HL Deb 06 May 1983 vol 442 cc278-309

11.28 a.m.

Baroness Faithfull

My Lords, I beg to move that this Bill be now read a second time. In moving the Second Reading of this Bill, I am aware that in its present form, or perhaps in any form, it is not acceptable to Her Majesty's Government which, in effect, means the Charity Commission, whose advice the Government take. Nevertheless, I dare to think that the present unsatisfactory position in England and Wales of parochial charities for the poor should be brought to the notice of your Lordships' House. I am heartened that my noble friend the Minister may, if your Lordships agree that this Bill be read a second time, accept the recommendation that a Select Committee of the House of Lords should be set up to look into parochial charities in this country.

This is a complicated legal and social problem and 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 on the Welsh parochial charities. I am grateful to the West Yorkshire Charities Information Bureau, the Community Council of Humberside, and the South Yorkshire Information Service, the many individuals up and down the country who have written to me, from Cornwall to Cambridge. 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, 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 specific area, grouped together, use their joint resources to be allocated according to the wishes of the original donor. It is strange that this was first recommended in the Nathan Report of 1952 and agreed by the Charity Commission. Then again the same recommendation was made in a Select Committee Report into the accountability 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 from 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 civil administration the religious and humane practice grew up for donors wanting to leave money to the poor to do so using parish personnel as trustees. In those far-off days the vicar and the lord of the manor were likely to be the only ones who could write. Historically I contend that the donors left money to the poor using the parish for 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 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 international organisations. Only a few continue 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. Now what did this research reveal? The research revealed a generally chaotic position. First, the demographic changes in parishes. In the last two centuries there have been great shills of population. There is, for instance, a new estate with a population of 13,000 which was built only since the last war, served by four parochial charities which together bring in £8 a year. In the adjoining parish there are 800 people only, few of whom are in need, with an income from parochial charities of £3,000 or £4,000 a year, unable to spend it in accordance the donors' wishes. Then in Dunwich in Suffolk, once a borough with a charter and now with a population of 155 and an income from a parochial charity of £1,600 a year, there is a balance sitting in the bank of £11,000.

Then the research pointed out the number of outdated purposes. There is, for instance, one charity where a man centuries ago suffered grievously from a wart on his nose. He left money to anyone suffering from 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 profitably be used for allied medical problems. In the North there is a parish where bread was left to the poor. The vicar distributes to his parishioners a loaf of bread once a month, be they poor or not. I ask, is this what the donor wanted? Some trustees use money to give small Christmas presents, which does not meet the needs of those suffering real hardship. Then in another parish the vicar can claim £2 for preaching a sermon, and the churchwarden 50 pence for listening to it.

The reviews also showed a lamentable neglect of accounts. Of the eight reviews in which research was done, 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. Also 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, surely not in accordance with the donors' wishes.

Then there are large unused balances. Total balances shown amount to over 18 months' income. Thus, roughly, if £20 million is the income of all charities in the country, it suggests that possibly there may be £35 million lying unused in banks. Again we come to inflation. Money left in past centuries was substantial but now the income, due to inflation, is so small as to be useless. Approximately as many as 20,000 charities may have an income of less than £10 per annum.

As this stage I cannot forbear to mention a Private Member's Bill on charities now before another place. I cannot agree with the Bill, which destroys trusts which individually may have become too small to be useful. I respectfully suggest that it offends the known principle of charity law on which donors have relied—namely, that a charity trust cannot be allowed to fail. I believe that these many small charities should be incorporated into neighbourhood trusts, as recommended in the Bill before your Lordships' House today, and not be dispersed as recommended in the Charities Bill.

I have taken long to set the scene. To meet the welfare conditions of our modern state, to concur with the wishes of the donors who left the money for the poor, this Bill recommends that the Charity Commissioners should study the reviews of parochial charities, should ask local authorities who 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 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 Charities 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 donor's wishes. The right reverend Prelate, the Bishop of London, may have something to say on this. When it was necessary because of changing social conditions 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 will need extra money to spend to allocate to voluntary organisations or, indeed, to carry out themselves this small piece of reorganisation. The cost will be infinitesimal compared with the return. It has been costed at £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: 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 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 sound, well-administered parochial charities, but they are in the minority. Thus, the Bill makes the reorganisation in neighbourhood trusts mandatory simply because there has been and is under the Charity Act 1960 the possibility of trustees voluntarily organising into neighbourhood trusts. But I must point out that, except in a few instances (and those not very satisfactory) this has not been done.

I must say a word about the Charity Commission. In 1960, the then commission agreed with the concept of neighbourhood trusts. Since then, not only has the commission failed to deal with the many trusts which are failing both the original donors and those who should benefit, but now in 1982 the commission has changed its view on neighbourhood trusts. I am grateful to the new Charity Commissioner, Mr. Peach, and his staff for discussing the Bill with me. However, despite our good relations, I am still of the opinion that this quasi- independent judicial body, which is answerable to no one, should be reorganised as recommended in the Nathan Report.

In conclusion, the central argument is that money left by donors for a specific use should be used for that use; that is the relief of poverty. If it is not possible because of the circumstances of the bequest then the money should be used as nearly as possible in the spirit of the bequest.

Lord Renton

The cy-près principle, my Lords.

Baroness Faithfull

My Lords, as my noble friend says, the cy-près principle. I do not believe that originally the money was left to the parishes, but I believe it was left to the poor to be administered by the parishes. Should the Bill be accepted by your Lordships' House, many in need would be helped and assisted in a way that they cannot be at the present time. I beg to move.

Moved, that the Bill be now read a second time.—(Baroness Faithfull.)

11.47 a.m.

Lord Mishcon

My Lords, not for the first time will your Lordships be grateful, from whatever portion of the House the tribute comes, to the noble Baroness, Lady Faithfull, for raising a matter of which she has such great knowledge in the fields of welfare and the relief of distress. On a Friday morning on which the sun seems to percolate somewhat feebly, nevertheless apparently, through your Lordships' House, it is perhaps not an original remark to make that the noble Baroness is possibly the most aptly named in your Lordships' House because she has indeed been so loyal and faithful to the causes to which she has devoted so much of her life.

I hope that that introduction will enable the noble Baroness to realise that from these Benches, on behalf of my noble friends, we do not wish to be unhelpful to any approach to this difficult subject. It is a difficult subject and unfortunately one cannot leave it purely and simply on the basis that there is a problem to be solved in relation to the great waste that exists in parochial trusts; the relief of poverty; the many cases in which some of these trusts have become so small that they are almost useless; to the lack of administration by trustees, and many other cases of inefficient administration. All these are problems.

I was glad that the noble Baroness mentioned the helpful possibility of a Select Committee of your Lordships' House. One wonders whether a Bill of this nature should not have further investigation, data and thought of that type about the interference with trusts which have been set up by people who have donated their own money for certain purposes.

I wish I could say that the law on charity in this land is clear. It has a hoary antiquity which gives it grounds for our reverence; but it also lacks certainty at times, which makes all of us who are concerned with this matter a little unhappy.

Your Lordships will know, I am sure, that we still rely for our interpretation of the law of charity upon an edict of the first Queen Elizabeth and that the rules that are quoted in regard to those charities go back to the last century when a very great lawyer, Lord Macnaghten, laid down four heads of charity: the relief of poverty; the advance of education, the advance of religion and the general good of the community.

Much case law has been built up and, within the case law that we have, and the rules of Macnaghten and the statute of Queen Elizabeth, many conundrums still beset the lawyer who tries to administer the law of charity. I believe that I am right in saying that the right honourable and learned gentleman the Attorney-General has had a little difficulty when trying to present common sense, as many of us see it, to the interpretation of what is charity when looking at organisations like the Moonies, and finds himself as a lawyer up against some rigidity of the law when he receives a reply from the Charity Commissioners to certain questions that he poses to them.

It is a fact that this law is in a state of some uncertainty, but when one comes to look, as the noble Baroness asks us to look, at parochial charities, one finds that there are intense loyalties still within the parishes. If I may put it in one short sentence, the parish pump has not yet dried up in our tradition.

I noticed, as your Lordships will have noticed, that the Bill deals not just with charities that are limited to the relief of poverty; the Bill deals with those which have as their primary object ( as well as those which have it as their sole object) the relief of poverty. There are many parochial charities where local loyalties, local loves, local devotion, have meant that there are subsidiary objects which have very definite relationships with the parish concerned.

As the noble Baroness was fair enough and reasonable enough to admit, there are many parochial charities solely for the purpose of relief of poverty which are being very well administered. They may be small. The trustees are devoted people. Suddenly to confront them with a mandatory set of provisions, which means that very likely they are to be relieved of their trusteeship, in spite of the fact that they have been duly appointed in accordance with the wishes of the original set law, and that they are to be merged into neighbourhood trusts going beyond even the bounds of the parish, makes one think a little before saying that mandatory provisions should apply so that they are merged in neighbourhood trusts.

