§ 3.32 p.m.
My Lords, I beg to move that the Bill be now read a second time. A Second Reading of this Bill took place on 6th May of this year. With the Dissolution of Parliament the Bill fell. The then Government, while not wholly in sympathy with the Bill, nevertheless agreed to a Second Reading, accepting the recommendation that a Select Committee of the House of Lords be set up to look into the position with regard to parochial charities for the poor in England and Wales. I am given to understand that this position is unchanged. In the circumstances, my instinct is to say very little. On the other hand, there are in your Lordships' House today those who were 373 not present on 6th May. I therefore crave the indulgence of those noble Lords who have heard this speech before.
I have altered the shading of some of my statements in my last speech due, first, to the publication of the report of the Charity Commissioners of 1982; secondly, to the publication of a consultative document by the National Council of Voluntary Organisations; and, thirdly, to a one-day seminar for trustees organised by the Charities Aid Foundation. Indeed, I was heartened when in answer to a question at that seminar the noble Lord, Lord Goodman, supported the Bill which is before your Lordships' House today.
Parochial charities present a complicated legal and social problem. I am grateful for the help that I have received from the Oxfordshire Rural Community Council, and in particular Sir Charles Kimber; from the Humberside County Council, through the good offices of Mr. Frank Courtney; and from those interested in parochial charities in Wales. Indeed, I know that the noble Lord, Lord Prys-Davies, will speak for those charities in Wales. I am also grateful to the West Yorkshire Charities Information Bureau, the Community Council of Humberside and the South Yorkshire Information Service and the many individuals up and down the country, from Cornwall to Cambridge, who have written to me.
There are in this country 140,000 registered charities. Of course, parish charities for the poor comprise approximately between a quarter and a third. Their endowments bring in millions of pounds; yet at present, with a few notable exceptions, they are largely a wasted asset. This Bill recommends the formation of neighbourhood trusts, whereby a number of trusts in a specified area group together and join their resources to be allocated according to the wishes of the original donor.
It is strange that this was first recommended by the Nathan Report in 1952 and agreed by the then Charity Commission. Again the same recommendation was made in a Select Committee Report on the account ability of the Charity Commission in 1975; and yet again in the Goodman Report of 1976. Yet still no effective action has been taken to deal with the chaotic position with regard to parochial charities in England and Wales.
Far be it for me to outline a social history of this country, but account must be taken of certain events long ago. After Henry VIII dissolved the monasteries, where, in the main, the poor were assisted, the first Queen Elizabeth instigated the Poor Law Act 1601, whereby parishes were made responsible, through overseers, to assist the poor. Alongside this administration, the religious and humane practice grew up for donors who wanted to leave money to the poor to use the parish for the purposes of administration, as was the practice in those days. Except in a few instances, the money was not left to the parish.
With the passing of the centuries came the development of the poor law Acts, social security Acts, national insurance and pension Acts, national health Acts and education Acts; so that in this present age the relief of the poor falls mainly to central and local government. At the same time gradually donors tended to leave money for the poor to national and 374 international organisations. Only a few continued to use the parish to administer their bequests.
The Charities Act 1960, based on the recommendations of the Nathan Report, was intended to render outdated charities effective in the new situation created by welfare provisions of the modern state, while ensuring that the money continued to go to the same general purpose which the donor intended. To this end the Charities Act 1960 provided for reviews of parochial charities to be carried out in every county and for review organisers, where possible, to persuade trustees to amalgamate their charities on a voluntary basis, thus rendering them more effective.
In May 1982, in answer to a Written Question, it was stated in Hansard that reviews of parochial charities had been carried out in part or the whole of every county in England and Wales. These reviews were usually carried out by rural community councils, charity information bureaux and a few local authorities. Research has been carried out on eight of these reviews. What did the research reveal? It revealed a generally chaotic position. First, there were the demographic changes in parishes. In the last two centuries there have been great shifts of population. For instance, there is a new estate with a population of 13,000, which was built only since the last war, and this area has only two charities, bringing in £8 a year. In the adjoining parish there are only 800 people, few of whom are in need, and the charity has an income of £3,000 to £4,000 a year, which it is unable to spend in accordance with the donors' wishes. In Dunwich, in Suffolk, once a borough with a Royal Charter, and now with a population of 155 and an income from parochial charity of £1,600 a year, there is a balance sitting in the bank of £11,000.
The research pointed out the number of outdated purposes. For instance, there is one charity where centuries ago a man suffered grievously from a wart on his nose. He left money to anyone suffering a similar disfigurement. This money has rarely been spent. In these days the National Health Service would take care of such a case. This money could more profitably be used for allied medical problems. In the North there is a parish where bread was left for the poor. The vicar distributes a loaf of bread once a month to his parishioners, be they poor or not. I ask: is this what the donor intended? In another parish, the vicar can claim £2 for preaching a sermon, and the church warden 50 pence for listening, and very little of the money goes to the poor—unless of course the right reverend Prelate thinks that the vicar is poor.
The reviews also showed a lamentable neglect of accounts. Of the eight reviews in which research was carried out one-third of the parochial charities had no accounts, and another quarter had kept no accounts for 10 years. The money of a proportion of the parochial charities had not been properly husbanded. Money had not been properly invested, and some trustees of land-owning charities had not revised the rents in accordance with modern standards. In some charities only £12 per week rent was being obtained when the average rent per week should have been £30. Thus, in some instances farmers who rent charity land are the largest beneficiaries of parish charities for the poor. Again, that is surely not in accordance with the donors' wishes.
375 I have taken a long time to set the scene. In order to meet the welfare conditions of our modern state, and to concur with the wishes of the donors who left the money for the poor, the Bill recommends that the Charity Commissioners should study the reviews of parochial charities. The commissioners should contact local authorities, which in turn may, as they have done in the past, allocate to voluntary organisations such as community councils the task of grouping parochial charities into neighbourhood trusts with trustees, some of whom will be from the original trusts. The neighbourhood trusts will still be administered by voluntary trustees and will continue to give—and to be—a voluntary service, as hitherto. This will be of inestimable value to those needing to apply. The task of offering advice, help and supervision to the neighbourhood trusts by the Charity Commission will then be a practical proposition.
I am fully aware that there are parishes which resent having to share their parochial charity resources with others, even if they cannot use them in accordance with the donors' wishes. The right reverend Prelate the Bishop of Norwich may have something to say on this matter. When, due to changing social conditions, it was necessary for the Church to unite three or four parishes under one vicar, the position was accepted. Why, I wonder, do trustees feel unable to amalgamate into neighbourhood trusts?
Another contention is that the county councils would need extra money to allocate to voluntary organisations to carry out the reorganisation. This exercise has been costed, and we reckon that it would cost only £2,000 a year for two years per local authority.
I am grateful to the Home Office for writing to me to let me know its objections to the Bill. I understand that the objections are as follws:The reluctance of Trustees to co-operate with local reviews in modernising their Trusts: that Trustees should retain the right to decide what happens to the Trusts they administer and that such Trusts should be allowed to retain their identities".I do not accept that argument when it means that the money left by donors is not being used as was intended, has been badly husbanded, or is not in some cases being used at all.
I hope that I have shown how unsatisfactory is the overall position in England and Wales. I am bound to ask: for whom are the trusts run? If they are run for the poor, which was the intention of the donors, why cannot this be made possible? I am the first to admit that there are some sound, well-administered parochial charities, but research has shown that they are in the minority. Thus, the Bill makes mandatory the reorganisation into neighbourhood trusts simply because while under the Charity Act 1960 it has been, and is, possible for trustees voluntarily to organise, into neighbourhood trusts, this has not been done except in very few instances.
In my speech of 6th May, I stated that the Home Office was the mouthpiece of the commission. The annual report of the Charity Commissioners (which is in your Lordships' Library) corrects me and points out that the commission, as a quasi-judicial department, is in effect an extension of the High Court, free from day-to-day political intervention. I accept that 376 statement. However, I am bound to say that the position is peculiar and strange. If the commission is independent of the Home Office, then with what knowledge does the Home Office speak in your Lordships' House and in another place, and who is responsible for initiating improvements, changes and reforms?
I should like to quote from the consultation document of the National Council for Voluntary Organisations, which has just been published. The document states:We have already mentioned the changing landscape of voluntary social action, in response to unprecedented social and economic change. We hold that there are a number of areas where the law is out of touch with modern social conditions".The consultation document was drawn up by a committee which was established by the National Council for Voluntary Organisations to look into charity law in this country.
