§ 6.35 p.m.
§ Baroness BIRK
My Lords, I beg to move that this Bill be now read a second time. This is the Bill which I promised just four weeks ago when I replied to a Question put by my noble friend Lord Maybray-King. My noble friend also initiated a debate on an Unstarred Question on 29th March on this same subject, so a great deal of the credit for what has happened rests on his pressuring.
The sole purpose of this Bill is to amend the law relating to rate relief for charity gift shops for England and Wales, and also for Scotland. It is a short and, I think I can say this time with some certainty, a simple Bill. A great many noble Lords have interests in charities—indeed, many have multiple interests—so some will be well acquainted with the relief law for charitable bodies. However, I think it might be helpful if I explain briefly the background to this Bill.
The law concerning rate relief for charities in England and Wales is contained in Section 40 of the General Rate Act 1967. Scotland has her own provisions in Section 4 of the Local Government 85 (Financial Provisions) (Scotland) Act 1962 and they are virtually identical. Rating authorities must give not less than 50 per cent. rate relief to
(a) any hereditament "—and I am quoting from Section 40 here—
occupied by, or by trustees for, a charity and wholly or mainly used for charitable purposes (whether of that charity or of that and other charities); or(b) any other hereditament, being a hereditament held upon trust for use as an almshouse."
In addition, rating authorities have discretion to grant further relief to charities and certain other organisations. In short, rating authorities must give 50 per cent. rate relief to charities and they may give relief on the whole or part of the remaining 50 per cent.
The present complicated situation arose because in 1972 Birmingham City Council contended that, although the nine Oxfam gift shops in their area were occupied by a charity, they were not wholly or mainly used for charitable purposes; this was because raising money by trading was not considered a charitable purpose of the charity. This contention was upheld last year on appeal to your Lordships' House, and, as can be well imagined, it has put an unfortunate revenue cat among the charitable pigeons. I think it fair to say that most shops run by charities are wholly or mainly engaged in selling goods donated to the charity. Before the Oxfam ruling, these shops —known as gift shops—were granted rate relief, which as a result of the ruling they now no longer get.
There are a series of remaining shops run by charities which fall into one of two categories. The first can be called " trading " shops, and these are shops wholly or mainly selling goods bought under normal trading conditions. These goods may be specially made for the charity; for example, Christmas cards, tea towels, biros and a variety of other things. In the Oxfam case, the charity conceded that had their shops fallen into this category they would not have expected to receive rate relief on them. The second category of shops are those mostly engaged in selling goods produced to further the charity's activities. A good example of this type of shop is one owned by a charity for the blind, and selling goods wholly or mainly produced by the blind. Another example would be an Oxfam shop—though
86 I doubt whether such shops actually exist at the moment—wholly or mainly selling articles made under the charity's " Helping by Selling " programme, whose purposes are to encourage village industries and provide employment in poor countries. These shops would qualify for rate relief under the law as it stands at present, because they are used for purposes completely ancillary to the charitable objects of the charity. This point was conceded by Birmingham City Council in the Oxfam case.
I will now explain why it was held that gift shops should not receive relief on rates. It was because entitlement to rate relief is dependent on the premises being used for charitable purposes. This was held to mean purposes directly related to the objects of the charity, but not simply raising money since this was not a charitable purpose of the charity. I am sorry that this is rather complicated, but it is a legal point and the charity law is very complicated. This ruling came as a severe and startling blow to the charities affected and the Government naturally had a great deal of sympathy with them. Therefore. we promised to take steps to rectify the situation as soon as possible and we have now done this in the Bill before your Lordships.
The provisions of the Bill are simple and straightforward. There is only one main clause. Its sole purpose is to restore not less than 50 per cent. mandatory rate relief and discretionery rate relief to charity gift shops. In England and Wales this is done by inserting a new clause alter Section 40(9) of the General Rate Act 1967 stating that a hereditament is used wholly or mainly for charitable purposes if it is used wholly or mainly for the sale of goods donated to a charity and the proceeds of the sale are applied for the purposes of a charity. Similar provisions are inserted at the end of Section 4 of the Local Government (Financial Provisions) (Scotland) Act 1962.
There is, however, one small difference between the English and Welsh provisions and the Scottish provisions which I should explain. This concerns the special transitional arrangements for Scotland in Section 1(3) of the Bill. In Scotland a charity may qualify for mandatory rate relief for the first year claimed, but only if notice is given to the rating authority 87 not later than 30th June. As this Bill is unlikely to be enacted by that date, we are proposing to set aside the time limit for 1976–7. A similar provision is not required for England and Wales because there is no time limit for notice to be given. This means that in Scotland and England and Wales the provisions of the Bill will come into effect from the date of enactment.
I am sure than, this measure will be warmly welcomed by the charities and also by the many noble Lords with charitable interests and connections. I hope that it will receive the support of both sides of the House and also that of the noble Lords who sit on the Cross-Benches. Therefore I commend this Bill to the House.
