CHARITABLE TRUSTS

HL Deb 13 May 1959 vol 216 cc364-415

3.7 p.m.

LORD NATHAN

rose to draw attention to the White Paper on Government Policy on Charitable Trusts in England and Wales (Cmd. 9538) arising out of the Report of the Committee on the Law and Practice of Charitable Trusts (Cmd. 8710); and to move for Papers. The noble Lord said: My Lords, it is almost to the month exactly ten years since the noble Viscount, Lord Samuel. whom we all rejoice to see here in his place to take part in this discussion, opened a long debate calling attention to the need for the encouragement of voluntary action to promote social progress. That arose out of a book then recently published by the noble Lord, Lord Beveridge, Who would certainly have been here to participate in this debate had it not been for the heavy bereavement he has sustained and in which all your Lordships will sympathise with him.

The outcome of the debate which the noble Viscount opened was a statement by my noble friend Lord Pakenham on behalf of the Government of the day, undertaking to set up a Committee to look into charitable trust law reform. It was stressed in all parts of the House, which was of one mind on this wholly non-political issue, that the problem in its various aspects was one of pressing urgency. That was ten years ago. The Committee was appointed by my noble friend Lord Attlee—then Mr. Attlee, Prime Minister—and I was appointed Chairman of that Committee. We set to work in January, 1950. Over a hundred years previously a Committee of Inquiry into the law of charities had been set up under the chairmanship of Lord Brougham. That Committee took a period of seventeen years to conclude its labours, which were ultimately found, in essence, to be incorporated in the great Charitable Trusts Act of 1853.

The Committee of which I was Chairman started upon its task in January, 1950, and in the summer of 1952 reported to Sir Winston Churchill, who had then become Prime Minister. It was in the summer of 1953, six years ago, that the Report was debated. On that occasion, the Motion was also moved by my noble friend Lord Samuel. The debate was long and covered a wide field—indeed, it occupied no fewer than 100 columns of the OFFICIAL REPORT. It was two years after that debate of 1953 before there was any movement on the part of the Government, and the movement, when it came, was the publication of the White Paper referred to in the notice of Motion. Two years after a debate, which was itself more than a year after the presentation of the Report, can hardly be called rapid progress. And the rest, since 1955, has been silence.

In the 1949 debate on Lord Samuel's Motion I spoke in the light of my own experience of a good many years of voluntary service: in the 1953 debate, I spoke as Chairman of the Committee whose Report was under consideration: to-day, I speak with further practical experience as Chairman of the Isaac Wolfson Foundation, established four years ago, the latest recruit to the small but notable band of our great national charitable trusts.

In bringing this subject forward today, I have two main objectives. In the first place, the White Paper presented in 1955 has not yet been debated, and certainly should be. Of course, it is right that the public must be allowed time in which to form its views, in order that the Government may know how public opinion stands; but, even allowing for all that, and the importance of this subject to vast masses of Her Majesty's subjects. close on four years must surely be accounted enough in which to gauge public opinion. This debate, I hope, will bring public opinion to a focus. In the second place, since the publication of the White Paper there has been no evident progress at all. During the past four years not only has there been silence; there also, to all outward observance, has been complete inactivity. I hope that the discussion to-day may lead to some indication from the Government of what they actually intend to do and how soon they intend to do it.

In the light of our past discussions, I scarcely think it necessary to stress the importance of charitable trust law reform. For a hundred years it has excited the minds of many of those qualified by their own activity in the field of voluntary service and charity, and since the passing of the Act of 1853 there has been a constant movement pressing for reform. Why is it important that this matter should not be allowed to remain much longer as it is now? I will give your Lordships what seem to me to be some, at least, of the fundamental and pressing reasons. In the first place, I think that I shall carry your Lordships with me when I suggest, as a general proposition, that voluntary action in itself is valuable in the community and should be encouraged. It was my noble friend Lord Pakenham who, in the debate ten years ago, speaking then for the Government of the day, said that: Without voluntary service the State would lose its soul. I adopt that phrase. Voluntary service is a vital strand in the social fabric. Your Lordships may have seen yesterday that The Times had a valuable turnover article very revelant to these contentions and very apt in point of time.

Another reason why matters cannot be left as they are and why reform is pressing is that charitable trusts are an important form of public service, and voluntary bodies should be able to play their part to the full. No unnecessary obstacles should be placed in their way. I think that your Lordships will feel that all the more when I recall that the number of charitable trusts, so far as known, is no less than 110,000—possibly a great many more. Their funds, irrespective of land, are estimated to be of a value of upwards of £200 million, and their investments in land are enormous, though the exact extent is not precisely known. That shows how, from every point of view—from the point of view of the values involved in terms of property, the number of people involved in terms of service, and the vast, incalculable number of beneficiaries—this is a matter of prime public importance.

Another reason why the moment for action has come, and more than come, is that the law of charitable trusts has been the object of criticism, as I have said, for more than a century, and particularly as regards that peculiar, perhaps somewhat obscure, central doctrine of charitable law which is recognised as the cy-près doctrine. The law as it stands constitutes a major barrier to the effective working of trusts in more than one respect. It is not only that since the Act of 1853 the efforts have not yet culminated in reform. The last decade, the last twenty years, have seen more than one heavy attack on charitable objects by the Commissioners of Inland Revenue, whose activity, however disinterested their motives, cannot have anything but an enervating and unnerving effect upon the charitable movement as a whole. That is why elaborate rescue operations have been resorted to by Parliament in order to repair the damage thus done. Parliament had to see that they put right what had been done against the will of Parliament, as shown by their own subsequent actions.

First, there was the necessary pronouncement, as a result of my Committee's Report, by the noble and learned Viscount the predecessor of the noble and learned Viscount who sits on the Woolsack to-day. That pronouncement was followed by the passing, as an emergency measure, of the Charitable Trusts Validation Act, 1954, in order to save for charity trusts which otherwise the Revenue were likely to seek to have declared invalid. That Act proceeded directly from recommendations made by the Charitable Trusts Committee and arose out of two cases which will be familiar to some of your Lordships, at least—namely, the Oxford Group case and the Ellis case. Then there was the more recent legislation necessitated by the devastations caused by the decision in the Baddeley case. All the more reason, therefore, for forging ahead with charitable trust reform and thus putting new heart into the voluntary movement for which we have worked so hard and suffered, in this way, so much for so long.

What about the White Paper? The Government had the advantage over the Committee of being able to judge the Committee's recommendations in the light of public reaction to them. Of course, this Government, like any other, would wish to carry the public with them, especially in a matter like the law of charitable trusts, so closely bound up with principles that should govern testamentary dispositions, questions of social responsibility and the whole range of activity which falls within the definition of voluntary service. Therefore I will say at once, and frankly, that, having read and studied the White Paper, I feel a great measure of gratification to find that on so many issues the Government's White Paper is at one with my Committee's Report.

I am not going to trouble your Lordships by reciting all the points of agreement and disagreement. Let me, however, examine three or four of the more important issues, partly of agreement and partly of disagreement. I shall say nothing save on what I regard as the issues most essential to maintaining the health of charitable trusts, to some of which The Times drew attention to-day in what I regard as an interesting, helpful and, I hope, prophetic leading article. There are four, and possibly five, subjects that I will quite shortly put to your Lordships. The first is that the public should be allowed to know and have the opportunity of learning what charitable trusts exist. When I speak of "the public", I mean not only potential beneficiaries but also public authorities, which must increasingly nowadays work in partnership with the voluntary bodies. I think it is worth observing—and it is sometimes overlooked—that all charitable trusts are, both in fact and in law, not private trusts but public trusts, and should, therefore, be recorded for the information of the public for whose benefit they were designed.

Then, again, the objects of trusts must keep in step with public needs. And needs change. As even the youngest among us have seen, needs have changed rapidly during the past few years. Domestic servants, for instance, for whose benefit many charities were founded over a long period of years, are, alas! a disappearing class; but delinquent or emotionally disturbed children have appeared as a new class of possible beneficiaries. These children were not treated in the old days as possible beneficiaries of charitable trusts but were treated in quite a different way. However, we have learned better now. Beneficiaries change; areas change; and great public services rise to carry out the work previously shouldered by the voluntary movement. It is the business of charitable trusts to pioneer, not to stagnate in backwaters of social change, and the law must put nothing in their way.

Then, while, as a general rule, trustees must clearly be allowed to manage their own affairs, there must, I think, be some central authority ready to step in to induce laggard trustees to undertake, where necessary, reform of their trust if it is called for in the public interest. Further, there is a highly controversial question, and perhaps the only really controversial question upon which the noble and learned Viscount on the Woolsack and I may not think alike; we shall see. I believe that the present arrangements for the proper husbanding of the property of trusts are not satisfactory. There ought to be safeguards of their income and general resources, which during these past years have decreased so vastly in value. Trusts ought to be capable of protecting themselves in periods of sustained inflation from the effects of a fall in the value of the pound; they ought to have the same possibilities as are open to the trustees, as prudent men, looking after their own affairs.

How do the Government propose to deal with these three or four key issues to which I have referred? As to the need for the recording of trusts, which was strongly pressed by my Committee, the Government agree; and I regard that as a big step forward. The Committee, it is true, pressed for a central record to be kept by the Ministry of Education for educational trusts and by the Charity Commissioners for the rest. This is accepted. But the Government do not accept the further recommendation that there should be local recordings also. I said in the debate in 1955, and I repeat it now, that though I should have preferred there to be local recording also, it is not a matter I should wish to press unduly. The fact that it is now accepted that trusts should be recorded, even though only centrally, is a great step forward. As these invaluable records are built up, I have not the least doubt that enterprising local authorities will see to it that they get, somehow or other, the information they need and would have had under the law had our recommendation in that respect been accepted.

I now come to the central point of difficulty—it is an old point—about the relaxing of the cy-près doctrine. Here, again, the Government have accepted the Committee's solution, and I must confess to a feeling of considerable satisfaction that the Government and the Committee have reached a fairly identical conclusion, for thus may be solved one of the thorniest and most difficult problems of the whole great tangle of charitable trust law. Broadly, under the existing doctrine, a trust's objects may be altered only when impossible of fulfilment, and then only to objects as near as possible to the original. Under the powers proposed by the Committee, and broadly accepted by the Government, it would be possible, with the consent of trustees within the first thirty-five years, and without their consent if unobtainable after thirty-five years, to change the objects in conditions falling a good deal short of their having become impracticable or impossible. These conditions would include, as the White Paper puts it, changing circumstances (including changes in the scope of public or local services); and the purposes of a charity having become obsolete.