Furthermore, whose responsibility is it to see that the work of the commission can be carried out? Last year 4,000 new charities were registered. There are already on the register 143,000 charities which should be looked at every year, and 70,000 are exempted or excepted in regard to regulation. Six hundred letters are received by the Charity Commission every day. Is the Charity Commission adequately and appropriately staffed for this work? If neighbourhood trusts were set up, that would reduce the number of trusts the accounts of which should be seen each year by the Charity Commissioners. At present the Charity Commission seems to have more to do than it can possibly manage.
I end by quoting again from the National Council for Voluntary Organisations working party. The report states:The Commission's approach to the modernisation of charities whose purpose has become irrelevant to contemporary social needs has been the object of considerable criticism. Views differ on what is needed: some favour the establishment of neighbourhood trusts; others, the winding up of small out-moded charities; still others a relaxation of the cy-pres doctrine. We believe that a public enquiry is needed into this important area and would welcome the recently proposed House of Lords Select Committee".My Lords, I beg to move that this Bill be now read a second time.
§ Moved, That the Bill be now read a second time.—(Baroness Faithfull.)
§ 3.51 p.m.
§ Lord Mishcon
My Lords, not for the first time do I look with envy upon the noble Baroness, Lady Faithful She delivered a speech in regard to this Bill on 6th May this year. It was a very good speech, if I may be allowed to say so. She appears before this House again saying, as she was entitled to forecast, that those who heard that speech would be more than prepared to hear it again. Those of your Lordships, including myself, who heard that speech largely made again heard it with pleasure. I do not have any illusions that your Lordships are prepared to extend the same tolerance to me. I followed the noble Baroness on that occasion, and I said certain things in the course of what I believe was a 15-minute speech which I intend, if I may, to summarise but not to reproduce. Then, if your Lordships will allow this latitude, I should like to say a few words on behalf of those on the Benches upon 377 which I have the honour to sit as to the general law of charity and the possible need for change.
On the previous occasion I said that I hoped your Lordships would very definitely give the Bill a Second Reading, that it would be referred to the Select Committee and that there were problems within the problems to which the noble Baroness had rightly drawn our attention. There was the question of whether a perfectly well administered small trust, run by loyal, careful trustees, should be mandated to give up the trust that had been reposed in them by some settlor in the past and made to amalgamate the trust in a neighbourhood trust. We do not often exercise mandatory powers where we find that they are not completely necessary.
Secondly, I ventured to say that this was possibly an administrative task, if we are dealing with mandatory matters, both in regard to the Charity Commission and local authorities, which might be rather heavier than had been suggested in the noble Baroness's Second Reading speech. I drew for my reasoning in that connection from the very committee whose findings the noble Baroness found were sympathetic to the Bill that she has presented to your Lordships. I referred to that committee's report in this connection, and read to your Lordships from page 146 of it. This stated:we have considered whether it would be practicable to place an obligation on county and county borough councils to review the parochial charities in their areas and to submit proposals to the Commissioners who would then, if they thought proper, make schemes. The formidable number of these charities makes us hesitate to suggest this. It is, we think, too difficult at the present moment to estimate what would be the extent of the task, what other and perhaps more urgent tasks may be imposed on local authorities or whether it would be found practicable to give the Commissioners the staff necessary to deal with the work at the centre".One wonders whether 1952 was a more prosperous time in regard to the funds of local authorities, their ability to spend and the staff they had available, and also whether it was a better year than 1983 for the Charity Commissioners. One has reservations; one has doubts. The real point is that it is so sensible for a Select Committee to examine these matters, to decide upon them and to make recommendations after hearing whatever evidence can be afforded to them.
If this is to be called the Faithfull Bill, noble Lords will be aware that there is another Bill that deserves the title of the Renton Bill. That was, I know, the inspiration of a very much respected Member of Parliament in another place. I know that the noble Lord, Lord Renton, took the burden of that Bill on his shoulders. In the last Session it was called the Small Charities Bill. I have no doubt that it will have the same name now.
§ Lord Renton
My Lords, it was in the last Parliament called the Charities Bill. I have taken it upon myself to alter the Short Title and to call it the Small Charities Bill. I like to think of it essentially as Sir Angus Maude's Bill.
§ Lord Mishcon
My Lords, the noble Lord has spoken with his usual modesty in two directions. First, he has ascribed the Bill to Sir Angus Maude, as I hope I also did. Secondly, with his usual modesty he has made the Bill a Small Charities Bill and not just a Charities Bill. I recognise that at once. I know that your Lordships will listen to the Second Reading 378 debate on that Bill with great interest. It deals with the ending of small trusts, and not with the consolidation and continuance of them. That is again an interesting proposition because it makes the ending of them permissive. That, too, is something that the Select Committee will no doubt be examining in due course.
I turn speedily, if I may, to a feeling that your Lordships may share. It is a great pity that we are dealing with an issue by small bites when it is very necessary that it should be considered as a whole. I refer to the present law on charity. I noticed with pleasure that the noble Baroness referred to a very up-to-date document called, "Charity Law—a case for change?", which was the result of very hard work by the Charity Law Working Group. It has just been issued, and it contains many interesting findings and recommendations.
One notices the call in that document for evidence to be given, observations to be made and representations to be put by September of this year. One hopes that those submissions will be made to the working group and so will enable a more weighty series of findings and recommendations to be considered. But the Government, over a period of some four years, have seemed to be saying, in answer to all the criticisms, that charity law is in a fairly satisfactory state. One was glad, therefore, that in the closing moments of the last Government the learned Attorney-General, in answer to a question in another place on 18th April 1983, at column 17, said:Charity law is not in chaos. Charity law is of long standing. Many judicial decisions upon which the charities commissioners act are rather old. The law has not, perhaps, kept up with the change in the nature of trusts seeking charitable status. Originally the law was designed to deal with rogues and crooks and the misuse of charitable funds. The law is probably necessary. Perhaps we shall see a way forward after the final decision is taken on the Moonies. It may then be necessary to reconsider the whole of charity law.It seems that when we are considering aspects of the law relating to small charities, the bad administration of some charities and how we should deal with it and how we should look after the poor in regard to community trusts and neighbourhood trusts that might be set up if the Bill is passed, we should also have a general look, especially at a time when there is no doubt that voluntary effort and voluntary funds coming in to so many worthy objects are a need of the times. There is no doubt about that. One finds that the present state of our charity law and the findings of the Charity Commissioners is that if there is a fund set up to deal with trying to find employment for the unemployed, it is not charitable.
One finds also—and this is as a result of a decision which took place before we were a multi-racial society—that the promotion of racial harmony is not a charitable object. I see doubt creeping upon the face of at least one noble Lord, but I am quoting from an actual decision which has not, in fact, been altered. One finds that the pursuit of the objects of a charity in order to try and change the law which it finds harmful to its charitable object may be questioned by the Charity Commissioners as a proper use of its funds. And here I am not referring in any way to the pursuit of purely political objects which all of us would agree do not and should not come within the charitable arena, but it may be that on some occasions it is very difficult to draw a correct line of demarcation.
379 Those are matters that ought to be considered, whether it be by a working party or by another Royal Commission. Perhaps, with the advantage of a continuation of progressive Ministers at the Home Office, one can hope that inspiration and initiative can come from that direction. Whatever it be, there is, first, no question in your Lordships' minds that you would want to give the Bill a Second Reading; secondly, that it ought to go to a Select Committee before your Lordships consider it further so that you may have the recommendations of the Select Committee before you; but, thirdly, ought we not to grapple with this issue and see whether we cannot find it within ourselves to reform the whole law of charity and make it a matter of the 20th century and not a matter of Queen Elizabeth I?
§ 4.3 p.m.
§ Lord Foot
My Lords, on the last occasion when we debated this matter on 6th May I spoke briefly from these Benches giving all the support I could to the noble Baroness and her Bill. I certainly do not intend on this occasion to try and repeat what little I said on that other occasion. However, I should like to thank her—as I did originally—not only for her initiative in producing this Bill, but now for her perseverance in promoting it again in this new Parliament; and again, as I did previously, I wish the Bill well.
I am quite sure that the whole question of charities is a matter so esoteric and so complicated that one steps on to the ground with some caution and care. It is pre-eminently the type of subject which can be best considered by a Select Committee of this House. It is reassuring to know that although the Government do not approve of the Bill in all its aspects, they are, as I understand it, going to adhere to what they said previously: that is, they are going to support the Bill being sent to a Select Committee. That is the place where these matters can be properly investigated.
