CHARITIES BILL [H.L.]

HL Deb 31 March 1960 vol 222 cc527-618

3.14 p.m.

Order of the Day for the House to be again in Committee read.

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

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD MERTHYR in the Chair]

LORD SILKIN moved, after Clause 13 to insert the following new clause:

Charitable trusts

". A trust shall be a valid charitable trust notwithstanding that any word or expression indicating the purpose or purposes of the trust for which the application of the trust property or any part thereof is authorised includes within its scope both charitable and non-charitable purposes.

Provided that any such trust shall be construed and given effect to in the same manner in all respects as if it authorised the application of the trust property or any part thereof for such charitable purpose or purposes only.

Provided also that any trust which cannot be construed as applying to or for a charitable purpose shall not be capable of being a valid charitable trust."

The noble Lord said: This Amendment is designed to deal with cases where a person desires to create a trust fund for what he believes and intends to be a number of separate charitable purposes. It has on occasion transpired, sometimes long after the charitable trust has been operated, that although one or more of the intended charitable purposes has been valid, the others in the same trust have been declared by the courts not to constitute true charitable trusts. In these cases the courts have held that the whole trust, both those bequests which are deemed to be charitable and those deemed to be not so, has become invalid for uncertainty, and the wishes of the creator of the trust have been completely frustrated.

I would illustrate this by a case which has become well known. It is the case of the Chichester Diocesan Board v. Simpson, in 1944, which has since become known as the Diplock case. Here the whole trust failed as the result of a decision of the House of Lords which decided that although one part of the trust was recognised as definitely a charitable trust, another part was not a charitable trust, and therefore the whole trust failed. In that case the testator had intended, among other things, to benefit over 100 hospitals, and in fact the fund had already been distributed to these hospitals. Following the decision of the House of Lords that the whole bequest ceased to be charitable, the fund had to be recovered from these hospitals on behalf of the next-of-kin, and this, as your Lordships will appreciate, was a long, expensive and most distasteful process.

Following this case, the Government decided to meet the difficulty which had been created with a number of other trusts as a result of that decision, and they introduced legislation known as the Charitable Trusts (Validation) Act, 1954, which validated certain trusts which had come into operation before 1952 and had been regarded as charitable but which came within the scope of the Diplock case. But the Act specifically made it clear that it did not apply to trusts which came into operation after 1952. The Government, in their statement of policy on trusts in 1955, said: It is agreed that it is not expedient to attempt to validate imperfect trust instruments coming into existence in the future. They gave no reason for this and no explanation as to why it was not expedient to try to carry out the wishes of a testator or the creator of a trust.

There is no guarantee that the same difficulty may not arise in the future. A person, on the most competent advice available to him, may decide to create a trust, and in due course it may be found that part of the trust is not a charitable trust, and so the whole of the trust will become invalid and pass to persons or institutions that the creator of the trust had no wish to benefit at all. As I say, difficulties of construction will undoubtedly arise in future, and although every legal practitioner will benefit from the decision in the Diplock case and will not repeat that particular mistake, there is no guarantee that other decisions of the courts may not affect this kind of trust in the future, and this kind of thing will happen all over again.

This position has been experienced in other countries in the Commonwealth, and the laws of Australia and New Zealand are well worth studying. For instance, Section 131 of the Property Law Act, 1928, of the State of Victoria provides as follows: (1) No trust shall be held to be invalid by reason that some non-charitable and invalid as well as some charitable purpose is or could be deemed to be included in any of the purposes to or for which an application of the trust funds or any part thereof is by such trust directed or allowed, and (2) Any such trust shall be construed and given effect to in the same manner in all respects as if no application of the trust funds or any part thereof to or for any such non-charitable and invalid purpose had been or should be deemed to have been so directed or allowed. That is very much the wording of the Amendment that I have on the Paper. A substantially similar provision is contained in Section 37 (d) of the Conveyancing Act, 1938, of New South Wales and in Section 2 of the Trusts (Amendment) Act, 1935, of New Zealand. From such inquiries as I have made, I am informed that remarkably few difficulties have been experienced in the application of these particular Acts in the Commonwealth. We should be ready to learn from the experiences of other countries, and particularly from Commonwealth countries. They are liable to experience the same kind of problems as we do, and in their view they have found the answer.

It may be said that donors have now been warned, and must state clearly what is the purpose of the trust without ambiguity. But judges are constantly making new decisions and redefining what is a "charity" People have created their trusts in the best of good faith believing that they are valid, and have then found, as a result of decisions of your Lordships' House or the Courts below, that they are not. A trust can, of course, follow earlier decisions explicitly, but except where the terms of a later gift are identical with that of a gift in a reported case, the margin of freedom for a judge is very wide. It is therefore often almost impossible, except in cases where a decision on an identical gift already exists, for a draftsman to predict whether the gift will take effect or not. My Amendment is designed to ensure that that part of a gift which is definitely a valid charitable gift shall not be treated as invalid merely because another part of the gift is held to be invalid. By all means do not validate the invalid gift, but, on the contrary, where a testator's intentions are perfectly clear and perfectly good in themselves, in my view the law should be so amended that it should be respected and that part of the gift held to be valid. I beg to move.

Amendment moved— After Clause 13 insert the said new clause.—(Lord Silkin.)

LORD DENNING

May I say a word in support of this Amendment? The Diplock case, to which my noble friend has referred, exposed an absurd situation in the law, all due to a typist's mistake. The words in the will left a quarter of a million pounds to "such charitable or benevolent purposes as my trustees shall select". It ought to have been "to such charitable and benevolent purposes as my trustees shall select." If the word "and" had been used, instead of "or", the will would have been perfectly good, and the hospitals would have had their quarter of a million pounds. But on a typist's mistake the word "or" was put in, and as a result the whole gift failed. That decision has been remedied for cases before 1952 by an Act of Parliament which was passed in 1954. But if anyone should make a mistake such as that in the future, there is no remedy.

The report of my noble friend Lord Nathan said that everybody must be presumed to know the law. I had occasion to point out recently that that is a bad maxim. Everybody is not presumed to know the law. The true maxim is that no one can pray his own ignorance of the law in excuse for himself. How, for instance, can a person who makes a home-made will be able to know the difference between "charitable or benevolent" and "charitable and benevolent", when the Town Clerk of Gillingham, in the Gillingham case, did not know it? He said that after providing for the cadets' funerals and so on, the money collected from the public should go to such worthy causes as the mayor should select. That was sought to be validated under the new Act, but there was a difference of opinion two to one in the Court of Appeal and it was held that it was no good. All that money went to the funds in court, and could not go to the charities.

In Australia and New Zealand the situation has been remedied by a very simple provision. A case recently came before the Privy Council in which money was given to "such Order of nuns as my trustees shall select". That would combine both charitable Orders who do good work and non-charitable Orders who only pray—because the law says that nuns who only pray are not charitable. In Australia, that gift was able to be validated for good charitable purposes by their Act. Ought we not to have a similar provision in this Bill dealing with charities? We should not leave it to the Act of 1952. We ought to make it continuous for all who do not know the law of charities and who can be well excused for not knowing it.

3.28 p.m.

THE LORD CHANCELLOR (VISCOUNT KILMUIR)

The noble Lord, Lord Silkin, and my noble and learned friend Lord Denning have raised a very interesting point, but I do not think it is quite so simple as the admirable speeches to which your Lordships have listened have sought to make it. Your Lordships will realise that the law of England gives two primary benefits to gifts for charity. First, you can make a gift to charity in perpetuity, and, secondly, of course, a gift to charity is not exigible to tax. That is why the law has drawn the distinction between true gifts to charity and those such as the one my noble and learned friend quoted, under which it would be possible for the executors to apply the whole of the money to non-charitable purposes. They are both considerable concessions and that is, I think, part of the reason why this distinction has been made. It does not stop there, however—and this is the aspect of the matter which noble Lords have not mentioned. If the gift is imperfect, in that the money can be applied, as I have said, to non-charitable purposes, then of course it is void; and it is void generally against the next of kin of the testator.

That brings us to the substantial point (and the noble Lord, Lord Silkin, asked me to make it) that in those circumstances you are affecting private rights. It has broadly been the practice, I think, of Governments of every complexion not to affect private rights until they have had the advantage of having the matter considered by an independent committee. I am stating the principle very broadly, but I think that that puts it sufficiently accurately for this purpose. As you have heard, we were faced with this decision, by the decision to which reference has been made. We did refer it to an independent Committee: the Nathan Committee, as we have called it, presided over by the noble Lord who has done such an immense amount of work on this subject. And in Chapter 12 of their Report the Nathan Committee expressed their view that while it would be right to legislate so as to save for charity a large number of trusts which had been thought to be charitable until recent decisions of the Court, this could not be extended to trusts coming into existence since these decisions. Not only was that the view of the Nathan Committee, but immediately after the Report on December 16, 1952, if my memory is right, the Government announced that they would legislate in order to validate those gifts which had been thought to be charitable up to that time but which had been found by the decision not to be charitable.

I looked up the proceedings in your Lordships' House. The Bill to do this, with the limited objective specified by the Nathan Committee, was introduced into your Lordships' House by my noble and learned friend Lord Simonds, who was then Lord Chancellor, on January 19, 1954. He gave a very full account, which I have had the pleasure of reading again, of the scope of the Bill and what it was intended to do. The noble Lord, Lord Nathan, spoke next. Of course I am not for a moment taking the point that he was speaking for the Opposition, but he was speaking as one who had a particularly great knowledge of this matter and he accepted that position: that the Bill would validate gifts made before December 16, 1952, but that it would not apply to trusts created after the date of the Bill.

I know it is attractive to say that your Lordships ought to try to follow the intention of the testator, and ought not to think of other people who would benefit if the gift failed. I think my noble and learned friend Lord Denning would agree, however (there are an immense number of cases with which he and I are very familiar on this subject) that quite often it is not a question of a typist's error, but that the testator has wished to cover a wide field of gifts—for example, charitable or patriotic benevolent, where he has had in mind a more extensive gift. The effect of accepting this Amendment—I do not want to exaggerate it at all—would mean that that gift intended for a wider field would be limited to the charitable field. That is my view of the law—I shall be corrected if I am wrong. The effect, therefore, would be to narrow the intention of the testator and, of course, to deprive the next of kin of their rights, not against the testator's original intention but against the narrower intention that your Lordships will substitute for it.

I respectfully suggest to your Lordships that when private rights are affected it is a very sound rule that Parliament should not rush into legislation until the matter has been the subject of recommendation after full consideration by an independent body. We have had it considered by an independent body, an independent body that recommended the action which I have mentioned. We took that action relatively at once, and it was put into legal effect after full consideration and debate in your Lordships' House. For that reason I ask your Lordships to rest content with the view that you took some six years ago. If further difficulties do arise, then it will be possible to look at it again. With all respect to the noble Lord, Lord Silkin, I think that he was too modest about the learning of his profession; that point having been carefully considered and having been the subject of legislation, I do not think the likelihood of these mistakes in the future is nearly as great. But I will rest my case on the first point; that we ought not to take rights away from people, contrary to the one recommendation we have had, without having the matter again fully considered by an independent body.

3.38 p.m.

VISCOUNT SIMONDS

I should like to say a very few words in support of what the noble and learned Viscount, the Lord Chancellor, has said. I remember very well the Diplock case which has been referred to; and I have every reason to remember it very well, for I was one of the Members of your Lordships' House who decided that case. Upon it my noble and learned friend Lord Denning has put a completely unwarrantable gloss. There was no question of typist's error or anything of the kind. Deliberately the testator selected as the objects of his bounty charitable or benevolent institutions or societies. What did he want? He wanted either benevolent institutions, which are not necessarily charitable, or charitable institutions to be the objects of his bounty. I am sure the House of Lords, in deciding that case, merely reasserted a principle that was well established 200 years ago, and I think it would be a very grave act if your Lordships were now to depart from a principle so well established. It is quite true (and I think I may mention it) that the learned judge, Mr. Justice Farwell, who originally decided the Diplock case, held that it was a good gift. But I am justified in telling your Lordships that Mr. Justice Farwell told me he never could understand how he came to such a decision, which was clearly wrong.

I would rather rest my opposition to this Amendment upon its language. If your Lordships have it before you, you will see that it prescribes that: A trust shall be a valid charitable trust notwithstanding that any word or expression indicating the purpose or purposes of the trust for which the application of the trust property or any part thereof is authorised includes within its scope both charitable and non-charitable purposes … That means this: that if the testator uses words of the utmost generality, such as "public purposes", they are purposes which include both charitable and non-charitable purposes or objects. There need be no reference to charity at all in the testator's words; he uses general words which include within their scope both charitable and non-charitable purposes. It is elementary in the law of England that a man must make his own will; he cannot depute to his executors or to any other persons the power to make a will for him. Yet if he uses such words as my noble friend suggests—namely, "such purposes", or "such public purposes", whatever you like, he is, in effect, leaving it to his executors to make the will. The law of England is quite elementary—many hundreds of years ago it gave a power of disposition to testators—that a man must make his own will and not leave it to others to make it for him. Therefore, on that broad ground, I should oppose the Amendment which the noble Lord, Lord Silkin has suggested. Apart from that, I would in every regard respectfully adopt what the noble and learned Viscount the Lord Chancellor has said. I hope that your Lordships will not agree to this Amendment.

LORD MORTON OF HENRYTON

I also have been closely concerned with this particular subject, both as a Chancery Judge, and afterwards in the Court of Appeal and in your Lordships' House. I came here this afternoon with an open mind, not at all sure which way my mind would ultimately move. I have listened with great care to what has been said, and there are two observations I should like to make. First of all, the wording of this Amendment may be open to criticism, but this is a matter of a wide principle—namely, are you, or are you not, going to put right, to this extent, wills which have gone wrong since 1952?

There is one matter that I should like to emphasise. Both the Lord Chancellor and my noble and learned friend Lord Simonds have spoken of taking away rights from private persons. I wish to point out for the consideration of the Committee that the persons who are being cut out are the next of kin, whom in none of these cases had the testator the slightest intention of benefiting. He intended to benefit particular objects. He has described them to this extent: that instead of limiting them to charitable objects he has brought into the scope of his gift objects which are not charitable, with the result as has been pointed out, that the full gift has become invalid. If an Amendment on these lines—I do not say in these particular words—were accepted, the result would be that funds would be applied to the purposes specified, which are charitable. That, of course, would cut out the next-of-kin. But need we be careful of the rights of the next of kin? The testator intended this money to go to certain objects. He never intended a penny of it to go to the next of kin. I should like the Committee to have that point in mind when they decide on this matter. I still preserve an open mind, because I have not yet heard all that may be said upon it. I appreciate the objections which have been raised, but I think there is a great deal to be said in favour of having the Amendment, although possibly in different words.

LORD SILKIN

It looks as if the judicial side of your Lordships' House is evenly divided. I am never impressed with the argument that the wording of one's Amendment is defective. In all the years that I have been in your Lordships' House I have never been able to produce an Amendment which has been acceptable in its language, and I do not suppose I ever shall.

THE LORD CHANCELLOR

The noble Lord must not be too pessimistic; there is a lot of this day to go.

LORD SILKIN

Well, perhaps I may have the privilege of taking back my words at the end of the day. But up to the present moment I have never been successful in producing an Amendment that has been accepted in its language, although I have often, especially from the noble and learned Viscount, had Amendments accepted in principle.

The question we have really to consider is whether we are to do our best to carry out the wishes of the donor or testator, however defective the language of the will or trust may be, or whether we should try to do the job for him (which is what the noble and learned Viscount did not wish to do) and say that, because the language is defective, his clear wishes should not be carried out. I am sure that your Lordships will want the wishes of the donor to be carried out so far as it is practicable to do so. As to interference with private rights, whose private rights are to be interfered with? Who are the people who have the private rights? Is it the next of kin who, as the noble and learned Lord, Lord Morton of Henryton, pointed out, has been deliberately excluded from the will? What are his private rights? Of course he has the right to challenge the will; but he would challenge it on the ground that he ought to have been included in the will, and not that the intentions of the testator should be set aside.

I feel that this is a matter which the Committee ought to consider further. If the noble and learned Viscount feels that he has said the last word on this subject, then I should like to put the matter to the Committee and ascertain their wishes on the matter. I am assuming from what the noble and learned Viscount has said that the Government have made up their minds on this point and that there is nothing more to be said. In that case, I would ask the Committee to divide.

THE LORD CHANCELLOR

I have put to your Lordships the view that the Government have taken, and I do not think the noble Lord quite did me justice. I took next of kin as an example, but of course it might be the residuary legatee or the like. It is not bound to be a question as naked as the one which was put. But I hope that the noble Lord will agree that the points raised by my noble and learned friend Lord Simonds on the Amendment, apart from the principle, are serious ones. I should prefer that the noble Lord would give us the chance of considering the Amendment again in the light of this debate, and that he would put it down on Report stage next week. He has only a week to do it. I will then consider the point again. I do not want to buy off a Division by seeming to give a promise, but in view of what has been said by my noble and learned friends as well as by the noble Lord, I am prepared to consider it. As I say, I cannot give a promise in the matter other than to promise consideration. I am afraid that is as far as I can go at the moment.

3.50 p.m.

LORD SILKIN

I do not want to enter into any negotiations with the noble and learned Viscount over this matter, but, frankly, I do not want to be faced again with the argument that he has put up on this occasion—that this Amendment is bad. If the noble and learned Viscount will forgive my making a suggestion, will he give me the use of the Parliamentary draftsman to prepare an Amendment which would be acceptable in its terms without prejudice to the acceptance of the principle? On that basis, that there be no more argument that the language is bad, I would be willing to withdraw the Amendment and to put it down again on the Report stage.

THE LORD CHANCELLOR

Certainly I will do that with the greatest pleasure.

VISCOUNT ALEXANDER OF HILLSBOROUGH

I should like to be quite clear about this matter—though of course it is entirely in my noble friend's hands. Does the noble and learned Viscount mean that he is not against this Amendment in principle? If there is no guarantee at all that we are going to get our point of view received really favourably, and in view of the fact that this is a Bill of House of Lords initiation, I have to consider our interests in this matter in another place, and we ought to show what our opinion is now. I should like to be quite clear what the noble and learned Viscount means.

