§ 2.50 p.m.
§ Order of the Day for the Second Reading read.
§ THE LORD CHANCELLOR (VISCOUNT KILMUIR)
My Lords, it gives me great pleasure to move the Second Reading of this comprehensive measure which is among those which my right honourable friend the Home Secretary has prepared during his tenure of that office. It brings up to date the Statute Law relating to charities. It is right that I should pay a tribute to the interest and to the labours of those noble Lords who have contributed to its conception. It was in 1949 that the noble Viscount, Lord Samuel, introduced a debate calling attention to the need for the encouragement of voluntary action to promote social progress. This had been preceded by a book published by the noble Lord, Lord Beveridge; and both drew attention to the fundamental problem "What is charity to do when its traditional objects have been overtaken by the statutory services of the Welfare State?"
Early the following year, a Committee under the Chairmanship of the noble Lord, Lord Nathan, began the work of considering the changes in the law and practice (except as regards taxation) relating to charitable trusts in England and Wales which would be necessary to enable the maximum benefit to the community to be derived from them; and I must again express the appreciation of Her Majesty's Government on the speed and clarity with which the noble Lord and his colleagues disentangled the complicated elements in the situation and laid before us a series of precise recommendations, in the Summer of 1952. A year later the noble Viscount, Lord Samuel, initiated a debate on the Report; and what was said then proved 563 helpful to the Government in framing the policy set out in a White Paper issued in 1955. In May, 1959, Lord Nathan again performed a signal service in initiating a debate on the White Paper, in the course of which I was able to give an outline of some features of the legislation which was in preparation by my right honourable friend the Home Secretary, and committed myself to a modest prophecy, which now turns out to have been inspired, that this Session of Parliament would see the introduction of the Bill.
Besides being a measure of consolidation and Statute Law revision, the Bill's primary purpose, while preserving what is valuable in the existing system, is to introduce a number of reforms to assist charity to perform its due function in the modern Welfare State. It has four main aims: first, to modernise the machinery of administration of charity law; secondly, to establish a statutory foundation for voluntary co-operation between charity and the statutory welfare services on a basis of equality and partnership; thirdly, to establish a central register of charities, and fourthly, to extend and specify the conditions which must be satisfied before the purposes of a charitable trust can be altered, by what is known as a cy-près scheme. I will try to explain this expression to your Lordships later.
The years spent on preparation of the Bill have been necessary and well spent. It now embodies almost the whole of the Statute Law (apart from ecclesiastical law) relating to charitable trusts from the 16th century to 1958. In addition we are taking this opportunity to repeal the law of mortmain, an anachronism dating from feudal times whose original purpose has been lost. This prohibition on holding land without Royal licence now applies only to a capricious selection of corporations, and is combined with a prohibition on death-bed bequests of land to charity.
The abolition of these restrictions on devises of land to charity was recommended by the Nathan Committee; and the total abolition of the law of mortmain enables another vast clearance to be made of obsolete Statutes, which will be found in Part II of the Seventh Schedule to the Bill, and go back to the eighteenth year of the reign of King Edward I. All practitioners in the law 564 of real property will, I hope, welcome the removal of what has often proved to be a trap.
The Bill goes far to meet the recommendation of the Nathan Committee that the Statute Law should be incorporated in a single intelligible Statute. It has been a matter of the greatest delicacy and complexity to introduce reforms envisaged in the White Paper into a corpus of law which is founded less upon Statute than upon the principles evolved over the centuries by courts of equity and embodied in case law. It has frequently been difficult to discover what the law is; and much of the detailed provision regarding charities in the old Statutes has been found to have been superseded by enactments relating more generally to the law of property without the older provisions being repealed. The Fifth Schedule makes a clearance of such measures which now appear to have no effect.
Before turning to the details of the Bill, let me mention a few general matters. In the first place, this Bill touches at certain points on Crown interests and prerogative, and I have it in command from Her Majesty to acquaint you that She is graciously pleased to place Her interests and prerogative at the disposal of Parliament so far as this Bill may affect them. Next, this Bill does not deal with the powers of investment of charity trustees. The Government have put forward a proposal for amending the general law on trustee investments, and, as has already been announced in another place, the Government intend to introduce legislation early next Session. There is therefore no question of separate legislation on investment by charity trustees only.
Where the Bill deals with the general law of charity and the powers of the courts, it applies to charities of every kind. Further, all the enabling powers of the Charity Commissioners and the Ministry of Education will be available to all charities on request. The Commissioners' powers of inquiry and supervision, and the provisions for registration, however, are applicable in full only to charities having a permanent endowment. They apply only in part to charities without a permanent endowment, and not at all to the exempt charities listed in the Second Schedule, 565 for which, generally speaking, there are other statutory provisions for supervision.
The concept of the "mixed" charity, that is, one which is partly permanently endowed and partly supported by contributions, has caused much difficulty to lawyers in the past, but will in future cease to have any legal significance. Nearly all the provisions of the Bill extend to England and Wales only; the law of charity in Scotland is different. Clause 46 enables the Parliament of Northern Ireland to enact parallel legislation.
I now turn to the four main aims of the Bill to which I have already referred. In seeking to modernise the administration of the law of charities, the underlying object of the Bill is to ensure that charity in the future, as in the past, should remain free from political pressure and yet achieve adequate relations with the services which are supported by public funds and for which Ministers are responsible. Much thought has been given to the proper balance between ministerial control and responsibility for the Charity Commission and on the other hand the maintenance of their independence as, in part, a quasi-judicial body.
The plan put forward in the Bill is that the Home Secretary should be responsible for the appointment and removal of the Commissioners, who will be senior civil servants. He will not control their activities, but will receive an annual report from them and lay it before Parliament where it can be debated. He will make regulations and other statutory instruments affecting their work and will be responsible for the Vote. The Commissioners will have the functions of encouraging good administration, advising and assisting trustees, and investigating and checking abuses. These functions have in practice been exercised for many years but are now for the first time set out in the Statute in Clause 1 (3). Further, Clause 1 (4) makes it clear that the general object of the Commissioners' action in any individual case will be to promote the purpose of that particular charity. The trustees remain wholly and solely responsible for the administration of a charity; and the Commissioners have no power to administer a charity 566 themselves.
These are the main principles governing the activities of the Charity Commission. The Home Secretary intends that it should be re-equipped for its new tasks. It will be strengthened by the addition of an administrative element, and this will help to bring its work into relation with that of the welfare services administered by other Departments. The Government were much assisted in framing their proposals by the contributions of noble Lords to the debate on the White Paper last May. Apprehension was then expressed that charities might be subjected to interference by local authorities, but it will be seen from Clauses 10 to 12 that local authorities are given no compulsory powers. They are not empowered to review or intervene in the affairs of charities without the trustees' consent. Where a local authority carries out a review, and after consulting the trustees forwards recommendations to the Charity Commissioners, these recommendations will of course be considered; but it will remain the responsibility of the trustees to decide whether or not they will make an application to the Commissioners. Clause 12 gives statutory authority for consultation and co-operation between charity trustees and their fellows, and between charities and local authority services at all levels from field worker upwards, and authorises the exchange of information for this purpose.
My Lords, my right honourable friend the Home Secretary and I have reason to hope that these proposals will command a wide measure of agreement among local authorities and organised charity and will be accepted as a lasting contribution to the future development of voluntary service in the modern State. The voluntary and statutory services in the same field have to learn to live and work together. In very many places this is already the case; the purpose of these clauses is to remove the last obstacles, the last suspicions, the last argument that Parliament does not approve co-operation.
Clauses 4 and 5, which contain quite new provisions, provide for the establishment of a central register of charities. No such register at present exists, and its absence has meant that the fullest use may not be made of charitable 567 resources or they may be applied so as to overlap or duplicate other provision. It is thought that there may be 150,000 charities to register. New charities will be registrable from the commencement of the Bill. The registration of already existing charities will be undertaken by stages and may not be completed, perhaps, in less than five years. Charities which are not required to register may nevertheless be allowed to do so on application. The effect of placing an institution on the register of charities will be that it is conclusively presumed to be a charity unless, and until, steps are taken to appeal to the High Court. Any person affected may object to the inclusion of a charity in the register; and the power of the Commissioners to determine charitable status will remove the uncertainty and danger of litigation which often causes anxiety to charity trustees.
It is obviously necessary—and I hope that all your Lordships will agree—that all Departments of Government should take the same view of claims to charitable status. Inclusion in the register will afford evidence of eligibility for tax relief as a charity, and provision is made in Clause 9 for consultation between the Commissioners, the Inland Revenue and local authorities so as to ensure that institutions which have hitherto been accepted as charities for fiscal purposes will be placed on the central register; and that future cases of doubt will be resolved, so far as possible, by interdepartmental agreement rather than by involving the claimant in expensive litigation. Ephemeral and insignificant charities will not be required to register. There is a power to exempt classes of charity by regulations from the registration requirements, and it is intended that this should be used freely to avoid registration which is, for instance, duplicated elsewhere or unnecessary for other reasons. Thus, consideration is being given to exceptions for the working funds of churches and the large number of small religious funds they administer, which are of denominational interest only. I understand that informal discussions have already begun with a view to specifying the funds in question in a degree of detail which is impossible in the Bill but can, it is intended, be effected by Statutory Instrument so as to leave 568 no doubt what is to be registered and what is excepted. I hope that in this way we shall meet the fears expressed by the right reverend Prelate the Lord Bishop of Chelmsford in our debate last May.
The next Part of the Bill deals with the assistance given to and supervision over charities by the Court and by the Charity Commissioners and the Ministry of Education. I referred earlier to what is known as the doctrine which is applicable; and under this doctrine the Court may alter the purposes of a trust in certain circumstances. The most important change in the law in this part of the Bill is effected by Clause 13, which specifies the circumstances, short of absolute failure of a trust, which must in future be satisfied before the purposes of a charity can be altered. As my noble and learned friend, Lord Simonds, said in our last debate, there is seldom any difficulty in finding suitable new purposes once it has been decided that a scheme is necessary: and the Bill does not attempt to regulate this matter. The power of the Court to make a scheme altering the trusts of a charity is already unlimited, but the circumstances which are at present required to exist before the Court can exercise its powers are already too circumscribed by the existing law. The clause, in addition to specifying the circumstances, adds to their number. For example, it w ill in future be open to the court to make a scheme cy près in order to amalgamate the funds of two charities which can be more effectively used in conjunction with each other. The powers conferred by this clause on the court are conferred equally on the Commissioners and the Ministry of Education by virtue of Clause 17.
I should like to make it perfectly clear that the Government are conscious that the success of this Bill will depend on its acceptability to charity and those concerned with the law and the machinery affecting charitable trusts. It has been the desire of my right honourable friend the Home Secretary that at all stages our proposals should be fully discussed with those concerned. And we have received and shall, I hope, continue to receive, both from your Lordships and from other sources, comments of great assistance in producing a workable Bill. In particular, we have received comments from Her Majesty's Judges of the 569 Chancery Division of the High Court on the clauses affecting the powers of the Court, and means will doubtless be found of improving them in Committee. We also propose, on the Judges' advice, to amend Clause 21 so that schemes for common investment funds may be made by the Court.
Your Lordships may have noticed that Clause 17 (6) contains an exceptional power to make a scheme without application by the trustees but on a reference by the Home Secretary. It may perhaps forestall criticisms which may have occurred to your Lordships if I also reveal that we are considering whether it is possible to narrow this subsection so as to confine it as strictly as may be to those very exceptional cases where trustees plainly default in their duty to apply. There has also been criticism of Clauses 6 (1) and 19 (1) on the ground that they appear to go further than the Government intend. I gladly give the undertaking that they will be reexamined.
Clauses 14 and 18, of which the latter re-enacts part of the Charitable Trusts Act, 1853, deal with those cases where the court has no jurisdiction to make a cy-près scheme because its effect would be to alter a Royal Charter or Act of Parliament. It is often an historical accident whether the instrument regulating a charity is a trust deed, a Charter or an Act of Parliament. But the practical consequences when it comes to securing an alteration of the trust vary considerably and in some cases cause great concern and expense to the charity. These clauses provide machinery whereby the desired relief can be obtained without cost to the charity. Moreover, since it will be ordinarily unnecessary to promote a Private Bill when the same results can be achieved by a Parliamentary scheme, free of cost, the expenditure of charity funds on a Bill is prohibited without the leave of the court or the Commissioners.
Clause 19, to which I referred a moment ago, is a new provision which enables the Commissioners to act in an emergency for the protection of charity property. In most cases the only action now open to the Commissioners or Minister after holding an inquiry is to report the case to the Attorney-General. It may well happen that in the interval 570 between the discovery of misfeasance and the launching of Chancery proceedings, the charity assets suffer further loss. Certain powers to act in such an emergency have already been conferred on the Charity Commissioners in relation to charities for the relief of distress arising from the war and to charities for the benefit of disabled persons. These powers have proved so useful that it is now proposed, under subsection (1), to apply the principle to all charities made subject to inquiry. But, as I say, I am very ready to listen to any points that may be raised in this regard during the debate.
My Lords, I have already referred to Clause 21, which relates to common investment schemes, and I need only add that this rather lengthy clause follows what is now settled practice for schemes of this sort, which may be made where two or more charities delegate to joint nominees the management of their common funds. If charities so desire, their common funds can be managed by the Official Custodian, with the advice of a panel of investment advisers, in the same way as the Public Trustee manages private trust funds in his custody. Clause 26 re-enacts the Charitable Trusts (Recovery) Act, 1891; and since the policy of redeeming small annual charges on land has been applied with great advantage to tithe and land tax, it is thought that the time has come to apply it to charity rent-charges also. Clause 27 consolidates what is believed to be the existing law regarding the institution of charity proceedings. The form of proceedings is left to be regulated by the rules of the court.
I would draw your Lordships' attention to new arrangements regarding appeals to the Court. It was one of the principal objects of the first Charitable Trusts Act, as it is of this Bill, to prevent charity money from being spent not for the charity purposes, but on the costs of litigation, and an administrative machine was provided to deal, free of charge, with non-contentious charity business. In order to protect charities from being drawn into legal proceedings instigated by other parties the leave of the Charity Commissioners was required before any proceedings regarding a charity could be instituted by anyone other than the Attorney General. To modern ideas, 571 however, it seems strange that an administrative body can finally bar access to the courts, without any appeal or redress, unless the applicant can persuade the Attorney General to proceed ex officio. The Bill therefore provides that proceedings in the Chancery Division may be commenced either with the leave of the Commissioners or—and this is new—with the leave of a Judge. The Court will thus, in the last resort, decide whether or not proceedings are justified.
It will, I hope, be a source of gratification to the noble Viscount, Lord Samuel—and may I at this stage take the privilege of an old friend and say how delighted everyone in the House is to see him in his place to-day?—to see that steps have been taken in Clause 30 to protect the expression "common good" fund or trust, so as to encourage the formation of such funds by giving some warranty of their object and good faith. I think it is fair to describe the remainder of the Bill as re-enactment or machinery and I need not detain your Lordships with detailed explanation, except perhaps as regards the Second Schedule, "Exempt Charities."
Section 62 of the Charitable Trusts Act, 1853, provided that that Act should not extend to certain charities specifically named there—that is, the Universities of Oxford, Cambridge, London and Durham, together with their colleges and halls except as regards London; Queen Anne's Bounty, now the Church Commissioners, and the British Museum. The Act of 1855 added Winchester and Eton, which were subject to other enactments. Private Acts have added nearly all modern universities. A very few other institutions have been exempted by Public Act or Church Measure. These are, in the main, subject to other forms of Parliamentary control or supervision. These existing statutory exemptions are, therefore, carried forward into this Bill, and in order to secure consistency it is intended to make it possible for all present and future universities to attain the same exemption. The Bill accordingly provides, as recommended by the Committee presided over by the noble Lord, Lord Nathan, for additions to the list of exempt universities to be made by Order in Council.
An exempt charity, like all other charities, can apply to the Commis- 572 sioners or the Minister of Education for the exercise of their enabling powers under the Bill (some of them had a similar right under Section 14 of the Charitable Trusts Act, 1869), but none of the powers of the Commissioners or Minister is made exercisable in relation to an exempt charity except at the request of that charity. There are, of course, many other charities, notably those controlled by Government Departments, where registration and supervision by the Charity Commissioners may be superfluous, and it is proposed to deal with these by administrative order or regulations, excepting them from the provisions relating to registration, submission of accounts, and land transaction control.
My Lords, may I say again, in concluding my remarks, that we have taken careful account of what has been said in the informal consultations before and during the preparation of the Bill. The advice of the National Council of Social Service, to mention only one important voluntary organisation, has been of the greatest assistance in producing a measure which will, we hope, command a wide measure of acceptance. I need hardly tell your Lordships that I shall listen with the greatest attention to everything that may be said in the course of debate, and will consider carefully, along with the Home Secretary, details which may be capable of improvement, in the hope that the Bill, when it reaches the Statute Book, will receive recognition as an outstanding landmark in the history of voluntary action in this country. My Lords, I beg to move the Second Reading of this Bill.
§ Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
§ 3.24 p.m.
§ LORD NATHAN
My Lords, everyone in your Lordships' House is indebted to the noble and learned Viscount on the Woolsack for the clarity and, having regard to the complexity of the subject, the brevity with which he has introduced the Second Reading of this Bill. I personally stand here to-day in what might be called a double capacity. In the first place, I am the spokesman for my noble friends upon these Benches in saying that they regard this Bill as in no sense a Party measure: they welcome it and will support its Second Reading, whilst of course making all proper reservations as regards the Committee stage. 573 So much I say on behalf of my noble friends. However, I have a special, peculiar interest in this Bill—at least an avuncular, and perhaps even a parental, interest. Indeed, this debate marks a great occasion for myself and for the members of the Committee, or those who survive, who for so many months devoted their time and energies to the work of the Committee, so familiar to your Lordships—and all that nearly a decade ago. It has been worth waiting all that time for this Bill.
I hope to say something in a moment about the Bill itself, but before I come to that I should like to refer to a particular point which has given me, and I am sure has given your Lordships, great satisfaction. Your Lordships will appreciate that this Bill is a result of an immense clearance operation that was necessary in order to achieve the objectives which my Committee set out in their final paragraph to which the noble and learned Viscount has referred. We said:… that the present law, with the changes we propose, should be simplified and reenacted as a single, short, intelligible Statute".Now in the course of surveying the existing law, we were very much struck—I might say we were appalled—by the clutter of the Charitable Trusts and other Statutes with which trustees had to contend. It was a tangle of Statutes scattered over many centuries: a tangle of Statutes which would perhaps be better described as a jungle. Those responsible for drafting this Bill had to hack their way through that jungle and cut down the dead wood, branch by branch, trunk by trunk, thicket by thicket. The results of their labours are embodied in the Fifth and Seventh Schedules to this Bill, "Enactments Repealed as Obsolete", and "Enactments Repealed as Superseded".