My Lords, it is a Friday morning and one must not be too long in addressing your Lordships otherwise one loses one's popularity, if it exists at all, very quickly. The noble Baroness mentioned the Nathan Committee and that was a very important committee. Indeed, out of its recommendations came the 1960 Charities Act. After dealing briefly, as I have tried to do, with some of the principles behind this Bill and a question mark—and I say merely "a question mark"—which hangs over them, there is no doubt that something has to be done about the waste that does exist. I have no doubt about that; I am sure your Lordships have no doubt; it is just a question of the way to do it. From the point of view of practicalities, away from the principles, the first thing that one has to say—and again the noble Baroness has said it in so many words; and I do not know whether she said it quite deliberately—is that there are not the data procured by the Charity Commissioners which many of us would want to see before even one could say very definitely that the instruction be given to the local authorities: "Please get on with a consideration of the parochial charities within your area! Here is a full list of them, here are all the trustees and here are all the details".

I believe that to impose a duty upon local authorities at this time of all times takes me back to a couple of sentences that I read at page 146 of the Nathan Report where the Committee said: 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". If I may pause for a moment, that is exactly what this Bill tries to carry out.

The Nathan Committee was in doubt, and goes on to give the reason: 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. The Nathan Committee was saying something prior to 1960 which your Lordships might think, unfortunately, is very true of 1983. I say that to impose this burden on the local authorities and upon the Charity Commissioners at this moment may be very difficult. On a matter of this kind one hesitates to introduce even a hint of politics; but one has to observe that the right honourable lady the Prime Minister said with some pride at a public meeting only within the past 48 hours that the Civil Service staff was now at its lowest in numbers for the past 17 years and that in one year's time it would be the lowest since the war. As fellow practitioners with me will know, the Charity Commissioners take a very considerable time to deal with urgent correspondence on the formation of charities and on queries arising even now. The reason given for this is shortage of staff.

The fact of the matter also is that local authorities, too, have had to cut down their staff. If the noble Lord the Minister will forgive my saying so, there are those of us who suffer now, even with his own department, when questions arise about immigration matters and naturalisation matters—and I know that it is a different department from the one which we are now discussing. The noble Lord the Minister will know with pain and anxiety of the terrible delays that exist in dealing with correspondence. This is sometimes urgent correspondence of immigrants who do not know where they stand and of people who are applying for naturalisation, and so on, who want to try to get some security in their life. The reason given, if one asks anybody at the Home Office Immigration Department, is this. As a rule it is a very courteous reply which says: "We are trying to get on with things but we have got so many applications that we are afraid that we cannot promise to give you an answer within weeks or months".

It is very easy to pass Bills of this type which throw upon the Charity Commissioners and local authorities very considerable burdens; but at the same time one has to look at the practicalities. You cannot take a pride in the economy in respect of numbers and at the same time take a pride in passing legislation, however good, which is going to be administered only with difficulty. By this Bill a duty is cast upon the Charity Commissioners—a very proper duty—to do something within 12 months, and the local authorities will have to produce schemes all over their area within five years.

The intention of this Bill to deal with a very real problem is very good and for that the noble Baroness deserves all our thanks. There is no reason why this Bill should not be given a Second Reading. The noble Baroness said—she will correct me if I am wrong—that a Second Reading should be given to the Bill because of her proposal, which she understands to be acceptable, for a Select Committee of your Lordships to be set up in order to consider this whole problem, to find out the facts and to make practical recommendations. At that stage I hope I am right in believing that the noble Baroness would say: "We have given the Bill a Second Reading; there have been consultations, and we have these recommendations. No doubt my Bill will have to be amended, but let us get on with it." I see that the noble Baroness is nodding her charming head, so I know I am right.

I feel that the House should give the Bill a Second Reading on this understanding. There are problems, and they ought to be solved. There is a waste. Let us see what the Select Committee of your Lordships' House has to say, and then, by all means, let us have a proper measure which is administratively possible so that it can be carried into legislation.

12.3 p.m.

Lord Foot

My Lords, a few days ago, when I was out of London, I was asked whether I would say a few words from these Benches about this Bill today. I was then in some doubt as to whether I could undertake the task, and at that stage I had not seen the Bill. But I was greatly reassured when I learned that the Bill was being promoted by the noble Baroness, Lady Faithfull. We have all learned over the years that if some case is being advocated, promoted or defended by the noble Baroness, it is almost certain to be all right. The only thing that causes me some surprise from time to time is that the noble Baroness apparently finds herself at ease on those reactionary Benches in spite of the wisdom of her speeches in this House and her devotion to all good causes.

Having now read some literature on the matter, and having had the advantage of hearing the noble Baroness, I would have thought that some of the basic propositions on which this Bill is based would be a matter for almost general agreement. In this, I depart a little from what the noble Lord, Lord Mishcon, was saying just now; but I will come back to that in a moment. I should have thought there was general agreement on the proposition of the noble Baroness that the present state of these charities, with their multiplicity of sizes, and so on, is wholly unsatisfactory. Something ought to be done about it in any event.

I should have thought, secondly, that there was a general consensus that this problem has extended back over something like 30 years, and nothing has been achieved during those years by way of resolving it. The third matter on which I should have thought there was general agreement is that the 1960 Act was intended by its authors to provide a machinery which might cure this situation on a voluntary basis, but that in the event all those expectations and hopes were not realised. The fourth proposition which I suggest will be generally agreed is that if a solution is to be found it is to be found in the general concept of the neighbourhood trust, as this Bill provides.

If it be right that there would be fairly general agreement upon all those four propositions, it is on the question of whether the Bill should be mandatory that disagreement is likely to arise. I listened with care to what the noble Lord, Lord Mishcon, said about that, and particularly about the staffing burdens that would be imposed upon the Charity Commissioners and local authorities. I appreciate the difficulty, but I suggest it is not one which ought to kill this Bill, because one finds that the duty of the Charity Commissioners to furnish the local authorities with a list of charities in their areas is one for which they are given a period of 12 months. After that, the process of consultation by the councils with the trustees of the charities concerned may be spread over a period of five years.

Whichever side of the House one sits on, I do not think anybody will say that our economic situation will be as serious as it is now over the whole of those five years, because if the Labour Party get back they have already promised that they will expand bureaucracy at a great rate and no doubt will give the Charity Commissioners all the assistance they require. If, on the other hand, Mrs. Thatcher is successful after the election, whenever it may occur, surely we are being led to believe by the Members opposite that within those five years she will have accomplished her economic revolution and all will be well. So whichever party wins—and I do not, of course, discount the possibility of the Alliance winning—it seems to me that is not a serious objection.

But is this not the serious point?—and, it is, I suggest, the point which might very well be examined by the Select Committee, as the noble Baroness proposes. If there is a general consensus about those propositions to which I have referred, is it not really rather deplorable that we cannot devise voluntary machinery which will accomplish the purposes of this Bill? If one looks at the record over the last 25 years, as the noble Baroness pointed out, and if one looks at the lack of progress that has been made in spite of the general wish that there should be progress, is there any reason whatever to suppose that 25 years hence we shall not be in the same position as we are now?

In human affairs a time comes when you have to make decisions. I realise that one does not want to impose further obligations upon, for example, the local authorities. But if one is to take this matter seriously and is to have a radical reorganisation of the present unsatisfactory situation, I have come to the conclusion that it is necessary that there should be these mandatory instructions; and I hope that that is a matter which the Select Committee, in their time, will be able to resolve. Therefore, on that account, at this stage, I am strongly in favour of the noble Baroness's Bill, and I wish it every fair wind.

12.11 p.m.

The Lord Bishop of London

My Lords, before I express my support for this Bill, I must ask for the forbearance of your Lordships, if it proves necessary for me to leave before the end of the debate. I have a pastoral engagement which I have delayed but which I cannot properly cancel nor delegate, and which I must go to fulfil if need be.

I wish to echo what has already been said in your Lordships' House about the qualities possessed by the noble Baroness, Lady Faithfull, and to express our gratitude to her for introducing this Bill. She has made very clear the reasons which make some reform of local charities urgently necessary—necessary, not merely as a matter of administrative tidiness, or for a better use of available resources, but as a matter of justice to the poor and the needy to whom belong the charities which are dealt with by this Bill. It is often forgotten, as the noble Baroness has pointed out, that they belong not to the parishes but to the poor and needy, and, in my judgment, the Bill enables their assets to be used for the benefit of those to whom they were given.