Again, the principles put forward by the Committee to govern the changing of trust objects are also accepted by the Government. They are derived largely from the existing Scottish law, and I would make my tribute here to Lord Macmillan, who gave evidence before my Committee, and who drew my Committee's attention to these particular provisions of Scottish law which we adopted. The principles which have to be borne in mind are: the public interest; existing conditions; the spirit of the intention of the founders; the interest of the locality to which the endowment belongs; the possibility of effecting economy in administration by grouping, amalgamating or combining trusts or by dividing them. I believe this to be an entirely workable and acceptable plan for a reformed cy-près doctrine, and I am glad to know that Her Majesty's Government are of the same mind. I would ask your Lordships to notice in particular, as one of the conditions of change, regard for "the spirit of the intention of the founders". It is that to which the scheme-making authority must have special regard as a central factor in reaching their determinations. I believe that this reform, even though taken by itself, holds out great promise of new life for scores, hundreds and perhaps thousands of charitable trusts.

But progress is clearly closely linked with the nature or constitution of the authorities which will exercise these new powers. For various reasons, with which I will not trouble your Lordships, there is not likely to be much difficulty with the Ministry of Education in the administration by them of their powers. But what about the Charity Commissioners? Here the Government do not see eye to eye with the Committee—far from it. The Committee wanted the Charity Commissioners reconstituted as a part-time body of men and women of standing in public and charitable affairs—a body of the same kind as the Governors of the British Broadcasting Corporation backed by an advisory body and served by a permanent staff like, for instance, that of the Director-General of the B.B.C. In effect, the Government want to maintain the present Charity Commission almost unchanged. They add to the two legal Commissioners a non-legal Commissioner, but, on the other hand, they take away the Parliamentary Commissioner.

I must confess to disappointment about this matter. I believe that the newly-constituted Commission will be less likely to take full advantage of new powers than the body suggested by the Committee, and I feel fairly confident that it will also carry with it far less of the confidence of the public than the Commission which we proposed. I trust that if, contrary to my belief as to what is likely to happen, the Government decline to resile from their present position and adopt the Committee's suggestion, they will at least make provision for an advisory committee. There might be a good deal of public advantage in that.

I am glad that the White Paper shows that the Government have accepted the recommendation that a Minister—it turns out to be the Home Secretary, and that is an admirable selection—should be appointed to represent the Commission in Parliament and in the Government. Hitherto it has had no spokesman, either in the Government or in Parliament. The Minister's powers will, rightly and properly, be much hedged about, but he is there as a safeguard against a tendency to stagnation on the part of the Charity Commissioners or trustees.

I come lastly—and I am always frightened of those who say that, because so often it is misleading—to the question of the maintenance of trust income. Here I must frankly say to Her Majesty's Government that I feel a good deal of alarm and despondency at their refusal to accept a widening of the range of trustee investments recommended by the Committee. The evidence for revision and extension, as given to my Committee on behalf of the London Stock Exchange and the Institute of Chartered Accountants, was overwhelming. That change has had persistent support in the Press, and the courts have also shown a general inclination to broaden the range of charitable investments. It is mostly with regard to the older charitable trusts that this difficulty has arisen; in the more recent trusts the range is, from the outset, fairly wide. For over forty years no trusts with which I have ever been concerned have had any but the widest provision for investment, and I believe that to be the general practice.

But these old trusts ought to be protected, and also those modern trusts where settlors have been so misguided as to insist upon the restriction of trustee investments. It is sad to think that where trusts are tied to the narrow range of fixed-interest-bearing stock, authorised under the Trustee Act, 1925, in times of inflation, such as those through which we have been living, the effect has become not merely serious but disastrous. We all know the fall in the value of the pound, and the resources of charitable trusts, both as regards their investment and their income, will be a third of what they were in the years immediately preceding the war. It would not have been so had they taken advantage of the large range of investments that the courts are now permitting, on application being made, in cases where they consider it to be just and proper.

The Government's alternative is to keep the present pitiful range of trustee investments broadly speaking as it is, but to give power to the Charity Commissioners to widen the range of suitable trusts. Now to the Charity Commissioners "suitable", in practice, means suitably large. The weakness of the Government's proposal is that most trusts are too small to be acceptable in this context to the Commission. So that the country has before it the astonishing spectacle of the Government immunising against polio, on the one hand, and, on the other, injecting the rank and file of charitable trusts with a wasting disease known to be fatal to them. I hope the Government will think again, particularly, perhaps, as the rise of unit trusts offers, it seems to me, a new field of investment very suitable for the funds of small charities.

Now I come to a matter which, in the presence of the noble Viscount, I would not ignore; it is one to which I know he has attached great importance, and so, in a personal way, have I, and that is the establishment of common-good trusts. I must confess I am disappointed that the Government have been so lukewarm; I could wish that they would have taken some positive action. Surely charity has a better moral claim to bona vacantia than the Chancellor of the Exchequer, who, in my belief, has no moral claim to it at all.

I have confined myself to what seemed to me the really outstanding issues on this broad matter, which has been before your Lordships now for a period of just ten years. I hope to hear that the Government intend without more delay to bring in at least the long-awaited reforms they have accepted, the reforms they accepted four years ago. I do not think I can do better than end by expressing the hope that, when legislation is introduced, it will not take the form of a series of Bills to deal with reforms subject by subject—as for instance, the repeal of mortmain—but will take a broad, comprehensive view. I hope that, in the closing words of my Committee's Report, … the present law, with the changes we propose, should be simplified and re-enacted as a single, short, intelligible Statute. I hope we shall hear to-day that this is in fact the Government's intention, for if it is we can look forward to the opening, not in the very distant future but almost at once, of a new era for charitable trusts and a new era for the whole move- ment for voluntary services upon which so much of the welfare and wellbeing of our people depend.

3.43 p.m.

VISCOUNT SAMUEL

My Lords, my noble friend Lord Nathan has covered a very wide field in a very comprehensive fashion. There is nothing in what he has said from which, on first hearing, I should be inclined to dissent, and there is no excuse, therefore, for me to repeat a second time anything that lie has said. Consequently I am able to confine my speech to-day to a brief space and to occupy your Lordships' attention for a very short time.

I propose to deal in fact with only a single point. It is the one which was my chief interest when I first brought this matter to the attention of your Lord-ships' House ten years ago, and it is my chief interest still. It is the proposal to establish what were called common-good funds. I was impressed by the fact that in Scotland there are many ancient funds in many of the Scottish towns, some of them dating back for centuries, which have a total capital value (so I was informed by the Scottish Office), of about £4 million and a revenue of some £400,000, and many of which have rendered and are rendering great services in the cause of charity. Some, it is true, are devoted to convivial purposes, and perhaps that may be often quite a legitimate thing to do. In the United States also these institutions are a common feature of the social life of the country.

I was in search of some possible source of revenue for such funds, to start them off. I was impressed by the fact that there are various dormant balances in banks or in the Chancery Division of the High Court, and there are intestate estates, and it might be possible to bring these sums, or some of them, in to give a beginning to the establishment of these new funds. I did not know then, and I do not think that anyone was fully aware —the fact was disclosed only a few weeks ago when the centenary was celebrated of the building of what were, 100 years ago, the new Law Courts in the Strand—that the money for those buildings, amounting to about £1 million, was taken from derelict funds in the hands of the Chancery Division of the High Court. I do not know—perhaps the noble Viscount on the Woolsack will be able to tell us—by what authority that was done. Presumably it must have been a clause in the Finance Bill or some legislative measure of the kind, but it would be interesting to know how it was that that came about.

When the debate took place in your Lordships' House ten years ago I was astounded that it had a very loud echo from the country. The Press gave it great prominence; I had, I think, more newspaper cuttings about that debate than about any other speech that I had made in the House until that time. The public interest was concentrated on this particular point: that it seemed that there was money to be had for nothing; that instead of putting everything on to the taxpayer or raising special subscriptions there were some scores of millions of pounds to be had, somewhat like a pirate's treasure hoard, and that I had the chart for the discovery of the Treasure Island and for revealing where all this glittering wealth was situated, as it was only waiting to be fetched. As my noble friend has said, ten years have passed since then. I do not myself think it is a very excessive time. My experience is that the majestic deliberation of our legislative procedures for any measure which is almost generally agreed to be obviously right and proper to be carried into legislative effect takes, as a rule, twenty or sometimes thirty years; so if this now bears fruition in the present Parliament we should be exceedingly pleased that such prompt progress has been made.

This period has been put to good purpose in this instance, as it has been in a great number of other instances, by the opportunity having been given for a most careful and laborious inquiry. It is often thought that a Government refers a matter to a Royal Commission or a departmental committee usually merely as a convenient way of shelving some difficult and possibly controversial question. Certainly that may be the case occasionally. But almost all the great reforms, political and social, in this country during the nineteenth century and the present century have been preceded by inquiries—by Royal Commissions as a rule, many of whose Reports have gained historic importance. In this particular case the noble Lord, Lord Nathan, and his colleagues are entitled to our gratitude, as indeed have been all those who have laboured at these various inquiries on political matters.

Lord Nathan's Committee sat for two years; they presented a Report covering 250 pages—thorough, painstaking; one might even call it monumental. I moved another Resolution in the House after the publication of that Report in July, 1953, when the Lord Chancellor was the noble and learned Viscount, Lord Simonds, who took a great interest in the question and who was able to announce to the House that the Government thought that there was a case for consideration with a view to legislation; and under the present Lord Chancellor the White Paper was published in July, 1955, which made a number of practical and positive recommendations.

The noble and learned Viscount on the Woolsack is a Minister who possesses one of the most valuable qualities that a Minister can have: he is expert in the art of getting things done, and his period of office has been exceedingly fruitful in the legislative harvest. For my own part, I am becoming expert in exactly an opposite quality. With years that are not merely advancing but formidably advanced, I am practising with growing skill the art of shifting work on to other people; and this matter, in particular, I have been happy to transfer to my noble friend Lord Nathan, who has the additional advantage of being a solicitor of long and wide experience, while I have not been trained in either of the legal professions.

With regard to this question of dormant funds, the Committee were informed by the Government that that was not for them, and implied that if that subject were to be discussed it should be done by a Committee somewhat differently constituted. I cannot quarrel with that. I think there is great force in what was said. The consequence is, however, that we have not before us any proposals with regard to dormant funds as such. But the Committee did recommend most strongly that common-good funds should be 'established. The Report strongly favoured that proposal, and the White Paper also favours it in principle, though with important qualifications. I do not quarrel with those qualifications. I am anxious that a Bill Should be prepared and presented which should not be controversial and should pass with little difficulty through both Houses of Parliament in a short time. It would be a great pity if there were any overt disagreement on any particular points among the advocates of that measure at the outset. Therefore I do not quarrel with any of the passages in the White Paper.