The repealed enactments—12 of the 64 pages; about 20 per cent. of the whole of this Bill—go back, as the noble and learned Viscount has reminded us, to the reign of Henry VIII and, for the mortmain repeals, to Edward I—Edward I, 1272 to 1307. Nearly 80 enactments, not to speak of Church Assembly Measures and Orders in Council, are affected and over 90 relating to mortmain. This must have been a stupendous undertaking—even more stupendous than I had ever believed it 574 to be. Indeed, it largely explains the time taken to produce the Bill; and I must, for myself, confess to a sense of contrition in having, on more than one occasion, criticised the Government for what seemed an undue delay.
To dwell on this clearance operation is to dwell on negative results. I turn to the Bill itself. I said that what my Committee looked for was, "a single, short, intelligible Statute", and here it is—or, rather, here it will be when Parliament has expressed its will. It is a single instrument; it is short; it is intelligible. I feel sure that I speak not only for myself when I say that this is a superb piece of drafting; and for my part I should wish to congratulate Parliamentary Counsel on having succeeded so well in a most formidable task. They have carried out our objectives admirably.
Before I come to the actual contents of the Bill, there is one matter to which I should refer, and to which I think no reference was made by the noble and learned Viscount upon the Woolsack, although it was mentioned in our earlier debates. It is a curious point, but I think one of some importance. This is the Charities Bill, yet nowhere is "charity" defined. Clause 44 of the Bill, the main definition clause, states that'Charity' means any institution … which is established for charitable purposes and is subject to the control of the High Court in the exercise of the court's jurisdiction with respect to charities".But in Clause 45, "charitable purposes" are defined aspurposes which are exclusively charitable according to the law of England and Wales".In other words, the Bill leaves us exactly where we were. It may be—I have heard distinguished lawyers argue the point—that to define now would alter the content of charity and might disturb old decisions and modern decisions, too. I suppose I must accept the fact that in this regard we had better leave matters as they are.
I come now to the several Parts of the Bill, and with your Lordships' permission, I will comment briefly on three of the most important Parts—Parts I, II and III. I take Part I last, because I think that this is more convenient to the argument which I wish to address to your Lordships. Therefore, I come first 575 to Part II, which relates to… inquiry into, making known and co-ordinating charitable activities,including the provision for a central register of charities. Thus the Bill here gives effect to one of the three or four recommendations to which my Committee attached the most importance. I regard a central register as constituting an immense step forward in the direction of enabling the public to derive the maximum benefit from charitable trusts, which, it must not be forgotten, by their very nature have been created for the benefit of the public. A charitable trust, or a foundation, as it is now ordinarily called in the case of more important charitable trusts, is not a private institution: it is a public institution; and that is so as a matter of fact as well as a matter of law. It is right, therefore, that the public should have an opportunity of knowing what these charities stand for, what service they can render.
It must be recognised, however, that a comprehensive, up-to-date register will be achieved only on certain conditions. The first is that the community must be determined to have this register and to see that it is maintained. Trustees, whether compelled by their own realisation of the value of the register or by public opinion, must come forward readily to register their trusts. This is the first, the essential, prerequisite of success. The second necessary condition is that the register must be usable. It must have a purpose, and a purpose capable of being fulfilled. It must be capable of throwing up not only the primary but also the secondary objects of trusts and their classes of beneficiaries and beneficial areas. This is a large undertaking of an administrative character, the importance and difficulty of which must not be underrated. It will take time. But if it can be done, it should be done. It is essential, if the register is to fulfil this purpose.
I am not at all clear that in certain of its aspects in regard to registration this Bill goes quite far enough. Clause 4 (1) provides that the register shall includesuch particulars as the Commissioners may from time to time determine. …This is not very reassuring. Clause 10 (1) is a little more helpful. It provides that local authoritiesmay maintain an index of local charities or of any class of local charities576 in their area. This implies, at any rate, that the register is to be capable of throwing up local charities, county by county, borough by borough and class by class.
The third necessary condition is that no disincentive to registration should be created, that nothing should be done to discourage trustees from registering their trusts. It is here that I have some reservations on Clause 9. The noble and learned Viscount on the Woolsack referred with some particularity to Clause 9 and, as I understood him, indicated that the provisions of that clause would be receiving further consideration. As I think that this is a matter for Committee stage, rather than for Second Reading, I leave it there, whilst reserving my position by saying that it needs further consideration and, perhaps, amendment. My own opinion is that if we can look forward to a climate of opinion in which trustees will not fail to come forward to register, then we shall get a really sensitive and detailed classification of registered trusts, with the result that the registration will become a potentially powerful instrument for strengthening the whole voluntary movement in this country. I regard the central register as the essential key.
In Part III of the Bill we reach the most outstanding, and perhaps the most difficult, problem of all—the problem of relaxing the cy-près doctrine. Clause 13 reflects what was proposed in the White Paper, and as that reflected what my Committee had suggested, I am well satisfied. This will mean that the conditions to be fulfilled before the purposes of a trust may be changed will be much wider than they have been hitherto, and it should thus be possible to keep charitable trust purposes in tune with public needs in the changing times. I say that it should be possible to do so, because here again a reality will not be made of this new key provision unless trustees play their part. The onus is on them to initiate change. My Committee took the view that while the duty of initiating and putting forward the scheme lay primarily with trustees, in default of their moving local authorities, or the central authorities, should be empowered to take the initiative. The recommendation regarding local authority initiative was not accepted in the White Paper, but I am glad to see that our point of view has 577 been met in part by the declaration in Clause 13 (4) that:… a trust for charitable purposes places a trustee under a duty, where the case permits and requires the property or some part of it to be applied cy-près to secure its effective use for charity by taking steps to enable it to be so applied.That provision is most valuable. So is the provision in Clause 17, that the Secretary of State may refer to the Commissioners any case which seems to him for special reasons to require the making of a scheme. This is no doubt only a reserve clause, and the power it confers would and should be resorted to only in exceptional cases; but taken together, these two provisions should go far to give trustees some incentive to keep their trust purposes under constant review and to apply for a scheme if necessary. I understand from the noble and learned Viscount on the Woolsack that he is considering some modification of the provision with regard to the Secretary of State's powers, but I hope he will not modify them too much.
There are two other provisions to which the noble and learned Viscount referred and which I wish to mention—namely, Clauses 21 and 30. Clause 21 empowers the Commissioners on the application of any two or more charities to provide for the establishment of common investment funds. I was interested in what the Lord Chancellor said as to the authority for this being vested in a Judge of the Chancery Division. That is a proposal which I understand is very much in line with the authority of the Judges of the Chancery Division now in relation to the Variation of Trusts Act and matters of that kind, and it will be interesting to see the more detailed proposals which the noble and learned Viscount brings forward at the appropriate time.
Clause 30 protects the expression "common good". I join (as I am sure we all do) with the noble and learned Viscount on the Woolsack in saying to the noble Viscount, Lord Samuel, now in his place on the Benches he has adorned for so long, how glad I am to see him here to-day. I take special satisfaction in that, because it was he who introduced the original Motion as a result of which all this emerges; it was he who introduced the debate some time later on my Committee's Report; 578 and it was he who from the beginning held firm to the conception of "common good". I am certain it is a great satisfaction to the noble Viscount to-day, as it is to all of us, to see that particulars as to that are now to be embodied in a Statute of the Realm.
I turn now to Part I, dealing with central authorities. All these vital new provisions, in particular those for a central register, for a closer, better articulated relationship between charitable trusts and public bodies, and above all for the relaxing of the conditions in which the purposes of a trust may be changed, betoken a much more lively, much more dynamic conception of the functions of charitable trusts than that which has reigned heretofore. What, as a consequence, ought the function of the Charity Commission to be? And how, in turn, should the Commission be constituted? The answer turns very largely on the question of initiative. My Committee, as I have said, proposed that, while the duty of taking the initiative in calling for changes in the purposes of a trust lay primarily with the trustees, the Charity Commission should have a reserve power itself to take the initiative.
We accordingly proposed three changes: first, that there should be a Minister, with strictly limited powers, responsible for representing the views of the Commissioners in Parliament; secondly, that the Commission should be reconstituted and should consist of a small number of men and women of standing and experience in public and charitable affairs, instead of, as at present, of lawyers; and thirdly, that the new Commission should have power to set up an advisory council. The Bill has taken a different line on the question of initiative, and I say, frankly, that I think, on balance, that it must be accepted as being more in accordance with the public view on this difficult matter. The Bill has given the Commission no power of initiative, but has given the Minister a reserve power. I accept that.
But I think the proposals regarding the Commission have swung too far away from those proposed by my Committee and, moreover, are out of line with the new powers proposed in the Bill. Only our proposal that there should be a Minister, with strictly limited powers, is accepted. The Com- 579 mission is to remain very much as before, except that one of the Commissioners need no longer be a lawyer. I have no hard feelings for lawyers (how could I, of all people?) but I must confess that I think that some mixture of lawyers and laymen is good in a Commission of this kind. As I say, the Commission is to remain very much as before, except that two only, instead of three, will be lawyers. But of the advisory council there is not a word. I feel that, particularly if the Commission is to be constituted as now proposed, it should be enabled to take a wider view of social trends and social needs as a whole, and ought therefore to have an advisory body at hand. The noble and learned Viscount on the Woolsack may perhaps say that technically there is no need in the Bill to provide for such a body, and I may therefore be drawing the wrong conclusion from there being no provision in the Bill for setting up such a body. But I would urge strongly the need for such a body, in order to give advice and guidance to the reconstituted Commission as now proposed, and I hope that we may hear from the Government before the Second Reading is concluded what their view on this matter is.
I shall end as I began, with praise for the Bill as a whole. When it becomes law it will be a landmark in the long, history of the law relating to charitable trusts, and will, by its very completeness, compactness and clarity, constitute a challenge to trustees and to the whole voluntary movement. Here at last is Charity's Charter.
§ 3.47 p.m.
§ LORD AMULREE
My Lords, as one of the Peers who spoke when my noble friend Lord Samuel brought in his Motion ten or eleven years ago, I should like to say a few words about the Bill which is before your Lordships' House to-day. It is a Bill which I think all of us who have studied the charity question must welcome, because, as has been said, it tidies up the muddling laws relating to charities on which we have been working for so long. There are one or two comments I should like to make before referring to the Bill itself. Charity, of course, goes back a long way, to the time before the State began to take any interest in the welfare of the individual. Therefore people have inquired why it 580 is necessary for charity to play a part in the affairs of the country now that so much is done by the Government and we have in being what is called the Welfare State. That has never seemed to me to be a right point of view. There has always appeared to me to be a great deal of scope for the voluntary organisations and charities which have that flexibility behind them that no official or statutory body can have. That is why I am pleased that the charity trusts continue to exist; and I am sure that more will be made in time.
I was pleased to hear the noble and learned Viscount on the Woolsack say that Parliament is giving final approval to the voluntary bodies, and, that the voluntary bodies can co-operate with statutory bodies. I am sure that those who are interested in voluntary organisations are most grateful. I agree with the noble Lord, Lord Nathan, when he referred to what his Report recommended for the Charity Commissioners. I think the body which he suggested would have been a more satisfactory one than the body which now appears in the Bill. It would have been quite possible, with the five or nine people he mentioned, for one or two to be members of the legal profession. I think that that would have been essential, and it is a very good point. But I am not at all sure it is necessary that the Commission should be so small, particularly when two-thirds of a total of three are to be barristers or solicitors. It does not leave much scope for anybody outside.
I am sorry, too, that the advice of the Council has been dispensed with. One would have thought that that was an extremely important body. Various charitable trusts with which I am connected find the advice and work of the Council is of great value to their work, and it helps a great deal in making up their minds what they should do. The noble Lord suggested that it might be possible to incorporate the Council later on, but I will not press that point any more at present. There is a certain danger that the members of the Charity Commission being so few, and being civil servants, they might try by some means or other to get some of the bigger charitable trusts to carry out investigations and inquiries, to make reports, or to do a number of things like that which should really be done by the State or by 581 the Government itself. I am sure it was never the intention that the charitable trusts which we have now should be used to subsidise work which should be done by the central Government.
There is a fear, which I think is probably quite groundless, that the Secretary of State would attempt to influence some of the policies of the charitable trusts in the way in which the Secretary of State of the day wishes. I know that some bodies feel that that may be a possible danger. One can have no objection at all to the fact that charities can be investigated, if it is thought that their affairs are not being managed in the most efficient and proper way. The kind of thing I have in mind is that one found in the past that with certain charitable bodies far too high a proportion of their income was spent upon administration and not enough on the work for which the charity was intended. Some bodies are loath to spend the money which they have raised, and they tend to keep it as an investment trust or, as you might say, wait until a rainy day comes along, whereas I think the money should be spent freely and more money collected. If you have a good charity, then more money will come along.
There is nothing but good to be said for the establishment of the central register of charities, but there is one point I have had brought to my attention. I was approached by the Boy Scouts' Association, of which I regret to say I am not a member, and they told me that according to a judgment in the High Court given in 1932 each of their branches will need to register separately. According to my working out, that will mean that there will be about 11,000 or 12,000 different branches who need to register separately with the central register. If that is true, it will make an enormous amount of work for the 12,000-odd branches, and a great deal of work for the central register, too. I wonder whether it would be possible for a body like that to conk under the exempt charities, or whether it would be possible for the central office to register for the whole lot.
There are some doubts in my mind, but not very strong ones, about Clauses 10 to 12, which deal with the question of local authorities. Nothing but good can be gained from the proper co-operation of local authorities with 582 voluntary and charitable bodies. But there does not seem to me—perhaps I misread the Bill—to be any protection against a local authority who wants to interfere improperly in the affairs of the charity. Although most local councils are good, one must confess that certain local authorities in the past have acted in an ultra vires fashion—as they possibly will in the future. One wonders whether there is enough protection in the Bill to see that they do not do that in the future. In the same way, the powers of the Commissioners in Clause 17 (6) to make a scheme for special reasons is just a little vague, and if it were not closely interpreted might again lead to events which one would not want to see occurring.
There is another point about which I am not quite clear. What would be the body who would advise charities upon certain of their regulations and rulings which have become out of date and no longer applicable? The point I am thinking of is this. If some people want to apply to enter homes, almshouses, et cetera, they must give particulars not only of what money they have themselves, but of what money their fathers had earned. That seems to me to have no bearing on whether they want to go into a home. A large number of people would not know what their fathers had earned if they were put in the witness box and examined upon oath. One finds that a number of these rules are relics from the past, and I hope it will be possible to get rid of a great many of them.
There are two points I should like to bring forward which are not applicable to the Bill. In the United States, if some individual wishes to give some present to a museum or collection, the money which it costs is free of tax. That has a bearing on charity, too, and I wonder whether it is possible—although I know this is a finance matter which I should not be talking about—to introduce something of that sort here? It is a fact that private individuals who give money to charity under covenant need to pay surtax, whereas boards of directors do not. I wonder whether that is not rather an unfair differentiation between the two, and whether one would not get more individuals giving money under covenant if that particular anomaly were removed.
583 There is one final personal matter I should like to mention. I am sure that many schoolboys are glad to see that the Statute of Mortmain and quia emptores have gone. I was never quite sure what they meant, but I felt they were doing something good to protect the people against the powers of the Church. Although it is quite proper that they should have gone, I think one should say a word in sorrow at their passing.
My Lords, before the noble Lord sits down, am I right in thinking that he has discovered a method by which a private individual can give money to a charity and reclaim surtax on it?
§ 4.0 p.m.
§ LORD EVERSHED
My Lords, may I immediately set your Lordships' minds at rest in one respect? I have not in my mind this afternoon, as an old Chancery Judge, if I may so describe myself, to address your Lordships on the historically interesting, if erudite, topic of the law of charity, including the definition of "charity" to which the noble Lord, Lord Nathan, referred. I am venturing to speak this afternoon in another capacity, namely, as chairman of the Pilgrim Trust, and also on behalf and with the authority of a number of other like charitable foundations, including the Nuffield Foundation.
I wish to make it quite clear at once that all these charities for whom I am privileged to speak wholly support this Bill and the general idea which underlies it, including the particular provisions to which reference has already been made, provisions for registration, supplying accounts and information, and also the provisions for broadening the so-called cy-près rule and for reconstituting the Charity Commissioners. Those for whom I speak would not wish it to be thought for a moment by any of your Lordships that they consider that, because of their size or otherwise, they should be in any sense above or exempt from the general law relating to charitable trusts, still less that there was anything about their affairs which they at all wished to conceal.
But I must say on their behalf that these charities have been somewhat 584 disturbed by the provisions and the possible application, as the clauses stand, or three clauses in the Bill, namely, Clauses 6 (1) and 17 (6), which confer wide powers on the Home Secretary, and also Clause 19 (1). On behalf of these charities again, I very much welcome what has fallen from the noble and learned Viscount on the Woolsack—namely, that he will consider further with a view to limiting them, the first two of these provisions, Clauses 6 (1) and 17 (6). The noble and learned Viscount will no doubt consider consequentially the terms of certain other clauses, Clause 17 (9) and 18 (6).
I shall not weary your Lordships by citing them, but your Lordships will recall that under Clause 17 (9), as the matter stands, the Home Secretary is given power to direct the Commissioners to exercise their jurisdiction under the clause, even in a case which the Commissioners may think should more properly be adjudicated by the Court. Misfeasance, abuse or misconduct on the part of trustees is, of course, one thing; but the language, I suggest, of Clause 19 (1), as it stands, covers a much wider area. It covers, for example, the case of what is described as "giving … excessive remuneration"—and I am not sure by what standard excessiveness is to be judged—even if authorised or required by the terms of the trust. Again I do not wish your Lordships to suppose for a moment that I am trying to conceal what any of these charities suppose is excessive remuneration being paid to any of their servants. I cite it as an example, and I leave Clause 19 there, for it is a matter of drafting, if I may say so, more proper to be considered at a later stage.
