatively minor changes to the trusts, it is reasonable to expect it to make those changes. But that will not always be possible. And to say that where this is not possible, the institution, whether it is a school, hospital or whatever it may be, must be closed down and its assets applied for a different purpose, is unreasonable. That applies to schools operating under trusts as well as schools which are carried on by corporate bodies.

The effect of my amendment would be that a trust which had ceased to be charitable could carry on its existing purposes. I have also provided that if the trust comes to an end or ceases to be workable—for example, where an independent school is closed because it is making unacceptable losses—any available assets should go back to charitable purposes. It obviously would not be right that trustees or shareholders in a corporate body should take for themselves property which was originally dedicated to specific purposes which at that time were charitable.

This problem is considerably more serious than the Government are prepared to recognise, and we need a solution to it in the Bill. The solution which I proposed is based on the suggestion from the Joint Committee, and it is fair and reasonable. I beg to move.

Lord Phillips of Sudbury

My Amendment No. 16, in the name also of my noble friend Lord Dholakia, is part of this group. I am extremely grateful that the noble Lord, Lord Hodgson of Astley Abbotts, has agreed that his Amendment No. 19 should form part of the same group. The same goes for the right reverend Prelate the Bishop of Southwell with Amendment No. 19A, because all the amendments address, centrally and essentially, the same point. I suppose that, like the noble Lord, Lord Hodgson, I should repeat my conflicts of interest and I do so in the same terms as I did on Second Reading.

It is a pity that this Committee stage has to start with this extremely heavy artillery. I do not know how many Members of the Committee followed the extremely learned explanation of my noble friend Lord Goodhart. The proper construction of Clause 1 in relation to charities which are embarrassed, if I may use that word, by the evolution of the definition of "charity" under this Bill, is a very technical matter.

I shall give an example which might help—an old-fashioned one at that. There was a case in the 19th century of a school which provided education exclusively for the sons of the gentry—exclusively for gentlemen. It was the Earl of Lonsdale case of 1827. I shall not go into the extremely interesting question of whether the Earl of Lonsdale precedent is still relevant. I can see members of the Charity Commission staff nodding their heads in amused wonderment. If the Bill evolves—because it will evolve; that is the whole purpose of the common law and the common law definition—so that a charity exclusively for the sons of gentry can no longer be said to fulfil the public interest, it would therefore have drifted out of charitable status. That is unfair, or at least counterproductive Each amendment attempts to deal with the problem in its different way.

I draw the Committee's attention to the fact that there is a misprint in Amendment No. 16. It says: if and insofar as there are hereafter", when it should read, if and insofar as they are hereafter". I am sorry for that. The word "shall" is also missing before ipso facto. My amendment deals with matters slightly differently from that of my noble friend Lord Goodhart and the other two amendments. It would allow the charities' objects to be evolved in accordance with evolving charity law, without the need for a scheme from the Charity Commission, because that is what would otherwise happen. The charity concerned would, without the amendment, have to go to commissioners and say, "We have not changed our objects—we can't—but the definition of 'charity' has changed, and we have a problem". They would, in those circumstances, make a scheme. The only circumstances in which that would not happen would be if the trustees of the charity were unwilling to play ball, refused to change their purposes and were thus left in a position of some difficulty. I need not detain the Committee on that point now. I see that the noble Lord, Lord Wedderburn, doubts my modesty—well, I shall stick to it.

After the Committee, we need to sit around a table and talk about this. There are merits in all the amendments. I do not think that Amendment No. 19, in the name of the noble Lord, Lord Hodgson of Astley Abbotts, will do the trick, albeit that it has been drafted by an extremely eminent Queen's Counsel in the Chancery Division. It still comes back to being construed in accordance with the definition of "charitable purposes" in the Bill.

However, I shall cease there. The issue raised by my noble friend Lord Goodhart needs to be addressed, and I hope that we can come back on Report with a government amendment approved by all those in this group.

Lord Hodgson of Astley Abbotts

It might be for the convenience of the Committee if I spoke to Amendment No. 19, because it hits the same point. As I said in my opening remarks, I am a layman in the field. The noble Lord, Lord Goodhart, gave a helpful explanation of the impact on a school, as a practical example.

This is a very technical subject. We were approached by Mr Christopher McCall QC, who is a leading barrister in charity law. He drew our attention to the hole which, he believes, exists in the clause and which could be remedied—notwithstanding what the noble Lord, Lord Phillips, said—by Amendment No. 19. The Minister may agree with that or may have a simple explanation about why there is a hole in the first place.

Mr McCall explained the problem. In private trusts, there is a long tradition that new legislation does not change the beneficiary class under pre-existing trusts. So, in the old days, a statutory provision saying that "children" should include legitimate or illegitimate children tended not to be allowed to affect a trust made before the statute was passed. So, does the legislation change the meaning of charitable purposes and charitable objects set up in a trust for such charitable purposes or objects as the trustees think fit that was set up before the Bill becomes law? Assuming that the intention is that it should, that should be made clear lest some judge says in the future that a pre-2005 reference to charitable purposes or objects means "charitable" under the Statute of Elizabeth—a quite tenable analysis, which would mean that the new law was irrelevant to the construction of such a trust.

Why would that matter? It would matter because, as Mr McCall points out, we know of at least one new purpose that is being recognised as such; namely, the purpose of male recreation. If the legislation does not change the meaning for general charitable trusts set up before, then one could not amalgamate a general charitable trust set up in the old days with one set up in similar terms after the Bill becomes law because the one could not allow benefits to male recreational charities and the other could. Mr McCall suggests that Amendment No. 19 would help to plug that gap. I, too, look forward to hearing whether the Minister either has an answer or will meet us to discuss how the gap can be filled.

Lord MacGregor of Pulham Market

I, too, hesitate to intervene in this particular legal debate—even more so, having just listened to my noble friend. Perhaps I should declare an interest, as I did at Second Reading, for subsequent debates: that is, I am Deputy Chairman of the Association of Governing Bodies of Independent Schools and therefore I have some interest in that area.

The debate that we are having at the moment is relevant to some independent schools, as the noble Lord, Lord Goodhart, pointed out, but I think that it is also relevant to others. As I said, I am not a lawyer, although I have a law degree from way back, and therefore I am not sure that I have this matter absolutely right. However, I take the point made by the noble Lord, Lord Goodhart. In particular, in the case of some religious foundations, the Charity Commission's document produced last month on public benefit makes the point that the Charities Bill proposes that the presumption of public benefit for religious purposes is removed and then goes on to say that, as a result, many such charities will be thinking about the public benefit requirement for the first time. Independent schools have been thinking about public benefit for some time, but it may well apply to some of them.

Therefore, the question that I want to ask both the noble Lord, Lord Goodhart, and the Minister is as follows. Let us take the case of either a preparatory school, to which my noble friend Lord Brooke of Sutton Mandeville, referred during the Second Reading debate, or a religious foundation in a very remote rural area which, because of its geographical limitations and financial circumstances, cannot meet the public benefit test. As I understand it, under the new clause proposed by the noble Lord, Lord Goodhart, it would be able to continue as a school or a religious foundation using the premises which it had. If the trust came to an end or its assets could no longer be applied, then naturally the assets would be used for other exclusively charitable purposes.

As I read it, Amendment No. 16 would not enable such a school or religious foundation to continue. I am not sure whether I am right about that but it seemed to me that it shall, ipso facto, be varied so as to remain charitable. If it cannot meet all the public benefit tests, how can its arrangement he varied to bring it within the public benefit test? I am happy to give way.

Lord Phillips of Sudbury

I think there is a difference between the definition of "charity" and the issue of public benefit. First, an organisation has to be for exclusively charitable purposes and, secondly, it has to satisfy the public benefit test in the activities pursuant to those purposes. So it would have an automatic, or ipso facto, variation to keep it within the charitable definition. but it would then still have to deal with the public benefit test.

Lord MacGregor of Pulham Market

That is the point that I am making. If, because it was in a remote geographical area or because the financial circumstances were such that it could not give fee assistance or whatever, it could not meet the public benefit test, then I assume that it would cease to be charitable and would not be able to retain the premises or continue in existence within the premises for that purpose. However, I think that the new clause proposed by the noble Lord. Lord Goodhart, meets that point. If that new clause is not accepted, I should be grateful if the Minister would say what the position of a religious foundation would be in the circumstances that I have described.

4 p.m.

The Lord Bishop of Southwell

A moment ago, the noble Lord, Lord Phillips, said that he apologised to the Grand Committee for starting the debate with the heavy artillery. I think that the light infantry is coming in now, and I speak as a layman and a jobbing Bishop.

The effect of my Amendment No. 19A is to preserve the presumption of public benefit in relation to purposes for the advancement of religion, which are currently accepted as charitable and so allow bodies that exist for such purposes to enjoy charitable status without routinely having to demonstrate what public benefit they provide. That a body should provide public benefit and be answerable for doing it, if it is to be a charity, is self-evident. Religious bodies should not be exempt from that, but the question is whether they should have to demonstrate that public benefit routinely, and, if they should, how the public benefit that they provide will he assessed.

At Second Reading, I drew attention to the additional administrative burden that abolition of that presumption would impose on religious bodies. But I shall concentrate on the second issue to which I referred then; namely, how the public benefit of religious bodies will be determined.

Churches and other faith groups are concerned about how that procedure will work in practice. They are anxious, in particular, that the abolition of the presumption will lead to a creeping process of removal of the charitable status of religious bodies. As I explained at Second Reading, our concerns are partly derived from the fact that we live in a society in which the claims of religion and its benefits are increasingly questioned. We recognise the sensitivity of many of the issues, but religious bodies are as much entitled as any other to have their claims to public benefit analysed in a properly informed way.

We are grateful for the assurances and help that we have had to date from the Government and the Charity Commission. But points of uncertainty remain, including just how public benefit will be assessed in the case of the many religious bodies that exist, not only for the promotion of a religion generally. or the wide range of activities associated, for example, with the worshipping community—worship, pastoral care and mission—but also for some more specific purpose.

For example, what view will the commission take of a body that exists solely to convert followers of one religion to another, which is a purpose currently acceptable as charitable? At first sight, it may seem as if any benefit to the public from activity of that kind is somewhat remote. But we would argue, in this and in many other cases, that in assessing public benefit, regard should be had not only for the immediate consequences but also for the wider benefits to society of the religion of which that particular activity—the sharing of faith—is a natural manifestation.

Religion is not advanced in the abstract, but through particular activities such as those. It would be arbitrary to afford charitable status to bodies that had advanced religion generally, while denying it to purposes that simply reflect one aspect of the outworking of religion.

In response to concerns that I expressed at Second Reading, the noble Baroness, Lady Scotland, indicated that she understood the Charity Commission to recognise that public benefit in religious charities is broadly based and diverse, and that there would be an opportunity for discussion between the commission and representatives of various religious bodies as it consults on the guidance on public benefit required under Clause 4.

We of course welcome that opportunity. but the question is whether matters can simply be left to be resolved by further discussions with the commission or whether some more formal protection of the kind embodied in this amendment is needed.

In the absence of any provision of that kind, Churches and other faith groups would expect to have some further and more specific assurances that, if the presumption is abolished, the breadth of religious purposes currently accepted as charitable will in substance be preserved. We would, in particular, welcome greater clarity that the commission's guidance will not only recognise the benefits to society as a whole from the practice of religious belief, but will also accept that even very specific religious purposes can be seen as contributing indirectly to those wider benefits and thus meet the public benefit requirement. I hope that the Minister may be able to provide some assurance.

Lord Wedderburn of Charlton

One of the problems about Grand Committee is that all sorts of amendments tend to be thrown into one debate. Amendment No. 1 is grouped with Amendment No. 16. The noble Lord, Lord Hodgson of Astley Abbots, spoke to Amendment No. 19 and the right reverend Prelate has just spoken to Amendment No. 19A. They have every right to do so, but sometimes the ping-pong becomes three-handed and then four-handed, which leads the discussion into difficulty.

I vigorously oppose—if we ever sit in a place where one votes, I should vote against—Amendment No. 16 and, with great respect, Amendment No. 19A. The right reverend Prelate just asked for a new privilege for religious charities. I see no reason why there should be a particular privilege for religious charities. That opposes a central part of the Bill: namely, that public benefit, one of the few tests of charitable purpose and charity under the law, must be proved.

Indeed, a government document that I thought rather good, as opposed to some others, is a Home Office publication entitled, Charities and Not-for-Profits: A Modern Legal Framework. It is rare that I speak approvingly of Home Office documents these days, but it makes it absolutely clear that the Charity Commission must undertake an ongoing check on the public character of charities. That means that public benefit must be proved. I am against a new benefit of clergy that would appropriate some discriminatory advantage for any type of charity. Indeed, a point that my noble friend Lady Turner and I want to make about the Bill is that it discriminates. We do not like that public policy of discrimination. That amendment would add to it.

