Charities Bill [H.L.]

HL Deb 28 January 1985 vol 459 cc487-534

5.24 p.m.

Viscount Colville of Culross

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Viscount Colville of Culross.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

Clause 1 [Submission of, and publicity for, charities' accounts]:

Lord Renton moved Amendment No. 1: Page 1, line 5, leave out subsection (1).

The noble Lord said: I beg to move Amendment No. 1, and I suggest that, with it, we take Amendment No. 2 and Amendment No. 54, which will also be consequential. Amendment No. 2: Page 1, line 17, leave out ("such a charity") and insert ("a local charity for the relief of poverty"). Amendment No. 54: After Clause 5, insert the following new clause:

Application of s. 43 of 1960 Act.

(" . Section 43 of the Act of 1960 shall have effect for the purposes of this Act as it does for the purposes of that Act.").

May I say that these amendments and others which I have tabled in my own name are mainly technical and drafting and have been drafted by a member of the Chancery Bar who is, so far as I know, one of the greatest experts on charity law? Amendment No. 1 is simply to leave out subsection (1). The reason that is suggested is that it is unnecessary, because all that is required in the making of new regulations, which of course would have to be made, is to apply Section 43 of the Charities Act 1960. I should like briefly to draw your Lordships' Committee's attention to it. I think I should read out subsection (2), which is so clear, so direct, so short, and, if I may say so, so beautifully drafted. It says: Regulations may be made for prescribing anything which is required or authorised by this Act to be prescribed". It seems to me that to go into the detail which is set out in subsection (1) is quite unnecessary, in view of what is stated in subsection (2) of Section 43 of the 1960 Act.

Of course, I must deal with the point which no doubt will be raised in regard to re-writing or amplifying the Secretary of State's power. Subsection (1) says that it shall include power,

1. "(a) to prescribe the forms in which … statements are to be transmitted, and
2. (b) to require any such statements to include an itemised schedule … of all property currently held for the purposes of the charity, with an estimated value assigned to each item".

The Secretary of State has power to do that, if we apply Section 43 of the 1960 Act. For us to go into this quasi-administrative detail seems to be quite unnecessary. Therefore, I would suggest that subsection (1) should be omitted.

Before I go any further, I should acknowledge my indebtedness, and perhaps that of other Members of your Lordships' Committee, to the noble and learned, Lord Brightman, to whom last week I sent a note explaining the purpose of this amendment and my other amendments. With great alacrity and immense speed, and with his usual efficiency, he was good enough to send me a note. I think I should leave it to him to amplify the point of view which he expressed in that. But I want to say this. He referred me to paragraph 91 of the Report of the Select Committee upon which this Bill is based. If we refer to paragraph 91, we find this: The Committee recommend that requirements with regard to the content of the accounts be improved by a revision of the Charities (Statements of Account) Regulations 1960 so as to give greater authority to Charity Commission Forms AC(A) and AC(B)". But then—and this is the particular point which I think should be stressed—the committee went on to say this: The Committee prefer not to prescribe the detailed provisions of such Regulations, which should be made at the discretion of the Secretary of State under s. 43 of the Charities Act 1960". But they do recommend, that in the case of local charities for relief of poverty"— which is what we are dealing with here— the Secretary of State should have power to prescribe the forms". They also recommend the itemised schedule to which I have referred, which is in paragraph (b) of the subsection.

5.30 p.m.

It seems to me that the wishes and recommendations of the Committee would be perfectly well met if we use the power which is in Section 43. But there would have to be a minor consequential amendment (Amendment No. 2) and another consequential amendment (Amendment No. 54), to which I should quickly and briefly like to refer.

Amendment No. 54 appears at the bottom of page 5 of the Marshalled List. It says: Section 43 of the Act of 1960 shall have effect for the purposes of this Act as it does for the purposes of that Act". I beg to move.

Lord Denning

I hope that your Lordships will not accept this amendment. It takes out one of the most important provisions of the Bill. When the Select Committee reported they showed how important it was that the existing lassitude should be remedied. They said that that was most urgent. They said at paragraph 90: The Committee … are satisfied on the basis of the evidence that there is an overwhelming need to remedy this state of affairs. They think that this can best be done by putting trustees of parochial and local charities for relief of poverty under a stricter duty with regard to the contents of accounts; creating a greater expectation that they be compiled and transmitted; and ensuring that they receive a wider dissemination". Certainly I would agree with my noble friend Lord Renton that the Secretary of State has power already. If we construe Section 43 of the 1960 Act, we find the power is there. But it is very important to give the Secretary of State a prod, to tell him what he ought to do—in effect to tell him that his regulations should provide for these matters as is set out in Section 1. I have no doubt that if he were given that prod he would do it and therefore would carry out the recommendation which the Select Committee have put forward. I hope that your Lordships will not accept the amendment.

Viscount Colville of Culross

I entirely appreciate the reason why my noble friend Lord Renton has tabled this amendment, and certainly it would not be my wish to complicate the Bill any more than is necessary. There are, however—and were in the view of the Select Committee—certain possible defects which suggest that we ought to put this matter beyond doubt in very much the way in which the noble and learned Lord, Lord Denning, has just suggested.

In the first place, although the general power to make regulations appears in Section 43 of the 1960 Act, the power to require particular statements of accounts in fact appears in Section 8. Section 8 does not say anything about forms of account at all; it does not make it clear that the Secretary of State can apply his mind to the particular form of account that is necessary in order to provide the statistics which in all the deliberations of the Select Committee were found to be so woefully lacking or at any rate woefully out of date. If there is not a specific power to prescribe forms, it seemed to the Select Committee that it was worthwhile putting it in the Bill. I would also suggest to my noble friend Lord Renton that there is another technical reason, and this one may possibly appeal to him even more.

My noble friend rightly referred to the fact that this clause relates to a limited selection of charities for the relief of poverty. Under the 1960 Act and the provisions which relate to regulations, there is no provision—as sometimes occurs in more modern legislation—that regulations could be made for different purposes and in different forms. In other words, there is no clear provision in the existing legislation for this particular small group of charities and, for all we know, for them alone (because there is no evidence whatever about what is needed for other forms of charities); there is no specific provision for the Secretary of State to be able to make regulations which apply only to them.

As I said to your Lordships on Second Reading, it is no part of this Bill to carry out a major reform of charity law as a whole. The target is a very specific one: the small charities. If there is any doubt about it, it seemed to my colleagues who sat on the Select Committee—and it certainly still seems to me, even though I have heard what my noble friend has to say—that it would be infinitely desirable to make it clear beyond peradventure that the Secretary of State has indeed the power to make this specific form of regulations for these particular charities. Therefore, if we leave this provision in the Bill, he will have it beyond a doubt. If we do not do so I think that there are legal reasons for it not to be absolutely certain that he can do what I believe all of us, including my noble friend, wants. So I would urge your Lordships not to accept this amendment. I hope that my noble friend will withdraw it for the reasons that I have given.

Lord Renton

I certainly do not intend to press this amendment. I take note of what has been said by the noble and learned Lord, Lord Denning, and by my noble friend Lord Colville of Culross. But I must make the following comment before I withdraw the amendment. I think that both of their speeches—and I say this with deep respect—reveal a woeful lack of confidence in the Home Secretary and his advisers, including the commissioners. It is a sad situation if Parliament is to go into quasi-administrative details in legislation, because that shows such a lack of confidence in those who have the responsibility of keeping an eye on this branch of the law or on any other branch of the law. However, having said that, and saying it I trust without rancour, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

Lord Renton moved Amendment No. 3: Page 1, line 18, after ("annually") insert ("by the charity trustees")

The noble Lord said: This is purely a drafting amendment and I think that it is so self-explanatory that it needs no further explanation from me. I beg to move.

Lord Colville of Culross

It is so obviously correct that I have no hesitation in accepting it.

On Question, amendment agreed to.

Lord Renton moved Amendment No. 4: Page 1, line 19, leave out from ("authority") to end of subsection (2) and insert ("as well as to the parish council or the chairman of the parish meeting as the case may be.").

The noble Lord said: The purpose of Amendment No. 4 is to ensure that parish councillors shall be given the right to receive the statement of accounts direct from the charity trustees. I understand that they have that right at present. If we are to make things clear in the Bill, then this is something that we should make clear beyond doubt. So often parish councillors are asked to appoint a trustee or trustees. In those circumstances, I suggest that it must be right for them to be given the accounts direct. Accordingly, I beg to move.

Lord Denning

For many years I was president of the National Association of Parish Councils. I have been president of the Hampshire Association of Parish Councils. They are the best possible people to overlook these charities and to ensure that things go well. I always told them that, like a judge, they ought to be independent of party politics. They were all very good; they were absolutely at the grass roots and able to look after their local affairs. Who better to receive the accounts of these small charities than the parish councils? They do not have too much to do. I learned what they had to do and they did it extremely well.