But more significant, in the view of those for whom I speak, is the width of the powers as they now stand, conferred upon the Home Secretary by Clause 6 (1) and 17 (6). May I say a word about 6 (1) (and what I say is equally applicable to the other clause); and I shall be brief, in view of what the noble and learned Viscount the Lord Chancellor has already said about them. As your Lordships will recall, Clause 6 (1) says that the Commissionersif so directed by the Secretary of State shall, institute inquiries with regard to charities or a particular charity … either generally or for particular purposes.585 Those inquiries might obviously be of a very onerous character. They are not, on the face of the clause, limited to cases where any misfeasance or misconduct is suspected. The purposes, general or particular, are wholly unspecified and unlimited.
I have heard what the noble Lord, Lord Nathan, has said on this matter, and I do not wish to exaggerate it. But I do ask your Lordships: Is so wide a power right or necessary? We all know in these days that, in one way and another, pressure may be brought to bear on Ministers. I do not for a moment suggest that the holders of the office of Home Secretary, certainly not the present holder, would act irresponsibly in the matter. But one can think of cases of pressure worked up and brought to bear by some active body of people desirous that the funds of some charity might be applied or applied to a greater extent, in favour of some particular pet object of their own, overriding entirely the perfectly proper discretion of the trustees, and perhaps even the purpose of the founder of the trust. These wide powers are not hinted at in the Explanatory Memorandum which accompanies the Bill. In that Memorandum Clause 6 is described as merely re-enacting the Commissioners' existing powers. Nor are they hinted at in the Government's White Paper to which the noble and learned Viscount referred, paragraph 7 of which states:The Government agree with the general conclusion of the Committee that the existing powers of inquiry are wide enough.Moreover, the powers appear to me to be in conflict with what the Committee themselves said. Without wearying your Lordships by many citations, may I refer to paragraph 156 of the Committee's Report:We have been particularly anxious to avoid making demands on trustees which would be irksome or considered inquisitorial.And paragraph 374—and the noble and learned Viscount alluded to this in his speech this afternoon:Charity has always in this country been regarded as standing quite outside the realm of party politics, and it is, in our view, of the first importance that it should continue to be so regarded.My Lords, I apologise for taking up time on this matter, but I have felt it right to say that the inferences and the poten- 586 tialities of this novel power conferred upon the Home Secretary by the clauses as they stand appear to be a little disturbing, and are perhaps obvious enough. I repeat that on behalf of these charities I welcome what the noble and learned Viscount the Lord Chancellor has said—namely, that he will consider the revision, and limitation perhaps, of their effect.
May I repeat, in conclusion, that the charities for whom I speak wholly support the general idea of this Bill and wish in no way to qualify the powers and the duties to be exercised by the Charity Commissioners, who will be, after all, a quasi-judicial body. In these days, unhappily, the ordinary individual can do little to support charity—if one may properly quote from the Collect for two days ago, "the very bond of peace and of all virtues". The trusts in these days, like those for whom I speak, many of recent origin, many the fruits of industry, perform, I hope and believe, a highly important public service in the Welfare State. The clauses to which I have ventured to allude, if left as they stand, contain, as I submit to your Lordships, the possibility, directly or indirectly, of the kind of pressure upon, or interference with, trustees in the performance of their duties which might seriously discourage benevolent men and women in the future from establishing such trusts, and might even discourage public-spirited persons from acting as trustees.
§ 4.10 p.m.
§ LORD SILKIN
My Lords, I should like to begin by offering my congratulations to my noble friend Lord Nathan on the successful issue of his presiding over the Committee some ten years ago. I suppose the average time between the submission of a Report to the House and of the introduction of legislation to implement that Report is about seven years. But I appreciate that this has been a particularly difficult measure to implement, and I would not accuse the Government of being particularly lackadaisical on this occasion—I think they have done well to get a complicated measure of this sort before Parliament within the time available to them.
This is a great day for my noble friend and he is entitled to enjoy it. He spoke also for noble Lords on this side of the House in expressing our general support for the Bill, and we do indeed give our general support. But that in no 587 sense means that we accept every part of this Bill, or even that we agree with my noble friend in some of the matters which he raised this afternoon or in the Report itself. The Bill is a non-Party Bill, and each of us not only is entitled, but has a duty, to examine the Bill closely and to put before the House any ideas he may have for the improvement of the Bill; and I would say that this House is at its best in dealing with a non-Party measure of this kind. I would say, therefore, that the Committee stage of this Bill is going to be of the greatest importance, because we may get general agreement as to the main principles of the Bill but, when we come down to the details of it, we shall find that there is a good deal that we want to discuss, to have amplified or even to amend.
Therefore, it is from that angle that I want to say a few words about particular aspects of the Bill. I do so with some diffidence because, unlike the noble and learned Lord, Lord Evershed, I speak with no authority of any kind on this question, not even legal authority. But, as has been said, this Bill is one which has been specifically designed for people like myself who have no legal understanding of these matters but can read; it is fairly clear (I think it is all the better for that) and it enables us to put forward our different ideas.
The first thing that strikes one—my noble friend has already referred to it—is that there is no definition in the Bill of "charity". Therefore I take it that the ordinary definition contained in the Statute of Charitable Uses of 1601 will still apply. I will, not at this stage but perhaps at a later stage, read out that definition to your Lordships. I think your Lordships will find that it is almost wholly obsolete, largely in unintelligible language, and relating to circumstances which certainly do not apply to-day. Moreover, superimposed upon this definition has been a multiplicity of legal decisions, not all of them consistent, which add to the difficulties of anyone who has to decide whether or not a particular matter is a charity. I do not suggest for one moment that it is difficult in all cases to decide what is a charity. It is like a good many things—you recognise a charity when you see it. But there are borderline cases, and 588 I will refer to one or two in a moment. I think it would be helpful to have a clear, up-to-date definition of "charity".
I see that we are repealing the Statute of Mortmain. That was passed 300 years before the definition of "charity" in the Act of 1601, and I hope we shall not have to wait another 300 years before we come to the time when it is opportune to lay down a definition. In this matter I have had considerable support from a number of Judges and learned counsel, although I am bound to say that there is a conflict of view about the matter and no doubt there are an equal number of Judges who take the view that we ought to leave well alone. But I think it is right that this matter should be ventilated in Committee, and in due course I propose to put down, not my own attempt at a definition but that of somebody who is far more qualified to make the attempt—namely, Lord M'Naghten. Lord Sterndale said:I am unable to find any principle which will guide one evenly and safely through the tangle of the cases as to what is and what is not a charitable gift.This has been supported by Mr. Justice Vaisey, who was the senior Judge of the Chancery Division, and by many others. I will not try to amplify that; I will leave it to the Committee stage.
But I should like to point out one or two absurdities which arise from the present definition and from the body of case law which has grown up over it—for instance, the present status of sport. Recreation in a particular locality is charitable; so are many of the types of physical recreation under the Recreational Charities Act, 1958. But amateur sport is not charity—well, I hope it is, in order to remain amateur. But under the definition of "charity" it is not. Again, an educational trust for the children of a certain town is charitable; a similar trust for the children of employees of a large firm operating in that town is not. I think we ought to attempt—at any rate, now that we are having a consolidated measure and laying down the law on charities for a long time to come—a definition which will be acceptable and which will remove many of the difficulties, complexities and contradictions that exist at the present time.
589 The next is the cy-près doctrine. So far as I can see, the provisions of Clause 13 extending the powers of the Court to vary the purposes of a charity are satisfactory so far as they go. But in two respects I think that they do not go far enough. The first is that there is no power given to the Court to re-frame testamentary clauses that fail purely through imperfect drafting. In such a case, although the intention of the testator may be perfectly clear, the charitable trust becomes wholly void and invalid. This matter was considered in 1953 and 1954 when the Charitable Trusts (Validation) Act, 1954, was passed and it was put right in respect of all instruments made up to 1952. Parliament therefore recognised that it was right and equitable that these imperfect trusts should be rendered, so far as possible, practicable in order to comply with the wishes of a testator; but all imperfect trusts made after 1952 remain imperfect and are invalid. I believe it is suggested that, with the passing of the Act of 1954, testators and their legal advisers are put on notice that an imperfect trust cannot become valid. But I can see no reason why a Court should not have power to render valid a trust which is invalid purely for technical reasons, and thus comply with the wishes of the testator.
The second point, also in connection with the cy-près doctrine, is that there is no provision for dealing with surplus charitable funds no longer needed for their original purpose. There are a number of well known cases of that kind, the latest being the Gillingham bus disaster, in connection with which funds were collected to be used for the charitable purpose of helping the victims of the disaster and their next-of-kin. But it afterwards transpired that the bus company whose vehicle was responsible for the accident accepted full liability, and all the victims of that disaster were fully compensated; so that the fund was rendered unnecessary. There is no provision for dealing with a case of that kind. All that could be done there was to seek out the people who had made contributions to the fund and restore the money to them so far as it was possible to find them. But since the subscribers to this fund were people who had given very small sums of money, usually anonymously, that was impracticable 590 and so these funds were treated as bona vacantia and paid into court. For all I know they are still there, probably earning interest but that is all. The money is of no benefit to anybody.
I feel that some provision should be included in the powers given to the Court to deal with the doctrine of cy-près enabling the Court to deal with cases of that kind or similar cases where the purpose of a charity was originally perfectly sound and good but where either people who are capable of benefiting by that charity no longer exist, or the purpose of the charity has been taken over by the State—as in the case of the building of a hospital, so that funds are no longer necessary for the purpose. Under the doctrine of cy près, I should also like the Court to have power to deal with a charity which exists solely for the purposes of remunerating those who are administering it. That is the kind of case to which the noble and learned Lord, Lord Evershed, referred under the heading of excessive remuneration.
In my profession, but perhaps not in others, there is a standard of remuneration. We are subject to a person called the taxing master, who has the power to settle what is right and proper in the case of solicitors' remuneration. But I have heard of charities of the kind I have mentioned. I heard of one to-day which is administered solely for the purpose of the administrators of that charity themselves. They pay themselves a handsome fee for the work of administering it, and beyond that nobody seems to benefit. That fund is slowly accumulating. I do not know whether the Bill contains any power on the part of anybody to do anything about that, but it seems to me that it would be a very desirable extension of the cy-près doctrine if those conditions can be shown to exist and if the Bill does not otherwise deal with such cases.
There are some questions as to the new powers of discretion given to the right honourable gentleman the Home Secretary under Clause 6 (1) and Clause 17 (6) of the Bill, with which the noble Lord, Lord Evershed, dealt. I myself have no, great apprehensions about the Home Secretary's either using his powers improperly or using them under pressure. I believe that if we are going to have a Minister responsible for the 591 administration of charities we must give him ample power to act in accordance with his own discretion. After all, every Minister is open to pressure; it is not unique to the Home Secretary; and we assume that Ministers are strong enough not to succumb to improper pressure and that they will be equally strong under pressure which is proper; and I would be prepared to assume that the Home Secretary would react properly and would give him all the powers he needs, rather than seek to curtail them. Again, however, this is a matter which would be very properly dealt with in Committee, and I would ask the noble and learned Viscount not be too ready to give way on this point but to hear both sides of the argument, because I believe there are two sides to it.
There is just one other point to which I want to refer—the question of registration. It is assumed by everybody that registration is necessarily a good thing. I think it all depends on the purpose of registration. I would not assume that it is necessarily a good thing, but I believe it is perhaps desirable that there should be information available to the general public as to what are charities and, broadly, what they are all about. It is not quite clear to me what is to be the relationship between the central list and the list compiled by local authorities, and why, if it is desirable that local authorities should have a list of charities, it should not be mandatory on their part—why it should be optional, so that in one county or borough one will be able to get a list, while in another, when one asks, it will be found that they have no list. That seems to me to be getting the worst of both worlds, and I would suggest that the whole question of registration—whether both a central and a local list of charities shall be kept and whether keeping them should be made mandatory—needs very careful examination. If there is a local list, why should it not be made mandatory on all local authorities to keep it?
As I say, I have submitted these points with all diffidence. I hope we shall have ample time to discuss these and many other matters on the Committee stage, so that by the time the Bill leaves this House it will be found to be a better Bill, worthy of all the time and devotion 592 that have been given to it by my noble friend Lord Nathan and his Committee, and one which, realising that the probabilities are that it will be many years before we have another measure of this kind, we can allow to leave this House with pride in our achievement.
§ 4.31 p.m.
§ LORD SPENS
My Lords, it is over a quarter of a century since I first ventured to intervene in a debate in another place; and, although a long time has passed and one has had the experience of speaking there and elsewhere, I am bound to say that I rise with as much diffidence as ever, and crave your Lordships' well-known indulgence, courtesy and patience while I make a few remarks on this Bill. It is also over seventeen years since I practised at the Chancery Bar, though during the 30 years preceding that time I was engaged in a good many cases connected with charities and with schemes. However, I confess that I am out of date, except as a reader of recent decisions by noble and learned Lords, some of whom are present to-day. On the other hand, I have during these last years been both trustee and manager of various educational and other charities and have, therefore, some knowledge of the practical questions that arise in connection with charities.
I suppose that when many of us first read the Report of the Nathan Committee one of the two questions which came to our minds was whether or not the Government would attempt to define "charities" and "charitable purposes", and whether the Government would make any substantial extensions of the cy-près doctrine. I know that many laymen—and, I suppose, some lawyers, having regard to the speech of the noble Lord, Lord Silkin—would like to see a definition attempted. But I am bound to say that so many and various are the types of gift intended by donors for benevolence and charity, and so many and various are the words which they use in giving those gifts or attempting to establish charitable trusts, that I personally firmly believe that the Government have been quite right in refusing to attempt any definition of "charity" or "charitable purposes" and in leaving it, as the law is to-day, to be determined in each particular case as it comes before the courts whether or not a gift has 593 succeeded in being a good charitable trust. Cases have come down over 300 years and more; they establish principles which can be applied, with the help of learned Judges; and I do not believe, even after all the time that has passed since charitable gifts were first given in this country, that anything better can be done than is done to-day.
My Lords, I would venture to make one or two remarks on that aspect. In the old days I think that the great bulk of the decisions on whether or not a gift was a good charitable gift were given in the Courts of Chancery where, on the one side, there were persons interested in establishing a good charitable gift and, on the other side, someone like a next-of-kin or persons who, in default of a good charitable gift, were put up to oppose the validity of the charitable gift. It has been noted by at least one learned Lord and one recently appointed Judge of the Chancery Division that, as often as not, the persons whose duty it was to oppose the validity of the gift had no real interest in doing so. They were often a widow or next-of-kin who knew that the one thing the donor never intended was that the property should come to them. In those circumstances, sometimes the battle to upset the charitable gift was not carried on quite so equitably and successfully as it might have been, and the atmosphere was one in which, more often than not, charitable gifts and charitable trusts were declared valid when they were, perhaps, very borderline cases.
In more recent years, however, a very strong antagonist of charitable gifts has come into the field in the person of the Commissioners of Inland Revenue. So great are the fiscal advantages to be enjoyed by charities that it is in the interests of the Revenue that the Commissioners should rightly, as and when they can, do their best to upset charitable trusts and charitable gifts. They can do it on any occasion when some fiscal advantage is being claimed by a charity. A charity of which I have the honour to be a trustee has for years published a magazine which, under the rules of the charity, is given free to those who have contributed a certain sum to the charity. The magazine not only set out the accounts but gave a description of the work of the charity, and included a number of other articles connected with 594 the work of the charity. This charity was accordingly attacked by the Inland Revenue Commissioners on the ground that it did not exist exclusively for charitable purposes. The claim was made and withdrawn. But, needless to say, the charity had already incurred a very serious amount of costs which it could ill afford.
The officers of the Inland Revenue are undoubtedly now the great watchdogs, in order, if they can, to question and upset charitable trusts; and one of the things I am concerned about in this Bill arises out of that new atmosphere. So far as I can understand, now that charities can and should be registered, one of the parties who may object to a registration or move for a charity to be removed from the register is the Commissioners of Inland Revenue themselves. If I am right about that, then I think those powers will have to be carefully looked at at a later stage when we consider the Bill in Committee. It seems to me quite wrong that a charity which has been recognised as a charity, and has functioned as such for a number of years, should be brought into peril by the way in which these daises are at the moment worded.
If I may turn to the next point which I should like to discuss, it is this. Clause 13 is—I am not going to say the most important, but at any rate one of the most important clauses in the Bill. I have never myself believed that the cy-près doctrine was applies so rigidly as appears, from the evidence to Lord Nathan's Committee, to have been thought in some quarters. In fact, I know that on occasions the cy-près doctrine has been applied by the Courts to do useful and wonderful things, some of which would, I think, have surprised the ancient donors. There is no doubt, I feel, that, when dealing with ancient charities, a much more liberal and flexible attitude towards schemes was adopted than when dealing with newly established or recent charities. That, of course, is obvious, because with a new or recent charity the circumstances had not very much changed since the donor had endeavoured to indicate how he wanted his benevolence to be distributed, and I think the Courts felt themselves more strictly bound to follow the actual wording of the gift than when dealing with a charity years old, when 595 circumstances had completely altered and the ancient wording of the gifts was probably quite hopelessly out of date. As I read Clause 13, its effect is to enable a scheme—a liberal, generous scheme—to be authorised by the Courts or the Commissioners in the case of either old or new schemes; and it seems to me that the wording of Clause 13 will in many cases enable more useful schemes to be made in the future than have been possible in the past.
As regards Clause 13 I should like only to add that I view subsection (4) with some anxiety. It imposes a duty on trustees to apply for a scheme when it should be applied for. I do not know what the sanction is, but I imagine that it is, if the Charity Commissioners or the Minister think that trustees have neglected to apply for a scheme when they should have done so, probably a compulsory inquiry; and a compulsory scheme would then be imposed on the charity. I think, as my noble and learned friend Lord Evershed has said, that the compulsory powers of both the Minister and of the Commissioners will have to be very carefully looked at as we go through this Bill.
I do not want to weary your Lordships with comments on the many administrative changes, all of which, I think, are on the right and on helpful lines, but I should just like to say a word about the schemes for the common investment fund. As I gather from what the noble and learned Viscount on the Woolsack has said, one anticipates that two or more charities will combine in applying, for a common investment scheme, and that the assets of the fund are likely to be vested in the official custodian, with an advisory committee to assist him. I am not quite clear what powers of investment will apply to a common investment fund. Will the custodian be bound by restrictive investment provisions applicable to any of the funds that join? Will he have to continue to restrict himself to existing powers of investment, or will it be possible in a common investment scheme for new powers of investment to be introduced into the scheme? If that is possible, the immediate advantages of a common investment scheme for trusts which are confined to very strict investment clauses will be obvious to everyone. On the other hand, 596 I cannot be sure that it will be possible to introduce what I might call a modern investment clause into a common investment scheme. I should therefore be grateful if that point could be made clear.