The first is a very minor point—merely verbal. The Government do not like the term "common-good funds," and, for reasons which they give, they prefer the expression "common-good trusts". I see no reason to dissent from that. But much more important is the fact that they do not favour the idea of national common-good funds or trusts, such as were recommended for England, Scotland and Wales. The reason that they give is —I imagine that it was the probable reason—that some of the great national organisations, charitable or cultural, are against the proposal, because they fear that subscriptions and bequests might be diverted from channels through which they usually now flow to favour more generalised funds. The Church of England in particular, through the mouth of the most reverend Primate the Archbishop of Canterbury, urged that it would be a mistake Ito set up funds such as this which might take away bequests from ecclesiastical purposes. The National Council of Social Service took the same view.

It is the case that persons who are testators and who have no family or other cogent claims on their money of estates have a wide choice of objects, of which everyone is aware, to which they can devote their funds—not only ecclesiastical, not only the Council of Social Service, but such bodies as the Royal Society for Prevention of Cruelty to Children, the Royal Society for Prevention of Cruelty to Animals, the National Trust which provides for the preservation of places of natural beauty or historic interest, or the National Art Collection Fund, and so forth. Therefore, I do not think we need attach too much importance to this question of the national funds. Perhaps these various organisations are unduly alarmed at the prospect held out. That may be so, and I am rather inclined to think that it is so. if so, after a few years' working, it may be that national funds might be established. But since the Government are definitely against it, and since there is this large body of opposition from responsible quarters, I think it would he a mistake for us to make a sine qua non of this particular proposal. I believe that the case of the Law Courts and the Chancery funds may be taken as a precedent, and that if some occasion arises in the future of some object which commands widespread national support but which it is thought could not properly be paid for out of taxes or rates, special measures might be taken for an expedition to be sent to my "Treasure Island" to find the ownerless wealth there, and devoted by general consent to that particular object.

For the rest, the Government in the White Paper, in paragraph 69 on the last page, express agreement that more common-good trusts should be established, but that they should be local and spontaneous in origin, unofficial and not subsidised or set up by the Government. For my own part, I should be most grateful if that were done. It would certainly require legislation, and I hope that we may assume that the legislation will come at an early date, preferably in the present Parliament, because there is always a risk—slight though that risk now appears to be—that after a General Election some other Lord Chancellor, perhaps not quite so fully informed and sympathetic, might be installed upon the Woolsack.

If this is done, and if these funds are set going from private contributions or bequests, then it may be that a century hence the common-good trusts may be the normal part of the social equipment of all progressive towns. They will originate or help to maintain perhaps thousands of institutions, philanthropic or cultural, enlisting on behalf of charity or the promotion of the arts the very valuable quality of local civic patriotism. If that is so, then your Lordships may feel pleased to think that our successors may be glad that the initiative for this had been taken by this generation of the House of Lords.

4.1 p.m.

LORD DENNING

My Lords, I should like to support my noble friend's plea for action, because even since the White Paper was published in 1955 cases have arisen which show the urgency of the need for action on what my noble friend called the essential point of the doctrine of cy-près. I cannot say that I have much confidence in my knowledge of charity law, let alone that of cy-près, but I can perhaps give your Lordships an illustration of how it works.

In the year 1956, when a case came before the courts, it appeared that the people of Ulverston had for years subscribed together at fetes, bazaars and street collections for a new hospital for their area. Between 1930 and 1947 they had collected some £32,000 for this hospital. Then, with the coming into force of the National Health Act, there was no longer a need for this hospital, for it was to be provided by Government funds. What was to happen to the £32,000 which had been collected? The matter came before the courts. Your Lordships might think that it was a good case for that £32,000 to be applied to what might be called cy-près—as nearly as possible to the original objects: homes for the elderly, disabled or infirm, whatever it might be. But lo and behold! the courts said that that could not be done. The £32,000 had been given for a hospital, and there was no general charitable intention otherwise. The money could not go to the Crown; it had to be returned to the people—if they could be found—who had put pennies in the collection boxes or spent sixpence in raffles at bazaars and so forth. If those people could not be found the money had to go, as I presume most of it has gone, to the unclaimed balances in the funds of the court. Surely there is an urgent case for the relaxation of this doctrine, so that when funds have become inapplicable for a particular trust purpose they can be applied to some good purpose as near as possible to it. That is the first point that I would stress—as my noble friend has stressed—the need for relaxation of that doctrine.

Then there is the next point. In 1954 the Charitable Trusts Act was passed especially to help imperfect documents, documents which had not been well drawn up—usually by lawyers. Charitable trusts were there mixed with non-charitable trusts, and the whole attempt failed. Let me give your Lordships an example which that Act did not cure: your Lordships will remember the case where a bus ran into a party of Royal Marine cadets in the streets of Gillingham, in Kent, killing 24 and injuring others. The mayors of the three local towns put out an appeal far money for a memorial for the cadets, for care for the disabled, and then, it was said, for other worthy causes to be selected by the three mayors.

A fund of £9,000 was collected in street collections—a penny here and a penny there, and so forth; but only £2,000 was used for the cadets' funerals, because the bus company had admitted their liability to pay compensation. As a result, a sum of £7,000 remained outstanding. Your Lordships might think that in accordance with the mayors' declaration they could have chosen some other worthy causes for which the money should be used. But no! The courts said that the new Act did not validate that, and that the £7,000 could not go to any worthy causes selected by the mayors, although the money had been subscribed for them. The £7,000 was not to go to the Crown, as bona vacantia. It was to be returned to the individuals who had subscribed pennies, twopences and sixpences—if they could be found. If they could not be found, as presumably they were not, that £7,000, too, must go to the unclaimed balances in some fund somewhere which no one can touch.

In Australia and New Zealand they have wider legislation than ours to cure imperfect trusts. Only recently a case came before the Privy Council which will illustrate the wide power of the Acts in Australia and New Zealand. A lady had left her property to be applied to "such Order of nuns as my trustee shall select. "Your Lordships might think that that was a good charitable gift. But no! Some Orders of nuns are charitable—when they do good works; others are not charitable, when they do not do good works but pray far the welfare of others. In England there might be great difficulty in upholding that gift, because it is partly charitable and partly non-charitable; but the Australian and New Zealand legislation made that perfectly good, in so far as it could apply to what was really charitable, for the nuns who did good works, omitting those nuns who simply prayed for others. Our charitable trust legislation is confined to deeds before 1952, and is not so comprehensive as the Australian and New Zealand legislation. The Act to which I have referred was passed in 1954. I would plead for an extension of it now, so as to validate more of these imperfect trust instruments, some of which are not framed by lawyers but by laymen.

One last word about our own small parochial charities, which go back for centuries, whether for blankets, or coal. or a small pension—how they need to be reorganized! But they should not be taken away from the individual parish but kept for the area of benefit. There is a great deal of local community interest in these charities and they should not be administered indirectly through some central Commissioners but through the local people themselves. We all know of these small funds. They still do good work, with a few shillings being taken, here and there, to old pensioners. Let those be kept with the local community. Those are the three points that I wish to make, but there are many others in this field of charity to be dealt with, if Her Majesty's Government are to take up and improve the law on this matter.

4.9 p.m.

THE LORD BISHOP OF CHELMSFORD

My Lords, I regret that my first speech in this House should be concerned with certain technical points rather than with more weighty moral and spiritual issues, but at least I can assure your Lordships that, as a result, my speech will be marked by a brevity appropriate to one bold enough to touch on certain matters of law on which I can speak only with the limited knowledge of a layman. I venture to say a few words on behalf of the Churches Main Committee, of which I am chairman. This Committee, as your Lordships may be aware, represents all the leading religious denominations in this country, and is therefore in the unique position of being able to act as a mouthpiece for all the Churches of the country on any Government national questions which concern the welfare of the Churches, particularly on the material side. In general, the Committee have welcomed the Nathan Report and the Government's White Paper; and I would express our gratitude to the noble Lord, Lord Nathan, for his initiative and leadership.

The law of charitable trusts and the administrative machinery to deal with it have grown up over a very long period of years, and the present system could be improved in a great many ways. I shall content myself with referring, very briefly, to four particular points, and shall then turn, I hope with equal brevity, to a wider issue. The first point is that the proposed repeal of the cy-près Acts will greatly facilitate transactions in land for Churches and will therefore be greatly welcomed by the Churches of this country. Secondly, the procedure in amending trust cy-près, as the noble Lords, Lord Nathan and Lord Denning, have recently pointed out, needs to be widened and amended so as to meet changing circumstances. My third point is that it is greatly to be hoped that some relaxation will be made in the range of trustee investments permitted by the Act of 1925. Many church bodies are suffering under the handicap of this Act and are put to considerable inconvenience and expense in seeking to obtain relief from the Courts or Parliament. My fourth point is that control of dealings in land in some directions can be speeded up and simplified. This is a technical point on which I do not propose to enlarge.

Having touched briefly on these four particular points, I would turn to a more general point that has a wider significance. Churches are among the oldest forms of charity in this country, but in some respects they are different from all other charities. Many of the large denominations have a complete and organised system of control and check. We realise that the State has a duty to act as custodian of perpetual trusts and to ensure that the original intentions of the trusts are observed. But we do not think that the State would be justified in claiming to interfere in the collection, distribution and administration of church funds under trust, held in trust, for general maintenance. There is a danger that in the course of setting up new machinery for registering and controlling charities there may be unnecessary and unjustifiable overlapping and interference. I am sure that the Government have this point in mind. My Lords, with these brief observations, it gives me pleasure to support the Motion that stands in the name of the noble Lord, Lord Nathan.

4.14 p.m.

VISCOUNT SIMONDS

My Lords, the noble Lord, Lord Hylton, has been good enough to allow me to intervene at this stage, in his place, and that has given me the pleasure and privilege of congratulating the last speaker, the right reverend Prelate, on his contribution to our debate, and to say how warmly we all hope that he will frequently speak in future.