When we passed the Act about footpaths, they mapped out their footpaths; they look after the bus shelters and so on. Apart from that, they do not have enough to do or as much power as they ought to have. Why not let them be recognised? They are the grassroots people to supervise these little local charities. They take a great interest in them. Let them have the accounts direct. Let them have a voice in the matter. It will be good for them and good for the charities. I support the amendment.

Viscount Colville of Culross

This is a difficult point. I know that the National Association of Local Councils, which is the current body—

Lord Denning

Perhaps I may interrupt with a few words. That association produces an excellent magazine or periodical which is circulated to all local councils. So if publicity were to be given to this matter, all these people would know about it; it could be sent to all the parish councils. That is the point that I want to make.

Viscount Colville of Culross

I was simply about to say that I have received representations from that association. As a matter of fact, I did not reach the stage of becoming its president, but I was a vice-president for a time and so I have considerable sympathy with what the noble and learned Lord, Lord Denning, has said.

When deciding upon the drafting of the Bill the problem that faced the Select Committee was as follows. The whole object of this little piece of legislation is to try to make matters as easy as possible for the trustees. Under Clause 1(3) they have to send their statement of account to the appropriate local authority, which would probably be the district council. Of course, anyone else can ask for a copy and from the way in which the Bill is drafted, there is a great incentive for anyone, including a parish council or a community council in Wales, to ask the trustees for a copy of the accounts until they have carried out the obligation to send a copy probably to the district council, whereupon it becomes the repository and would be responsible for providing other people with copies.

The object of the whole exercise was to try to impose one simplified form of accountability upon the trustees and to make it in such a form that, if they once filed one set of accounts, thereafter they would not have to bother with the matter any more because people could go—and it is not usually very far—to the district council office and obtain a copy there. That seemed to us to be an incentive to them to do what, alas, is so often not done—to make locally available every year a statement of their accounts which everyone can look at.

Like so many of the matters in the Bill, this is an experimental provision. If, for one reason or another, it should turn out that the parish council or the community council is not succeeding in obtaining a copy of the accounts—either because it cannot get to the district council or perhaps because the trustees do not obey the law and provide a copy upon request—there are powers in subsection (3)(c) of this clause for the Secretary of State to make regulations which would allow him for instance, to require the trustees to send a copy to the parish council, because that is another local authority.

However, the Select Committee thought that it would try the simple way first. Very far from having no confidence in the Home Secretary and his advisers—which my noble friend Lord Renton suggested just now—we think that the Home Secretary would readily respond with alacrity to any widespread complaint that parish councils were not receiving copies of these accounts under the primary system that we have set out in the Bill. If that were to occur, he could make the regulations which would restore the present position whereby the parish councils are entitled to a copy.

Therefore, we thought that the best way was to try it empirically, to see whether this stick and carrot system, as it were, would work; then, if it did not, we had still provided a reserve power so that the parish council would be able to obtain its copy. I hope that that will satisfy my noble friend. We want to make matters as easy as possible for the trustees of the very small charities, so that at last we obtain public information on a sufficient scale to enable sensible judgments to be made on a matter which so far I am afraid is very obscure.

5.45 p.m.

Lord Maude of Stratford-upon-Avon

I very much agree with everything which the noble and learned Lord, Lord Denning, said and I can see my noble friend's point about trying to make the Bill simple. If this had been a case of something being included in the Bill which did not exist before, or if that is what my noble friend is suggesting in his amendment, I could understand it. But surely the Bill is taking away from the parish councils a right which they already have under the 1966 Act. That seems to me to be rather a heavy-handed thing to do. I really cannot see any justification for it, and I hope that my noble friend Lord Colville might think again about this.

Lord Renton

I, too, hope that my noble friend Lord Colville will think again about this. He acknowledges that parish councillors should have the right to receive the accounts if they wish. But he suggests that this admirable objective should be achieved by taking, so to speak, two bites at the cherry. The first bite is to leave them to ask the district council for a copy and, if that does not work in general, then the Secretary of State will be asked to make regulations, which will then have to be laid before Parliament. I suggest that that is a much more cumbersome way of establishing the right than for us to accept this simple amendment.

I should like to add just one remark. It was all right in the days when, for example, in my old constituency there were no fewer than nine district and borough councils; but now all those nine councils are covered by one district council—a great bureaucracy. I cannot feel confident that there will be quite the same opportunity for the many parish councils in that district—and there are about 60 of them—to obtain satisfaction from this large district council as there used to be under the old aegis. Therefore, I must ask my noble friend Lord Colville to think again about this matter and to bear in mind what has been said by the noble and learned Lord and by my noble friend Lord Maude of Stratford-upon-Avon.

Baroness Trumpington

Perhaps I may say a few words on behalf of the Government in order to get the Government's position clear. The Government believe that the effect of the amendment will be to place a further unnecessary administrative burden on the trustees of parochial charities by requiring them to send their accounts to two local authorities.

As my noble friend Lord Colville has already said, there is provision in the Bill for the Secretary of State, by regulation, to require the local authority which receives the accounts to send them to any other local authority specified in the regulations. We appreciate the concern that parish councils should be informed about the local charities in their areas, but we do not consider that this should be required by law. If, in the event, this view is mistaken, the situation can be remedied by means of subsequent regulations which, as my noble friend Lord Renton has said, would not be cumbersome.

Lord Renton

Had I known that my noble friend Lady Trumpington was about to intervene, I should not have made my second intervention. Having heard my noble friend, may I say again that I am surprised, because it is acknowledged, that, if they want them, these parish councillors should have copies. That is acknowledged by my noble friend Lady Trumpington. But that is not unnecessary duplication. Indeed, this amendment suggests that trouble would be avoided by simply requiring the charity trustees to do as they are obliged to do at present, and to send a copy of the accounts to the parish council. It does not seem to me to be very much to ask.

Lord Wilberforce

I just want to raise one point for clarification. I have probably completely missed the point and, if so, I ask the indulgence of the Committee. Clause 1 does not deal with parish charities; it deals with local charities. To find out what a local charity is one has to turn to Clause 6(1)(b)(i), and one finds that that is one which falls within an area. It has to be an area greater than a parish. It has to fall, within not more than 5 adjoining parishes". Therefore, a local charity is not coincident with a particular parish. It may extend over several parishes.

I wonder whether that is not an argument for not imposing on the trustees the duty of finding out which is the relevant parish, of sending it to possibly two parishes, or three or four, which does seem to complicate their task, if I have the point right, but it may be that I have not understood the mechanism.

Lord Airedale

That was the speech which it was on the tip of my tongue to deliver.

Lord Brightman

May I say a brief word against this amendment? The trustees will already be required to send their accounts centrally to the Charity Commission. One single local filing centre would seem to be adequate for all reasonable purposes. The scheme of the Bill is to make the appropriate local authority the local filing centre. It seems to me that it is not really a necessary burden to impose on charity trustees that they have to file their accounts a second time locally. It should be sufficient for the parish council to ask the local authority for a copy of the accounts under Clause 1(4)(b).

Viscount Colville of Culross

I have listened carefully to this debate. The noble and learned Lord, Lord Wilberforce, and the noble Lord, Lord Airedale, are of course absolutely right. It could be a good deal more than one parish council which has to receive a copy of these accounts. What I should like to do is to see how effective has been the duty imposed under the present law. I do not know whether it is going to be possible to find out, but efforts could at least be made.

There has been a statutory duty now for 25 years for all these charities to file their accounts with the parish councils. The fact remains that whether they have done it or not the ignorance about the financial status of this sort of charity is absolutely staggering. It suggests to me that, whether or not the parish councils have had the power to receive the accounts, they have not enforced it. They just have not been using it, and they have not been requiring the local charities in their parish, or in their locality, to send in the accounts so that there is some idea of what is the sort of sum of money both in terms of capital and income with which we are purporting to deal. We thought that it was much more likely that the district council would be more firm about this and that it would make certain that these accounts were filed annually.

I should like to take this back, as my noble friend has suggested, and see whether it really looks as though it would add to the information collecting function of this Bill, which would greatly assist the Charity Commissioners as well, if we introduced this further duty on the trustees. I believe there is a balance here. I do not think that they should be overburdened or they will not fulfil the law, as I am afraid they have so often not done in the past. There is a point to be looked at here. If my noble friend will leave it with me, I shall make such inquiries as I possibly can before the next stage of the Bill.

Lord Renton

I am grateful to my noble friend for his constructive suggestion. I too should like to consider with care what has been said in this debate. Perhaps we can have a discussion about it between now and Report stage. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hooson moved Amendment No. 5: Page 2, line 3, leave out ("2") and insert ("12")

The noble Lord said: As regards the time during which local authorities must hang on to the statement of accounts sent to them under the provisions of Clause 1(3), it seems to me more sensible that this should be 12 years rather than two. The purpose of the local authority hanging on to the statement of accounts, among other things, is that the statement should be open to public inspection. There is no provision requiring the local authority at the end of the proposed two-year period to pass the accounts to the Charity Commissioners in the first place.