I was looking back at the record of the previous debate this morning and I noticed that there were 11 speakers other than the Minister. It is noteworthy that except for a few words of caution from some of the speakers, the 10 speakers who followed the noble Baroness were all in support of the Bill. We had to wait until the Minister rose to his feet to hear the arguments against it. As I understood them, the arguments against the Bill fell into two categories. There was the argument that this measure, by taking mandatory powers to compel our small trusts to join together in neighbourhood trusts, was not in keeping with the spirit and principles of the law of charities. The practical argument was that to impose the burden upon the Charity Commissioners in the first place and upon local authorities in the next place, to produce schemes of neighbourhood trusts of this kind, would be imposing too heavy a burden upon them. Re-reading the debate, as I did this morning, I am hound to say that I am reinforced in my support of the Bill because I think that there is very little of merit in either of those arguments. However, they are supremely arguments that could be properly examined by a Select Committee.
I concluded by making two observations upon two of the matters to which the noble Lord, Lord Mishcon, 380 referred. He spoke of his hesitation and doubts about the propriety of using mandatory powers to compel a small, useful, well-administered trust to combine with other trusts, with other charities. I appreciate that, and superficially it is a matter of objection. But the history of this matter over the past 30 years—certainly since the passing of the 1960 Act—has only illustrated beyond peradventure that we are not going to get anywhere by purely voluntary efforts. In the 1960 Act, machinery was created by the authors of the Act with the intention that trustees of small charities like these would be able to produce schemes for amalgamation and getting together. The authors of the Act foresaw that that might be the right road to proceed along. In fact the machinery which was created at that time has proved not only ineffective, but wholly ineffective. On the last occasion we debated this matter I asked whether, if this is not put upon some mandatory basis, we will be in any better condition in 30 years' time than we are today.
The noble Lord, Lord Mishcon, made a general comment upon the law of charities. I of course agree with him that a review of the whole of charity law is long overdue. But I think that the noble Baroness is justified in presenting this little measure in advance of any general reform of charities, and I take that view for two reasons. The first reason is that it is, as I see it, a self-contained measure. It will not inhibit any future action that may be taken by anybody to reform the general law of charities. If she had waited for a general review of the law, then of course she might have waited forever. Therefore, again—as before—I wish the noble Baroness's Bill a fair wind.
§ 4.10 p.m.
The Lord Bishop of Norwich
My Lords, I believe that we all stand in debt to the noble Baroness, Lady Faithfull, for her persistence in bringing this very important matter before us. I particularly take up the phrase just used by the noble Lord, Lord Foot, who said that this is a small matter even though it is detailed and full of various problems. But it is just the sort of matter which I believe a Select Committee of your Lordships' House can examine with a fine tooth-comb, which is what this demands.
I am delighted to take part in this debate and to underline and summarise one or two of the matters which the right reverend Prelate the Bishop of London raised from these Benches on 6th May. But I do so with a sense of history, seeing one or two noble Lords from Norfolk and Suffolk present, such as the noble Lord, Lord Melchett. I was delighted to hear that the Dunwich charity is still going so well. I am only the 69th Bishop of Norwich, but I am the 104th Bishop of East Anglia and I trace my pedigree right back to St. Felix of Dunwich. I know that Dunwich is all under the sea now and that you cannot hear the bells out to sea, but he is our saintly predecessor. Of course, your Lordships know that the name "Felix" means happy, and we have sought to keep a happy diocese running all those years. However, I have a slight feeling that the noble Lord, Lord Melchett, who stands firmly for the rights of the individual, may have some sort of a noble spanner, which we shall hear about later, to throw in the works. We can but tell. However, I am delighted to know that Dunwich was mentioned.
381 I was a little distressed when the noble Baroness said that Henry VIII dissolved all the monasteries which cared for the poor, because I am actually still the Abbot of St. Benet's. I am the only "undissolved" abbot since the days of the Reformation, and on the first Sunday in August every year, at three o' clock in the afternoon, I go down-river to the ruins of St Benet's Abbey, which was founded by King Canute, and there we hold a great service to which, once again, all your Lordships are warmly welcome if you should happen to be sailing on our Norfolk Broads on the first Sunday in August. That is my commercial; I now get on with the work.
I, too, read carefully the speeches made by the noble Lords, Lord Mishcon and Lord Foot, on 6th May, and I am delighted to find that the two key words of those two weighty speeches still appear to be "their mind". At column 285 of the Official Report on 6th May the noble Lord, Lord Mishcon, said:There is a waste. Let us see what the Select Committee of your Lordships' House has to say.The noble Lord, Lord Foot, said:the present state of these charities, with their multiplicity of sizes … is wholly unsatifactory".I take comfort from that because I appreciate that the Government, who have a right and I think a continuing responsiblity to care for the freedom of the individual, may look with some nervousness here.
Your Lordships will remember that the noble Lord the Minister entered that careful caveat that we should take particular care to safeguard these charitable trusts and their original purposes as far as practicable. When the purpose of a charity is altered according to the cy-prés doctrine, the new object must of course remain within the spirit of the original donation. I am quite sure that the noble Baroness, Lady Faithfull, has that in her mind in pressing this Bill upon us, because there is no sense in which we desire to overthrow the mind of the donors of years gone by. But I think that the answer to the particular point made by the noble Lord, Lord Elton, last time is that, in fact, the original plans have meant these charities really are not now able to be used and, if anything, the freedom to use them has been inhibited by time and changing social conditions.
Therefore, there is a sense in which this Bill is a liberalising Bill rather than a restraining Bill. I believe that the mandatory aspect needs to be seen within that context. I think that we must take note of the historical fact that the Charities Act 1960 provided a voluntary form of such neighbourhood trusts; but in the 23 years since the passing of the Charities Act, as far as I know (although I stand to be corrected on this) no neighbourhood trusts have in fact been set up on a voluntary basis.
This may mean, of course, that the pressure against a mandatory plan will surface, but I take some comfort from the fact that the principles of seeking to find a mandatory way forward are suitable when all people who are concerned in these areas are willing to agree to the importance of the greater good coming from the lesser deprivation of liberty. I read carefully the speech made by my noble friend and brother from this Bench, the Bishop of London. At column 287 of our proceedings on 6th May he said:I believe that the Bill has the general support of those who sit on these Benches. I might add that the representatives of the main 382 denominations who sit on the Churches Main Committee, of which I am chairman,…expressed support in principle for the general objective.As your Lordships know, the Churches Main Committee is an important forum where main general issues of religion are discussed with all the major denominations. The right reverend Prelate the Bishop of London himself welcomed the setting up of a Select Committee.
I should like to summarise two of his points, which I think are worth remembering, and two of the excellent reasons why he felt that we should go forward in the direction of this Bill with the safeguard of a Select Committee. The first is that the English tradition of adaptation is an important tradition, rather than of abolition. I believe that we are moving towards an adaptation here. The present situation in regard to parochial charities does not really encourage voluntary care at local level. Therefore, it is not surprising that people are now much more disposed to help wide national charities rather than small local ones; and that is the difficulty of these small charities falling into desuetude.
However, the right reverend Prelate made the second point—and I summarise it very shortly—that the Bill is based on the principle of partnership and sharing. He used the analogy of the formation of the Church Commissioners to explain what he meant. Your Lordships will remember that before 1948 there was the Queen Anne's Bounty and there were the Ecclesiastical Commissioners. From 1948 the two bodies were amalgamated into our present Church Commissioners.
The Church Commissioners have always sought to try to deal with parochial-type matters, not in isolation—which, of course, is the present way in which, alone, we can deal with these charitable trusts—but in partnership and in consultation, so that the wider good can be shared. In fact, we contained the Endowment and Glebe Measure 1975 (which I hasten to mention in case your Lordships, with your knowledge of that measure, think that my argument is not sound) within the boundary of the diocese. I think we were right to do so. Within a Church situation a diocese is a major family area, and they are large areas. The Endowment and Glebe Measure is the sharing of glebe and endowment matters within the diocese. I only use that example to show that in the Select Committee which I hope your Lordships will set up we may have to find that there are certain restrictions which will come naturally to the surface in our detailed discussion, but the principle of partnership and sharing is, I believe, a true one here. Therefore, this would not be any new departure in practice if we sought to set up neighbourhood trusts.
The noble Baroness asked if I would refer to the Sheffield Report, in which we are trying to share the clergy of the Church of England more equitably across the whole area of the two provinces of Canterbury and York. Those more favoured dioceses with more clergy should share their clergy. They seem to go down into the bottomless pit of the back streets of Manchester. What happens to the clergy when they get to the back streets of Manchester is still another of those mysterious secrets of the Church of England to which we do not draw attention, but we are trying to share the clergy round better.
383 The noble Baroness asked whether the various parishes were happy when they had to amalgamate under a bishop. The noble Lord, Lord Melchett, knows very well that they are not always, except for the loving, persistent, tactful and caring approach of the Lord Bishop for those particular parishes day after day after day until, like it or not, they do come to agree. In fact, they are always happy as long as you put the clergyman in charge of more parishes in your parish. They do not mind then, but it is not easy.