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 denominations who sit on the Churches Main Committee, of which I am chairman, have considered the Bill and expressed support in principle for the general objective. They would, I am sure, as I would myself, welcome the setting up of a Select Committee of your Lordships' House which could consider the best methods of achieving it and to which they might be allowed to give evidence.

There are, I believe, many excellent reasons for supporting this Bill, but I shall confine myself to mentioning two of them. The first is that it is based on the fine English tradition of adaptation to meet new circumstances. I must confess that I was a little surprised to hear the conservative advocacy of the status quo by the noble Lord, Lord Mishcon. I look more to that flexibility which has given strength to our nation, and which has enabled progress to be made by evolution rather than by revolution or destruction.

The Bill which is being considered in another place, and to which the noble Baroness, Lady Faithfull, has referred, does not follow this tradition. It is based on a policy not of adaptation, but of destruction—and of destruction not merely of parochial charities which, as it were, are allowed to wither away, but also of the voluntary element which has played such an important part in meeting social needs in this country. I believe that a policy which is based on co-operation between voluntary effort and state provision is sound and is the best for our nation. It is this policy, I believe, upon which the Bill is based.

The present situation in regard to parochial charities does not encourage voluntary care at the local level and it is not surprising that people are now more disposed to contribute to national appeals and so on. But I believe that parochial concern should be encouraged. In that respect, I echo much of what the noble Lord, Lord Mishcon, said about the importance of the parish pump, and I believe that by the formation of neighbourhood trusts much could be done to encourage local support.

My second point is that the Bill is based on partnership and sharing, which is something I wish to encourage. We who sit on these Benches are sometimes accused of preaching what we do not practise. There are, no doubt, occasions when this charge is fully justified. We are as Christians aware that, for us, these Benches are penitent Benches, but in this matter I believe that our penitence can rightly be muted, for the Church of England, through the Church Commissioners—as the noble Baroness has already briefly indicated—has, with the full approval of Parliament, sought to pursue a policy by which parochial endowments have been shared in such a way that all parishes benefit to the greatest possible extent.

There is an interesting parallel between the Charity Commissioners and the Church Commissioners, which have been operating for very much the same length of time. The basis is not very dissimilar, but the difference in the method of operation is remarkable. The Charity Commissioners have tended to look at each trust in isolation and primarily, as regards their legal commitments, have treated trusts as if they existed for the parish and not for the poor, which has led in large measure to our situation today. The Church Commissioners, on the other hand—formerly, before 1948, the Ecclesiastical Commissioners—have, with the approval of Parliament, consistently sought to see how the parochial endowments could be so used as to enable the purpose for which they were given to be fulfilled in the best way.

So it was that in 1975, when presenting the Endowment and Glebe Measure to the General Synod for final approval, the then First Estates Church Commissioner, Sir Ronald Harris, could say that any suggestion that by passing this Measure the Synod would somehow be doing something novel and out of keeping with the history and ethos of our Church would be to ignore history. He went on to say that for some 150 years action has been in train under the authority of Parliament to redistribute endowments. Of the establishment of the Ecclesiastical Commissioners in 1836, it has been said that it represented the establishment, or rather the re-establishment, by Parliament of a principle; namely, that the benefits of a trust should be applied to those who needed them and were not to be attached to a place or a person irrespective of need.

I make this comparison between the working of the two bodies—the Charity Commissioners and the Church Commissioners—because I have heard it argued that it would be something quite new for us to agree to the trusts of one parish being shared with those of another. I cannot see that there is any justification for saying that a new principle would be established, because of the principle which has operated throughout with the Ecclesiastical Commissioners and now with the Church Commissioners. I cannot see, when Parliament initiated and has continued to approve a policy of sharing parochial trusts by the Church Commissioners, there is any reason why the similar principle should not be applied to parochial trusts for the poor.

I am, of course, well aware that the amalgamation of parishes and of endowments has not taken, and does not take, place without sadness and regret, and perhaps at times even pain. But it cannot be denied that, without such amalgamation and sharing, the present pastoral provision for the parishes of this country which is now made would have been impossible.

But I would make two points. First, provision has been made in the legislation under which the Church and the Church Commissioners operate for the views of interested parties to be made known and taken into account, with the right of appeal. I find it difficult to see why some similar provisions could not be made available for those who would be affected by this Bill. In view of what has been said about the administrative arrangements, particularly by the noble Lord, Lord Mishcon, I would say that what has been achieved by the Church Commissioners in a relatively short time, and with great administrative despatch, is very remarkable. That is a tribute to the way in which the matter has been handled and organised. I do not believe that it is so difficult as is sometimes made out. I would also point out that the actual number of appeals in cases which come to the Church Commissioners is relatively small. I do not think that the number would be significantly greater in the case of proposals for the sharing of parochial trusts.

The second point I want to make is that, much as we may regret, in some ways, the need to share and amalgamate parishes, and so on, the fact is that we are now spared the unedifying and scandalous spectacle of underemployed clergymen in tiny villages enjoying large incomes while their brother priests work their hearts out on a pittance in neighbouring large, industrial parishes. It was scandals and injustices of this kind which led Parliament to establish the Ecclesiastical Commission.

In the sphere of parochial charities for the poor, scandals and injustice exist today. Your Lordships may feel that those words are too strong. I do not believe that they are. I do not believe that it does the concept of a charity or trust any good to allow the present situation to continue as it is. We have the scandal of the situation in which trustees have more money at their disposal than they can possibly spend on the benefits of the trust as it stands. We have the scandal of resources remaining unused because the purpose of the trust cannot be fulfilled. I know from personal experience as a parish priest that we have the injustice of those who cannot receive the help which they sorely need because they live on the wrong side of the street which forms the parish boundary.

The Charities Act 1960 defined the functions of the Charity Commissioners as being to promote the effective use of charitable resources. I do not believe, with all the charity I can muster, that they can be said to have fulfilled this function. I believe that a Bill of this kind is necessary if the Charity Commissioners are to do so and if action is to be stimulated. As has already been pointed out in your Lordships' House, nothing has happened since that Act was passed and some action is needed to stimulate reform. I believe, particularly after hearing what the noble Baroness, Lady Faithfull, said about the prospects of a Select Committee being set up, that the Bill will give stimulus for this matter to be dealt with. It is, I believe, a matter of injustice, of wrong use of resources, to allow the assets of our charities to remain as they are. It is a Christian duty to use resources in the best way for the relief of those in need and to encourage care for one another's needs by sharing one's goods. It is because I seek to respond to that duty that I urge your Lordships to vote today for the Bill.

Lord Mishcon

My Lords, I wonder whether the right reverend Prelate will allow me to correct a misunderstanding he is apparently under about one part of my speech. I tried to make it perfectly clear that I thought the status quo should not continue, that there must be reform, that I welcomed the idea of a Select Committee in order that the House may be guided as to the way in which reform should be carried out.

The Lord Bishop of London

My Lord, I thank the noble Lord for what he has said. If I referred incorrectly to what he said, I apologise and withdraw. However, the noble Lord laid great stress on the importance of the parish and on the dangers of trying to extend benefits from one parish into neighbouring parishes. It was that point about the status quo which I had in mind.

12.25 p.m.

Lord Beloff

My Lords, in rising to support the Bill and in particular to express deep regret at the Government's unwillingness to sponsor it themselves, I do so not merely out of a sense of physical loyalty to the only other Peer who derives her territorial title from the same parish as I do nor, indeed, because of a sudden upwelling of charitable impulse, but for a specific reason: that the inquiries which preceded the Bill and the researches of Sir Charles Kimber and others to which the noble Baroness referred appear to me to reveal a quite surprising weakness in one of the organs of central Government; namely, the Charity Commission. This seems to me to be a matter of some concern to your Lordships' House and of general concern to those who feel not only that policy must be right but that we need to have the machinery by which policy can be made effective.

If we were to begin by creating a body to supervise charitable endowments in this country, I believe we should expect it to perform four functions. We should expect it to perform the function of registration, which means seeing that charities conform to the law and are properly, therefore, to be treated as charities by taxing and other authorities. That, no doubt, the present Charity Commission has, with some bizarre exceptions, fulfilled to the best of its ability, and on that score there is little at which to cavil.

Secondly, we should expect that body to supervise the activities of trustees in order to make sure that they keep their accounts in a proper fashion and that they treat their endowments so as to produce the maximum benefit for those for whom those endowments were intended. The researches to which I have referred seem to reveal grave lacunae: trustees who hardly ever present proper accounts and trustees who, as the noble Baroness has pointed out, let the land which is the basis of the endowment for much less rent than could reasonably be obtained for the benefit of the poor to whom the money should go.