THE LORD CHANCELLOR

I thought I had made it quite clear that I was not accepting this in principle; I cannot do so. I have come here with the views which I have expressed. I have heard other views. This is not a Party or political matter and, broadly, we approach Bills of this kind (and I have always tried to do so with your Lordships) in this way: when serious arguments, contrary to those with which I agree, are put, I promise to consider them, and in many cases the results on the Report stage have been entirely satisfactory. But the noble Viscount the Leader of the Opposition asks me to eat my words and my view. I cannot do so without consideration and I do not think it would be fair to ask anyone to do so.

I am sorry that the noble Lord, Lord Nathan, is not here to-day, because the Government referred this matter to his Committee and the Committee recommended that we should deal only with existing trusts. My noble and learned friend Lord Simonds immediately proceeded to introduce a Bill to deal with existing trusts. Your Lordships approved of that and I am here to-clay with a view, which I do not abandon, that where the private rights of individuals are concerned it is proper, when it is proposed to change the position, to have the problem examined by a Committee—as we did. We have carried out the recommendations of a Committee presided over by the noble Lord, Lord Nathan, a very distinguished Lord who sits opposite; and we have come to-day with the view that we did right.

We took the course of which your Lordships have approved, and I think it is unfair to ask me, to-day, to take a different view. I do not believe that any Minister could go further than to say that he will give the matter reasonable consideration, and I ask your Lordships, if a Division is pressed, not to support the Amendment to-day, because I have already said I will consider it before the Report stage. I cannot go any further.

LORD BEVERIDGE

I wonder whether the noble and learned Viscount would allow me to put to him a question which has troubled me as one who once intended to pursue the law—and is still a barrister. The noble and learned Viscount has raised two objections to this Amendment: that it is wrong in principle and badly drafted. May I ask him whether he does not think that one, at least, of his own arguments against the Amendment was rather badly drafted? He stressed that the only person who can make a will is the testator; and he is suggesting, by refusing this Amendment, that we shall insist that the will shall be made by the House of Lords or by some judge disallowing it on the ground that it covers both charitable and benevolent purposes. Surely that means setting up a state of law which is designed, almost, to defeat the wishes of the testator. Is that really an absurd point of view to put? If it is absurd then I should be glad if the noble and learned Viscount would call it absurd; but it does not seem to me to be so.

THE LORD CHANCELLOR

I would never apply the expression "absurd" to anything said by the noble Lord, Lord Beveridge, but I would say to him, with great respect, that it is an uncomprehending view. I believe he has not comprehended that, as my noble and learned friend Lord Simonds says, the will must make clear the objects that the testator has in mind. That is the premise with which my noble and learned friend started. Now if the objects which the testator had in mind were several, some of which were charitable, some of which which were not, there is a difficulty.

May I give your Lordships an extreme example which my noble and learned friends will remember, an example given by the late Lord Russell of Killowen?—not the Lord Chief Justice but the one known to us all as Frank Russell. Having considered the charitable purposes he went on to consider the words "or patriotic"? The example he gave, coming ancestrally from what is now the Irish Republic, was that patriotic purposes might well include providing all the children of Belfast with union jacks. I am not going into the politics of it but merely quoting the late Lord Russell of Killowen from memory. The position is that that gift would be bad because patriotic purposes are not charitable, and to that extent the provision would be defeated.

The point I put earlier, which I believe the noble Lord, Lord Beveridge, has not quite understood, was that the wish of the testator was that his executors might apply it to charitable purposes but equally might apply it to patriotic purposes. What this Amendment would do would be to strike out "patriotic purposes". To take a less extreme example used by my noble and learned friend Lord Simonds when your Lordships were dealing with a Bill six years ago, some parochial purposes are charitable and some are not. The effect of such a bequest is that the bequest may be given to the non-charitable purposes.

What the testator obviously intended was that all purposes should be benefited, and unfortunately by the law of this country that is not a good gift in perpetuity, because such a gift is limited to charitable purposes. Had the noble Lord, Lord Beveridge, been in charge of my hypothetically independent Committee he would no doubt have considered that the whole law of charity should be scrapped and a new and much better law invented by himself. I should have no complaint on that point if we had entrusted it to the noble Lord; but we did not do so. It was the Labour Government who entrusted this matter to the noble Lord, Lord Nathan, and his Committee. They chose the Committee. The Committee considered the very point which is being put to your Lordships and came to the conclusion that the proper course to be followed is the course for which I am arguing.

We can, of course—it is perfectly easy—throw away Lord Nathan and his Committee, but I am not asking the Committee to go as far as that. I am asking you to-day not to pass an Amendment before I have had the chance of further consideration of matters which have been put forward most reasonably to-day. It is really, I think, rather severe on the Government to force this decision upon them, contrary to the view of a Committee appointed by their predecessors and presided over by the noble Lord, Lord Nathan, without giving me the chance of a week's consideration. I am not going to make any other appeal but, with great respect, I ask the Committee to say that that is not a reasonable way of dealing with a difficult point.

LORD BEVERIDGE

While thanking the noble and learned Viscount greatly for the kindness of his treatment to me, I say to him that to my profound regret I am still uncomprehending. I do not think the testator ought to be able to get his wishes where they conflict with any public policy, but if he has mistaken his law or advice given him, is it not better for him to get half his wishes which are perfectly legal than nothing at all? With deep thankfulness to the noble and learned Viscount I am still, with deep regret, uncomprehending.

LORD SILKIN

I feel very much the same. I feel that we have not really had a satisfactory answer, at least not one that satisfies me or some of my noble friends with whom I have been able to consult. I do not want to argue this matter afresh. I should just like to say this one thing. The noble and learned Viscount has much stressed the Nathan Committee, but the Government have not accepted all the Nathan Committee's recommendations. It is a very good debating point to say, "This is what they recommend and therefore it must stand", but they do not say it when they do not accept the recommendations, as often is the case with some of the recommendations of the Committee. I know that when the noble and learned Viscount says he will consider a matter that he really will consider it; and if I may have the services of a Parliamentary draftsman, to ensure that at any rate the argument will not be thrown at me that my Amendment is badly worded, I am willing to withdraw this Amendment and argue it on the next stage.

Amendment, by leave, withdrawn.

Clause 14 agreed to.

Clause 15 [Entrusting charity property to official custodian, and termination of trust]:

On Question, Whether Clause 15 shall stand pail of the Bill?

4.3 p.m.

LORD SALTOUN

There are two questions that I should like to ask Her Majesty's Government, and one, I think, properly comes in this place, and I will ask them both now in order to save the Committee's time. Clause 15 deals with property vested in the official custodian. This Bill sets up a whole new scheme of charity. In my opinion our charities have flourished greatly because the Charity Commissioners have largely left them alone. I believe that now the Charity Commissioners are based in London and their typists in Newcastle, and every letter that is drafted has to go to Newcastle and come back, there is an interference with business which is more favourable to the existence of King Log than King Stork.

Now we are setting up a body of Charity Commissioners and we are threatened with the possibility of a charities advisory committee, I suppose with appropriate salaries, and we must expect a great deal more activity and King Log will turn into King Stork. I think it is very possible that a great many charity trustees may be inclined to say, "We cannot go on like this. We are being too much badgered. We shall have to give up". After all, we have to remember that these are men who do their work gratuitously and occupy a good deal of time for no payment at all in doing public work of great importance. I can think of many of these cases, and it may be that they would like to resign their trusts.

Here we have vested in the official custodian property which is limited to movable, personal property, and I should like to ask Her Majesty's Government whether it would not be a good thing to enable the official custodian to accept property and take the place of charitable trustees who wish to resign. I believe—perhaps the Government spokesman will correct me if I am wrong—that at the present time charity trustees can resign and they resign in favour of the official receiver. It seems to me that if we are setting up a whole lot of new machinery under this Bill it would be much better to have the proper person to preside under this head.

The other question which I should like to ask Her Majesty's Government does not strictly refer to this clause and I put it only in order to clear the air. I have been told that after the passage of this Bill into law, if it is passed into law, no charity, however old established, will be considered as a charity for income tax purposes unless it is registered. I should like to ask if that is the case, because that seems to me to be a complete change in the law as it stands at present and I think it ought to be put into the Bill. But, in any case, I should be very grateful for an answer to that question.

THE LORD CHANCELLOR

On the first point, my noble friend Lord Saltoun has, I think, misunderstood the effect of the clause, and certainly this clause is not susceptible by any reasonable method of approach to one's saying that it badgers anyone. All that the clause does is to make the services of the official custodian available to all charities—and in this case I ask the noble Lord, Lord Silkin, to note that that was recommended by the Nathan Committee and accepted by the White Paper, so that I have two supporting matters of that kind.

Subsection (1) empowers the Court to vest any charity property in the official custodian. That is a matter for the Court, against whom alone my noble friend Lord Saltoun has made no complaint up to date in the Bill. Subsection (2) enables any person to vest personalty—and this is the point my noble friend had in mind—in the official custodian in trust of a charity, but only with his agreement. Up to that time my noble friend Lord Saltoun had contented himself with using the bludgeon but then his argument turned from the bludgeon to the rapier with the dagger, because he introduced the suggestion in the mildest possible way and with all the charm for which we respect him so much that it would be much better to have the official receiver than the official custodian. I thought with great respect to my noble friend, that that was rather a dagger blow which was undeserved.

However, on the second point, I explained, I think, on Second Reading that with regard to exemption from income tax, what is expected and indeed envisaged by the Bill is that there should be consultation between the departments concerned so as to save a great deal of litigation and difficulty. But, broadly, one returns to the point that my noble friend had in mind on the earlier clauses. Of course, if a charity is exempted from registration its right to income tax relief is not affected at all.

The position is similar with regard to the excepted clauses. It will still be perfectly possible for those that are excepted to show—and, if that is the case, there will be no difficulty in their way at all—that they are charities and are therefore entitled to the income tax relief. So I think that on both points my noble friend may be quite reassured: first that this clause places no further responsibility on those for whom he is speaking and, with regard to his second point, that no difficulty need be anticipated. I am glad to be able to reassure him.

LORD SALTOUN

I must apologise to the noble and learned Viscount for explaining myself so badly. So far as I can see there is no way provided in this Bill by which a charity trustee can resign from his charity in favour of either the Charity Commissioners or some person appointed by the Government. I have asked people who I believe know something of English law whether, as things stand to-day, a charity trustee can resign from his charity, and I have been told "Yes, he can, but only to the official receiver." I do not know whether that is the law or not. But what I really asked the noble and learned Viscount was whether it would not be a good thing to provide a means by which charity trustees can resign from office, and whether this clause was not the place in which to put it. I am quite prepared to be told that it is not, but I should like to know whether there is any way in English law to-day in which a charity trustee can give up his trust.

THE LORD CHANCELLOR

I did not appreciate that there was any difficulty at all in that way, and I did not think it was necessary to put anything in this clause. However, I will willingly have this matter meticulously considered (and I hope my noble friend will understand that I am using the word "meticulously" in the most helpful way), and I will send him a letter explaining the position quite fully. At the moment, however, I do not think he has been correctly informed, and I do not think the difficulty arises.

LORD SALTOUN

I am much obliged to the noble and learned Viscount.

Clause 15 agreed to.

Clause 16 agreed to.

Clause 17:

Concurrent jurisdiction with High Court for certain purposes

17.—

(4) Subject to the following subsections, the Commissioners shall not exercise their jurisdiction under this section as respects any charity, except—

1. (a) on the application of the charity; or
2. (b) on an order of the court under subsection (2) above.

4.13 p.m.

LORD SILKIN moved to add to subsection (4): () on the application of the council of a county or a borough in respect of any local charity in the council's area; The noble Lord said: In moving this Amendment I hope your Lordships will allow me to consider at the same time Amendments Nos. 40B, 44A and 47A, all of which deal with the same subject. The object of these Amendments is to enable the councils of counties and county boroughs to apply to the Commissioners, and for the Commissioners to be enabled to exercise their scheme-making powers in respect of local charities in the council's area. The Commissioners' powers to make schemes in respect of charities can be exercised only on an application by the trustees; by an order of the Court, or, for special reasons, on reference by the Secretary of State.

The Report of the Nathan Committee, in paragraph 332 (I will not read it now), specifically recommends what I am seeking to do in this Amendment, and your Lordships will see that that is one of the recommendations which is not included in the Bill. But in paragraph 28 of the White Paper of 1955 it is stated: Local authorities should have no independent powers; their proper course is to persuade the trustees to ask for a scheme. If the trustees will not do so, the local authority can ask the scheme-making authority to take independent action; but it is hoped that such cases will be rare. Now that is exactly what I am seeking to do by this Amendment. I am seeking to get the Government to act on what they were suggesting in their own White Paper, but which, for some reason, is not included in the Bill. I do not think I need elaborate on these four Amendments, because they are largely self-explanatory. I am content to leave it at that, and to hear what the noble and learned Viscount has to say in reply. I beg to move.

Amendment moved— Page 16, line 33, at end insert the said paragraph.—(Lord Silkin.)

THE LORD CHANCELLOR

Here I ought to have the support of my noble friend Lord Saltoun, and I am glad to see that he is in his place, because the effect of this Amendment would be to enable the local authority, instead of the trustees, to set the scheme-making machinery of the Commissioners in motion, as recommended by the Nathan Committee. Now we have taken the view that it is the trustees' responsibility to apply, and that is underlined in Clause 13, subsection (4); and where the trustees are plainly in default, the Commissioners may seek a reference from the Home Secretary under Clause 17 (6). Broadly, the principle has been that there is no justification for introducing strangers whom the court will not hear into the exercise of the powers by the Commissioners.

I want to put the position to the noble Lord, Lord Silkin, in this way: that we have tried by the Bill to get the most acceptable method of securing, ultimately, co-operation between the statutory services—whether they are central or, as in so many cases, local authority services—and the voluntary services. The noble Lord, Lord Silkin, can see from the last two days on which we have discussed this matter at great length (and I do not complain about a minute of it) that I am having considerable difficulty with noble friends of mine who are most interested in charities and who feel that we are going too far. A number of my noble friends have expressed their doubts as to registration. I believe in registration, because I think it is most valuable to have a list of charities so that people will ultimately know what are the potentialities of voluntary effort in an area. When that is known—take, for example, the case of old people's homes, and the like—people will know how far voluntary effort is going, and I think that will be helpful to local authorities who have to consider the same problem. It will also be helpful to people who are thinking of using their money for such a purpose. From every point of view, having considered carefully the objections that have been made, I think that it would be helpful to the position.

At this stage, we want to carry the voluntary movement along with us. The noble Lord, Lord Silkin, heard the speech of my noble friend Lord Saltoun—I am not taking the points he was making on that particular Amendment. It was typical of a number of speeches which have worried me very much as to whether, even to the very limited extent we are going, we are going to have an adverse effect on those who have given much of their lives to charitable work. I think the noble Lord will agree that if we were to go further than that, and, as his first Amendment would do, were to enable the local authority, instead of the trustees, to set the scheme-making machinery in motion, we should be running into still further trouble.

With regard to the noble Lord's second amendment, he could, were he disposed to make debating points (and he is very good at refraining from doing so) have made another against me there, because he could point out that two inhabitants of the area have for over a century had the right to apply for a scheme. There, from the entirely practical point of view, I do not think there is any reason to add the council to the list. Application to the Commissioners costs nothing, and it is not unknown, I am informed, for a borough treasurer and his clerk to be the two inhabitants who have made the application. Similarly, on Amendment No. 44A, the council are, to use words that have now become almost a term of art strangers and the court will not hear them in proceedings on the administration of a charity save again that the parish council were given special rights as regards parochial charities in this respect. For these reasons I ask the noble Lord not to press me. As he knows so well, there is no more difficult or depressing ministerial activity than having to try to hold a middle course; it is always much easier to take an extreme course one way or the other. But here I think it is an important point, and we have had it in other debates: that one of the great problems is to get the statutory service and the voluntary service to work well together. I ask the noble Lord not to press me on this point, which undoubtedly—and he has heard all the speeches in the debate, as well as I—would have a depressing effect on those in charge of voluntary services which I should like to avoid.

LORD SILKIN

This Amendment and a number of similar Amendments which I have already moved or which I have on the Paper to move at a later stage have all been put down at the request of the local authorities concerned. So far as I can see, this Amendment would do no harm to anybody. It would merely enable the local authority to make representations. It does not give them any power beyond making representations asking the Commissioners to do something which in their view the Commissioners might not be in a position to do because they had not the information. The local authority may be in possession of information which would justify the making of a scheme; and the trustees may be unwilling to act. All the local authorities want is to be empowered to make these representations because it might be argued that at the present time they have no statutory power to do so.

On an earlier Amendment the noble and learned Viscount promised that he would look into the question of whether it was desirable merely to give them powers, not necessarily on this point but (I think it was on Clause 11) to carry out certain functions in connection with charities. I should imagine that these four Amendments and the later ones I have on the Paper more or less all stand together, on the general principle of whether we should give local authorities the locus of making representations. I do not want to press this Amendment. Once again, I am prepared to make a gesture, because I want to get the business through as quickly as possible. I will not move my remaining Amendments, provided that the position of the local authorities can be clarified in some way, either by discussion with them or by further consideration of what they are asking. All the Amendments that I have put down right through the Bill amount in practice to the same thing. They are not, as I say, asking for powers to do this themselves, but are asking for it to be recognised in the Statute that they have power to make these representations, and possibly to incur such slight expense as may be involved.

Having said that (and I rely on the assurance that I have already been given at an earlier stage, that the question of the position of the local authorities will be looked at again), I am willing to withdraw this Amendment and not to move the remaining three, and also not to move the further Amendments that I have down on the Paper—no doubt I should get the same answer—in so far as they relate to giving to local authorities these additional powers. I hope I 'have made some contribution to the speed of progress on the Committee stage. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR

This Amendment, together with Nos. 43, 44 and 47, are all part of the series which I did my best to explain to the Committee in introducing Amendment No. 3. I beg to move.

Amendment moved— Page 16, line 43, leave out from ("Where") to ("without") in line 2 on page 17 and insert ("in the case of a charity, other than an exempt charity, the Commissioners are satisfied that the charity trustees ought in the interests of the charity to apply for a scheme, but have unreasonably refused or neglected to do so, the Commissioners may apply to the Secretary of State for him to refer the case to them with a view to a scheme, and if, after giving the charity trustees an opportunity to make representations to him, the Secretary of State does so, the Commissioners may proceed accordingly").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

I beg to move the next Amendment.

Amendment moved— Page 17, line 22, leave out ("or by the Secretary of State").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR: I beg to move Amendment No. 44.