Now, if I may, I want to raise a point on behalf of the University of Oxford. The noble and learned Viscount on the Woolsack has referred to the universities' being exempt charities under the Second Schedule; and, of course, as such, they are free from some of the more rigorous clauses applicable to charities generally—for instance, no inquiry can be imposed upon them. But it does appear that they come within the scheme-making powers both of the Courts and of the Commissioners or the Minister. As the noble Viscount informed your Lordships, for a number of years the universities have had their own powers of legislation, dealing with and reforming any of their charitable trusts or those of their colleges. Such legislation is subject to the approval of the Privy Council, and has to be laid on the Tables of both Houses of Parliament. It is a method of dealing with their charitable trusts which has been enjoyed by them, and which has worked extremely well. And although they cannot, except at their own request, be subjected to a scheme by the Charity Commissioners, they have made representations to indicate that they feel that the Bill is a "back door" way of getting the Charity Commissioners inside their affairs, and they have asked, and will ask, to be further excluded from some of the clauses in this Bill. I raise these points only to indicate that at a later stage Amendments will be put down to deal with the matters about which the universities feel some anxiety.
Finally, my Lords, I cannot resist referring to the repeal of the law of mortmain. It was introduced centuries ago to secure the revenues of many of your Lordships' predecessors, who felt it hard that they should lose their feudal dues and fees when land found its way into the dead hands of ecclesiastical and other bodies. These laws were got rid of when, at the beginning of this century, the incorporation of commercial and other companies started in their thousands, and they were given statutory permission to hold land. The result is that it is true to-day that these laws 597 serve no purpose, except possibly to control the number of foreign companies who endeavour to hold land in this country—and I understand that that is more of an embarrassment than an advantage to the Government and to the country. Therefore, their use has come to an end. I look back, as do some of my noble friends, at our labour in the early years of this century in learning land law, the bulk of which became only of academic or historic interest when the great Birkenhead legislation went through in 1925. What remains has now become completely useless. I am bound to say that it is with a nostalgic acquiescence that I say, "Goodbye to 1290 and all that."
§ 4.52 p.m.
§ VISCOUNT SIMONDS
My Lords, I rise to support this Bill, but not to give it an equally enthusiastic support in all its parts, Before I do so, I have, in accordance with our custom, the very pleasant task to perform of congratulating my old friend Lord Spens on his maiden speech in your Lordships' House. Inevitably, as my noble friend was speaking, my mind went back to a day long, long ago, the first day on which I took my seat on the Bench in the Chancery Division of the High Court of Justice. The first counsel who addressed me was my old friend, then Mr. Spens, K.C. He made a very convincing speech, I doubt not. Since then, he has played a distinguished part, both in this country and in India, in many fields, and now he has come to your Lordships' House. I am sure that your Lordships will all join with me in congratulating him and hoping that on many occasions we may have the benefit of his experience and wisdom.
I have wearied your Lordships more than once upon the subject of charitable trusts. It was a matter to which the Government were giving their consideration—I think "earnest consideration" is the term commonly used—before the noble and learned Viscount who now occupies the Woolsack had assumed his office. I think it must be said that they have given earnest consideration, proper and good, to the matter. This Bill has had a long gestation, and it is natural that it should. It is a subject of profound importance, because the law of charity impinges upon our social and 598 economic life at very many points.
Always there are the poor at the gate. There always have been and I suppose there always will be. And always there are the warm hearts of men who are led to relieve their distress and give comfort to the needy. Equally, always there are men whose piety leads them to the building of churches and the promotion of religious worship, though often, it may be said, in manners profoundly antagonist and intolerant of each other, but none the less charitable. So also there are many men whose beneficence has led them to the establishment of schools and other places of learning. And in a thousand other ways, which your Lordships would hardly believe until you have studied this subject, often curious, often fantastic, sometimes even pathetic, you will find men helping their fellow man. So it is that through the centuries there has grown up a great body of law dealing with these human activities, not only a great body of Statute Law, to which reference has been made, but also a great volume of Case Law. I should not like to say how many hundreds of thousands of pages in the Law Reports deal with charity. Still less should I like to say how many pages I have contributed to that amorphous mass.
But now I think that we have reached a milestone. I cannot praise too highly the draftsmanship of this Bill. The way in which it has cleared up so many untidy places and reduced so many ambiguities is admirable. There is one point upon which I am bound to say that perhaps I would specially praise the Bill. And here I join issue with the noble Lord, Lord Silkin, but I am happy to have the companionship of my noble friend Lord Spens. I think that the Government have been very wise not to attempt to define "charity".
I do not want to embark on an old controversy in this matter. I would say only two words. If you attempt to define charity, you have two alternatives. The first is to try to set out in detail, and exhaustively, every kind of activity or institution which is to have the benefit which accrues to charities under the law. If you try to do that, you will soon give it up as a hopeless task. Moreover, if anybody thinks that he can accomplish that task, he will find that the next man will disagree profoundly with him and 599 never come to any agreement of any kind. For example, A will say that nothing is more beneficial to mankind than medical research, the study of anatomy and vivisection, while B will say that nothing could be more valuable to mankind than to encourage devotion of the welfare of animals, and we must have anti-vivisection. You will never come to any agreement on what is charitable, and therefore the question of detailing it is perfectly useless.
The alternative is to have general words. And if you have general words, you are in just the same position as you now are under the law as it is. You have the same difficulties and the same problems, and there it is. In my view—and I am bound to say that I have considered this long and often—I think that the Government have adopted exactly the right course in declining to attempt the definition of charity.
I remember well that when this matter of charitable trusts was last before your Lordships' House, I ventured to criticise as severely as I dared the proposal which I think the Government were then toying with, to have some independent provision regarding the investment of charitable trust funds. I ventured to say then that it was a most unwise provision and that, if it found any place in the Bill, I should have something even more severe to say about it. I hardly dare suppose that my minatory words had any effect, but at least there is no such provision in the Bill.
So far every word I have said has been of praise, but now I come to a part of the Bill upon which I am bound to say I feel a great deal of doubt—that is. I am sorry to say, the special child of the noble Lord, Lord Nathan—the central register. I ask myself what purpose this is really destined to serve. Think of what it involves. I had no idea myself of the number, but the noble and learned Viscount the Lord Chancellor has told us that there are perhaps 150,000 charities, and the number is a growing one. In respect of each of those charities there shall be maintained a register which shall containsuch particulars as the Commissioners may from time to time determine,and all the documents will have to be forwarded. What sort of establishment 600 is going to be created in order that all this may be done? I find it alarming. One thing is quite certain: that it will involve a great increase of staff—more Charity Commissioners, more assistant commissioners and more staff generally. That wants a lot of justification.
For myself, I can see no particular virtue in increasing the number of Charity Commissioners. It is not a thing in itself laudable to make two Charity Commissioners grow where one Charity Commissioner formerly grew. There is no merit in it. You have to justify it in some way, and I am puzzled to know how it is to be justified. Who is going to benefit? Is it the individual who wants to be benevolent and to leave money? I cannot believe that he needs anything of the kind. Is it the person who is in need; the man who suffers from some disease or is in need of some particular relief: does he need anything of the kind? I do not believe it. You can go to any sort of voluntary organisation and find the relief you want and get any information you want. I do not believe that there is a corner of England where you cannot get exactly the information you want. If you cannot so get it, do you suppose you can get it from Whitehall, or from wherever this registry is to be established, by searching through 150,000 charities? I do not think it will do any good.
What I am afraid of is that it is simply part of a centralising idea. I do not like it. So much of charity is local: a pride of citizenship in a particular place, a desire of a particular person to benefit the place he has known, often in a rather eccentric way. A local register might be of some use, but I do not believe in the least in a central register or in the suggestion of interference which I see throughout this Bill from a headquarters in London. I am bound to say, if the noble Lord, Lord Nathan, will forgive me, that, as I listened to him, I could not help thinking that that was rather the idea at the back of this central register: that the Commissioners should, to use a vulgar word, butt in where they were not wanted. I do not like the idea. I am not opposing it or suggesting that we should not have a Second Reading of the Bill or anything of that kind, but I think that this is a part of the Bill that wants closely looking into. It is dangerously like "Whitehall knowing 601 best", and, as I say, it is a part of the Bill for which I feel no enthusiasm whatever.
There are many small points which will no doubt come up in Committee. I have only one word to say further on the important Clause, Clause 13. That clause deals with cy-pres schemes—and that is a term little known to most of your Lordships until recently, but now no doubt part of your common parlance. Clause 13 on more than one occasion refers to a scheme being made in accordance with "the spirit of the gift." I wonder what that means. Is it an expression which is taken from some case law? It may well be. But if not, I am bound to say that I feel difficulty in saying what it means. Clause 13 (1) (a) says:Where the original purposes … cannot be carried out, or not according to the directions given and to the spirit of the gift.…How do you find out the spirit of the gift except from the words used? And what is the difference between the words used and the direction given? Perhaps the noble and learned Viscount on the Woolsack would be good enough to elucidate what is meant by "spirit of the gift" which is to guide the Commissioners or the Court in determining the limits of their powers—if not now, perhaps at some future time.
From time to time I have, as your Lordships know, had a considerable part, in the discussions of these matters, and I welcome this Bill, except, as I say, as to the one central feature about which I have felt and continue to feel very grave doubt.
§ 5.6 p.m.
THE LORD BISHOP OF CHELMSFORD
My Lords, I hope that, first, I may be allowed to endorse the words spoken by the noble Viscount, Lord Simonds, in appreciation of the maiden speech to which we have recently listened. If, as I believe, sitting together at a City banquet can be the means of creating a very real friendship, then I hope I can refer to the noble Lord, Lord Spens, as my noble friend. Lord Spens claimed that he spoke with real diffidence, but I would submit that, speaking on matters on which he is clearly an expert, he had no reason for claiming such diffidence. But such is not the case with myself this afternoon, for I stand as a layman 602 in matters of the law, and it is with the greatest diffidence that I venture to intervene in this debate. I do so as Chairman of the Churches Main Committee, a body which, as your Lordships will be aware, contains representatives of all the organised churches of Great Britain, including the Roman Catholic Church, and which acts as the official intermediary between these churches and Government Departments.
In general, I welcome this Bill, and do so warmly. It introduces a much needed simplification into the highly complicated and, indeed, antiquated law of charities; and if anything is needed to illustrate this point it will be found in the sixteen pages of repeals, including 28 enactments repealed as obsolete. But there are also certain important changes which will assist the churches; and I have in mind, particularly, the repeal of the law of mortmain and the extension of the powers of cy-près.
One of the fundamental proposals of the Bill, as we have been reminded by many of your Lordships, is the setting up of a central register of charities in which all charities not exempted or excepted will be required to record their trusts. We have been reminded by the noble and learned Viscount the Lord Chancellor that there may be as many as 150,000 charities involved in this registration. In the Church of England alone there are probably many thousands of trust deeds, and other churches have a correspondingly large number. From the point of view of the Church of England I might say, for example, that many parochial church councils manage two or more trusts and, as managing trustees, would have the responsibility of registering each trust. All our dioceses and boards of finance have a considerable number of trusts which they would be under an obligation to register. This provision, therefore, regarding the recording of trusts in a central register, valuable as it may be, does give us serious concern.
The Bill lays down in Clause 4 (5) that in each case a copy of the trust deed has to be forwarded. It can well be imagined that an immense labour and much expense in copying, and so forth, will be involved. Fortunately, the prospect may not be so black as it appears, as by Clause 4 (4) (b) any charity may be excepted by order or 603 regulation. I welcome the assurance given by the noble and learned Viscount on the Woolsack that many of the smaller trusts are likely to be excepted in this way, and I indeed hope that this will prove to be the case. Consecrated property and registered places of worship are, I am glad to see, already free from this obligation.
At this point I should like to mention one way in which the churches differ from many charities. Most of their large endowments are vested in or controlled by responsible bodies; in the Church of England, for example, there are diocesan boards; in the Roman Catholic Church the diocesan bishops; and in the Free Churches the governing bodies. There already exists, therefore, an adequate machinery for safeguarding many of the trusts. We welcome very much the expressed intention of the Government not to interfere with funds bequeathed or collected for the general purposes of the churches. Conversations have already begun about the terms in which orders and regulations can be drafted so as to grant reasonable exceptions, and, if these conversations progress as they have begun, I am hopeful that the churches will be well satisfied.
I would also remind your Lordships that under Clause 28 there are powers vested in the Charity Commissioners to control the sale, leasing or mortgaging of land. Here, too, exceptions can be made, and we shall want to look carefully at any order or regulations under this clause.
It would, I think, not be appropriate for me to enlarge at this stage on points of detail. There are, of course, points which will need to be clarified, and perhaps Amendments to be moved. There are, however, two or three points which I should like to make, particularly on behalf of the Church of England, and which we feel require further consideration. I will mention these as shortly as I can. Clause 4 provides that exceptions to the requirement of registration can be made by order or regulations. I assume, I hope correctly, from the reassuring speech made by the noble and learned Viscount on the Woolsack that adequate consultation will be carried out with the churches before these are actually established. The churches will 604 be glad to set up a small body of representatives to advise on these matters as quickly as possible. It is clearly essential that the regulations should command general assent.
Another point arising on the same clause is that, under the Bill, any application for a charity to be registered has to be accompanied by a copy of the trust deed. Would it not be possible to amend this so as to provide that a complete copy of the trust deed will not be necessary where the Charity Commissioners already have the deeds or copies in their possession? Another point arises on Clause 21. In general, the churches welcome the power to establish common investment funds, and, indeed, they think that the terms of the Bill might go further. They would suggest that a power might be given to a single body holding a number of individual trusts to apply for authority for a common investment fund in respect of the trusts vested in it.
A further point arises in Clause 31. This, and Clause 8 of the Bill, seem to imply that every charity, however small—such as a trust to spend £2 per annum on the upkeep of a particular grave—must keep books of accounts and send copies to the Charity Commissioners. We hope that here, again, considerable use will be made of the power to except small charities, especially where they are already subject to control from such provisions. As an example, I have particularly in mind the accounts of parochial church councils which are already subject to statutory control. Will these have to be sent to London every year?
Lastly, we are somewhat troubled about the precise implications of Clause 44 (2) of the Bill. This attempts to exclude from the expression "charity", ecclesiastical corporations, whether sole or aggregate, in respect of corporate property held for ecclesiastical purposes, and the trusts of property for purposes for which the property has been consecrated. We assume that under the first part of this clause the residences of cathedral clergy, such as deans and canons, will be outside the scope of the Bill, and that the same applies to glebe land. We hope, however, that we are right in assuming that the fact that certain properties are not affected by the Bill does not mean that they will not be 605 accepted as charities for the purpose of income tax, rates et cetera. Could some assurance be given on this point?
The second part of this clause, which deals with consecrated land, raises some difficult points which need to be further considered, but with which I will not trouble your Lordships. Perhaps in his reply the noble and learned Viscount could say something on the points that I have mentioned, and in the meantime is only remains for me, in warmly welcoming the Bill, to say that we shall watch its progress most carefully and we believe that its ultimate results will be wholly beneficial.
§ 5.17 p.m.
My Lords, like my two predecessors I am very glad to have the opportunity of welcoming a brother Scot and a brother New College man to your Lordships' House. I should like also to thank him for the very able speech with which he opened his career here, and particularly for what he said about Clause 13 (4). The point had already occurred to me, because it seemed to put the burden of the proof of guilt or innocence on the wrong quarter.
Ever since the Napoleonic Wars at least, Britain has been distinguished for its great charities. There is the Royal National Lifeboat Institution, founded in 1824; and in much more modern times there is the Boy Scout and Girl Guide movement, which operates with affiliated branches all over the civilised world. I may say that the Lifeboat Institution is accepted by other similar institutions all over the world as the doyen of life-saving at sea. There is the Boys' Brigade, which is affiliated to all the Churches of Britain. There is the Salvation Army, which is probably, I think, the most important great Protestant movement in all time, which operates all over the world. There is Dr. Barnardo's Homes, which does such magnificent work amongst children, and there are all the various bodies which look after and care for the blind.
My title to speak to your Lordships to-night is the fact that for many years past I have been a member of the Royal National Lifeboat Institution. I am a member of its Committee of Management, and I am peculiarly charged with the business of its collections in Scotland. There is nobody else in the Committee of Management that has an office of 606 quite that kind, and it has the very peculiar advantage to myself that there is hardly a burgh or clachan in Scotland in which I have not a friend, and in which I cannot find some business to do. In that way it is a very fine office and job, and it brings me closely into contact with the people who actually contribute to charity—because all the charities that have mentioned are great collecting charities, and they depend for their life on collections from the public. All these charities have taken counsel together, and they have put to me the points in this Bill which give them disquiet.
For the Bill as a whole they have nothing but praise. They, too, unlike my noble fellow countryman, frankly rejoice at the disappearance of mortmain, and most of the clauses they welcome very much indeed. Other noble Lords who have spoken before me have said better than I can what I am saying now, and I hope, therefore, that if I now proceed to criticise certain clauses and explain why they give us disquiet I shall not be taken as a critic of the Bill.
It would very much have simplified the situation if the charities I have named could have been included in the Second Schedule of the Bill and been exempt. But I am told that Her Majesty's Government are quite adamant on that point and that they are not going to extend that Schedule. May I make a mild remark—that that is a ukase and not a reason. If these charities are not going to be exempted, it would very much help if they could be excepted under Clause 4 (4) (b), by order or regulation. I am told that the Government wish to have every endowed charity registered, and that this might lead to some difficulties. It will not affect the institution I belong to very much, but as the noble Lord, Lord Amulree, pointed out, it will very much affect the Boy Scouts and Girl Guides. They form local units to assist their work in different localities; the Scouts have some 12,000 of them, and the Guides some 24,000. So that if every one of those has to be registered it will immediately give the Charity Commissioners up to 36,000 registrations from this one source alone.
The whole question of local charity is extremely difficult in this Bill. One would like to see it confined to charities 607 whose operation was entirely within the particular locality and exclude even such a charity if it was affiliated and registered in the books of the great central charities. I do not know if that is possible; I do not know if the distinction can be made. After all, when the Scout movement was started it was never thought they would be brought under an Act of Parliament, and they chose a form that suited best the work they had to do.