Thirdly, we should expect such a body to have complete knowledge, complete statistics, of charities all over the country. They should know where they exist and what are their resources and purposes. I do not disagree with the noble Lord, Lord Mishcon, who said that we need to give this matter a great deal more thought and that we also need better statistics, more data, more information. But, after the 30 years which have elapsed since this matter was first considered and the period of over 20 years since the Act which we are talking about was passed, one would have thought that the Charity Commission would have at its fingertips the knowledge which local authorities require and that it should be a matter of telephoning and sending down a Xerox copy of an existing set of documents. If the Charity Commission have not done this, surely they have behaved in a way which would not be expected of the Church Commissioners in relation to their own endowments—nor, indeed, of other bodies which supervise the expenditure of money.

The fourth point—perhaps the most important point of all which relates most closely to the object of the Bill—is that the commission should have some degree of initiative. Just as, as the right reverend Prelate has told us, the Church has looked closely at the way in which its resources can best be spent for the purposes for which they were originally given, so one would expect the Charity Commission to realise that, even if the law dates from the first Elizabeth, we live in the reign of the second, that the basic function of private charity now must be to supplement the work of the welfare state, and that this clearly means looking at whether this is a genuine supplement or whether, as in the case of the vicar distributing loaves of bread, it would appear to be superflous. This initiative appears to be wholly lacking, otherwise the voluntary principle which the noble Lord, Lord Mishcon, pins his faith to or asks that we should pin our faith to would surely have had a better run over the past 20 years than emerges from these reports.

If, therefore, we have a Select Committee on this most important Bill, I hope that it will feel itself free to look at the machinery through which these neighbourhood trusts, if they come into being—as I hope they will—are supervised, because they in turn may be found wanting in some respects as social conditions and need change.

If one asks why the Charity Commissioners have not done these things and why they now require to be done, one can give two answers—one specific, and one more general. The specific answer (and this was referred to by the right reverend Prelate) is the business of treating each trust as a separate entity without regard to its possible relationship to other trusts. This is regarding the commission as a form of law court; a body separate from the machinery of Government and mainly concerned with adjudicating questions, such as whether or not a particular charity has the right to registration.

There is a more general answer, which is that it is no longer proper, whatever may have been the case in the past, for a body which does affect the expenditure of what are still, by any standards, quite considerable sums of money to be so removed and remote from our general machinery of Government—whether parliamentary or administrative. The Select Committee might therefore look at two possibilities. First, that the Charity Commissioners should be made responsible, as the Parliamentary Commission of Administration is, to a parliamentary committee. In this case, clearly, and particularly in view of your Lordships' experience in these matters, it ought to be a Joint Select Committee of both Houses.

Alternatively, that its present rather remote relationship with the Home Office—which is exemplified by the fact that we are to hear the arguments it has against the Bill from the mouth of the Minister representing that department in your Lordships' House—should be substituted with a relationship of a more intimate kind with the department which spends hundreds and thousands of times as much money on assistance to the needy—namely, the Department of Health and Social Security. It seems quite absurd that there should be this gap between private charity and—using the word in no derogatory sense—public charity. The fact that a Minister from the Department of Health and Social Security has not participated in this debate highlights the weakness in our governmental arrangements, which I should like to draw to your Lordships' attention.

12.32 p.m.

Lord Prys-Davies

My Lords, I should like to give positive support to the Bill which has been introduced by the noble Baroness, Lady Faithful, because I am satisfied that the status quo is not the answer. The House must be indebted to the noble Baroness for introducing this Bill and for the considerable volume of research which she and her small team of volunteers have collected over a short period of time. All that is relevant when one comes to consider the inactivity of the past 20 years on the part of other people.

The passing of the Charities Act 1960—and there has been a great deal of reference to that Act this morning—was a monumental achievement. Parliament in its wisdom made it possible for trustees to modify the objects in accordance with the spirit of the gift where such objects had become outmoded. That was made possible by the famous Section 13, which allowed charities to merge, to widen their area of benefit, or to take other steps to enable a charity to make the most effective use of its property—again, within the spirit of the gift. This morning we have not heard of Section 18 of the 1960 Act: but under that section the Act placed trustees under a duty to apply for a scheme to alter the objects in certain circumstances. I will return to that point in a minute or two.

The 1960 Act therefore had considerable potential. It provided the mechanism to promote better investment (and we have heard this morning of the scandalous state of investment in many of the trusts) and more effective administration and application of charitable property, to enable the ancient charities to play a positive role in the modern welfare state. However we have heard time and again this morning that the evidence shows that Section 13 has not been activated as one would wish. There may have been a misplaced sense of loyalties, but there has also been a great deal of sheer apathy.

In general, trustees have not grasped the initiative which was theirs to take. Since the period 1960 to 1965, the Charity Commissioners appear to have been content to exercise a passive role. One often hears of the Charity Commissioners' preference for saying "No". Since 1960–65, the Charity Commissioners do not appear to have seen it to be their role to facilitate and encourage charities to take advantage of the provisions of the 1960 Act to attain their aims. I believe that this negative response is tantamount to denying the existence of the problem; a problem that was recognised by Parliament a quarter of a century ago. We should not underestimate the significance of this non-activity.

It will be interesting to learn from the noble Lord the Minister—either today or later—how often the commissioners have exercised the power available to them under Section 18 to request the Home Secretary to refer a case to them where they are satisfied that the interests of the charity require a scheme but that the trustees have unreasonably refused or neglected to do so. The critical question posed by the noble Baroness is: How do we move forward so as to give effect to the principles of the 1960 Act and to the spirit of the donor's intentions?

We have heard that the Bill proposes a merger of parochial charities for the relief of poverty to form neighbourhood trusts to serve a group of parishes; and that a duty will be placed on the county councils (to be exercised over a period of five years—not 12 months) to prepare the necessary recommendations to the commissioners. We have seen already in the 1960 Act the principles of merger and of widening the area of beneficial benefit. So the new principle (and I am not so sure that it is new, given Section 18 of the 1960 Act) is the mandatory requirement. I agree with my noble friend Lord Foot: is that requirement to kill the Bill?

I support this Bill because something has to be done and I believe that this Bill takes the right approach. I wish to refer briefly to three matters in the light of our experience in Wales, where there is considerable concern about the inactivity of the ancient charities and where a steering committee has already been established to review the position and to make recommendations. The first point is a very minor one. The Bill throughout refers to parishes, which no longer exist in the Principality. It therefore requires a minor amendment so that the word "parish" is construed to mean a community.

Secondly, one would wish to know why the Bill is confined to those parochial charities whose aim is the relief of poverty. It has been put to me that in Wales there are probably more educational trusts than trusts for the relief of poverty. The state of the statistics is poor, and I am unable to verify that that is so, but I would wish to know why it is not extended to cover educational trusts. It may be that one cannot at this stage place an additional burden on the various authorities, and that I would accept, but in due course the educational trusts will also require proper consideration in legislation.

The third point is that in any scheme of reorganisation of the Charity Commissioners—this is not dealt with in the Bill, but reference has been made more than once to the role of the Charity Commissioners in the modern state—there is a need for the Charity Commissioners to establish a separate Welsh Office in Wales to which responsibility for oversight of Welsh charities could be transferred. The geographical area would not be extensive. Such an office would be close, or closer, to the eight county councils and to most Welsh charities. I believe that in co-operation with the county councils it could build up a bank of up-to-date standardised statistics about Welsh charities, and it would also relieve the burden on the Liverpool office of the commission and make it possible to bring a greater concentration to bear on the needs of the Welsh charities.

So, my Lords, initiative to integrate the ancient parochial trusts, and where necessary to reformulate their objects in order to achieve the donor's aim, is long overdue. Once again one says that the status quo is not an option. I believe that this Bill offers a new, practical and relevant approach to the problem, and it has many merits, which I trust will commend themselves to your Lordships' House.

12.43 p.m.

Lord Mottistone

My Lords, I, too, should like to congratulate my noble friend Lady Faithfull very much on bringing this Bill before us. I also very much support the idea of it being committed to a Select Committee; and I am delighted to hear that the Government agree with that approach. I will touch on only one or two small points, because the Bill has been very well dealt with by other speakers.

Before tackling the problem of supporting the Bill I consulted, as I do in these cases, the Isle of Wight County Council. It is, I think, of some interest that they indeed tried to make a list of the charities and to investigate them in 1977. They persuaded the junior branch of Rotary to do it. But in the event it was not found a suitable task for a group of young persons, so the work was not done, and nothing has been done since. I think that, perhaps—and here I would pick up a point made by my noble friend Lord Beloff—had the matter been one for the Department of the Environment there might have been just that little more pressure, and acceptance of pressure by the counties, for this to be got on with; but because it was the Home Office, to which they do not directly report and which does not give them money in the ordinary sense, they perhaps did not. I know my noble friend has said that it should be the DHSS, but I do not think that would improve the position. I think there is a problem of the work in the counties, and I think this is something that will need to be examined by the Select Committee.