Amendment moved— Page 17, line 40 leave out from first ("of") to end of subsection and insert ("one of the judges of the High Court attached to the Chancery Division").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

I beg to move.

Amendment moved—

Page 18, line 3, at end add— ("(13) In the application of this section to the Minister of Education, subsection (6) shall have effect so as to authorise him to proceed with a view to a scheme in the circumstances in which it authorises the Commissioners to apply to the Secretary of State for him to refer a case to them.").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 17, as amended, agreed to.

Clause 18 agreed to.

Clause 19 [Power to act for protection of charities]:

4.30 p.m.

LORD SALTOUN moved, in subsection (1) (a), after the first "or" to insert "culpable". The noble Lord said: This clause says: Where the Commissioners are satisfied as the result of an inquiry … that there has been in the administration of a charity any misconduct or mismanagement (including the giving to persons acting in the affairs of the charity of any excessive remuneration or reward, even if authorised or required by the trusts of the charity "— they may do certain things. I seek to amend that by saying: or culpable mismanagement by any trustee. The clause as it stands gives the Charity Commissioners power to do a great many things. One of them is to revise one's whole salary list. There are charities, I believe—I do not know anything about them; I have been told—who on the whole give very small salaries. There are other charities which go to extreme pains to discover what is the current rate of pay for that kind of job and give the people they employ that sort of salary. I think it is putting an insulting power into the hands of the Commissioners to enable them to go through one's whole salary list and criticise it, and I think all the more so as the Charity Commissioners are now going to be a Government department.

There is another point here. If the treasurer or one of the employees of a charitable trust goes away with a sum of money—embezzles it, or steals it—you cannot say that there has been no misconduct; you cannot say that there has been no mismanagement. But surely it is the business of the charitable trustees themselves to put that right. I think the power granted in Clause 19 is far too great. These charitable trustees do important work. If there is any misconduct by any of them, I think it is very rare. It is nearly all gratuitous work, and it rather shocks me that a provision of this kind should be calmly applied to them. Are the charitable trustees of England so much worse than the charitable trustees of Scotland, Eire and the United States of America that they need this provision? I do not think so. Nearly all the trusts that I know of—smalls trusts, perhaps—seem to me to be extremely well run, and I question the value of putting in such a drastic provision. I think that if the wording were altered so as to read: Where the Commissioners are satisfied that there has been in the administration of a charity any misconduct or culpable mismanagement by a trustee certain things might follow. That would seem to me to be a reasonable Amendment. I do not feel inclined to make a long speech on this, and I beg to move.

Amendment moved— Page 19, line 30, after ("or") insert ("culpable").—(Lord Saltoun.)

4.34 p.m.

THE LORD CHANCELLOR

The first point I ought to make clear is that this situation occurs only and the Commissioners can take action only where they are satisfied—and I ask my noble friend to note the next words— as the result of an inquiry instituted by them under section six (a) that there has been, in the administration of a charity, any misconduct or mismanagement. Therefore, there must have been an inquiry, and the Commissioners, as a result of that inquiry, must be satisfied as to the existence of misconduct or mismanagement.

My noble friend, Lord Saltoun, does not object to the word "misconduct", because he would include that unqualified in the clause which he read to us a moment ago. I do not like adding the word "culpable". It is generally considered loose thinking in the development of our law when you try to make adjectival criteria. If the trustees are not blameworthy in the sense of having misconducted themselves, but if they are so incompetent that it is necessary for the Commissioners to act for the purpose of protecting the property of the charity, is there any reason why they should not do so? I cannot see any. That is the position one has to face; there has been an inquiry, and when the Commissioners have found mismanagement they have to act to protect the property of the charity. I should like to say—and I hope my noble friend Lord Saltoun will take this from me—that because one has to put in stringent provisions to deal with the occasional bad case, that is not a reflection on the good trustees. It is merely an essential provision to protect trust property.

Perhaps my noble friend will allow me to deal with his next Amendment, as I think he adumbrated it. My noble friend would have preferred the provision limited by the words, "by any trustee." But if there has been misconduct by the secretary or another officer and urgent action is necessary to prevent further loss, it is right, I submit to your Lordships, that the Commissioners should be able to get rid of that officer in order to protect the charity property. There may be cases where it is difficult even to identify the trustees, and where the trustees in some cases—again, a rare case, I repeat to my noble friend—may be merely figureheads.

As to my noble friend's other point, if your Lordships will allow me to look on to my Amendment No. 51 I think it is relevant for me to mention it. That is: The references in subsection (1)"— and that is the one my noble friend Lord Saltoun is dealing with— above to misconduct or mismanagement shall (notwithstanding anything in the trusts of the charity) extend to the employment for the remuneration or reward of persons acting in the affairs of the charity, or for other administrative purposes, of sums which are excessive in relating to the property which is or is likely to be applied or applicable for the purposes of the charity. That was to deal with a fear expressed by my noble and learned friend the Master of the Rolls on the Second Reading. But I think it deals with a fear of Lord Saltoun that it might be used to deal with payment of salaries which, as I think my noble friend put it, was in itself an agreement in accord with the trustee.

I have tried to meet the point. If there are any improvements suggested when it comes to Amendment No. 51, I shall be pleased to have a look at it again, but I hope it shows my noble friend that I have in mind the difficulties of the good charity. What we want by subsection (1) is simply a method of protection in the bad cases when they occur. They have occurred occasionally. They are very rare, but we must, when we are legislating, deal with them. I hope that with that explanation my noble friend will not press the Amendment. As I say, if he has any other suggestion I shall be more than ready to consider it between now and the Report stage.

4.40 p.m.

LORD SALTOUN

I am much obliged to the noble and learned Viscount for the way he has taken this point. I am not entirely satisfied. "Misconduct" of course implies culpability, so I did not put the word "culpable" before "misconduct". But the point about "by the trustee" seems to me to have some material weight. Will the noble and learned Viscount consider the matter? If the Commissioners have an inquiry and it is shown that a servant of the trust has misbehaved or made away with money, surely it is primarily for the trustees to deal with that. The noble and learned Viscount's argument against me seemed to me to suggest that there were here among the charitable trustees in this country a great many people who refused to "bell the cat". I dare say it is true. It is a very lamentable state of affairs if it is the case. I do not feel inclined to press this Amendment. I should be grateful if the noble and learned Viscount would consider that point. Surely it is the duty of the trustees in the first place, with the help of the Commissioners perhaps, to put the matter right.

THE LORD CHANCELLOR

I hope I did not convey, and I did not mean to convey, that there was a great number of trustees, but only that it might happen on a few rare occasions. I will certainly assure a brother Scot like my noble friend that any approximation that we can make to Archibald Bell-the-Cat, will be favourably received by me.

LORD SALTOUN

In those circumstances I do not propose to press the Amendment, and I beg leave to withdraw it.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR moved in subsection (1) (a) to leave out from "mismanagement" to the end of the paragraph. The noble and learned Viscount said: Perhaps your Lordships would consider Amendments Nos. 50, 51 and 52 together. Subsection (1) (a) of this clause has been criticised on the grounds that it empowers the Charity Commissioners to set up arbitrary standards for the payment of officers and treat payment in excess of those as misconduct or mismanagement, even though, as I mentioned, it was expressly authorised or required by the trusts. I believe that this is an irrational fear, but it must be conceded that it is awkward to class as "misconduct" or "mismanagement" execution of the founder's direction. What was aimed at, as I am sure your Lordships appreciated, was the bogus collecting charity where the proceeds were swallowed up by administration. The Amendment introduces the full criteria of the War Charities Act on which this clause was modelled, treating as misconduct the giving of remuneration which is excessive in relation to the sums applied to the purposes of the charity. The third Amendment is drafting, to bring out that there is an appeal against any order under the section. I hope that this Amendment will meet the fears of noble Lords. I beg to move.

Amendment moved— Page 19, line 30, leave out from ("mismanagement") to end of line 33.—(The Lord Chancellor.)

LORD SALTOUN

There is one question I should like to ask. I am trying to understand the difference the placing of this makes. The question that occurs to me is, would it not be the simpler way to arm the Inland Revenue, and where a great deal of money was being paid by a charity in fictitious (if you like) salaries to employees of the trust, to enable the Inland Revenue to say, "We will limit the income tax relief to that portion which is actually spent on charity", or something like that? I do not propose to oppose this Amendment, but I am merely asking the question in connection with the whole problem with which the noble and learned Viscount is trying to deal.

THE LORD CHANCELLOR

That is a very difficult method of approach. I can tell my noble friend that when I was a Law Officer of the Crown I had the problem in a similar way, as to what was expenses and what was remuneration. That is the same type of problem. It meant a great deal of detailed factual investigation and cross-examination. I should have thought here that to leave it to the Inland Revenue to do that and take it through the Commissioners of Income Tax would be a roundabout method of arriving at the result. I will look into it, because frankly I have never thought of it before, but I think that would be the difficulty.

LORD SALTOUN

I am much obliged.

LORD EVERSHED

As this Amendment was introduced in part as a result of a statement I made on Second Reading, may I say, on behalf of the charities for whom I spoke, that they think it is satisfactory, and gratefully acknowledge it accordingly.

On Question, Amendment agreed to.

THE LORD CHANCELLOR

I beg to move.

Amendment moved—

Page 20, line 14, at end insert— ("(2) The references in subsection (1) above to misconduct or mismanagement shall (notwithstanding anything in the trusts of the charity) extend to the employment for the remuneration or reward of persons acting in the affairs of the charity, or for other administrative purposes, of sums which are excessive in relation to the property which is or is likely to be applied or applicable for the purposes of the charity,").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

I beg to move.

Amendment moved— Page 21, line 8, leave out from ("Act") to ("shall") in line 9 and insert ("(6) Subsections (10) and (11) of section seventeen of this Act").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 19, as amended, agreed to.

Clause 20 [Publicity for proceedings under ss. 17 to 19]:

4.48 p.m.

LORD SILKIN moved, in subsection (1), after the second "notice" to insert: being not less than one month from the date of such notice". The noble Lord said: This is a very simple Amendment which I have put down mainly for the purpose of clarification. Clause 20 deals with publicity for proceedings. The Commissioners, where they have taken action, must give notice of their proposals and invite representations to be made to them. They are required to give a month's notice of their proposals. Presumably, in that notice they have to state when representations can be made by any person affected. They may, in the course of that notice, specify the length of the notice that a person may have. Theoretically, it would be possible, would it not, the month's notice of their proposal having been given, for them to say that anyone who has any representations to make must make them within a fortnight? That would be quite contrary to the intention of this clause. I should have thought that, since it is stated in the clause that they must give a month's notice of their proposals, the time in which a person can make representations should similarly be contained in the clause, and not left to the Commissioners. I think it is important that a person who is affected by any proposals the Commissioners want to make should have ample time, and should know how much time he has, in which to make his representations. I suggest a month as a reasonable length of time. I hope that the noble and learned Viscount will agree that it would be desirable to put some time in the Bill itself. I beg to move.

Amendment moved— Page 22, line 1, after ("notice") insert ("being not less than one month from the date of such notice").—(Lord Silkin.)

THE LORD CHANCELLOR

I accept this Amendment. I recommend the House to accept it ipsissimis verbis.

LORD SILKIN

I should like to say that this has been a great day for me—a historic day. It is the first time I have had an Amendment accepted in the identical terms of the Amendment itself.

On Question, Amendment agreed to.

Clause 20, as amended, agreed to.

Clause 21 [Power to establish common investment funds]:

THE LORD CHANCELLOR

The next four Amendments, Nos. 54 to 57 go together. The first two were foreshadowed by me on Second Reading and give effect to the wishes of the Chancery Judges that the power given by this clause for making schemes for common investment funds for two or more charities should be exercisable by the court as well as by the scheme-making bodies. The fourth Amendment is consequential. The third Amendment provides that the consent of the Charity Commissioner should be given before the official custodian, who is a member of their staff, is appointed under a scheme made by another authority to manage a common investment fund. I beg to move the first Amendment.

Amendment moved— Page 23, line 6, after ("The") insert ("court or the").—The Lord Chancellor.)

On Quest ion, Amendment agreed to.

THE LORD CHANCELLOR: I beg to move Amendment No. 55.

Amendment moved— Page 23, line 19, after ("The") insert ("court or the").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR: I beg to move Amendment No. 56.

Amendment moved— Page 24, line 29, after ("and") insert (", if made by the Commissioners or if they consent,").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

I beg to move.

Amendment moved— Page 25, line 29, leave out from first ("as") to end of subsection and insert ("it applies to those made by the Court").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 21, as amended, agreed to.

Clause 22 [Power to authorise dealings with charity property, etc.]:

4.53 p.m.

LORD HAWKE

When a consecrated church of the Church of England becomes redundant it can be used for a lay purpose by a scheme of the Church Commissioners and the Privy Council. If that happens it vests in the diocesan board, and any variation in the trust for its use would have to go through a similar procedure, with rights of appeal and objection to the Commissioners and the Privy Council. We think it wrong therefore that a parallel jurisdiction by the Charity Commissioners might be held to exist over a redundant but still consecrated Church. I beg to move this Amendment.

Amendment moved— Page 26, line 25, at end insert ("nor shall any such Order authorise the doing of any act in relation to property which has been consecrated and is comprised in a Scheme made under the Union of Benefices Measures 1923–1952 or the Reorganisation Areas Measures 1944 and 1954").—(Lord Hawke.)

THE LORD CHANCELLOR

As I understand it, the main purpose of this Amendment is to put it beyond doubt that the Charity Commissioners cannot authorise the sale or leasing of a consecrated church, even if it has for the time being been appropriated to some secular charitable purpose—for example, a public library. I think it is clear, as my noble friend Lord Hawke has indicated, that under this appropriation scheme the church vests in the diocesan authority, and it is inconceivable that that authority, who alone have the legal estate, would dream of selling in a manner not provided for in the Measures. There is no power at all, in the example I take, of the managers of a public library (who have the mere use of the premises) to sell with or without the Charity Commissioners' authority. However, if my noble friend would allow me to say that I have full sympathy with the purposes of the Amendment. I should like to reconsider the drafting, and I will communicate with him the lines on which we suggest the drafting should take place. I hope he will be content with that. I should like to have a further look at the point, following his speech.

LORD HAWKE

I thank my noble and learned friend, and on that undertaking I will certainly withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 22 agreed to.

Clauses 23 to 26 agreed to.

Clause 27 [Taking of legal proceedings]:

THE LORD CHANCELLOR

This Amendment is consequential. I beg to move.

Amendment moved— Page 29, line 26, leave out from beginning to end of subsection and insert ("one of the judges of the High Court attached to the Chancery Division").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 27, as amended, agreed to.

Clause 28 [Restrictions on dealing with charity property]:

4.58 p.m.

LORD SALTOUN moved to leave out subsection (1). The noble Lord said: I think I have made no secret to the noble and learned Viscount who is in charge of the Bill that I attach the greatest importance to the next two Amendments. The first subsection of this clause says: Subject to the exceptions "— and, of course, those exceptions are the same at the moment— … no property forming part of the permanent endowment of a charity shall, without an order of the court or of the Commissioners, be mortgaged or charged by way of security for the repayment of money borrowed, nor, in the case of land in England or Wales, be sold, leased or otherwise disposed of. I think this is a most stringent condition. Suppose the British Legion want a hall. They raise a subscription in order to buy the hall, and they buy the hall. What is the first thing they do? They get a bond or mortgage, and they raise money on that hall for working expenses. They use the hall for their own purposes, and they let it for dances and other things, and they make money. They pay off the mortgage, and the whole thing goes to the British Legion. If they cannot raise money on their hall they are going to be "stuck" because, except in certain conditions, they cannot sell it.

I view this clause with the greatest possible alarm. Suppose the Salvation Army raise a sum of money in excess of £500 to buy a hall, and then later on find they are doing very well and require a bigger hall. They cannot sell the original hall without the express permission of the Charity Commissioners, and they have to sell it in the way that is dictated to them. I told your Lordships on Second Reading—and I hope I made it quite clear—of the terrible sense of frustration that every charity trustee has when he has to buy or sell any property and get the sanction of any Department of State for that purpose; and that must, I believe, include the Charity Commissioners. It is necessary to get the sanction either of the district valuer (that was the trouble in my case) or someone else. I have heard of such a Department, having realised the necessity of a sale, suddenly importing into the contract the condition that the purchaser must pay all expenses. Anybody who deals in any market knows that if a condition of that kind is suddenly imported into a bargain the purchaser is immediately on the defensive, and on his inquiry, and the bargain is spoiled altogether. It means that even if one can sell, one has to sell at a poor price instead of the proper price. A great many different classes of case are affected here.

I am told that if more than £500 is raised in any way from the public to buy a property, that property immediately becomes part of the endowment and cannot be sold again without this special sanction under subsection (1). Let us take the case of St. Dunstan's, which owns 900 small dwellings in all parts of the country which are occupied by war blind beneficiaries. These properties have been acquired over the years from free funds, and from time to time it becomes necessary to dispose of some of them, on death or when a man changes his residence from one area to another, or, for some other reason.

The institution with which I am connected, the Royal National Lifeboat Institution, have to provide their mechanics with houses. We have our own central headquarters which I suppose might be considered as part of our original endowment. Sometimes we require more than one house in the same place at the same time, because the widow of a mechanic may be living in one house and we must provide another mechanic with a house. In such a case we may have to have two houses there. Later, when the widow moves or dies, we want to sell one of the houses. All these things which one does to-day, quite naturally in the market, and to the best advantage, will be interrupted and made much more difficult and much less profitable by the effect of this clause. Even if the clause is amended, the distinction it makes will present considerable difficulty, because no solicitor looking at this Bill can be sure whether or not the property which is a consideration is one which the charity in question has power to sell. I am proposing that subsections (1) and (2), one after the other, shall be omitted from the Bill. I beg to move.

Amendment moved— Page 30, line 5, leave out subsection (1).—(Lord Saltoun.)

THE LORD CHANCELLOR

I was not sure from the speech of my noble friend Lord Saltoun whether he realised that he was suggesting a revolutionary change in the law—because the Commissioner's general power to control dealings in endowment land and the mortgage of charity property dates from 1855. The effect of his Amendment is to get rid of the last 105 years. There is no reason why the noble Lord should not be revolutionary, but I was not quite sure that he appreciated that that was the effect of his Amendment. The power of the court to control dealings in endowment land and the mortgage of charity properties is much older and is fundamental to the law of charity. I hope that my noble friend will reconsider this point and perhaps he will forgive me if I develop it at some slight length, because I should like to take him with me on the matter if I can.