I know the intention of the amendment of the noble Lord, Lord Phillips, but I object to it not just because it lapses into Latin with ipso facto, although I am generally against ipso facto rules because no one quite knows when the ipso is facto. In a funny sort of way, it demands that existing charities should remain charities, albeit that the Charity Commissioners will consider them. To make existing charity law, before the Bill is enacted, apply to charities that are charitable under it, which then appear inconsistent with charity law when the Bill is enacted, seems wrong and, with great respect, misguided.

The noble Lord, Lord Goodhart, made a strong case for his approach to the matter, but I cannot believe that the noble Lord, Lord Phillips, would want some of the established principles of case law to remain. Indeed, at one point. I thought that he was saying that those cases should be varied. If so, I am pleased.

For example, in 1973, we find a property left on trust for the continuance of the work of God, as maintained by Mr H G Hobbs. The said Hobbs was a friend of the testatrix, and she thought that he was rather good at it. In the end, up after a considerable battle, the High Court found that that was charitable. The Charity Commissioners ought to look at that; there should be no ipso facto presumption that that should remain charitable when the Bill is enacted. The Government are clear that public benefit must be checked and reconsidered.

The whole of charity law in those tomes in the library, Tudor on Charities and Luxton on Charities, must be considered for their chapters on public benefit. In so far as Amendment No. 16 detracts from that, I submit that there is no good case to be made for it, any more than there is for an ipso facto presumption in favour of the charity passed by the High Court in 1906—we do not have to go back to the 19th century for examples. That was a trust for a gift to have the bells of the parish church rung on 29 May each year to commemorate the restoration of the monarchy. That was held to be charitable, as the advancement of religion. Some commentators suggested that the provision might be a bit strained in its interpretation, but it stands unamended at the moment and would fall within Amendment No. 16. I do not believe that the noble Lord, Lord Phillips, really means that. and I hope that he will tell us that proof of public benefit is the essence of the Bill and adjust his amendment a little to recognise that.

[The Sitting was suspended for a Division in the House from 4.10 to 4.20 p.m.]

Lord Phillips of Sudbury

The noble Lord, Lord Wedderburn of Charlton, made comments on Amendment No. 16 and, in effect, invited me to comment on his comments, which I happily do. He exposed an inadequacy in the wording of Amendment No. 16 by citing a bizarre case—I cannot remember what it was—where the philosophy of some unknown gentleman was held to be charitable.

Lord Wedderburn of Charlton

The case of Hobbs.

Lord Phillips of Sudbury

Thank you. I accept that at the outer margins of charitable law there are some wonderful beasts lurking in the undergrowth. I accept that my amendment should he changed so that not in every case would there be—I hate to use the phrase again—an ipso facto variation of objects because no variation might be available to allow the charity concerned to remain charitable in the light of the evolution of charity law. I take the noble Lord's point and I can assure him that I will bring forward a renewed amendment at the next stage omitting those Latinate words.

Lord Bassam of Brighton

This has been a disparate but very useful debate and I am grateful for the points of clarification that have been made. I shall endeavour to be helpful and set out our position on the amendments that have been offered to the Committee.

Let me start with the substantive amendment of the noble Lord, Lord Goodhart. The Bill provides that any purpose which is recognised as charitable under the existing law—by which I mean the law applying before the Bill comes into force—remains charitable when the Bill's new definition of charity takes effect. The noble Lord, Lord Wedderburn, made the point that, as the Bill provides a further strengthening of the regulatory role of the Charity Commission, this means that the Charity Commission will from time to time look at different charities to ensure that they pass the public benefit test and that they are indeed serving charitable purposes. We all understand that that is a necessary and important part of regulation. The safeguard is contained in Clause 2(4)(a) of the Bill.

Lord Wedderburn of Charlton

Before my noble friend moves on from that point, perhaps I may clear something out of the way. We have jumped now to Clause 2(4), which states that those that are recognised for charitable purposes under the existing charity law are within its purposes. But why is it necessary to maintain the existing charities forever when the plan to check the public character of charities, and especially the public benefit, is the most important recommendation in this Home Office document, which I understand represents the Government's policy?

I understand that it would be stupid and most unfair to end a vast number of charities—after all, we are discussing taxation—and it would be quite unfair to, ipso facto, with the passing of the Bill. cut short their taxation benefits. But is it necessary to maintain their status for all time? That would rather encourage the Charity Commissioners not to get on with the test of public benefit for some time.

Lord Bassam of Brighton

The noble Lord has anticipated something I was about to say. As I was explaining, the safeguard is in Clause 2(4)(a). This gives effect to a commitment the Government made when replying to the Strategy Unit review. But this is not a guarantee— this picks up the point made by the noble Lord, Lord Wedderburn—that every organisation which is a charity now will be a charity after the Bill comes into force. It is perfectly conceivable that a purpose which is acceptable as being charitable now will cease to be charitable as a result of future changes in society. That is the point that the noble Lord, Lord Phillips, made—the beauty of how charity law has evolved is that the application of common law principles means that these things can move forward and change as society itself changes, and reflect those changes.

New purposes come to be accepted as charitable, and it should be no surprise that that can also work in the opposite direction. There might also be some registered charities which, as a result of future scrutiny by the Charity Commission when there has been no scrutiny up until now, are found to be registered with purposes that have ceased to be charitable at some point.

There is a third set of instances in which some registered charities, after the same sort of scrutiny, are found not to meet the public benefit requirement and tests. That third example breaks down into two different types of cases. Some charities found not to be meeting the public benefit requirement might be capable of meeting it if they changed the way in which they operated. Others might, as it were, be institutionally incapable of meeting it, however they operated.

I must mention, perhaps to dismiss, another type of case, in which the people running the charity knowingly use its assets for purposes that are not contemplated by its constitution. Many people believe that, when the trustees of a charity mismanage its assets in that way, the consequence is, or should be, its loss of charitable status. That is not so and should not be so. Rather than take away the charitable status of a charity, the remedy should take the form of regulatory action by the Charity Commission against the trustees responsible for that mismanagement. The aim of the commission's action would he, if possible, to restore the charity to the financial position it was in prior to the breach of trust and to ensure that the charity is put into the hands of a group of trustees, who would in future manage it properly. If a charity lost its charitable status when it had been mismanaged, the people who would suffer would be its beneficiaries, who had no part in its mismanagement. It is right that the axe should fall instead on the trustees responsible for that mismanagement.

That takes us to the question of what happens to a charity's assets if it ceases to be a charity. The current law is based on the proposition that once assets have entered the domain of charity, it is desirable to keep them there so that they can he used in perpetuity for charitable purposes. The rule that gives effect to that proposition is the cy-près rule, which allows the court or Charity Commission to alter the purposes for which assets are held once those purposes have ceased to he charitable. In altering purposes in those circumstances, the court or the commission would ensure that altered purposes were charitable ones similar to the original ones that had ceased to be charitable. The Government believe that that continues to be the right and appropriate way in which to deal with charities which have ceased to be charities.

The amendment proposed by the noble Lord. Lord Goodhart, would change that, but only in a rather piecemeal way. His amendment applies only to charitable trusts, which means that the assets not subject to a trust—the assets of charitable companies, for example—would not be caught by his provision and would continue to he treated as at present. Charitable companies constitute, we estimate, somewhere between 15 and 20 per cent of all charities. Of course, his amendment applies only to assets of charitable trusts which lose their charitable status in his particular and specified circumstances, for want of public benefit—if I have understood his intention correctly.

In practice, it would be very difficult. when a charity was found no longer to be for the public benefit to judge whether that was a consequence of the removal of the presumption or whether there were other factors operating as well or instead. Even if it were possible to make that judgment, we do not see why the assets of a charity that ceases to be a charity in those circumstances should be treated differently from the assets of a charity that ceases to be charitable in other circumstances. The amendment also leaves unanswered the question of who, if anyone, would regulate the trust that had lost its charitable status but which continued in existence as a non-charitable trust, with its original purposes and assets intact.

Having reflected on the matter, we believe that the noble Lord's amendments might end up creating more problems than they solve. However, I accept the overarching point that there is great merit in having further discussion and debate on this. The amendment of the noble Lord, Lord Hodgson of Astley Abbotts, is one to which I think we could agree to give some fair consideration, but I suggest, as did the noble Lord, Lord Phillips, when discussing his amendment, that it might be more valuable to have some discussion about this outside Committee.

I think that I was not the only one who found some of the explanations of the noble Lord, Lord Goodhart, very interesting, but hard to digest across the floor of a committee. I think that the noble Lord would probably accept that. So, without offering necessarily to consider the amendment of the noble Lord, Lord Goodhart, in the way in which he has argued, I suggest that we have some side discussion between now and Report on that amendment, as well those of the noble Lords, Lord Hodgson and Lord Phillips, to see whether the issue which this group of amendments is addressing can be looked at again in order to find some form of resolution. I add the caveat that we do not necessarily come to the conclusion of the noble Lord, Lord Goodhart.

4.30 p.m.

The amendment of the noble Lord, Lord Hodgson, is helpful. We certainly recognise that there might be some merit in setting out the scope of the operation of Clause 2(1), as does Clause 1(2), in accordance with the general application of the definition of "charity". We are happy to consider it in those terms and, as it were, hoover up some of the issues which were usefully raised.

I turn to the amendment of the right reverend Prelate the Bishop of Southwell. This amendment, which has been regrouped with the others, would preserve the presumption that organisations established for the advancement of education, the advancement of religion and the relief of poverty provide public benefit. Removing it would place them on a level footing with all other charities, as all charities would have to show that they provide public benefit. The amendment would mean that, for charities established for the advancement of religion, the presumption that they provide a public benefit would be preserved. It would place them in an anomalous position compared with all other charities, which would have to demonstrate the public benefit that they provide. That was probably a point towards which the noble Lord, Lord Wedderburn of Charlton, was moving.

The Charity Commission has for some time applied the public benefit test to religious bodies that apply for registration. Removing legal presumption will not affect that approach and demonstrating public benefit should therefore not cause difficulty for established religions, while continuing to ensure that harmful organisations are not registered.

I can, I hope, reassure the right reverend Prelate that removing the presumption that the advancement of religion provides public benefit is not intended to lead to a narrowing-down of the range of religious activities that are currently considered charitable. The Government certainly recognise that religious activities bring benefits, not just to those who take part in them, but also to wider society. I think that it would be generally acknowledged that religion has an important, if not vital, role to play in society through faith and worship, by motivating charitable giving and by contributing in other ways to strengthening our community through pastoral activities—not to mention my own interest, which is the upkeep of church buildings.

We are, to some extent, entering uncharted territory with the removal of the presumption and, for that reason alone, I understand the right reverend Prelate's concerns. I suggest that he approaches the Charity Commission, perhaps in the context of the meeting that I was suggesting earlier, to arrange discussions at a senior level about the public benefit requirement in the context of religion, so that any concerns that the Church might have can be addressed and allayed. I am sure that the commission would respond positively to that.

A couple of other points were raised during the discussion of that group of amendments which require a response.

The noble Lord, Lord MacGregor, raised the issue of schools and foundations that cannot meet the public benefit test. Specifically, the noble Lord was thinking back to points made at Second Reading by the noble Lord, Lord Brooke of Sutton Mandeville, who has joined us. The current law would allow the Charity Commission to alter its purposes for something close to the original purpose which was charitable, and the new purposes would have to allow it to pass the public benefit test.

I think that I responded to that point at Second Reading. I made a careful note of what the noble Lord, Lord Brooke, said at the time and I certainly understood the difficulty. But I think that the public benefit test could be argued in such a way as to include schools that were affected in the manner suggested by the noble Lord. That is effectively what would happen in that example.

I hope that I have dealt with the points raised. I think we can have some useful discussions to take forward some of the issues advanced in the debate this afternoon. We certainly want to be as helpful as we can.

One other point raised by the right reverend Prelate the Bishop of Southwell concerned the public benefit test relating to a charity whose purposes were solely to convert members from one faith to another. It is clearly acceptable for religious charitable bodies to convert members to their religion by evangelising or through missionary work, and that will not change. I hope that that is of help.

Lord MacGregor of Pulham Market

Perhaps I may return briefly to the issue that I raised following the point that my noble friend Lord Brooke of Sutton Mandeville mentioned at Second Reading. The provision does not apply only to small rural schools; it could apply to religious foundations and other bodies of that kind. Although I well understand the analysis given by the Minister and also some of the concerns relating to the amendment of the noble Lord, Lord Goodhart, nevertheless there is a really important point at the heart of this amendment which I want to bring out. I hope that it can be addressed in our discussions as I do not think that it was dealt with in the Minister's answer.

I shall take the case of a school which wants to meet the public benefit test but which is in a rural location where it cannot be accessed by the public generally. It may not be able to offer much assistance with fees because of its financial situation. As I understand it, under the cy-près law and under this Bill, that school would have to close. That seems to me unfortunate. Of course, no one would want to use the premises for educational purposes.