If, as my noble friend Lady Faithfull says, it is only a cost of £2,000 a year for two years, that is fine; but that needs to be properly established. Also, I think the counties should be encouraged to use voluntary groups to do it. It might even be almost an understood thing that that is the way in which it should be done. At the time I am speaking of, in 1977, the counties were not short of staff in the sense that they perhaps now are, to which the noble Lord, Lord Mischon, called our attention. It could be that it would be more difficult now. I think this is a point we have to study: how it is done and who by, not unnecessarily burdening the counties with the task.

The other point I took from the noble Lord, Lord Mishcon, with which I agreed is the difficulty of persuading people to join in such a scheme as this. It is a shame that the right reverend Prelate has had to leave, because I have experience of church parishes being amalgamated and of the rivalries and difficulties that that can cause. I think it could well be that there are some charities which should be allowed, at any rate initially, to opt out of the neighbourhood trusts scheme. Of course, if they could show the Charity Commissioners, presumably, that they were a well-established charity and were being properly run, that there were suitable people existing to benefit from the charity, and a few obvious points like that—there could be some sort of guidelines—and if they satisfied all those criteria, they could be left alone for the time being.

One would hope that the neighbourhood trusts would grow in such a way that these other charities might be attracted to them in due course. I agree with the noble Lord, Lord Mishcon, that one needs to go very carefully to ensure that one is not treading unnecessarily on the toes of those operating something which is working in this particular area. I think the Bill is perhaps a little too compulsory. I can see why it is. Perhaps one should have some sort of let-out on the lines I have described, and the Select Committee might look into that.

My final point is in relation to the Charity Commissioners. I must say they seem to have come out of this extraordinarily badly. I entirely agree with the general theme of what my noble friend Lord Beloff had to say. I should like my noble friend the Minister to tell me, if he can, when he comes to make his contribution to the debate, who the commissioners are. What sort of people are they? Are they civil servants, or are they lawyers? Are they of this generation, or is it necessary to be over 90 before you are a charity commissioner? There must be some explanation for it. Who selects them, and what sort of criteria do they have in selecting them? Something desperately needs to be done to bring them into the 20th century, and to do it before the 21st century is upon us.

I really think this is something that needs to be dealt with, quite separately from this Bill and from the need for it to be progressed through its Select Committee. I think the Church Commissioners—I mean, of course, the Charity Commissioners; I hesitate to say the Church Commissioners, and if my noble friend Lord Sandford were here he would be very upset—need a long hard look taken at them, and perhaps we should sack the lot and start again. But I hope very much that we will encourage this Bill to go forward, and that it will in some form or other eventually reach the statute book.

12.49 p.m.

Lord Campbell of Alloway

My Lords, like other noble Lords, I would wish to pay my own tribute to my noble friend Lady Faithfull, without whose initiative we should not, in all probability, be discussing this very important subject which bears upon the humanities. It is at her request that I speak in this debate, but I have no expertise whatever in charity law. It is not my purpose to criticise any Government department, or any division of work between Government departments, or the Charity Commissioners, but to support the board case for committal to a Select Committee which was advanced by noble Lords who have spoken before me in this debate, including of course the right reverend Prelate the Bishop of London.

As the noble Lord, Lord Foot, said, there is general consensus on the need for investigation. I support the Second Reading in order to support the Motion for committal. But in this context it is relevant, in submission, to consider the Bill which, I understand, is about to passs in another place this afternoon; not at length, but very briefly. That Bill, which is to enable the property of small charities to be extended without regard to restrictions distinguishing between capital and income, will, it is understood, be opposed by certain of your Lordships, including my noble friend Lady Faithfull, not only on the issue of what is meant by value but on the fundamental issue of whether the Bill would not operate to destroy those ancient legacies to the detriment of the poor.

To this Bill now before your Lordships' House, which seeks amalgamation of parochial charities into neighbourhood trusts in order to preserve these legacies, it surely is relevant to consider that this will destroy nothing but will unlock dead funds and put them to some useful charitable purpose. These provisions include resort to the mandatory provisions of Clause 4. For some this would be too draconian. If I may borrow the observations of the noble Lord, Lord Mishcon (and it is not for the first time I find myself in total agreement with him) one must approach this with a considerable measure of care. That is one of the reasons why I am supporting the Second Reading—so that there should be this investigation.

With the greatest respect to the noble Lord, Lord Foot, who thought otherwise, I adopt here the concern expressed by the noble Lord, Lord Mishcon. I do not know if this was the thought of my noble friend Lord Mottistone—and I agree with him in the principle of his concept—but perhaps there should be a form of appellate procedure which could be invoked by any interested party so that the recommendation of the local council, which, subject to modification under Clause 4 by the commissiners becomes the scheme for the amalgamation of the charities, may be subject to general review by some revisory tribunal or court, even perhaps the Privy Council. It is a very important matter concerning the rights of donors, where the future of the willingness of people to give is concerned and where the more prestigious the tribunal perhaps the more appropriate it would be.

Is it not evident that on any showing there must be a measure of reorganisation of these parochial charities, quite outside the question of charities generally? The question is: what should be done about it? On that question there is, as has been observed, again by the noble Lord, Lord Mischcon, no substantial unanimity. It is common ground that we should do something but we are not agreed on what we should do. Is not this the classic situation where we should refer the matter, by committal, to a Select Committe? Indeed, is it not unneccessary, and indeed unwise, to allow two Bills which lie in conflict and which purport to deal with the same subject to entertain the time of your Lordships' House? Would it not be fare more preferable that we should have the benefit of those who are really skilled in this esoteric subject of charity law to assist us with our deliberations before we debate either of these Bills?

I have no intention of detaining your Lordships by seeking to canvass the merits of either Bill. That would be quite contrary to the main tenor of my submissions to your Lordships that the merits or demerits are relatively immaterial in the form of drafting and the form of purpose of these Bills. What matters is that we should receive expert assistance from the Select Committee in order to know how we should deal with them.

In conclussion, I take the point made by the noble Lord, Lord Foot, that it is no use saying that the voluntary reorganisation is a runner at all. Nothing will happen. I take, with gratitude, the point made by the right reverend Prelate the Bishop of London, who observed that adaptation by statute is the only way forward and that we should free ourselves from the legalistic approach of the Charity Commissioners. By using the words "legalistic approach" in relation to a body set up to apply the law I am not seeking to criticise them. At this stage criticism, in submission, is totally idle. What we need is information and advice.

12.58 p.m.

Lord Allen of Abbeydale

My Lords, I rise to express my appreciation of the initiative taken by the noble Baroness, Lady Faithfull, my general sympathy with the objectives of the Bill and, in particular, my support for the proposed reference to a Select Committee.

Some of us have from time to time urged a review of the general law relating to charities and I, too, derive some comfort from seeing that the Attorney-General, to judge from remarks in another place, is now coming round to that view. But, although the debate today—inevitably, I suppose—has tended to go a little wide, what we are, or at any rate ought to be, concentrating on is just one aspect that, happily, does not raise any great political or philosophical question—subject to the one point about staff to which I shall come in a moment. Certainly what has been said in the debate demonstrates that all we are talking about is something of much greater significance than one might be tempted to think at first sight.

Some rather unkind things have been said about the Charity Commissioners. I do not propose to lengthen my speech by answering all the questions asked by the noble Lord, Lord Mottistone, tempting though that is. However, I do believe that they have been handicapped by a lack of resources, for which historically I suppose I must accept some responsibility, and also by the somewhat confusing development of the law over the years both in Parliament and in the courts. Perhaps we need a new Charities Act, but certainly the Act of 1960, which reconstituted the commission and redefined its responsibilities, has turned out in some respects to have been lacking in precision, and it has indeed failed to meet some of the high hopes that were placed in it.

I took the trouble to re-read some of the debates on that Bill, and have been reminded of the importance which the Government of the day attached to the section authorising the review of local charities by local authorities and the contribution which they hoped these reviews would make towards promoting the more effective use of charitable resources. Unfortunately, though, this section did not attempt to define the purposes of these local reviews, and the picture which was conjured up of the Charity Commissioners, the local authorities and the charity trustees working together in harmonious co-operation to bring the local charities up to date and to avoid overlap with the statutory services does strike one as being—how shall I put it?—idealistic.

Nor has the register of charities set up under the Act proved to be the mine of information one had rather hoped for. Previous speakers have referred to the lack of precise information. One must say that we are today discussing the future of parochial charities for the poor without any precise knowledge of how many charities there are, what assets they have, what they spend their money on, what their income is—still less what their income ought to be, given the point the noble Baroness made about the tenant farmers using charitable land for which they pay what is now a ridiculously low rent.