§ Moved, that the Bill be now read 2a.—(Baroness Birk.)
§ 6.42 p.m.
§ Lord SANDYS
My Lords, the noble Baroness can indeed be confident that the Bill will be welcomed most wholeheartedly on this side of the House and, I am sure, throughout the House. We are grateful to the noble Baroness for most painstakingly having explained a number of matters concerned with the Bill, especially the transitional arrangements under Section 1(3).
I should like to declare an interest, one which I feel that I should declare as somebody who is concerned with the British Red Cross Society and Oxfam, both of which charities operate gift shops. took part in the debate on the Unstarred Question asked by the noble Lord, Lord Maybray-King, on 29th March and I should like to pay my tribute to him. It is due to the noble Lord and to the very hard work which the noble Baroness has done that the Bill has come before your Lordships' House. As this Bill has been produced in your Lordships' House, I feel that we should curtail our remarks in order to speed it upon its way as quickly as possible.
With those few comments, may I express our gratitude to Her Majesty's Government for making the arrangements for its introduction and hope that they will ensure that the Rill has a swift passage through another place.
§ 6.44 p.m.
§ Lord MAYBRAY-KING
My Lords, my noble friend Lord Gore-Booth, who cannot be here tonight, has asked me to associate him with what I am going to say about this Bill. I know that in welcoming this little measure I am speaking not only for my noble friend but also on behalf of many of your Lordships on all sides of the House. I learn year by year how many of your Lordships are interested in one good charitable cause or another. If the country knew, I think that they would be surprised at the number.
The case for this Bill was put in the debate on 29th March by everyone who spoke in it. It has now been presented with crystal clarity by the noble Baroness, Lady Birk, and those of us who are interested in this measure all thank her for the interest she herself has taken in it. On behalf of all who work voluntarily in charity shops, I wish to thank the Government for keeping their promise, made on 29th March, to introduce this excellent and necessary amending Bill. Especially I would thank the noble Lord the Leader of the House, with whom I discussed this matter on several occasions, and the Ministers on the Government Front Bench, for their keen and sympathetic interest, once they realised that they had to tackle a problem when they found that charity shops were suffering as a result of an unclear definition in two Acts of Parliament. Knowing many of the Law Lords as I do, I think that they will be as happy as I am that this step has been taken to clarify the law and remove the burden which their ruling placed on the shoulders of many good British citizens.
From long experience, the best advice is to speak briefly about the Bill, because all the time that we are talking it is in danger. Therefore, I hope that this Bill will have a swift and unanimous passage through the House, for it will relieve many good folk of a grievous burden. When the Bill goes to another place, I hope that all who admire the services given by the voluntary citizens of our country —Oxfam, Help the Aged, with which I am connected, Save the Children Fund, Age Concern; the list is enormous—will speed the Bill on to the Statute Book. I am delighted by what the Minister 89 said tonight about removing some of the time barriers which might have interfered with the passage of the Bill. I know that in the other place there are Ministers and Opposition spokesmen who are as keen and sympathetic about this measure as are Members of your Lordships' House.
I find that it is impossible to express how delighted and grateful I am today and I wish to express my personal thanks to the noble Baroness, Lady Birk, and to the noble Lord, Lord Sandys, who tonight have made a formidable and warmhearted Front Bench coalition. if I may coin a phrase, or steal one from Nixon's tapes, in the last month the noble Lord, Lord Sandys, and I have been co-conspirators over this Bill. 1 like the saying, " Gratitude is the memory of the heart ". I do not like the saying, " Gratitude is thanks for favours yet to come ". But tonight I would say that all who welcome this Bill are anxiously waiting for the date on which it will become law, when they will be relieved of something which has caused them great suffering. May that day be as soon as possible.
§ 6.48 p.m.
§ Baroness HORNSBY-SMITH
My Lords, may I add my thanks to the noble Baroness, Lady Birk, for the detailed manner in which she has introduced this most welcome Bill. May I join my colleagues on your Lordships' Benches in thanking Her Majesty's Government for sorting out what was a very real dilemma which gave very grave affront and caused, great frustration to many of those volunteers who, day by day, gave their time willingly to serve in the charity shops, only to find at the end of the week, particularly if it had not been all that successful a week, that £16 to £20 of their takings had to go towards the rates. Volunteers can be very sensitive indeed.
I speak as one who is very much involved with one of the medical research charities. I am very proud to say that last year 1.1 million went exclusively towards arthritis research, all of which was directly centred around additional research for the National Health Service. In the case of the six major medical research bodies—cancer, heart disease, some of the others and our own, the ARC—many millions of pounds have been found since the war to augment and help the National Health 90 Service in areas where they themselves, however willing, could not find the money.
As I am chairman of the appeals committee, it happens to be my job in my charity to keep happy those who give their time- -and, so far as the shops are concerned. those who may work for live days a week in those shops—and to see that nothing discourages them from the great voluntary work they do. I am more than grateful that the Government, as voiced by the noble Baroness, have sensed not only the value of the work provided by the charities but also have so speedily set out to try to meet this contretemps.