Having said that, I propose to say very little. I speak only because, on the last occasion on which this matter was debated in this House, it fell to me, as the occupant of the Woolsack, to say a few words upon the Government's intention in the matter. The other day I did what I dislike doing extremely: I read the speech that I made on that occasion. I was gratified to find how little I had committed myself to anything, and how little I had committed the Government to anything: because I said, as I observed over and over again, that the Government were giving the matter their earnest consideration. And, my Lords, how right I was! That was five years ago; and they have been earnestly considering it ever since. With those observations, may I just make one or two remarks upon matters that occur to me as being important?

I think that most speakers concentrate upon what they call the cy-près doctrine, a doctrine which enables the court to divert to some relevant purpose funds which had been devoted to a purpose that has become obsolete. There are two aspects of this case which have to be considered and, I think, kept apart. The first is this: at what stage is one entitled to say that a charitable trust has become obsolete, in the sense that it no longer usefully fulfils the purpose for which it was destined? That is a very difficult problem, because while it may well be that the general sense is that the purpose has become obsolete (as is so often the case with parochial doles), on the other hand, it seems very wrong that for the purpose to which the pious founder has devoted his fund there should be substituted some other purpose. That is one aspect of the cy-près doctrine: at what stage does it arise? When can one say that the fund is now no longer used, or cannot be used—perhaps the law does not permit it to be used—for the purpose originally destined, and therefore it must be applied cy-près?

The second aspect is this, Assume that the first condition is satisfied, and that the fund can be applied cy-près. How near or how far is the new purpose to be from the original purpose? Upon that question I think there has been a good deal of misunderstanding. I speak as one who for many years spent some part of his life in the administration of the law of charity in the Chancery Courts; and I believe that it would be a great mistake to think that any great relaxation is needed. In my experience there has been no difficulty, when once the purpose of the fund has been found to be obsolete, in devoting the fund to a purpose which is indeed remote; and I have never heard of any objection to it.

In connection with the matter of cy-près, I must take up one point with my noble and learned friend, Lord Denning. He referred to the case of Ulverston. That was a case where a fund was collected; no other purpose was designated except the particular purpose, which was no longer necessary. He seemed to think (and some other of your Lordships did, too) that it was very wrong that an attempt should be made to discover the donors who had given for the particular purpose, in order that, that purpose being no longer applicable, their subscriptions might be returned to them. That is one aspect. But who has not heard of the other: of the person who says, "I gave my fund for a particular purpose. If it is not wanted, why should someone else decide that it should go to some other purpose." That person wants his money back. The courts have often said that he is entitled to have it back. That is the other aspect, and I utter it as a word of warning, in view of what my noble and learned friend said, who regarded it as something preposterous. It is not. I might say, "I have given my money for a particular purpose and it is not wanted. I should be glad to have it back, so that it may be given to some other purpose which I choose, and not to someone else's purpose."

There is one other point on a very general question. I deprecate in these matters more central control than is necessary. We hear so much that "Charity begins at home". It is the child of civic pride and of local patriotism; and I think it will be a matter which will both damp subscriptions and be likely to prevent getting the right people to administer it if it is thought that there is going to be too much interference with the local administration of their own home charity. Therefore, quite generally, I would venture to ask Her Majesty's Government to bear that aspect in mind; remembering, too, that in the matter of charity I doubt very much whether "Whitehall knows best". It is a matter upon which civic, local knowledge is all-important; and I think there would be grave objection to interference from central quarters.

There is one more word that I wish to say—and I am afraid I am delaying the noble Lord, Lord Hylton. There is one matter upon which I quarrel with the Government, and upon which, if the matter comes before the House in legislative form, I shall continue to quarrel with the Government; that is, any suggestion that there should be an alteration of the powers of trust investment which will rest upon any administrative body. It is suggested, I think, that the power of giving the right to invest in what are called "other than trustee securities" to some administrative body—the Commission, or whatever it may be—should form part of the new scheme of things. I think that is altogether wrong. If it is desired to give extended powers of investment, that should be done universally and by an Act of Parliament. For, if not, how are you going to determine it? Are large charities to be given extended powers and small charities not? Why should that be? It is just as important for a charity whose income is £100, to increase that income as it is for a charity whose income is £1,000 to increase theirs. If it is said: "A small charity cannot afford to lose its capital", the answer is that no charity can afford to lose its capital: and the risk ought not to be run, unless it is utterly negligible, of either large or small charities losing their capital.

If you are not going to differentiate according to the size of the charity, what differentiation are you going to make? Are you going to say that, if there is a trust company, a bank, or an insurance company, who are to act as trustees, then you will give them extended powers, but not otherwise? That will be a most unfair differentiation. It will not only put charities to the cost of having remunerated trustees, but it will, in fact, make an unfair differentiation, because private trustees are just as competent—and very likely more so, because they take a personal interest—as these trust bodies.

Then, my Lords, if you are not going to differentiate according to whether the trustees are a trust body or individuals, how are you going to differentiate? You are not going to take a professional man, I suppose—a barrister. He is quite hope? less in a matter of business. Who are you going to take, to be given these extended powers? You will create nothing but discord and jealousy. Your conduct must be arbitrary and capricious; and I distrust altogether the suggestion that this power is to be given to an administrative body. And why should it be? Surely the right course is that which has been adopted in the past where it is desired to increase the scope of trustee investments—to do so by an Order in Council, if that is permitted under the Trustee Act, and if not, by proper legislative authority. I shall renew that argument if, when the Government bring in their Bill, I find any such provisions in regard to the extension of investment, and I shall do it with a great deal more illustration than I have found possible in the short time I have had this afternoon. Upon that matter I quarrel with. the Government, but upon every other point I would venture to support what they say in the White Paper; and, so far as I may, I give it my blessing.

4.25 p.m.

LORD HYLTON

My Lords, your Lordships, I am sure, have been delighted to hear the noble and learned Viscount who has just sat down, and only regret that he does not more frequently address your Lordships' House. I venture to make a few remarks (which will be very short) on Lord Nathan's Motion because I am one of the survivors of the early debate in 1953. I should like to draw attention to two aspects of this matter to which the noble and learned Viscount has just referred. To take his second point first, he said that charity starts at home, and I believe that recognition of that principle is essential when dealing certainly with parochial charities, and very often with larger charities as well. I do not believe that charity starts in county halls or in city halls, and I deprecate very much the suggestion that local authorities, whether county councils or urban authorities, should co-operate with, or consult with, and so on, the trustees of existing charities. It would be, I believe, to the benefit of neither. Local authorities are elected for certain statutory purposes, the administration of charity not being one of them. With a considerable experience of local government behind me, I do not believe that any intimate co-operation of elected members of local government bodies with charities is going to be in the best interests of either.

It is true that the Charity Commissioners, when setting up a new scheme, perhaps initiated by the mayor of a town, will in that scheme designate a number of the members of the local authority as trustees. That is perfectly justifiable, and probably works very well. But it is a totally different matter to say that local authorities are to inquire into the circumstances and the administration of existing charities which never have had members of local authorities among their trustees. It is true to say that the proposals in the White Paper go nothing like as far as the proposals contained in the Report of the Committee of which the noble Lord, Lord Nathan, was Chairman, but I still feel that the position ought to be carefully scrutinised by the Government before they introduce any legislation, if they have the intention of so doing.

The noble and learned Viscount referred to investments in equities, and from what I gathered from his remarks he was not in favour of allowing charities to carry out such investments. But the fact is that, at the present time, charities are allowed to invest in equity shares. Only quite recently I had an interview with the Senior Charity Commissioner, when he gave his approval in principle to the investment of a proportion of the funds of a certain charity in equity shares. So the position to-day really is that a proportion of capital can be invested in equity shares, unless I 'have been misinformed on the point. But I think that there must be a limit to those who can carry out such investments. As the noble and learned Viscount has said, where do we draw the line? The point arises, as it has already arisen during recent years in the case of some charities who have bought shares which are now showing a loss on the capital involved in the transaction, that equity shares, which everybody thinks are bound to show an appreciation, may show a loss.

Let me finish by saying that the noble Lord, Lord Nathan, gave the impression that nothing was happening in charitable matters because the Government had not accepted in too the recommendations of his Committee's Report. That he considered to be a very bad thing. But it is hardly true. I am sorry that the noble Lord has left his place. The Charity Commissioners continue to administer charities and to bring in new schemes. Only a few weeks ago I had to approach the Commissioners to obtain a scheme, which was obtained within a reasonable number of months, and this charity is now fully set up and will start working within a few weeks. It is quite erroneous to try to make out the case that because the Nathan Report recommendations have not been adopted fully by the Government, charity has come to an end. New trusts and new charities can be set up through the Court of Chancery, if it is wished. The somewhat black picture painted by the noble Lord is far from the truth.

In conclusion, I would say that I hope that we shall see the noble Viscount, Lord Samuel, more often at the Table and that perhaps on his next appearance he will have the good fortune to be able to say that common-good trusts or funds have finally been authorised.

4.33 p.m.

THE EARL OF IDDESLEIGH

My Lords, on the occasion of our last debate upon this Report, it was my not very pleasant duty to give voice to the genuine apprehensions which the Report occasioned in the minds of certain ecclesiastical authorities. I followed and supported the most reverend Primate the Lord Archbishop of Canterbury, who made a severely critical speech on the subject. However, I did not fail to acknowledge that the ecclesiastical authorities to whom I have alluded were fully aware of the need for some overhauling of the law relating to charities and found much good in many aspects of the Nathan Report. To-day, it is my much more pleasant duty to say that the White Paper has removed to a large extent and in substance the apprehensions which those authorities felt, and that they would be ready to support legislation based on the White Paper, provided that there is no material modification of the White Paper terms. Since the White Paper undoubtedly represents the considered judgment of Her Majesty's Government, we have no doubt that the legislation which will be ultimately introduced will be substantially on the lines of the White Paper.

There are certain modifications of the Nathan Report recommendations which we are particularly glad to see. The standard form of rendering accounts and the necessity of the auditing of accounts would have been a real hardship to sonic small charities, in which I feel an interest. For example, up and down the country there are many small but useful convents, doing for the most part educational work, which represent in the mass a great number of small and humble trusts, who should not be overburdened with legal requirements which may be suitable enough for larger bodies. For my part, I am particularly glad to have removed the recommendation that information regarding all trusts should be sent to local authorities. I do not altogether, share the enthusiasm of the noble Lord, Lord Nathan, for co-operation between local authorities and charities. In my experience, it not infrequently means that charities are asked to provide for needs which, in my judgment, the local authorities have the right and duty to provide. I have seen rather too much of charitable money being used to subsidise the local ratepayer. The whole relation of local authorities, as the administrators of State welfare, and charities is a very delicate one and one which requires a great deal of constructive thought.