On 27th May last (col. 1358 of Hansard), I asked the Government how many local and parochial charities having a permanent endowment were registered in three of the four groups as laid down in the Macnaghten judgment—that is for the relief of poverty, for the advancement of education and for other purposes beneficial to the community. I did not ask about those for the advancement of religion. I was told in reply that no distinction was made in the register between charities having a permanent endowment and others, and that this information—which was not actually what I had asked for—could be obtained only by examining the individual deeds, the cost of which would be disproportionate. My Lords, I can only say, Alas! But I agree with what I understood to be the point that the noble Lord, Lord Beloff, was making: that the absence of detailed information is not of itself a reason for sweeping the whole issue under the carpet and that if we do nothing there seems to be no likelihood of anything better emerging on its own initiative. We do know quite a bit, as the noble Baroness has said, from the county reviews. We know that there are a great many parochial charities which do not have very much money, but we know that there are quite a number which have a great deal. In spite of the picture which the noble Lord, Lord Mishcon, painted for us in such moving terms about the application and loyalty of the local trustees, I am afraid we do know that a great deal of the income is not being usefully and imaginatively applied. We know, too, that there is very little sign of the consultation between trustees and the statutory bodies that had been hoped for. What is perhaps even more important, there is very little sign either of anything being done voluntarily to make things better.

The crux of the problem dealt with by the Bill seems to me to be this. These charities were endowed for the relief of the poor and not for the amenities of the parish. It was quite natural at the time for the parish to be taken as the unit, since in the days of the Poor Laws each parish was responsible for its own poor. But, leaving aside the very tiny charities, in many areas it is now possible to ensure that the money is sensibly used for the relief of the poor in ways not covered by the welfare state only by enlarging the area of operation. The argument for the Bill is that it is much more in keeping with the intentions of the donors to do this, rather than to go on dribbling the income away in pretty useless doles; or, alternatively, departing from the wishes of the donors and ceasing to use the money for the relief of poverty, diverting it instead to amenities within the parish. This is the main purpose of the Bill, as I understand it, and I go along with it.

There are one or two aspects of the Bill itself about which I am not altogether happy, but this is not the time at which to go into detail about them. But I may perhaps just mention that I am a little uneasy about the definition of the objects of neighbourhood trusts, as set out in Clause 5. I am not sure what the sanction is if the local authority fails to put in its proposals within the five years specified in, I think, Clause 4. But points of this kind—and there are quite a few—can be threshed out later.

But before I sit down I should like to comment very briefly on two of the other objections to the Bill which have been voiced by Home Office Ministers—contrary though it is to my whole upbringing to voice the slightest doubt about their views. The first one is the point about staff. I understand the fears, but I think that it is possible to exaggerate them. Some of the preliminary work must have been done in the county reviews; and, so far as the counties are concerned, the further demands should be quite modest and voluntary bodies of a suitable kind could be called upon to help. So far as the Charity Commission is concerned, they already manage to put through each year a substantial number of amalgamation schemes of a rather different type—174 of them in 1981—and the end result of setting up neighbourhood schemes would mean such considerable economies for them in future in having to deal with fewer boards of trustees that some additional effort should be well worth while.

A second objection was that to compel the trustees of these old schemes to combine would deter potential donors now. I am sorry, but I simply do not understand this objection. No one is coming forward now to set up new parochial schemes for the poor, and I really should be surprised if anyone were put off making a charitable contribution simply because better effect was being given to the desires of people who endowed charities a long time ago. But if there is anything in the point, it must apply with rather greater force to this other Bill about small charities which appears on the agenda in another place this very day, and which, for some unaccountable reason, seems to have received some sympathy from Her Majesty's Government.

But I will leave it there, apart from striking just a note of warning about the extent of the remit of any Select Committee which is appointed, given some of the comments which have been made in the debate. I shall sit down, again saying that I support the proposals of the noble Baroness.

1.10 p.m.

Baroness Lane-Fox

My Lords, I have just two small reasons for wishing to give the Bill my wholehearted support. First, like so many of your Lordships, at one time I lived in a village. The village had a small parochial trust, which was quite out of step with the current situation. This was the cause of very much thought and concern to dutiful inhabitants and parish councillors, who almost wished that it would go away.

It seemed like fantasy. There was good money, and it was a puzzle to know how to spend it.

Secondly, a few years ago I was sent to work for several days on researching at the headquarters of the Charity Commissioners, to discover suitable charities to approach for a project with which I was connected. I was amazed by the lack of cross-referencing and up-to-date details afforded by the files. It was a question of wading through stacks of amazingly dusty files. Although I was very grateful to have permission to do this, I was much less grateful for the billows of dust from the files—dust which enveloped me and triggered off my asthma.

This exercise certainly aroused my interest in the Charity Commissioners. I was very ignorant about them. Who were they, and what made them tick? The nearest answer at which I arrived was that they are a quasi-quango, a quasi-judicial body, apparently accountable to nobody, but with the Home Office as their spokesman. From what I saw for myself it seems extremely unlikely that they have any necessarily detailed grass-root information on the numerous parochial charities on the scale that is needed today. Without this they can be in no position to administer the charities, as presumably was intended.

I congratulate my noble friend Lady Faithfull on her customary skill and her adroit handling of a very delicate matter, and I am delighted to support the Bill's provisions. I hope that with the help of my noble friend the Minister the Bill will lead eventually to the funds in question being made available for the many needy rural and other causes that surely exist today.

1.12 p. m.

Lord Cullen of Ashbourne

My Lords, I shall not delay the House by more than a minute. I should just like to congratulate my noble friend Lady Faithfull on introducing the Bill, and on the way in which she did so. I wish to support my noble friend Lord Mottistone in some of his rather forceful questions about the Charity Commissioners. This has nothing to do with the parochial charity for the poor. I had a difficult experience with the Charity Commissioners, and I believe that as a result of the Select Committee's activities, the more we can hear about their work, their method of operation, their structure and accountability, the better we shall all be pleased.

1.13 p.m.

The Parliamentary Under-Secretary of State, Home Office (Lord Elton)

My Lords, I am grateful to all those noble Lords who have made such valuable contributions to the debate; and I am particularly grateful to my noble friend Lady Faithfull for giving the House an opportunity today to discuss the work of parochial charities. She has given us an admirable survey of the long history of the charities with which her Bill is concerned. She has also illustrated their great diversity, not always with examples designed exclusively for the benefit of the poor. I was particularly taken with the foundation which offered £2 to a preacher to preach, and 50 pence to the church wardens to listen. That is an interesting principle. If it were applied to this Dispatch Box and these Benches, I dare say that it would be necessary to reverse the proportions in order to secure an attendance.

As we have heard, a similar Bill was introduced as a Private Member's Bill into another place, where there was no opportunity for it to be debated. Therefore I am glad now to have a chance to set out the Government's position on the Bill before us.

My noble friend has made the suggestion that the Bill should be handled by a Select Committee. I believe that that is a constructive suggestion, and it is one which the Government would not wish to obstruct. As my noble friend said, this is a complex field, fraught with a lot of difficulty, and not a little emotion. My noble friend's desire is to see the large, but fragmented, amounts of money in local charities brought to bear with greater effectiveness on real and pressing problems. While we sympathise with that, we have grave doubts as to whether what she proposes in the Bill sits well either with the spirit in which many of these monies were given, or indeed with the doctrine of cy-près, which lies properly at the heart of existing requirements for the change of the purposes of charitable trusts.

This difficult ground seems to me appropriate to be worked by a diligent Select Committee. This is in itself a large and potentially fruitful field. It could only suffer if it were to be dealt with in haste, and the pressures of the parliamentary timetable would almost certainly introduce an element of haste into any treatment accorded it by a Committee of the Whole House. But to widen the terms of reference as my noble friend Lord Beloff suggests, to cover the whole field of charities and their administration, would I think be to overload the consideration, and here I echo the wise, cautionary words of the noble Lord, Lord Allen of Abbeydale.

It is not in any case what my noble friend is proposing, and I would not feel free to support it if it was; nor do I feel that my noble friend Lord Trefgarne is at fault, if that was my noble friend Lord Beloff's suggestion. I do not think that my noble friend Lord Trefgarne is at fault in his absence from this debate. My noble friend Lord Beloff should not suppose that Ministers are so little pressed in their work that they can afford to attend personally every debate in which they may have an interest when responsibility rests properly in the hands of another.

We are talking of a Select Committee, and a Select Committee stands out of the pattern of the main traffic of committees, and I am perfectly content that my noble friend's Bill should be handled as she proposes.

However in the absence of such a proposal, I should have found it difficult not to pour a great deal of cold water onto the Bill, despite the fact that all of us share my noble friend's desire to see the resources of charities, both large and small, used to their greatest effect. We are well aware of the nature of the problem. Of the 144,000 charities registered with the Charity Commissioners, well over half have an annual income of less than £100. It is right that we should be concerned with the proper and relevant use of funds donated, sometimes hundreds of years ago, when some of the needs of the poor were very different from their needs today.