It is sense to rationalise our resources of manpower, of money, and in this case. I believe, of charities. I shall not, therefore, weary your Lordships with further argument on that except to say that in general terms we from these Benches feel that this is a proper way of approaching this matter; that with 140,000 small charities there is waste, there is inefficiency, and there is therefore a strangulation of charity which is there that could be used if, through neighbourhood trusts, we brought this up to date and found a new way forward. I would therefore feel that this is a good Bill, and I hope that we may feel that on these Benches we are solidly in support of it.
§ 4.22 p.m.
§ Lord Renton
My Lords, your Lordships will have taken careful note of what the right reverend Prelate has said with his immense experience, especially in his own diocese. I shall have reason to express some misgivings about the Bill. Before I do so there is one thing I should say with which perhaps the right reverend Prelate would agree, and that is that an open confession is good for the soul, and perhaps for the mind. I should also say that when defending criminals I always used to say to them that it is better to confess before they are found out. Therefore, let me confess before we go any further that I was one of the authors of the 1960 Act.
Indeed, I had to play some part in its preparation, and I had the responsibility of piloting it on my own but with the assistance of the then Solicitor-General, the noble and learned Lord, Lord Simon of Glaisdale, through its Committee and Report stages in another place. However, that does not mean that my mind is closed to its improvement. Indeed, I think that after these many years it is time that we had the kind of general look at the 1960 Act which the noble Lord, Lord Mishcon, has suggested.
We should be grateful to my noble friend Lady Faithfull for, if I may say so, the able and persuasive way in which she has tried to convince us that her Bill should have a Second Reading. Although I have misgivings about her Bill, and she has misgivings about the Small Charities Bill, we have "a knock-for-knock agreement". We have agreed that we will not oppose the Second Reading of either Bill, and that we will support the suggestion that each of the Bills should be considered by the same Select Committee of your Lordships' House. I very much hope that when both of these Bills go before a Select Committee they may be prepared to have a broad look, as the noble Lord, Lord Mishcon, has suggested, at those parts of the Charities Act which perhaps could be improved.
384 But I give this warning: there was a long period of gestation between the recommendations of the Nathan Committee in, I think, 1952 and the passing of the Charities Act in 1960. A large part of that time was taken up not merely by consideration in the Home Office and behind the scenes of the Government in the Ministry of Education, as it was then called, which had a responsibility, and other departments too, but the Home Office were meticulous—and the noble Lord, Lord Allen of Abbeydale, can take some credit for this perhaps—in consultation with the charities and the representatives of the many small charities. May I say in passing that the noble Lord, Lord Allen of Abbeydale, is chairman of one of our great charities of which I happen to he president, and so we would have an interest in any general look at the law of charity as well as the interest that arises on this Bill.
I should give notice to your Lordships, those who have not noticed it on the Order Paper, that the Small Charities Bill which, as has been mentioned earlier in the debate, was piloted through all its stages in another place by Sir Angus Maude, will come up for Second Reading on Tuesday week, 12th July. I have not yet placed a Motion on the Order Paper that it should be referred to a Select Committee, but I have every intention of doing so.
Just for the sake of the record may I, with due humility of course, express some misgivings about the Bill before us. The first thing about it is that it is confined to the relief of poverty, directly or indirectly confined to it, and that arises under the definitions in Clause 1 of the Bill. The right reverend Prelate's remarks to your Lordships have to be regarded in the light of the fact that this Bill does not apply at all to ecclesiastical charities, and that may be of some disappointment to him and a matter which may require some detailed attention by a Select Committee. It would seem to be absurd that so many neighbourhood charities which touch upon ecclesiastical matters should not be included when other charities within a parish, within a neighbourhood, are to be specially scrutinised.
Of course, there is a partial bridging operation attempted by my noble friend Lady Faithfull when she says that if it is for the education of the poor, then it is all right; it can be brought within the purview of the review. But so many educational charities, as my noble friend Lord Elton knows well from his long experience in education, are not merely for the education of the poor. Indeed, the definition of "poor" has become one which is now rather difficult in our reasonably well provided modern society. Therefore, I start with that misgiving, that the application of the Bill needs careful consideration.
I was surprised to hear my noble friend Lady Faithfull saying that the cost would be only £2,000 a year for two years for each county council. I should be grateful if my noble friend Lord Elton could say whether that is right or wrong, but I must confess that I have doubts about it. Two thousand pounds a year is about half the cost of a typist. When one realises how paper accumulates and what a lot of coming and going and travelling expenses, negotiation and the employment of specialist officials will be required, that figure seems to me, with the deepest respect to my noble friend, a patent underestimate. There will be a 385 manpower burden placed on local authorities. Some burden will be placed on the charities themselves, who will have to incur expenses, perhaps employing expert advice; bearing in mind that there will be compulsion. There will sometimes be doubts about whether the scheme that is proposed for a neighbourhood trust is consistent with the terms of the testator's or settlor's original trust deed. Let us not delude ourselves: there will be a burden.
The burden upon the Charity Commission has been mentioned. I must confess that I agree with the noble Lord, Lord Mishcon—and I believe the noble Lord, Lord Foot, also referred to it—that the Charity Commission would appear to be under-staffed. Besides the Royal Society for the Mentally Handicapped, which I was mentioning obliquely earlier, I have had experience in dealing with the commission over other charities. One receives wonderful help eventually. However, very often there are inevitable delays. One noble Lord mentioned to me only today—I am sure he will not mind my repeating this and might well be grateful, though I do not think it would be right to mention his name—that with the charitable trust with which he is concerned he experienced a delay of three weeks for the Charity Commission, which for some reason had to be consulted, to agree to the alteration of some investments, and the market was missed accordingly. The stockbrokers had agreed to a change, had agreed that then was the right moment to do it, but the market was missed.
Quite apart from any reform that may be needed in the law, my right honourable friend the new Home Secretary—who is a lawyer of immense ability; although like me is mainly a common lawyer, my right honourable friend and I have to apply our minds in our practices and in ministerial work to Chancery matters—would do well to take a close look at the Charity Commission. It is possible that some unnecessary burdens are already being placed upon the commission and in some ways it might be able, quite freely, to dispense with the responsibility it is given and allow the charity trustees to get on with the job.
§ Lord Mishcon
My Lords, I hope that the noble Lord will forgive me, but it may be of help on the point he is making to get this on to the record. Is he aware that it takes months, not weeks, for an application for registration of a charity to be sanctioned by the Charity Commissioners, or even indeed for them to look at it?
§ Lord Renton
My Lords, I am very sorry to hear about that. My experience has been that it has taken weeks rather than months, but I found that weeks were too long.
One could go on talking about the detail of this matter for some time. I invite the attention, in anticipation of things to come on 12th July, of my noble friend Lady Faithfull and the noble Lord, Lord Mishcon, to Clause 6 of the Bill because that envisages, as does the Charities Act 1960, the possibility of particular charities being wound up. Indeed, I do not see how one can make progress in this matter unless one is prepared for charities to be wound up. As the Small Charities Bill inevitably involves that 386 in many cases, I hope we shall agree with each other that this is a necessary condition that we have to accept and that it is a waste of time saying that it is a terrible thing, as my noble friend Lady Faithfull said on 11th May, that the funds of a charity should be "dissipated".
If the funds are very small and cannot fulfil their purpose something must happen to them. It should be justifiable to wind the charity up in order to fulfil its purposes and to spend the money, because one might not be able to spend it if one relied merely upon income. Thus, let us understand each other on both of these Bills, that sometimes charities will have to be wound up.
In spite of having expressed these misgivings, which I trust are constructive because we have to consider these matters, I hope that your Lordships will not oppose a Second Reading of my noble friend's Bill.
§ 4.36 p.m.
§ Lord Prys-Davies
My Lords, we are again grateful to the noble Baroness, Lady Faithfull, for her continuing contributions in this field. In response to her initiative it is good to return to this difficult subject, albeit a small subject. In the debate on 6th May I ventured to express the view that the status quo was no longer an option and that the Bill presented by the noble Baroness at least offered a new, practical and relevant approach to the subject.
Re-reading the record of the debate it is clear that there were differences, as one would expect; but I believe that in the main they were differences of emphasis. I have taken careful note of the reservations of the noble Lord, Lord Renton. Then—and I think the same is true of today—we were all seeking to serve the same aims and the same objects. The noble Baroness and my noble friend Lord Mishcon have identified at least two of the most critical problems: trusts whose assets are so small that they are almost useless, and lack of efficient administration by trustees.
