HL Deb 28 January 1958 vol 207 cc231-44

3.20 p.m.

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD TERRINGTON in the Chair]

Clause 1:

General provision as to recreational and similar trusts, etc.

1.—(1) Subject to the provisions of this Act, it shall be and be deemed always to have been charitable to provide, or assist in the provision of, facilities for recreation or other leisure-time occupation, if the facilities are provided in the interests of social welfare:

Provided that nothing in this section shall be taken to derogate from the principle that a trust or institution to be charitable must be for the public benefit,

(2) The requirement of the foregoing subsection that the facilities are provided in the interests of social welfare shall not be treated as satisfied unless—

  1. (a) the facilities are provided with the object of improving the conditions of life for the persons for whom the facilities are primarily intended; and
  2. (b) either—
    1. (i) those persons have need of such facilities as aforesaid by reason of their youth, age, infirmity or disablement, poverty or social and economic circumstances; or
    2. (ii) the facilities are to be available to the members or female members of the public at large.

LORD CONESFORD moved, in subparagraph (ii) of subsection (2) (b), after "or" to insert "the male members or the". The noble Lord said: The object of this Amendment is to remedy the defect, as it seemed to me, of the clause to which I drew attention in the debate on the Second Reading. Subsection (2) of the first clause lays down certain minimum requirements. Unless these requirements are satisfied the recreational trust or institution will not be considered charitable. If they are satisfied it will still be for the court to determine, in a disputed case, whether the particular trust or institution is in fact charitable.

The Committee will remember that my noble and learned friend the Lord Chancellor, in explaining the Bill in the debate on Second Reading, dealt with the case of the Commissioners of Inland Revenue v. Baddeley, the case mentioned in the Explanatory Memorandum to this Bill. He said that, while it was not intended in any way to reverse or alter that decision by legislation, it was desired to relieve from anxiety certain institutions and charities which thought, as a result of that case, that their own charitable status might be in doubt. My noble and learned friend explained that it would have been possible to deal with this problem by two alternative methods. It would have been possible to list the institutions which we wished to treat as undoubtedly charitable and expressly to validate their trusts. That alternative was deliberately rejected by Her Majesty's Government, who preferred to lay down a principle which the courts could apply and develop.

The point was so admirably and clearly put by my noble and learned friend that perhaps I may read three sentences from his speech [OFFICIAL. REPORT, Vol. 207 (No. 23), col. 13]: It has therefore been necessary—and very difficult—to find a legislative formula which would clarify the position without upsetting those decisions (including that on the Baddeley case itself) or interfering with the law of charity. There are many and obvious good reasons against attempting to do this by setting out a catalogue of institutions and declaring their trusts validated. The Bill therefore proceeds by declaring a principle which is to be applied in individual cases by the courts and can be developed by them in the future according to the changing circumstances and needs of the tines. Let me say at once that, in my opinion, and also, I feel certain, in the opinion of the Committee, the Government were undoubtedly right in preferring not to catalogue the institutions and then to validate their trusts, but to declare a principle. But surely they are right in this only on one condition: that the principle to be laid down is just and right and commends itself to the conscience and good sense of the community.

Does the principle, as it at present stands, satisfy those conditions? What does this new principle say? It says that a trust or an institution can be charitable although all its benefits are restricted to women, but that an otherwise identical trust, whose benefits are restricted to men, is incapable of being a charity. That is a very odd provision to lay down as a principle to be observed in the future. There is, as I ventured to suggest on Second Reading, all the difference in the world between removing an existing disability in law and creating a privilege. We are quite accustomed to removing disabilities from women in our legislation, but it is quite another matter to create a privilege.

I have carefully read the speeches of the learned Law Lords in the case of Commissioners of Inland Revenue v. Baddeley, from which, as I have said, this legislation arises. I should like to remind the Committee that in that case the trusts were held not to be charitable, apart altogether from the fact that the beneficiaries constituted too restricted a class. It is, I think, by no means clear that, if the trusts of the women's institutes fall within the words of subsection (1) of this clause, the courts would be likely to hold that the women's institutes were not charitable merely because the benefits were confined to women. Nevertheless, I shall not trouble the Committee with a consideration of that matter, for this reason. I am quite content, as I am sure the Committee will be content, to accept from the Lord Chancellor that the point may be sufficiently doubtful to make it desirable to give women's institutes the benefit of the sub-paragraph we are now considering. My Amendment, therefore, does not seek in any way to modify the protection given to women's institutes and similar bodies by the Bill as introduced; it seeks merely to give, on the same conditions, the same protection to men.