I suggest to your Lordships that the machinery whereby the Charity Commissioners, representing the beneficiaries, consent to dealings by the trustees with endowment land is obviously beneficial and necessary for the preservation of charity capital. Its continuance was recommended by the Nathan Committee and accepted by Her Majesty's Government in the White Paper. May I take one example which is sometimes criticised? My noble friend did not mention it, but I am sure it has been mentioned to him. That is, that the Charity Commission have the procedure, in regard to the control of sales of charity land, of requiring the highest offer to be advertised in the hope of eliciting a higher bid; and it is sometimes said that that hampers charity in land transactions and results in sales "going off". The Nathan Committee investigated this practice. They said that it benefited charity and should continue; and again the White Paper agreed. There is something which, I have no doubt, does work. Many cases could be quoted where an apparently sufficient offer has been advertised, a higher hid obtained and advertised, and so on, until three or more times the original offer has been realised.

There are just two points before I quote the really remarkable examples which I shall give to my noble friend in a moment, but I want to emphasise (I tried to do so in my reply on the Second Reading, but I know that it was lengthy and the hour was late, and I hope that my noble friend will excuse me if I repeat it) that this requirement applies only to land which represents the permanent capital of the charity. The price of land is a matter for bargaining. It is not quoted on the Stock Exchange, and one has always to guard human nature from itself. It is always said that when a man sells somebody else's property there is less inducement to obtain the highest possible price than when he sells his own. That is not my own cynicism. A famous Charity Commissioner of the last century once told a Select Committee that when people asked him what a Charity Commissioner did, he replied that he spent much of his time preventing people from buying charity property too cheap.

There are two other principles that I would ask my noble friend to note. First, a trustee must have, of course, not a less but a higher degree of prudence in the affairs of the trust than he is bound to exercise in his own. If my noble friend or I were selling our own house we could let a friend have it cheap if we so desired—that occurs North of the Tweed, and my noble friend must not shake his head so readily—but, of course, if we were trustees we could not do that. Further—and I am sure I take my noble friend with me in this—any transaction in charity property must be for the benefit of the charity, otherwise there would be no reason to sell it. If a transaction is not for the benefit of the charity, it is in breach of trust, and the court may set it aside at the suit of the Attorney General, and the trustees will be liable to make good any loss.

I now pass to examples relevant to what is in the mind of my noble friend Lord Granville-West. Let me take four examples. In 1955 some Landon property belonging to White field's Tabernacle was sold by the Congregational Union. It was valued at £2,170. The offer first advertised was £2,750; the price finally realised was £10,100. With regard to Marylebone Church Hall and other property belonging to the Presbyterian Church of England, the offer first advertised was £40,000; the price finally realised was £83,250. At Blackwater, in Surrey, a property belonging to Fellowship House was valued at £11,600. The offer first advertised was £12,800 and the price finally realised £34,000. There are two smaller ones, two Baptist properties, disused. So far as one in Leicestershire was concerned, the offer advertised was £200; the price realised was £500. For one in Lindsey the offer advertised was £500; the price realised £1,100. That shows exactly that it is necessary for the Commissioners to impose this particular control on advertising. The Committee will see the fantastic losses that would have occurred to the charities had that not been done in the cases I have given.

This is a practical problem. If one sells privately, the sale goes through, and a neighbour or somebody else who happens to have been abroad at the time comes up to one and says, "If I had known of that offer I would have offered twice as much." That does happen. I ask my noble friend to remember that this is not only a protection for the charitable property; it is a protection for the trustees. Those who administer charities are not always aware of the liabilities they have undertaken. I put it in this way to my noble friend. The fact that charity transactions are seldom set aside nowadays, whereas before 1853 the trustees were exposed to constant risk, goes some way to support my case for maintaining the law of the last 105 years and not altering it as my noble friend suggests.

On the questions of procedure I should like to assure my noble friend that the Charity Commissioners will consider whether the procedure can be operated more flexibly and how it can be improved. But it seems right in principle. It ensures compliance with the law and protects trustees; and the gains to charity are considerably greater than the difficulties which may arise. After all, the Charity Commissioners have now had 100 years' experience, and they are well aware of the difficulties in trading on a rising and falling market. May I repeat the other point which I put to my noble friend Lord Saltoun on the Second Reading? This procedure will in future apply only to premises representing permanent capital. As I tried to make clear, it will not apply to premises purchased with funds expendable as income by the trustees. It is intended to maintain this position as regards functional premises so provided by national charities, including those in which my noble friend is interested (and I do not think I put this point when we discussed this matter before), by making excepting regulations which will detail the classes of property excepted, possibly by reference to named charities, so that conveyancers will be in no doubt whether a given property is or is not subject to the control. That is our intention and I think it meets another of my noble friend's difficulties.

My noble friend might turn my argument round on me and say, "If it is good for permanent endowment land, why is it not good for other charity land?" But the answer to that is this. The general principle followed is that the Commissioners are specially concerned with the preservation of charity capital. It would not be practicable to extend the system of control to all transactions where the proceeds are expendable as income, and its value would be halved since (there could be no check on whether the trustees spent the income to good effect. I am sorry to have been so long, but I know that my noble friend Lord Saltoun felt strongly on this point and, therefore, whether I have convinced him or not, I wished in courtesy to expound my argument as fairly as I could so that he could realise what it was.

LORD SALTOUN

I am sorry if I misled the noble and learned Viscount, but I was not referring to private sales of charity lands; I was referring to public sales through agents on the property market. I do not think those can be looked on as private sales of the kind to which the noble and learned Viscount seemed to me to be referring. I do not propose to press this Amendment, because I accept from the noble and learned Viscount that this has been the law of the land for over 100 years. But my experience is that it is a bad system and I had hoped that the opportunity would be taken to amend it. In the circumstances, however, I beg leave to withdraw my first Amendment.

Amendment, by leave, withdrawn.

5.18 p.m.

LORD SALTOUN moved to leave out subsection (2). The noble Lord said: This is a different case because I think it alters entirely the present law of the land, and I rather hope that the noble and learned Viscount will accept the Amend- ment or something to take its place, because I think I just heard him say that the great object of the Commissioners was to preserve land which was the permanent endowment of the charity. This clause says: Subsection (1) … shall apply to any land which is held by or in trust for a charity and is or has at any time been occupied for the purposes of the charity, as it applies to land forming part of the permanent endowment". If that does not tie up all the land the charity owns into the permanent endowment of the charity, I am afraid I entirely misunderstood the meaning of the words. If that became the law of the land it would make everything that we do, everything that Dr. Barnardo's do, everything St. Dunstan's do, everything the British Legion do, questionable, and I think it is essential to get some clear line on this matter. If the words do not mean what they appear to me to mean, I hope that the noble and learned Viscount will explain them. I cannot see any other meaning of these words, and I therefore beg to move.

Amendment moved— Page 30, line 11, leave out subsection (2).—(Lord Saltoun.)

LORD HAWKE

I think my noble friend Lord Saltoun is only giving expression to a general feeling of dissatisfaction which has existed for a long time over the necessity for going to the Charity Commissioners with regard to dealings in property, whether property of a permanent endowment or as mentioned in this clause. Nevertheless, I have a feeling that his is not the right way to do it. I believe that control over dealing in property serves a useful purpose in the case of some of the smaller charities, and that probably the way to get round this undoubted difficulty is for the use of the list of exceptions which was foreshadowed by my noble and learned friend. At a latter stage in the Bill I think I shall suggest that between now and its passing into law such bodies as the Diocesan Finance Boards should come right out of the control of the Charity Commissioners. If we, by making selective groups, take them right out, I think a great deal of the dissatisfaction which my noble friend has instanced will vanish.

THE EARL OF IDDESLEIGH

I wonder whether the noble and learned Viscount the Lord Chancellor will be so good as to give special consideration to the situation which arises when one charity wants to sell land to another; and to the question of whether serious hardship does not arise, and loss to the general cause of charity, when these restrictions are implemented.

THE LORD CHANCELLOR

May I deal with the point raised by my noble friend Lord Iddesleigh first of all? I will certainly look into the problem. Of course, there ought to be no expense in getting this consent, but it is not a set of transactions to which I have directed my mind, and I promise him I will do so after to-day. On the general point, the difficulty about subsection (2) is that it deals with the problem that it cannot be ascertained from mere inspection of the documents of title whether functional land held by a charity is part of the permanent endowment or not. Thus, to take the example that my noble friend Lord Saltoun mentioned, land held for a village hall would, as a matter of common form, be conveyed upon trust for sale; but, obviously, if it were sold, the charity would come to an end, because there would be no village hall. It is impossible to deal with this matter by any general formula without producing great uncertainty and giving rise to litigation, and that is why we have taken the route which was commended, subject to his right to suggest improvements, by my noble friend Lord Hawke.

The subsection provides, for the reason I have given, that such land shall be treated as permanent endowment unless excepted by order or regulation. Now it is intended that the regulations should be drafted so as to maintain the existing position—for example, as regards the local premises provided at discretion from the expendable funds of a central body; the position I mentioned to my noble friend Lord Saltoun before—and to produce certainty for conveyancing purposes whether a parcel of land is or is not subject to control. If I may prophesy, it is very likely that the regulations will deal with a number of charities by name, and it is the intention that they should be discussed with the organisation concerned before being made.

My noble friend Lord Saltoun will remember that we had a discussion on the proper and improper use of regulations, and I ventured to put to him the view by which I have always stood in my political life: that regulations are useful for dealing with a transitional position when you want flexibility and the right to change and adapt your procedure in order to meet the wishes and to assist the subject matter of the legislation. I think, on principle, that dealing with this matter by order or regulations is a suitable method, and I hope that, on consideration, my noble friend Lord Saltoun will be prepared to give that method a chance.

LORD SALTOUN

The noble and learned Viscount puts me in a very difficult position. I am sure he remembers as well as I do the story of the horse and the stag. To change the simile a bit, we are rather like those children playing at hanging. They get one of their number to put his head in the noose, and then they pull it; and if they pull it too tight, then there is an end of their victim. We are asked to pass what I am bound to say I think is a very drastic new law in the hope that we may be exempted and that other people may be subjected to it. We are told, too, that we cannot ascertain the position before the Bill actually becomes law. That is rather a hard position.

There is only one way out of it that I can see, and it applies to both subsections of Clause 28. That is this: if any charity has any difficulty about selling land, or if it has the sale of land spoilt by the action of the Charity Commissioners, questions should be asked in Parliament and the matter pressed every time it occurs. That is the only recourse that we have, as it seems to me, if we once accept this clause. I propose to accede to the request of the noble and learned Viscount, but I will put this second Amendment down, or another one that meets my point, on Report stage, and will see what reception it gets on that occasion. I will not press it at this moment, but I think the situation in regard to this matter is serious.

LORD DOUGLAS OF BARLOCH

Before the Amendment is withdrawn, I should like to ask the noble and learned Viscount a question, the answer to which does not appear to have emerged from the discussion that we have had so far. The object of these provisions, as he has explained them to the Committee, is to prevent property belonging to a charity from being sold at an under-valuation—and that, undoubtedly, is a very worthy purpose indeed; and certainly since this kind of legislation was first introduced many cases have come to light in which that has happened. But why is it less reprehensible to sell at an under-valuation land which does not form part of the permanent endowment of a charity rather than land which does form part of the permanent endowment? If these provisions are based upon the idea of preventing land from being sold at an under-valuation, why does it not apply to every piece of land which the charity owns?

LORD SALTOUN

Perhaps I could say a word or two on that point. Anybody who deals in what I think in England is called real property knows that when you go into the market you must be in a position to make a bargain, and if you have someone behind you who can cancel that bargain, or import conditions which are not the market conditions, you are sunk: you get no market at all or you have to accept a smaller market. It is therefore necessary, especially for people whose business is concerned with houses, that they should be able to make their bargain outright and not have to refer back to Commissioners in the background to have their bargain perhaps quarrelled with by them—and probably see the purchaser go off and not be willing to buy.

LORD DOUGLAS OF BARLOCH

That is not quite on the point I was making.

THE LORD CHANCELLOR

I think the noble Lord, Lord Douglas of Barloch, was asking me why I draw a distinction between permanent endowment land and land that might have been purchased out of income. I actually mentioned that at the conclusion of my speech, but my speech was such a long one that I exonerate the noble Lord entirely if I did not make myself clear to him. The question has been posed, and there is a considerable amount of influential opinion which suggests that it ought to apply to all land transactions. On the other hand, there is quite a lot of opinion—and in this field one must give great weight to it—of trustees like my noble friend Lord Saltoun which says that the less interference the better. Therefore, again searching desperately for a right via media, we have taken the view that the general principle is that the Commissioners are specially concerned with the preservation of charity capital, and they have a higher duty in that regard. I think the examples that I quoted show how easy it would be for the most admirable charities to have lost heavily had the Commissioners not insisted on the methods which I described.

The other difficulty is this practical one—and perhaps the noble Lord will follow the transaction out. There is a sale of property that has been acquired out of funds that can be spent as income, and the proceeds of sale then stand as income in the accounts; and of course the Commissioners have no special control, as opposed to the general controls by inquiry and so on, into the expenditure of the income. Therefore, it is thought that, both from the standpoint that the preservation of charity capital is the more urgent duty and from the practical difficulty of controlling the use of the income, we should keep the control at the point which I have mentioned. The noble Lord, Lord Douglas of Barloch, may say that it is not entirely logical, but one wants the co-operation of those engaged in voluntary matters, and it is sometimes better to sacrifice logicality to co-operation and goodwill. That is the best answer I can give to the noble Lord.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR

This Amendment has been put down to meet the point raised in the following Amendment standing in the names of the right reverend Prelate the Lord Bishop of Chelmsford and my noble friend Lord Hawke, and I am grateful to them for raising the point with which I have tried to deal. The reason for drafting it slightly differently is that subsection (3) deals with the kind of transaction excepted and subsection (4) with the kind of charity excluded from the clause. The disposition of an advowson is a transaction and should come in subsection (3) rather than subsection (4). I hope that this meets my noble friend's point and that of the right reverend Prelate. I beg to move.

Amendment moved— Page 30, line 31, at end insert ("or () for any disposition of an advowson".).—(The Lord Chancellor.)

LORD HAWKE

I thank my noble and learned friend for putting down this Amendment: his drafting is obviously right.

On Question, Amendment agreed to.

5.35 p.m.

LORD GRANVILLE-WEST moved to add to the clause: () This section shall not apply—

1. (a) to any land which is a registered place of worship as defined in section four of this Act; or
2. (b) to any land which is held upon trust to be used as a residence for a minister of religion".

The noble Lord said: I beg to move the Amendment standing in the name of my noble friend Lord Milner of Leeds and myself. I have listened with great interest to the arguments which the noble and learned Viscount the Lord Chancellor addressed to the noble Lord, Lord Saltoun, in regard to the Amendments he had moved concerning this clause. The noble and learned Viscount was anxious to make it clear that the noble Lord was being revolutionary in his proposal and it was necessary that he, the Lord Chancellor, should take a more conservative view of the proposals which the noble Lord had put before the Committee. In this Amendment I am seeking to prevent the noble and learned Viscount from being revolutionary and urging upon him to take a more conservative view, because under this clause as it stands there is a deprivation of a right which Free Churches have exercised for over 100 years. So far as I can see, without any justification or any reason, that right is now being taken from them. It is a right which the Committee presided over by the noble Lord, Lord Nathan, recommended should not be interfered with. Indeed, the White Paper issued by the Government, after they had taken three years to consider the recommendations of that Committee, recommended in paragraphs 52 and 53 the very course that I am now suggesting, to the Government should be adopted in this case.

In paragraph 52 of that Report (Cmd. 9538) under the heading "Further exceptions", it is said: Since the Act of 1853 experience has shown that in some kinds of charities supervision by the Commissioners serves no useful purpose. It is proposed that the list of exceptions should be extended so as to recognise that fact. Then paragraph 53, which explains what was said in paragraph 52, says this: First there are local trusts, in various forms, for the benefit of religion and religious congregations. The congregation looks after its own, and the Commissioners' work is largely duplication. It is proposed that the present exception in favour of registered places of worship should be enlarged by excepting the following classes of trust from jurisdiction—

1. (a) trusts whose endowment is a building used as a place of worship, or as a residence for a minister of religion;
2. (b) trusts for buying or erecting such a building;
3. (c) trusts for endowing or augmenting the stipend of a minister of religion."

The Amendment which I am moving meets the points which the Government themselves declared in paragraph 53 (a). My noble friend and myself, and indeed the free Churches, the Churches Main Committee, the Baptist denomination, the Congregational denomination, and their advisers, all take the same view as the Government took when they published their White Paper in 1955: that there should be an exemption with regard to places used for religious worship and manses and houses for Ministers.

Under the Places of Worship Registration Act, 1855, premises which were in bona fide use for religious purposes, and were registered, have always been exempt from the operation of the Charitable Trusts Act. Thus the trustees of the chapels were free to sell without having to obtain the Commissioners' consent. That has proved a great benefit to the chapels concerned, but the noble and learned Viscount will see that we have specifically exempted or excepted from our Amendment places of religious worship which have become disused. We did that to meet the cases which the noble and learned Viscount mentioned to the Committee. We realise that, by reason of the transfer of population—sometimes because of economic circumstances and change in customs; I know that during the days of depression in Wales communities were dispersed—chapels which had been built by the endeavours of the local inhabitants who wished to have a place of worship of their own, not endowed but done by their contributions and by their work, became disused. By reason of the dispersal of the congregation, the properties remained vested in one or more trustees. We believe that premises of that sort should come under the control of the Charity Commissioners, so that, if they are disposed of at a time when there is no longer a congregation in control and able to direct affairs, there is somebody having control and able to give directions with regard to the proceeds of sale of those properties which have been so sold.