Then I should like to turn for a moment to paragraph (c) of the same subsection. If the limit of £15 was raised to £100, that would avoid a great deal of unnecessary work and, I imagine, would relieve institutions like the Boy Scouts from a great deal of registration. In this subsection (4) there is another provision about which I should like clarification: the one that denies exemption to charities that have the use and occupation of land. Does it really mean that the Boy Scouts group which takes a field every year for its sports is to be denied exemption it would otherwise be granted just because of that use and occupation of land?
Then we have the question of charities which are already registered—I am not at all sure that the noble and learned Viscount did not give me some assurance on this in his opening speech: the question of the charities already registered under some Act or other or granted Royal Charter. Some charities, for example, are registered as public companies, and they already send accounts to the Registrar. Then again, there are other charities—for example, all our blind charities—which, under the National Assistance Act. 1948, Section 41, are obliged to be registered with the local authority. Is Section 41 of that Act going to be repealed, or will they have to register again, or will the local authority be the party that has to register them? The whole thing is very difficult and they are very uneasy about it.
This brings me to Clause 8, which deals with accounts. Nobody objects to presenting accounts. Our relations with the Charity Commissioners have been excellent and we have always sent them accounts and they have always been satisfied with them. But we, the Scouts, the Salvation Army and others, operate outside England, and present 608 accounts for the whole area. We operate in Great Britain and all Ireland, and our accounts cover that whole area. When we send these accounts to the Charity Commissioners they accept them and they understand them; but if we have got to send accounts in a specially stated form, that is going to entail a very great deal of extra work upon us, because we cannot alter our accounts. This is a matter of which I have considerable experience: in a collecting charity you must not alter the form of your accounts from year to year. In one charity I know an accountant was a member of the accounts committee. He wanted to alter the accounts. The finance committee withstood him, and the only thing he was able to effect was a change of the wording in the narrative of one entry. Immediately they got a letter from somebody in the north, about 120 miles away, saying, "What are you up to with your accounts? You are changing them". It is all right when the man writes in, but when the man does not write in and says, "Somebody is up to some mischief", and stops his subscription, you have no way of getting at it. People are often very glad of an excuse to cease the subscription.
Now we come to one of the most difficult clauses of the Bill, Clause 11, which says that,The Council of a county or of a borough may initiate, with the consent of the charity trustees of any local charities … (other than ecclesiastical charities) … a review of the working of those local charities …Your Lordships would think that we in the Lifeboat Institution, which operates all over the country, would not be caught by that provision, but there are cases in which we might be. But the Boy Scouts, for example, with their unit charities in every area, are certainly going to be caught by it. This clause, as it stands, does expose those charities, and it exposes them in two directions. It exposes them to local busybodies, and secondly, it exposes them to persons who are constitutionally opposed to charity and ready to make difficulties wherever they can. That is a political opinion with which I do not happen to sympathise, but I do not think it ought to be allowed to hamper the great work we are doing. In Scotland, where the law is different, we do meet these cases: I 609 always deal with them personally, and it rather amuses me.
In Scotland we are not going to have Clause 11. The Government have exempted ecclesiastical charities, and it occurred to me (I do not suppose it was the real reason) that among their virtues our ecclesiastical charities have the reputation for making trouble for a Government which makes trouble for them. I do not think it is why they did except them, but it is certainly true. We do not make trouble for Governments and we are victims. It would help us a great deal if the consent of the Charity Commissioners were also a requirement. We should then be dependent for our protection on the Charity Commissioners themselves. The noble and learned Viscount said that the charity trustees could always refuse their consent, but if you are a great collecting charity you are dependent on the favour of the public for your success in your work, and we dare not alienate the favour of the public by refusing the review, however unnecessary, costly and troublesome it may be.
I will give your Lordships a case which occurred to me some years ago and which rather shows what I mean. There was an Act of Parliament—it was an Education Act. I was one of the governors of a school which took children from broken homes. We educated them for the whole of their lives, until they left school altogether and went out into the world. We gave them what children need more than anything else—security. People tell you that children want love and affection. Children need security and regular meals far more than they want love and affection. We gave them those things. They came back to us, as their old home, when they came home from abroad, or from wherever they had been earning their living, and they treated the school like their old home. Under this Education Act the local education authorities could make schemes. The local education committee made a scheme. I personally think that the scheme was made without there being much knowledge of the school. But it absolutely cut our work in half. It was a dreadful scheme. I left the board because I simply could not bear to see our work so frustrated. However, a member of the education committee, who was a very good fellow, came on to the 610 board. Fate stepped in and made the scheme impossible to carry out. Now the children are all back in their old place, and they go on the whole of the time in the same school, as was the case hitherto, in one branch or another; and our friend, who came in under what I might call Clause 11, has proved a good director and we all like him a great deal. But that is just good fortune, and it shows what may happen in this type of case.
I have said what I wanted to say on Clause 13. I should like now to go to Clause 27 (1). What are "charity proceedings?" Are they legal proceedings with reference to charity? If that is so, I should rather like to know several things. Is it intended that no charity shall take legal proceedings without the permission of the Charity Commissioners? Some charities are involved in many summonses, and there are occasions in Probate and Chancery matters where prompt action is essential. If we have to get permission from the Charity Commissioners, every case that arises is going to make our operations extremely difficult, the more so because I believe the Charity Commissioners are in London and, when they dictate a letter, it has to be sent to Newcastle to be typed, and has to come back to London to be corrected. Your Lordships can imagine how difficult it will be to work a system in that way. There is another point. Why should not a single person take action against trustees if he thinks the charity is not being properly run? I can give your Lordships a case which arose under the National Health Service Act.
I was trustee of a great many trusts and funds which had to be handed over to the Regional Hospital Boards. In the end they were handed over. But when they came to me for the transfers to be signed I said "No; I am not going to sign these transfers. Parliament has given you power to take these securities, but you cannot make me sign these transfers unless you satisfy me, not only that you have got power from Parliament, but also that you are going to carry out the trusts and undertake the administration." They said, "What are we to do? We do not want to pass a special regulation." I said, "This is not political. I want to see that the thing is properly done." With nearly all the 611 trusts it was perfectly plain sailing, but one trust had a special function. I went to the Department of Health and said, "Look here, this trust is not completely dead. It can still be brought into operation and the will of the trustee can be carried out." They said, "Yes, you are perfectly right. We will have an exchange of letters and we will carry this out." The exchange of letters took place, and the securities were handed over. But from that moment the thing has gone dead, and it is not being administered as I think it ought to be. Why should I not take action? It is a matter which I think I should have to consider. If I thought it was of sufficient importance I ought to be entitled to do so.
The most serious clause of all is, I think, Clause 28, especially subsection (2), which imposes restrictions on dealing with any land held by or in trust for a charity which is or has at any time been occupied for the purpose of the charity. That is a very difficult thing for most of us to accept. I do not see how we can run in such shackles. I will give your Lordships a simple case. In the Lifeboat Institution we have mechanics' houses scattered all over the country. Perhaps a mechanic is drowned; sometimes he retires or dies, and we have to get a new mechanic. We have to buy him a house. In the ordinary way, he would move to the old mechanic's house. But there may be cases—this is not at all unusual—where, naturally, we are most reluctant to move a widow. In such a case the only thing we can do in these days, especially when it is impossible to hire houses, is to buy another house, and then, when one of the two becomes redundant, to sell the one that we wish to get rid of. It seems to me that this clause would entirely prohibit that.
To take another case, I was on the board of a blind school which was evacuated during the war to the country. After the war we wanted to get premises which were commensurate with our needs. We were absolutely tied; we could find absolutely nothing. We could not move without the Department, who insisted on the district valuer's valuation. There was no property that we could buy that was anything near that valuation, and we were reluctantly compelled to the view that we could 612 never shift, but must stay on in these inconvenient huts. Then fate stepped in and we had a fire, mercifully with no loss of life, and we had to place half our blind children in another place. We were then even more desperate than before, and at last a neighbouring property came into the market. I am afraid that I behaved very badly, and said. "You have got the funds. It is your own money. Buy it and present them with a fait accompli." We bought it, and I am glad to say that the Department realised that it was a proper action. I do not think there was any word of the district valuer when we bought it.
We went on and we made our plans, and developed the place. The only quarrel I have is that when we sent our plans to the Department they checked them rather savagely. I am ready to serve a charity with passion. I am ready to suppress my temper and to work loyally and cordially with my colleagues, even in matters about which I do not agree with them. But when we are doing this work with such a sense of responsibility I do not like to see our plans returned to us, with red ink all over them, like an idle schoolboy's Latin prose, by people who do not realise our emotions and our enthusiasms. So I rather gave up active participation in this charity. They are all my friends and they have asked me not to resign.
For that reason, the story tells your Lordships two things. The first is that if we drive charities too hard, with authority from the top, we either drive trustees into retirement or break their hearts. The other thing is that charities are frustrated which cannot deal with their land as they would deal with any other property, and I should like to see the whole of Clause 28 go. The law of succession in England is one that I do not like and with which I do not agree, but it treats real and personal property as one thing. Why should charity alone be put in this strait-waistcoat? I should very much like to see charities just as much at liberty to deal with land as they are to deal with stocks and shares. After all, the land is not the purpose of the charity, it is only the instrument—which is the same as the money they have.
There are a few more points with regard to the Bill to which I want to draw the attention of Her Majesty's 613 Government. I feel that the words "local charity" require some further definition by the Government; and again, in Clause 45, the words "charity trustee" might need further definition. In the case of a charity which is a public company, are the directors of the company charity trustees, or is it the company—or what? So far I have spoken for those who have briefed me—my clients; but now I should like just to say a very short word on my own account.
While I feel that this is a very good Bill I still think it needs a great deal of attention. One thing that is going to be painful to charity in this country is any feeling by people that it is under Government control. That is most vital. In 1953, when this matter was debated in your Lordships' House before, I was furnished with a foolscap page covered on both sides with typescript—nothing bat short formulae from wills by which we had received legacies which made the legacy invalid if the Government had the smallest finger in our activities. The formulae are all different but to the same effect.
The lowest point that the Royal National Lifeboat Institution ever touched in its history was in the third quarter of the nineteenth century when it was receiving a Government grant. When that Institution repudiated the grant, refused it and put it aside, the public took the Institution to its heart and it has never failed since then. Then your Lordships will remember the Education Act, 1928, which gave the education authorities power to take possession of funds of educational trusts. I believe it was a Scots Act; at any rate it had effect in Scotland, which was full of educational trusts or "mortifications" as we used to call them. I do not know where the name was derived from—possibly John Knox. My noble friend Lord Elgin was always acting for education authorities and the late Lord Leren of Melville was opposing him, and they often fought their battles out in this House. From that moment educational trusts in Scotland stopped, and the money, or at least a very large portion of it, came to the Royal National Lifeboat Institution. I believe that educational trusts are beginning to creep back again, although I do not know.
614 In some ways this Bill reminds me a little of a small prince trotting along in the palace garden, watched by extremely respectful and apprehensive gardeners. Whenever he pulls up a plant to see how it is growing one or other of the respectful gardeners dashes forward as soon as the little feet have trotted on it, to try to repair the damage. I think my clients this afternoon represent these respectful gardeners. I wind up by saying that I believe British charity is unique in the whole world. Some of it, like the Boy Scouts and the Salvation Army, have spread over the whole world. It is a very luxuriant plant, but if we prune back its eccentricities too much we shall find that, however beautiful it is and however well it grows, it is only a half hardy perennial, and we may kill it altogether.
§ 5.46 p.m.
§ LORD TAYLOR
My Lords, while I do not entirely follow all that the noble Lord, Lord Saltoun, has said, I agree that he has made one point of very great importance: that this is a Charities Bill and not a Charitable Trusts Bill. In that, it differs from its predecessors, the Charitable Trusts Acts, 1853 to 1939. It involves the registration of bodies which are not trusts. If I have read correctly Clause 4 (4) (c), to which the noble Lord referred, it means that even though a charity has no permanent endowment, if it has the use or occupation of land it has to register. I am an officer of a charity which is a nonprofit-making company and I certainly assume that I shall have to register, although we have no endowment. We have a very considerable subscription income and I imagine that we are compelled to register under Clause 4 (4) (c) because we are in fact occupying land.
Now I want to draw your Lordships' attention to one section of the Bill only: that dealing with the purpose and function of the Charity Commissioners. If one reads the Explanatory Memorandum of the Bill one sees that they are both a legal body and an advisory body, and in some ways I believe there is a compromise here. Her Majesty's Government have tried to marry the legal provisions with the thinking of the Committee of my noble friend Lord Nathan, which saw the Charity Commissioners having a rather wider and more of an advisory function, 615 in which case my noble friend Lord Nathan suggested that there should be a different type of person serving on the Commission.
Instead the legal emphasis has been retained and they nevertheless get the advisory function, although they are not going to be a very suitable advisory body. They have three jobs to do. The first of these is the maintenance of this register. The noble and learned Viscount on the Woolsack suggested that there are probably about 150,000 charities to be registered. It may be that if all charities which have not got trusts attached to them have to register—if, for example, all branches of the Boy Scouts which happen to have a Scout hut have to register—the figure may become astronomical. Nevertheless, I believe that a central register is a valuable thing providing, as my noble friend Lord Nathan said, it is really made to work and do a job.
It is not much good just collecting information if it is not to be made available, and the handling of this data will be a very big job indeed. It has to be classified according to subjects with which charities deal, so that those who want information on sources of charitable assistance will be able to go to the register and look under the particular heading with which they are concerned—whether it is education, youth, research, adult education or physical recreation; and, whatever the subject, that will have to be cross referenced by locality if it is to be as valuable as it ought to be. In the making of the register, all the trustees of all these charities may be involved and their numbers may run into a million or more. A great many of them are ordinary people, quite untrained in the law. They not only have to register, but they have to decide whether to register with the Charity Commissioners or with the Minister of Education. It is difficult for a non-technical person to make this decision.
Again, the charity which I run is typical of many in that it has partly educational objectives. Two of its seven objectives are educational and the remaining five are non-educational. I presume, therefore, that I should register with the Charity Commissioners and not with the Minister of Education. If, however, I have read the Bill aright, it is 616 up to the person who registers to make this judgment himself. In his book on voluntary action, the noble Lord, Lord Beveridge, suggested that when charities were in doubt about with whom to register, the person to whom to turn might well be the Lord Chancellor, and that he should give a ruling in all these doubtful cases. One hesitates to suggest this onerous duty, because one does not know how many people are involved. I believe that many village halls contain some education provision. Rulings will therefore be necessary. I plead that there should be prepared by the Charity Commissioners for the trustees of these innumerable charities or their management committees a simple guide as to their duties, in ordinary, non-legal language. This may be a difficult thing to do, yet it is well worth doing, because these trustees, often very small bodies, must take the appropriate action.
The second function which the Charity Commissioners have to perform is that of scheme-making, although, as I understand, this is a parallel function to that done by the Courts. One would have thought that non-legal Commissioners, as proposed by my noble friend Lord Nathan, would have come into their own and would have been particularly valuable, because in scheme-making it is necessary to have constructive, forward-looking imagination and to get away from the narrownesses of a charity which has ceased to be able to perform its functions, and to try to get the spirit—not necessarily the strict legal spirit, but the actual spirit—of the donors who created the charities.
One feels that there are two classes of charity. There is a small number which are doing badly. Often, they may be very small charities which require surgical treatment. Secondly, there is a great number which are doing very well indeed and which need to be left entirely alone. One feels that the danger it that under the compromise there may be a little done to all charities; that all charities may be forced to furnish a great many documents and accounts, which they will find difficult to do. The result will be that the Charity Commissioners will get a huge volume of material, but will find it difficult to pick out those on which they need to operate and which really need their help and advice.
617 The third function is described in the Explanatory Memorandum as giving advice and assistance to trustees. Most of those whom I know who have had dealings with the Charity Commissioners have found them very slow in answering letters. Their advice and assistance has taken a tremendously long time to be forthcoming. I am not quite sure about the nature: of the advice. Is it advice as to the law, is it advice on how to keep accounts or is it advice on how to make the trusts serve the public better than they already do?
One would suggest that in giving advice to those who run charities, non-legal are quite as important as legal functions. Again, one feels that the Nathan Committee model of the charity trustees might have been much more effective when it came to giving advice which was not strictly legal. How much work will the Charity Commissioners have to face? I cannot see their being able to deal personally with every case that requires investigation—it will be quite useless for them to try to do so if they are to run any sort of advisory service. The proper answer is that they must have an adequate staff of legal and other officers, working under the general direction of the Commissioners, with the difficult cases only coming before the Commisioners for decision. One would like to make the positive suggestion that to the three Civil Service Commissioners, two of whom are legal and one non-legal, there might be added two part-time Commissioners, men or women of standing in public or charitable affairs, who might exert a stimulating effect on the efficiency of the Charity Commissioners and on their public relations in dealing with the public and with the many ordinary trustees and the many ordinary people who are running charities.
There has been considerable discussion this afternoon of the rôle of the Home Secretary in relation to the Charity Commissioners and the charities on which they keep an eye. He can be regarded either as a danger or as a safeguard. One of the great charitable trusts was recorded in the Observer as saying that he brings the trust into the political arena. I entirely disagree with this. I think it is the collective experience of all your Lordships—I hope that it is—that Home Secretaries are the least likely 618 among Ministers to exercise political pressure. The great safeguard against their doing so is their answerability to Parliament.
There are, however, more subtle dangers. In the initiation of social and economic action in all forms of research, the great charitable trusts are now an alternative to the Government. If the Government turn down a proposal, people can still get these proposals carried out, if they are reasonable, by going to the trusts. Governments are not all wise, and it is vitally important to the dynamics of our society to have these alternatives. Such action by the great trusts may be unpopular with the Government. More important, it may be unpopular with the Civil Service. It is never nice to be told that one's carefully considered decisions are wrong it is never nice to see them carried out in spite of oneself. The danger is that there may be subtle pressure on the charitable trusts not to act against declared Government policy.
The second danger is that the Government may push off their responsibilities on to the charitable trusts and get the trusts to do what they are not prepared to do themselves. This is a matter of degree. It is right and proper that the Government and the great trusts should often co-operate in all sorts of enterprises—for example, in the Jodrell Bank telescope. It was a very good thing for the Nuffield Foundation and the Department of Scientific and Industrial Research to co-operate upon. The noble Lord, Lord Nathan, has played a notable part in another important piece of co-operation in connection with criminology.