Therefore both nationally and in the local authority areas it will be desirable to monitor the results of this piece of legislation during the course of the next decade. It seems to me it would be more sensible to require the local authority to keep the accounts for 12 years rather than two. I cannot see that this would impose any burden upon them. I beg to move.

Viscount Colville of Culross

Again, this is very much a matter of judgment. The existing provision for the retention of accounts is in Section 32(2) of the 1960 Act, and at that time Parliament, in its wisdom, said seven years. The noble Lord, Lord Hooson, said 12, and we say two.

The real problem is to get the balance right between a retention of the accounts locally for a sufficient period of time perhaps to collect statistics in the way that the noble Lord has said, and any possible resource implications which might fall upon local authorities to add to their storing system, their files, their methods of retrieval, and that sort of thing, at a time when, as every single Member of this House will know, local authorities are under considerable financial stringency.

The noble Lord, in putting forward a 12-year period, would be adding something quite substantial, particularly in view of the point made by my noble friend Lord Renton that the district councils may now well have a largish number of these charities within their area. It is a matter for the noble Lord to weigh up.

If this matter is properly dealt with in accordance with the existing law and this Bill, there ought to be copies with the Charity Commissioners for at least seven years, which would enable research to take place, and not least if the Charity Commission could only get their computer. I wonder whether there is any additional advantage in making a requirement for it to be kept for yet a further period of years in a scattered form round the country in the hands of the local authorities. I have no strong views about it, but I think it could prove to be a burden that the local authorities would not welcome.

Lord Brightman

There is a statutory period for the retention of accounts by charity trustees, but I think I am correct in saying that there is no statutory period for the retention of accounts by the Charity Commissioners. I have been informed by the Charity Commissioners that in fact they retain accounts of charities indefinitely, and that they have never yet thrown away a set of accounts.

The result of that is that if any member of the public wishes to see the antique accounts of a charity he can always go to the Charity Commission and obtain a copy. It would therefore seem unnecessary for the accounts to be retained locally encumbering the warehouses of local authorities for a longer period than two years.

Lord Hooson

In the light of that information, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Colville of Culross moved Amendment No. 6: Page 2, line 5, at end insert ("and")

The noble Viscount said: These two are technical drafting amendments.

Amendment No. 7: Page 2, line 8, leave out ("and (c)") and insert ("(3A)")

What has happened is that, if your Lordships will look at subsection (3), you will see that at the present moment there are three paragraphs which make certain requirements. They begin at line 3 of page 2 with the words "during that period".

"during that period— (a) the statement shall be open to public inspection at all reasonable times".

That is fine. And,

"during that period— (b) the authority shall, on the request of any person, supply to him a copy of the statement". That is fine. But I do not think it is sensible to require the Secretary of State to make any necessary regulations "during that period". He may want to make them at any time, for the sort of reasons we were discussing just now.

It therefore seems better to split up the subsection as it stands and turn it into two subsections so that what is now (c) will stand in its own right not qualified by any period of time during which action has to be taken. Therefore we should have (3)(a) and (b), and then we should have a new subsection which contains the present paragraph (c). I beg to move.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 7:

[Printed above.]

On Question, amendment agreed to.

[Amendment No. 8 not moved.]

6 p.m.

The Deputy Chairman of Committees (Baroness Wootton of Abinger)

I have to point out before I call Amendment No. 9 that if this amendment is agreed to I shall be unable to put Amendments Nos. 10 or 11.

Lord Renton moved Amendment No. 9: Page 2, line 26, leave out subsection (5).

The noble Lord said: I will bear in mind what the noble Baroness the Deputy Chairman has just said about its effect on Amendments Nos. 10 and 11, but I think that your Lordships might wish to consider Amendment No. 9. The point that arises is that Clause 1(5) appears to be unnecessary as it is always open to anyone to make representations to the Charity Commissioners to the effect that charity trustees are in default.

This is an exploratory amendment. If your Lordships feel that the subsection should stand, if only to enable Amendments Nos. 10 and 11 to be discussed, I would not press it any further, but the subsection appears to be unnecessary. I beg to move.

The Deputy Chairman of Committees

The Question is that Amendment No. 9 be agreed to.

Lord Renton

With great respect, what we need to have put now is that the amendment is proposed. It is not a question of putting the Question just yet. I have moved the amendment: it is now for the Deputy Chairman to say, "Amendment proposed…".

Viscount Colville of Culross

May I proceed on the basis that that is what the noble Baroness the Deputy Chairman has done? When the Select Committee decided that subsection (5) should be included we did not overlook the point that my noble friend has made about the ability of everybody to make a request to the Charity Commissioners. The trouble about it is that on the whole they do not very much. The Charity Commissioners do not have the facilities to check for themselves whether the charity trustees have put in their accounts for the year. If the Charity Commissioners were to be asked about any one specific charity they would look up their files and would immediately and willingly say whether that was so. There is no question of recalcitrance on their part, but they do not make an automatic check every year to see whether trustees have submitted their accounts.

It seemed to the Select Committee that a number of people locally, with the interests that this legislation may, with luck, arouse, may wish to know the current situation. Therefore, it is to underline the power of members of the public to ask the Charity Commissioners whether the trustees are in default.

Of course, certain people can make a complaint—and that will be extended under another provision in the Bill—under Sections 18 and 19 of the 1960 Act, but we thought that this would reinforce the power of the public to try to put pressure on the trustees of a charity to ensure that they fulfilled their duty. We think that from the psychological point of view this is worth having in the Bill.

Lord Renton

I am most grateful to my noble friend, and in view of what he says I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Denning moved Amendment No. 10: Page 2, line 26, after first ("to") insert ("the appropriate local authority or")

The noble and learned Lord said: As my noble friend Lord Colville of Culross said, in a way this clause is to enable some sort of pressure to be put upon the commission by individual members of the public to see that the obligations are fulfilled. The obligations are there to file the proper accounts and to prepare them, and for the local authority to receive them and make them available.

My amendment is designed to increase that pressure. It should not be left simply to any member of the public to take action. Surely the people to take action should be those who receive the accounts. These people are bound to receive them and to make copies of them available. They know whether the accounts are in order. Therefore, to put more pressure in the field of enforcing the accounts, instead of having only the phrase "open to any person", any member of the public, I should like to insert the provision that "the appropriate local authority" themselves may do it. They are the people who receive the accounts; they can see whether they are in order; and, if the regulations are not complied with, they can operate the system. Why not let them be in charge? It will give them an incentive. I make it optional by saying, "to the appropriate local authority or" any member of the public. This would make pressure available to the local authority which receives the accounts to see that the rules are complied with. I beg to move.

Viscount Colville of Culross

This is the amendment that I have been dreading most of all in the entire Marshalled List, because I have to tell the noble and learned Lord that, for a very good legal reason, his amendment is unnecessary. The point is that in the Interpretation Act 1978, in Schedule 1, it is said that "person" includes, a body of persons corporate or unincorporate", and that includes all local authorities. So they already have the power under the provisions of the Bill as it stands.

I hesitate to make a point of that sort to a person of the stature of the noble and learned Lord, but I promise him that it is correct and I hope he will accept it.

Lord Denning

I recognise that it is unnecessary. It is already there by virtue of the Interpretation Act, but I believe we should make it a little clearer and provide the opportunity to bring pressure on the appropriate local authority, which knows all about it. That is the point of my amendment.

Lord Renton

I hope that my noble friend Lord Colville will not submit to the learned blandishments of the noble and learned Lord, Lord Denning. We must be well disciplined, if I may say so with deep respect, in everything that we do when legislating. These words really are unnecessary. I am sorry to have to say that. I hope that on this occasion my noble friend Lord Colville of Culross will stick to his guns.

Lord Denning

In the circumstances, I will not press my amendment any further. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 11 not moved

]

Lord Renton moved Amendment No. 12:

Page 2, line 31, leave out subsection (6) and insert— ("(6) Notwithstanding subsection (4) of section 18 of the Act of 1960, the Commissioners may exercise their jurisdiction under that section in the event of default by the trustees of a local charity for the relief of poverty for a period of at least twelve months in complying with this section or the Act of 1960.").

The noble Lord said: This is a purely technical and drafting amendment. In discussing the previous amendment, my noble friend Lord Colville referred to Section 18 of the 1960 Act. Amendment No. 12 is a redrafting of subsection (6), but with a reference to Section 18 of the Act of 1960 which I think needs to be made. I do not wish to labour the matter. If noble Lords would be so good as just to look at the wording that I propose, I think that they may see that it has an advantage in it. I beg to move.

The Deputy Chairman of Committees

I have to point out that if this amendment is agreed to I shall not be able to put Amendment No. 13.

Baroness Trumpington

The Select Committee believed that the affairs of local charities should be conducted with greater openness and that trustees should be more accountable for administering their charitable funds. The proposal that anyone should be entitled, in the case of a charity in default in respect of accounts, to make representations to the commissioners was designed, I believe, to enable defaults to be brought to the attention of the commissioners when they might not otherwise have come to their attention. This seems to be a positive and reasonable reform.