I think it must be clear that the instances to which the noble and learned Viscount referred in the course of his speech upon the earlier Amendments must have had relation to disused properties and not to religious properties which were then bona fide used for religious purposes. Why is it that the Nonconformist denominations are anxious to retain this right which they have enjoyed for over 100 years? There have been changes of population; new housing estates have been built; the Government, by their policies, are directing new industries to areas which have been suffering unemployment, and there is a transfer of population and a transfer of membership. Throughout the country a position is arising where the trustees and congregation of places of religious worship have decided that it is desirable to transfer their places of worship from the locality in which it now is to a place where their membership has gone and where, by reason of the housing estates, there are other members. So it is necessary that, in the proposals for erecting new religous premises, they should contemporaneously make arrangements to dispose of the existing chapel premises. They can do that because they can make their arrangements, obtain the best price (which the trustees are under an obligation to obtain) for the chapel premises which they are yielding up because the membership is moving away, but which, nevertheless, is being bona fide used as a place of religious worship. When the transactions are completed and the new church is available to the membership, they can give up possession of the chapel which they are then using, and there is no disuse of the chapel premises. In those circumstances it is a convenient and satisfactory means of dealing with this position.

Then, as I understood it, the position with regard to the houses or manses for ministers was that many of these chapels were receiving no benefit from endowments; they had been built by the endeavours of the congregation. They were supported wholly by voluntary contributions and, therefore, under the law as it existed, were completely free from control. In many cases they had succeeded not only in building their places of religious worship, but in acquiring a house in which their minister could live. Up to that point it was free from control. As I understand the position, the Act stated that a charity wholly maintained by voluntary contribution shall be entirely exempt from the operation of the Act, but when the point was considered by the court, the court came to the conclusion that if the words, "wholly maintained by voluntary contributions", were read in their widest sense, every charity would be exempt from the Acts for which the ultimate source of all charitable endowments is the spontaneous bounty of founders or supporters Therefore a limitation was imposed, and that limitation was that if the charity religious body acquired property which brought in an income, then it became an endowment: and immediately it became an endowment it was caught by the provisions of the Charitable Trusts Acts, and came under the direction and control of the Charity Commissioners.

The matter is taken a stage further in the case of Mathieson, in 1902, when, if the church trustees and members purchased a house for their minister, and the minister resided in it, although there was no income going into the place of religious worship, nevertheless, there was a benefit because their minister was occupying the house. Therefore, that also became an endowment and was caught by the Acts, and was subject to the supervision and control of the Charity Commissioners. There seems to have been some doubt as to whether, if such a body bought land and invested their contributions in the purchase of land which brought in no income and no benefit, that made it an endowment or not. Lord Sterndale, the Master of the Rolls in the Child Villiers application in 1922, took the view that it did.

There is a further difficulty which the Free Churches are facing with regard to the manses. We realise that friendly societies are exempt under this Act. If clubs which have trustees and are registered under the Friendly Societies Acts, and are used for the supply of intoxicating liquor, need to purchase a house for their steward and to raise money upon it, they can negotiate at once for the purchase of the house; they can make arrangements for the raising of a loan to enable them to complete it, and the steward can move into the premises of the club with very little delay. No consent, of course, is required, because under the Act they are exempt, and under this Bill when it becomes an Act they are still exempt. But if in the same community there is a chapel whose members desire to purchase a house for their minister, if it is necessary for them to raise money on mortgage to obtain the house they have to make application to the Charity Commissioners for consent to raise the loan. But if it is a place of religious worship which has no endowments the Charity Commissioners will direct them that they can do nothing in the matter until the trustees themselves have entered into a binding contract to buy. So the trustees must enter into a binding contract; they must commit themselves to purchase the house, and at that moment, although the building society has given them authority to say that it will advance a certain sum, they cannot obtain the consent from the Charity Commissioners until they have committed themselves in that way.

The next step is that, having entered into a binding contract, the trustees make application for consent. They have to investigate the title of the vendor; they have to draw the deed; they have to declare the trust, then send it to the Charity Commissioners for them to peruse; and then the Charity Commissioners will submit for approval a draft form of consent. That draft form is returned to the Charity Commissioners but is not issued until after the purchase has been completed. The deeds must be executed; the deeds must be sent to the Charity Commissioners and registered with them; and when that is done the consent form is given. What is the position here? Someone has to provide the purchase money to enable the transaction to be completed. It may well be that the building society will say "We are quite satisfied now that the Charity Commissioners have given their indication that they will give a form of consent". But the form of consent is not issued until after the transaction has been completed. The position, in my view, is this: if a building society advances the money before the consent is obtained, the transaction may well be regarded as a void transaction. It seems to me that the arrangements which at present prevail for the Charity Commissioners and the places of religious worship and their trustees are so unsatisfactory that the exception we propose in this Amendment should be accepted. I beg to move.

Amendment moved— Page 30, line 33, at end insert the said subsection.—(Lord Granville-West.)

5.53 p.m.

LORD MILNER OF LEEDS

My noble friend has made such a powerful case that I think there is little I can say to add to what he has already so well said. It seems to me a remarkable state of affairs when the Nathan Committee recommend that the power which has existed for over a hundred years should be continued, and added to that power to sell the chapel should be the power to sell the manse, and when further the Government themselves in the White Paper agree with the Nathan Committee, and yet in this present Bill the whole of those recommendations, both from the Nathan Committee and the White Paper, are wholly disregarded and the Government take precisely the opposite view.

In the debate which we have already had on Lord Saltoun's Amendment it did not seem to me that the noble and learned Viscount the Lord Chancellor really dealt with this position. He may have dealt with Lord Saltoun's Amendment, but he did not deal with the case where there had been an existing right which had been exercised, so far as I know, without complaint, for a hundred years, and which right it is now proposed to take away. The noble and learned Viscount gave one or two instances. I do not think he gave the date of those instances whereby by reason of the action of the Charity Commissioners an increased price was obtained.

THE LORD CHANCELLOR

I can give the dates to the noble Lord. The first was 1955. The biggest one related to a church and church hall of the Presbyterian Church of England. Instead of the offer, as advertised, of £40,000 they got £83,250—that was in 1959. The last two were in 1959, so they are not old results. It is tremendously important that these churches should get the best return for their property and should not be left with these minute fractions they would have had if the Commissioners had not acted.

LORD MILNER OF LEEDS

I agree that it is desirable that the charities should obtain the largest possible price, but, with all respect, the instances given by the noble and learned Viscount are not in any way conclusive. I do not know what the special circumstances were. It all depends on the circumstances of the case. Perhaps the noble and learned Viscount would let me or my noble friend have particulars so that we can inquire into them. A great deal depends on the particular merits or de-merits of the particular case.

The curious thing is that the Government's White Paper uses the phrase The congregation looks after its own and the Commissioners' work is largely duplicated. I think that that is perfectly true. What the noble and learned Viscount is saying in answer to the noble Lord, Lord Saltoun, and presumably will make in answer to the plea by my noble friend, is that "Whitehall knows best". I do not agree in this particular instance that Whitehall knows best. As a general rule the funds of these Free Churches and so forth are provided locally. There are trustees who have for many years taken an interest and continue to take an interest in the charity. I know of my own knowledge, though I do not know the precise details, of a chapel in the City of Leeds which had not become disused but the congregation dwindled to a comparatively small number because, by reason of slum clearance, the great majority of the previous congregation had moved to housing estates. It was perfectly easy to make arrangements locally with the corporation whereby the trustees of the chapel should be able to dispose of the chapel and might have a site in a new housing estate. There was no difficulty; everybody was happy. There was no necessity for the delay or expense which would be incurred by application to the Charity Commissioners.

The noble and learned Viscount, in response to a question by a noble Lord on the Cross-Benches, said that there would be no expense. But there would be expense; surely the Commissioners would require plans, particularly, probably a valuation—I do not know—and that would result in very considerable expense in an application being made to the Charity Commissioners. The Charity Commissioners, complete strangers, could not form an opinion as to the price, as to whether it was high enough, without having appropriate particulars. Probably there would have to be a survey in all cases. Who would pay the expense of the survey? Would it be imposed on the trustees of the chapel?

Considerable delay would be involved. I have not any personal interest, but perhaps I ought to declare that my office from time to time has acted in some of these transactions. I have inquired and I gather that it is usual for there to be a delay of from two to three months in obtaining the consent of the Charity Commissioners in those circumstances where it now has to be obtained. That is a great disadvantage. It may result in a sale falling through. It is inconceivable to me that in the normal case, of trustees attending to their business, they or their predecessors having provided the money, knowing the local circumstances, being at least as anxious as any Charity Commissioners would be to obtain the best price, they should be deprived of the right and opportunity of dealing with the matter locally.

In my submission, this is an exemption which ought to be made. Incidentally, on this matter of exemptions there is a very curious procedure, although I know it has happened in previous Bills. When the Government present a Bill of this sort they provide that certain exemptions are going to be made. I have no doubt that a provisional list of exemptions is at any rate in the Government office at present. Why cannot the noble and learned Viscount at some stage of the Bill tell us what exemptions it is proposed to make so far as they have been decided upon? If my assumption is correct, and if the exemptions that I am pleading for are included, then the rest of the matter could be quite quickly disposed of. I submit that it is quite unfair to both Houses of Parliament to come forward with a Bill and thereby to lead Members and the general public to believe that exemptions are going to be made, but in fact, when the exemptions come forward after the Bill has been passed in good faith, perhaps the particular charities or organisations concerned are not included therein. I submit that the noble and learned Viscount, who we all know from experience desires to be fair and to give the fullest information to the House, should at some stage of the Bill give some indication of what exemptions are proposed.

In my submission there is a clear case for a continuation of the practice of the permission which has existed for over a hundred years in the case of chapels, and for that permission to be given in the case of the manse. More particularly do I think it necessary when one knows that the great majority of these manses are small houses. What the Government are asking for is that the Charity Commissioners should be smothered with pettifogging details in regard to these houses, many of which are frequently in slum clearance areas and are worth £100 or £200, or at the highest £300. It is ridiculous to put local trusts, as these would be, to the expense, the delay and the inconvenience of going to the Charity Commissioners 40 obtain their approval in respect of a manse. Therefore I hope that the noble and learned Viscount will be able to tell us that he accepts the Amendment proposed by my noble friend.

LORD SALTOUN

I am not one of those who, because I have lost my tail, insist on everybody else losing theirs, and I should like to put in a word for the Amendment of the noble Lord opposite. I should like to draw his attention to a certain part of his own speech. He said that for over a hundred years the Free Churches had been exempt from the control of the Charity Commissioners, to their great advantage: then he proceeded to give examples of their procedure which underlined and emphasised what I said myself to the noble and learned Viscount who is in charge of the Bill. I should like also to point out to the noble Lord, Lord Granville-West, that in seeking to remove subsection (2) of this clause from the Bill I am seeking to prevent a change in the law. I hope that on the next stage of the Bill I may have his assistance in trying to amend the Bill in that particular.

6.4 p.m.

LORD OGMORE

I should like to support the Amendment so powerfully moved, as I thought, by the noble Lord, Lord Granville-West. I, too, with Lord Milner of Leeds, am most surprised that the Government who have recently—indeed, even to-day—been exhorting your Lordships not to depart from the terms of the Nathan Report on one point, are in this case not only departing from the terms of the Nathan Report but also from their own words in their own White Paper. I think we ought to have an explanation of why that should be. The noble Lord, Lord Granville-West, has talked about the Free Churches as a whole. I should like to say something in particular about the Congregational Union, because I think they have a different status, in some ways, from the others. His case applies, of course, to all, including the Congregational Union. I would seek to show why it applies particularly to the Congregational Union.

The effect of this Bill will be that every individual chapel will have to register unless its only assets are, first of all, a registered place of worship; secondly, an investment income not exceeding £15 per annum, and thirdly, current cash funds. By the very nature of the thing, there are few chapels that have not got a place of worship; and in these days there are few chapels which have not also invested funds of more than £15, and of course all of them have current accounts at the bank, otherwise they could not carry on. So, by and large, every single independent nonconformist Free Church in this country will have to be registered under this Bill.

So far as the Congregationalists are concerned—the old Independents—they have the longest history of all. I notice the noble Viscount, Lord Alexander of Hillsborough, looking at me, but that is so. However, I will not enter into the moot point of whether the Independents, the Congregationalists, hived off from the Church of England or whether the Church of England hived off from the Independents, the Congregationalists. The Independents were the original Puritans—Cromwell was one of them, and so were many Members of your Lordships' House and of another place in the Parliamentary disputes which took place in the seventeenth century.

The whole structure of the Independent chapel, the Congregational chapel, is that they run their own affairs, and always have done. This is the earliest example of true democracy in the country. The chapel runs its own affairs each member has a vote, and the members elect the executive committee which controls the affairs of the chapel. All accounts are submitted to the annual meeting, and the members at the annual meeting can raise any questions they wish, and they pass the accounts or not as they think fit. In addition, the minister is not imposed upon them by anyone. When there is a vacancy in a chapel, various ministers are invited to preach, the members select the one whom they like, and they invite him to take charge of the church. If he so desires he does so, otherwise he does not. All these things have to be added to the fact that they are entirely independent financially: they have no State assistance, they have no tithes or anything of that kind, but are entirely independent.

All this has created in the minds of the churches throughout the centuries a spirit of independence, which has been of vast importance not only in religious life but also in political life. Most of the early members of the Liberal Party, and some at least of the early members of the Labour Party, learned their—I was going to say, political doctrines, but at all events they learned how to speak and how to conduct democratic assemblies through their training in the Nonconformist churches.

What is the situation under this Bill? As I have said, not only have these churches to register in practically every case, but their accounts are open to public inspection. As the Committee will see in Part II, there are a large number of provisions which will affect them, so that all their activities have to go to someone to be approved. Even the local authorities come into it. They have to approve things too, and they can demand accounts and explanations of this and that. What is the reason for this? Is there any case, or are there any number of cases, where the Free Churches have failed in their duties? Are there any scandals? If there are, I have not heard of any, and I have heard of no case where they have failed in their duties. Here, in the Free Churches, is the oldest system of true democracy that we have in the whole country, and particularly, as I have said, in the Baptist and Congregational churches.

Until recently a Congregational church had not, and would not admit to, any superior authority at all. It is only quite recently that they have had moderators. But the moderators have very little power in fact they have advisory powers, but few executive powers at all. And especially in these days, when—unhappily—government is going more and more into the field of religion in some countries, it little behoves any Government to push its way into the realm of the Free Churches without any excuse or adequate explanation, after the hundreds of years during which they have been in existence and the great contribution they have made to our religious and our national life.

LORD HAWKE

The noble and learned Viscount was saying a little time ago that he found it difficult to find any broad categories which he could put in this Bill to be free from the machinery of the Charity Commissioners. I should have thought that here there was a broad category and I hope he will be able to see his way towards accepting something like this Amendment: because I submit that the machinery of the Charity Commissioners is designed for two purposes only, the first of which is to protect the properties from fraud or mismanagement; and from what I have seen about the Free Churches they are men of the utmost uprightness and very shrewd when it comes to dealings. This might well he a category which could be kept out, and I would assure my noble and learned friend that we who sit on boards who have to deal with the Charity Corn-mission machinery find it at times vexatious and irksome, and sometimes the cause of loss.

6.12 p.m.

VISCOUNT ALEXANDER OF HILLSBOROUGH

I should like to tell the noble and learned Viscount before he replies how greatly I want to support, not the legal points, for I can leave those with my professional friends on these Benches, but the general case for the independent Free Churches which has been put so well by the noble Lord, Lord Ogmore. I will not quarrel with him as to who was the most historical in age in this country. I was married to my dear wife in a Baptist Church, founded in 1607 by the Dutch Anabaptists in the county of the present Chancellor of the Exchequer. The fact is that Congregationalists and Baptists are outstanding as independent Christian communities. Their church government is independent. They have to do what they must in finding their own finance, starting from the bottom, making their own contributions and relying on their own loyalties. As the noble Lord, Lord Ogmore, has said, I can find nothing in the back of my mind which shows that there have been any scandals at all in this matter.

I believe I do not need to say much more, but I shall listen with great interest to the answer of the noble and learned Viscount, because I think he has a very strong case to answer. I am grateful to my noble friends who have already spoken upon this matter from these Benches and I hope they will be getting their legal arguments ready if by any chance the noble and learned Viscount is not going to accept the general case. For—let him be under no misunderstanding about this—the Congregational and the Baptist denominations feel very strongly about this. We feel that at this moment, on these points, the Government have in charge the maintenance of a heritage in independence and veracity which these denominations have built for themselves. I hope very much, therefore, that, whatever may be the present legal considerations in his mind, he will find a way of dealing with this really necessary case.

THE LORD CHANCELLOR

I am most grateful to all noble Lords who have spoken for the strength of their arguments and the eloquence with which they have been put forward. I should like to make it perfectly clear that this problem is one to which we have to find a solution, but we have to do so with the greatest sympathy for these spiritual forces who are concerned. If I may tell the noble Viscount who leads the opposition that I have the honour to be related, by marriage, to William Carey, which, I believe is one of the great names in the community of which he spoke, he will realise that I certainly have nothing but respect for that body; and of course the same applies to the Congregational Union, though there does not happen to be a connection of the same kind.

I approach this matter with great sympathy and I should like to put the difficulty in which we find ourselves and then to consider what is the best solution. I assure all noble Lords who have spoken that we have no desire at all to impose any restriction that does not exist in the present law. I believe it is largely a matter of method, but I should like to deal with one or two points. I do not complain of any form of argument, but it has been rather put against me that the White Paper has taken a view from which the Bill departs. If noble Lords will look at paragraph 53 of the White Paper they will see that the words are: It is proposed that the present exception in favour of registered places of worship should be enlarged by excepting the following classes of trust, and then it sets out some. I think it is clear—I have always taken it that way—that the White Paper is dealing with places used for religious worship and not with places that have ceased to be so used; and there are really two points of difficulty. One is when we are dealing with local bodies whose composition is that of local trusts. The other is the question of whether there should be a control on the buildings of a religious charity which should be left to be determined by whether they are still used as a church or not. That has been found to be a very unsatisfactory position in the existing law.

The exemption from the Charity Commissioners' jurisdiction extends to places of worship registered under the Places of Worship Registration Act, 1855, only so long as they are bona fide used as such. In other words, a place of worship which has ceased to be used immediately falls within the jurisdiction of the Commissioners and cannot be sold without their consent. It is obviously a most unsatisfactory state of affairs if the validity of the title to land turns on the question of when the last service was held and whether there is an intention to hold another at the time of selling. I do not think I need to elaborate to my legal colleagues the absurdities and anomalies in the law of property to which this situation leads.