There are certain points in the White Paper about which I personally—and I speak entirely for myself here—do not feel very enthusiastic. I hope that before the introduction of legislation further consideration may be given to the proposal to give the Home Secretary a general responsibility for the Charity Commissioners and to abolish the Parliamentary Commissioner. Is there not a real danger of introducing charitable work into the field of Party politics? Is there not a danger that, for Party political reasons, questions will be addressed to the Home Secretary which would not have been addressed to the Parliamentary Commissioner? is there riot a danger that, under the fear of Parliamentary pressure, the Home Secretary may be deterred from exercising his discretion to its full? It seems to me that that is a point to which further consideration might usefully be given.

For the rest, there is one small point which I would make regarding paragraph 49 of the White Paper, which deals with exceptions. Cathedral or collegiate churches are to be excepted, and that provision is taken from the Act of 1853. In 1853, of course, there was only one kind of cathedral; but to-day there is more than one kind. There will, at least, have to be some definition of what is meant by "a cathedral", and possibly some consideration as to whether, in fact, that exception is in the public interest or not. Apart from that, I join with the noble Lord, Lord Nathan, in expressing the hope that legislation on the lines of the White Paper may be introduced at no distant date.

4.41 p.m.

LORD HAWKE

My Lords, it is a long time since the Royal Commission produced their Report and it has taken some time for the White Paper to be: published, but now that it has come out, I believe it to be, on the whole, a most satisfactory document. I am particularly glad that the Government have come down strongly against any local interference in trusts through scheme-making or even compulsory recording. I have two main reasons for saying that. First of all, I dislike intensely the idea of what are in essence political bodies having charitable funds to administer. There is a danger that any charity might become a sort of political shuttlecock in the council chamber. If the local authorities administer the ratepayers' money badly they can be called to account by the ratepayers at the next election; but if they were to administer charitable funds badly, apart from any definite criminal negligence, they would have nobody to account to except the souls of the departed.

My second point is that testators would intensely dislike the idea that local authorities could play their fingers on the money which they had laboriously accumulated during their lifetime. One might think, perhaps, that such views of testators are narrow and old-fashioned. but gentlemen who have accumulated large fortunes during their lifetime often have strong views on subjects of this sort; and, after all, it is their money. I believe that if the local authorities had been brought in there would certainly be no new era, as the noble Lord, Lord Nathan, said, because the fount would dry up. I do not mind the local authorities approaching the Charity Commissioners or the trustees of a fund and saying that they would like them to get a scheme to tackle a particular problem, because then it would be up to the Charity Commissioners or the trustees to do as they liked.

The other thing I dislike, which I am glad the Government have turned down flat, is local recording. I am not too enamoured of central recording for all these small trusts, because it involves a great deal of trouble and clerical work. Suppose some charitable gentleman died leaving £10,000 the income from which was to be held in trust for the benefit of miners' widows. The income from that fund would be about £500 a year, and at present the trustees could hunt round their district and without any difficulty find the requisite number of miners' widows on whom to spend the annual income. But suppose that, through wider recording and wider information, news was broadcast throughout the coalfields of Britain that there was money waiting for miners' widows, the trustees would be snowed under with applications; and as the applicants would, in politeness, expect a reply, the funds of the charity might well be entirely disbursed in postage and stationery. That may be considered to be a far-fetched instance, but I do not think it is so far-fetched as might be thought. In those circumstances, no trustee would continue to stand; he would not have the time or the inclination to deal with a vast postbag every day asking for the small amounts of money at his disposal.

I agree that central recording is useful from the point of view of a fount of information for professional people who are interested in the classification of particular charities and people who would be able to evaluate their financial position. For instance, they would not turn full publicity on to my mythical case, but would keep it comparatively private. Some charities, of course, like to receive publicity, because it is useful for them; but some do not. I should hope to see the recording rather follow that line of demarcation.

Several noble Lords have referred to this difficult question of the widening of the investment clause. It has been a real dilemma for trustees, because in the past they have had the choice between accepting a low coupon rate and some capital appreciation to set off against inflation, or a reasonably high coupon rate, low capital appreciation and a certainty of loss of real value. I should imagine that all trustees would welcome a wider investment clause. But I am not so certain that they would all welcome the responsibility. There are many people who would be rather reluctant to have the task of investing charitable funds in what are non-trustee securities at the moment. But, at any rate, the Royal Commission recommend a widening, and the White Paper accepts it. Up to date, it has been for the court to decide: the Government suggest the Charity Commissioners and the Minister of Education, and that seems a sensible line.

However, there are two difficulties that I see. First of all, there is the question of administration. The volume of requests will be enormous, and I think it will overwhelm the Charity Commissioners. Then there is the problem of differential which has been referred to this evening. Are you going to have the same rules for the small as for the big, assuming that the big have access to good investment advice and assuming, possibly quite wrongly, that the small have not? Each in its own way has exactly the same need to preserve its capital intact, so the need is exactly the same; it is just a question of whether the responsibility is there or not. It is going to be a most invidious task for the Charity Commissioners and the Minister of Education to say, "You can do what you like—you cannot."

We had this problem in the Church of England, and I think we have solved it. The right reverend Prelate the Lord Bishop of Chelmsford referred to difficulties in the churches. I think he was speaking for the Churches Council, and was referring to the non-Church of England churches, because I believe we have solved it. We took power in the Church Funds Investment Measure for the Church of England Finance Board—that is not the Church Commissioners—to form investment pools, and any investment in these pools was held to be a trustee investment for the benefit of the trusts in the case of any trust connected with the Church of England which was truly charitable in that it was able to obtain full return of income tax.

We took power to run any form of pool—different pools to suit different types of trust—but I believe that at present only two are being run. The first is designed for the deposit of monies required intact at some specific date, and this pool tends to operate in Treasury Bills, local authority loans, Government stock, industrial debentures and so on, and it can do better than a trustee buying Government stock in the open market. The other pool invests largely to secure long-term income, and, it is hoped, a long-term capital appreciation to secure against inflation. Many charities have thrown their investments or cash into these pools to the amount of many millions of pounds, and they have thus thrust upon professional paid managers, advised by highly-skilled volunteers, the task of investing the money of the numerous parochial charities of the Church of England. I stress that this is entirely voluntary; nobody comes in unless he wants to. I suggest that consideration should be given to some similar scheme for the benefit or use of the numerous small charities up and down the land under the aegis of the Charity Commissioners or the Minister of Education.

Of course, there are arguments both ways, and if I set out one or two, that does not mean to say that there are not a great many more. From the point of view of the Charity Commissioners, it would certainly be a way out of their great administrative difficulty and, indeed, I must say, out of what may be chaos through the applications for the widened powers. It would relieve them of the invidious task of trying to distinguish between the charities, as to which should have which powers. For charities, it would be a means of getting quickly powers to spread their investments—cowers which, in the normal course, it might take a considerable time to get. It would enable a very small fund to become widespread. It would get expert management. It would get tax refunds at the same time as the income was paid out.

The contrary points that stick out are, first: would the trustees up and down the country blame the Government if the pool did not do as well as they thought it should? Quite frankly, I do not know the answer to that psychological question. Could one get skilled managers? If one is prepared to pay out of the fund, as is done in the Church of England, I do not see why on earth one should not. Could one get skilled voluntary advice for the managers? I believe that there are men in the City who would be prepared to run public services of such a nature in an advisory capacity, as they do for the Church of England. Would the charities come in, in view of the management and the advisers? I think a great many of them would. They would still have the three choices: they could stay as they are, they could apply for a scheme or they could use the pool. Would the pool have any advantage over individual investment by charities? Of course, it would provide a much wider spread, a better management, and more high-powered advice, and the dividends would be paid without deduction of tax.

Then one might ask: would the pool have any advantage over permission to invest in, say, commercial unit trusts? There I think it would, because the tax refund would be available at once at least it is in the Church of England pool—at the same time as the dividend is paid out, and the pool could set off in-corners against out-goers, so that its spread between buying and selling was reduced, which would not be the case, I understand, in a commercially managed one. Whatever the pros and cons—and there are many—it would be an important step, and I earnestly hope that some thought can be given to this matter.

That is all I will ask tonight. I would not want a reply now, because I know the inclination of advisers and Ministers, when something new is shot at them, is always to produce the reasons why it will not work. That is human nature. But when we come to the Charity Commissioners, whatever happens—whether there is a pool or not—arising out of the White Paper there is a great deal more work for them, so far as I can see, and they will definitely have to be strengthened. At the moment they are extremely thin on the ground, particularly in the top grades, and anything out of routine which presumably requires the sanction of the higher authority is apt to be a slow and laborious business. There is always a danger, in selling property and that sort of thing, that trustees may miss a market in cases which are not quite routine, through the lack of staff of the Charity Commissioners to deal with the matter swiftly. As I said before, I welcome the White Paper, which I think is a very suitable and realistic method of replying to the valuable Report of the noble Lord, Lord Nathan.

5.0 p.m.

THE LORD BISHOP OF SHEFFIELD

My Lords, at this stage of the debate my desire to hear what the noble and learned Viscount on the Woolsack is going to say far exceeds any wish I have to inflict another speech on your Lordships who have the same desire. I will confine myself, if I may, to three points. Looking forward for a moment, rather than back, I think we have to take into account the fact that everybody to-day is conscious that we are living at a time of very rapid social change when, among other things, the value of money is depreciating rapidly. One growing consequence of this, I believe, is that to-day people with charitable intentions and some little capital to allocate no longer share to the full the mental attitude of testators who lived in a much more stable society.

We realise that, however prophetically minded we may be, we cannot see very far into the future; and we are therefore less anxious than our forbears were to tie up our little benefactions so tightly. We have seen in the span of our own lives the whole pattern of our society alter very much. So I believe, looking to the future, that a wise and charitable man to-day will not only wish to give his money to this or that object for which he has great care and concern, but will also want to be sure that, in the changed situation which he cannot really foresee, when the need which he did see no longer exists, his money will be transferred by some intelligent persons to meet some other object or need fairly in line with the spirit and intention of his original gift. I am quite sure that in this country we shall always be rightly conservative in not altering easily the terms of trusts formed by donors in the past. I am not, therefore, greatly impressed by the argument that some relaxation in the terms of trusts will necessarily dry up the springs of charity, as it might have done in the eighteenth or even the nineteenth century. I think that the mentality of testators to-day is changing as much as the pattern of society.