The sensible answer would be to remove the charitable status but allow the school to continue, which I think would be the effect of the amendment of the noble Lord, Lord Goodhart. After all, about 17 per cent of all schools in the Independent Schools Council do not have charitable status. So the amendment would put it on the same basis as those schools and enable it to continue. That seems to me to be a sensible way through and I hope that it will be considered in our discussions.

Lord Bassam of Brighton

Perhaps I may respond positively. I think that that would probably be the outcome. and I am sure that the Charity Commission would want to offer advice and assistance to enable that to happen. With regard to charitable status, in any event the commission would want to try to preserve what was of value at the school because it would not be in anyone's interest to do otherwise. There would, after all, be a wider public benefit.

Lord Phillips of Sudbury

If it is not too late, perhaps may ask the noble Lord, Lord MacGregor, whether he is suggesting, as he did at the end of his intervention, that the very narrow category of schools concerned would keep the assets. Or does he accept that, if such schools were allowed to continue, the charitable assets would have to be separated and used exclusively for charitable purposes?

Lord MacGregor of Pulham Market

I think that it is for the noble Lord, Lord Goodhart, to answer that. I believe that under the terms of his new clause they would keep the assets. But of course, if they ceased to be schools, the assets would have to be used for charitable purposes.

Lord Phillips of Sudbury

I thank the noble Lord.

Lord Goodhart

I start by apologising to the Committee for having introduced what was a highly technical debate. We went into some rather arcane parts of the law—and the law of charity is pretty arcane. My justification for doing so is that I think the issue that has been raised by the amendments we have been discussing for the past hour or so is an important one that justifies further investigation.

Several alternative amendments have been included in the group. My noble friend Lord Phillips of Sudbury has tabled Amendment No. 16. I will not go into detail on that, but I am not entirely sure what he means when he says that the purposes of the charity would, ipso facto, be varied so as to remain charitable. I do not think that he means that they would, ipso facto, be treated as charitable without variation. It must involve some variation: we need to consider who does the varying and who decides whether the varying is sufficient. However, my noble friend and I could perhaps get together outside the Committee and consider whether we could reconcile the lines that we are taking.

Amendment No. 19, tabled by the noble Lord, Lord Hodgson of Astley Abbotts, is, I think, about a rather different subject. It probably ought not to have been included in the group. The noble Lord's amendment is really covering the question of whether the definition of "charity" and the variation, in particular, of the public benefit rule applies retrospectively. I understood that it would be intended to apply retrospectively—that is, to existing charities—and the amendment makes that clear. However, that is a different issue from the one that I raised.

The right reverend Prelate the Bishop of Southwell, who has tabled Amendment No. 19A, asked for a special exemption for religious bodies which now have charitable status so that they do not have to satisfy the expanded public benefit test. I sympathise with him, but I differ in my solution. A failure to meet the public benefit test, whatever the nature of the institution involved—whether it be concerned with religion, education, health or whatever— should lead to the loss of existing tax benefits. Equally, the loss of charitable status should not necessarily lead to the extinction of any institution that fails to meet the new public benefit test.

The Government need to take the issue on board. It needs discussion. I see that regulatory action against trustees is plainly justified if there has been mismanagement, but it is a different situation if the purpose has ceased to be charitable. There is virtually no law about that. There have been very few cases in which a charitable trust that could continue to perform its objects has been considered by the Charity Commissioners because those objects, although viable, are no longer charitable. The cy-près rule—a highly technical rule—has, I believe, normally been applied only if the purposes can no longer be carried out, possibly because the group of people for whose benefit the charity was originally set up has ceased to exist. It is also doubtful that the cy-pres rule applies at all to charitable corporations. The position of charitable corporations is uncertain in the Bill. Clarity is needed.

We need to consider the matter further. I hope that it will be possible to come to some understanding with the Government about their intentions. The present position is unsatisfactory. If we cannot reach agreement, the issue will have to be reconsidered on Report.

4.45 p.m.

Lord Wedderburn of Charlton

Before the noble Lord sits down, concluding on that inevitable note, perhaps I may intervene. He mentioned the cy-prés doctrine. I am not clear on the effect of that but, more importantly, on the effect that Clause 2(4)(b) and (c) would have on the arguments both on his amendment, which seems to have great value, and on the other amendments. It would be better if we discussed Amendments Nos. 19 and 19A when we reach where they are in the groupings.

Clause 2(4) states: The purposes within this subsection". This means that it is referring to a charitable purpose and not to public benefit. Given the previous subsections, subsection (4)(b) includes, any purposes that may reasonably be regarded as analogous to, or within the spirit of, any purposes falling within any of those paragraphs or paragraph (a) above"— and subsection (2)(a) refers to "relief of poverty".

Subsection (4)(c) states: any purposes that may reasonably be regarded as analogous to, or within the spirit of, any purposes which have been recognised"— which is a very different formula— under charity law as falling within paragraph (b) above". Subsection (2)(b) refers to "the advancement of education". I note the special formula for education.

What effect on the debate on Amendment No. 16 does that have, or does it have none at all?

Lord Goodhart

It has no effect at all. Clause 2(4) concerns additions under the list that is set out in subsection (2)—namely, purposes that may be regarded as charitable if they are for the public benefit.

But the problem that is dealt with here arises from what I might describe as the more activist public-benefit test that will be applied under Clause 3—in particular, under Clause 3(2)—because of the removal of the presumption that trusts, for example, for the advancement of religion or education are almost always charitable.

Lord Wedderburn of Charlton

With respect to the noble Lord, perhaps I may comment on his reply. This is about purposes: it is not about public benefit. We have talked as though the problem arises only where all of the purposes suddenly become unacceptable. If there is a tiny purpose that prevents us saying that an institution is no longer exclusively charitable, is there no effect on Clause 2(4)? It refers back to subsection (2), which does not say that a purpose falling within paragraph (1) "may" fall within a charity; it says that it falls within the subsection—that it is, according to the previous subsection, a "charitable purpose". There is no "may" about it. Does it therefore have no effect on some of the situations that we have been discussing? The noble Lord is no doubt right but I should like him to think about it.

Lord Goodhart

I still think that the answer is "No". It is clear that Clause 2, particularly subsection (4)(a), cannot be used to narrow the existing definition of what is a charitable purpose. Therefore, no existing charity will find itself ceasing to be a charity because it fails the charitable purpose test in Clause 2. The problem is exclusively the public benefit test in Clause 3.

Lord Wedderburn of Charlton

Without wearying the Committee, we ought to think more about that. I do not wish to draw my noble friend the Minister into conversations that he would rather have in the Corridor. However, we ought to know what the Government think about that, especially as regards Amendment No. 16 and the effect of subsection (2) as a whole. I shall leave it at that, but I hope that my noble friend will comment.

Lord Phillips of Sudbury

I agree with my noble friend Lord Goodhart in his response to the question raised by the noble Lord, Lord Wedderburn. I thank the noble Lord, Lord Bassam, for his reply. There is a great deal of work to be done outside the Chamber.

Lord Goodhart

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 [Meaning of "charitable purpose"]:

Lord Craig of Radley

moved Amendment No. 2: Page 2, line 8, at end insert— ( ) the promotion of the efficiency of the armed forces of the Crown;

The noble and gallant Lord said: In moving Amendment No. 2, I hope that it will prove to he a rather more straightforward issue than that which we have just debated. My charity interests are as recorded in the register of interests.

It will be common ground that there are many service—that is, Armed Forces—non-public funds that currently enjoy excepted charity status. A total of up to 2,000 is mentioned in the Explanatory Notes that accompanied the draft Bill that was considered by the Joint Committee. I think that is a gross under-estimate and misleading when considering these non-public funds. A figure of more than 15,000 would be nearer the mark.

Statutory Instrument No. 1056 of 1965, the Charities (Exception from Registration and Accounts) Regulations 1965, which came into operation in May of that year, is a statutory vehicle for their current accepted status. These regulations, the SI states, shall apply to a charity wholly or mainly concerned with the promotion of the efficiency of any of the armed forces of the Crown".

These charity funds are held at various levels in the Armed Forces, ranging from individual small units up to the central funds of the three services. They are essentially funds used to support unit and other formations' social, sporting and adventure training activities. Their income derives largely from worldwide NAAFI rebates—to be replaced at home from a pay-as-you-dine arrangement levy—and, in some cases, by servicemen and servicewomen gift-aiding their pay for one or two days a year. There is no fund-raising effort devoted to bringing additional funds into these accounts.

Charitable support of the Armed Forces can be traced back to the 1601 statute. Its preamble sets out a broad concept of the kind of public utility which will satisfy the quality of charity. The "setting out of soldiers" was specifically mentioned in the 1601 statute. The Joint Committee on the draft Bill devoted several paragraphs of its report to the topic of the services' non-public funds. I shall return to the Joint Committee's views in later amendments.

Meanwhile, given the attempt in the Bill to categorise charities by purpose. it was surprising to find no reference in the Bill now before the House to the charitable purposes of these non-public funds in supporting the welfare and efficiency of the Armed Forces of the Crown. None of those purposes listed in Clause 2(2), or expanded upon in Clause 2(3), can be construed to encompass a proper purpose or purposes for these Armed Forces' charity funds.

It might be argued that Clause 2(4), which states any purpose not within the above but, recognised as charitable purposes under existing charity law", covers the service funds. Maybe, but the importance of the Armed Forces to the defence and security of the country, their involvement in aid to the civil power—remember, for example, their massive contribution towards dealing with the foot and mouth disaster— seems of sufficient importance in any public benefit test for them to be treated rather better than as an also-ran charity purpose.

Given this rare opportunity to record in statute up-to-date charity purposes, and recognising that the Armed Forces' funds will continue to enjoy a charitable position, it seems only right to include wording along the lines of my amendment. Better drafting and detail, and greater expertise in the precise way that this purpose should be recorded in the Bill, may well be called for. but the inclusion of a reference to the Armed Forces' charity purposes seems to me to be necessary. It is at present missing from the Bill.

The amendment is my best shot at correcting this omission. I hope that other noble Lords and the Minister will support the amendment, which surely does provide for clarity. I beg to move.

Baroness Turner of Camden

May I ask the noble and gallant Lord, Lord Craig of Radley, why the amendment is drafted in this way? It refers only to, the promotion of the efficiency of the armed forces of the Crown". I could understand, if it dealt with organisations concerned with the welfare of the Armed Forces of the Crown. There are a number of admirable organisations concerned with the welfare of the Armed Forces, both the present Armed Forces and people who have been in the Armed Forces. However, I do not understand why the amendment refers only to "efficiency".

Amendment No. 5, which is grouped with Amendment No. 2, would leave out the words "conflict resolution". I cannot understand that. The phrase is in the line dealing with, the advancement of human rights". Many people would maintain that, sometimes, attaining human rights can depend on conflict resolution. I do not understand why the amendment would remove the reference to conflict resolution from that line. Will the noble and gallant Lord deal with those questions?

Lord Craig of Radley

I am happy to speak to the first point, but the second point relates to an amendment tabled by the noble Lord, Lord Hodgson of Astley Abbotts. I shall leave that point to him.

I drew the wording in the amendment straight from the statutory instruction that I quoted. It talks about charities being wholly or mainly concerned with the promotion of the efficiency of any of the Armed Forces of the Crown.

We should bear it in mind that these are services non-public funds. I draw a distinction between them and, say, the Army Benevolent Fund or the Royal Air Force Benevolent Fund, which also assist the Armed Forces in a charitable way. These services non-public funds are within the bodies of the three services, so they are a different type of charity. That is why they have been treated for the past 40 years as excepted charities.

Lord Hodgson of Astley Abbotts

It might be for the convenience of the Committee if I explained the background to Amendment No. 5, which is in this group. It will be open season thereafter.

I support the approach that the noble and gallant Lord has put forward in Amendment No. 2 With regard to non-public service funds, we have tabled Amendment No. 114 to try to ease the way in which, it is proposed, they will be treated under the Bill. That is a point that we would like to come to on another day.

We would like to address the issue of the position of the Armed Forces in another way, by considering subsection (2)(h) of Clause 2, headed "Meaning of `charitable purposes'". Subsection (2) lists the eight new charitable heads added to the four original heads.

We are content with the length of subsection (2), but we have some concerns about the way in which (h) has been drafted. It reads: the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity". Amendment No. 5 would, as the noble Baroness said, remove the words "conflict resolution" from the subsection. It is a probing amendment, designed to get clarification and confirmation from the Minister that the defence of the realm and the furtherance of the efficiency of the Armed Forces will remain charitable purposes.

We have had representations from representatives of the service non-public funds, in particular from Major Adler of the Independent Services Agency. He highlighted the concerns within the Armed Forces regarding their status and function under the Bill. We want to test the Government's thinking on the charitable status of the Armed Forces of the Crown.