It might be argued that a contract of sale can be entered into without consent while the church is still being used, but I do not think that that is a method of dealing with the problem which would really commend itself. One can see possible ways of dealing with it, but I do not think it is one that is desirable, and it seems contrary, really, to the plain terms of the exemption. If you sell it by dealing with, not an out-and-out sale, but other forms which your Lordships will appreciate, while it is still being used, or by substituting some other form from another sale, you are really getting round the provision which, as I say, has been the law for a hundred years.

As I said, there is no intention whatever to interfere with the liberty of churches, within the scope of the particular trust, to take decisions as to how and when properties should be disposed of and for what new work they should be used. The difficulties arise when the properties do not belong to the churches or their use is restricted by trusts. I do not think that it would be right to exempt disused places of worship from control. Such cases are constantly being dealt with by the Charity Commissioner. The reasons for the control are, first, to ensure that if the property is sold a proper price is obtained for it. The noble Lord, Lord Milner of Leeds, said, "It is ridiculous if you bother about £200." I do not think that that is right. Take the two examples I gave: they were both Baptist properties and I do not think the noble Viscount was in the Chamber at the time. The point I was making then was to justify a practice of the Commissioners, which is that we must advertise a reserve price before we finally sell. I was giving examples. I quoted one again which the noble Viscount heard; but I gave these two and they were both Baptist properties and disused chapels. In one case the offer advertised—this was a property in Leicestershire—was £200 and the price realised after the advertisement which was ordered by the Commis- sioners was £500. There was another one in Lindsey. The offer advertised was £500 and the price realised was £1,100. I do not think you can, as did the noble Lord, Lord Milner of Leeds, deal with one side. It would have been a terrible thing if these local bodies had got only £200 instead of £500 and £500 instead of £1,100.

LORD MILNER OF LEEDS

If the noble and learned Viscount will forgive me for interrupting him, may I say that I was referring to a site or chapel in a slum clearance area, and the noble and learned Viscount knows how little is obtained for a site in those circumstances.

THE LORD CHANCELLOR

But it would not be right from the point of view of the Baptist Church that, because something was originally offered at only £200, there should not be some machinery to see that they got the market value. A religious body must look after its affairs well, and desires to, because it has to live; and the more independent it is the more important it is that one should ensure that it mobilises all its potential funds. That is the first point: to ensure that a proper price is obtained for it. And the examples I gave were very striking. The Presbyterian Church of England may have a slightly different form of church government: but to advertise the first offer at £40,000 and for the price to go up to £83,250 because of the procedure of the Commissioners is a really remarkable point.

VISCOUNT ALEXANDER OF HILLSBOROUGH

I should like to know how they did that. They have first of all to advertise the reserve price, which must be satisfactory. I should like to know how the Commissioners then obtained a much higher price. In an ordinary commercial undertaking, let alone a church trust, represented by legal representatives, they would get offers over and above the reserve price. I do not accept the whole argument as between reserve price and the price obtained. And what is the difference in the costs incurred as between what happens in this case and in other transactions?

THE LORD CHANCELLOR

If the noble Viscount will allow me to develop the point I will do so happily. I want to satisfy him. I am not here so that an argument will prevail or to vote in the Division Lobby; I want to satisfy the Committee on what I believe is a very important point. The noble Viscount was not here when I explained certain matters, but I explained that one of the rules of the Charity Commissioners was that we had to advertise an offer: we could not sell without advertising an offer. So this was an offer made and it was advertised in accordance with the rules. The result was that, instead of that offer being accepted, an offer for more than twice as much was ultimately accepted. I was giving examples to that effect.

The point was this—if the Committee will forgive me for going over it again, because the noble Viscount was not here. My noble friend Lord Saltoun was complaining about having to get the consent of the Charity Commissioners. I was arguing that point and I quoted a famous Charity Commissioner in the nineteenth century who said that his main work was to prevent charity property from being sold for too small a price. Then I gave these examples concerning the rule they had created. The first offer was advertised, and in most cases more than twice that amount—sometimes nearly three times the amount—was obtained. We are not dealing here with anyone who wants to hold down the body. We are here dealing with quasi-judicial people in the Charity Commissioners whose only desire is to see that the property of the charity is maintained. I was going on to say that the second purpose of the control is that if the proceeds are to be applied for another purpose—that is, if, as in the examples given, the particular chapel is no longer necessary—they will be applied cy près; that is, for a purpose near to the original purpose.

There are many places of worship or manses belonging to small denominations or local congregations where the supervision is necessary for the first purpose; that is, the preservation of the property for the charity. I have given instances where the original prices offered were doubled or more than doubled. On the other hand, where a central denominational body is the trustee and has a complete discretion to provide from the expendable funds such local premises, and to close them and apply the proceeds to other purposes, it is intended to except these transactions, first, because the central body has an interest to secure that a proper price is paid; secondly, because it is in a position to ensure the appropriate application of the proceeds of sale; and, thirdly, of course, because it has power to spend them at will. When discussion on the regulation proceeds, it may well be found possible to make excepting regulations (I have referred to this before) from this clause in respect of property held, for example, on the model trust deeds of the Baptist Union. I am sure the noble Viscount is familiar with the model trust deeds. As I say, I think that it may well be found possible to deal with this by excepting regulations. Where, however, there is a local trust for a chapel or a manse which is tied to a particular locality and is not at the disposal of a central body at discretion, the supervision provided to protect the charity property and secure its due application ought to apply. And if there are intermediate cases between these two that I have mentioned, they can certainly be brought up in the discussions which it is understood are shortly to take place.

Far be it from me to say that any particular body should be bound by what has been done by another body: I know and understand the differences. But that is, in fact, the principle followed in discussions with representatives of other denominations and of national charities which, at their discretion, provide from central funds local premises occupied for the purposes of the charity. It is hoped that this principle will be found generally acceptable, and that it will be seen on reflection that this clause is directed to producing certainty and ease of administration in the conveyance of functional land, which at present gives rise to much doubt and trouble.

I have put the matter rather at length because it may be that people will want to consider it before the next stage, But, if I may summarise it, there are really two points. The first is whether it is better to deal with the matter by excepting regulations—that is the broad point. The other is that a real difficulty is created by what I described earlier—namely, the question of whether the church is used or unused—if, as I say, that has to turn on when the last service was held and whether at the time it is sold there is an intention to hold another. I do not want to argue about what is really a question of fact, but as I understand it the procedure whereby the Charity Commissioners have dealt with property that has ceased to be a church is quite an old one. The point here is whether we ought to deal with this difficult problem of whether a church has ceased to be a church or not by the method that I have suggested, of discussion and of regulation.

The other point put to me was about the Charity Commissioners and the stage at which they might feel able to give consent to a mortgage before the property became charity property. That is based (as I think the noble Lord, Lord Granville-West, would find if he considered them even further than he has obviously done at the moment) on the awkward wording of the existing Statutes; and the Bill will do away with this difficulty, and will enable the Commissioners to sanction a transaction in advance. I can give him that assurance. I hope that the Committee will accept our method of dealing with it, and will not press for putting it in the Bill. However, whatever view is taken on this Amendment I should like noble Lords to realise that this is done in order to improve the working of the system and not to handicap in any way the bodies under discussion.

LORD SILKIN

I am sure that all those who have raised this question will be very grateful to the noble and learned Viscount for the full, clear and careful statement he has made. Speaking for myself, I feel that it would be worth while examining very carefully what the noble and learned Viscount has said before pushing this matter to an extreme at this stage.

There is one point on which I should be glad of some elucidation. The noble and learned Viscount referred to the possibility of excepting regulations. He held out no promise as to what they would be, but I rather thought that he was referring to cases where there was a central trust, and not to cases where there is a local trust. Of course, the whole argument that has taken place on this Amendment has been in these cases of local trusts. In the case of the central trust I think that probably something could be done. But it is in the case of the local trust, where there are these local traditions, and so on, that the difficulty arises. In particular, as both my noble friend Lord Granville-West and my noble friend Lord Milner of Leeds have pointed out, there is the case where, because the population is departing, a chapel ceases to be used and has to be sold to find the money required for new premises at the place where the population has gone, and where it is undesirable to do anything to delay or frustrate the possibility of a sale.

I should be grateful if the noble and learned Viscount would say whether I am right in my belief that his conception of excepting regulations is limited to cases of the centralised trusts. Would he be prepared to consider the matter further in the case of the local charities and, where real difficulties have been put forward, see whether anything can be done to meet them? I feel, with the noble and learned Viscount, that this is not a matter which ought to be decided on a vote without the fullest possible consideration and discussions if necessary, but I think it would be a good thing if some of the doubts about what is being suggested could be cleared up as a preliminary to the further talks.

THE LORD CHANCELLOR

I am very grateful to the noble Lord, Lord Silk in, and I should like to have a look at this matter myself. He has pinpointed something which had occurred to me but which, as so often happens when one has a vast number of Amendments, I was not able to check up. I am not quite sure—I will be quite frank with your Lordships—how far his point is affected by the words that I have mentioned: that it may be found possible to make excepting regulations from this clause in respect of property held, for example, on the model trust deeds of the Baptist Union. I should like to make sure whether that includes the model local trusts, as opposed to those held by a national body. I will look into the point with the greatest pleasure.

LORD GRANVILLE-WEST

I am sure the Free Churches will be most disappointed to read the statement of the noble and learned Viscount and of his unwillingness to preserve that freedom which they have enjoyed for so long. The noble and learned Viscount seems to have rested his case on the difficulties of the disused chapel. We are not seeking to have freedom with regard to the disused chapel. I had hoped that I had made it clear that we recognise that in such cases there is a need for the Charity Commissioners to intervene. But the point we were making was that the chapel being used for religious purposes pre-supposes that there is a membership of a church, that there are trustees in existence, the congregation who can control the trustees and the trustees who can carry out the wishes of the congregation. Why should they not have the right to manage their own affairs in their own way, without having to go to the Charity Commissioners for permission to do so?

I see no great advantage in this scheme which the noble and learned Viscount has put forward: in fact, even if the regulations which he has in mind exempted those churches which had model trust deeds, large numbers of churches would be left outside. We should then have the anomalous position of some churches being free and other churches being outside. I feel that it would be far better—and I urge the noble and learned Viscount to give further consideration to this matter—if the rights of the churches were preserved. What is the evidence that they have failed in their duty? The instances which the Lord Chancellor has mentioned in the debate this afternoon have no relevance whatsoever to the case I am making in regard to chapels which are being used for religious purposes under the control of a congregation and controlled by trustees.

There is also this great difficulty which the churches have to face when dealing with the Charity Commissioners now: that in those cases where the Charity Commissioners' consent is sought it may be as long as six months before the necessary consent is obtained. So far as the difficulties which the noble and learned Viscount mentioned about conveyancing are concerned, and the difficulty of deciding whether a church is being bona fide used as a place of religious worship or not, I can tell him that all practical conveyancers who have dealt with this matter over the years have found no difficulty whatever in dealing with the point. There never has been any difficulty. The argument which the noble and learned Viscount put forward on this point cannot be supported. I have no desire to divide the Committee on this Amendment at this stage. I hope that the noble and learned Viscount will look at the points again, because we shall have to return to this matter on the Report stage; and unless something can be done in the meantime, I shall then be compelled to seek a decision of the House upon it.

THE LORD CHANCELLOR

I will certainly look at it again. We have had a most interesting debate on a subject on which noble Lords feel strongly. I cannot, of course, give any undertaking now, because I want to consider the points raised. I will certainly do that with the greatest of pleasure.

LORD GRANVILLE-WEST

I am grateful to the noble and learned Viscount. In those circumstances, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 28, as amended, agreed to.

Clauses 29 and 30 agreed to.

6.46 p.m.

LORD MCNAIR moved after Clause 30 to insert the following new clause:

Universities of Oxford and Cambridge

". The powers conferred by this Act on the Commissioners and the Minister shall not be exercised in relation to the universities of Oxford and Cambridge or the colleges or halls in these universities or any institution which is recognised by, or administered by or on behalf of, any of them."

The noble and learned Lord said: I beg to move the Amendment standing in the name of my noble and learned friend Lord Spens and myself. I must begin by thanking the noble and learned Viscount the Lord Chancellor for the great kindness and patience which he has shown in exploring the apprehensions that lie behind this Amendment, but I regret to say that he has not succeeded in allaying those apprehensions, and I must try to explain what they are. I feel that I should state the procedure whereby during the last 100 years the Universities of Oxford and Cambridge have made their Statutes and modified their trusts by means of the link which they possess with the Privy Council.

When the university or a college desires to amend a Statute or to modify a trust the new Statute modifying the trust is sent to the Privy Council and is then laid upon the Table of this House and the Table of the other place; then, after the lapse of the necessary period, the Royal Approval is given. That procedure rests upon and is sanctioned by three Royal Commissions and three Acts of Parliament—an Act of 1854, an Act of 1877 (which established the Universities Committee of the Privy Council) and an Act of 1923. That rather special procedure is reflected in a passage in the Report of the Nathan Committee upon which this Bill is based. In paragraph 406 it is stated: Throughout the present century the weight of Parliamentary and public opinion has increasingly been against the idea of university authorities falling within the ambit of the State educational system. At a time when, in almost every country, the State, as represented by the Government, of whatever political complexion that Government may be, is continually becoming more powerful, it is no bad thing that at any rate one sector of the educational system should be in the position described in the Nathan Report. The apprehensions in the Universities of Oxford and Cambridge are that this Privy Council procedure may in the future be threatened by this Bill, and I must endeavour to justify that statement.

In the course of the Second Reading debate the Lord Chancellor was good enough to give me certain assurances on this point. If I may quote his words he stated [OFFICIAL REPORT, Vol. 221 (No. 45). col. 646]: There is not the slightest intention to encroach in any way on the autonomous Statute-making powers of Oxford and Cambridge. I need hardly say that I entirely accept his assurances, and I am quite sure that so long as the noble and learned Viscount continues to exercise his great influence in the government of this country there will be no encroachment upon the autonomous Statute-making powers of those two universities. But the noble and learned Viscount will forgive me, I am sure, when I say that universities have to take a long view. We have to look ahead a very long time. When we examine this Bill, and when we try to foresee the way in which it may be judicially interpreted and administratively applied, we have, I submit, cause for misgiving.

The noble and learned Viscount has pointed out that there is nothing in this Bill that prohibits the universities from resorting to the Privy Council for the approval of their Statutes and the modification of their trusts, as has been done during the past 100 years. That is perfectly true. But the effect of this Bill is clearly going to increase enormously the powers and influence of the Charity Commissioners, and of the Charities Department of the Ministry of Education. My fear is that at some time the Privy Council might weary of well-doing, or might be induced to say to the universities: "Why do you not go to the Charity Commissioners or the Ministry of Education? They have power to modify your trusts. Why bother us?" That would clearly constitute a serious interference with the system of making Statutes and modifying trusts which has prevailed now for 100 years, with all the authority behind it of three Royal Commissions and three Acts of Parliament. To the best of my knowledge—and to some extent the matter is within my own knowledge—that machinery works efficiently and smoothly.

If those apprehensions were justified, the universities, instead of continuing to make use of this machinery which has worked so well, might find themselves dealing with one or both of these Departments which are now, according to the estimate given to your Lordships on the Second Reading by the noble and learned Viscount, to acquire the duty of looking after something like 150,000 charities. That seems to indicate to me that it could hardly be expected that that method of making Statutes and modifying trusts could work with anything like the smoothness, the rapidity and the efficiency of the method which now has behind it 100 years' experience.

Moreover, those two departments, the Ministry of Education, with its new powers, and the Charity Commissioners, with their greatly enhanced status, are policy-making departments. Hitherto, the machinery whereby the Government discusses policy with the universities has been the machinery of the University Grants Committee and the Committee of Vice-Chancellors—and a very good piece of machinery it is. I submit to the Committee that it is open to the Com- mittee to consider whether it is wise to make a change of this character.

THE LORD CHANCELLOR

What change does the noble Lord say we are making in the Bill?

LORD MCNAIR

As I endeavoured to explain, the Bill contains no prohibition.

THE LORD CHANCELLOR

I did not want to interrupt the noble Lord on a debating point, or least of all as he knows in an oppositional way. Is he referring to the change that might happen? When he says, "Making a change of this sort" he is referring to that change, and not to any change made in the Bill. Am I right?

LORD MCNAIR

I made it perfectly clear that there is nothing in the Bill which prohibits the universities from using the Privy Council procedure.

THE LORD CHANCELLOR

Or anything that compels them to go to the Commissioners or the Ministry of Education.

LORD MCNAIR

Nothing in the Bill. But, as I indicated, when one attempts to foresee the interpretation and the administration of the Bill, the existence of those two alternative jurisdictions does constitute a threat to the continuance of the Privy Council procedure. It is for those reasons that I would ask your Lordships, and in particular the noble and learned Viscount in charge of the Bill, to consider whether he cannot, without in any way destroying an essential part of the Bill, remove those apprehensions by doing something very like what is done by the Education (Miscellaneous Provisions) Act, 1948, and by incorporating at some appropriate place the substance of the Amendment which I beg to move.

Amendment moved— After Clause 30 insert the said new clause.—(Lord McNair.)

LORD SPENS

If I may add a short speech to the excellent explanation given by the noble and learned Lord, Lord McNair, on behalf of Cambridge University, I would merely say that, whatever antagonisms there may be at the end of the week between the two universities, there is absolutely no difference of opinion as regards the possible outcome of this Bill. Your Lordships know that when the Charitable Trusts Act, 1853, came into being, the then four existing universities and their colleges were all excepted from all the provisions of that Act, and all the more recent universities and their colleges have also been excepted by the Private Acts which apply to them. The two reasons which were given or were thought by the Nathan Committee to produce that situation in 1853 were, first, that the universities were such well-established educational charities that any suggestion that they should be superintended by the Charity Commissioners was out of date; and, as the Nathan Committee found, that suggestion remains as strong to-day. The second and much more important one was that they had their own system of dealing with their charitable trusts by the machinery of which the noble and learned Lord, Lord McNair, has informed your Lordships.

It is quite true, and I think it is foolish to burke one's fences, that under the Charitable Trusts Act, 1853, Section 14 enabled the universities and the colleges, if they thought fit, to apply to be brought inside the jurisdiction of the Charity Commissioners. But that has, in fact, been a dead letter right through the centuries; it has not been used. They have maintained their independence and deal with their trusts under their own machinery which belongs to them. Similar machinery belongs to the other new universities, and we believe that many of them feel very much the same way at the possibility of the ultimate effects of this Bill.