There is so much widespread neglect, ineffectiveness and had administration. However, I recognise that there are two difficulties within the problem. There is the parish loyalty, and there is the unique legal status of charities. I have always accepted that there are intense loyalties within a parish and to parish institutions which draw on voluntary principles and which have drawn on the voluntary principle for centuries. Indeed my roots are in a small village in the county of Gwynedd—although parishes no longer exist in the Principality, where, by today, they have been merged to form communities. But the tradition of the parish is very much alive. In my own home, my father had at all times fostered and protected the identity and independence of his parish and wrote a book on its history. Therefore, being my father's son, I fully appreciate the significance and strength of parish loyalties. They are not to be underestimated.
I also acknowledge that charities have a unique legal status, and that for centuries the Crown, through the courts, has undertaken to enforce for ever, so far as practicable, the intentions of the donor's property given for charitable purposes. The courts are not there to kill charities; but charities, it appears, acquired their special status because it was in the public interest that 387 provision should be made for the needs of those who were unable to help themselves. But it is also in the public interest in the 20th century that we should get the machinery of the parochial charities right. We acknowledge that the main pieces of the jigsaw were set out centuries ago. But there are other pieces which have been determined and moulded by our own age and day. Inflation and the change in the value of charitable endowments have had inescapable repercussions and, where parishes exist, their boundaries, determined centuries ago, may no longer make sense. However, what does make sense is that the role of the parochial trusts for the poor should be reviewed, and the machinery, where necessary, reformed so that we can try to ensure that resources are concentrated wherever possible in order to produce maximum benefit yet in keeping with the spirit of the donor's intentions.
In the course of the debate on 6th May, reference was made to the power residing in Section 18 of the Charities Act 1960, and in reply to a question the House was told by the noble Lord the Minister that this power had not as yet been exercised. We should not underestimate the significance of this information and it is evident (is it not?) that the commissioners have been reluctant to take a lead. In the course of the May debate I drew attention to the particular needs of Wales which are not met by the Bill; and those needs remain. I mentioned that a steering committee had been established to review the role of the ancient charities in the Principality, and that the steering committee sees the need to restore some of the educational charitable trusts to more effective use. They will be disappointed that the educational trusts are not included in this Bill. They also consider that the time has come to establish in Wales an office of the Charity Commissioners. But I do not propose this afternoon to go over that ground.
I am in support of the principle of the Bill. I consider that the noble Baroness is right in believing that the time is ripe to combine the parochial trusts to form neighbourhood trusts, that a fresh initiative along these lines is called for and that that initiative is required because there is very little evidence that anything has been done voluntarily, notwithstanding the Charities Act 1960, to improve, matters. I see the Bill as the natural place to continue the work of the philanthropists of history and with this kind of initiative, the initiative which this Bill offers, we could be carving out a new base for the parochial charities to build for the future. I am grateful that there are indications that the Government agree that this Bill be submitted to a Select Committee of your Lordships' House.
§ 4.45 p.m.
§ Baroness Lane-Fox
My Lords, like others of your Lordships, I am grateful to my noble friend Lady Faithfull for introducing this compact and attractive Bill. There seem to me to be, among others, two reasons why no time should be lost in tackling the present, perplexingly, obsolete situation. One that there can never have been a time when more heartrending appeals for funds professionally launched are pressed on the public. The majority of 388 the causes are excellent but the sums of money required are an increasing burden on the more generous, not necessarily the most wealthy, sections of the public. When I was launched into the world of appeal, a subtle and conscientious uncle insisted that I take meticulous care in the expenditure of money raised in this way since often it represented a sacrifice.
He prescribed particularly that money given in this way should not be spent on objects for which other funds were available. Parochial trusts, made in such generous spirit years ago and no longer relevant to present lifestyle, can I think be likened to the age of candlelight with that of electricity. The end product of the charitable cause and the end product of light are still the same but the methods of use have changed. There are so many rural and community calls for help. As adviser to a disbursing charity, I am well aware of the wide variety of these causes of poverty, from self-help groups, voluntary care organisations, children's groups, et cetera, that simply cannot afford that there be left in their midst pockets of money sitting idly by. Clearly trusts must be well protected from greedy eyes and hands; but, given that protection. it must be likely that the good people who set up the old trusts in many cases would be the very ones today wanting to support, for instance, schemes designed to alleviate poverty and need. One cannot be sure, but at least it seems logical.
My second reason for gladness that we may get movement on this front is that this may bring into sharper focus the work of the Charity Commissioners. Information about the charities concerned seems to be buried very deep. Delays are experienced—and I agree with other noble Lords who have mentioned this aspect—in finding out information. Getting answers to applications for registration takes a very long time and requests for the right just to set up funds to help as well as to obtain the up-to-date information from the records held by the charities can take an age. Small, new charities, I find, when they are successfully registered. use this status to lend weight and authority to their appeal—which seems, in a way, out of step with the influence that the Charity Commissioners bring to bear on their operations. From an outsider's point of view, now is the time for the files and the records to he shaken free of dust and cobwebs and to be brought, surely, into the era of information technology. With more up-to-date methods, it will surely be possible to get from the commissioners—fairly quickly, can we hope?—more information to get useful, good causes and to feel more certain that they could spot and quash the less salubrious organisations be they cults, crafts. or charlatans. It would appear, however excellent their intention, that the Charity Commission can have the effect of thwarting good initiatives and giving encouragement to the more dubious ventures. Even though discussion of the 1968 Act may not fall within the remit of the proposed Select Committee its work must highlight facts to which I have referred. Therefore, I beg to support the Bill.
§ 4.51 p.m.
§ Lord Allen of Abbeydale
My Lords, I should like to express my sympathy for the purposes at which this Bill is aimed and to support the proposal that it should be referred to a Select Committee, although, as on a 389 previous occasion, I have taken some slight alarm at the width of the remit which some who have spoken seem to contemplate for the committee.
As we have been reminded, the last major legislation on charities was in 1960. The Act which was passed in that year achieved a great deal and I should not like to let this opportunity pass without saying just a word of appreciation for the work of Christopher Hill, who died quite recently and who, as I am sure the noble Lord, Lord Renton, will agree, gave great help to Ministers in preparing and piloting the Bill. He was then the first head of the reconstituted Charity Commission. But, as the noble Baroness made clear when introducing the Bill, there are some aspects relevant to today's discussions of the 1960 Act which have fallen some way short of the high hopes that were placed in it. Local reviews have not resulted in voluntary mergers and trustees have not exactly been falling over each other to take advantage of the revised cy-prés provisions in the Act. Also, despite the decision of Parliament that a central register could be set up, there remain considerable gaps in our knowledge of the facts.
All the same, we do know there are a lot of parochial charities with such tiny incomes that they cannot do very much on their own, although they might be able to do something worth while if they clubbed together. We also know there are a number of parochial charities which have substantial funds, thanks to what has happened to land values, and they might have even greater funds if only they charged economic rents to the farmers. We know that for some of these, at any rate, the income is not being usefully applied and indeed cannot be usefully applied without some change in the powers of the trustees. It is this sort of problem that the neighbourhood trusts envisaged by the Bill—and as the noble Baroness, Lady Faithful, explained, this is not a novel idea—are designed to cope with.
Last time we debated this subject, objection was taken that the proposals would involve departing from the original purpose of the individual charity and would mean overriding the wishes of the donors. This argument, it seems to me, is central to the Bill and I should like to try my own hand at explaining the justification for the Bill, as I see it. It is, I suggest, that the donors intended their charity to be used for the relief of the poor, and it is only by enlarging the area of operation that it is now possible to ensure that the money is so used, in a sensible way and in ways not covered by the Welfare State. For the reasons which have been explained, it was natural at the time for the parish to be taken as the unit; but now, the argument goes, it is more in keeping with the intention of the donors to use the money for the relief of the poor over a wider area than to continue, on the one hand, to dribble small amounts away in useless doles or, on the other hand, to divert the income of the more prosperous charities to other purposes within the parish.
It seems to me that there is force in the contention that to use the money for amenities within the parish would indeed be to override the wishes of the donors, who could have left the money for such purposes if they had so wished, and that to ensure that the money 390 can be sensibly used for the poor is better calculated to safeguard the original purposes of the donors so far as is practicable and to be perfectly consistent with the cy-pres doctrine, as extended in the 1960 Act.