As the noble and gallant Lord pointed out, the promotion of the efficiency of the Armed Forces—one of the last remaining elements of the Tudor public utility concept of charity, the setting out of soldiers—is neither one of the listed charitable heads nor, in our view, does it easily fit into any of the other given definitions. Indeed, it might arguably contradict subsection (2)(h) on the advancement of conflict resolution. That is why, on a probing basis, the amendment seeks to remove these words. The Armed Forces might well create conflict rather than resolve it, albeit in defence of the realm. That could create a stumbling block to the continuing charitable status of their non-public funds in the future.

If the general emphasis in subsection (2)(h) is to give peacekeeping a charitable status, one consequence could be that the military services charities, with their purpose of the defence of the realm, contradict this. With the new heads being drawn so that they do not fully and clearly embrace the Armed Forces, the latter's position is somewhat ambivalent and their concern is therefore understandable.

Trusts directed to promoting the security of the nation by military means have, up to now, generally been held to be charitable. The Bill's proposal to include as a specified charity head, the advancement of human rights, conflict resolution or reconciliation may fly in the face of "military means trusts". I do not for a moment suppose that the Government intend that the clause should discriminate against service charities, but it would be helpful for service charities and the general public if the Minister could say that in as clear and unambiguous a way as possible. I would then be happy not to press the amendment.

5 p.m.

Lord Hylton

I have some sympathy with Amendment No. 2 in the name of my noble and gallant friend Lord Craig. However, I feel it would have been better if he had worded it in terms of the welfare or well being of serving members of the Armed Forces and their dependants. I say that because I tend to agree with the noble Baroness, Lady Turner of Camden, that the efficiency tout court of the Armed Forces is a state responsibility and not a charitable function. So perhaps there is some scope for redrafting.

On Amendment No. 5, I was very pleased to see that the Bill contained the words "conflict resolution", and I will try to explain why. Conflict resolution, whenever it happens, can prevent loss of life, suffering, the movement of populations and many other ill effects. At the moment, it is a rather grey area; it is not entirely clear whether this is charitable or not. I should have thought that there was enormous public benefit, whether in this country or overseas, in including conflict resolution as a charitable function or purpose. I know that this is only a probing amendment, but I am not happy at the prospect of removing these words.

Lord Borrie

I instinctively feel a great deal of sympathy with the noble and gallant Lord's amendment. The efficiency of the Armed Forces is almost, by definition, in the public interest and for the public benefit. Personal security and public safety depend on the efficiency, to use that word, of the Armed Forces. "Efficiency" includes a number of the other matters to which we have referred. I am sure that the noble and gallant Lords, Lord Craig and Lord Bramall, and others in the Committee, will accept that matters that improve the welfare and education of the forces are cumulatively helpful towards the efficiency of the Armed Forces.

However, I thought that the noble and gallant Lord underestimated the way in which many, if not most—his knowledge of the charities involved will be greater than mine—of the charities related to and involved in the Armed Forces will be covered by various of the provisions in subsection (2). Those include the advancement of education, health or sport, to which I refer because the noble and gallant Lord referred specifically to it, or matters of welfare, which are largely covered by paragraph (j). Unfortunately, paragraph (k) refers only to animal welfare, as though that is somehow more important than people's welfare, but that is a side point. A great many of the matters and the types of charity with which the noble and gallant Lord is concerned are covered there.

With regard to what the noble Lord, Lord Hylton, said, I strongly feel that since 1601 the, efficiency of the armed forces", which is the phrase chosen by the mover of the amendment, is very much, and thank goodness it is, one of the prime responsibilities of any government. It is probably that of any other state, let alone ours, with which we are concerned. The efficiency of the Armed Forces is rather different from the things that properly feature in subsection (2).

Finally, on conflict resolution, I am against the amendment of the noble Lord, Lord Hodgson. The phrase in the Bill covers not only conflicts between states but conflicts between individuals. As the Government and, more than once, the Lord Chief Justice, have said, alternative dispute resolution procedures should be encouraged so that the courts, which are so expensive, will be simply one of many ways in which conflicts are resolved. In many cases, charities setting up such bodies of mediation, arbitration and so on seem to fulfil what are intended to be charitable purposes under the Bill.

Lord Shutt of Greetland

My interests are set out in the register. I declared all of them on Second Reading but shall refer to one in a moment. I could not understand the noble and gallant Lord's amendment. I wrote down the word "efficiency" and asked myself, "Why not add transport undertakings or have the promotion of efficiency as one of the purposes?" However, the noble and gallant Lord explained that it is about welfare and, if there is to be a specific paragraph on the matter, the word welfare is important.

Secondly, the amendment tabled by the noble Lord, Lord Hodgson of Astley Abbots, would delete the words "conflict resolution". At this point, I declare a particular interest as a trustee of the Joseph Rowntree Charitable Trust. Over the years, we have given many grants in the field of conflict resolution—for example, in Northern Ireland. Earlier, when the noble Lord, Lord Borrie, was speaking, it occurred to me that the Marriage Guidance Council, now called Relate, could also be referred to as being involved in conflict resolution. So I very much hope that the words will remain.

Over the years, we have had to send people concerned with conflict resolution to the office of my noble friend Lord Phillips so that he could assist them with obtaining charitable status. Of course, that was under the then regime of PERO: poverty, education, religion and other. My noble friend had to argue that that was an important matter that should be considered under the heading "other". I am rather pleased that the meaning of "charitable purpose" is now to be more expansive in order to broaden what is possible as a charitable activity. That is a good thing. For the avoidance of all possible doubt, I would like the Minister to make it absolutely clear that subsection (4) covers "other", if it has not been laid out in the new list. There may be all sorts of purposes beneficial to the community that we have not thought of as a possible specific and have therefore not included in this new list. It is important to retain that catch-all of "other purposes beneficial to community" as a charitable purpose.

Lord Bramall

I too support my noble and gallant friend's amendment as he drafted it. I declare an interest too as a retired soldier or part-retired soldier. We are not arguing at this point—we will do that later—about the precise status and accountancy of a non-public fund. My noble and gallant friend's amendment would ensure that something about the Armed Forces is included in Clause 2(2) as there has been since Tudor times, one might say.

The Armed Forces as a whole constitute a good, charitable purpose. They cover the defence of the realm and its citizens; the aid to the civil power in every kind of national disaster; and assistance during fire strikes and other industrial disputes. The Armed Forces also do a great deal to support the humanitarian side of our foreign policy. They are providing an absolutely vital service to the public and they therefore remain a good charitable purpose. We felt that if nothing about the Armed Forces was included, in years to come, they might have their case weakened.

The words that my noble and gallant friend proposes—"the promotion of the efficiency"—lie easily with those in Clause 2(2). One could substitute "efficiency and welfare"—I do not think that my noble and gallant friend would argue about that— but "promotion of the efficiency" came out of the 1965 Act. It seemed to satisfy everybody then and I do not see why it should not satisfy everybody now.

It is very important that the service that the Armed Forces give to the community is recognised in the Bill and goes alongside these other vital purposes such as the prevention of poverty, the advancement of education, the advancement of religion, the advancement of health, culture and sport and many others. The Armed Forces of the Crown and the service that they give to the community should remain a good charitable purpose and they should be recognised in the Bill.

Lord Dholakia

I support my noble friend Lord Shutt. I do so because I have the same approach as the noble Baroness, Lady Turner, and the noble Lords, Lord Borrie and Lord Hylton, who mentioned the matter relating to efficiency. I shall deal with the second point—on conflict resolution.

I said at Second Reading that it has taken us about 40 or 50 years to include human rights, racial harmony, equality and diversity among charitable purposes. It is about time too. But as part of that exercise, we must also accept that, in the promotion of racial harmony and diversity, we have seen the type of conflict that arises in the community from time to time. Those who include conflict resolution among their activities should he deemed as charitable.

So I do not necessarily agree with the noble Lord, Lord Hodgson, on this matter. I hope this will he part of the exercise and I hope that we will give serious thought—as we do in relation to animal welfare—to whether the concepts of "welfare" and "charitable" encompass the kind of arguments advanced by the noble and gallant Lord, Lord Craig.

5.15 p.m.

Lord Swinfen

When the Minister replies, will he tell the Committee what "conflict resolution" means in the context of the Bill? Is it purely the making of peace between individuals or groups of people or nations? Is it clearing up the mess after a conflict? I am speaking in this context as an adviser to the Leonard Cheshire Centre of Conflict Recovery, an organisation which goes into countries after conflicts to advise them and to help them to set up their medical services again, because most times they have been totally destroyed.

It is essential that we know what "conflict resolution" means. It may be necessary to write a definition in the Bill.

Lord Phillips of Sudbury

I have only a few brief remarks to add to those made by many noble and gallant Lords and noble and not-so-gallant Lords.

I can understand why the Armed Forces feel a bit miffed that they are not mentioned on this long list. I have sympathy with that.

I am a little disappointed with the wording of Amendment No. 2. I do not know about other noble Lords, but I am utterly fed up with the word "efficiency". It is a rather nasty little word. It is an altogether inadequate word for the work of Her Majesty's Armed Forces— and, indeed, for the work of anyone. If you have to have a single word, the word "effectiveness" is a much fuller, deeper, more rounded word than the mere word "efficiency". It is notable that where the Charity Commission is dealt with in the Bill, the word "effectiveness" is applied to the duties that fall on it. It is a small point.

I am utterly confused by Amendment No. 5, tabled by the noble Lord, Lord Hodgson of Astley Abbotts. Probing it may be, but I cannot see at what it is probing or to what end. I do not see any conflict or paradox at all between Amendment No. 2 and Amendment No. 5. Indeed, the Armed Forces spend most of their time these days dealing with conflict resolution and trying to keep the peace.

It has taken a long time to get conflict resolution accepted by the Charity Commission as charitable. A number of very important charities today function under that heading, including International Alert, for which my son-in-law used to work. The conflict resolution role is blindingly obvious and necessary all round the globe and I hope that the Minister will hit the amendment well into the long grass.

Lord Wedderburn of Charlton

This debate shows the deep waters into which charity law takes us. The Government have been very brave—perhaps unnecessarily brave—because they have done what other administrations have refused to do: they have spelt out a long list of charitable objects rather than confine themselves within a statute of Elizabeth I of 1601, about which I shall say a little more in a moment.

A long list such as the one in Clause 2 invites additions. The Government knew that very well when spelling out a long list of charitable purposes, which is what we are now considering. We are not dealing with public benefit at the moment and we should not confuse the debate by referring to that issue.

What are charitable purposes? Instead of what the courts considered, eventually, were roughly the four heads that came through after the statute of Elizabeth I, we have got paragraphs (a) to (k). which refer to specific purposes, and then we have got paragraph (1) which refers to, any other purposes within subsection (4)". I am not going to go through subsection (4) again but it is very relevant to some of the points that have been made about the noble and gallant Lord's amendment, Amendment No. 2, to which we will return.

If you spell out a long list of this sort, you try to expel, to use a Marxist phrase, the spectre which has haunted charity law since 1601. You try to obtain certainty where it is very difficult to do so, and that is a brave venture. Some people will like some of the items specified, but some people will not understand what is meant by, for example, "conflict resolution".

Members of the Committee must realise that the list invites one to express not merely one's interests—I should say at once that I have reason to be grateful to the Royal Air Force Benevolent Fund; I do not know whether that counts as an interest but I hope that noble Lords will declare their interests on this matter—it also invites an expression of what your friends will call your "social purpose" and what your enemies will call your "social prejudices". There is nothing wrong with that—it is done every day in the Chamber—but people pretend that they are not doing it.

We are all influenced by what we feel about this list. Why should animal welfare be included and not human welfare? The answer might come within subsection (4)—I am sorry to return to that subsection—which includes anything, that may reasonably be regarded as analogous to, or within the spirit of", what is set out above. That involves a statement of support for or dislike of specific social purposes, and people may want to add further ones. Amendment No. 2 in the name of the noble and gallant Lord must be seen in that light.

It occurred to me that one might say that the noble and gallant Lord's amendment goes to the heart of the matter in every sense. Of course, it is difficult not to support groups and organisations that provide sustenance to the Armed Forces. I shall not be led—for once, at any rate—into saying whether wars are a good thing or a bad thing, but it is obvious that the forces have a certain amount of support in people's hearts. However, the amendment must be tested in the same way as any other amendment.

It has been asked why only the "efficiency" of the Armed Forces should he mentioned. I accept that the noble Lord. Lord Phillips, is fed up with the word efficiency, but the marketers thrust it on us. Since 1980, we have been caught in the trap of judging everything by its efficiency without anyone spelling out what that means in the public rather than the private sense.