Viscount Colville of Culross

I appreciate the reasons why my noble friend Lord Renton has moved this. I think that, to some extent, we are in a bit of a drafting muddle here, because there is no doubt that it would be very desirable to include a reference to Section 19 because the powers of the commissioners to act in the case of default are comprised in both Sections 18 and 19 and they might want to use one or the other or, conceivably, both.

For the moment, what I should like to do, if my noble friend agrees, is to see whether I can persuade the committee to accept Amendment No. 13, to see how that looks on paper and then. perhaps, just go back and look at his Amendment No. 12 to see whether there is any further improvement that could be derived from that. I should be extremely unhappy not to get in at this stage the reference to Section 19 that we have under the next amendment. I wonder whether we may do it in that way.

Lord Renton

I am most grateful to my noble friend. I think that he has made a wise and constructive suggestion, which I greatly welcome. I therefore beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Colville of Culross moved Amendment No. 13: Page 2, line 36, after ("1960") insert ("or settle a scheme under section 19 of that Act").

The noble Viscount said: I have really just dealt with this. It extends the powers of the Commissioners under this Bill to deal with defaults under Section 19 of the 1960 Act as well as under Section 18. The point of it is this. At the moment there is a limitation on the sorts of people who can make application under these two sections. What we are doing in this Bill is to throw it open to anybody, including indeed the local authorities, as we have just been discussing. Therefore, it seems that they should have, at the invitation of anybody who has a justifiable complaint, the full range of powers to use as they think fit under the 1960 Act. I beg to move.

On Question, amendment agreed to.

6.15 p.m.

Viscount Colville of Culross moved Amendment No. 14:

Page 2, line 36, at end insert— ("(7) This section does not apply to an exempt charity.").

The noble Viscount said: I wonder whether I may deal with the question of exempt charities all in one go without getting into the most staggering muddle. At the present moment, the Bill has in Clause 6 a provision which leaves out any possibility of the exempt charities benefiting from any of the provisions of this Bill. The exempt charities are listed in the second schedule to the Charities Act 1960. They include a great many people who, I am quite sure, will never want to take advantage of any of these powers. But representations have been made—for instance, by one or two of the universities—that when it comes to some of the powers to change the objects of charities (which is particularly relevant under Clause 3) they could very usefully employ the provisions that are now being put forward. Therefore the decision has been made to deal with exempt charities clause by clause.

This is the first provision of this sort and it has been thought that Clause 1 of the Bill should not apply to any exempt charity and that it should therefore remain as the original draft stood. However, when we get to Clause 2—and that is covered by Amendment No. 28(11)—there is a specific provision which has a slightly different effect. It withdraws again any application from an exempt charity or, indeed, from a charity which is a company or any other body corporate: in other words, it goes slightly further than the second schedule to the 1960 Act.

Under Clause 3, however, (which is where there has been a request for the use of the powers in this Bill) exempt charities, will, if they wish, be able to take advantage of these provisions unless they come under paragraph (g) of the second schedule. What comes under paragraph (g) in the second schedule is, any registered society within the meaning of the Industrial and Provident Societies Act, 1893, and any registered society or branch within the meaning of the Friendly Societies Act, 1896". The reason why they do not need to have any provision made for them in this Bill is because they already have their own registrar, who can deal with all matters that would be necessary in this respect. Then, when it comes to Clause 4—and this is covered by Amendment No. 49—the same applies to any exempt charity, except the ones in paragraph (g), to which I have just referred, would be able to use these powers of their own volition. Therefore, instead of having a blanket ruling out of exempt charities it has been dealt with bit by bit all the way through the Bill. This is the first occasion. Perhaps if I explain it in that way, it will save a little time, but we still think it right that exempt charities should not be able to be involved in Clause 1. I beg to move.

Lord Renton

I feel bound to point out that this question of exempt charities and the matters with which Clause 1 deals is even more complicated than one might have judged from listening to my noble friend Lord Colville of Culross. The definition of an exempt charity is in subsection (1) of Section 45 of the 1960 Act. That says that an: 'exempt charity' means (subject to subsection (9) of section twenty-two of this Act) a charity comprised in the Second Schedule". Those in the second schedule are a very odd bunch and include the universities, university colleges, the British Museum, the Church Commissioners and all other kinds of very distinguished and select bodies. But when we come to Section 22(9) of the 1960 Act, we find this rather strange provision relating to a common investment fund. It states that it, shall be deemed for all purposes to be a charity, and the assets of the fund shall be treated for the purposes of this Act as a permanent endowment, except that if the scheme establishing the fund admits to participation only charities not having a permanent endowment, the fund shall be treated as a charity not having a permanent endowment;". Then we find these words: and if the scheme admits only exempt charities, the fund shall be an exempt charity for the purposes of this Act". The difficulty that I experience in trying to correlate those provisions with the provisions of the Bill is that I do not see how a local charity for the relief of poverty could be an exempt charity within the meaning of the definitions in the 1960 Act. Therefore, while greatly appreciating the constructive purpose and the thoroughness with which my noble friend has moved this amendment to leave out exempt charities, I just wonder whether it is necessary at all. He might care, between now and the Report stage, to consider the possibility that it is not necessary.

Viscount Colville of Culross

I think I agree with my noble friend that it is extremely unlikely that a body which he has described and which has the form set out in Section 22(9) of the 1960 Act would come under Clause 1. Therefore, there is no disagreement between us about the impact of the amendment that I am moving, because it is not changing anything in any way. The difficulty has been to find a formula, because in the case of Clauses 3 and 4 certain sorts of charities are thought, or could be thought, to profit from being able to use the provisions of the Bill. Therefore, one has to deal with exempt charities in the other clauses of the Bill where it is thought that they would not be able to profit.

We do not think they can profit under Clauses 1 or 2, so it is specifically being said in each case. Therefore, when you come to Clauses 3 and 4 you say which exempt charity may be able to use the provisions. That is the way that this has been done, and it is part of the pattern. Of course I will look at anything again; but I in fact believe that this is all right, although I would be the first to admit that it is extremely complicated.

Lord Renton

I appreciate what my noble friend means, and I appreciate what he is saying, but I really think that his purpose might be better achieved by having an amendment to Clause 6, which would then enable the application of exempt charities to the various provisions of this Bill in its various clauses to be clearly stated in one place, rather than picking out their application to individual clauses one by one, as it seems he is intending to do.

Viscount Colville of Culross

I will look at that. It was really exactly from that sort of formula that we departed in embarking upon this series of amendments. But, pending that, I should like to make it abundantly clear that exempt charities are not within the scope of Clause 1 and so I hope that this amendment could go into this Bill this evening.

On Question, amendment agreed to.

On Question, Whether Clause 1, as amended, shall stand part of the Bill?

Baroness Ewart-Biggs

I should like to make one general point, but first I should like to apologise to your Lordships for the disappointment that you must be feeling that it is me at this Dispatch Box instead of my noble friend Lord Mishcon, with all his wealth of experience. However, he is out of the country today and so is unable to be here. All I can say is that I hope your Lordships will take advantage of the fact that I must be very representative of a lot of lay trustees who will be very much affected by the provisons of this Bill. Perhaps they can use me as a measuring stick as to how much comprehension will be inspired by the Bill itself. I think it is true to say that wide comprehension of this Bill is an essential criterion for its success.

Just on a very general note, I should like to stress that we on these Benches entirly support the provisions in the clause, which are there purely for the purpose of stimulating local interest in the local charities, which are there for the relief of poverty, and also to call attention to the charitable monies which are available and of which they may not previously have been aware.

Finally, of course we fully support the measures proposed to ensure a greater accountability on the part of local charities. Our only fear could possibly be, knowing the sensitivities of people who run charities and those who are the trustees of charities, that their sensitivities should not be upset by the greater accountability they are asked to give. There should be a balance between respecting the sensitivities and bringing greater accountability in respect of their affairs, which is clearly so necessary.

Viscount Colville of Culross

I am perfectly certain that I speak for everybody in this Committee when I welcome the noble Baroness to the Dispatch Box to speak on this Bill—and a very good point she has made. There does need to be a balance, and certainly the members of the Select Committee were very well aware of the susceptibilities of local charity trustees.

There is, however, the other point of view; namely, that they are handling what is effectively public money. As I think I said on Second Reading, if it is money which is derived from income they receive tax relief, so that it is public money which is being provided for at the expense of the rest of the taxpayers. I think that accountability, in these circumstances, is not something too unreasonable for which to ask.

As for the complexities of the subject, I am very pleased to see that the Charity Commission have already issued a sort of provisional pamphlet which explains what is in the Bill. It has been widely distributed; and I have no doubt that there will be other explanatory material coming forward if in fact the Bill is able to survive its parliamentary course. I welcome the noble Baroness's contribution very much indeed.

Clause 1, as amended, agreed to.

Clause 2 [Resolution by trustees of old charity to alter objects]:

Viscount Colville of Culross moved Amendment No. 15: Page 2, line 37, after ("applies") insert ("subject to subsection (11) below")

The noble Viscount said: This is a paving amendment for the passage about exempt charities in Clause 2, and I have already explained it. I beg to move.