Objection was also taken to the element of compulsion in the Bill, but I think there is really very little need for me to add much to what the noble Lord, Lord Foot, has already said on this point. I am well aware of the almost complete absence of compulsory powers in the 1960 Act but, without some such provision now, what are the prospects of achieving anything worth while? We have had 23 years of voluntary effort and have precious little to show for it. Also, the Charity Commission, which as we have heard, is not over-generously supplied with resources, cannot be expected to find staff on the scale that would he needed if it were to embark on the task of persuading large numbers of trustees up and down the country to take some initiative.
It was also suggested last time that the Bill would discourage potential donors to charity. I am currently concerned, as the noble Lord, Lord Renton, knows very well, with a charitable appeal and I am only too conscious of the many reasons which are advanced for showing a lack of enthusiasm in responding to an appeal for contributions. But I cannot see why this Bill should be an additional reason for discouragement if it is known that these are sensible moves, designed to ensure that the intentions of the original donors are carried out so far as possible. I must say that at first sight it seems to me a rather more attractive prospect than the prospect in the Small Charities Bill that after 40 years the trustees would be able to wind up the charity altogether. No doubt these are matters we can discuss further on a later occasion.
Speaking of the Bill of the noble Lord, Lord Renton, if I may so describe it, leads me to say that no one supposes that neighbourhood trusts would mop up every single tiny charity. There would undoubtedly remain some small charities which ought to be wound up, as Clause 6 of the Bill contemplates. Whether the figure of an income off £10 per year in that clause is the right figure is something that we could discuss at a later stage; and there are also one or two other points where I have some doubts about the Bill, which again may be more suitable for discussion later. They are indeed points subsidiary to the main issues raised by the Bill, and I go along with those who think that the noble Baroness has made out her case and that her proposals well merit further scrutiny.
There is just one other point that I should like to raise. On 6th May, at col. 306 of the Official Report, the noble Lord, Lord Elton, referred to a local charity review in Lancashire. The gestation of this review has been, prolonged and, now it has started, I gather that it is likely to go on for some years. I am not quite sure, I confess, what its relevance is to the issues that we are debating today and which ought to be settled within a matter of months rather than years, and perhaps the noble Lord, Lord Elton, could enlighten us on this aspect when he comes to wind up. That is all I want to say in support of the Bill. I hope that the House will give it a Second Reading and will then remit it to a Select Committee.
§ 5.1 p.m.
§ Lord Beloff
My Lords, I should like to take the opportunity of a charities Bill to make some uncharitable remarks. Shortly after the general election was called, each of us present received a personal Writ of Summons to attend this House. We did not have to wait for the suffrages of the electorate. Noble Lords, opposite remain with their numbers undiminished and, some believe, shortly even to be increased. This should lead one to the reflection that this is a continuing body. We are who we were on 6th May. One might have thought, therefore, that the procedures of the House would allow business to be continued.
But let us suppose—and there is good historical precedent for this—that Parliaments, even the Upper House in Parliament, should each be regarded as starting afresh. Then one would have thought that it would still be possible to look back and say, "We had got to this or that point in our work". Obviously, I am talking not of matters of great party controversy, but of matters such as the one that occupies us this afternoon, and one would have expected that there would be a purely formal Second Reading of the Bill of my noble friend Lady Faithfull and a formal moving of the appointment of a Select Committee. We could then have gone ahead as we would have done if Parliament had not been dissolved.
Instead of that, we have had to have a second debate rehearsing the arguments which we heard on the initial occasion. I am not complaining at the joy of hearing the noble Lords, Lord Mishcon or Lord Allen of Abbeydale, which is exceeded only by the joy of hearing my noble friend Lady Faithful! herself. But I think there is a serious point in this, because we would not in fact be having this debate, nor would we be now assured that a Select Committee would be appointed, had not my noble friend Lady Faithfull in the interval been able to carry on rather difficult negotiations with the Home Office to assure herself, and to assure the House, that there was no change in their intentions.
I say that because the original replies which she received from the Home Office—and the noble Lord, Lord Allen of Abbeydale, has mentioned in particular the reference to the Lancashire inquiry—suggested that all the objections which had been raised in the past, which had been, in the view. I think, of most of us here, satisfactorily dealt with in the course of our debate on 6th May, were going to be rehearsed all over again. One wonders, indeed, whether the reading of the House of Lords Hansard should be made compulsory upon officials who have to advise Ministers, particularly Ministers newly taking office, before they launch into the business of this House.
That is a serious constitutional point and a serious practical point, because, after all, we are only one House of a two-House legislature. We may have—I hope now, indeed, we are assured that we shall have—our Select Committee upon this Bill. It will emerge in some form, no doubt, and be subject to the remaining stages of legislation. But there is clearly no point in our going through what will be an arduous task for Members of the Committee, and a certain amount of extra time when the Bill, if amended, comes back before us, unless we have some indication that in the other place facilities will be provided to turn this Bill 392 into an Act, and indeed in a relatively short space of time, because nothing more important has been said this afternoon than what the noble Lord, Lord Allen of Abbeydale, said: that is, that this is a matter which should be cleared up not in a matter of years but, in fact, in a matter of months. The advantages of the Bill are so patent, the abuses which it seeks to correct are so obvious, that there is no serious case for delay and, I believe, no serious need for delay.
If I may make one remark in answer to my noble friend Lord Renton, I think that, when this figure of £2,000 in each of two years was mentioned, that was simply the cost of local authorities equipping themselves with lists of the charities in the areas for which they were responsible. It clearly was not the total cost of the reviews, of the schemes, and so on. This should not be too great a figure, provided one finds that the register which the Charity Commissioners are obliged to keep can be searched on behalf of the local authorities, in order to produce the information which they need. That having been said—
§ Lord Mishcon
My Lords, I interrupt the noble Lord only so that he can continue, as he always likes to do, with correct facts before him. Maybe he is arguing now as to why we should have a Bill debated again in a new Session, because this Bill provides not that the local councils furnish lists, but that the Charity Commissioners furnish lists to the councils. So that cannot possibly he the cost to the councils of furnishing lists.
§ Lord Beloff
My Lords, I think that there is a misunderstanding. The council would as my noble friend Lord Renton, pointed out, need to have an official who would correspond with the Charity Commissioners in order to get the list. Presumably, he would have a typist who would type out the list and distribute it to the interested parties. So that there is a cost, even though the basic information is with the Charity Commissioners rather than with the local authorities at present. Therefore, it is not, I should have thought, a very expensive procedure provided that the register is up-to-date. At any rate that is the estimate that we have received. If there are alternative estimates of the cost of the operation then, clearly, it is for the Home Office, with the Charity Commissioners, to supply these estimates. It is curious that, though we have had costs adduced as one of the reasons for scepticism about this Bill, we have not had these costs in figures before us.
So all one can say is that we have had a couple of hours which probably could not have been spent more advantageously at this stage of the Parliament. We are where we were on 6th May, but. I hope, with the reinforced conviction that the Bill is a sensible and desirable one, and with reinforced gratitude to my noble friend Lady Faithfull, for having done it not only once but twice.
§ 5.9 p.m.
§ Lord Melchett
My Lords, I am not where I was on 6th May, because unfortunately I was not able to take part in the Second Reading of the Bill then. I am delighted for that reason that the noble Baroness has had to bring her Bill back to the House for a second 393 time, because it has given me the opportunity to intervene—very briefly, I hope—at the end of a second run-through on this Bill.
I had better declare an oblique interest in the Bill. I am one of those people who have been mentioned both by the noble Baroness and by the noble Lord, Lord Allen of Abbeydale, during the course of this debate—a farmer who rents land from a parochial charity. I hasten to add that I am not, I hope, a farmer who rents land at far too low a rent from a parochial charity. I believe we pay a very fair, not to say generous, rent to the charity in our parish.
I also hasten to add that this parochial charity is one that I believe to be reasonably well run, having very consciencious trustees, the interest of a very great many people living in the parish, and which keeps its finances up to date—but it does suffer from the problems of having fairly restricted objects and from not being able to support some of the things in the parish which I believe both the trustees and the local community would like to see supported, with the generous rents which we as farmers of their land pay them.
It seems to me that in discussing this Bill it is inevitable that we should also look at the Small Charities Bill of the noble Lord, Lord Renton. Three interests need to he distinguished. First, there are the interests of the beneficiaries of charitable gifts, which I would say is by far the most important interest. In that case, the noble Baroness, Lady Faithfull, has made an absolutely overwhelming case for the kind of reforms which her Bill proposes. It seems to me that the present situation, involving a scandalous waste of resources and, to some extent, the misuse of resources, is really deplorable. I am very saddened, to put it no higher, that the Government are not more concerned about doing away with this waste of resources and improving matters.