The second point to which I would draw attention—it has been made already—is that those who care greatly for voluntary social service have had a growing anxiety during the past ten years that the situation is, from their point of view, worsening rather than improving. We hoped when the Nathan Committee was set up that it would lead fairly rapidly to some relaxation in regard to trusts and would in fact lead to the bringing back into real use of a good deal of the money which is locked up and tied up in obsolete trusts, or indeed is lying dormant in banks. I fancy that there is more of that than is sometimes realised. To-day, after ten years, I believe that many of the voluntary organisations and services are very seriously straitened financially. For this reason, among other things, to bring up a point already made, it is desirable, if the capital is not to wither away, that they should be allowed, I think by law, as the noble and learned Viscount, Lord Simonds, has suggested, to invest their capital in a wider range of securities. It has been my sad experience that in the last fifteen years much the surest way of losing capital is to invest it in undated gilt-edged stocks. That has, I think, placed a good many voluntary organisations in serious financial difficulties.

The third thing I should like to mention very briefly—and one reason why I am grateful to the noble Lord, Lord Nathan, for bringing forward this Motion is that he has provoked the noble Viscount, Lord Samuel, to speak once again—is the subject of common-good trusts. I believe that we ought to press forward the setting up of common-good trusts, and I was wondering, when the noble Lord, Lord Hawke, was speaking, whether it would not be possible to have some sort of marriage between Lord Samuel's common-good trusts and some kind of pool which would enable very small local trusts—and there are a great number of such trusts—to invest their money wisely and well and not allow it to wither away. Common-good trusts in a locality might be set up in an advisory capacity, and might foster some local trusts without actually getting rid of the actual trusteeship. I believe that locally in many parts of this country we need such trusts. Voluntary organisations are sometimes unnecessarily fearful about their influence on their own finances. I do not imagine that normally a common-good trust would make wide public appeals for money. Rather would it be a depository for small monies from small trusts—for benefactions from people who were not desirous to give all their money to one particular cause, and that kind of thing.

I think it would be of immense value in many parts of this country if such trusts could be set up, because I believe that if the trustees were wise, sensible people, and were refreshed by fresh personnel from time to time, they would be a very valuable advisory body, holding together the many smaller, not always very expert, trusteeships in a locality. It is quite a different matter from handing them over to a local authority. I am sure that there is a future for such trusts—indeed, the experience of America and Scotland Chas proved the need for setting them up South of the Border. Finally, I hope very much that it will be possible for the Government, after these ten years of intensive thought, to promise us some legislation which will liberate some of this locked-up money and also help us to go forward and strengthen, rather than weaken, the voluntary organisations of our country.

5.8 p.m.

LORD CLITHEROE

My Lords, I will not detain your Lordships more than a few moments, but I want to add my thanks to those already expressed by other noble Lords to the noble Lord, Lord Nathan, both for the admirable Report of the Committee on the Law and Practice relating to Charitable Trusts and also for raising this Motion in the House to-day.

I want to deal with only one point, among many which interest me very much in this subject, and that is the range of trust investments. That is a subject of which I have considerable knowledge, and therefore I take the liberty of addressing your Lordships' House on the matter. It is now more than 20 years since I first raised this question in the other House. I have been wholly unsuccessful during the whole of those 20 years in pressing the Government to amend the Trustee Act. The Trustee Act, if I may say so, at the present time is a crying scandal, and nothing less. It was designed in times when circumstances were wholly different, and its application to trusts to-day has resulted in many trusts losing a very substantial part of their capital and income. I take it that the object of the Trustee Act, apart from the protection of trustees, is to protect and secure the trust funds. As it now stands, the Trustee Act not only fails to protect them, but makes it quite certain that a substantial portion of them will be lost. That is a situation which surely ought no longer to be tolerated, and I hope that when the noble Viscount comes to reply he will be able to tell us that something is really going to be done about it.

Paragraph 17 of the White Paper states that the Government consider that a distinction should be drawn between the arrangements relating to charitable trusts and those relating to other trusts. They do not say why. They then go on to set out certain suggestions for dealing with the investments of charities. I should consider it very wrong indeed to deal merely with the question of the investments of charities, and not with the whole range of trusts; and I feel sure that the noble Viscount, Lord Simonds, who spoke earlier, shares that view—in fact, I think he almost expressed it. The point is that there must be given to trustees a larger range of investments than is now permitted. It is all very well set out in Lord Nathan's Report, in paragraphs 277 onwards. The Report describes the existing range of investments; it explains how archaic they are; it explains the effect which inflation has had on all investments which are tied solely to money, and it goes on to give a proposed extended range of investments, with appropriate safeguards, which seem to me very good. No doubt in minor details they might be varied to meet the views of Parliament, but, broadly speaking, they seem very good. I beg the Government to tell us not only that they are going to deal with charitable trust investments, but also that they are going to deal with the Trustee Act itself and with the whole range of trustee securities. The Act must be amended, and the sooner the better.

I should like to make one other very small point before I conclude. The trustees of small trusts find it a convenience to invest in a stock which does not have income tax deducted at source, and for that reason a great many trustees up and down the country invest in War Loan—it is convenient to them. It would be of great convenience to trustees if there were provided a Government stock with a date of redemption and in regard to which tax was not deducted at source, which trustees would have at any rate available to them as one of their investments. I am not suggesting that no trustee should invest money in Government funds. I know how anxious the Chancellor of the Exchequer and the Treasury must always be to maintain their large clientele of investors in Government funds; but I do say that to tie trustees to specially fixed-interest investments is wrong, and that the sooner that is brought to an end the better.

5.14 p.m.

THE LORD CHANCELLOR

My Lords, I am only echoing what every one of your Lordships feels when I say that we owe a debt of gratitude to the noble Lord, Lord Nathan, for having raised this afternoon the question of legislation to deal with the future of charitable trusts. We are also grateful because it has been the occasion of the maiden speech of the right reverend Prelate the Lord Bishop of Chelmsford. We are delighted that he should have broken his silence in the House, and we hope that we shall hear him often again.

I want to say generally that there is little in the speech of the noble Lord, Lord Nathan, with which I have occasion to quarrel, and if I take rather a long time in not quarrelling with it it is only because the subject is important and I know that he wants to get the latest Government view on the various points. As again your Lordships have said, not only on this occasion are we grateful for the speech of the noble Lord this afternoon, but anything that is said on behalf of Her Majesty's Government ought to be prefaced by a repetition of our gratitude and appreciation of the work of the Committee of which the noble Lord was Chairman the Nathan Committee, as it is known in this context. Since we had the Report in 1952 we have had the advantage of the debate in this House in July, 1953. I should like to say that the views that were then expressed were of material assistance to Her Majesty's Government in formulating the policy set out in the White Paper, which I think I can claim has received general approval from your Lordships this afternoon.

The noble Lord, Lord Nathan, summarised the views of his Committee on a number of important points. I hope that he will forgive me if I quote what I regard as a most important passage from the Report—namely: The resources at the disposal of voluntary action should be put to the most appropriate use, and we therefore recommend that in exercising or taking advantage of the new scheme-making powers four guiding principles should be borne in mind:—

1. (a) It is the duty of the trustees to put their resources to the best possible use in the services of the community;
2. (b) It is for them to decide in the light of this principle what to do with these resources;
3. (c) The resources should, as a general rule, remain at the disposal of the voluntary movements;
4. (d) It is the peculiar function of voluntary organisations to pioneer."

With these recommendations Her Majesty's Government wholeheartedly concur, and I should like to say here how infinitely I agree with what has been said about the importance of voluntary organisations and voluntary effort at the present time.

Last week I had the honour to address a gathering of the Citizens' Advice Bureaux of the National Council of Social Service—organisations which are of immense help to me in connection with the background of the Legal Aid scheme. If the right reverend Prelate will take this from me in the spirit in which I utter it, which is one of entire reverence, as I hope he will believe, it is a real difficulty to-day, with the extended spheres of the activities of the State, that people take the attitude, "Oh, is that not covered by the State?" I venture to put it in this way in the spirit that I have described: that if one tried to translate the parable of the Good Samaritan into modern idiom it would be wholly insufficient for the modern person to say that all the modern good samaritan needed to do was to ring up 999 and leave the rest to the National Health Service. That is an attitude which, fortunately, has not spread widely, but it is one which we have to bear in mind. Therefore, anything that we can do to underline and stress the importance of voluntary organisation will always in every field have my support, as it has the support of the noble Lord, Lord Nathan.

I suppose that there has been some divergence on the method of carrying out the recommendations, but here again, considering the scope of the subject, the divergences are not very great The Nathan Committee suggested that there should be a relaxation of what was known as the ey-près doctrine, of which there has been much discussion this afternoon, and on which, as the noble Lord, Lord Nathan, has said, there is a considerable field of agreement. But, more importantly, they suggested that while proposals for a scheme should normally be put forward by the trustees of a charity, either the central authority—that is to say the Charity Commissioners or the Ministry of Education, or any county or county borough council in whose area the charity was operated—should also have power to initiate a scheme for the reconstitution of a charity. There was a difference there and we have had the other point of view explained this afternoon by my noble friends Lord Hylton and Lord Hawke. They felt that that constituted a severe threat to the independent administration of charitable trusts.

My noble and learned friend Lord Simonds made what I believe was an important point in this regard. It is by no means easy to find competent persons who axe willing to act as trustees of charity; and to place charity trustees in the position of subordination to local authorities seemed to Her Majesty's Government to be in the best interests neither of charity trustees nor of the local authorities themselves. We felt that the proper relationship should be that of cooperation, not of subordination, and the proposals of the White Paper were therefore cast in this mould. The White Paper makes it clear that whatever local authorities may do in the way of co-operation with, or a review of, local charities, that may be done only in consultation with the trustees and with their consent. I believe that that meets the point that my noble friend Lord Hylton particularly had in mind, and I assure him that it is one whose importance we appreciate. It will be carefully scrutinised, although we trust that on that basis the co-operation I have mentioned is not beyond our hopes. I think your Lordships will see that it is a principle running through the proposals of Her Majesty's Government that charity trustees should not be subject to political pressure by local or central authorities, and I hope that my noble friend Lord Hawke will accept that that is certainly our intention and is a point which we shall bear in mind.

The noble Lord, Lord Nathan, has asked when Her Majesty's Government propose to take action to implement the policy declared nearly four years ago in the White Paper. The task of preparing legislation which has been in progress since 1956 has been one of exceptional difficulty. The law of charity is traditionally the province of the Courts; it is founded less upon Statute than upon the principles evolved over the centuries by courts of equity and embodied in the corpus of Case Law. The existing Statute Law, moreover, is to be found in a variety of intricate and largely obsolete Statutes scattered over the last 150 years, and to introduce into this corpus of law the reforms envisaged in the White Paper is a matter of the greatest delicacy and complexity. The conclusion has been reached that the best course is to repeal the whole of the charity Statutes since 1800 and to re-enact their substance, with the amendments required, in a consolidated form. I believe that that again is very much within the letter, as well as the spirit, of the suggestion of the Nathan Committee.