I think I heard my noble friend say that the value of the charities is £35 million. If the value is really as high as that—and I say this in ignorance of her grounds for stating it; I take leave to doubt it—it would arouse avarice. If, as I think, it is less, it still arouses a considerable and legitimate interest.

The Charities Act 1960 specifically entrusts the Charity Commissioners with the responsibility, of promoting the effective use of charitable resources by encouraging the development of better methods of administration, by giving charity trustees information or advice on any matter affecting the charity". Moreover, they must 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". Your Lordships will not need reminding that under the cy-près doctrine the purpose of a charitable trust can be altered by the Charity Commissioners in certain circumstances, so long as the new purposes are as near as possible to the old ones. Certain procedures have to be followed, including the advertising of the proposals and the consideration of objections. I need not elaborate upon this now, except to emphasise the point that the commissioners' scheme-making power can be exercised only on a voluntary basis, on application by the trustees. The commissioners may, however, proceed on application by certain parties other than the trustees where the charity's income is not more than £50.

There is also power to proceed by compulsion where the commissioners are satisfied that the trustees ought to have applied for a scheme but have unreasonably refused or neglected to do so, and the Secretary of State endorses the commissioners' view. That power which resides in Section 18 of the Act has never yet been exercised. That answers the noble Lord, Lord Prys-Davies.

My noble friend Lord Mottistone asked me who and, indeed, what the Charity Commissioners are. The Charity Commission is a Government department, but its functions on individual charities are quasi-judicial, and in these it is entirely independent of all Government Ministers. There are, as the Charities Act 1960 requires, three commissioners, of whom at least two must be lawyers. They are appointed by my right honourable friend the Home Secretary. The present chief commissioner was appointed in March last year, after selection through open competition. I must again emphasise that in their quasi-judicial functions the commissioners are not subject to direction by the Government, and also that with one exception, which I have already mentioned, they have no power to act independently, on their own initiative. They cannot therefore have had the opportunity to avoid the criticism of my noble friend that they have shown no initiative.

The 1960 Act also makes provision for local authority reviews of local charities in England and Wales. Section 11 empowers local authorities to initiate reviews of their local charities. They, may make to the Commissioners such report on the review and such recommendations arising from it as the council after consultation with the trustees think fit". The charity trustees must consent to the review.

The question of the charity trustees' consent to these reviews was considered very carefully at the Committee stage of that Bill in this House. The noble Lord, Lord Saltoun, expressing fears that a local authority might exert undue pressure on local charities to agree to a review, moved an amendment to Clause 11 that reviews of local charities should be initiated by the Charity Commissioners at the request of the local authority. The noble Lord, Lord Silkin, thought that local authorities should be able to carry out a review without the consent of the trustees, and moved an amendment to that effect. Neither amendment was accepted after the then Lord Chancellor, the noble and learned Viscount, Lord Kilmuir, had explained that the main purpose of the clause was a partnership in which both sides worked together voluntarily so that the best use might be made of their respective resources.

I can only echo those words. I think that it would be an unjustifiable infringement of partnership and cooperation on an equal basis—saving the presence of the noble Lord, Lord Allen of Abbeydale, who, not for the first time, I believe, has ventured out of the safe ground delineated by his long experience to criticise the department—if the local authority could carry out reviews without the consent of the trustees. I must apologise to your Lordships for having dwelt at such lengths on the provisions of the Charities Act. I hope your Lordships will agree that it already provides a legislative framework for the review and modernisation of parochial charities.

I must nevertheless accept the arguments put forward by my noble friend Lady Faithfull and supporters of her Bill that progress in carrying out the reviews and amalgamations envisaged in the 1960 Act has been slow, especially in recent years. I should, however, remind the noble Lord, Lord Prys-Davies, that reviews have been instituted in every county of England and Wales, and that in the 16 years until the end of 1980 1,242 schemes had been made by the Charity Commissioners as a direct result of local reviews.

To those who believe that it is in the best interests of charity that small and out-dated charities should merge to be more effective in achieving their purposes and in relation to the area in which they can be applied, the results of this part of the 1960 Act must be disappointing. While it is the case that the majority of small charities have already had their purposes modernised by the commissioners where this was necessary, the number of grouping schemes has not been as great as expected.

I think we have to examine the possible causes for this apparent lack of progress before we can give the Bill before us today proper consideration. As I said a moment ago, your Lordships' House itself originally considered the need for the consent of the trustees to a review to be essential. The experience of some local review organisers has shown that trustees of parochial charities guard their independence jealously, and they are often unwilling to see their benefits distributed over a wider area. Although this attitude is sometimes considered as intransigent and old-fashioned, it surely can also be seen as the proper respect for the donor's wishes, or the proper interpretation of those wishes with which the trustees have been entrusted. The reluctance of many trustees to participate in reviews only illustrates the point that most concerns the Government: that the imposition of a compulsory element onto reviews of local charities is objectionable in principle.

A further consideration was that expressed by the noble Lord, Lord Mishcon, who echoed a point made in the annual report of the Charity Commissioners in 1980 and placed on it a very polite and subtle but nevertheless political gloss. The commissioners said: With local authorities under increasing pressure to reduce their expenditure, it is not surprising that few of them are willing to embark on reviews of charities operating within their area. This is in continuation of a trend which has been apparent for some years". In consequence, the report continues, the two local review sections were disbanded and the work absorbed into the mainstream of the commissioners' work.

While I understand and respect the reasons behind my noble friend's promotion of the Bill, I have to say that the Government see serious objections to it. It is fundamental to the law relating to charitable trusts that the property held on such trusts must be used for the purpose for which it was placed on trust. Any trust is protected in law, but charitable, trusts occupy a privileged position in that they are not subject to the rule against perpetual trusts, nor do they fail because their objects are uncertain or become impracticable. It seems right that we should take particular care to safeguard their original purposes as far as practicable. When the purpose of a charity is altered according to the cy-près doctrine, the new object must remain within the spirit of the original donation and be varied to the minimum degree necessary to enable the charity to serve a useful purpose. This is a very different principle from that of the Bill before us, which overrides the wishes of the donors in a way which we believe is out of keeping with the principles and spirit of charity law.

Charitable giving is, after all, essentially a personal and a voluntary activity. The Bill before us seems to have little sympathy with this. The thousands of local charities which would be affected by the Bill were established to help the poor in a wide variety of ways, reflecting personal interests and areas of concern. Much thought must have been given to the precise ways in which the donors wanted to benefit their localities, and it is worth remarking in passing that these charities are a fascinating record of how people in the past tried to help those in need. Certainly it is haphazard as a system, and it may not be the most rational way of using these resources.

The right reverend Prelate has suggested that this may be at the bottom of a perceived drift of charitable giving away from the very local and therefore very personal and welcome level. That is a point well taken, but there is another that we have to bear in mind. It is that charitable giving is already showing signs of decline. If people were not free to give as they pleased in the confidence that their wishes would be carrried out, it might well decline further still.

I do not regard this (as the noble Lord, Lord Allen of Abbeydale, shakes his head) as a fanciful consideration. I think of the benefits left in the wills of people for local concerns. I would have thought that in drawing up their wills they would very much feel threatened by a sweeping and compulsory power operating on the field into which they wished to make a small and personal intervention, feeling that it might be absorbed into other purposes. Charity is voluntary giving, and charity law is based on the importance—

Lord Allen of A bbeydale

My Lords, I am sorry to interrupt the noble Lord. Will the Government express the same sentiments in dealing with the Bill that is currently in another place?

Lord Elton

My Lords, when we come to see that Bill I shall address myself to that question.

Lord Mishcon

My Lords, I am afraid that the noble Lord the Minister cannot get away with that very short, sharp sentence. Are we to understand that, in spite of what he says, this other Bill which is in the other place is in fact favoured by the Government? If it is, there are many of us who will feel very angry, especially at that short reply.

Lord Elton

My Lords, what I am doing at present is addressing myself properly to discussing a Bill on the Order Paper of this House. The noble Lord wishes me to start to discuss a Bill on the Order Paper in another House. I very much doubt if I can properly at this stage introduce the discussion of another Bill. If I can do so, I shall return to the subject. In the meantime, I spare the noble Lord the pain of interrupting me further.

Lord Mishcon

My Lords, the noble Lord accepts the pain and is prepared to suffer it for the sake of justice and for the sake of clarity in this House. The noble Lord the Minister has just expressed the principle—a very clear principle—that it would deter people who might be wishing to make charitable gifts or, indeed, legacies in their wills, by the fact that their purpose may be frustrated. There is another Bill in another place which does frustrate that object by making it a fact that such trusts come to an end. Would the noble Lord the Minister say whether in his discursion into this matter he feels that that is consistent with what he has just said? If he feels that that object is inconsistent, may we take it for granted that the Government are consistent in their view and will oppose the other Bill?