The noble Baroness gave, as she did before, some amusing examples of objectives which people saw as being important many years ago but which are no longer relevant. But the House should be reminded that we are dealing with a scandal. There is a great deal of money which could be and should be spent on very needy causes, which is not being spent at the moment. I agree with the noble Lord, Lord Beloff—although I did not expect to hear myself say this very frequently in your Lordships' House—about the urgency for some reform.
The second interest—and I would put it quite a long way behind beneficiaries—is that of the donors. Frankly, I do not find any weight in the argument put forward by the Government on previous occasions—that those interests are in some way threatened by the proposal to amalgamate charities in the neighbourhood trusts. That seems to me to be a nonsense, and the noble Lord, Lord Allen of Abbeydale, dealt with that point very effectively.
I find the Small Charities Bill a serious threat to the interests of donors, and I consider that the proposal that trustees should be allowed to wind up the trusts, even if they are very small, is a dangerous one. I personally would oppose it very strongly. It seems to me that the problem which the noble Lord Lord Renton, has identified could be met by allowing 394 trustees to transfer their capital, as capital, to a trust with similar objects, with the condition that it remains a capital sum. There may well be other ways of dealing with the problem of trusts having very small incomes without that money being lost as capital-producing interest for charitable purposes—which I believe is a principle that should be retained at all costs.
The third interest is that of the trustees, and I hasten to add that I would put this interest a long way down the list. It is here that I share the concern that has been expressed by my two noble friends about the mandatory element in the Bill of the noble Baroness. There are real grounds for concern, and I do not agree with the noble Lord, Lord Foot, that this is a superficial objection. It goes deeper than that. In particular, my noble friend Lord Prys-Davies made a very strong argument about the interest which many people living in a parish will have in a parish charity. That is certainly true in the case of our own parish, where the land was originally set aside to provide fuel for the poor of the parish, as a fuel allotment. It became known as common land, and although at the present time there are no common rights registered over it, it is still seen as a piece of land over which people in the parish have an interest—and, I am glad to say are still able to make use of by picnicking, walking, and generally enjoying the countryside.
The parish interest that exists in some parish charities cannot be ignored. When this Bill and the Bill of the noble Lord, Lord Renton, are referred, as I hope they will be, to a Select Committee, I believe there will be a need to introduce some softening of the mandatory element. I do not wish to draw analogies which may upset noble Lords on the other side of the House, but it seems to me that the good trade union principle that people should have to opt out of something rather than opt into it—when thinking of the payment of political levies, for example—might be one that we could adopt here. The previous law asked trustees to opt into an amalgamation and it has clearly been an abysmal failure. It may be that this Bill can include something that will allow people to opt out, under fairly stringent conditions, which would make it unlikely that many would. Nevertheless, it would leave that door open and will remove a not important but nevertheless significant objection which a number of noble Lords clearly share to the Bill as it is now drafted.
That is all I have to say about the Bill at this stage. I strongly support the view that it should be referred to a Select Committee. I am delighted that the noble Lord, Lord Renton, and the noble Baroness, Lady Faithfull, have made the deal that they have—that both Bills will go before a Select Committee—because clearly that is the most sensible option. I hope, again in common with the noble Lord, Lord Beloff, that the Government will be prepared to take a rather more openminded view of both the advantages which the noble Baroness's Bill so clearly contains and the significant danger which I believe the Bill of the noble Lord. Lord Renton, contains—although I accept that it also tries to deal with some significant problems to which we must find some solutions.
§ 5.16 p.m.
§ The Parliamentary Under-Secretary of State, Home Office (Lord Elton)
My Lords, you will share my 395 admiration for the energy and persistence with which my noble friend Lady Faithfull has been promoting her Bill, and my gratitude to her for setting out before us the very real problems which exist in this field. I had looked forward to a kind of matinee performance of last May's show. There have been some slight changes in the cast, with the part of the Bishop of London being played by the Bishop of Norwich, and an interesting supporting role written into the last scene for the noble Lord, Lord Melchett. The drama, although similar to the earlier performance, proved to be rather more different than that, I am glad that my noble friend Lord Beloff has not had his way yet, so that I had the pleasure of seeing it again—and of hearing my noble friend's agile entr'acte as well. I say "hearing" rather than "seeing" because. like my noble friend Lady Faithfull, he always persists in performing from the back of the stalls.
Quite clearly, we are all agreed that something needs to be done about certain parochial charities. I fear, however, that enthusiasm for action over some parochial charities can lead to the danger that all parochial charities will be regarded in the same light. Several speakers have voiced doubts about the provisions of the Bill in this respect, and that reflects the Government's own reservations. The noble Lord, Lord Mishcon, has expressed concern on a previous occasion about the compulsory nature of the Bill, and he has referred to this again. Other noble Lords and the right reverend Prelate have suggested amendments which they would like to see made at a later stage. I have noted, for example, a suggestion that well-run charities should be exempted from the provisions of the Bill, and that there should be a right of appeal in some form: the noble Lord, Lord Melchett, was the most recent speaker to advance that proposal.
Wide-ranging and informed as both debates about this Bill have been, one fundamental point still needs to be underlined. This Bill is a measure intended to redistribute charitable resources: to take assets from a particular area designated by a donor and make them available over a wider area. Let us first acknowledge that. if this Bill were passed tomorrow, not a single penny would be devoted to charitable causes that has not already been donated to charity.
It has been said that this Bill is about unlocking charitable funds. That implies that trustees do not already have the keys. The Bill aims at a fairer and more effective distribution of the funds in parochial charities—but I, for one, still have doubts as to whether that is what its provisions would entirely achieve. If we are to have any regard for the wishes of the original benefactors (and I believe it was this interest that the noble Lord, Lord Melchett, put second, although. as he said, a long way second) we must be concerned if the effect of the Bill is to diminish the benefits which a charity confers on any beneficiary identifiable under the original foundation.
I take it that my noble friend would be concerned at that. If she were not, I would be surprised, because she would then be setting her own judgment—or, rather, that of those empowered under her Bill—far above that of those who actually provided the money in question, and saying, in very firm tones, that the "lady from Whitehall" knows best. As the right reverend 396 Prelate has emphasised, we have no wish to overthrow, as he put it, the minds of donors of years gone by. They provided the money in the expectation that it would be used as they specified.
Yet it seems to me that the effect of the Bill would quite intentionally be to level out charitable resources in a given district, deflecting them both from the most specific purposes and from the most specific areas chosen by the benefactors. The jam, by being spread more generally, would necessarily be spread more thinly in some places than it had been—something which is perhaps more easily achieved with jam than with clergy. Beneficiaries of charities already being properly administered and fulfilling useful purposes could suffer from their merger with others less well endowed. There may be a mathematical justice in this, but its desirability as a means of disposing of charitable bequests does seem to me to remain very much open to question.
Of course, one cannot be certain how much this would happen, and here I am happy to agree with supporters of this Bill. We know comparatively little about the parochial charities of England and Wales. We know that they form between one-third and one-quarter of the 144,000 registered charities, and we know that many of them have a very small income. There is some information available from local reviews which have been completed and published. The opinion has been expressed forcefully that we should know more. That is one of the reasons why a Select Committee seems to me the right way to proceed in this matter.
We have a very limited knowledge of the subject—too limited to form an accurate general picture. To generalise from specific examples is, I think, especially risky given the scope for idiosyncrasy in the endowment of individual charities and the great variety of ways in which trustees interpret their functions. My noble friend Lady Faithfull has amply illustrated this. Apart from the fact that most of these trusts have been adapted to present-day conditions, it would be wrong to assume in the absence of reliable information that they are in any way typical of the generality of such charities.
I said a moment ago that I was struck by the strength of feeling that something ought to be done about parochial charities. I have also been struck by the strength of feeling about another matter, and that is the Charity Commission, or perhaps I detect a change in that concern and it is now more appropriately directed against the law of charity as a whole. The noble Lord, Lord Mishcon, made a succinct and persuasive speech on this subject, and I shall certainly bring his concern to the attention of my right honourable friend the Secretary of State for Home Affairs. We have heard some severe criticisms of the commissioners. We have been told in particular that they should have played a more active part in initiating local reviews of parochial charities and schemes for amalgamations.