Why did the noble and gallant Lord not use the words "efficiency and welfare" of the Armed Forces? It seems to me that that would he very easy to do and would improve his amendment. Why does he limit it to the Armed Forces of the Crown? Your Lordships have had two Bills on the fire and rescue service and, only in the past month or two, two members of that service have lost their lives in an attempt to improve public safety and rescue trapped people. Are they not also worthy of attention? Some people would say, "What about the police?" They have a very dangerous occupation these days and everyone wants more and more from them. Why are they excluded?

I then come to a more fundamental point. Albeit that the merits of all those organisations are seen by most people as obvious, some may disagree when it is asked: what about those who want to promote conflict resolution, and not just conflict resolution but disarmament? What is wrong with those who have raised funds to support the Campaign for Nuclear Disarmament that they should be thrust out of tax benefits in amendments of this kind? What is wrong with the other organisations that support not only conflict resolution—

Lord Phillips of Sudbury

I am very sorry to interrupt the noble Lord's flow, but surely he is aware that the difference is that the Armed Forces, the police and all the other bodies that he mentioned are currently charitable but disarmament is not. That is the difference.

Lord Wedderburn of Charlton

With great respect, I do not think that one would find that the Charity Commissioners have registered every organisation which has discussed with them the raising of funds for support for the police. The noble Lord knows a great deal about the register. I am sure. Why not put it in the Bill? What is wrong with saying things rather than muttering in the corridors and leaving people to find out when they apply?

I refer to peace organisations. I do not think that every organisation which is formed for the purposes of disarmament and peace has received charitable status. I see that the noble Lord agrees with me. Well, I think they should. If we are to have a list like this, we have to have some notion of equity and accept that some groups we do not happen to support should appear side by side with other groups on the register.

I should like to conclude my point, which I think is obvious. The noble Lord will no doubt vote against it if he has the chance. I should like to say something about the Statute of Elizabeth 1601. If the noble Lord wants to intervene, I am happy to sit down.

Lord Phillips of Sudbury

I am only trying to help the Committee. The point about Clause 2 is that it is not new law; it is declaratory of existing law, so that while the issue raised here is whether or not the efficiency of the Armed Forces should he specifically mentioned, in talking about disarmament and the promotion of peace, the noble Lord is talking about what he might want to see as charitable. But I emphasise that there is nothing new in Clause 2. If the noble Lord wants to extend charitable purpose, that is a different matter, but he should not confuse the two.

Lord Wedderburn of Charlton

Nothing new in Clause 2? The relief of poverty was under the Statute of Elizabeth. Certain forms of the advancement of education were under the same statute. Religion came in, but in a rather funny way, as the courts interpret it. All the rest are new. Which are not new?

Lord Phillips of Sudbury

I am sorry, but all the rest simply put into words what are already charitable purposes under the fourth head. That is a fact. There is nothing there that the Charity Commission has not accepted as charitable.

Lord Wedderburn of Charlton

It may be—although I think not—that everyone who could be referred to under Clause 2(2) has been registered by the Charity Commissioners. I should like to go through the register with the noble Lord and see whether that is so. I do not believe it is. Neither do I believe that those who are within the spirit of the list are all registered, but we would have to go through the register to see. We will come to specific paragraphs; I shall not muddle the debate by adding to the hands in the ping-pong.

To be set out in Clause 2 gives you a clear statutory status. If the noble Lord, Lord Phillips, likes the whole of Clause 2, he must be broad-minded enough to ask whether there are other people who should have the same statutory status. I do not care whether they are analogous; I do not care whether they are similar. If you have a place in this list, your tax benefit is half secured; you have to prove public benefit.

I ask again: what is wrong with mentioning other meritorious groups and organisations or, rather, the organisations that support the welfare of other groups and organisations? This will come up in debates on forthcoming amendments in a very big way.

Members of the Committee must take their pick. Either they will be non-discriminatory, on a fair basis, or they will simply express their prejudices and say, "We like the Armed Forces; we do not much like the fire service". They may or may not be accepted when checked out by the Charity Commissioners—of course the fire service would—hut they are not on the face of the Bill. Being on the face of the Bill is a statutory benefit.

The Government's bravery in setting out a list leads to the traps and hazards that every inquiry conducted before the Bill predicted would be a problem. Everyone will want to get in on the act with his own little or large group. That is very natural, and I quite understand it. But if you are going to include the Armed Forces, I could simply say, "I want peace organisations and conflict resolution". I believe that they are admirable things, but that is just a peculiar prejudice of my own. Noble Lords should not legislate on the basis of their hostility to groups—and we will come to the charter of human rights and its effect on the debate in a moment. They should not do what they believe is simply in the spirit of the Statute of Elizabeth of 1601.

5.30 p.m.

We are all going to refer to that statute—it is referred to twice in the Bill— and so we had better know what it says. In 1601, the purposes specified in the preamble were as follows: The relief of aged, impotent and poor people; the maintenance of sick and maimed soldiers and mariners"— only them— schools of learning, free schools and scholars in universities; the repair of bridges, ports, havens, causeways, churches, sea-banks and highways; the education … of orphans; the relief, stock or maintenance of houses of correction; the marriages of poor maids … the relief or redemption of prisoners or captives; and the aid … of any poor inhabitants concerning payment of fifteens, setting out of soldiers and other taxes". "Fifteens" meant one-fifteenth of your property due to the king since the 12th century.

The courts massively manipulated those heads in the case law between 1601 and the 19th century, and we shall come to some of those in future amendments. But if noble Lords are going to refer to the statute of 1601, they should realise how narrow it was and how the courts of equity entered into what was, ultimately, a very fair approach to regarding other things as analogous to, or, as they said then. "within the spirit of", the Statute of Elizabeth and setting them up. Noble Lords must be as fair as the courts were by the 19th century and realise that what they want in the list is their own personal, particular hobby. Other people may have very different hobbies and want them to be in the list as well.

I do not know what my noble friend the Minister is going to say about the matter; I do not know whether he realises that he is being quite as brave as he is. But he will know very well the arguments of those who were against the list and who said the very things that were being said in this Grand Committee when the matter came up. People will say, "Such and such a group must be set out in the list", and that is quite understandable because being in the list puts you halfway to tax exemptions, along with other benefits, although tax exemptions are what come first to everyone's mind.

I would be against the amendment as set out. I would ask that it be expanded to include other groups, and certainly the welfare of the groups that we support. I hope that, if this matter comes to a challenge on Report. we shall not be asked to vote on anything quite as narrow as the amendment proposed by the noble and gallant Lord.

Lord Hodgson of Astley Abbotts

My Amendment No. 5 took some incoming fire from the noble Lords, Lord Borrie, Lord Shutt and Lord Phillips, so it is worth while trying to explain what I was trying to achieve.

The Independent Service Agency, which represents the service non-public funds, believes—and I am not a charity lawyer—that including the words "conflict resolution" could set at risk the charitable status of Armed Forces' charitable funds because they are not concerned with that. The agency may be right or wrong, but that is the point that it has made.

The amendment was not designed to be an attack on organisations concerned with conflict resolution. I am sure that Relate is a splendid organisation, and no doubt the son-in-law of the noble Lord, Lord Phillips, works for an admirable reconciling force. Instead, the amendment was intended to be a defence of service non-public funds. I thought I had made it clear that all I want the Minister to do is to assure me that the Government see nothing in the Bill that will disadvantage the charitable status of the Armed Forces' charities. It is nothing to do with trying to get at people who are concerned with conflict resolution; it is a defence of the Armed Forces, and we tabled the amendment because the Independent Service Agency was advised that there was a legal concern about the position.

Lord Bassam of Brighton

I may not yet be a charitable institution but I have got an awful feeling that at the end of this debate I am supposed to resolve conflict and offer a little mediation. In trying to do so, I shall carefully go through the threads of the debate and please as many people as I can because that, essentially, is what I want to do.

Let me deal first with the amendment of the noble and gallant Lord, Lord Craig of Radley, which was admirably addressed by the noble and gallant Lord, Lord Bramall. They put forward a passionate case for the amendment and I can understand why that should be the case. Clearly the Armed Forces' charities, the benevolent societies and those which have acted in aid of those within the Armed Forces have undertaken fantastic work over many generations. I know that to be the case from personal family experience. That is not declaring an interest necessarily; it is a reflection of the effectiveness of the charitable work that has been undertaken, and is currently being undertaken, by Armed Forces' charitable bodies.

As many contributors to the debate have said, the promotion of the efficiency of the Armed Forces has long been recognised as a charitable purpose. I can say quite clearly, without any qualification, that that position will not change—it is not intended to change in any way—as a result of the provisions of the Bill. The Government fully recognise the valuable work performed by the Armed Forces' charities and the undoubted public benefit that they provide.

I want to make sure that our assurance that the charities which have been referred to in the debate will remain as charities after the Bill is passed is clearly understood. It will not be affected by the fact that there is not a specific Armed Forces category identified in the list that the noble Lord, Lord Wedderburn, described as being a brave list to bring forward. We did not envisage it as being a brave list.

As we have had explained and debated many times in your Lordships' House, a list in legislation invites additions and deletions. However, we took the view that we had to start somewhere, and the list we have provided is an important beginning. There has not been a list in the past but there have been broad headings. We are trying to achieve a balance so that the list includes best established and recognisable charitable purposes but is short enough to be a memorable list. I would argue in defence of the list being reasonably memorable. Whether at the end of the Bill I shall be able to remember all of the categories remains for debate, but I shall certainly try.

The Government believe that the specific purposes contained in the list of charitable purposes reflect the major areas of charitable endeavour which have enjoyed and should enjoy strong public recognition. Charities concerned with the promotion of the efficiency of the Armed Forces will come under the twelfth category of "any other purposes", and there is absolutely no threat of a change in their charitable status in saying that.

I am sure that the noble and gallant Lords who have spoken will see that as less than adequate for their purposes, but it is not intended in any way, shape or form as a slight to the Armed Forces' charities. On the contrary, we, as a government, obviously greatly regard their work. I hope that the noble and gallant Lords will be reassured that the promotion of the efficiency of the Armed Forces will continue to be recognised and acknowledged as a charitable purpose and that they will feel able to withdraw their amendments.

I turn now to the second amendment in the group tabled by the noble Lord, Lord Hodgson, which deals with the issue of conflict resolution. As I have explained, it is difficult to put together a list which is defensible in all circumstances. But this list came out of the strategy unit's original consideration and it proposes a list of 10 charitable purposes to replace the four heads of charity which have been referred to many times during the course of the debate.

Of those who responded to the Government's consultation on the strategy unit report a large majority—some 95 per cent—were in favour of introducing a new list of charitable purposes along the lines of those set out in the strategy unit's proposal. There were, however, as one can imagine, many suggestions for additions to the list, and the draft Bill published in May incorporated three suggestions that attracted a wide consensus—that is, animal welfare, science and social housing. The Joint Committee on the draft Bill recommended further additions which the Government have incorporated into the Bill that is now before the Committee for consideration.

The fact that a particular purpose is not included in the list does not mean that it will cease to be charitable under the Bill. That is because Clause 2(4)(a) has the effect of ensuring that any purpose that is already recognised as charitable will continue to be charitable under the Bill even if it is not specified in the list. That reflects the view of the strategy unit and the Government that no charity should lose its charitable status purely as the result of the adoption of a new list of charitable purposes.

Conflict resolution was one of the purposes included in the strategy unit's original list and it has, in any event, been long recognised by the Charity Commission as a charitable purpose. The Commission has recognised it as covering activities directed at resolving a variety of conflicts, from those taking place at a local level to national and international conflicts. The noble Lord, Lord Swinfen, asked for a definition—or, if you like, a meaning—of "conflict resolution". We see it as involving and including activities relating to resolving disputes at both national and international level by non-political mean. It also includes the issues to which the noble Lords, Lord Dholakia and Lord Shutt, referred in their contributions as resolving domestic and other disputes to the public benefit. So we see it as having a wide meaning and we want to see it adopted in its broadest sense.

We do not see any inconsistency in accepting as charitable purposes the promotion of conflict resolution and reconciliation and the promotion of military efficiency. The noble Lord, Lord Phillips, made the point very well that, in a sense, the Armed Forces are there to help in reconciling conflicting sides and to play an important peace-keeping and conciliatory role. We recognise the value and importance obviously, as governments do, of that work. It is not in any sense our view or wish to see that change in any way, shape or form.

It would be fair to say that conflict resolution is an activity of increasing importance in a contemporary world and one in which the charity sector makes a very important and vital contribution. The Government believe, therefore, that conflict resolution deserves to be mentioned in the same context as the promotion of human rights, and to be related to that and all other related purposes which are charitable under paragraph (h).

In view of what I have said, I hope the noble Lord, Lord Hodgson, will feel confident enough not to press his amendment. I also hope that I have gone some way towards satisfying the understandable concerns raised by both noble and gallant Lords who have contributed an important element to the debate today.