The noble Lord, Lord Nathan, asked me whether The Times leading article was prophetic. While at this stage of the Session and Parliament it is necessary to make the correct constitutional noises, I think that The Times is right in prophesying that next Session will see the legislation. I think I can go as far as that without impropriety on any grounds; and if your Lordships would allow me to mention a personal point, I would modestly underwrite The Times' charming recognition of the complete irrelevance of whether I hold my office or not. The working out of the policy in the White Paper has shown the need for a number of modifications, and on behalf of my right honourable friend the Home Secretary, who under the legislation envisaged in the White Paper would have special responsibilities for the Charity Commissioners, I should like to tell your Lordships what he has in mind for dealing with some of the problems.

My noble friend Lord Iddesleigh was rather worried about the introduction of the Home Secretary as a political Minister. Having held that office for three years (I speak with some diffidence in the presence of my great predecessor, the noble Viscount, Lord Samuel), I would say that the Home Secretary has so many and varied tasks to perform, and occupies such a special position in the ministerial set-up, that I do not think he will find himself the subject of political pressure. He will find himself the subject of pressure to get on with his work and improve it, but I do not think the pressure will be political in the Party sense, of which I believe my noble friend was afraid.

I propose to deal with the four main topics raised by the noble Lord, Lord Nathan, and to take up as the opportunity arises the remaining points raised by other noble Lords and right reverend Prelates. I hope that the noble Lord is satisfied with my answer on his first point. I believe that he will agree that in May, 1959, no Minister could have been more forthcoming on that paint. I hope he agrees; for that is what I intended to be.

I come now to the problem of central records, the first of the topics raised by the noble Lord. As he said, the need for central records has been accepted by the Government. Further study of what is involved in such an undertaking has led to the development of the policy in a number of ways. It should help social workers to discover what means exist for meeting the needs of those who are not precisely covered by the public welfare services. As I mentioned a moment ago, my right honourable friend the Home Secretary is at one with the noble Lord in the hope that local authorities in counties and boroughs will be prepared to maintain local public indices of charities operating in their area; and it is in his mind that the central authorities will supply copies of index entries to such local authorities. Second—and I believe this is an important point—any organisation which is included in the central register of charities must be treated as having charitable status, but independently of the Government. I am glad to inform the noble Lord that it is the intention of the Government that inclusion in the register will be treated by the Inland Revenue as prima facie evidence of charitable status. The third point is this. To serve its purpose, ways have to be devised of keeping the central record complete and up to date with basic particulars of permanent or important charities. On the first point, if I may add a slight touch of levity, I would say that the noble Lord may remember that when he and I were young there was a song which finished with the words: Will you join me, Mr. Gramps? I will precede you, Mr. Grips. I think on this point I have not only joined the noble Lord but, an important particular, I have preceded him in that work.

I want to say just a word about religious charities, because some fears were expressed about the registration of trusts for the advancement of religion, a matter to which the right reverend Primate referred in the course of the debate in 1953. If I understood the right reverend Prelate the Lord Bishop of Chelmsford and my noble friend Lord Iddesleigh correctly, they had that point in mind from the standpoint of their respective churches. The Government have no intention or desire to interfere with the administration of funds held by religious organisations for general religious purposes, but I think we should all agree that there should be central records of property which has been left on perpetual trust for religious purposes, and that charities administered by denominational authorities or for social welfare purposes, such as schools and holiday homes, should be treated in the same way as other charities held for similar purposes.

After careful consideration of this problem—I think, again, this is important—we doubt whether it would be practicable to find a statutory definition which did not leave great uncertainty in many cases. We have in mind, therefore, that in place of the statutory exception contemplated in the White Paper, a list should be worked out in consultation with the authorities of each of the principal denominations showing what denominational fund should be exempted from the supervisory function of the Charity Commissioners proposed in the White Paper. If this is a solution which commends itself to representatives of the churches, we will certainly be prepared to consider the possibility of such an arrangement.

If I may say one or two words on the question of the relaxation of the cy-près doctrine, on which generally the noble Lord, Lord Nathan, was not discontented with the approach in the White Paper, I will put two of the main—I do not say contentions: that is wrong—but approaches which we have heard of in your Lordships' House. The noble Lord, Lord Nathan, has emphasised the need for relaxing the existing doctrine of cy-près to enable charity to keep up to date, and I think the majority of expressed opinion has been with him. My noble and learned friend Lord Simonds has, broadly, taken the approach that the courts are well equipped to deal with the alteration of trusts in case of need and that there is not the same vital need to amend the law. I hope I am putting it fairly. That is the difference of approach as I see it. Indeed, my noble and learned friend Lord Simonds made, I thought, a cheering remark from his great experience that once you made the decision, or the decision was clear, that the trust or the purpose of the charity was obsolete, then there was not a great difficulty in finding an alternative purpose.

But I would ask your Lordships' attention for a rather different issue, which has struck me in considering this matter. It is not the courts, but charity trustees and the Charity Commissioners and the Ministry of Education, who need to know, with certainty, what standard short of absolute failure of a trust is to be applied to justify the making of a scheme. In considering what the criteria should be, we have found of great assistance a statement of principle enunciated by my noble and learned friend Lord Simonds in his judicial capacity in the National Anti-Vivisection Society case in 1947. He said that a scheme should be applied for—now I quote his words: …if by a change in social habits and needs, or, it may be, by a change in the law, the purpose of an established charity becomes superfluous, or even illegal, or with increasing knowledge it appears that the purpose once thought beneficial is detrimental to the community. I am sure the noble Lord, Lord Nathan, had that in mind in writing his Report. As the noble Lord, Lord Nathan, pointed out, all charity is necessarily for the public benefit; and the general criterion that we have in mind for distinguishing where a scheme ought to be made is that no substantial public benefit continues to be provided in the mode prescribed by the founder.

The courts, not the Government or the founder, are the judge of what is for the public benefit; and this raises a further important point. How is it possible to ensure that trustees will apply for schemes when these circumstances arise? The Committee presided over by the noble Lord, Lord Nathan, thought that this should be the function of, inter alia, local authorities: local authorities should keep local charities under review and report to the Charity Commissioners when reform appeared to be needed. The White Paper rejected this view and emphasised that reliance must be placed on trustees themselves to take the initiative, but in exceptional circumstances the Home Secretary or the Minister of Education might direct the preparation of a scheme without the application of the trustees. Further consideration has suggested an alternative approach. It has been laid down by the court that it is the duty of trustees to apply for a scheme in the circumstances described, and we think that if Parliament declare this in the Statute it would greatly help the Charity Commissioners in inducing trustees to act, and it would render the intervention of the Minister necessary only in rare cases.

As I said, my noble and learned friend Lord Simonds has rather taken the view that the court's powers of altering the objects of a trust are already sufficiently wide. I agree that the court has a wide discretion; nevertheless, it is proposed in the legislation to give the Charity Commissioners and the Minister of Education an equally free discretion. On the noble Lord's second point, I hope that we are advancing with minds unclouded by prejudice or preconception.

Now I come to the third point, where there is more difference: that is as to the constitution of the Charity Commission. The noble Lord, Lord Nathin, drew attention to his proposal that the Charity Commission should be formed of a number of part-time Commissioners of standing in public and charitable affairs, led by an advisory body and served by a permanent staff. It is not, in our view, intended that the Charity Commissioners should have any general policy to enforce upon charity trustees. Our view is that the initiative and responsibility should rest with the trustees themselves, and that the Charity Commissioners should act as their friends and advisers in assisting them to carry out their functions. It seems right—and here we are in agreement—that the Charity Commission should have a permanent staff, equipped to render the service which charitable trusts require, able to help them in their dealings with local authorities and with other Government Departments, and able to indicate where technical guidance can be obtained when they are not qualified to supply it themselves. So on that point there is, I think, agreement between the noble Lord and the Government.

My Lords, we are quite prepared to consider the appointment of an advisory committee, but we feel that further consideration should also be given to the benefit which the Charity Commissioners will receive from the functioning of the informal contacts which I have just described. So, although on that point we cannot come quite ad idern, again I hope the noble Lord will see that we have considered carefully what he suggested.

The functions of the Charity Commissioners and of the Minister of Education in relation to charities should no doubt be defined in the Statute. The present law contains no such definition, and this may well have hampered the Commissioners in the performance of their functions. We propose to make it a part of the duty of the Charity Commissioners to exercise the jurisdiction conferred upon them exclusively for the benefit of the charity and so as to secure the best employment of the charitable resources for the advantage of the beneficiaries so far as possible and in accordance with the intentions of the founder: that is, we are proceeding on the same principles as those I quoted from the noble Lord's Report. The Commissioners would further be required to advise and assist charity trustees in carrying out their charitable purposes; to secure the preservation of charity property; and to promote the co-operation of trustees with each other and with the statutory welfare services. Finally, they might be empowered to inquire into alleged abuses of charities and to encourage the development by voluntary bodies of improved methods of administration. So I think that, there again, although our approach is not identical, we are covering much of the work which the noble Lord had in mind for the Charity Commission.

Now I come to the last main point of the noble Lord, Lord Nathan, which is a point that has been emphasised by my noble and learned friend Lord Simonds and also by my noble friend Lord Clitheroe in the last speech of the debate. I agree that the most pressing problem confronting charities of all kinds may well be the extension of the range of investment. I need not enlarge upon the disadvantages to which those trustees who are confined, by their trust instrument, to investments on the Trustee List laid down in the Trustee Act, 1925, have been subject in recent years. This list represents, in the main, what would have been considered suitable by a prudent investor of thirty years ago or more, rather than what is prudent to-day.

The Government announced in the White Paper their intention of dealing with this problem, but developments since that date have resulted in the abandonment of paragraphs 17 and 18 of the White Paper in favour of comprehensive legislation dealing with trustee investment generally instead of investment by charity trustees alone. I am using almost the same words as my noble friend Lord Clitheroe used a short time ago. I need not go into the reasons which have led to this conclusion, but I imagine it will be generally welcomed not only in your Lordships' House but outside. This is, however, a matter of great importance, affecting the private fortunes of a great many individuals and organisations, and is not to be approached lightly. A comprehensive scheme is being evolved, and I hope that a public announcement will be made shortly. Again, I hope that the noble Lord, Lord Nathan, will say that, on his fourth point, I have not only dealt with what he expected but have perhaps gone beyond what he had hoped.