It is difficult to suggest to your Lordships that the fact that the Bill contains a similar power to Section 14, namely, that trustees of the universities or trustees of the various trusts could at some time ask the Charity Commissioners to take charge of them, is anything that threatens the independence of the universities and their present machinery. But that is what they all feel. They ask, why re-enact in this Bill the provisions of Section 14 of the 1853 Act which has never been used and never wanted? The relations of the universities and the college authorities with the Privy Council have, right down the century been very close and satisfactory and all that the universities want. That is the case. It is thought that if you introduce, or reintroduce, another machinery, in this Year of Grace, 10, 15, 20 or 30 years hence it may be thought by someone that this machinery is the one that ought to be applied and not the machinery through the Privy Council, and that, by pressure of one sort or another, the independence of the universities, with their independent machinery in the Privy Council, may have to be given up and they may find themselves under the Minister of Education and the Charity Commissioners of the day. That is what they are afraid of. That is what they do not want. I know the noble and learned Viscount has given a great deal of attention 10 this matter but it is pressed for by the universities and, I believe, by other and newer universities as well. I hope the House will think that this is a proper Amendment to make to the Bill.

LORD SILKIN

Before the noble and learned Viscount replies, may I say that I do not want to say very much on the merits of this Amendment, but I have not appreciated, either from the speech of the noble and learned Lord, Lord McNair, or of the noble and learned Lord, Lord Spens, what it is exactly they fear. I know that they do not want to come under the Charity Commissioners or the Ministry of Education, but what is the underlying fear behind it? What is the evil that may emerge? The second question is, are the universities of Oxford and Cambridge seeking privileges for themselves which are not contained in the Amendment as it stands for other universities? What is the position of London, Liverpool, Birmingham and all the other places that have universities. Are they in the same position but the Amendment does not bring them into the picture?

LORD SPENS

We have not got all their Private Acts, but we believe that practically all the other universities are in the same position. But of course we have no authority to ask for legislation for them.

LORD SILKIN

My third point is that, on the ground that one has apprehensions about the effect of coming within the scope of this Bill, are there not an enormous number of charities that have the same feeling? Most of us fear the dark and fear the unknown, and generally without any justification. I should like at some time to know what are the exact fears that they have in coming into this Bill.

LORD SPENS

May I answer that shortly? Apart from the universities, I do not think there are many other charities who have their own statutory system of regulating their trusts and altering and adjusting their objects as times change. There may be some charities with Charters and, possibly, Acts of Parliament, but I think very few compared to the universities—both the four old ones which have been in existence since 1853 and the nine or eleven new ones that have come into being since.

THE LORD CHANCELLOR

Again, I must ask your Lordships' indulgence if I deal at some length with the points that have been raised by my noble and learned friends, Lord McNair and Lord Spens. As I sensed in the speech of the noble Lord, Lord Silkin, it is very difficult to grasp the fears that are inspiring the universities or, indeed, their most able advocates in this House. Therefore, I should like to deal with the position in such a way that not only my noble friends who hear the speech but those who are interested in the point should have a chance of considering the position.

Let us get quite clear the position from which we start. It is not that there is any compulsion or any threat of compulsion on the universities. What is objected to is that the universities or any of their colleges should be entitled to apply for the use of the enabling powers of the Commissioners or the Ministry if they want to do so. All that is objected to is the existence of a permissive power which will exist in the case of the universities. My noble and learned friend, Lord Spens, with the frankness which one would expect of him, made clear to your Lordships that this has been the position for roughly 100 years. Although, as he said, the universities of Oxford and Cambridge were excepted from the Act of 1853 along with those of London and Durham, they were brought in again and given the power to apply to come into the jurisdiction, and that provision was subsequently modified in 1869 to enable thorn to apply for a partial extension of the Acts to their charity properties.

Lord Spens and I are at one as to the effect of the Act. Of course, I will check it again in view of what my noble friend has said, but I am told that from time to time vesting orders and schemes have been made under these provisions in respect of certain Oxford and Cambridge institutions, so far as is known with the greatest goodwill on both sides. But I am also told that it has not often been necessary to seek the exercise of these powers, since, as has been pointed out, the universities and colleges have wide autonomous Statute-making powers of their own to alter the Statutes and trusts. But I would ask whether my noble and learned friends would agree with me that it is a condition to their being able to come back for further alteration that the Statutes and trusts should already have been altered by the Royal Commission on the university.

The other point which I suggest to my noble and learned friend Lord McNair is that there is no power in the Privy Council to send the universities to the Charity Commissioners or anyone else, or to refuse to deal with a case. The procedure is that the university or college makes the amending Statute, and there is no power to stop them except by petition or prayer against the Statute, either in the Privy Council or in Parliament. As I understand it, that is the position. Of course, by legislation anything can be done; but under the existing legislation there is no power to send them anywhere else. If there is a petition against it, it will, of course, be considered in the ordinary way.

Now let us come a little nearer to the present day. When the Nathan Committee came to review the situation, they made suggestions about periodic reviews of university trusts which are not within the scope of the Bill. They also recommended that the universities should be excepted from the new jurisdiction proposed to be conferred in the Ministry of Education, but should be able to apply to come within it as at present. They added that such a step at present gave the Minister permanent jurisdiction over the property, and that this consequence was disliked by the university. So that again we come to the same point: that they should be able to apply to come within it. The White Paper did not extend the Ministry's jurisdiction; it proposed that universities and certain other charities should continue to be excepted from it, but, again, that all excepted bodies should be able to obtain the exercise of the enabling powers of the Commissioners and the Ministry, on occasion, without permanently coming under their supervision. That is the present position, because as we came to draft the Bill it was found that the White Paper had come to the conclusion that all the enabling powers should be open to any charity on application. That is precisely the position that the Bill creates.

Further than that, the existing statutory exclusion of universities from restriction, compulsion and supervision is carried forward in the Second Schedule to the Bill, but, like any other charity, they can obtain the benefit of the enabling powers on request—that is, on their request—free of charge, and without obligation or prejudice to the exercise of alternative powers where they exist.

Therefore, I confess that until quite recently—because my noble and learned friend Lord McNair has been very good in writing to me about this matter—I had some difficulty in seeing why such simple and beneficent provisions should be viewed with such suspicion. However, I answer the grounds of suspicion as I see them. As I said, the powers conferred by the Bill upon the Commissioners and the Minister of Education in relation to exempt charities—that is to say, those in the Second Schedule, including Oxford and Cambridge Universities and their colleges and halls—are only exercisable on the application of the universities or colleges themselves. Yet there has been this fear. My noble and learned friend Lord Spens said on Second Reading that he was anxious lest this power should prove a back-door way of getting the Commissioners inside their affairs. But if it is a back-door way, it is a back door through which the universities can pass only at their own request, and one which has existed ever since the Commissioners have existed.

My noble and learned friends have made it quite clear to-day that there is nothing at all in the Bill which can be said to trespass upon, or interfere with, the jurisdiction of the Privy Council, and I think that, as my noble and learned friend Lord McNair said, one can formulate this fear only as a possible lapse of Privy Council procedure. The powers which the Commissioners and the Minister may exercise under the Bill at the request of the university or college are general powers, identical with or similar to powers of the court, and there is no more prospect of the link between the universities and the Privy Council being undermined by the powers under the Bill than of their being undermined by the jurisdiction of the court. They could go to the court, and the powers of the Commissioners are the same.

I think it amounts to this and to nothing more: if the university or college cannot help itself because the case is outside its Statute-making powers, so that it is obliged to go to the court or to promote a Bill in Parliament to secure the relief it requires, it can, under the Bill, as it has always had power to do at its discretion alone, go instead to the Commissioners or the Minister for the relief it seeks, instead of having to go to the court or Parliament. In these hard times I confess that it is one of the few examples that have come to my weary mind where people have said, "We object to this. Here is a power which we need not exercise unless we like it, but it exists. It is a power to save money." But they are saying to us, through this Amendment, "Take it away, and let us spend the money on going to the court or in promoting a private Bill."

Just let us look at it a little further, because I want to face the reasons. The first reason for seeking the preservation of the existing position is, in substance, that if an alternative method of procedure exists the Privy Council procedure may wither away. I should have thought that that was an extremely difficult view to conjure up from the constitutional point of view. The one compelling consideration for prescribing the Privy Council procedure was that universities are chartered bodies. Alterations of their statutes are tantamount to alterations of charters and regulations made under charter, which can only be effected by a supplementary charter or Order in Council or, with Her Majesty's consent, by Parliament, and the courts have always recognised that the alteration of charters is outside their jurisdiction. Therefore, so long as Royal Charters exist and are dealt with in the same way as at present, I can see no reason for supposing that there can be any change in the practice as regards university bodies.

The second reason has been a sort of suggestion conveyed discreetly by my noble and learned friend Lord McNair's compliment to me, that so long as I am here things will be all right, but that of course I should be gone—if not dead and gone—before very long, and then things might be more difficult. But I want to face up to a more robust suggestion than that: that there is some intention to enhance the status of the Charity Commissioners and the Ministry of Education, and transform them into policy-making bodies with policies to enforce on charity, which ultimately may result in pressure upon the universities. I understand that reference in correspondence with the universities to the provision of a national service may have aroused some feeling that departments are to be reorganised and administered in a mould set by the Government. Nothing could be further from the intention. It is simply intended that a national service will be provided and available for all who wish to make use of it.

Certainly it is intended to enlarge the Department's functions and re-equip the Charity Commissioners to meet the needs of charity in the changed circumstances of to-day. But it is the precise opposite of the Bill's intention to suggest that the Commissioners are to make and enforce policies on charities. On the contrary, great care has been taken to establish, in the opening clause of the Bill, that they are not subject to ministerial direction and are bound to act in the case of each charity so as best to make effective the work conducted by the trust of the charity. This statuory duty applies to the Ministry of Education equally with the Charity Commissioners, and I hope that it is sufficiently evident that there is neither a sinister intention nor any ground for apprehending that any encroachments on the present responsibility of charity trustees can result.

But it goes further than that. Far from the Government plotting to place shackles on the universities, they are giving evidence in the Bill of the intention to enlarge their freedom of action. The Bill repeals Romilly's Act which hitherto has required them to obtain the consent of the Attorney General before Chancery proceedings, and extends exemptions, hitherto granted to their corporate property only, to all their special endowments and trust funds. That is done under paragraph (e) of the Second Schedule.

One main reason for the existence of the charitable trusts jurisdiction and why it is now made to extend to all charities alike is, as I have indicated, that it is free. It exists to enable non-contentious charity business to be done without legal expenses and to ensure that money given to charity is spent on a charitable object and not on unnecessary costs. I do not know whether my noble and learned friend Lord McNair remembers that great figure among Liverpool solicitors in my young days who was our local hero of that proverbial story that he asked: "Is it really meant that the money should be frittered away among the beneficiaries?" But that is exactly what this procedure is intended to do: to enable them to do it freely and without incurring expense.

There is another point, and I should like my noble friends and those in the universities who have been anxious about this matter to consider whether I am wrong here. In my view, not every trust, by any means, is within the Statute-making powers of the university or college. It might be that the college was co-trustee with someone else and it is doubtful whether in such a case the Statute-making powers would apply. But if we take the case where a college received a bequest and did not feel it needed it for the purpose for which that bequest was given, and wanted a cy-près bequest, why they could not go without expense to the Commissioners I find difficulty in seeing. That might be a large trust, but some trusts administered by universities are very small, with incomes of less than £10 a year. How can it be right that universities should put themselves in a position where, if any legal operation becomes necessary, the charity runs the risk of being extinguished by the costs that would be necessary? I hope I have said enough to dispel the misunderstandings and fears that seem to have dogged this proposal since its inception.

I want to come to only one other point, which the noble Lord, Lord Silkin, had in mind. So far as we know, the other universities do not share the anxieties of Oxford and Cambridge and through the Vice-Chancellors' Committee have expressed their approval of the Bill and the continued exercise of the powers under it. Most of the universities, likewise, have Statute-making powers under their Charters or under Private Acts, and I should like again to assure both my noble friends that the fears they have expressed for the future autonomy of the universities as a result of this Bill have no foundation whatever. If any future Government (for whom I cannot speak) had such intentions, then certainly a provision like that of my noble friends would not stand in the way.

There are difficulties about the Amendment but I am not going into these, because I have dealt with it on general grounds; and I hope that in the light of what I have said noble Lords will come round to the view that the services of the Commissioners and the Minister should be available on request to all charities. Again, I put to them the point that a university or college may be a co-trustee with somebody else. Surely it must be right that the provision should apply to all charities; and the creation of a class of super-exempt charities—because they are already exempt—differing from all other charities and universities in this respect, is surely wrong in principle. I ask my noble friends not to press the Amendment.

LORD MCNAIR

We are greatly indebted to the noble and learned Viscount for the very careful and detailed exposition he has given us. I made it quite clear in my opening remarks that there was nothing in the Bill itself which threatened the continuance of this procedure. I should like to assure the Committee, however, that those highly experienced persons who are responsible for the administration of the universities and colleges have given great thought and study to the position created by the Bill, and they have genuine apprehension about the effect the Bill may have in future upon their highly cherished Privy Council procedure, which has worked with such efficiency and with such authority behind it for 100 years. I do not propose at this hour to divide the House, and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 31 [General obligation to keep Accounts]:

7.30 p.m.

LORD MCNAIR

I do not know whether the House would wish me to explain this Amendment, which is really in the nature of a drafting Amendment. The position is this. In the case of two universities and their colleges, and perhaps other bodies, the duty to publish accounts does not derive directly from an Act of Parliament but from some other provision made in pursuance of an Act of Parliament. It seems to me that it would more effectively carry out the intention lying behind this provision if the words contained in the Amendment were inserted.

Amendment moved— Page 31, line 25, after ("by") insert ("or under the authority of").—(Lord McNair.)

THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE)

I was not quite sure that the insertion of the words "or under the authority of" would add anything to the force of this clause, but I think from what the noble Lord has said that they would add something. I can see no harm in them. I think if we were to consider it we probably could not do any better, and I think it would save time and be more satisfactory if your Lordships would accept the Amendment, which the Government are willing to do.

On Question, Amendment agreed to.

LORD HAWKE

This is a drafting Amendment. The word "kept" in relation to accounts generally means to write them, and I think the Bill means to preserve them.

Amendment moved— Page 31, line 31, leave out ("kept") and insert ("preserved").—(Lord Hawke.)

THE EARL OF DUNDEE

I think that my noble friend's Amendment might perhaps avoid some confusion, and the Government would be quite willing to accept it.

On Question, Amendment agreed to.

Clause 31, as amended, agreed to.

Clauses 32 and 33 agreed to.

Clause 34:

[Transfer and evidence of title to property vested in trustees]:

(6) The Trustee Appointment Act, 1850, the Trustee Appointment Act, 1869, the Trustees Appointment Act, 1890, and in so far as it applies any of those Acts the School Sites Act, 1852, shall cease to have effect; but the repeal of those Acts by this Act shall not affect the trusts of any charity in relation to the manner of appointing trustees of land assured before the commencement of this Act for a purpose to which any of those Acts applies.

LORD GRANVILLE-WEST moved to leave out subsection (6). The noble Lord said: I beg to move the Amendment standing on the Order Paper in the name of my noble friend Lord Milner of Leeds and myself. This clause, as I understand it, is designed to incorporate the provisions of the Trustee Appointment Act, 1850, and the amending Acts of 1869 and 1890, and to extend them to all charities. Unfortunately, the clause as it stands does not reproduce the provisions of those Acts in the following respects. First of all, it applies only where under the trusts trustees may be appointed or discharged by resolution either of a meeting of the trustees or by members of the institution or other persons. Under the Act of 1850 the powers are exercisable even if the trust contains no such powers, and in that case the modus operandi is decided upon at the meeting.

Under the Act of 1890 there is this further provision: that once six months have expired from the date of the meeting the appointment of new trustees is unchallengeable. The new clause merely provides that a memorandum signed by the person presiding at the meeting or in some other manner directed by the meeting and attested by two persons is "sufficient evidence of the fact". As I understand it, "sufficient evidence of the fact" means merely prima facie evidence, and it can be contested by other evidence. But under the Act of 1890 there was an unchallengeable appointment, which, of course, is of great benefit to the chapel trustees. Under Peto's Act a very simple procedure for the appointment of new trustees was provided, and in reliance on that Act many trust deeds of the Baptist denomination, and indeed of the Congregational denomination and many other smaller denominations, omitted provisions for the appointment of trustees. This is a real difficulty which this new clause presents, and I therefore move the Amendment which stands on the Paper.

Amendment moved— Page 33, line 37, leave out subsection (6).—(Lord Granville-West.)

THE LORD CHANCELLOR

I should like to have another look at the drafting of this. I think we have got down to the point, and it is merely a question of drafting. From what the noble Lord, Lord Granville-West, said, I think he is worried in case the limit of subsection (6) does not bring out clearly enough that the repealed Acts are reserved as regards existing trusts. I will gladly have a look at the drafting, and I will write to him and let him know.

LORD GRANVILLE-WEST

I am most grateful to the noble and learned Viscount, and in the circumstances I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 34 agreed to.

Clauses 35 to 39 agreed to.

7.38 p.m.

LORD HAWKE moved, after Clause 39 to insert the following new Clause:

By-laws under 22 Vict. c. 27

". Section two hundred and fifty-one of the Local Government Act. 1933, shall apply to by-laws made under the Recreation Grounds Act, 1859, as if they were by-laws to which section two hundred and fifty of the said Act of 1933 applies."

The noble Lord said: As the Bill stands at the moment, it repeals the Recreation Grounds Act, 1859, which allowed land to be held by trustees for resort and recreation of adults and playgrounds for children. Moreover, the managers of this land had power to make by-laws subject, curiously enough, to the approval of the Treasury. We do not think it right that this Act should be repealed, because the grounds held under it include many of those of the National Playing Fields Association. By repealing the Act one would abolish, first of all, a simple way of creating a public playing field, and, secondly, the existing rights of the managers to make by-laws. Thirdly, it would cause people to look up a repealed law to find out under what trusts a recreation ground was held, and that seems rather queer and inconvenient. We prefer to keep the Recreation Grounds Act, 1859, but amended in such a way that we modernise the by-law provisions so that by-laws can be made and enforced in a magistrates' court, as provided for in the Local Government Act, 1933. At the same time, it seems that the limit or £1,000 of value of the land that can be made into a recreation ground under this Act is out of date, and so we should like to abolish that. We tried to accomplish all this by this Amendment, No. 68, together with Amendments 85 and 92. I hope that the three of them, between them, will achieve our objects. I beg td move.