What is it that my noble and learned friend the Lord Chancellor fears would result from the adoption of my Amendment? I think and hope that I represent him correctly if I describe his fears as follows. He fears that there might be a reversal, or a possible reversal, of a view of the law long held, that recreational institutions or clubs confined to men of full age are to be treated as non-charitable. I appreciate the anxiety of Her Majesty's Government not to disturb established law, but I am a little troubled by a doubt whether my noble friend's possible fears in this matter are well founded. So far as any decided cases are concerned, should similar facts recur in future, none of them would be decided differently, if my Amendment were accepted, unless the ratio decidendi under which the institutions were held to be non-charitable was that women were excluded from those able to benefit. I do not think that that applies to many cases. If I may mention one authority quoted in the Baddeley case, which my noble and learned friend the Lord Chancellor will very well remember, because he was counsel in the case—Williams Trustees v. the Commissioners of Inland Revenue, reported in 1947: Appeal Cases, where the beneficiaries were Welsh people in London—that would still be decided in exactly the same way, should similar facts recur, even if my Amendment were adopted. For those reasons I think that there is merit in an Amendment which accepts fully the words that give protection to the women's institutes but avoids giving women's institutes a special privilege.

In his speech on Second Reading the Lord Chancellor referred to the Report of the Royal Commission on Taxation of Profits and Income, which sat under the noble and learned Lord, Lord Radcliffe. There are several paragraphs in the Final Report of that Commission which deal with charities—your Lordships will find them in paragraphs 168 to 175. That influential body, sitting under that distinguished lawyer, strongly recommended a new definition of "charity." I can imagine many excellent reasons for not acting, or not immediately acting, on that recommendation; but there is surely something strange in neglecting to follow the advice of such a body but, nevertheless, introducing legislation to vary the laws dealing with charitable trusts by introducing a wholly new principle, never, I think, suggested either by the courts in any judgment of a learned Law Lord or by any body which has ever considered the problem of charities and charitable trusts, a principle, moreover, which does not appear to be based on considerations of law or morals or common sense. I beg to move.

Amendment moved— Page 2, line 7, after ("or") insert ("the male members or the").—(Lord Conesford.)

LORD FARINGDON

In two words, as a layman, I should like to express my feeling about the rectitude of this Amendment, so eloquently and intelligibly delineated by the noble Lord, Lord Cones-ford, for the benefit of your Lordships. I hope that Her Majesty's Government will see their way to accept it. It seems to me wholly irrational to make this special case for women. I understand the reason, which has been so ably and clearly explained by the noble and learned Viscount the Lord Chancellor, but it seems to me that a recreation, in a case where the trust would otherwise be charitable, might appeal to one sex only. In spite of the equality of women, recreations are still to a considerable extent limited by the sex of those who take part, and I think that the noble Lord's Amendment is entirely logical. I believe that it is desirable and I hope that Her Majesty's Government will accept it.

THE LORD CHANCELLOR (VISCOUNT KILMUIR)

In spite of the eloquent appeal, urged with great modesty as to his legal position by the noble Lord, Lord Faringdon, and the most comprehensive speech of my noble friend Lord Conesford, I cannot advise the Committee to accept this Amendment. I hope your Lordships will bear with me while I indicate the reasons. There are two main reasons which I venture to advance in answer to my noble friend. The first is that the principle on which the Bill is based is a sensible and reasonable one. The second, I think, is even more compelling. If my noble friend will look at the Bill he will see that the Long Title says: An Act to declare charitable under the law of England and Wales the provision in the interests of social welfare of facilities for recreation or other leisure-time occupation,… This is a Bill which seeks to declare as charitable in this connection the position that obtained before the judgment in the Baddeley case, and not, as I pointed out on Second Reading and as my noble friend quotes to-day, to change and enlarge the law of charity.

The formula on which the Bill is based has certain clear characteristics. There are two constituents of what it makes charitable: first, provision of facilities for recreation or leisure-time occupation, and secondly, that these facilities must be provided in the interests of social welfare. As my noble friend said, the Bill does not give a definition of social welfare, but states the minimum, the sine qua non, which must exist if social welfare can be implied. Therefore it is expressed in negative form—namely, that social welfare under the Bill does not exist unless it conforms with two requirements or limitations. The first is as to the object or aim or intention of the benefits—that is, the object of improving the conditions of life of the classes of people affected. The second limitation is as to the classes of people. There are seven classes. Five of these are of people in need—first, by reason of youth; secondly, by reason of age; thirdly, by reason of infirmity or disablement; fourthly, by reason of poverty, and fifthly, by reason of special social and economic circumstances. I gave to your Lordships, as it happened to me, one near to my own heart, the example of merchant seamen, who come within special circumstances when they come to a different port. Then there are the two general classes: first, the public at large, and secondly, the one to which my noble friend takes exception standing alone, the female members of the public.