Lord Elton

My Lords, the other Bill to which the noble Lord refers does not have an element of compulsion and we are in favour of the voluntary principle. The noble Lord will not expect me to announce the Government's proposed Second Reading speech on the other Bill before it reaches this House, which is what I thought he wished me to do. But if the noble Lord, asks me whether we are consistent in being opposed to compulsion, the answer is, Yes.

Central and local government may have a variety of ideas about how resources can best be deployed and they have access to resources with which to give effect to such policies and priorities in rational and efficient ways. It is to be hoped that similar principles will apply to resources contributed voluntarily, but it is fundamental to existing charity law that no Government compulsion of any kind should be admissible to achieve that.

We have received letters from a number of trustees of charities who would be affected by the Bill; most have raised objections to it. They accept that some charities are not effective but many of the letters point out that their charities are performing useful tasks efficiently, and on one occasion they even produced accounts to prove it. The trustees are understandably anxious to preserve their independence and express resentment that they might be forced into amalgamations regardless of how much of a success had been made of each charity. Trustees of local charities have considerable duties to perform and many of them take great pride in performing them well—a pride which is not directly related to how much money is at their disposal.

Although the Bill aims for the effective use of charitable resources it could well have an opposite effect both in the loss of active, thriving local charities which would be caught by the Bill, and in the possible loss of many interested and experienced trustees.

Nor is it the charity trustees alone who are to be subjected to the compulsory elements of the Bill: the local authorities also must carry out their reviews of the charities in their areas within one year of the Bill's passage and the Charity Commissioners must issue schemes giving effect to the recommendations arising from the review reports. We believe that most counties would not welcome the Bill on cost grounds, as they would simply be unable to carry out the provisions within their existing resources. I am as chary of my noble friend's optimistic assessment of the cost of those as I am of her estimate of the capital sums in question. We have already seen signs of a decline in charitable giving and we have already seen signs of unwillingness under the voluntary reviews so far carried out. The same is true of the Charity Commission: there is no way in which it could take on this work without extra staff and increased expense to the taxpayer. As my noble friend Lady Faithfull said, the commissioners have a difficult task and we are fortunate that they carry it out with such dedication and judgment.

Even were the principles not objectionable there could be no question, at the moment, of the Government allowing additional resources for either local authorities or Charity Commissioners to carry out the tasks which would be imposed on them by the Bill. But this does not mean that we are not prepared to look at ways in which the resources available to local charities may be appropriately put to more effective use, where this is thought desirable.

Like the noble Lord, Lord Mishcon, we believe that we should know more about the difficulties which local charity reviews encounter, their possible benefits in persuading charity trustees to release resources for wider use, their cost-effectiveness, and the scope for establishing a neighbourhood trust or improving the use of local charitable funds by making information about their objects more widely available. As my noble friend Lord Campbell of Alloway has said, information is something which we still do not have enough of. To this end the Home Office Voluntary Services Unit is funding a local charity review in Lancashire. It has taken some time to get going but it has started work this month with the appointment of a review organiser. Progress in reviews like this is never as quick as one would like, but those concerned are very enthusiastic and I believe that it will give us a good opportunity to see how effective a review, which does not rely in any way on compulsion, can be in practice.

I have explained at too great length why the Government consider that this Bill is out of step with charity law, and how those most closely affected by it could not welcome it, warts and all. For these reasons, the Government are unable to advise the House to support this measure, although I would not be so churlish as to advise it to reject it.

Support for the idea of the Select Committee has been pretty general this afternoon, and I heard with particular interest the support given to it by the right reverend Prelate and, indeed, by the Churches' main committee. A Select Committee might be able to acquire a great deal of valuable knowledge and a welcome depth of wisdom on this subject. It might even enable the Bill to qualify to benefit from that charity to which my noble friend earlier referred whose founder suffered from warts on his nose, and get some of them off the Bill.

Lord Campbell of Alloway

My Lords, before my noble friend sits down, I should like to ask a point of clarification. I must have misunderstood. What is the point of sending this Bill to a Select Committee if Her Majesty's Government are committed to the other Bill? Perhaps I have misunderstood the position?

Lord Elton

My Lords, I think that I have said very nearly as much as I can on this subject. I have told your Lordships of a principle which we find objectionable in this Bill; your Lordships have asked whether it is in the other Bill, and I have said, No. But I think my noble friend should consult through the usual channels if he wants to take the matter further, because I cannot take it further.

Lord Mishcon

My Lords, I wonder whether I might extend this point. I am sure that the House does not wish to waste its time or that of a Select Committee of your Lordships' House. The noble Lord the Minister expressed a point of view of principle and then said that he was now on another principle—that of compulsion or voluntary act. I am assuming, as I believe others of your Lordships are assuming, that the origional settler or testator is now dead and therefore cannot be consulted, and therefore cannot be said to be doing something voluntarily. He has a succession of trustees and they of course could, under the other Bill, cause his charitable trust to cease and be frustrated. That is not, from the point of view of the original settler or testator, a voluntary act because he is in another place—whether higher or lower—where his consent cannot be given.

Therefore, I am afraid that the question of compulsion or voluntariness does not apply to the principle that the noble Lord the Minister is trying to enunciate. I believe that this House would be extremely angry—and I have used that word before—if it were led to believe that the whole matter was being considered by a Select Committee when in fact another Bill was going to be given Government assistance in another place.

Lord Elton

My Lords, I am not sure how long the conventions of this House allow us to play ping pong across the Table at Second Reading. On the question of compulsion not being exercisable upon a testator who had departed these realms to another place, the wishes of the testator nevertheless survive him in the hands of the trustees. It is the voluntariness of the actions of the trustees which we think should not be impinged upon. As I do not know the outcome of what is happening in another place at this stage, I still am not in a position to predict what will happen in this case.

1.41 p.m.

Baroness Faithfull

My Lords, I think I should rise quickly because otherwise we might be here until tomorrow morning. What is perfectly clear is that, The time has come, the walrus said, For something to be done". All those who have spoken today agree that something has to be done, though many of us have been divided as to exactly what it should be. I shall not detain the House very long because there is further business. First of all, I thank every noble Lord who has spoken in the debate today. I know that the subject is a complicated one, and I am most grateful to all those who have spoken and contributed.

Perhaps I may briefly make a few points. First, we—and in particular, the noble Lord, Lord Mishcon—have talked about the question of resources. The noble Lord, Lord Foot, very well answered the question. If any other Government department—and we have learnt from my noble friend the Minister that this is regarded as a Government department—was running on such short resources that it had to be inefficient, because that is what it means, I wonder whether that would be allowed. I suspect not.

On the question of the mandatory and voluntary principle, it has been pointed out by many noble Lords that the voluntary principle for the formation of neighbourhood trusts has existed since 1960. This has been pointed out by many noble Lords, and it has not been effective. Another point is the question of data. I understand that there are data, because the reviews have been carried out throughout the country. This is in the hands of the Charity Commissioners. What I would suggest is that those data have not yet been properly analysed, but they are there.

With regard to the Bill before the other place, I am going to be careful over this, because otherwise we could continue. I would support other noble Lords who have said that this is an extraordinary situation. I have on other Bills found myself in disagreement with my noble friend the Minister. I have the greatest admiration for his ability and, usually, for his logical approach to everything. In this, I have to say that it is not a logical approach to support the Bill before the other place and not to support the principles of the Bill before your Lordships' House today.

Many noble Lords have talked about the composition of the Charity Commission and the way it works. Many noble Lords have said that it is an independent, quasi-legal body. I wonder whether my noble friend the Minister will forgive me if I say that his speech today bears that out. I would suggest that he is speaking to a brief, and obviously, with all that he has to do, he cannot possibly have the time really to know how the Charity Commission operates. This point was well brought out by the noble Lord, Lord Beloff, and the noble Lord, Lord Mottistone.

I am grateful for what has been said. I must make my position clear over the Charities Bill before the other House. Should it come to this House I could not possibly support it. If your Lordships are going to grant a Second Reading, followed by the agreement to a Select Committee, I would suggest that the Bill before the other House should be considered by the Select Committee rather than us having yet another debate, though that is not for me to say. I thank your Lordships for your support, and I thank the noble Minister for what he has had to say, although I cannot fully agree with him.

On Question, Bill read a second time.

Baroness Faithfull

My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the Bill be committed to a Select Committee.—(Baroness Faithfull.)

On Question, Motion agreed to: Bill committed to a Select Committee accordingly.