Lord Craig of Radley

I have listened to the Minister and I thank him for his response. I cannot say that I am satisfied because this is such an important point that his assurance—or any ministerial assurance—is not the same as having it on the statute itself. So I shall wish to return to this issue.

I have had a great deal of stick—I suppose is the right word—about the choice of words for the amendment. I am not learned in the law. I thought it would be appropriate to turn to a Home Office document—which is what I did—and I referred to Statutory Instrument No. 1056, which I have mentioned already. It was signed on 29 April 1965. It stated: These regulations shall apply to a charity wholly or mainly concerned with the promotion of the efficiency of any of the Armed Forces of the Crown". I deleted the words "of any", but otherwise I stuck rigidly to that formulation, which was signed by Frank Soskice.

5.45 p.m.

I hoped that if those words were good enough for me, they would be good enough for the Committee. It may be that additional words would be helpful. I am certainly not setting my mind against that. I looked for a comprehensive and understandable phrase that was well used and well known and would fit with what was already proposed. In conclusion, 1 thank all Members of the Committee, particularly those who supported my amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Lord Elton)

Amendment No. 3 has already been withdrawn.

Baroness Turner of Camden

Amendment No. 3 has been withdrawn, but on the groupings list it is grouped with Amendment No. 17.

Lord Elton

If the amendment has been withdrawn, it cannot be spoken to. The speech that the noble Baroness wishes to make should come at a later stage.

Baroness Turner of Camden

I simply wanted to make the point that the grouping was wrong, but I will deal with that later.

Baroness Turner of Camden

moved Amendment No. 4: Page 2. line 10, at end insert "or belief, other than predominantly a political belief The noble Baroness said: In moving Amendment No. 4, I wish to declare my interest. I would describe myself as a humanist. I am a member of the Secular Society. My concern is that if the Bill is not amended secular organisations could be disadvantaged.

A purpose falls within the scope of the Bill if, among a whole list of purposes, it is concerned with the advancement of religion. At Second Reading, I was very impressed by the speech made by the noble Lord, Lord Lester. He welcomed the Bill, as I think we all do, but he drew attention to the legal uncertainty and the potential for discrimination, resulting from the absence of a definition of religion and the absence of a reference to belief (at col. 918 on 20 January).

He also cited the view of the Joint Committee on Human Rights, which recommended that compliance with the Convention requires the Bill to be amended to include the advancement of both religion and belief, as is the wording in Article 9 of the Convention and the Human Rights Act.

I am aware that the view of the Home Office at present is that organisations advancing non-religious beliefs would not be disadvantaged under the Bill. I am not happy about that. Looking at the list of purposes defined in Clause 2, I cannot see that an organisation such as the Secular Society would be regarded as coming within the clause. Perhaps the Minister will tell us that guidance will be issued which will make everything clear. But it is surely better that a definition should appear in the Bill.

Our amendment seeks to take account of the issues raised in the speech made by the noble Lord, Lord Lester, that drew heavily on the recommendations of the Joint Committee on the draft Bill, which resulted from evidence given to the Committee.

There was concern that non-deity religions, such as Buddhism, might not meet the current legal definition of religion. Our amendments—particularly Amendment No. 18, with which Amendment No. 4 is grouped—attempt to deal with that by spelling out exactly how religion should be defined, including religions based on deistic, multi-deistic or non-deistic premises, beliefs, revelations or worship. That is a reasonable definition, which it would be a good idea to include—for the sake of clarity, if nothing else. I beg to move.

Lord Hylton

I have no problem with the word "belief' in this amendment, but I have some difficulties with the word "predominantly". First, it is likely, even probable, to lead to a great deal of litigation, which should be avoided if at all possible. Secondly, what happens if a belief is linked with a political belief to a partial extent, but not to a predominant extent? It is unclear and needs a good deal of polishing up.

Lord Wedderburn of Charlton

In response to the point just made by the noble Lord, the proviso in the amendment is a genuflection towards current conventional law. There has been a debate, which will not interest most Members of the Committee, about whether Marxist Leninism could, if belief entered the list, be registered; namely, whether an organisation founded for the purposes of advancement of that philosophy could be a charity and have a charitable purpose. Most people, and conventional wisdom, say that it could not if it is predominantly political in its purposes. I do not think that the Charity Commissioners will ever rule on that.

I do not think that there is any more or any less likelihood of getting litigation on the matter. Members of the Committee should realise that almost every point made today could and might be the subject of litigation. That is not because lawyers are evil chaps but because that is the way in which our society deals with conflict when it cannot be resolved. I note that the noble Lord and I are both in favour of conflict resolution appearing squarely in the Bill.

The reason that there is a need to say something in the Bill overlaps with what I said earlier to the noble Lord, Lord Phillips. If a purpose is omitted, it does not get over the first hurdle without persuading the Charity Commissioners that it should be included. Immediately, I say to the noble Lord, Lord Phillips, that some humanist groups and organisations have asked to be registered and they have been refused.

The report of the Joint Committee of your Lordships' House and the other place should be the foundation of the debate on this Bill—certainly the first part of the Bill. The evidence of the executive director of the British Humanist Association to the Joint Committee stated that, The Act prohibits discrimination by the Government and other public authorities on grounds of religion or belief … and case law under the European Convention on Human Rights and the Human Rights Act [in Britain] makes it absolutely clear that Humanism is a 'belief' within the meaning of the Act", and should not be discriminated against.

In its evidence, the association said that it had made that point again and again in meetings with the Home Office and in submissions to the Government. The Joint Committee was cognisant of the argument. The executive director said that the Joint Committee, agreed with us … but still the Government ignores it".

The claim is that the Bill is discriminatory against those who do not fall within religion as it has been interpreted. I have given the Committee examples of the curious way in which it has been interpreted. I am sorry if Members of the Committee do not like legal points, but we are passing a law, which tends to raise legal points. This point is very clear; namely, current law and the law under the Bill would discriminate against people with beliefs that are as sincerely held and as important to them as any religious belief of another citizen.

The British humanists said that they relied on Article 9 of the European Convention on Human Rights, incorporated into our law in the Human Rights Act. The appropriate words are that, Everyone has the right to freedom of thought, conscience and religion; this right includes freedom to change religion or belief and freedom, either alone or in community with others … to manifest his religion or belief, in worship, teaching, practice and observance". The same formula is used, in effect, in the United Nations International Covenant on Civil and Political Rights, where the wording is slightly different. In every case in international documents, religion is accompanied by belief in one form or another. There are different interpretations in some documents about what belief means. For example, in the Communications Act, the Government included an obligation on broadcasting authorities to give representation to those who are of religious and "other" beliefs.

I shall not read from the Communications Act, but the wording is slightly different from the usual international interpretation. Everywhere, except in British law, international organisations and national laws have come to recognise the equality of those who do and those who do not have religious belief. The very notion of religious belief is very difficult to state. In literature, organisations for the purpose of the saying of mass and other similar religious organisations are counted as charitable with no difficulty. But a group of Chinese immigrants with practices which, they thought, saved the souls of the dead, or at any rate communicated with them, was just slung out because it was not considered to be a religion.

The question arises—it has never been settled—of whether all species of Buddhist belief fall within English law as a religion. Although Buddhist organisations have been registered, it is the majority view that the Charity Commissioners would not register all forms of organisations with Buddhist beliefs. There is also a school of thought in the literature, which is vast, that Hinduism is a problem. The basis of English law, in accepting religion, is that there must be, as Lord Denning once said, the worship of a supreme being. Indeed, he went further and said that that had to manifest itself in some public way. He said: What a man is doing when he says prayers alone in his bedroom is private. But if it is done in worship, in community, that is religious". There is a great deal of case law on that basis.

This is not an old set of authorities. In 1980, Lord Justice Dillon said that, ethics are concerned with man's relations with man". But religion is concerned with man's relation with God.

Reports are still prone to say that if you do not worship a supreme being, you are not part of a group that comes within that head of charity. I do not have to argue that that is discriminatory; it is plainly discriminatory. It is an argument that has gone on for years, as the British humanists have shown. It is time for British law to come into line with decent standards of equality. That is why the record should reveal that the case put forward by the humanists must be answered in the Bill.

There are two ways of getting around that. The first is the "Alice in Wonderland" interpretation; namely, that the advancement of religion, includes the advancement of non-religious beliefs". If you want to live in "Alice in Wonderland" law, that had better be in the Bill. Our amendment does not do that. We think that the truth should be told; namely, a belief that is non-religious should have some equality in the first hurdle. The second hurdle is whether you can prove public benefit, and that applies to religious and non-religious organisations as equality on the second hurdle but not on the first.

The other way of getting around it is by patronising recognition of humanist organisations. People say, "Oh well, you are analogous to religious belief". Most humanists would object to that. To refer to the list of Richard Dawkins, the eminent scientist in Oxford. there are three ways in which to rely on religious belief in argument. One is authority, another is tradition and the third is revelation. He quotes examples in religious doctrine, such as the bodily assumption of Mary's body, which arose only with authority in 1950 for Roman Catholics.

6 p.m.

Richard Dawkins argued, in a letter to his 10 year-old daughter, which I am sure that members of the Committee would understand if they read it in his admirable book A Devil's Chaplain, that you should look at the evidence for what you believe. I am not trying to persuade any members of the Committee to accept his argument; but I am saying that his argument deserves equal treatment and deserves not to be discriminated against because some members of the Committee cannot bear to see it in the list in a Charities Bill. I am arguing that it deserves equal tax treatment, too, because it is that which holds up organisations that do not happen to fit in the list.

It is axiomatic in charity law that public benefit has to be shown and, as it stands in British law, that religion is required in some form or other. I have quoted already two peculiar examples of how religion has been interpreted. Some religious groups complain themselves that they do not quite fall within the British notion of religion. That used to be much more common in the early nineteenth century. In 1949, Lord Reid, in a leading case, said that British law had now come to regard all forms of religion as equal. That does not stand up to examination in every way, but it is true that if you can show the courts that you worship a superior being, they tend to accept even new religious groups—although they did not accept the Church of Scientology. That was a very peculiar case and will obviously have to be revisited. If you look at that judgment, you will see that there might be arguments that would not be accepted under our amendment. But that remains open.

I have no view for or against revisiting that matter as to what the conclusion would be—nor about Marxism/ Leninism as the purpose of a group, although that is, with the groups that actually exist, likely to fall into the political arena. I can say to the noble Lord who challenged that notion that I believe that there would be wide support for the argument that a body which was exclusively political in the conventional sense would not normally be accepted as a charity. We put in "predominantly", although the indefinite article is in the wrong place—that is entirely my fault—so the amendment should read, belief other than a predominantly political belief". Perhaps the noble Lord can do better than that text; if so, I look forward to seeing it; but we put it in to show that we had not forgotten the point.

This is the challenge to those who say that this is a joke or something to be smirked at: do they really think that a vast number of the inhabitants of the British Isles are happy that only those groups which count as the advancement of religion are included? Remember, it is not just having a political belief, it is advancing a political belief or some other belief. That point goes to the boundary of education and does not belong here. But do they really believe that most people in the street—or Ivor Jennings used to say, "The man from Hoxton"—would not say, "Well, I don't care. If they're genuine about it and they really believe that that is what they want to persuade people of, why should they not be treated equally with other groups which say that they are religious".?

Before the Committee makes up its mind against the amendment, it must have an answer to that in modern society. The European Convention on Human Rights is against it; the national law in the Human Rights Act is against it; and all the international texts and most of the European constitutions are against such discrimination. There is a question over one of them, but in western Europe, all but one are clearly against it. In considering whether humanist groups should be dealt with in the Bill, such opposition is a very heavy burden of proof for someone to resist on account of his principles or, as his enemies would say, his prejudices.

It is no answer to say, "Oh well, perhaps the Charity Commissioners would like this particular humanist chap or that particular humanist chap because they can say it's analogous to religion". In 2003, regulations were made by the state saying that you must not discriminate in employment on the grounds of religion or similar belief. An attempt to tell the Government that humanist beliefs are not similar to religious beliefs was totally ignored. In the same way, in their response to the Joint Committee the Government totally ignored the British humanist argument. The Joint Committee document, which I urge your Lordships to read, accepts the argument and sets out what the committee considers should be the approach to statute. Any organisation, be it non-deity or multi-deity, should be able to satisfy the paragraph on religion for charitable purposes, subject to showing a public benefit.

In a paragraph to which I can only award a beta-minus, the Government said that they had considered their response to that and to the strategy unit's review of charity law and whether a definition of "religion" should be identified by the Joint Committee. The clear evidence was that non-deity and multi-deity groups can already satisfy charity law as a religion, but non-deity groups satisfy "religion" with great difficulty under the current law simply because people do not quite like the look of them. But nothing in the Bill cures that discrimination, and it is no good saying, "Well, the Charity Commissioners might accept you by some analogy with something that you're not analogous to". You either pass a law which is non-discriminatory or you do not, and there is no half-way house between the two.