I should like to ask one small question. The Bill reads at the moment:
… wholly or mainly for the sale of goods donated to a charityThis is easy for those of us who take what our friends and supporters will donate and sell it, but perhaps I did not quite get the full import of what the noble Baroness said when she mentioned the blind. Having been born and bred in the area where the Royal British Legion factories are located, I should like to ask whether this Bill would cover the Lord Roberts' Workshops? Would it cover the type of shop where blind people make goods for sale, and also the disabled men's homes where leather goods, chairs, stools and such things are made? I am sure it would be the will of the public that disabled people, who are enabled to stay in sheltered employment, whereas they could not find employment in the ordinary open market, should have their products covered, and there are very few of these specialised outlets. Would the Bill cover shops of that nature where a registered and nationally known charity provides very protected employment for disabled men and women who seek the outlet of a shop or a centre in order to sell the goods they produce? With those few words I welcome the Bill and wish it a speedy passage.
§ Baroness HYLTON-FOSTER
My Lords, speaking as a trustee of the London branch of the British Red Cross, I should like to say how much we appreciate the fact that the noble Baroness, Lady Birk, and the Government have introduced this Bill, and to say what a great encouragement it will be to our volunteers, who will now feel that an unintentioned wrong is about to be put right.
§ Viscount AMORY
My Lords, I wish only to add my mite of support to what has been said. I have no intimate knowledge of these shops but I feel, and I am sure your Lordships will agree, that in the present state of inflation charities are having a very difficult time. I welcome any support and help we can give them. I should like to support what the noble Lord, Lord Maybray-King, said about voluntary service. This is one of the most precious things we have in this country and anything we can do to encourage those who are devoting so much of their time to it is well worth doing.
§ Lord MORRIS of BORTH-Y-GEST
My Lords, I should like to add just one other voice from the Cross-Benches by way of warm welcome to this Bill. I do so with special pleasure because I was one of those who sat when the case came before your Lordships' House sitting in its judicial capacity. It was a question of construing the Act of Parliament; purely a question of construction. The learned judge had given his decision and we came to the conclusion that he was right. Of course our only task was to give our best endeavour in construing the Act and when we reached our unanimous conclusion in a judicial capacity more than one of us did so with regret in the capacity of a citizen.
§ 6.55 p.m.
§ Baroness BIRK
My Lords, of all the Bills which I have had to introduce into or pilot through your Lordships' House for my very large Department, this Bill, although small, has given me the most pleasure. First, it is putting right something which inadvertently had gone wrong, and there is no motivation to change any policy. It is nice to see that one can put things right as well as create other large new areas of policy. Secondly, I find the acclaim and pleasure that has permeated all sides of the House extremely pleasing. I am grateful for the very felicitous way in which the noble Lord, Lord Sandys, spoke from the Front Bench opposite. The interests he declared were some of the best interests one can declare, in the British Red Cross Society and Oxfam, and I am grateful to him for his swift, short reply in order to give the Bill a swift and short passage through this House and through Parliament.
92 I am grateful for the thanks expressed by my noble friend Lord Maybray-King. I think I should always be a co-conspirator of his, certainly in matters of this kind. The noble Baroness, Lady Hornsby-Smith. put her finger on a very important point concerned with the personnel involved in these activities. She is quite right that it is not just a question of the finances of the rating, although that is important; but as all of us who are involved in voluntary work are an are, it is easy for people to get dispirited when they feel so passionately about something, and especially when it is something that does not seem to make any social sense. This is another reason why I believe we all want to see the Bill go through Parliament quickly.
The noble Baroness asked me a question about the Lord Roberts' Workshops. This Bill does not affect charities of that sort. It affects those charities where goods have been donated. I should have thought this would come under the same category as the blind making goods for a blind charity, but to be absolutely certain I will check the situation and will write to the noble Baroness about it. I was also very grateful for the intervention by the noble Baroness, Lady Hylton-Foster, who endorsed the point of the tremendous encouragement to the volunteers, because unless we keep the voluntary workers who are engaged in the work we shall not have any voluntary work and we shall not have the funds to carry it out.
As always, I am grateful when anything I do gains the support of the noble Viscount, Lord Amory. I thought it added greatly to this short debate when the noble and learned Lord, Lord Morris of Borth-y-Gest, was able to put what I would call the human legal side of this problem. Having heard his interventions in debates before, I am sure he must have found it extremely uncomfortable having to interpret the law, as obviously and quite rightly he did, because that, if I may say so, was " how it was wrote ", and that is how it had to come out. In this Bill we are making quite sure that the intention is strictly interpreted legally, and in legislative terms. I hope we shall see the remaining stages of the Bill go through as quickly as this, so that we may send it to the Commons and with some luck we shall see it made law this Session.
§ On Question, Bill read 2a and committed to a Committee of the Whole House.