On Question, amendment agreed to.

Lord Hooson moved Amendment No. 16: Page 2, line 38, after ("poverty") insert ("or a registered charity (not being an ecclesiastical charity) of which the gross income in the preceding accounting period was £200 or less,").

The noble Lord said: As a mere common lawyer, I move very gingerly in the realm of charities. My purpose in moving this amendment is to discover why charities within the ambit of Clause 3 should not also use as an option the mechanics of Clause 2. Clause 2 at present applies only to poverty charities which are at least 50 years old. They can alter their objects in order to re-invigorate themselves. Clause 3, on the other hand, is not confined to poverty charities. There is no time limit but there is a financial limit: that is, an income of £200 or less in the previous year. However, the only right that Clause 3 gives is effectively to wind up the charity altogether by transferring its assets to another charity. I can think of no reason why they should not be given the option of going down the Clause 2 route of amending their own objects, rather than winding up. I have excluded ecclesiastical charities from the amendment. It seems to me on the face of it—and I am open to conviction the other way—that this would be an important and constructive change in the Bill. I beg to move.

Viscount Colville of Culross

I, too, looked upon it as being a constructive approach until I thought a little further and took some advice. The primary purpose of Clause 2 is to deal with the very obsolescent charities whose original donors had in mind some specific beneficiary of a sort which either does not now exist or does not cover adequately the provisions of poverty in an area. Therefore, it was particularly susceptible as a subject for changing the objects of the charity. That is why in Clause 2 one concentrates on this type of charity.

6.30 p.m.

It is perfectly true that there could well be other obsolete charities whose objects ought to be reconsidered. They can be, of course, under the existing law, because, although it is rather more difficult than the do-it-yourself scheme that the Bill produces, they can go to the Charity Commissioners who can make schemes and other alterations in accordance with the existing law. But the advice that I have been given really turns on the resource implications of what this would mean, because according to such calculations as can be made—and I agree that it is not entirely easy—there will be something like a seven-fold increase in the number of charities who will be eligible if this amendment is accepted.

The Charity Commission have been very cooperative about the preparation of this Bill, and I wish to pay full tribute to them. What they have said is that they have a very strict limit on the amount of resources that they could possibly spare in addition to what they are already employing. They think that they can just about handle the number of applications which would be likely to arise under Clauses 2 and 3 as they are at present drafted. But if one added seven-fold to the possibility of applications for trustees to change their objects under Clause 2, then I think we would run into a position where the Charity Commission would say that, alas! they could not cope.

The whole essence of this piece of legislation is that it has been constructed in conjunction with the Charity Commission and with the Home Office so as to lie within the bounds of possiblity of what they can cope with. I believe that unless we remain within those bounds we shall produce a measure which will not have the effect that we want and which, indeed, might draw criticism about the diversion of resources away from other things that may be thought more desirable. So although I very much take the noble Lord's point, I think that for that very important, and indeed sometimes central, practical reason of the amount of money that would be involved, I am afraid that I have to resist this amendment.

Lord Hooson

I very much regret that we are not taking advantage of this Bill. We always tend to have an over-cautious approach with regard to charities, and it would seem very sensible if we could incorporate this amendment within the Bill. But if there is an important resource implication which really cannot be met, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hooson moved Amendment No. 17: Page 3, line 3, leave out ("impossible") and insert ("impractical").

The noble Lord said: This is a very simple amendment. It seems to me that very little in this life is strictly impossible, and a change of word would mean a slight reduction in the number of formidable hoops through which trustees will have to go in order to get the remedy presented by this clause. It seems to me that the intention is to consider impracticality rather than impossibility, and the word "impossible" seems unnecessary here. I beg to move.

Lord Airedale

I wonder whether my noble friend will think that "impractical" is nearer in meaning to "lacking in usefulness" than to "impossible", and whether he might consider at the next stage of the Bill, if he thinks that "impractical" is a more elegant word, swapping "impractical" for "lacking in usefulness", rather than swapping it for "impossible".

Viscount Colville of Culross

There is another point. I hope that I shall not be accused of being flippant, but this was part of the evidence that was brought before the committee. One of the larger funds has taken over the administration of a charity which is for the benefit of the ladies of Paddington. The people who run this organisation have found it extremely difficult to define the ladies of Paddington—at least to the extent of avoiding trouble with the police. They have had to produce a device whereby in their accounts for each year they set aside a certain amount of money which could be provided for the ladies of Paddington if they ever found any—I think that the ladies of Paddington are described by some sort of adjective as well—and at the end of the year, because they have never found one, they distribute it among the other beneficiaries who are entitled. In that case, I think that the object is impossible and therefore there is some point in having this word in. If the noble Lord would like to consider changing "impractical" in the way that the noble Lord, Lord Airedale, suggested, I certainly would have no objection, but I believe that there are real cases of impossibility.

Lord Renton

If I may add one postscript to that, as I understand it, traditionally the powers of the court with regard to objects which have failed, for example, relate to their having failed, and they have failed because it is impossible to achieve them, not because it is impractical to achieve them.

Lord Hooson

The contribution of the noble Viscount, Lord Colville of Culross, seems to indicate that it might be impractical to find ladies of Paddington but surely not impossible. It seems to me that he underlined the very point that I seek to make; namely, that it would be better here to have the word "impractical" rather than the word "impossible", because very few things in this world are impossible of achievement. I shall bear in mind the suggestion of my noble friend that I should reconsider this matter before the next stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Colville of Culross moved Amendment No. 18: Page 3, line 15, leave out ("so set out") and insert ("of the charity").

The noble Viscount said: This is simply a drafting amendment. It clears up and makes a good deal more obvious what is meant by the text. I beg to move.

On Question, amendment agreed to.

Baroness Faithfull moved Amendment No. 19: Page 3, line 15, after ("charitable") insert ("and for the relief of poverty").

The noble Baroness said: Like the noble Lord, Lord Renton, I should like to thank my noble and learned friend Lord Brightman for his help with my amendments. The intention of this amendment is first, that a local charity for the relief of poverty with obsolete objects shall not alter its objects in such a way that the new objects cease to be for the relief of poverty; and, secondly, that where a small charity which desires to transfer its assets to another charity is a charity for the relief of poverty, the objects of the transferee charity must also be for the relief of poverty.

I quite realise that it could be said that under Clauses 2(3) and 3(2)(b) of the Bill as drawn this is explicit; that there is no need for this amendment and that it is written in that these charities shall be consistent with the spirit of the original gift. My amendment in no way alters the Bill, but it dots the "i's" and crosses the "t's".

Those of us who have attended parochial parish meetings and meetings of trustees know that if we are very anxious to have something it is possible to convince oneself and to turn something round in order to fall in with, perhaps, the spirit of the original gift. For example, there is one charity where the vicar is paid £5 for preaching a sermon and the churchwarden is paid 10 shillings for listening to it. Do they fall within the realm of poverty? The vicar, I am quite sure, and many churchwardens, will agree that they do. Therefore my amendment is simply to make it absolutely clear to everyone concerned, and to place beyond doubt, exactly what the Bill means. As I say, it does not alter the Bill; it just clarifies the situation. I beg to move.

Lord Brightman

I think that this amendment does reflect what was intended by the Bill and, if I may speculate, I think it is quite likely that the committee would have inserted those words if it had thought of them in time. Although it is perhaps not for me to support the amendment, I see no harm in it whatever.

Viscount Colville of Culross

My noble friend Lady Faithfull has entirely taken the point about the various safeguards that are provided in order to prevent the charitable money going away from the relief of poverty. There is the provision that there shall be no, unjustifiable departure from the intentions of the donor, or … the spirit of the gift", and there is of course in particular the provision whereby the commissioners themselves have to look at the reasons why the trustees are proposing the change and the change to which they are proposing to go. They are not lightly going to let through something which diverts the fund away from poverty.

I think there is one technical difficulty about the amendment. The definition in Clause 6 states: References in this Act to a local charity for the relief of poverty are to a registered charity … having the following characteristics— (a) the sole or primary object of the charity is the relief of poverty". The difficulty about my noble friend's amendment, even if we had thought in principle of putting it into the Bill, is that it leaves out the second half of the definition and confines a charity, which previously could have had a primary object and also a secondary object, to having only a primary object. Therefore even if the noble and learned Lord. Lord Brightman, is happy with the spirit of it, I am afraid that I am a tiny bit unhappy with the drafting.

I wonder whether that is something we could look at again so that we may be absolutely sure that it does not in fact restrict the ability of the trustees to transfer their funds to what they want rather than making sure that they do it in the right way. I wonder whether my noble friend will allow me to take advice on that, because I believe it is a technical matter which needs to be sorted out.

Baroness Faithfull

I am most grateful to the noble and learned Lord, Lord Brightman, and to my noble friend Lord Colville. Of course I will take note of what he says. I myself do not completely understand the legal situation and I also should like to look into it. Therefore, at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hooson moved Amendment No. 20: Page 3, line 17, leave out subsection (3).