In their response, the Government said that 200 charities are registered for the purposes of advancing the Buddhist faith and a similar number with the purposes of advancing the Hindu faith. Why do we not accept that in the Bill? The Government then said that it was well established that the Charity Commission would register such organisations. They said nothing about non-religious organisations, unless "non-deity" is meant to include everything and everyone. We deserve a better answer, and we deserve equality on the face of the Bill and not by the grace and favour of the Charity Commission.

Lord Hylton

The noble Lord, Lord Wedderburn, has raised the issue of Marxism-Leninism. Does he not accept that that is a philosophy rather than a quasi-religious belief?

Lord Phillips of Sudbury

It is very difficult to know quite where to start—

Lord Bassam of Brighton

The noble Lord has stolen my line.

Lord Phillips of Sudbury

It is difficult to know where to start on the subtle, far-reaching justification of Amendments Nos. 4 and 18 advanced by the noble Lord, Lord Wedderburn, on his own behalf and on behalf of the noble Baroness, Lady Turner. I must confess that I was hoping to keep my powder dry for Amendment No. 9, which stands in the name of the noble Lord, Lord Hodgson, and to which I intended to add my name. That amendment advances a new definition of "religion".

I am now a little bamboozled as to what to do. I shall certainly not bore the Committee twice with all the points that can be made. The noble Lord, Lord Wedderburn, asks, "Why not?" The answer is: it is ten past six and we have scarcely started on this great march. I shall have a self-denying ordinance, except to say one or two things.

Lord Bassam of Brighton

In the interest of speeding things along, I am tempted to accept that we should consider Amendment No. 18, which is in the pool, as it were, of religion and definition.

Lord Phillips of Sudbury

It is grouped with Amendment No. 4.

Lord Bassam of Brighton

Amendments Nos. 4 and 18 are grouped together.

Lord Phillips of Sudbury

Unfortunately, they are not grouped with Amendment No. 9, which bears considerably on the same issues covered by Amendment No. 18. I should have preferred to see Amendments Nos. 9 and 18 grouped together. However, they are not, and I am going to keep my powder dry, except to make certain points.

I am sympathetic to the broad thrust of what the noble Lord, Lord Wedderburn, says—for what that is worth. I understand the points he makes about humanism: I am only too well aware of the South Place Ethical Society precedent, which is very important for humanism. However, I think that Amendment No. 4 is far too broadly worded. Amendment No. 18 is a much more sellable proposition.

Amendment No. 4 would leave Clause 2 having, as one of its charitable purposes, the advancement of religion or beliefs. I know the bit about politics but that is superfluous because charity law is absolutely clear on the role of politics as permitted for charities.

Lord Wedderburn of Charlton

I hope the noble Lord will excuse me if I interrupt his flow to remind him that Parliament makes the law. The exception on grounds of "political" has been judge-made interpretation, which 1 wholly support. Nevertheless, a statute makes the law when there is any conflict with the courts. That is why we put it in—because we want to be clear.

Lord Phillips of Sudbury

I disagree with that. If one wanted to make every issue of common law charity law clear in the Bill it would be three times as long. It is unnecessary to say, which is why it is not said in Clause 2 at any point, that a charity must not be predominantly political.

The nub of the amendment is that Clause 2(2)(c) would refer to the advancement of religion or beliefs. The noble Lord can add his words if he likes. The phrase "or belief" has no constraint to it at all. The noble Lord chose to advance what I would call respectable beliefs—well thought through, humanist beliefs, as held by various groups of people in society. But "belief" on its own could embrace eugenics, hunting or a thousand and one other things. Frankly, we would be in a dark, deep, uncharted sea if the amendment were agreed.

Lord Wedderburn of Charlton

This is to keep things short. The noble Lord is absolutely right: the English language is deficient. If you look at the international texts, in German— and I am not very good at this—it is always Weltanshauung. In Italian it is the same as in French—conviction or convizione. We do not have a word for it.

Because of the objections to the word "belief", which was their first proposal, the humanists proposed to advance the term "life stance". I think that it is rather American. If the noble Lord prefers "life stance" or can think of a better word which covers the point, I will happily join him in the Lobby to put this matter right when the moment comes.

Lord Phillips of Sudbury

I cannot think of a better word. "Life stance"—is that about nudity? I would love that. I do not think that this is a runner. Therefore, and because it is beyond the wit of man, except perhaps the Germans and the Italians, the law is as it is. Someone at some point has to decide what is an admissible religion or belief for charity law purposes. I put it to the noble Lord that belief is an inadequate word that is incapable of judicial interpretation with any sense.

6.15 p.m.

However, Amendment No. 18 is much nearer the mark when it states: 'religion' includes religion based upon deistic", and so on. That is qualified by the word religion: it must be a religion. I appreciate that the noble Lord does not like that nexus.

Lord Wedderburn of Charlton

Read on.

Lord Phillips of Sudbury

I shall read on. Yes. it continues, on non-deistic premises", but the whole thing is qualified by the word religion and religious beliefs.

Lord Wedderburn of Charlton

Read it all.

Lord Phillips of Sudbury

I have read it all. Everything is posited on religion, so everything, including the beliefs, the revelation and the worship is related to religion. That gives us an anchor, a starting point and something that can be interpreted—it has been interpreted by the common law for centuries. I shall cease at that point and look forward to saying more on Amendment No. 9.

Lord Borrie

I feel that—

Baroness Thornton

Perhaps I could join in for a moment in what is becoming a two-person show. I counted five Aunt Sallys there and I cannot possibly knock them down with the skill with which my noble friend could, but, as a fellow humanist, and a member of the all-party humanists group, I feel that there is a valid question to be answered here. I do not think that it is answered by the most welcome recognition that the Minister has given in respect of Amendment No. 18. My question is: how will those legitimate concerns be addressed?

Lord Borrie

My query is whether the amendment goes far enough. The noble Lord, Lord Wedderburn, referred to the well-known phrase of Lord Denning, which is at least not in short, that religion involves the worship of a supreme being. There are other definitions, one of which the Minister has already said that he is minded to accept, which is to include religions, based upon deistic, multi-deistic", and so on, as set out in Amendment No. 18.

The amendment would add the words "or belief". I leave aside the business about political beliefs, which I do not want to get into. It seems to me that you can believe in a supreme being or in a number of supreme beings. Alternatively, you can believe just as definitely and specifically that there is no supreme being. My question is: what about those who say to themselves. "I do not know"? They may say, "I do not have any belief and I want to belong to an association and want it to be charitable and receive tax benefits and all the rest of it". My question to the noble Lord is, does the word belief include non-belief?

Lord Bassam of Brighton

It is extremely tempting to enter the spirit of this debate and consideration of belief and non-belief, but I caution the Committee to keep within reasonable bounds in considering the Bill. I thought that we were stretching it somewhat in that debate —although I cast no aspersions on any contributor's sincerity. No doubt the noble Lord, Lord Wedderburn, will think that my response is sub-beta minus, but I shall try to respond to his points.

Truthfully, the noble Lord, Lord Phillips has advanced most of the arguments that I support. The problem with extending the heading of charitable purposes from religion on its own to religion or belief is that we have a definition of religion, but we do not for the purposes of charity law have a workable definition of belief.

The noble Lord, Lord Phillips, made the point much better than I will, but "belief" could include just about anything. It might be belief in the all-conquering power of Sudbury Wanderers AFC or Brighton and Hove Albion, or whoever. It could mean that in the way it has been suggested. The first amendment proposed by noble Baroness takes steps towards narrowing down belief by excluding political belief—although again that is qualified in the phraseology that is used, as the noble Lord, Lord Hylton, said, by using the word "predominantly". There are a whole bunch of difficulties in doing that.

I do not underestimate the difficulties here in deciding when a particular belief is political. As it is drafted, in any event, it leaves us with quite a lot of difficulties. At one end of the spectrum, there is a belief system such as humanism, which has been referred to, which is—we would all have to say—serious, cogent and respectable. There is also the fact, which has already been acknowledged, that the British Humanist Association has been registered as a charity for more than 20 years under the charitable purpose of promoting the moral and spiritual welfare of humankind. But you could argue, as the noble Lord, Lord Borrie, was tending to suggest, that non-belief or anti-belief could also be defined in such a way as to promote the moral and spiritual welfare of humankind. So I believe that there is a profound difficulty in this regard.

We take issue with Amendment No. 18, which is grouped with Amendment No. 4, as I tried to indicate earlier, to move us along. The Charity Commission has a function of deciding whether an organisation seeking registration as a religious charity is a religion within the charity laws definition of religion. The commission has no latitude for making up its own definition of religion but is bound to follow the decisions of the courts as to the definition.

The Charity Commission has decided, by applying the common law definition of religion developed by the courts, that non-theistic and poly-theistic faiths can be religions in charity law. No one has taken the commission to court to invite the court to overturn that decision or approach, and we can probably conclude that that is helpful. Therefore there seems to us no practical need to legislate to the effect that non-theistic and poly-theistic faiths can fall within the definition of religion.

However, we recognise that legal uncertainty about non-theistic and poly-theistic faiths continues to exist, and we agree that the noble Baroness's proposed definition might succeed in encompassing the beliefs of such faiths. We would like to give that further consideration. We have already had some useful discussions and we believe that we may be able to come up with something on Report which meets her purpose. Obviously, she will withdraw her amendment today as that is how we work in Grand Committee, but we shall reflect on the wording.

I am sure that we shall have some useful discussions with the noble Baroness, Lady Turner, between now and Report to see if there is something workable with Amendment No. 18. That may well help with Amendment No. 9, proposed by the noble Lord, Lord Hodgson, which the noble Lord, Lord Phillips, said that he might support. We may be able to work out something there that suits all sides of the debate. I do not underestimate the difficulties, but we shall endeavour to do our best.

Lord Wedderburn of Charlton

The Government will not give way on this issue. It is prepared to leave our law in contravention of the Convention on Human Rights—which I do not find a funny subject—and of the Human Rights Act, as they have done in other circumstances. The noble Lord, Lord Phillips, nods his head.

I am referring to Article 9. I can read it if the Minister wishes me to. It says that religion or belief is accepted. Of course it is easier in German, because Weltanschauung means, as the humanists thought, "life stance", or something like that. Of course, it is easier in French. as conviction covers precisely the sort of area that the noble Lord, Lord Phillips, wants. Just because he cannot think of a word, he is going to base his argument on discriminatory law and approve it. I do not find that adequate.

If he wants a long definition but gets it just right, I am with him—I hope to see him come forward with a formula on Report—but he does not think that that suggestion is very serious.

Lord Phillips of Sudbury

No, I said that it is your amendment. You have to do the homework.

Lord Wedderburn

Yes, but I always like to be improved on by critics. Critics have an obligation to be positive, not like the Government, who have an obligation just to be negative. There are international obligations at stake.

Baroness Thornton

I thank the noble Lord for allowing me to interrupt for just a moment. I thought that the Minister was being rather nice. He said that he would take the matter away and talk to you about it, so I am not sure that he deserves to be lambasted in this way. I want to put that on the record.

Lord Dholakia

I was going to make the same point. The Minister was generous enough to say that he would take the matter away and assess how far he could take it forward. Simply to turn on him at this stage seems to be very unfair.

Lord Wedderburn of Charlton

But that was on Amendment No. 18. The noble Baroness pre-empted me because I was about to say that that was on Amendment No. 18. The Minister will correct me if I am wrong. I was addressing Amendment No. 4.

Amendment No. 18 is not enough. I heard what the noble Lord, Lord Phillips, said. He expressed his personal view that you could be on the list only if you were included under "religion". Amendment No. 18 spells out what different sorts of religion there may be. I do not have a religion. I am not similar to those who base their ethical code on revelation, authority or tradition—to take the three headings that Richard Dawkins put in his letter to his 10 year-old daughter. That is clear enough. I am not a religious person. I have a code of ethics. All the people who belong to the British Humanist Association—my noble friend knows more about the National Secular Society—also have codes of ethics. They do not depend on a religion. Amendment No. 18 defines religion in the widest possible way. I am not sure that "non-deistic religion" is particularly accurate, but it will do. We know what it means. The dictionary states that it means an argument that does not involve a supreme being of a religious kind which is the foundation of your code of behaviour.

I have the greatest respect for all of the groups that have been mentioned, whatever their religion. But when they object to my group being included in a tax break, my reaction is: "You pray if you want to, but I'll go on praying in moments of stress to those who may be concerned. I cannot join you in that. I have no objection to anything you do within the law generally, but why deprive me of equality in what is a very serious matter?" It is not a funny subject. It is a very serious miscarriage of justice and of non-discrimination, which has been in our law and been argued about.