It has been asked why it is that they do not keep more information about the charities on the register. Perhaps I may say that although the Charity Commissioners are appointed by my right honourable friend, they do of course act independently of the Government. I think I should refer your Lordships to their 397 annual report for 1982, just published. In this they say that although they have tried to make their functions clear to the public it seems thatthere is a fairly widespread misunderstanding of our constitutional position and of our powers and duties".I would not suggest that such a misunderstanding exists in your Lordships' House, but it is helpful to recall the terms of the Charities Act 1960, which established the Charity Commission in its present form and set out what are still its duties. Under that Act, the Commissioners have the responsibility of,promoting the effective use of charitable resource by encouraging the development of better methods of administration, by giving charity trustees information or advice on any matter affecting the charity".They must also,so act in the case of any charity (unless it is a matter of altering its purposes) as best to promote and make effective the work of the charity in meeting the needs designated by its trusts".It may now be thought that the commissioners should have been given wider powers—powers to compel amalgamations of small local charities or to force local authorities to carry out reviews of charities within their areas—instead of the power they have under Section 13 to carry out amalgamations at the request of the trustees, and their present duty under Section 11 to provide information from the central register to any local authority which is compiling an index of local charities. Under Section 12 of the Charities Act local authorities may carry out local reviews, and, as we have heard, all have at least started, but this is an entirely voluntary operation.
The noble Lord, Lord Foot, asked whether, under voluntary procedures, we shall be any better off in 20 or 30 years' time. The commissioners already assist in carrying out voluntarily what my noble friend wants to achieve by compulsion. Your Lordships should perhaps know that in the year 1978 to 1981 an average of 700 charities were grouped or amalgamated, and last year that number rose to 854. That is perhaps faster progress than some of your Lordships might have expected.
That we now find it inconceivable that wider powers of compulsion would be misused by the commission is a tribute to those who have served as the commissioners. It is understandable that when establishing this new body, as it then was, there were fears that it might become too powerful and ride roughshod over the views of trustees in pursuit of what it perceived to be the right course for their charities to pursue. The powers were therefore balanced so that the commission would operate in an atmosphere of co-operation, and I believe that probably that is the only way—and almost certainly it is the best way—for such an organisation to carry out its functions. The Charities Bill was formulated following the extensive work of the Nathan Committee. At that time the very fact of establishing, a central register of charities (as required by Section 4) was an important and valuable advance on what had happened before. The Charities Act may not be perfect, but it seems to us in Government that it commands more general respect than perhaps would some of the reforms that have been proposed.
I return to the Bill itself. The Government's views on this Bill are generally known, so I will be brief in setting them before your Lordships. The compulsory 398 amalgamation by the state of voluntary organisations offends in our view, and I rather think in that of the noble Lord, Lord Mishcon, against the spirit of charity law. Charity is voluntary giving and charity law is based on the importance of preserving that principle. It is the task of central and local Government to examine social needs and problems and to deploy their resources to tackle these problems in a rational and efficient way. We all hope that voluntary efforts will follow the same principles; but we in the Government do not accept the view that there should be any kind of Government compulsion to achieve that. Charity trustees should continue to exercise the right they have always had, to administer their trusts as they think fit, subject to the safeguards already contained in the Charities Act.
It must be realised that this Bill is largely indiscriminate in its application all pre-1948 local charities for the poor would come within its scope, even those which have sufficient funds to carry out a relevant purpose. I know that this element of the Bill is objectionable to some of their trustees; we have received letters from a number of them pointing out that their charities are well able to carry out their functions. Trustees guard the independence and tradition of their local charities and would be resentful of being forced into amalgamations regardless of their own performance and the effectiveness of their charities. Doubtless an escape clause—as some noble Lords, including the noble Lord, Lord Melchett, have suggested—might be an object of help here. Balanced against the gain of effectiveness charitable resources that the Bill promises, there might also be a loss of active parochial charities, and possibly of able and committed trustees as well.
Even if there were not objections in principle to the Bill, I should remind your Lordships—and this has been ventilated this afternoon—that there are cost implications which cannot be ignored. The expense would be not inconsiderable. I am told that the number of parochial charities for the poor has been estimated to be between 35,000 and 45,000. There are 53 county councils to carry out the reviews. This suggests that an average council would need to carry out reviews of between 700 and 900 charities. I have to say with my noble friend Lord Renton that I find it barely credible that the figure of £4,000 which was put forward by my noble friend Lady Faithfull as the figure needed by the local authorities to do this would go very far in reviewing that number of charities, even with the help of local voluntary organisations. I will read with care what my noble friend Lord Beloff said. If he was saying that there must be other work than that costed in that figure than I think he must be right.
I know that local authorities have already expressed their doubts about these figures. There would also be considerable resource demands on the Charity Commissioners themselves who would need to employ many extra staff to carry out the duties proposed for them by the Bill. Those of your Lordships who say they are understaffed will accept that argument, I am sure.
Before I conclude, may I remind your Lordships that on this occasion, unlike the last time we discussed the Bill of my noble friend Lady Faithfull, there is another Charities Bill in your Lordships' House, and it 399 is a great relief to me to be able to refer to it. This Bill, tabled by my noble friend Lord Renton and ably advocated by him this afternoon, also seeks to unlock those charitable funds that are locked up by reason of the smallness of the parcels or pockets in which they are held. We find that Bill preferable to this one if only because it lacks the element of compulsion which is the hallmark of the measure now before your Lordships. It also rests upon a principle accepted as necessary by the noble Lord, Lord Allen of Abbeydale, in his interesting speech and rejected with vigour by the noble Lord, Lord Melchett, in his interesting speech.
There may of course well be different features which others of your Lordships find make it less attractive, and I say only that it would be a great pity to rule it out of consideration by proceeding separately with another Bill ahead of it on the Order Paper. There are elements in each Bill which will I think, be found to be compatible with the other, and this seems to provide very strong grounds for referring both of them to a Select Committee of this House. That is a course which commends itself to my noble friend, and, she tells us, to the NCVO, the report of which was published only yesterday—and my noble friend will forgive me as I have not yet read it.
This has been a very useful debate and has served to illustrate many aspects of the problems that face us. It has been helpful to hear from the noble Lord, Lord Prys-Davies, on the particular concerns of Wales. The contribution of my noble friend Lady Lane-Fox was, as always, lucid, relevant and concise.
The noble Lord, Lord Allen of Abbeydale, asked about the review in Lancashire, I think his question was about its relevance to this afternoon's debate. The answer is that it will not be concluded for a year or two and that it is not directed specifically to this debate but at the larger question of discovering what is going on in parochial charities throughout the country. If he wishes to press me further on the matter I shall have to write to him because I cannot help him more at this stage.
While I cannot support the Bill in its current form, it has served a valuable purpose in directing our attention as a matter of urgency to the difficulties surrounding parochial charities and we must be grateful to my noble friend Lady Faithfull for this opportunity. There are no easy solutions in matters as complex as these; but perhaps the conclusions of a Select Committee would provide us with valuable insight into what should he done, and I am very glad that she also sees that as the proper way forward, as does my noble friend Lord Renton.
§ 5.34 p.m.
§ Baroness Faithfull
My Lords, may I first thank all noble Lords who have again taken part in a debate on this subject, and the noble Lord, Lord Melchett, who has taken part for the first time. I am indeed grateful, knowing the time and work that is involved. If your Lordships will forgive me, I do not intend to reply to the points made by each of the speakers. I shall merely make one or two of my own comments. First, I think that every noble Lord who has spoken is agreed in principle that we need to use to the very best of our 400 ability, and effectively, money that was left in years gone by—even St. Benedict's Monastery—which at the moment is not being used. We are therefore, agreed on the principle of the Bill. What we are not agreed on is how this could best be achieved.
My second point concerns the call by the noble Lord, Lord Mishcon, for a wider review of the parochial charities. We have had wide reviews over many years. There was the Nathan Report, the Select Committee report and the Goodman Report, but nothing has happened. I thought that, in considering this Bill, if we were to isolate a small section and work out principles in that small section it might well lead to the same principles being extended on a wider scale. However, I hope that if we have a Select Committee it will not go the way of so many Select Committees in the past, as was said by the noble Lord, Lord Allen of Abbeydale. It was for that reason that we isolated that one field; in order to carry out the principles of the right way to deal with unused charities.
My third point is that, although it seemed from the speech of my noble friend the Minister that he supports this Bill being committed to a Select Committee—and we are grateful for that—I wonder whether he is more interested in the trustees and what they think and feel than he is in the donors and the recipients. I wonder whether the Law Commission is not very much taken up with the position and the feelings of the trustees.
I am extremely grateful to my noble friend Lord Elton for all his help and what he has said today but my final point is that he has said what is wrong but not how it can he put right. The figures he has given sound very impressive and suggest that much has been done. I shall not quarrel with that. Much may have been done, but there is much yet to be done. It is what must be done on which we are concentrating today. Again, I am very grateful to your Lordships for the interest shown and to those who have spoken in today's debate.
§ On Question Bill read a second time.
§ Moved. That the Bill be committed to a Select Committee.—(Baroness Faithfull.)
§ On Question. Motion agreed to: Bill committed to a Select Committee accordingly.