It must, however, be co-operation between equals, between two autonomous bodies: one should never be able to coerce the other. The only indication for intervention must be real, serious and manifest scandal, and in curing the longstanding evils of the obsolete trust we must not introduce a new evil, that of imperilling the independence of the great, independent, public-spirited trusts which have such an important part in our society. I believe that this risk has only to be realised to be avoided. There may occasionally be individual Machiavellis 619 in the Government or in the Civil Service, but neither the Government nor the Civil Service is collectively Machiavellian. The integrity of the Home Secretary and the Home Office is likely to be a better safeguard for the great trusts than any other arrangement. I hope that there will not be a weakening of the position of the Home Secretary under the Bill. I hope that the Government and the Lord Chancellor will feel that, since he is there, he is more likely to do good by being able to exercise restraint on appropriate occasions, and his answerability and his own position will themselves provide the best safeguards which these great autonomous bodies can enjoy.
My Lords, we all admire the immense work that has been done by these great trusts since the coming of our new social security society. They are the spearhead of our social advance, of experimentation and of new thinking. It is vital that in the Bill there should be nothing to prevent them from doing what the Secretary of the Carnegie United Kingdom Trust is quoted by my noble friend Lord Nathan's Committee as saying:I think it is the business of trusts to live dangerously.So long as they do that, and so long as the Bill does not prevent them from doing that, so long will they continue to do real good for our society.
§ 6.2 p.m.
My Lords, I was asked to make one or two points on behalf of the Church Commissioners, but my noble friend the right reverend Prelate has already made them, and therefore I shall not weary your Lordships by making them again. I may say, however, that the Commissioners are extremely pleased with one portion of the Bill—namely, the Second Schedule. This is the third time that I have spoken on this subject, and I took the precaution of looking up the past to see whether time had impaired consistency. I was relieved to find that I could with a clear conscience say almost the same as I had said twice before. The Bill has good points and, like all Bills, it has bad points.
Taking, first, the good points, I regard the power to institute inquiries as very 620 valuable where there is suspicion of abuse or fraud. Presumably an inquiry will be set on foot as a result of complaints from the public, much as an inquiry by the Board of Trade under the Companies Act is started by some shareholders. I hope that the inquiries will take place, and that schemes will result where objects appear to have failed and where charities are being kept in being largely through the efforts of their paid servants. That sort of thing has existed and does, I believe, exist. I hope, also, that inquiries will be possible into the question of appeals run by paid organisers, where the expenses are sometimes very large and take a very big proportion of the ultimate proceeds. It is a pity in some ways that a formula for publicity of accounts of these appeals cannot be devised, because the contributors or donors to such appeals very rarely see the ultimate results or accounts of the appeals; and I think that, occasionally, they would be rather shocked if they did see them.
I welcome the widening of the scheme-making power because, in spite of the Welfare State which has rendered many old objects obsolete, there are many new ones not far removed to come in their place. I welcome, also, the provision for common investment funds. I am not quite sure what the ultimate objective is here. From the wording of the clause, it rather looks as if something like the investment pools under the Church Funds Investment Measure is visualised, but there seems to be no widening of the investment powers in this Bill. Presumably, if the Trustee Bill foreshadowed by my noble friend on the Woolsack turns up in the Autumn, the common investment funds could be run with wider investment powers.
I believe that, if the investment powers for charities and trusts in general are widened, it is rather important that these common investment funds should exist, because for one of the smaller charities it is a most invidious task for a trustee to stray outside the list of trustee securities; whereas if he knows he can put his charitable fund into a pool run for him by people of first-rate ability, he will, I think, have no such compunction. The power to authorise dealings in charity property which could not otherwise be within the power of the trustees is obviously a useful power at times, but 621 if it is to be exercised with usefulness and effect, the Charity Commissioners will have to be a quicker-moving body than they usually are at the moment.
I am very pleased to see that there is no compulsory local authority register, against which I have spoken twice, because I believe that too much interference by a local authority would kill bequests to local charity. Naturally we are all pleased to see the last of mortmain. I only hope that my noble friend on the Woolsack will suffer no inconvenience from the repeal of the Augmentation Acts or the mortmain provisions thereof. As to common-good funds, the protection of the name presumably leads the way to the setting up of these funds in England, and I can see nothing but good coming from that. Finally, on the good points, there is something in the Sixth Schedule on which I have not been able to take professional advice, but it looks to me as if the retention of income in full, without having to reclaim tax, is to be made easier. However, I may be wrong.
Coming to the bad points, I think that the major bad point is the compulsory central register envisaged in the Bill as it now stands—that is to say, the central register with a very narrow escape clause for all these innumerable trusts and charities. I can think of four reasons which could be advanced for a central register. First, it could be said to be a means to facilitate the swallowing up or amalgamation of all these charitable trusts—one must acquit a Conservative Government of any such ideas. Secondly, it could be for the prevention of fraud; thirdly, for the information of benefactors; and, fourthly, for the information of beneficiaries.
First of all, as to the prevention of fraud, I do not believe that registration among such numbers is any protection at all. It will be rather like a passport, which causes much anxiety and annoyance to honest men but does not deter rogues from popping across the international frontiers at their will. I do not think that any information about malpractices in charities will come from researches by the Charity Commissioners into their accounts; it will come from information laid by the general public. In fact, if we really have up to 150,000 trusts, what sort of examination will their accounts get? I think the question of 622 the register being run for the benefit of benefactors was dealt with by my noble and learned friend Lord Simonds. I think we find the real reason when we come to the beneficiaries; and here the Nathan Report bears one out, where it says in paragraph 690:Up-to-date classified records are badly needed by would-be beneficiaries and voluntary workers".Then it goes on, and puts in a slightly sinister phrase:and are a pre-requisite of comprehensive reform of trusts.If this central register were to consist only of substantial trusts and the collecting societies I should not quarrel with it at all. But I really cannot see that the listing of anything from 50,000 to 150,000 trusts, the vast majority of them purely local and the vast majority of them small, can be of any service to anybody. Of course, the mere fact of their smallness and their local-ness might protect a great many of them from begging letters. But the slightly larger ones, and those whose objects are not purely local, would not be protected; and the receipt of begging letters in any number by small to medium size trusts would be a very grave embarrassment. If they were to reply to them the expense would be a serious drain on the funds; and if trustees have too much work in connection with these trusts I am perfectly certain they will hand over and clear out; and the people they hand over to may be less reputable than themselves. The mere cost of registration, of course, will be a tremendous burden—having to deal with the particulars of trust deeds, very often lost; and there will be information demanded by the Charity Commissioners. The trusts sometimes have to employ solicitors, and fees will be a further charge on a very exiguous income.
At the receiving end, the Charity Commissioners will have to sort through these tens of thousands of applications for registration. Many of them they will have to refer back because of errors and omissions, since it is surprising how many people always make mistakes in this sort of procedure. I do not agree with the noble Lord, Lord Nathan, that wholesale registration is important to enable the general public to attain the maximum benefit from these charities, because at least 90 per cent. will be of 623 no interest whatsoever and their registration will be sheer waste of money.
At the present moment the Charity Commissioners are a small department, staffed by one or two senior civil servants and a handful of junior ones; and there are complaints from all sides about delays and undue rigidity. My noble friend Lord Saltoun instanced one or two. At the moment it is generally said that there is no chance of getting anything unusual done quickly—and if one wants anything unusual done it is nearly always necessary to do it quickly—unless one goes to see the Charity Commissioners personally and the senior officials there. If they are to have more function and more powers, it is essential that they have a much larger staff. If the Bill passes in its present form the staff will have to be immensely increased, and there will have to be a very substantial increase to the Civil Service, though Conservative Governments up to date have always prided themselves on being able to reduce the size of the Civil Service.
I hope that this Bill will pass, but in a form which will reduce the registration and the work therefrom to manageable dimensions and will provide a list which will be of real use to beneficiaries and social workers. But I hope that the local charities will be allowed to carry on with their good work and that only the larger and non-local charities will require to be registered. Smallness does not detract from charity, though nowadays people are apt to look down on smallness. A parochial charity to provide a bag of coal for poor widows at Christmas is a very valuable form of charity. I was told there is a distinguished professor of botany who was led to take up that subject from the perusal of a book he received as a prize from a local charity for sewing on buttons. If we get too much regimentation, my Lords, charity will be killed, and in spite of the Welfare State there is still much room for charity. I do beg the Government to seek some formula whereby this Bill can become what I believe to be of workable dimensions.
§ 6.20 p.m.
§ LORD BADEN-POWELL
My Lords, time is getting on, so I will not weary your Lordships with a long dissertation, but I want to say a few words on behalf 624 of the Boy Scouts and the Girl Guides Associations. The Boy Scouts have already been mentioned by the noble Lord, Lord Amulree, and by the noble Lord, Lord Saltoun, and from the few words they have uttered in this particular respect your Lordships will see that there is a large number of units of various sorts which, under this Bill, will have to be registered separately under the central registration scheme. If I quote a few figures, your Lordships will realise the enormity of the additional work which will have to be undertaken, not only by our own headquarters but by the Charity Commissioners themselves: and, as my noble friend Lord Hawke has just mentioned, the colossal amount of additional work which would be entailed by the registration of these additional groups would, obviously, be completely ridiculous.
There are a great number of scout groups in this country, some 10,500 in all. I might explain at this point that a scout group consists of a wolf cub pack, a scout troop, senior scouts and a rover group. There are some 900 local associations which look after them, and 75 scout counties. In the case of the Girl Guides' Association, there are 21,500 guide units, comprising brownie packs, guide companies and ranger companies. They come under 2,165 guide districts, 590 divisions and 79 guide counties. I would explain that in some cases counties are sub-divided for simplicity in administration. If my arithmetic serves me aright, that makes a total of 35,809 units altogether from our two separate Associations. The noble and learned Viscount the Lord Chancellor suggested that under 150,000 new trusts would have to be registered. If we can provide 35,809 of them, that goes a pretty long way towards securing the full total of 150,000.
With this tremendous number of units of all sorts that both the Scout and Guide Associations have, we hope (though perhaps optimistically so) that it might be possible for us to be included in the Second Schedule. No doubt that would be out of the question. We therefore hope that we might come under Clause 4 (4)(b), which says:The following charities are not required to be registered, that is to say,—625 We very much hope that we may come under that heading if we cannot be included in the Second Schedule itself. I will not weary your Lordships any further. I have certain other details in mind, but many of them have been covered by previous speakers in the debate, so that is all I have to say for the time being.(b) any charity which is excepted by order or regulations;
§ 6.22 p.m.
§ LORD MCNAIR
My Lords, I hope I shall not be thought to be lacking in sympathy with the objects of this Bill, or lacking in admiration of the work that had to be put in before the Bill could be introduced into your Lordships' House, when I venture to speak upon certain exclusions from the Bill and, in particular, certain universities. As I am a Fellow of my College at Cambridge and hold a minor sinecure office in the University, perhaps I ought to declare an interest in this respect. What I am about to say represents, I believe, the views of the University of Cambridge and its colleges; and, from what the noble ant learned Lord, Lord Spens, said earlier in the course of this debate, it seems probable that the same views prevail in the University of Oxford. I have no knowledge regarding the other universities in this respect, and my remarks must not be understood as referring in any way to their situation.
Universities and colleges are, of course, charitable bodies in the legal sense of that term, and in accordance with the recommendation made by the Committee presided over by the noble Lord. Lord Nathan, and with the Government's statement of policy published in the year 1955, it had been intended that they should be excluded from the Bill which is now before your Lordships' House, leaving them where they now stand in their relation with the machinery of the central Government. I wish to explain to your Lordships what that machinery is, at any rate in the case of the Universities of Oxford and of Cambridge. Those two Universities have been in a peculiar position, at any rate since the Universities Act, 1877, which established the Universities Committee of the Privy Council. That Committee has power to act by three or more of its members, one of whom must be the Lord Chancellor or a member of the Judicial Committee.
626 As to these Universities and their colleges, it is the Privy Council which is their parent and which does for them what the Charity Commissioners or the Ministry of Education do for other charities—and, indeed, much more, as I shall show. This link with the Privy Council is now thoroughly familiar and has worked very well; and the University of Cambridge and its colleges, at any rate, sincerely hope that nothing will be done which will impair this procedure or hinder its natural development.
I should like to explain briefly the nature of this procedure. This link with the Privy Council is twofold: it is both administrative and judicial—or, at any rate, semi-judicial. New or amending statutes made by a university or a college must be submitted to the Privy Council for approval; and, as your Lordships may have noticed, in our daily Minutes one frequently sees mention of such statutes being laid on the table of this House and on the table of the other place before being approved by Her Majesty in Council.
I said that the link with the Privy Council is also judicial, or semi-judicial. The Universities Committee has power to adjudicate upon certain kinds of disputes. I recollect some thirty or more years ago attending before this Committee when a large number of Cambridge colleges, represented by counsel, submitted a dispute to the Committee, composed of three noble and learned Members of your Lordships' House. My Lords, at Cambridge, at any rate, we are satisfied with this procedure, which works smoothly and efficiently and which could easily be amended, should that be required, to deal with any new situation. I should like your Lordships, in particular the Lord President of the Council, to realise that we regard it as an honour to be linked with the Privy Council in this way, and we should deeply regret it if this link were to be in any way weakened, impaired or thrown into doubt, as would happen if the universities were to be adopted by a new and unfamiliar parent.
My Lords, the bearing of these remarks upon the Bill now before your Lordships may not be immediately obvious, and so, without straying from the limits of a Second Reading debate, I wish to draw your Lordships' attention to the Second Schedule, mentioned by 627 the noble and learned Viscount on the Woolsack—a Schedule entitled "Exempt Charities". This Schedule defines as "exempt charities" within the meaning of the Act, among other bodies such as the British Museum and the Church Commissioners, the following—and here I quote:the universities of Oxford, Cambridge, London and Durham, the colleges and halls in the Universities of Oxford, Cambridge and Durham and the colleges of Winchester and Eton;I understand that the Nathan Committee recommend the complete exclusion of universities and colleges from any Bill designed to give effect to their recommendations.
The Schedule from which I have quoted defines exempt charities, but it does not state what they are exempt from; that is left, quite properly, to the clauses of the Bill itself. When one examines these clauses one finds that many of them contain a subsection which expressly states that "This section shall not apply to an exempt charity"; but not all clauses contain this provision. There are many clauses which do not and they will require careful examination before the House goes into Committee on the Bill, so that any Amendments that are required may be framed to make it clear that the existing link with the Privy Council remains undoubted and intact, and that there is no risk that an alternative procedure will compete with it or otherwise jeopardise it.
I am sure that the noble and learned Viscount on the Woolsack will agree that, in spite of the very skilful drafting of this Bill, it remains difficult and complicated, and I earnestly beg, of him that a generous amount of time will be allowed before the House goes into Committee, so that the inevitably intricate clauses of the Bill may be fully studied by those bodies which are, or may be, affected by the Bill.
§ 6.33 p.m.
VISCOUNT COLVILLE OF CULROSS
My Lords, some of the people who are going to benefit particularly from this Bill are the trustees, and out of the 150,000 trusts which have been mentioned this afternoon, whether or not the 35,000 girl guide and boy scout units are included among them, there will be 628 a large number of small trusts which are administered by trustees who are not men of the law and who will particularly appreciate the clarity and the compactness of this Bill. If this clarity and compactness leads to a little more activity, and a bit of overhauling of local charitable trusts, this will be a good thing. But in this connection, I think that it is a great pity that it has not proved possible to dispense with the duality of the central authority. I accept that this duality must remain and that the Ministry of Education and the Charity Commissioners must act concurrently. In practice, I think that there must be an assurance that this is going to work.
If there is to be an increase of applications and other dealings with local trustees, those trustees must be sure with which of the two authorities they are concerned. I know that Clause 2 (2) provides for Orders in Council to define areas of jurisdiction and also that Clause 2 (3) will excuse a trustee who gets it wrong, provided he has taken reasonable trouble to find the correct authority; but what is important is that, given diligence on the part of a trustee, if he sends the application to the wrong authority or if the trust is one of those complex ones which belongs partly to one authority and partly to the other, it should be the authorities themselves who should decide which is to take charge. They should post the application between themselves, when it is received, and not send it back to the trustee merely because he has approached the wrong people.
Furthermore, if there is to be this tremendous task of registration, combined with increased activity on the part of local trusts, there must be enough staff. The Commissioners particularly are involved, because it is they who are going to register and not the Ministry of Education. It would be most unjust if the Commissioners' staff were all employed for the next five years, let us say, on registration, while the Ministry of Education staff can get on with schemes and other matters dealing with trusts which come under their jurisdiction. I think that in the course of this Bill we must have an assurance from Her Majesty's Government that there will be staff; otherwise any springlike enthusiasm which this Bill may have evoked in the local charity world will 629 soon wither away when trustees find that yet again there are delays and nothing seems to be done.
Whatever may have been the scope of the cy-près doctrine heretofore, this Bill makes it clear that the power of scheme-making can be exercised over comparatively wide limits. In the case of small local trusts, I think it must be admitted that the very knowledge that it is a small area or community that is to benefit by the trust plays a large part in inducing a donor to entrust his money to one of these local charities or to found one. When one looks at the Bill as it stands at the moment, the scheme-making powers are defined in the main part. The enlargement of areas of local charities appears in the Third Schedule. In the second column of that Schedule, in paragraph 6, it says that a parish charity may be extended into an area not extending beyond the county district or districts comprising or adjacent to the parish or parishes in which the charity started.
I do not think that the Nathan Report envisaged quite such a large extension, and if the White Paper does so I am afraid that it does so on an analogy with an urban community. It is true that there has been power to extend local urban trusts over the rest of a municipal borough, but when one says that it is reasonable to spread a parish trust over the whole of the county district, or worse still, over a county district and the adjacent county districts, one is talking about a very different matter. I have been given one instance, which I have been assured was taken at random, of a corner parish in one of the Midland counties where, according to the definition in the Third Schedule, a trust started in that parish could be extended over no fewer than 101 adjoining parishes. That sort of extension must be too wide, although that is perhaps an extreme case. I am afraid that it might have the effect in due course of leading local men and women who wish to found a small trust for their own village or community to be frightened off, because they think that the benefit might be extended too widely or wasted or become lost among many other similar charities in the area.