I am happy for the Government to find better language on Amendment No. 4, but this argument has been had with government after government, as the British Humanist Association set out in its evidence. For the Government not even to refer to that argument in their reply to the Joint Committee is really pretty bad. If the Minister is going to discuss Amendment No. 4, as I hope he will, and find a way through that, I shall be delighted, but the Government has so far been silent on that issue. My noble friend Lady Warwick must understand that they have been silent on Amendment No. 4 issues. They now want to talk about Amendment No. 18. That is a great step forward, but they will find that they cannot discuss Amendment No. 18 without discussing Amendment No. 4. "Non-deistic religion" will lead them straight into a discussion of what it means. I will be delighted if the Minister takes that extra step and discusses those issues.

I have said that the recommendation of a list is very brave of the Government. I mean that, because I have foreseen almost every group that noble Lords have introduced to the argument. I did not foresee one that my noble friend Lord Borrie introduced; namely, nudist groups. But, of course, groups that people find funny will inevitably enter a claim for the list. You usually find funny things that you do not believe in. If you are a humanist you find most of the religious cases amazing, unbelievable, incredible. But let us suspend disbelief for a moment and ask ourselves whether we want our law to remain based on this discrimination.

6.30 p.m.

Baroness Turner of Camden

I thank the Minister for his response. He said that he was willing to have discussions, at least on Amendment No. 18, as I understand it, and I look forward to that occurring before we reach Report.

I am of course disappointed that we have not been able to persuade the Minister that Amendment No. 4 should be taken on board by the Government. A number of noble Lords who have spoken have raised the issue of belief and non-belief. I should say to my noble friend Lord Borrie that I thought our formulation met "non-belief". If it is felt that we should look at the matter again, I do not see why we should not do that between now and Report.

Certainly I do not expect the Government to write "Weltanschauung" into the Bill—some of us may not know what that means—but it seems to me that we have gone quite a long way in this discussion today. We have given a very good airing to the issues involved. As my noble friend Lord Wedderburn spelt out with great clarity, they are matters of great concern to large numbers of people. Far more people belong to the ranks of the secularists and humanists than we sometimes give them credit for.

Very many of us belong to that section of society which does not believe in organised religion and it is therefore important that we get the wording right. We should make it quite clear in the Bill that we are not discriminating against people without belief. We have to find a suitable form of wording and I welcome the opportunity to discuss the issue between now and Report. We will of course return to the matter at Report but, in the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 5 to 7 not moved.]

Lord Hodgson of Astley Abbotts

moved Amendment No. 8: Page 2, line 21, leave out paragraph (k).

The noble Lord said: Amendment No. 8 seeks to remove subsection (2)(k)—the advancement of animal welfare—from Clause 2. Again for the benefit of the Committee, I should emphasise that this is a probing amendment. We wish to discuss with the Minister the definition of the advancement of animal welfare. We agree that the advancement of animal welfare is a cause that could perfectly properly be included as a charitable purpose; however we believe that the full implications of the paragraph need to be given an airing as there has been confusion on the topic. Indeed, it caused some concern during the Joint Committee's discussion on the meaning of public benefit.

The broadness of the charitable sector was being discussed and the Minister, Fiona Mactaggart, from the other place said: I do not think that you could find criteria which could be equally applied to a village hall, to the Anti-Vivisection Society, to Eton, to a cottage hospital. I do not think that you could write criteria which could sensibly be operated in a way which really does cover the range of charities". Those words have been quoted several times but it is worthwhile placing them on the record in order that the Minister may deal with them.

Out there in the wide world, the mention of the Anti-Vivisection Society as falling within the charitable sector caused concern. We do not believe that the inclusion of animal welfare as a charitable head should mean that anti-vivisectionist groups could potentially gain charitable status. I believe the Minister may have been misquoted—that it was a slip of the tongue—but perhaps the Minister could confirm this when he comes to reply.

Not surprisingly, the RSPCA and the Charity Commission have both contacted us on this point, concerned about our intention in tabling the amendment. But both the Charity Commission and the RSPCA encouraged the amendment on the understanding that it sought clarification and open debate on the point I have just mentioned.

The following section from the Charity Commission's website is a useful point of reference because it provides a commentary on the descriptions of charitable purposes in the Bill. Under the section on animal welfare it states: The advancement of animal welfare includes any purpose directed towards the prevention or suppression of cruelty to animals or the prevention or relief of suffering by animals. Examples of the sorts of charities and the sorts of charitable purposes falling within this description include: Charities promoting kindness and to prevent or suppress cruelty to animals: Animal sanctuaries; The provision of veterinary care and treatment; Charities concerned with the care and re-homing of animals that are abandoned, mistreated or lost; Feral animal control, e.g. neutering".

That list indicates that the commission sees charitable purposes for animal welfare to be for quite a limited field of work, but it is still open to interpretation. The first description of the purposes by the commission is charities that promote, kindness and to prevent or suppress cruelty to animals". It cannot be entirely unimaginable to see that definition as being construed as at least one of the purposes of an animal rights group.

No one should be under any illusions as to the length that animal rights groups are prepared to go. I speak from some bitter experience as a non-executive director of one of Britain's largest regional breweries, with 2,000 public houses. One of our pubs served the owners and operators of a farm which, with full legal compliance with the Home Office, bred animals for research. The publican was approached by an animal rights group to ask him to ban the owners of the farm from his pub. His initial refusal led to an escalating programme of boycotts and violence culminating in the firebombing of the pub. The police subsequently visited us and advised us as main board directors to remove our home addresses from the Companies House return to reduce our own exposure to similar attacks. I must say that I have difficulty in seeing how any charitable purpose could be associated with that sort of operation and, given their recent legislative proposals, I doubt that the Government do either.

None of us denies that animal welfare is now an issue that touches public consciousness and that by including advancement of animal welfare within the list of purposes we reflect much better what the public understands as to what constitutes a charitable activity today. But what we wish to hear from the Minister is a statement that the inclusion of animal welfare as a charitable purpose is limited to the reasonably narrow descriptions listed above on the Charity Commission's website, and that anti-vivisectionist groups or animal rights groups that adopt violent means will not be able to attain charitable status. I beg to move.

Lord Phillips of Sudbury

I would only add to the noble Lord's comments that I had in my office two or three years ago members of an American group which was purportedly for animal welfare, whose real purposes when I asked them about the ins and outs turned out to be those of the sort of group to which the noble Lord referred. The only reassurance that I can give him—and the Minister's reassurance will be far more important—is that under the charity law as I perceive it, one had to say that they had no right to charitable status, and that was that.

Lord Bassam of Brighton

I am very grateful to the noble Lord, Lord Hodgson of Astley Abbotts, for raising this issue by virtue of this amendment. I can quite understand his concerns, particularly having heard the harrowing circumstances of the case that he understandably brought before the Committee.

Perhaps it is worth saying that the advancement of animal welfare was not included in the original list of charitable purposes proposed by the Strategy Unit. It was added by the Government largely in response to comments received during the consultation on the Strategy Unit's report. The promotion of animal welfare, as I believe the noble Lord, Lord Hodgson, would readily acknowledge, is well established as a charitable purpose. My understanding is that there are roughly between 1,500 and 2,000 animal welfare charities on the register. As we said in our reply to the Strategy Unit paper, animal welfare is a major area of charitable endeavour which has, and in our view should continue to have, strong public recognition. I think everyone would agree that animal welfare charities such as the RSPCA make a substantial contribution to our national life. The noble Lord, Lord Hodgson, was right to draw the Committee's attention to the way in which the matter has been defined in the past. In general, the advancement of animal welfare is taken to include any purpose directed towards the prevention or suppression of cruelty to animals or the prevention or relief of suffering by animals. The noble Lord quoted a list of five points, and it is not worth my repeating them, but that is our understanding of the advancement of animal welfare so far as concerns charitable purposes.

We also take the view that there is no necessary inconsistency between accepting the advancement of animal welfare as a charitable function and accepting medical research charities, which may use animal experimentation in their research, particularly on the basis of advancing health. As I explained in my reply to the point about conflict resolution, it is possible for two seemingly opposing purposes to be charitable provided that they are both capable of demonstrating public benefit. It is the public benefit test that is important.

That is well illustrated by case law in the field, which, as I understand it, goes back to 1948 and a case, which is well known in charitable circles, concerning the National Anti-Vivisection Society. In that case, the court considered whether a society that had as its object the total suppression of vivisection was established for charitable purposes. The judges decided that it was not. One of their main reasons, which we believe still holds good today, was that any public benefit that might result from the abolition of all experimentation on animals would be far outweighed by the detriment to medical science and research and, consequently, to public health. An organisation that provides some public benefit, but at the cost of greater public detriment, cannot be a charity. That was an important case that determined the issue, and it still has a bearing on the debate about the promotion of animal welfare today.

Therefore, we accept the point made by the noble Lord, Lord Hodgson, about the importance of having a definition that is reasonably narrowly confined, so that it cannot be abused— the noble Lord, Lord Phillips, gave an example of that—by those who seek to suppress forms of animal experimentation that have a wider benefit.

Lord Hodgson of Astley Abbotts

Perhaps I may ask the Minister one question. Let us assume that an animal welfare group obtains charitable status in a perfectly proper way and, later, after having obtained charitable status, the leadership of the group decides to adopt more direct action in promoting its cause that might include acts which break the law. How does the continuing public benefit test, as applied by the Charity Commission, interact with those charities, albeit registered quite properly, that have decided to move towards the breaking of the law? Is there any direct connection between the one and the other?

Lord Bassam of Brighton

I would expect the Charity Commissioners' regulators to intervene. From the way that the noble Lord set out his example, it would be clear that that organisation had changed its method of operation and that it would fall foul of its original stated purpose. There would then obviously be a question about whether it could continue with its charitable status. It is not for me to make that judgment, but it is a judgment which the Charity Commissioners may be drawn towards.

Lord Phillips of Sudbury

Perhaps I may help. First, charities are not made to suffer for the sins of their trustees. In the case mentioned by the noble Lord, the trustees would, first, be acting unlawfully and, secondly, they would be acting outside the objectives of the charity. Thirdly, therefore, were such a case to be brought to the attention of the Charity Commission. it would be under a duty to intervene and to tell the trustees to desist, otherwise, under the commission's powers, they would be removed.

6.45 p.m.

Lord Wedderburn of Charlton

This is a serious amendment. I would be against it in the form in which it appears. With respect, the noble Lord is launching a nuclear weapon to crack a popular nut. All that he mentions as real objections are direct action and things like that. He is right of course in saying that that would concern the test of "public benefit". He and I might have opposite views on "public benefit"—the Charity Commissioners will have to decide that or, in the end, the courts. It is not a basis on which you should move to delete, the advancement of animal welfare if, on other grounds, that should be in the list. That is an example of the problem of having an extended list.

The noble Lord, Lord Hodgson of Astley Abbotts, said nothing to justify the paragraph being totally struck out. Let us take as an example a little group that keeps puppies and advances their welfare. Noble Lords may be amused, but would that not be a society that would be struck out as soon as it appeared on the agenda? It is another example of an organisation being judged by activities that some of their adherents would claim fall into the category of "animal welfare", but to which the noble Lord and I might object because they are not "for the public benefit" in their transgressing the normal rules of social conduct. It is an example of the media giving a lot of attention to groups which. as the noble Lord, Lord Phillips, said, act unlawfully or on the margins of the law, but also have adherents who genuinely are in organisations for the advancement of animal welfare.

I would like to make a point that we did not cover in previous debates; namely, that here, and in many previous paragraphs, "advancement" is a complex subject as the case law stands. I am not trying to go back to old law once we have passed the Bill, but the "advancement" of various things is the basis of the distinction made by Lord Denning between a person saying his prayers privately in his bedroom and a community praying and advancing its beliefs through society at large. Lord Denning said that the first was not for the "advancement" of religion. As the noble Lord probably knows, exactly the same problem has beset enclosed orders of nuns. There was an absolutely marginal case a few years ago. A group of Carmelite nuns wanted to have their organisation recognised, first, as charitable, which we are discussing, and secondly, as being for the public benefit. The problem of "advancement" of religion arose if they were to stay silent and did nothing that touched the public at large, as certain of them did. It was a problem not merely of whether it was "for the public benefit", as the noble Lord has acknowledged, but also in respect of the first test: was it a charitable purpose? The noble Lord must accept that he goes too far with the amendment, whatever its other merits.

Lord Hodgson of Astley Abbotts

I hope that I made it clear to the Committee in the first place that my purpose was to identify the issue of extremism in relation to animal welfare and to ask the Minister to explain how that was going to be dealt with. The Minister did that and his comments were amplified helpfully by the noble Lord, Lord Phillips. I am perfectly satisfied with the Minister's response, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Bassam of Brighton

Given the hour, it may be convenient for the Committee to adjourn until Wednesday 9 February at 3.30 p.m.

The Deputy Chairman of Committees (Lord Lyell)

The Committee stands adjourned until Wednesday 9 February at 3.30 p.m. Committee adjourned at eleven minutes before seven o'clock.