I suggest to your Lordships that the principle that excludes the providing of recreation or leisure-time occupation for improving the conditions of life of male members of the public is, first of all, common sense, because one must deal in these matters with the facts as generally known. I ventured to use a phrase in reply to your Lordships on Second Reading which I think was first put forward by Sir Reginald Hill and appeared in many of these cases: that is, the question of self-regarding clubs. It is not a fault in a principle that it does not include the ordinary men's clubs where men go for leisure-time occupation, which they may think, in the words of the Bill, improve the conditions of life of themselves, but in which the time is often spent in a very happy condition around a convivial part of the club. It has never been held—and I do not think it is common sense—that that should be made a charitable purpose.

That is the difference that has always been drawn, and if my noble friend will look at the innumerable authorities, which he will find collected in the case of Williams, to which he has already referred, he will see that that distinction is one that has always been made in the law of charity, as I have understood it. That is the general point, and that is the point at which we stuck. We stood by that and have not made any extensions. But my noble friend will appreciate that there is still the further point—and this is vital to the Bill which I have put before your Lordships—that before the Baddeley case that was the law, and the limitations of charity before that case excluded the men's clubs and the bodies on the borderline that I have mentioned.

I should like to elaborate that a little for a moment. The formula in the Bill has been devised with the object of confirming the charitable status of those bodies that were regarded as charitable before the Baddeley decision but which are now doubftul of their position as a result of dicta uttered in that case. Among the bodies about which doubt has been expressed are women's institutes, which are, as their name indicates, confined to women. My noble friend agrees, and I am sure he would be the last person in your Lordship's House to desire any anxiety or doubt about the continuance of women's institutes. But may I take it from the other aspect? I know of no recreational clubs—and I have had the most elaborate inquiries made—confined to men, which were regarded as charitable before the Baddeley case. The National Council of Social Service have agreed that no such clubs have been treated as charitable in the past, and they cannot think of any that ought to be made charitable now.

It is necessary to make the formula in the Bill cover women's institutes, because, although they are probably mainly educational, their activities undoubtedly have a recreational complexion as a result of which their status is thought by some—and I give my noble friend the assurance that this view has been expressed in responsible quarters—to have been put in doubt by the Baddeley decision. If the formula were enlarged so as to include recreational clubs for men, which would be the effect of the noble Lord's Amendment, there would be a grave danger of changing the law and opening the doors of charity to what I have termed self-regarding clubs for men, which are now excluded by a line of judicial decisions, and any such enlargement of the law of charity would be contrary to the Government's intention, which, as I have said, is simply to restore the position as it was thought to be before the Baddeley case.

That is the argument in law, and your Lordships may be consoled—I hope the noble Lord, Lord Faringdon, will be—by the fact that these inquiries, which I assure your Lordships have been made in the most exhaustive way, have not found any body which would be within the previous law of charities that will be excluded. But to raise the question of doubt as to self-regarding clubs would, I think, be both a retrograde step and also contrary to the intention of this Bill, which is to restore the position to that which existed before the Baddeley case. Therefore, I hope, with that explanation, that my noble friend will not press the Amendment. I felt, in answer and in courtesy to the elaborate argument he produced, that I should try to explain the position as it appears to the Government; and that I have done.

LORD SALTOUN

One likes to understand what one is doing. I should like to ask Her Majesty's Government a question about this clause. Your Lordships will remember that before the last war the Government were anxious to stimulate athletics in the country and there was a "Keep Fit" movement. I remember well in one place that some charitable person gave a field and all the farm-servants of the district co-operated and made it into a recreational place for all the farm-servants of the district. I want to put this case. Suppose some charitable person had endowed that institution and provided also a ground for basketball for the girls, would the club thus formed be a charitable institution so far as the basketball ground for the girls was concerned, but not so far as regards the football ground for the men, unless the men had one or two girls regularly playing with them? That seems to be the meaning of these two lines in the Bill, and I should like to be enlightened on them.