There is a little disquiet about Clause 13 of the Bill regarding the mention of a Royal Charter. Both the Nathan Committee Report and the Government's 630 White Paper have made it quite clear that common-good trusts when they come into existence should be of a local nature only and not of a national nature. There has been a little anxiety that the provision for common-good trusts to be controlled by a Royal Charter may be paving the way to rather larger trusts of this nature than had been envisaged by the Report or by the White Paper, and I think an assurance that this is not so would go a long way to assuage the anxiety on that score. There are a few other small points with which I should like to deal on the Committee stage, but with which I will not weary the House this evening. In general, I would wish nothing so much as to join in the round of appreciation and praise which has greeted this Bill in your Lordships' House this afternoon.
§ 6.42 p.m.
My Lords, so many clauses of this Bill have been commented on from all sides of your Lordships' House that I do not think there is a great deal more to be said at this stage, except perhaps to try to sum up the general impression which this Bill gives to the lay reader. It is rather an authoritarian Bill. There is a great deal of new control on a three-tier basis. The Minister, for the first time, can be called in to adjudicate and to have dealings in the control of charity and charitable trusts; the Commissioners—and rightly so—are given greatly extended powers; and for the first time local authorities are called in on to the scene. I should like to make this comment to your Lordships. I believe that charity flourishes best in a soil of freedom and liberty. I do not believe that charity will flourish under the somewhat strict and severe conditions laid down by the Nathan Committee, but rather will be somewhat chilled. I think that the control of charities is best exercised in a very light and delicate manner.
The imposition of the Minister is a great innovation. He can move the Charity Commissioners to act. And what will be his reasons for doing so? Will they be political reasons or charitable reasons? The answer to that question has yet to be given. A Minister cannot be divorced from politics, and I should have thought that the executive hand of the Minister might well have 631 been omitted from this Bill. The Commissioners themselves in future are to be appointed not by Her Majesty the Queen, but by the Minister. Is there any advantage to charity in this? I think that is an important question.
The local authorities, who are now brought in by Clause 10, are given wide powers. They can maintain an index of local charities, which I suppose they will obtain from the general register. I take it that the local authorities will have sent to them by the Charity Commissioners a section of the general register—that is my reading of the clause. But the composition of the general register itself has been submitted to some severe doubts, both by the noble and learned Viscount, Lord Simonds, and by my noble friend Lord Hawke. But if such a register is compiled, then no doubt a section of it will go to the local authorities. And if your Lordships read on to Clause 11, you see what the local authority's duties will be. They… may initiate, with the consent of the charity trustees of any local authorities in the council's area … and may carry out in co-operation with the trustees a review of the working of those local charities …I think it is open to doubt whether that will be for the benefit of charity. I ventured to speak to your Lordships on this point on the last two occasions when the noble Lord, Lord Nathan, raised this matter. It will be difficult for one individual charity to resist giving their consent f the council of a county or borough, or even a district council, have obtained the consent of the other local authorities to the review; and I think the smaller charities may be almost forced to join with any other charities in such a review, even against their better judgment, as no doubt the consent of the majority of the charity trustees will be required for such a course. But I still doubt whether the local charities themselves would benefit very largely by this review by local authorities. Local authorities are elected not for charitable purposes but for local government purposes, and for the life of me I cannot understand how they are properly brought into the subject of charities.
Clause 13 has been acclaimed on all sides of the House. That clause deals largely with cy-près arrangements, and although they are set out here quite 632 clearly it has always been the practice of the Charity Commissioners, and of the courts when application was made to them, to authorise cy-près schemes. I can assure your Lordships that this is nothing new, and although it is set out here and brought up to date it has always been possible for charities whose purposes have elapsed to obtain such a scheme. I should like to refer only to two other clauses. Clause 23 enables the Charity Commissioners to give advice to any charity trustee in any matter affecting performance of his duties. I wonder whether that is wise, because if one trustee dissents from the opinion of the majority he may feel himself aggrieved, and he can create difficulties, so far as I can understand this Bill. He can write to the Charity Commissioners. Is it really necessary that the Charity Commissioners should have to correspond with individual trustees of a charity who do not wish to be governed by the majority vote? I foresee endless and futile correspondence under this particular head.
I should like to make one suggestion regarding the registration of charities. If such a provision should be eventually included in the Bill in its final form, would it not be possible for the Charity Commissioners to be reinforced by a registrar, and a complete registration of organisations set up to assist the Commissioners? Because undoubtedly they will be overwhelmed with their statutory work. Some such officer as the Registrar of Friendly Societies would, I should have thought, have been of great assistance in this formidable task. We have heard this afternoon how formidable it is, and there are great fears that it will be even more formidable than has been envisaged. If the registration starts off at a slow pace and takes several years to conclude, then none of the provisions dealing with what happens after registration can come into effect for a considerable number of years.
I regret that I was unable to be in my place this afternoon when the noble and learned Viscount moved the Second Reading, so that I am at a great disadvantage in speaking this evening. But these are, I think, a few comments which have some relevance to the debate which has taken place. Noble Lords on this side of the House are well aware of the great interest and pains the noble and 633 learned Viscount has taken, over many years now, in controlling the powers of Ministers and substituting other bodies for the sole Ministerial power. We are all grateful to him for his action in so doing. I hope that after the debate this afternoon he will be prepared to look again into the proposals of this Bill dealing with the new powers of the Minister, which appear to me, and, I think, to a number of noble Lords on this side of the House, to go too far.
§ 6.56 p.m.
My Lords, the noble Lord who has just spoken can rest assured that no one could argue that what he has said was irrelevant to the discussion. I only wish he had gone in to bat earlier, because what he said would have given other speakers something to "bite on," if I may use that expression in the most friendly spirit. Perhaps he and other speakers, including my noble friend and acting Leader Lord Silkin, and my noble friend Lord Taylor, and, indeed, all the other speakers, will forgive me if I do not stand between the House and the Lord Chancellor, in order to allow the Lord Chancellor to reply to points rather than attempt that task myself.
I should like to make two comments about the speeches that have preceded mine. The noble Lord, Lord Hylton, takes a different view of these things from those of us who sit on these Benches. That must be said clearly and firmly. But perhaps the issues can be drawn a bit closer when we get to the Committee stage. I should like to add one word of tribute to what has already been said about the speech of the noble Lord, Lord Spens. It would be an impertinence of me to talk as though he were a maiden speaker, in some sense a junior or less experienced than myself; but I know that all of us on this side would wish to assure him that he appeared this afternoon, as we have no doubt he is, a wise and learned gentleman, and a very charming speaker. We on this side—and that is all I can speak for, although I am sure it is true of the whole House—wish to hear him very often in the future.
I must pay a very strong tribute—at least as strong as any paid, and perhaps I have special reasons for doing so beyond those of other speakers—to the noble Lord, Lord Nathan, for his work in this connection. We are debating 634 what I hope will always be known in history as the Nathan Bill. It does not appear to be called that, but I hope that eventually it will become the Nathan Act: I hope that that may be moved as an Amendment before the discussions are over. But certainly part of the credit must go to the noble Lord, and I hope everyone will join in the warmest possible tribute to him. About him, I would say only this. One sometimes hears the phrase used derisively "So-and-so is a do-gooder." I would use that expression in terms of admiration to the noble Lord, Lord Nathan. I do not know anybody who goes about the world doing more good, doing it more generously and more unobtrusively than the noble Lord, Lord Nathan. In this case, he has been forced into the open, and I hope they will link his name with charities. Certainly no name could be more properly linked with them.
I want to make a few comments on the Bill and then to offer, I hope in a fairly brief space of time, some wider remarks before I sit down. I have had close contact in recent days with the National Council of Social Service, to which the noble and learned Viscount the Lord Chancellor paid so well justified a tribute. Though in my remarks no responsibility, except in the case I mentioned, must be accorded to them for anything I say, I should like to inform the House, if they are not already aware of it, that the National Council of Social Service, whose position, I suppose, is higher than that of any other single body in this field, are heart and soul behind the Bill. Apart from any details with which we need not be concerned now, they give a general welcome to this Bill; and that alone weighs very heavily with me.
I agree with those—though perhaps not to quite the same ecstatic extent—who are full of praise for the drafting of this Bill. Most of the praise, I think, came from lawyers in various parts of the House, who are no doubt perfectly capable of understanding any Bill. I would not choose even this Bill as bedtime reading, except perhaps that it would send one to sleep quickly; but those who feel that it is easy to read will no doubt prove their capacity to argue with one another when we reach the Committee stage. To me it is just a Bill, and very, stiff reading, though no 635 doubt put as clearly as possible. It is, however, no doubt a remarkable drafting feat, and we must be grateful. It protects the interests of charities and ensures that they shall not become subordinate to the authorities. That is my view, whatever the view held by the noble Lord, Lord Hylton. I should like to return later to the topic of the co-operation, the necessary partnership, between voluntary bodies and statutory authorities, to which I, and I think all on this side, attach the greatest importance.
I have listened with great care to the noble and learned Viscount, Lord Simonds, and others who criticised the central register. It has been asked: what is the good of this central register? Who is going to benefit? There I can quote the National Council of Social Service, who are likely to be at least as well informed as anybody else. They feel that it will greatly facilitate their work and the work of other bodies, in providing information and advice over the whole field of charitable work. That opinion weighs a great deal with many of us, and therefore I would strongly support the central register.
I welcome the proposal to relax the cy-près doctrine, but I realise that issues are involved which must be discussed on the Committee stage, and I can only indicate good will to what is proposed in a general way. There is the question of the composition of the Charity Commission. I feel, and I think I am in line with the noble Lord, Lord Taylor, that the noble Lord, Lord Nathan, had a better proposal than that to be found in the Bill. If I understood the Report rightly, Lord Nathan, apart from recommending a larger body, would have liked to see a body set up which represented various forms of experience in public life and charitable affairs; and I should have hoped that critics of the Bill, such as the noble Lord, Lord Hylton, who fear the dead hand of bureaucracy, and so on, would have preferred Lord Nathan's solution in this respect to the rather more bureaucratic solution (if that is the right expression) proposed by the Government.
But I must not be what one might call more of a Lord Nathan than Lord Nathan himself, and I gather that he has acquiesced in the Government proposal, realising that perhaps the best that could 636 be obtained in the circumstances was an advisory body on the lines of his original proposal. But I hope that the noble and learned Viscount the Lord Chancellor, when he replies, will be able to answer the question raised by the noble Lord, Lord Nathan on the subject of the advisory body. I think the noble Lord, Lord Nathan, raised the question of whether, in fact, it needed legislation. That was one issue that was raised. The noble and learned Viscount the Lord Chancellor may tell us that that particular proposal does not require legislation, but if that be so I hope that he will be able to express at any rate approval in principle for the idea of an advisory body; and that would certainly be the solution of many of us.
Then there are the powers to be given to the Home Secretary. There are other Ministers on whom they could have been conferred. I remember that when we discussed this question ten years ago, in the debate initiated by the noble Viscount, Lord Samuel (and we are pleased to see him here this afternoon), there were various suggestions that there should be some kind of Minister of voluntary action. I cannot remember what everybody said, or indeed what anybody said; but that idea was in the air, and on the whole it was turned down. I think this suggestion of giving the Home Secretary a kind of watching brief or power of friendy assistance is a better plan. It is better than having no one to assist the voluntary bodies and better than having a special Minister who might meddle too much. One could (think of other depositories for these powers. To name them is rather to reject them. The Lord President would not have sufficient staff. The Minister of Education would have other duties, and in any case many of these functions would not be educational. So I suppose that, on the whole, the Home Secretary is the best Minister. I welcome suggestions which appear to be made to enable him to assist the voluntary bodies.
Before I sit down I should like to offer one or two general thoughts which came into my mind when some noble Lords were speaking this afternoon, and going back to the debate, to which I have just referred, initiated by the noble Viscount, Lord Samuel. Ten years ago it fell to my lot in this House to emphasise the support of the Labour Government of 637 the day for voluntary action in general. To-day it is ancient history, and nobody would now think that surprising. I was, of course, speaking not off my own bat but on behalf of the Government as a whole. But in those days (and I hope noble Lords opposite will not be affronted if I remind them) it was far from certain how the Conservative Party viewed the Welfare State. If anybody doubts that, he need only look at that debate. It was not a term of praise on the lips of every Conservative speaker ten years ago. Equally, it was far from certain, at any rate in the eyes of those outside the Labour circle, how the Labour Party viewed voluntary action. To-day the danger of a conflict on Party lines between the principle of the Welfare State and the principle of voluntary action has disappeared—I hasten to say that I am not attributing it to any utterance of mine. I think it is worth reminding ourselves of the importance of keeping these things out of Party politics and our good fortune during recent years in having been able to eliminate the Party aspect from this particular discussion.
It seems to me that there will always be a problem here. All of us in this country now accept a kind of rather undefined community responsibility for national welfare, including, of course, welfare for those least able to look after themselves. But that raises a certain problem. How, if we accept the responsibility on behalf of the community, are we to discharge that responsibility by any kind of State action without interfering with essential liberties? That is the problem; and it will be a permanent problem, whatever Party is in power and whatever administrators are governing our affairs. The answer in general terms, which certainly I was instructed to supply ten years ago—I supplied it then with all my heart, and I think it is certainly accepted by everyone now: it is taken for granted in this House—lies in some form of partnership between the statutory bodies, whether they be central or local, and the voluntary associations.
The partnership, of course, may take a hundred different forms in this British society of ours. In the very interesting and, to me, rather formidable speech from the noble Lord, Lord McNair (I 638 must think over what he was saying in time for the debate on the universities in a few weeks) we heard references to the universities—voluntary bodies which receive most of their money from the State. Then we have certain voluntary bodies, varied forms of youth organisations, which receive quite a large part of their money from the State; and many of us are associated with charities which receive none of their money from the State, and on the whole prefer not to, because they feel they can do the job better that way. The partnership takes these different forms, and one hesitates to be dogmatic as to which kind of function or welfare service can be performed by the State and which kind can best he performed by voluntary bodies. Certainly in a sentence or two it would be very rash to appear to be laying down the law. But I think we are all well aware that the State has the overwhelming advantage of being able to lay its hands, in the last resort, on the resources of the community. And, of course, the smaller local bodies can lay their hands, within limits, on the resources of the local areas. That carries an advantage and a disadvantage. It is unlikely that a body that can make use of the resources of the community can so act without securing the consent of the community, which may take considerable time. It is less likely, therefore, that the purely State body will be the most active in pioneering; there is always bound to be a large function for the voluntary bodies there.
Then, again, though it is not certain to be so, the large body, particularly if it is to act according to certain rather definite rules, may find it harder to render a service of a personal kind than the smaller body. So on those two grounds alone, the need for a pioneering body and for the more personal touch, there is bound to be great scope for what is called voluntary action. I do not wish to try to lay down the law, but just to point out that, in my opinion, we in this country will never see the disappearance of the need for voluntary action. I do not think the need for it will grow less as the services rendered by the State expand, because we are all the time, so to speak, aiming at a moving target, a higher level of welfare provision for our people as a whole.
639 My Lords, I will close in a moment. Ten years ago on behalf of the Government I said that democracy without voluntary action loses its soul. I would say now that the Welfare State without voluntary action loses its chance of realising its vision of national welfare in freedom. Without voluntary action the Welfare State either would be bound to fail to provide welfare or it would be false to freedom. In either case, it would betray its ideal. Therefore, voluntary action, which is the underlying side to-day, is more important than ever it was, and becomes, as I said just now, still more important as we journey forward and, we hope, upwards.
Therefore, speaking from these Benches on behalf of my colleagues, I welcome with all my heart this Bill, on many grounds. The fact that it comes from our old friend and dear colleague, Lord Nathan, is an additional attraction; but, even apart from that, we feel that it is a real step forward in social progress. We commend it as fostering the spirit of charity. There has been some dispute as to the legal meaning which should be attached to the word "charity," and laymen can be forgiven if they are not quite sure what that meaning amounts to. But none of us has any doubt of what charity means in the Christian sense. As I see it, it means 50 million people trying to help one another, and not just 5,000 excellent administrators trying to help the rest of the 50 million. It is in that spirit, therefore, of mutual Christianity that I commend this Bill to the House; and I hope that when he replies the Lord Chancellor will be able to assure us, as I have no doubt he will, that the Government are dedicated to the ideal of the Welfare State, and that they believe that that ideal can be achieved in its fullest and highest sense only if the spirit of voluntary action is encouraged by every means possible.
§ 7.14 p.m.
§ THE LORD CHANCELLOR
My Lords, I am sure that no Minister in charge of a Bill could be anything but delighted by the reception that this Bill has had to-day. What I intend to do in my reply is to put in the first place those matters on which people have asked me for assurances, because that may be help- 640 ful to them in seeing the bodies with which they are interested and also as to their future conduct on the Bill.
But I could not go on to that without dealing with two personal matters which give me great delight. The first is the maiden speech of the noble Lord, Lord Spens. He referred to 25 years ago in another place. He may remember that a junior Member to him, co-operated with him in many matters a quarter of a century ago. It is a delight to hear him talking on a subject on which manifestly he is well informed, and we are sure that we shall have the same pleasure when he passes to other subjects.
Then I should like to thank the noble Lord, Lord Nathan, for what he said about the framework and the drafting of the Bill. I am specially grateful to him for his words about the drafting. I think that Parliamentary Counsel have a hard and thankless life. Whenever there is a difficulty someone draws attention to it; but when we, who are, or have been, Ministers of the Crown, think of the marvellous series of operations over the arches of the years which have come from that office, we indeed owe them a deep debt of gratitude, and I am glad that the noble Lord mentioned it to-day.
I think that the only point on which the noble Lord, Lord Nathan, would like me to say a word at this stage—the noble Lord, Lord Pakenham, reinforced this point—is with regard to the Advisory Council. My right honourable friend the Home Secretary was anxious to get the reaction of your Lordships' House to that conception. The noble Lord, Lord Nathan, was perfectly right in saying that it does not require any statutory provision to enable my right honourable friend to take that course. While he has not made up his mind on the matter, because he wanted to hear from me and to read the debate about it to-day, the door is not closed, and I shall report to him what the noble Lords, Lord Nathan and Lord Pakenham, have said, and we shall consider the matter again. I fully understand the weight of what has been said about the various aspects of the Bill where such an advisory body might be helpful to the Minister. Therefore I should like to leave that point in that way, with the promise that I will report to and discuss it with Mr. Butler myself.