Amendment moved— After Clause 39, insert the said new clause.—(Lord Hawke.)

THE EARL OF DUNDEE

The Recreation Grounds Act of 1859 is one of the Statutes which we are proposing to repeal under the Fifth Schedule of this Bill as being obsolete, and since my noble friend's two subsequent Amendments, Nos. 85 and 92, are to omit it from the Schedule, I am sure we shall be glad to discuss the three Amendments together. Section 6 of the Act provides that the managers of recreation grounds acquired under the Act may make bylaws for the management and care of the grounds, and the government of persons using them, such by-laws to be approved by the Charity Commissioners. But there is no power to prosecute for breach of these by-laws; all that can be done is to throw the man out if he is not behaving himself according to the rules. You cannot impose any legal penalty.

The Amendment proposes to put some "teeth" into these by-laws by transferring powers contained in the Local Government Act, 1933, which enables fines to be imposed of up to £5, plus £2 a day for a continuing offence, for breaches of these by-laws. The Government could not accept that. It would not be at all right, I think, to give charity trustees the power to create criminal offences in this way; and I am sure that whoever had to confirm it— whether it was the Treasury or (as in this case I think it would be) the Home Office—would not agree to do it, because it would be contrary to our policy. Nor do I think it would be reasonable to confer such a power on charity trustees who happen to have acquired their recreation grounds under the old Act of 1859 and not upon those who had acquired them without reference to that Act.

As to the Act which we are proposing to repeal, so far from empowering trustees of recreation grounds to exercise their necessary and inherent powers of management, it actually restricts them. The 1859 Act provides that if land is conveyed to trustees in this way they may restrict access only if they make bylaws and if these are confirmed by the Charity Commissioners; and from that point of view I think the trustees would be better able to regulate admissions and behaviour if this Act were repealed.

There is one point—I do not think my noble friend mentioned it—which I know has been raised in connection with this matter: that without the 1859 Act there might not be any legal power for the parish council to convey its own land to trustees without consideration for value. We are looking into that point. I doubt if there is anything in it, but if it is found that there is any useful purpose in preserving the Act of 1859 we will certainly introduce an Amendment to continue it. However, the Government could not agree to giving the charity trustees the power to create criminal offences with the penalty of a fine, which is the main effect of my noble friend's Amendment. It would be contrary to our policy; and I hope my noble friend will not press it.

LORD HAWKE

I quite see the dilemma of the noble Earl who has replied over this question of criminal offences being created by charity trustees. It seems to me that, in the absence of by-laws, there must be certain anomalies. I know of a case in Berkshire, for instance, where the cricketers and archers both tried to use the same piece of ground at the same time; and without some form of by-laws which can be enforced it is rather difficult to stop that sort of thing. But do I understand from my noble friend's reply that the general question of being able to create recreation ground trusts under this Act is still being looked into?

THE EARL OF DUNDEE

Certainly. We want to make sure that the repeal of the Act of 1859 will not hamper the parish councils in making over land without a financial consideration. We do not think it would, but we are going to make sure of it.

LORD HAWKE

In the meantime, at all events, I must accept my noble friend's assurance, and possibly, if necessary, return to the charge at a later stage of the Bill. I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clauses 40 to 43 agreed to.

Clause 44 [Construction of references to a "charity" or to particular classes of charity]:

7.46 p.m.

Loan HAWKE moved, in the definition of "parochial charity", after "consisting" to insert: at the date of the instrument for the time being defining the area". The noble Lord said: Perhaps I should apologise for the absence of my noble friend Lord Colville of Culross. Unfortunately (or perhaps fortunately) he had to be in Glasgow to-day, and is unable to be present. A parochial charity is a charity whose benefits are confined to a parish, and possibly four other neighbouring parishes: a maximum group of five neighbouring parishes. The parish council or parish councils of this group have important rights in regard to a parochial charity. They have the right to receive the annual accounts and they have the right to appoint the trustees. Of course, if there is more than one parish engaged they appoint the trustees by arrangement amongst themselves. But if by some boundary adjustment a parish should be split into two, or even if one of the neighbouring parishes is split into two, the group would then become six instead of five, and they would lose their rights to receive accounts and to appoint trustees. By this Amendment we are trying to ensure that these rights are reserved. I beg to move.

Amendment moved— Page 40, line 30, after ("consisting") insert ("at the date of the instrument for the time being defining the area").—(Lord Hawke.)

THE EARL OF DUNDEE

I appreciate the purpose of this Amendment, which is to secure that the parochial charity does not cease to be a parochial charity when the number of parishes included in its beneficial area comes by division of parishes to number more than five. As my noble friend has said, while the charity remains a parochial charity all the parishes in the beneficial area have certain rights under the Bill—such as the rights to receive charity accounts under Clause 31. But I think we must draw the line somewhere. If you had a huge built-up area which used to be a rural parish but which, owing to density of population, had been divided up into eight or ten parishes, that would be too many. The line must be drawn somewhere. We think that the present law, which is re-enacted in this Bill, is right, and that the maximum of five parishes seems quite enough for the area of benefit of a parochial charity. I know, of course, that there are always borderline cases wherever you draw the line, but our view is that the existing law is about right and should be continued.

LORD HAWKE

I must study the reply of my noble friend and take counsel before deciding whether or not we can finally accept it. Meanwhile, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

7.50 p.m.

LORD HAWKE moved, in subsection (2) (a), to omit all words in brackets and to insert: "sole or cathedral or collegiate church". The noble Lord said: I must apologise for the absence of my noble friend the Lord Bishop of Chelmsford, who, by a long-standing pastoral engagement, is unable to be here to-night. This Amendment and the next one are put down for the purpose of getting clarification. As amended by this Amendment and the next one, the clause would read: The expression 'charity' is not in this Act applicable— (a) to any ecclesiastical corporation, sole or cathedral or collegiate church in respect of the corporate property held by that corporation and applicable either for the endowment of or for the ecclesiastical purposes of the corporation or church".

The first Amendment is really designed to discover to whom the Government wish to give exemption under the Bill, and then to make the wording of the Bill so clear that it will be unnecessary to test the matter in the courts. The lawyers that advise the Church of England believe that the Government intend to leave in the Bill parochial church councils and diocesan boards of finance, and to exclude only the bishops, deans and incumbents from the provisions of the Bill. Quite apart from whether diocesan boards of finance, and so on, would like to be clear of the Bill, as no doubt they would, it is particularly important that the drafting of the Bill should be so clear that precisely what the Government's intentions are will not have to be tested in the courts. It is for this purpose that this and the next Amendment have been put down. I beg to move.

Amendment moved— Page 40, line 43, leave out from ("corporation") to end of line 35 and insert the said new words."—(Lord Hawke.)

THE LORD CHANCELLOR

As I understand it, my noble friend is prompted by the anxiety that bodies like parochial church councils and diocesan boards of finance may contend that they are ecclesiastical corporations, and he wants to limit the ecclesiastical corporations aggregate to cathedral and collegiate churches in the expectation that this will prove for practical purposes exhaustive. I would remind my noble friend that the standard statutory definition of an "ecclesiastical corporation" in Section 11 of the Episcopal and Capitular Estate Act, 1851, itself includes every minor ecclesiastical corporation in a cathedral or collegiate church". It may be that by now all these minor ecclesiastical corporations, apart from any such in Christ Church, have been deprived of their property by schemes made under Section 13 of the Cathedral Measure, 1931, but I would remind my noble friend, if indeed he needs reminding on so obvious a point, that that section itself gave power to reconstitute such corporations. I would also remind him that, in any case, the statutory definition that I mentioned is not necessarily exhaustive: it expressly excluded Christ Church and any college or hos- pital. I think, therefore, that the proper course is to state the principle rather than to embark upon a catalogue.

I will willingly look at the paragraph again to see whether its clarity can be improved, particularly as regards the case of the ecclesiastical corporation having non-spiritual as well as spiritual purposes, but the general opinion which I have met is that there is really no prospect of a parochial church council or a diocesan board successfully contending that it is an ecclesiastical corporation established for spiritual purposes.

I will also consider the drafting of the paragraph which is the subject of my noble friend's second Amendment. The Amendment, which I gather is mainly exploratory, is unacceptable, because in the case of an ecclesiastical corporation having other than purely ecclesiastical purposes—for example, Christ Church at Oxford—it would take the whole endowment out of the Bill instead of that part applicable for ecclesiastical purposes. It would also create difficulties in relation to property not strictly part of the endowment but for the time being administered as such. If the motive behind my noble friend's Amendment is to get us to consider and see whether we can find clearer words, then he has succeeded. We shall do that and make every effort, but I cannot make any promises as to the final result.

LORD HAWKE

I thank my noble and learned friend for his reply, which I shall study with great interest, because, as he is fully aware, I am considerably out of my depth in such ecclesiastical matters. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD HAWKE

This is another Amendment to seek clarification.

THE LORD CHANCELLOR

I have dealt with this.

LORD HAWKE

I am not sure that my noble and learned friend dealt with one point, and that is the question of glebe. We want to be certain that there is no possibility of by-passing the well-trodden and abundant safeguards for the disposal of glebe that now exist by some application to the Charity Commissioners. I beg to move.

Amendment moved— Page 40, line 36, leave out from ("held") to end of line 37 and insert ("by that corporation and applicable either for the endowment of or for the ecclesiastical purposes of the corporation or church;".—(Lord Hawke.)

THE LORD CHANCELLOR

I am sorry, but I thought my noble friend had adumbrated this Amendment, and therefore I dealt with part of it. If the purpose of his Amendment is to make it clear that where, for example, land is let as an investment by an ecclesiastical corporation the land still has the benefit of this exclusion from the Bill, then the Amendment is unnecessary, because plainly the land is held for the ecclesiastical purposes of the corporation, whether it farms it itself or whether it lets it out. In either case the money is used for the maintenance of, for example, the rector so that he can carry on his spiritual functions. Similarly, it can make no possible difference whether a house is used to house the cathedral organist or is let and the money paid to him as part of his stipend. It is not as if the Bill said "corporate body used and occupied for the ecclesiastical purposes". I think that covers the point.

LORD HAWKE

I thank my noble and learned friend, and I am sure the lawyers in the Church of England will read his reply with great interest. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 44 agreed to.

Clause 45 [Other definitions]:

LORD SILKIN

Amendment No. 74 was intended to be consequential upon the Amendment which I moved at the beginning of the Committee proceedings defining in my own way "charitable purposes". As the definition appears "charitable purposes" means "purposes which are exclusively charitable". That is not very illuminating, and I had hoped that I could produce something better. As I hope to put forward an Amendment defining "charitable purposes" on the Report stage, I do not propose to move this Amendment.

THE LORD CHANCELLOR

This Amendment is really drafting, to remove any doubts as to what is meant by references to the County of London. I beg to move.

Amendment moved—

Page 41, line 40, at end insert— ("'the county of London' means the administrative county of London").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 45, as amended, agreed to.

Clauses 46 to 48 agreed to.

First Schedule [Constitution, etc., of Charity Commissioners]:

THE LORD CHANCELLOR: The noble Lord, Lord Chorley, did not intend to move Amendments Nos. 77 to 81, in view of the discussion we had on this general point.

First Schedule agreed to.

Second Schedule agreed to.

Third Schedule [Enlargement of areas of local charities]:

LORD HAWKE

Under the Bill schemes can be made to widen the area of the local charity intended to benefit a parish or parishes, to stretch over the county district in which it lies, or even the adjacent county district if it lies on the boundary of such a district. Benefactors setting up a local charity have specifically in mind benefit to their parish, and they would not want to extend it to possibly a much wider area. If the parish happened to be on the boundary of a country district, the benefits of a charity intended for one parish could be stretched to more than a hundred parishes, and the original benefactor would probably regard stretching of that sort with disapproval and, in extreme cases, with a good deal of horror. I beg to move.

Amendment moved— Page 47, line 31, column 2, leave out ("county district or districts") and insert ("parish or parishes").—(Lord Hawke.)

THE EARL OF DUNDEE

As my noble friend has said, the effect of this Third Schedule, together with Clause 13, is to enable schemes to be made to extend the area of benefit where it appears to be reasonable and desirable, without strict regard to the conditions laid down for a cy-près scheme. I think my noble friend has made out quite a reasonable case for confining this extension to neighbouring parishes, or to a neighbouring parish. The scheme as it is now in the Bill is based on what were the views of the National Association of Parish Councils, as expressed to the Nathan Committee, but I understand that they now take a slightly different view. The change proposed is a marginal one, perhaps, but I think it is reasonable, and, in view of what my noble friend has said, I am quite willing to accept it.

LORD HAWKE

I am grateful to my noble friend.

On Question, Amendment agreed to.

Third Schedule, as amended, agreed to.

Fourth Schedule agreed to.

Fifth Schedule [Enactments repealed as obsolete]:

THE LORD CHANCELLOR

This is a drafting Amendment. I beg to move.

Amendment moved— Page 49, leave out lines 27 and 28.—(The Lord Chancellor.)

On Question, Amendment agreed to.

LORD GRANVILLE-WEST

This Amendment seeks to leave out of the Fifth Schedule, the Repeal Schedule, the Nonconformists Chapels Act, 1844. I cannot claim that if this Act were in fact repealed any great difficulty would be caused, but there would be some difficulty, because it has been used in connection with some very old trusts where the trust is defective or non-existent. Therefore, the 25 years' user is conclusive evidence in favour of the congregation. If I may give one example, it is under the old Baptist Trusts, where the trustees were for a body of Protestant Dissenters, this being the way in which the congregation was described in the old days. The effect of the Act was to fill in the gap and to confirm that it is Baptist. Apart from some occasions when it will be of value, I believe no great difficulty will be caused if the Act is repealed. I formally beg to move.

Amendment moved— Pag 49, leave out lines 33 to 38.—(Lord Granville-West.)

THE LORD CHANCELLOR

The repeal of the Nonconformist Chapels Act, 1844, is linked with the repeal of the Roman Catholic Charities Act, 1860. The purpose of these two Acts is similar in relation to the evidence to be admitted as regards user. Historically, it goes back to the time when the taint of illegality had been recently removed from trusts for the advancement of religion other than that of the Established Church. Provision was made for trusts to be determined according to the established user existing during a specific number of years immediately precedent to the bringing of action, whether those trusts were the true trusts or not. The survival of these provisions into the present day means that user in breach of trust over the required number of years precedent to the bringing of action will prevail over the true trusts. I do not think that that is a position one can continue any longer. I think we must say that the law of evidence should be the same with all classes of trust. There is another difficulty, in that it is by no means claimed that the Act of 1844 applies to meeting houses, et cetera, founded after the Act. For those reasons, I think we ought to get rid of this piece of lumber.

LORD GRANVILLE-WEST

I am grateful to the noble and learned Viscount for the explanation he has given. The only thing I would say in reply (I am bound to accept the view of the noble and learned Viscount on the question of the breach of trust), is that the advice I have received is that user in breach of trust is not affected by the Act. However, having regard to what has been said, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR

With the repeal of the law of mortmain there is no need for any restriction on the amount of land to be held by a benevolent society. I beg to move.

Amendment moved—

Page 50, line 36, at end insert—

("59 & 60 Vict. c. 25.	The Friendly Societies Act, 1896.	Subsection (3) of section forty-seven.")
	—(The Lord Chancellor.)

On Question, Amendment agreed to.

Fifth Schedule, as amended, agreed to.

Sixth Schedule agreed to.

Seventh Schedule [Enactments repealed as superseded]:

LORD GRANVILLE-WEST

Amendment No. 88 and the following two Amendments, are all related to the short discussion we had with regard to the Trustee Appointment Act, 1850, and the amending Acts. As the noble and learned Viscount has undertaken to look into the earlier Amendment to which these Amendments are related I do not propose to move them.

THE LORD CHANCELLOR

Perhaps I may deal with Amendments Nos. 93, 94 and 95. These are provisions relating to mortmain which have come to notice since the Bill was published. I beg to move that they be included.

Amendment moved—

Page 60, line 17, at end insert—

("29 & 30 Vict. c. 122.	The Metropolitan Commons Act, 1866.	Section thirty-one.")
	—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

I beg to move.

Amendment moved—

Page 60, line 33, at end insert—

("36 & 37 Vict. c. 50.	The Places of Worship Sites Act, 1873.	Section four, from "One witness" onwards.")
	—(The Lord Chancellor.

On Question, Amendment agreed to.

THE LORD CHANCELLOR

I beg to move.

Amendment moved— Page 61, line 53, column 3, after ("thirty-one") insert ("and in section thirty-two,").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE DEPUTY CHAIRMAN OF COMMITTEES (THE EARL OF BUCKINGHAMSHIRE)

I understand that Amendments 96 and 97 are in fact one Amendment.

THE LORD CHANCELLOR

These two further mortmain repeals are necessitated by Acts which have received the Royal Assent since this Bill was introduced. I beg to move.

Amendment moved—

Page 63, line 43, at end insert—

("8 & 9 Eliz. 2. c. 18.

The Local Employment Act, 1960.

In the First Schedule, paragraph 1 from "and power" onwards, and paragraph 10.

8 & 9 Eliz. 2. c.22.	The Horticulture Act,1960.	In subsection (1) of section nine, the words "and power to hold land without licence in mortmain"; subsection (1) of section fifteen, from "and power" onwards.")
	—(The Lord Chancellor.

On Question, Amendment agreed to.

Seventh Schedule as amended, agreed to.

House resumed.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, the Chief Whip on the Government side has had a talk with me. I am very anxious about next Thursday when this Bill to which we have given so much time is to come up on Report stage. A number of matters have been left over with the kind promises of the noble and learned Viscount on the Woolsack to go into them and there may still be some controversial matters. I hope that arrangements will be made that we should meet earlier than three o'clock next Thursday; I hope that it will be about 2.15.

THE LORD CHANCELLOR

I shall be delighted to fit in. I was just going to discuss the matter with my noble friend the Chief Whip. So far as I am concerned—and I am sure I can speak for my noble friend Lord Dundee—we shall be delighted to sit at any time that suits the House.