The noble Lord said: This is yet another probing amendment and I simply pose the question: does subsection (3) add anything to this clause? It seems to me that subsection (2) already covers this matter and that really this is a question of duplication. Is it not yet another example of the overcaution that is so often expressed when we are dealing with such things as charities?

I notice that at the end of subsection 2(b) the words, consistently with the spirit of the original gift", are already there. In subsection (3) we have, departure from the intentions of the donor, or violate the spirit of the gift". What really does subsection (3) add to the clause? I can see that it might provide infinite scope for trouble in the future. Of what assistance is it in the interpretation of this clause? I beg to move.

6.45 p.m.

Lord Renton

It seems to me that subsection (3) was an attempt to express the cy-prés doctrine. As to whether that is necessary or appropriate to do in this particular context, I must confess I have an open mind. I am not sure; but that seemed to be the effect of it.

Viscount Colville of Culross

I go back once again to the intention which underlies this piece of legislation. The purpose is to try to enable trustees without any substantial amount of professional advice to carry out certain changes—in this case, to the objects of their charity. One could of course achieve a certain amount through the doctrine of cy-près, to which my noble friend Lord Renton has referred, but the doctrine of cy-près—nobody is a greater expert on this sort of thing than the noble and learned Lord, Lord Brightman—is a fairly complicated and abstruse matter and can certainly be dealt with at the moment only through the Charity Commissioners or through the courts. It was the decision as set out in the Select Committee's report that, rather than tinkering with the doctrine of cy-près as it at present stands, as it has been built up by a long series of judicial decisions, it would be better to provide an easy bypass for the cy-près doctrine in its true sense. Therefore, if trustees are going to be invited to reconsider the objects of their charity, it was I think the view of the Select Committee that they need as much guidance about the sort of things that they ought to have in mind as it is possible to give them.

It is perfectly true that subsection 2(b) refers to the, spirit of the original gift", but I think if I was a lay trustee and I was faced with the possibility of changing my objects to something away from what they were, I might welcome a little more guidance than that as to what is exactly meant by something being altered,

consistently with the spirit of the original gift':. It was because of the audience or the constituency, as it were, to which this legislation is addressed that it was thought fit to try to spell it out a little more in subsection (3). I know that to some extent there is a repetition, but it is intended to try to set them on the right lines so that they will be able to write out the reasons in the form that appears in the schedule in a way which is consistent with what the legislation is really intending to do and in a way which will satisfy the Charity Commissioners.

In those circumstances and given that object, although I can entirely see the noble Lord's point of view about tautology, we thought it was worth while to put in these extra words and I hope that on reflection he will think that they may do some good.

Lord Brightman

I would respectfully ask that this amendment be not agreed to, because subsection (3) is intended indeed to spell out what is meant by,

consistently with the spirit of the original gift", in simple language that trustees can understand without incurring the expense of going to their lawyers.

As was said on the Second Reading of the Bill, the whole purpose is to make things easy for trustees, to enable them to get their house in order as easily as they can themselves without any expense and without advice. If we rely only on the words,

consistently with the spirit of the original gift", I am afraid that some trustees may be nervous of invoking this clause, may incur the expense of legal advice and so forth. I would respectfully ask that subsection (3) be allowed to stand.

Lord Hooson

I shall certainly bow to the far superior knowledge of the noble and learned Lord, Lord Brightman, on this matter. As I said, this was a probing amendment, but he has satisfied me of the good reasons why this subsection should be allowed to remain in the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hooson moved Amendment No. 21: Page 3, line 26, after ("unanimous") insert ("where there are four or fewer trustees but in other cases must be concurred with by not less than three quarters of the trustees (rounded up to the nearest whole number)").

The noble Lord said: This is not a probing amendment and, with the leave of the Committee, I shall also refer to Amendments Nos. 34 and 48 which stand in my name: Amendment No. 34: Clause 3, page 5, line 17, after ("unanimous") insert ("where there are four or fewer trustees but in other cases must be concurred with by not less than three quarters of the trustees (rounded up to the nearest whole number)"). Amendment No. 48: Clause 4, page 7, line 16, after ("unanimous") insert ("where there are four or fewer trustees but in other cases must be concurred with by not less than three quarters of the trustees (rounded up to the nearest whole number)"). The wording is identical in all three amendments, covering three separate clauses. I am told that in practice it is sometimes very difficult to get a decision out of a trustee who knows very little about the affairs of a trust which is in a semi-dormant state. Sometimes it is very difficult to get a decision from a very old trustee who, as it were, is reminded of the affairs of the trust and does not want to be bothered very much. I am told that inertia is often a real problem.

The temptation for me was to table an amendment which would mean that the requirement of unanimity should apply only where there were three trustees or fewer—three in favour being sufficient, in my view. However, in the event I have been a little more cautious and accepted that the three-quarter rule which I propose should be required only where there are four or more trustees. It seems to me that this is a sensible safeguard where everything points to the necessity for a change of mind by the trustees and they are held up perhaps by one person being excessively stubborn and not willing to bother about the matter. I beg to move.

Lord Brightman

The exercise of the unique powers given to the trustees by Clauses 2 and 3 is intended to be non-controversial. If the powers can be exercised by a majority of the trustees, perhaps against the wishes of a forceful minority, then controversy will be introduced into the exercise of those powers. If there is to be controversy, I suggest that it is more appropriate that it should be dealt with either through the courts or through the Charity Commission and not by the exercise of these rather exceptional powers proposed for Clauses 2 and 3. I suggest that it is not appropriate in the context of this legislation to allow a matter which may be in dispute between the trustees to be decided by a majority against perhaps a protesting minority.

Viscount Colville of Culross

I think this is a fairly important point. I bear in mind what the noble Baroness, Lady Ewart-Biggs, said just now about the susceptibilities of trustees. Underlying her point was that sometimes the activities of trustees in running their trusts in a small community can be a matter of very great interest and concern to members of that community. Therefore, it was one of the main safeguards built into the do-it-yourself provisions by the Select Committee, which are enshrined in the Bill, that we really ought to make sure that all the trustees agree because if there is to be a dispute, I believe that there would be the possibility of a very long-running and extremely divisive and unpleasant local row.

The accusation would always be, if anyone knew anything about it, that instead of acting on a majority, as the noble Lord, Lord Hooson, has provided for in his amendment, this matter ought to have been adjudicated upon properly by the machinery that has been set up by Parliament—either the Charity Commission or the courts—and that the trustees who have, as it were, railroaded it through had no right to take advantage of the provisions of this Bill and they ought to have listened to the person who dissents.

It is not always a matter of apathy. It is plain that apathy often plays a part and there are dormant charities and extinct charities, but sometimes there are occasions when people feel passionately on a matter of principle about what is being proposed. They could be over-ruled by the majority under the proposed amendment provided there were enough trustees. Therefore, my advice to the Committee is that we should retain the rule of unanimity and not provide for this sort of majority exercise, but do as the noble and learned Lord, Lord Brightman, suggests—which is to rely upon the existing provisions for dealing with disputes if unanimity cannot be achieved on one of these schemes.

I am afraid to say that I must say the same for all three amendments because I believe that in this case it is a matter of principle. I hope that in the circumstances the noble Lord will feel that he need not press the amendment.

Lord Hooson

I do not intend to press this amendment to a Division, but I am not convinced by the arguments I have heard. It seems to me that we take an exceptionally cautious approach on charities and one has to balance the practicalities of the matter with the desirability of unanimity; but in certain circumstances where unanimity is virtually impossible it may still be desirable that the powers given under the Bill should be exercised and it seemed that my compromise that, if four trustees are in favour, thereafter the three-quarter rule should apply, is about right to balance the practicalities of the situation with the desirability of having unanimity. However, I shall not press it to a Division. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Colville of Culross moved Amendment No. 22: Page 3, line 37, leave out ("opinion") and insert ("opinions").

The noble Viscount said: I shall speak to Amendments Nos. 22 and 23 together.

Amendment No. 23: Page 3, line 37, leave out ("subsection (2)") and insert ("subsections (2) and (3)").

The Charity Commissioners have to be convinced of the propriety of what is being proposed by the trustees. In the Bill as it stands the trustees have to tell them about the opinion that they form under subsection (2). We have just discussed subsection (3) and the way in which it elaborates upon the sort of thinking that ought to have lain behind the trustees' decision to seek an alteration in the objectives of the charity. The trustees are told that they have to form an opinion under subsection (3) as well. It seems wrong that they should not have to explain that opinion to the Charity Commissioners as well as the opinion they form under subsection (2) which relates to obsolescence, or whatever the words are to be. Therefore, these two amendments make sure that they explain both halves of their thinking in writing to the Charity Commissioners. I beg to move.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 23:

[Printed above: col. 510.]

On Question, amendment agreed to.

Lord Airedale moved Amendment No. 24: Page 3, line 43, after ("trustees") insert ("of the charity").