I wish that I could be as forthcoming to the noble Viscount, Lord Samuel, about the common-good trusts; because, if he will allow me to mention it publicly, it is now a period of forty years since we first became friends and since he showed such kindness to me when I stayed with him in 1919. If the House would allow me, I should like to express the dear delight it has been to all of us that he should have come and taken part in this debate. But in regard to the common-good trusts, I think that the noble Viscount found paragraph 69 rather like the curate's egg. The good part was the first part—that the Government agree that it would be advantageous if local common-good trusts were established more widely than at present, and that they should be spontaneous in origin and unofficial in character. Then, we propose in the White Paper that the title "common-good trust" should be protected by requiring the permission of the Commissioners for its use. The sad point is that, in the last ten years, there has not been spontaneous, voluntary effort to create common-good trusts. There is no obstacle in law to the establishment by anyone of such a trust, and we have said that we are prepared to protect them; but there has not been the interest which was hoped for by the noble Viscount and others. In the absence of a greater measure of public interest, the Government is in a certain position of difficulty; but both Mr. Butler and I will pay deep attention to what has been said by the noble Viscount to-day, and will consider the matter again.

With regard to bona vacantia, first may I deal with the interesting historical point which the noble Viscount raised. The dormant funds were used for the building of the Law Courts under the Courts of Justice building Act, 1865, and that Act gave an indemnity for any claims by beneficiaries Which might arise. In the ordinary way dormant funds are transferred to the National Debt Commissioners for investment, and the income goes to the Exchequer. In these circumstances, my right honourable friend the Chancellor of the Exchequer has two arguments: one, financial, that he does not want to lose the money; the second, moral, that it would not be a real encouragement to spontaneous charity if he started special charities out of public funds. It is in these circumstances that the difficulty which your Lordships appreciate has arisen. But I assure the noble Viscount that we will come back to consider a more extended use of common-good funds and we should be glad of any suggestions put to us.

I am sorry to have occupied so much of your Lordships' time, but I have tried to deal in broad outline with what I thought were the main points which the noble Lord raised and which attracted consideration in the debate. In conclusion, I hope that I have said enough to show your Lordships how intricate are the problems of the adjustment of the law dealing with charitable trusts and how important it is to find the right solution. This is a matter of first-class importance. As every noble Lord who has spoken has said, we are considering an important aspect of the future of the voluntary movement, which for so long has made a unique (in the true sense of that word) contribution to welfare of our people.

It is a hundred years since the last comprehensive legislation on this subject. The last decade has seen great changes in our society, and once the course of voluntary effort has been reset its progress may well continue on those lines, unaltered by further legislation, for many years to come. Therefore, it is our aim that legislation to implement the White Paper should encourage voluntary and statutory services to work, as the noble Lord, Lord Nathan, said, "in partnership". There will be no dissent in any quarter from this aim. The way in which this is to he achieved requires careful working out. While informal consultations with the interests concerned have been going on for some time, of course the Government have taken no decision so final as to exclude the further improvements as a result of today's debate. We will give the greatest consideration to all that has been said, and when legislation is finally introduced it is our hope that it will be in a form which will command general acceptance. We also wish to make no change in Lord Nathan's own desire of a single intelligible Act.

VISCOUNT SAMUEL

My Lords, I wonder whether the noble Lord, Lord Nathan, would allow me to intervene before he makes his speech in closing the debate? I was very disturbed by what the noble and learned Viscount said with regard to local common-good funds. I gather that the Government would be disinclined to put anything in their new Bill unless there is first of all a demand over the country for protection for common-good funds. The reason why so much public interest was aroused ten years ago was that it was thought that some kind of dormant monies might be made available for such bodies and thereby be an inducement to their formation. Once started, they would grow by bequests and contributions from the locality. But, for one reason or another, it appears that such funds will not be available at all.

The other reason why the trusts might be formed locally would be that the term "common-good trust" would be protected by law, and there might be something in the nature of a legalised pattern which such bodies could follow. Now, however, we are told that the Government are inclined to say that until the trusts get started they are not to have any legislation to protect them. We are also to believe that, unless there is legislation to protect them, they will not get started. This is an unhappy vicious circle: no legislation without trusts being formed: no trusts being formed without legislation. So we may go on in that circle. I hope that when the noble and learned Viscount and the Home Secretary come to give further consideration to this matter, as the noble and learned Viscount has kindly said they will, they will not tie themselves up in that circle but will proceed with the legislation clearly adumbrated in the last paragraph but one of the White Paper. What harm will it do to carry out that suggestion? The worst that could happen would be that it would remain a dead letter. The best that could happen would be that all over the country people would do as Birmingham and other boroughs have done—say that this is a fine opportunity, and go straight ahead. I trust that the noble and learned Viscount will consider this point.

THE LORD CHANCELLOR

My Lords, I am sorry that I must have failed to make myself clear and I want to make it absolutely certain now. I was not going back on anything that has been said in the White Paper. I intended to reinforce the first half of paragraph 69, which says: The Government agree that it would be advantageous if local common good trusts were established more widely than at present, and that they should be spontaneous in origin and unofficial in character. I could not agree more that it would be advantageous if local common-good trusts were established more widely. The paragraph goes on: It is proposed that the title 'Common Good Trust' should be protected by requiring the permission of the Commissioners for its use. Again I underline that that is still the policy of the Government. The last sentence is: However, it is not agreed that national"— as opposed to local— common good trusts should be subsidised or set up by the Government. That is the only limitation with which I was dealing, and I thought that the noble Viscount had accepted it. I am sorry if I appeared to be receding from these words of paragraph 69, because that is the last thing I intend to do. I hope that the noble Viscount will take it that at the end of the day these words remain the policy of Her Majesty's Government, and that he will accept my apologies if I did not make that fact clear.

5.59 p.m.

LORD AMWELL

My Lords, before the debate closes, may I be pardoned a slight intervention to clear up a point that arises in my mind? I am a member of the board of management of the largest animal charity in the world. What interests me—and it is this about which I should like some clarity—is the talk about the possibility of the work of a charity coming to an end because there ceases to be any public need for it. The only way in which it will be possible to bring to an end the work of a charity dealing with animals, and giving both medical and surgical aid, is to bring animal welfare under the Welfare State as a social service. The point that I should like made clear is this. Suppose that were to happen—and I think we might consider possibilities at this stage, even though they might not arise for a long time—we must remember that in the case of the Welfare State itself quite a large number of people prefer to go to their own doctors; they do not wish to come under the Welfare State. Large numbers of animal lovers will probably have the same feeling about their animals. What would the position be if it were decided by some authority, local or otherwise, that there was no further need of this charity, although a number of people preferred to be outside any Welfare State arrangement with regard to the general welfare of animals in the country?

THE LORD CHANCELLOR

My Lords, the noble Lord was looking at me while he was speaking, and I want to make it quite clear that nothing that I say relates to any concrete example, because I do not carry the trust deed of any particular example in mind. But on the general approach which has been favoured this afternoon, the result would be that, even if there was a State service, most of us think, irrespective of where we sit in the House, that there is always room for a voluntary service as well which gives the particular approach and state of mind which a voluntary service carries with it. In these circumstances, it is extremely unlikely that a State organisation would contain a prohibition against a voluntary service; and if it did not contain such a statutory prohibition—that is, a prohibition in an Act of Parliament—then no one else is in a position to take any action to prohibit the charitable work. I do not think the noble Lord need let that worry him, because I cannot imagine that any Government of any political flavour would put into an Act a provision of the kind that he described. That is only my prophecy of the future; hut, such as its value is, I hope he will find it consoling.

6.3 p.m.

LORD NATHAN

My Lords, this is the third debate upon charities in ten years and the last, as it seems to me in the light of what has been said by the noble and learned Viscount on the Woolsack, before the Second Reading of a Bill. That is a most satisfactory outcome of this series of debates. I have always felt that the work upon which my Committee have been engaged was interesting, but this evening I feel that it has been thoroughly well worth while. I am sorry that I was unable to hear the whole of the speech of the noble Lord, Lord Hylton, but I have been told what he said, and I think he rather misconstrued what I intended to convey to your Lordships. I hope I made it clear, but if not I will make it clear now, that I was not complaining of the White Paper. I felt that the White Paper went a long way towards meeting the recommendations made by my Committee, and that the points of difference were not so great as to change my mind from a general approbation into the reverse.

I am glad that the right reverend Prelate, the Lord Bishop of Chelmsford, seized this opportunity of making his maiden speech. He is not merely a dignitary among the Spiritual Peers of your Lordships' House, but he occupies a special responsibility in the Church Assembly for matters connected with the subject of this debate. It is most agreeable to know that he has taken his part in this debate, as doubtless he will again on similar matters.

It has long been the practice in your Lordships' House, certainly during the twenty years that I have been a Member, that no one speaking at the end of a debate raises fresh subjects of controversy. That seems to me to be a sound principle, and I have no intention of infringing it to-day. I am greatly indebted, as all your Lordships will have been, to the noble and learned Viscount on the Woolsack for the enormous amount of interest which he has taken in this subject and the equally great amount of work he has taken upon himself for the purpose of enlightening us as to the intentions of the Government. It was a masterly and exhaustive statement, for which, as I say, I am sure we are all grateful.

For myself, I heard with special interest what he had to say on the future of investments which is, I think, a critical point and is bound to arouse a great deal of public interest, not to say public controversy. If I were asked how I stood to-day with regard to this whole matter, I think I should say to the Lord Chancellor what perhaps at this stage he would most like to hear: that, without prejudice, of course, to what I might wish to say on the Committee stage, I should certainly find myself voting in the Lobby in favour of a Second Reading of the Bill which he adumbrates.

It is going to be a complicated Bill. I do not complain that it should take some time to draft it. I once spoke to one of the Parliamentary draftsmen and asked him how long he thought legislation would take, and he told me that he thought it was most complex and it would take at least three years to draft a Bill. I am much relieved to know that so much progress has been made that we are likely to have such a Bill before us within the next Session of Parliament. I feel so much indebted to the noble and learned Viscount on the Woolsack for what he has said, the trouble he has taken and the kind words he has spoken about myself and my colleagues, that I do not know that I can find more adequate words with which to express my appreciation than to say that I hope and believe, in the light of what he has said, that the future will have made it worth while. I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.