THE LORD CHANCELLOR

It may be convenient if I deal with that point now. First of all, I would remind my noble friend Lord Saltoun, for his peace of mind, of what I said on Second Reading: that in our native land the law of charity is in a different position and does not require the assistance of this Bill. This does not mean that I am not going to answer his question, but I know that he and I always feel for what might have to be the effect over the Border. I think his point is covered at the top of page 2 of the Bill, where the classes are defined. Paragraph (b) reads: either— (i) those persons have need of such facilities as aforesaid by reason of their youth, age, infirmity or disablement, poverty or social and economic circumstances ". Although I am not pledging what the result of an appeal to the House of Lords (which Heaven forfend, on the point my noble friend has mentioned!) would be, it seems to me that the case he has put would almost certainly come within "youth … poverty or social and economic circumstances", and it would be entirely irrelevant whether the men or the maidens played together or separately, or whether the maidens were debarred the privileges of the club. I think that deals with the point.

Quite seriously, I can tell the House that I have spent months in trying to get this matter right and to provide the balance between the deserving and needy causes and the deserving and needy people, and not extending the basis of charity to something which may be desirable and pleasant but is not something for which people should get off income tax if they pay money towards it. That is the blunt point here. I think one can draw the line between bodies for those in need, bodies for those that are for the benefit of the community generally, bodies such as women's institutes, and other bodies which, as I say, though entirely pleasant and suitable for people to go to, are not objects for which people ought to get relief from income tax if they subscribe.

LORD SALTOUN

I am much obliged to the noble and learned Viscount.

LORD FARINGDON

May I ask the noble and learned Viscount the Lord Chancellor two questions? He held that, in the event of his accepting the Amendment of the noble Lord, Lord Conesford, the men's clubs of the type of which he speaks would no longer be held to be ineligible as charities on account of their self-regarding nature. If that is so, would it not also be true that self-regarding clubs for women will, under this Bill, become eligible as charities?

THE LORD CHANCELLOR

With regard to the noble Lord's first point, I think it certainly would reopen the question. With regard to the noble Lord's second point, there is, of course, the double limitation that I have mentioned. If one takes women's institutes (the example I have particularly in mind), I think there would be no doubt that both the requirements to social welfare are provided—namely, that the object is to improve the conditions of life, and that they come within paragraph (b). I think the real point is the first one—that the insertion of these proposed words would reopen a question which at the present day, I am happy to say, is closed.

LORD CHORLEY

I have a considerable amount of sympathy with the point of view put forward by the noble and learned Viscount, and it would be ridiculous if a large number of ordinary men's clubs, which are called self-regarding clubs and which are run for social pleasure, were relieved of income tax through being brought within the ambit of this measure. On the other hand, I think the Lord Chancellor has not answered my noble friend Lord Faring-don satisfactorily in regard to the position of women's clubs of exactly the same kind. It seems to me that, with the object of protecting the women's institutes—which everyone would wish to protect—he is casting the net a great deal wider; and unless we are very careful we shall find a substantial number of women's clubs, if not already in existence, coming into existence, with the object of taking advantage of the provision. If there are only women's institutes to protect, would it not be better to face up to the matter rather crudely and include them in the Bill, instead of opening what might turn out to be a wide avenue along which a large number of carriages may be driven daring the next years?

THE LORD CHANCELLOR

I am sorry to talk so much, but these are interesting points which have been raised, and I want to try to satisfy noble Lords. I think the answer to the noble Lord, Lord Chorley, is that one tries to find a principle, and he knows the difficulty of getting a principle which covers the point exactly and which is not subject to attack from each side of the line. But, of course, the principle must be viewed in the light of existing circumstances. That, as the noble Lord knows very well, is one of the principles of construction of the Statute—namely, the state of the law at the time the Act is passed.

As I said in my earlier remarks, one has it perfectly clear, on the one side, that we have not been able to discover any men's associations which come within the same description as women's institutes. We have the position—and I think the noble Lord sympathised with it—that the clubs are mostly self-regarding. On the other side, we have the position that, broadly, I think it is fair to say, women have not had the same facilities for ebb-making as men; and one had, before the Baddeley decision, the fact that a great deal of money had been subscribed and left for women's institutes on the basis that they were charitable.

I say that with the greatest good temper, because after one has spent many months trying to find a formula it is always a pleasure to see if someone else can deal with the problem better. I think the formula which we have found— namely, that as the minimum for social welfare the object must be that of improving the conditions of life for the persons for whom the facilities are primarily intended, coupled with the provision of facilities for recreation or other leisure-time occupation,"— does provide a safeguard in regard to the female aspect of this matter because, as I said earlier, we are dealing with a background of fact which is different from that in the case of men.