The noble Lord said: This is only a drafting matter and Amendment No. 35 deals with the same point.

Amendment No. 35: Clause 3, page 5, line 35, leave out ("of the charity").

This subsection (7), and subsection (6) of Clause 3, are identical except for the curiosity that the words "of the charity" which appear in the later subsection are omitted from this one. I think there is virtue in consistency and clauses which are meant to be identical should be identical. I do not mind which way it is done, although I prefer this amendment to Amendment No. 35. If the noble Viscount prefers Amendment No. 35, I would be quite happy, but we ought to do it one way or the other. I beg to move.

Viscount Colville of Culross

As a matter of fact I prefer Amendment No. 35 because the scheme is meant to be that at the beginning of every clause when one first comes to a reference to the trustees one finds either the words "the charity trustees" or "the trustees of a charity". Thereafter, all through the rest of the clause unless there is a specific reason to differentiate between, for instance, "transferor trustees" and "transferee trustees" the Bill merely says "trustees"; in which case Clause 2 as it stands is all right. But I think that the noble Lord has a point in line 35 on page 5, because there the rule has been broken. That is why I prefer his other amendment.

May I draw the noble Lord's attention to something which I think even his eagle eye has missed, and that is another sin which has been committed on page 5, line 20, which he might care to deal with at a subsequent stage?

Lord Airedale

In that case, I beg leave to withdraw the amendment, but I shall be lurking in the shadows until we come to Amendment No.35.

Amendment, by leave, withdrawn.

7 p.m.

Viscount Colville of Culross moved Amendment No. 25: Page 4, line 1, after ("section") insert ("or as to their compliance with this section").

The noble Viscount said: Another of the things that it was thought better to include within the requirements that the trustees should send to the commissioners was their compliance with the various technical provisions which are necessary under Clause 2. We shall come to exactly the same point under Clause 3. There are various requirements for notice and that sort of thing, and it seemed right that the trustees should satisfy the commissioners that they had in fact complied with all those provisions. That is what they will have to do if this amendment is passed. I beg to move.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 26: Page 4, line 5, leave out ("within the period or) and insert ("not less than six weeks or more than").

The noble Viscount said: The Bill both under Clause 3 and under Clause 4 provides for representations to be made to the commissioners when an application is made either to vary the objects of the charity or for one of the amalgamations that can be dealt with under Clause 3. It seems perfectly ridiculous that the Charity Commissioners should be able to come to a decision on the matter before there has been time for representations to be received and considered. The suggestion in this amendment is that there should be a period of six weeks for those representations to be received and considered, and not until after that should the Charity Commisioners come to a decision about what to do. This provision is being suggested here and we shall come to a similar one at Amendment No. 37 in relation to Clause 3. I beg to move.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 27: Page 4, line 28, leave out ("or') and insert ("specified in").

The noble Viscount said: This is a very simple point. At the present moment, when the commissioners agree to a proposal by the trustees to change their objectives, the way that the clause is drafted would mean that the objects are in law changed on the very day that the decision has been taken. That means to say that they could easily change before even the trustees know about it. It seems better that the commissioners should in their consent specify the day upon which the objects are deemed to be changed. That is the point of this amendment. I beg to move.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 28:

Page 4, line 35, at end insert— ("(11) This section does not apply to an exempt charity or a charity which is a company or other body corporate. (12) Section 4(6)(b) of the Act of 1960 (duty to give notice etc. to the Commissioners) does not apply where the trusts of a charity are modified by virtue of this section.").

The noble Viscount said: This relates to the exempt charity part in Clause 2. Subject to the promise that I have already given to have another think about this, the new subsection (11) deals with that. There is, however, also new subsection (12), and this disapplies Section 4(6)(b) of the 1960 Act. That is a provision which places a duty on the trustees of a registered charity to inform the commissioners, among other things, of any changes in its trusts. Under the procedure that exists in Clause 2, the commissioners of course know, anyway, because they have had the application made to them and they have had all the details. They decide whether or not to agree to it. There is no point in providing an extra provision for them to be told under the existing law in Section 4(6)(b), so it is being left out. I beg to move.

Lord Renton

My noble friend Lord Colville has already kindly said that he will reconsider the way in which he is asking your Lordships' Committee to deal with these exempt charities. Seeing this new subsection (11), I must confess that I am rather confirmed in the view that I put forward previously that, instead of having them dealt with in these piecemeal ways, an elegant amendment to Clause 6 would be a far better way of dealing with them.

On Question, amendment agreed to.

On Question, Whether Clause 2, as amended, shall stand part of the Bill?

Baroness Ewart-Biggs

In spite of all the precautions that have been taken, I believe that this clause still lays a heavy responsibility on the trustees of a charity. As the noble Viscount said, it is a case where they will have to go in for a do-it-yourself operation, changing the objects of the charity. Having to work out how to adjust them while keeping them similar to the original objects and continuing to be charitable is quite a baffling task to many lay trustees. I worry about the possibility that some trustees may become very puzzled.

In spite of the assurances that the noble Baroness, Lady Trumpington, gave on Second Reading, I do not see what help those trustees will receive. I cannot believe that they can expect much help from the Charity Commissioners, who, with the best will in the world, are unable to respond with any speed to a request from a charity. I am merely putting myself in their shoes and thinking how difficult it might be for some of them to comply with this requirement.

I briefly, for the record, put forward a suggestion made by the director of the National Council for Voluntary Organisations, which he expressed in a letter to The Times recently and which might be of interest to the Committee. It seems to me to be very relevant. The letter welcomes the recommendations to permit the alteration of the objects of a local charity. It goes on to say: experience gained by NCVO suggests some practical difficulty in securing the Commissioners' consent to such alterations. Thus activities which trustees may not unreasonably feel to be in line with their charity's existing objects, often of an archaic nature, could fail the tests developed by the courts over the past 400 years (and by which the Charity Commissioners are themselves bound). It was with such considerations in mind (and not only in relation to the relief of poverty) that NCVO in its evidence to the select committee stressed the great benefit to the evolution of charity law as a whole that would flow from the creation of a suitors' fund (a form of legal aid) out of which key test cases could be financed. Responsibility for administration could lie with the Charity Commissioners who would carefully scrutinise all applications for assistance. Aid would be given broadly on the basis of the importance of the legal points involved, the complexity of the case and the circumstances (financial or otherwise) of the organisations concerned". The letter ends by saying: Soundings taken by NCVO indicate a very wide range of support in the voluntary sector for this proposal". As I said, I can fully appreciate the need to make adjustments in the objects of a charity, but I hope that help and advice will be available for the trustees, some of whom, from my experience, are not entirely expert in and familiar with the formal language which is used in trust deeds and which they would find it helpful to be familiar with in such a case.

Viscount Colville of Culross

Of course, I agree with that. The more help that can be given, the better. Having said that, I think it will probably be easier under this legislation to carry out these changes than it is to go through the technicalities of, for instance, getting a scheme or dealing with something under the cy-près rule within the full terms of the 1960 Act.

There may be a point that the noble Baroness has missed and I think that it is an important one. If she would be so kind as to look, for instance, at page 4, Clause 2(8)(a)—it does not matter very much which clause one looks at—she will see that the commissioners have a period (and of course it is a limited period) during which they have to make up their minds on the matter. When they read the reasons for the trustees forming the opinions that they have to form under subsections (2) and (3) that we were discussing just now, those trustees opinions are to be treated as prima facie well-founded and not to be set aside in the absence of contrary considerations.

Therefore, the balance of advantage lies in favour of the decision that the trustee has made and the charity commissioners would have to have some very good reason for refusing to consent to what the trustees want to do. This is quite a subtle point but I think it puts a very great advantage in the hands of the trustees in seeking to achieve the objects that they wish to achieve or make the changes that they wish to make. I am sure that this will all be explained, but this kind of provision has been built into the legislation to provide for exactly the kind of facility that we do hope will be available to the trustees.

Clause 2, as amended, agreed to.

Clause 3 [Power for certain charity trustees to transfer whole property to another charity]:

Baroness Ewart-Biggs moved Amendment No. 29: Page 4, line 37, leave out ("registered").

The noble Baroness said: In speaking to Amendment No. 29, perhaps I may speak also to Amendment No. 31. Page 4, line 38, leave out ("registered").

I am quite prepared to be shot down by the noble Viscount. Nevertheless, the reason, I have been advised, for wishing to take out the word "registered" both in lines 37 and 38 of Clause 3 is as follows. The wording as it stands means that charities wishing to benefit from the Bill will have to register only to deregister straight after the transfer. The reason for removing the word "registered" when it first appears and the reason for removing it in the next line would be to prevent the new transferee charity being an exception to non-compulsory registration. My amendment makes it mandatory that they register after the transfer.