The other point which Lord Nathan mentioned, and Lord Silkin developed, 641 and which was referred to by my noble and learned friends, Lord Spens and Lord Simonds, is the absence from the Bill of a modern definition of charitable purposes to replace the Preamble to the Statute of Elizabeth. Well, I listened, as I always do, with respect and attention to what Lord Silkin said, but I must say that my view is the view that we expressed in the Government White Paper after Lord Nathan's Report, that we agree with the content of the present law on charity. We think that it would be most desirable, if it could be done without danger, to put that in a statutory definition. But what the statutory definition would be is absolutely beyond my knowledge of law and beyond my imagination. As a Law Officer of the Crown I had to consider this point very often. The noble Lord, Lord Silkin may have had in his mind the definition of Lord M'Naghten and his four categories in Pemsel's. case. I would just ask the noble Lord, Lord Silkin, to go with an unbiased mind and to read that part of Lord M'Naghten's speech about the fourth category. I will then set him a short examination in that fourth category alone and will ask him to reduce it into legislative form. If he does that, my immensely high opinion of him will have increased even more.
Next, if I may take the points in order, the noble Lord, Lord Amutree, was the first to raise the question of the Boy Scouts, and that point was reinforced by my noble friend Lord Saltoun and also by my noble friend Lord Baden-Powell during his speech. Now the primary fear is that on registration each local manifestation of the Boy Scout Movement will have to be registered. On that point I can reassure noble Lords. What we want by registration is to have a central public record of organisations administering property for charitable purposes. We want that record to show what charities exist, where it is possible to communicate with them and what purposes they serve; and it arises from the responsible trusteeship of a minimum amount of trust property: for example, where there is a body which has a national manifestation and also a local manifestation, each local manifestation—perhaps a Scout group as my noble friend Lord Baden-Powell put it—should be separately registered. It may be that in certain cases there would 642 be some local holding of property with local trustees and that cannot be avoided. But in the ordinary case they may get a hall from a school or something of the kind and the Scout group may have very little more than running property; and then there would be no such question.
I should like to assure your Lordships very strongly that it is the intention of Her Majesty's Government that registration should be flexibly regarded and flexibly carried into effect. We do not want to chase people to register for the sake of registering them. We hope that in all these examples there will be flexibility. I am told that conversations have already begun with representatives of some Churches and of the Boy Scouts' Association and other national associations regarding administrative measures that would be appropriate to secure the best results, and I want my noble friends to realise that we are extremely desirous that this should be done sensibly. If I might pause there for a moment, I would say that I am particularly interested in the Boy Scouts' Association. I once rashly said in public that I was the first King's Scout to become Lord High Chancellor of Great Britain, and I was promptly told that the view of the Movement was that I was the first Lord High Chancellor of Great Britain who had been a King's Scout. That is a divergence which I apologise for inflicting upon the House.
The noble Lord, Lord Amulree, also raised the fear of the position of a local authority. My noble friend Lord Hylton also developed that point, as did my noble friend Lord Saltoun. I should like, first, to point out that under Clauses 10, 11 and 12, which deal with local authorities, nothing can be done except with the consent of the trustees. Clause 11, to which my noble friend Lord Saltoun referred, enables local authorities, with the consent of the charity trustees, to initiate reviews on the working of local charities and to make reports and recommendations to the Commissioners after consultation with the trustees. My noble friend Lord Saltoun said that there may be a need for consent but that trustees may be expressly or by implication bullied—I am putting it bluntly—into giving consent, or may be frightened to refuse consent. I believe that the answer 643 to that was foreshadowed by the noble Lord, Lord Saltoun, himself. He suggested that there should be the consent not only of the trustees but of the Commissioners.
I attach great importance—and here, with the greatest respect, I differ from my noble friend Lord Hylton—to Clause 23, to which he drew attention, which deals with obtaining the advice Of the Commissioners. I believe that that is very important. Supposing the situation arises (the noble Lord, Lord Saltoun had it in mind) that there are trustees of perhaps a not very big trust and the local authority comes along and says, "We should like a review." The trustees do not want to offend. What can they do? What should I do if I were a trustee? I should write to the Commissioners and say: "This is how we are doing our job. The local authority have suggested a review. We cannot see any reason for that, but it is very difficult for us, as we are local people who meet the local authority in other connections. That is the position. Will you help us?"
The other point where it is so important—and I do not know whether my noble friend Lord Hylton appreciated this aspect—concerns the giving of practical advice. The other day a local charity came to me, as a local resident, in one of these cases which are very common concerning village halls. A question arose with which I am sure all of your Lordships have had to deal, as to whether the hall had been built for the ecclesiastical parish or the geographical parish. There was a difference of opinion between the trustees as to the interpretation of the deed. I put to my noble friend Lord Hylton that here is a case where it is of supreme importance that there should be this right to go to the Commissioners—and it does not matter which trust goes. The Commissioners, at their own expense, go to solicitors and counsel, and get a first-class legal opinion as to the true construction of the deed, which they pass on: and the division between the trustees goes. That seems to me a most valuable and practical method, and I believe that the same thing could be applied, in a rather wider way, to the difficulty of the noble Lord, Lord Saltoun. But I do ask your Lordships, with respect, to re-read these clauses.
644 I have mentioned Clause 11 and, after all, Clause 12 gives statutory authority for consultation and co-operation. But in none of these clauses is there the slightest expressed or implied compulsion on the charitable trustees. Certainly if my noble friend Lord Saltoun can think of any words that will make the absence of compulsion clearer I shall be glad to consider them, because that is what I want.
My Lords, I am sorry to interrupt the noble and learned Viscount, but my point can be put quite shortly and clearly. Long experience in the work of a great collecting charity has shown me that it is—or would be—quite impossible for trustees on their own to refuse a request by a local authority for a review. They would have to get support from outside. It would have to be put in the Statute that the local authority must get the agreement of the Charity Commissioners.
§ THE LORD CHANCELLOR
My Lords, it is laid down in the Statute that they can consult, and they can get advice from the Commissioners; I should have thought that that was the way to meet that difficulty. I quite see, especially as regards a collecting charity, my noble friend's point. If it looked as if it were dodging (speaking colloquially) an inquiry by the local authority, that would put people off subscribing. But I think the answer is to go to the Commissioners and to say to them at the first sign of the matter. "You know all about us. You know how we are carrying on our work. You have a word on our behalf to the local authority".
May I go on to deal with other points in this order? My noble and learned friend Lord Evershed raised on behalf of the large charities the three provisions: Clause 6 (1), Clause 17 (6) and Clause 19 (1). Clause 6 deals with the power to institute inquiries, and Clause 19 (1) deals with a similar aspect of the matter where the action is for protection of the charities; and Clause 17 deals with a rather different point, when the Home Secretary will intervene. I think that there are obvious arguments, which indeed have been deployed in this debate, for the existence of a power to institute inquiries. I do not think my noble friend Lord Hylton heard my remarks, because he had the good fortune 645 to miss my opening speech, but I did mention that in regard to these matters, which are very germane to his general line of argument, we were prepared to look at all of them to see whether I could make them more specific and narrow them down.
§ THE LORD CHANCELLOR
It is an important point. I specifically mentioned that there are two in which the Minister is concerned, and I said that I would try to make them specific and therefore prevent the impression my noble friend had of the Minister wanting a sort of roving inquiry. I will consider it again when I have read the debate, but at the moment I think the power to have an inquiry may well be a necessary power, given the circumstances predicated.
As to the points of the noble Lord, Lord Silkin, I have dealt with the general point on the question of the definition of "charitable purposes". Perhaps, in view of the time, he would excuse me from going into the other points. There are clearly points which it will be most interesting to discuss on the Committee stage, but I am very anxious to give some assurances on specific matters about which I have been asked to-day, and therefore I would ask him to bear with me. My noble friend Lord Spens, in that excellent maiden speech, asked me a question about the common investment fund schemes. Broadly, I should have thought the investment clause of such a scheme would normally, as a matter of practice, be thought appropriate to the investment of trust funds under the general law; and if a trust has a more restrictive investment clause the proper course would be to modify this by the scheme before seeking to enter a common investment fund with wider powers. But as my noble friend knows, we have said we are going to legislate at the beginning of the next Session on the general question—I mentioned it—for trustees as a whole. So I think that, in a sense, that problem will become academic, unless there are deeds with a restrictive clause, in which case they can be dealt with in the scheme.
646 Perhaps I may deal now with the university point. I think my noble friend was the first to mention it, although it was developed with great force and clarity, if I may say so, by my noble and learned friend Lord McNair. I should like to make this quite clear. There is not the slightest intention to encroach in any way on the autonomous statute-making powers of Oxford and Cambridge. I am authorised to give as firm an assurance as could be given. The enabling powers of the Charity Commissioners are available to them on request, but there will be no pressure on them to use these powers if they do not wish it. Certain orders have been requested by Oxford and Cambridge from time to time because they were borderline cases and not clearly within their autonomous powers. As exempt charities—I think this is the point—they are wholly exempt from all the supervisory or restrictive powers in the Bill. But, of course, the general law of charity declared in the Bill must apply to them. That is as complete a reassurance, and is intended as such, as I can give to my noble friend Lord McNair.
My Lords, my noble and learned friend Lord Simonds, like my noble friend Lord Hylton, was in some doubt as to registration, and my noble friend Lord Hawke had the same thoughts. Apart from the question of knowledge, which my noble friend Lord Hawke very fairly deployed in favour of registration, and which my noble and learned friend Lord Simonds examined—that is, knowledge of benefactors and beneficiaries—think there is another important aspect in the matter. It is that fellow trustees (and I am afraid I put this rather elliptically in my opening speech) should know what other fellow trustees are working for, and to what purpose: what is the aim and what is the object of their trust. I say that because undoubtedly there is a danger that there may be trusts working on certain lines, and if only they were to alter these lines they would still be within their purposes but would be using their money much better. Similarly with regard to local authorities, I think it is useful that local authorities should know what work is being done in the area, and in regard to that there should be a much greater degree of knowledge all round. I have no doubt that we shall come back to this point on the 647 Committee stage, but that is my feeling on the requirements of registration.
Now, my Lords, if I might come to the points which the right reverend Prelate the Lord Bishop of Chelmsford asked me, I think that I can satisfy him on all of them. If I have missed any, I hope he will not hesitate to interrupt me, and I will do my best to answer them. First of all, on Clause 4 I gladly give the assurance that, as regards the making of excepting orders, adequate consultation will be carried out with those nominated before the nominations are made. I also promise that consideration will be given to the requirement, in subsection (5) of Clause 4, that an application by a charity for registration must be accompanied by a copy of the trust deed though the Commissioners already have a copy in their possession. Obviously, that should not happen. I will ask at once for that matter to be looked into and dealt with, but I am quite prepared to give the assurance that we shall look into; it and I am sure we shall find a way.
With regard to accounts (my noble friend Lord Saltoun was also on this point) it is intended that the power in Clause 8 and Clause 31 to require accounts should be operated flexibly. The accounts will not necessarily have to be sent to London every year unless there is a permanent endowment; and even there in the case of small charities the Bill contemplates that exceptions will be made to enable accounts to be submitted at longer intervals. In other words, I can tell my noble friend the right reverend Prelate that we shall achieve flexibility, and that the provisions will be administered sensibly in that way.
On Clause 21, the Court already has power to enable a body holding a number of individual trusts to establish a common investment fund, and the power has been exercised in many cases. With regard to Clause 44, subsection (2), the exclusion from the Bill of ecclesiastical corporations does not in any way derogate from their charitable status. Ecclesiastical property which has been accepted as charitable in the past will not be affected by its exclusion from the Bill. I hope that these are the points which the right reverend Prelate raised, and I have tried to deal with them.
648 There is one other aspect which comes next in the order, and that is the point on Clause 28 which my noble friend Lord Saltoun raised. If my noble friend would bear with me, I will give him the principle of Clause 28, and I will come to his point. If a charity has land which is a permanent endowment, it is bound to preserve the capital value, and since 1855 the consent of the Charity Commissioners has been required for any alienation of the land. The Committee under the noble Lord, Lord Nathan, recommended that the control of land dealings should continue, and this clause therefore carries forward this control. But—and this is the important point for my noble friend—where the charity is empowered to sell the land and to use the proceeds as income, with no obligation to preserve it, it is thought that there is no purpose in any control over such transactions, since there is no control over the discretion of the trustees in spending their income. To enact this and no more would be to leave a gaping hole in the intended control as regards functional land.
I will explain to my noble friend what I have in mind. Take the case of the village hall which I mentioned in another connection. Often the land is held on trust for sale by the conveyance, which is an English conveyancing expression, and it is seldom possible to discover from the documents of title alone whether it is intended as a permanent endowment or not. The solution adopted is to declare that the functional land shall be treated as a permanent endowment, so that the transaction is subject to the consent of the Charity Commissioners unless it is excepted by order or regulation. In my example, the land is given for a village hall. Even if the conveyancers put it on trust for sale, it is obvious that it is intended in the nature of things as a permanent endowment. If the village hall was sold, there would be no village hall, and the charity would come to an end. In these cases I think it is right that the Commissioners' consent should be required before sale.
On the other hand, there are certain large national charities, for example, which are accustomed to buying from their general funds, and selling houses for their local staff as occasion may require, and this is expendable as income. Here it would be purposeless, on the principles 649 we have adopted, to require the Charity Commissioners' consent; and it is the intention that excepting regulations or orders should be made under subsection (4) so that consent will not be required. It is intended that the regulations, which will go to title of the land, should be so drawn as to specify quite clearly (perhaps by naming each of the charities concerned) what properties are excepted from the clause, so that nobody will be in any doubt as to the power to sell: and, naturally, it is intended that the regulations will be drawn up in consultation with the charities affected. The Departments concerned have already opened up consultations with some of the charities; and I hope your Lordships will agree that the principles are right. I ask my noble friend Lord Saltoun to consider what I have said. If he is still in any doubt, and if he will do me the honour of writing to me about it, I will try to deal with it; but my intention was to meet his point, and I hope I have succeeded in doing that. It is certainly my view that I have met the problem which he adumbrated to us.
§ THE LORD CHANCELLOR
Thank you very much. Now the noble Lord, Lord Taylor, made a number of interesting points, and I think I should like to examine them more fully. I come back for a moment to the general value, which he mentioned, of the voluntary bodies. My noble friend Lord Hawke raised the question of Clause 21, and I have mentioned that. I have also mentioned his other point about registration. I have dealt with the remarks of my noble friend Lord Baden-Powell about the Scout Movement, and I have dealt with the university point raised by my noble and learned friend Lord McNair. On that, I have given him all the assurance I can. If, on consideration, there is anything else, perhaps he will again be good enough to write to me about it.
I come now to my noble friend Lord Colville of Culross, and I would remind him on his first part, on the question of staff, that I said in my opening speech that my right honourable friend designed to have the Commissioners equipped to deal with their new problems. I will certainly bring to my right honourable 650 friend's attention this specific aspect, but, though I have not had a chance of discussing the point, it seams to me that it was covered by the general view which I was asked to express, that they would be properly equipped to deal with the job. So far as I can see, the assurance which he asked for on Clause 30 seems to be a reasonable one, but perhaps he would not tie me to that, and if I have to modify it in any way I will write and let him know.
My noble friend Lord Hylton spoke to me more in sorrow than in anger and reminded me of the lines that Mr. Browning wrote in The Lost Leader. When my noble friend referred to the work I had done in the past in getting rid of regulations, it seemed to me that he rather suggested that I had fallen from my own high standard over this Bill. I assure him that I have not. To continue with Browning, some bade us crouch and the rest aspire. Let me look at this once again. My noble friend will observe that apart from the power of appointment—and, after all, someone has to be responsible for the appointment of persons paid from public funds—there are only the powers in Clause 17 (6) and Clause 21. I cannot remember—and I have dealt with these matters for 20 years—where Ministerial responsibility rode on a lighter rein. There are not even powers of general direction in the Home Secretary, only the powers under Clause 17 (6), which deal with a wholly abnormal situation which might arise, and the provisions for ordering an inquiry.
With regard to the Commissioners themselves, they work with the agreement of the trustees, and again there is a smaller element of compulsion—if indeed one can find an element of compulsion, except for ordinary inquiries. In answer to the noble Lord, Lord Amulree, I have mentioned that the local authorities can act only where there is consent. I certainly do not have the impression that this is a Bill which has authoritarian aspects. The whole intention of the Bill is to constitute a partnership. I would ask my noble friend to consider whether it is not a necessary concomitant of 1960 that there should be partnership between voluntary effort and State performance. I do not see how we can say, in 1960, that there must be no State action. While he and I have battled on behalf of the individual, we 651 have always realised that the modern State must infringe rights to some extent, for schools, factories, nuclear power stations and other things.
The noble Lord, Lord Pakenham, has stated the problem, the problem which I have tried to approach in presenting this Bill and with which my right honourable friend has tried to grapple in drafting it—namely, how can we produce a partnership which does not derogate from the position of either partner? I could not feel more strongly the need for voluntary effort—for three reasons. The first is that voluntary effort is essential for pioneering work in every social field. Voluntary effort is able to take the more adventurous course and to take a risk in doing things which the State or the local authority effort could not do. For that reason it is valuable.
Secondly, I still think that in many cases voluntary effort can give, if not a higher standard of work, then a greater feeling of personal warmth and interest. It starts with an advantage there. Thirdly, I have no hesitation in saying that voluntary effort is essential, if we are going to maintain and restore the moral standards of our people. Only if they engage in voluntary effort are our standards going to be worth anything at all. Therefore I assure my noble friend that I have an intense belief in the voluntary side of this partnership, but I feel that we have to face the problem of this partnership of effort. On the whole, I think that your Lordships believe that this Bill does face the problem realistically and sensibly, and I commend it to your Lordships.
My Lords, before the noble and learned Viscount finishes, perhaps he will ease my uneasiness and tell me whether blind charities will have to re-register in different form, and whether public company charities will have to re-register in different form, or whether the present registration is sufficient.
§ THE LORD CHANCELLOR
My Lords, I am sorry that I have not been able to get specific instructions on that point. It seems to me that it would be unusual if blind charities had to reregister and I do not see why a charity, so long as it is charitable, cannot be run as a company. I cannot see how the 652 Bill makes any difference. I have been chairman of a charitable educational company and I cannot see anything in the Bill which will alter that. But again, perhaps my noble friend will allow me the escape clause, in case I have not quite appreciated his point. I will write to him as soon as I can.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.