I have tried to answer all the questions which have been put to me, and I hope that my noble friend Lord Conesford will not press an Amendment whose effect would be to raise a danger of altering the law from the law as it existed before the Baddeley case.

LORD CHORLEY

I regret that I am not entirely convinced by the argument of the noble and learned Viscount. I am quite sure that there are women's clubs in London at the present time in which there is a good deal of educational work yet which are primarily social clubs, and which I think might well come within this formula.

THE LORD CHANCELLOR

How would they come within this formula if they are primarily social clubs?

LORD CHORLEY

They do educational work. They are self-regarding in the sense that they have the pleasures of an ordinary social club, but they also provide lectures and undertake educational activities. It would not be difficult for them to alter their constitution in order to get the advantage of this Bill. If the whole object of this clause—and I am entirely on the side of the noble and learned Viscount in his desire to help the women's institutes—is to help the women's institutes, why not put them in the Bill? I quite appreciate that it is aggravating for the noble and learned Viscount, after all the trouble he has taken, to have these criticisms fired at him in this way. But I do suggest that, if we are to make the position of the women's institutes safe, the best way of doing it is to put them straight in the Bill and not let in a large number of women's clubs which have an educational side to their work and which by means of this Bill may be able to avoid liability to income tax.

THE LORD CHANCELLOR

If the noble Lord looks at the Bill, he will see that I have put them in subsection (3) as an example.

3.59 p.m.

EARL WINTERTON

I hesitate to intervene in this legal argument, not being possessed of legal knowledge, but I feel that it would be for the advantage of those Members of your Lordships' House who have no legal knowledge if the Lord Chancellor could explain the meaning of what appears to be an extraordinary term, "self-regarding" clubs. There has been a constant reference to them, but nobody has explained what the term means.

THE LORD CHANCELLOR

"Self-regarding" is shorthand for a club which exists mainly or substantially for the enjoyment of its members, and not for the propagation of some more rarefied motive. I think that is the best I can do. If my noble friend Lord Winterton will come with me to the club of which we are both members I will illustrate it more graphically.

LORD CONESFORD

I want first of all to thank my noble and learned friend the Lord Chancellor for his clear and full explanation. He puts me in some difficulty, for this reason: that, quite frankly, he has not convinced me on the merits of my Amendment. At the same time, I would assure him that it is not my desire radically to change the law as hitherto decided in regard, to put it briefly, to men's clubs. Since, with the full weight of his authority, he says that my Amendment would run the serious risk of changing that whole law, I do not wish to press the Amendment on this occasion, But I hope the publicity which may have been given by the raising of this point may at a later stage of the Bill induce one of the learned Law Lords to give us the benefit of his views on what seems to me a most important change—the statement in this sub-paragraph of a principle which is quite novel in the laws of charity and which does not seem to me to be reasonable.

I agree with one point raised by the noble and learned Lord, Lord Chorley. It is most important to bear in mind that we are dealing not only with existing institutions but with the possible effect these words may have on future institutions. There is already a mention in this Bill of some trusts that are expressly validated, namely, the miners' welfare trusts. I should have greatly preferred, if women's institutes are the only women's charities that it is intended to protect by these words, to mention them expressly in the way we mention the miners' welfare trusts, and leave out the words "or female members" in the clause we are considering. That would completely protect the women's institutes without introducing a wholly novel principle for the future. If we are going to introduce this novel principle, I think it requires a good deal of consideration before we decide to create a privilege which, as far as I know, has never been suggested in any decided case.

I would remind the House, as also my noble and learned friend reminded it on the last occasion, that the first Statute we have to consider on this subject is a statute of the year 1601. There has been an immense volume of decided cases, and to suggest a principle which, as far as I know, has not been suggested in any of them is to take a step which I think is most questionable. On the other hand, I approve of the general intention of the Bill. I must yield to the authority of the noble and learned Viscount the Lord Chancellor when he holds that my Amendment as it stands would run the risk of altering the established law in a way in which I do not wish to alter it. In asking leave to withdraw the Amendment, I would only add that I hope some learned Members of this House may give us the benefit of their views at a later stage. I ask leave to withdraw this Amendment.

Amendment, by leave, withdrawn.

Clause 1 agreed to

Remaining clauses agreed to.

House resumed.

Bill reported without amendment.

House adjourned at six minutes past four o'clock.