Having said that, I do realise that the noble Viscount, Lord Colville, through his amendments—Amendments Nos. 30, 31 and 32—is seeking another way of dealing with this particular case that some charities are not required to be registered. We are merely putting forward our suggestion as an alternative. At this point I should like to stress that we on these Benches are most certainly giving our support to the aim of this Bill to encourage the formalisation of the local charity system. But in the particular instance of one charity being transferred to another, we thought it most likely that the Charity Commissioners, when presented with the resolution for the transfer, would exert their influence on the transferee charity to register and that this would be the most appropriate way of ensuring that such charities agreed, of their own free will, to register with the Charity Commission.

At this particular point I think it would be highly relevant to reiterate what was said during the Second Reading by many noble Lords—and notably by the noble Lord, Lord Allen—in relation to the importance of publicity for this Bill if it is passed. Surely its success relies considerably on the fact that it should be widely known and widely understood. I know that the NCVO will play a big part in giving it publicity. However, the danger is that small rural charities—in fact, the very ones which will benefit from this Bill—will at worst ignore its existence and at best know of it but not thoroughly understand it. I beg to move.

Viscount Colville of Culross

Perhaps in dealing with this amendment I may speak to Amendments Nos. 30, 31 and 32 and in the schedules, 64 and 65.

Amendment No. 30: Page 4, line 37, after ("charity") insert ("or a charity that is not required to be registered").

Amendment No. 31: [Printed above: col. 514.]

Amendment No. 32: Page 4, line 39, after ("charity") insert ("being a registered charity or a charity that is not required to be registered").

Amendment No. 64: Schedule 2, page 10, line 13, leave out ("registered").

Amendment No. 65: Page 10, line 16, leave out ("being a charity registered under the Charities Act 1960").

Far from shooting down the noble Baroness, I wish to support her. As she will see, we are wholly at one on Amendment No. 31. The effect of my amendments—and I think this comes to exactly the same as what she has just said—is that we wish to release the restriction on registered charities being able to take advantage of Clause 3, either as transferor or as transferee charities. The present unregistered charities are the exempt ones and charities which have no permanent endowment and an income of £15 or less a year. There is absolutely no reason why the amalgamation procedures in Clause 3 should not apply to them in either direction.

Therefore we are now proposing that the provisions of the clause should be extended to charities which are not required to register and in the schedules we are changing the forms which the trustees are invited to fill in, so that the same matter is reflected there. I hope the noble Baroness will be entirely happy and that we shall be able to charge through the next two or three amendments without too much difficulty.

Baroness Ewart-Biggs

I am very grateful to the noble Viscount for clarifying that and explaining it to me.

Viscount Colville of Culross

I should prefer the noble Baroness not to press Amendment No. 29. I should prefer to have the other three.

Amendment, by leave, withdrawn.

7.15 p.m.

Viscount Colville of Culross moved Amendment No. 30:

[Printed above.]

The noble Viscount said: I beg to move.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 31:

[Printed above.]

The noble Viscount said: I beg to move.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 32:

[Printed above.]

The noble Viscount said: I beg to move.

On Question, amendment agreed to.

Baroness Faithfull moved Amendment No. 33: Page 4, line 40, at end insert ("Provided that a charity for the relief of poverty shall not have power under this section to pass such a resolution for transfer to a charity which is not for the relief of poverty.").

The noble Baroness said: The arguments which I put forth on Amendment No. 19 apply to this Amendment No. 33. Therefore I shall not repeat them except to say that, taking the words of the noble Baroness, Lady Ewart-Biggs, the susceptibilities of trustees are such that it would be only human if one trust wanting money and knowing that another trust wanted to give some away tried somehow or other to come to a deal and interpret the law to suit them both. Therefore it was for that reason that I thought that we ought to put in the words to make it absolutely clear: that a charity for the relief of poverty shall not have power under this section to pass such a resolution for transfer to a charity which is not for the relief of poverty". I beg to move.

Baroness Trumpington

If my noble friend Lord Colville of Culross was dreading tackling the noble and learned Lord, Lord Denning, may I say that I have the same familiar feeling when tackling my noble friend Lady Faithfull. I have to say that the Government cannot support this amendment. We do not believe that the amendment is necessary to ensure that trustees transfer their property to a charity which has objects similar to those of their own charity.

The Bill as it stands does this by requiring trustees to satisfy themselves under clause 3(2) (b), that the objects of the transferee charity are not so far dissimilar in character to those of the original charitable gift that the proposed transfer would constitute an unjustifiable departure from the intentions of the donor or violate the spirit of the gift". The trustees must also of course satisfy the Charity Commissioners. Therefore, distasteful though it is for me to disagree with my noble friend, in this case I must do so.

Viscount Colville of Culross

I am sorry to say that I have to agree with my noble friend on the Front Bench. My noble friend Lady Faithfull will appreciate that in Clause 3 we have moved away from charities strictly for the relief of poverty into a much wider field. Of course I understand her concern that there should not be a transfer which takes the charitable money away from the whole field of the relief of poverty. But, for the reasons given by my noble friend Lady Trumpington, I feel that the scheme of this clause and the way in which the commissioners have power to consider and, indeed, to listen to any representations upon the proposed transfer give a completely adequate protection against any such thing happening.

Taking the point that I was making to the noble Baroness, Lady Ewart-Biggs, it is all very well for the trustees' opinion to be prima facie well founded and not to be set aside in the absence of contrary consideration, but one very good contrary consideration would be that the transferor charity was a charity for the relief of poverty and that the proposed transferee charity was nothing of the kind. That would be a very good reason for the charity commissioners to consider that they should not give their consent to the proposals.

I believe truly that the way in which the Bill has been drafted deals with this point. It is not a point that I wish to undermine or underestimate. It is simply that the machinery is, I think, there. I can assure my noble friend that we have thought carefully to see that no such mistake should occur. I hope that she may be content with that explanation, because there is nothing between us in the objectives that we seek.

Baroness Faithfull

I thank my noble friend Lady Trumpington, speaking from the Front Bench, and also my noble friend Lord Colville, for their explanations. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 34 not moved.]

Lord Airedale moved Amendment No. 35: [Printed earlier: col. 511.]

The noble Lord said: We discussed this when I moved Amendment No. 24. I beg to move.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 36: Page 5, line 37, after ("section") insert ("or as to their compliance with this section")

The noble Viscount said: This is a point that we have also dealt with previously. In addition to satisfying the commissioners about the opinions that they have to form, the trustees must also satisfy them that they have complied with the provisions of this section. I beg to move.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 37: Page 5, line 41, leave out ("within the period of") and insert ("not less than six weeks or more than")

The noble Viscount said: This is the same point about giving the commissioners time to consider representations. I beg to move.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 38: Page 6, line 16, leave out ("copies") and insert ("a copy")

The noble Viscount said: This is drafting. There is no reason why they should send more than one copy. I beg to move.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 39: Page 6, line 18, leave out ("then with effect from the date of the notice")

The noble Viscount said: This is the equivalent of the point about the date when the transfer is to take effect. As the Bill stands, it takes effect from the date of the notice. That could well be too early. It seems that it would be better to leave that out and to put in the words in Amendment No. 40.

Amendment No. 40: Page 6, line 19, leave out ("have power by virtue of this section to transfer") and insert ("on receipt of the notice make arrangements for the transfer of")

This would make it clear when the transfer took place. I beg to move.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 40: [Printed above.]

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 41:

Page 6, line 39, at end insert— ("(11) This section does not apply to a charity falling within paragraph (g) of Schedule 2 to the Act of 1960 or a charity which is a company or other body corporate.")

The noble Viscount said: Subject, by this time, to the normal reservations on this point, I beg to move.

On Question, amendment agreed to.

Clause 3, as amended, agreed to.

Clause 4 [Power for very small charities to spend capital]:

Lord Maude of Stratford-upon-Avon moved Amendment No. 42: Page 6, line 42, leave out ("£25") and insert ("£100").

The noble Lord said: In moving this amendment it may be for the convenience of the Committee to consider Amendment No. 46, which clearly hangs with it, and it is possible that some of your Lordships will wish also to consider Amendments Nos. 43 and 47, proposed by the noble Lord, Lord Hooson, which clearly fall within the same field.

Amendment No. 46: Page 7, line 2, leave out ("£5") and insert ("£10").

Amendment No. 43: Page 6, line 42, leave out ("£25") and insert ("£250").

Amendment No. 47: Page 7, line 2, leave out ("£5") and insert ("£50").

This is an amendment of rather more substance than the drafting amendments which we have recently been considering. It is one to which my noble friend Lord Renton and myself attach some importance. It may be within the recollection of your Lordships that the Small Charities Bill, which, with the Government's help, I was able to carry through another place and which my noble friend Lord Renton introduced into your Lordships' House, dealt specifically and only with the ability of charities to spend their capital. The figures that we inserted in the original Bill were, of course, very much larger than the figures we are talking about today. We have recognised, obviously, that the provisions in this Bill which enable small charities, by agreement, to merge themselves with larger and richer charities make the provisions of the original Small Charities Bill much less important than they were.

Nevertheless, we think that for very small charities the provision that they should be enabled to spend capital, which, in many cases, would mean winding themselves up, is important. We believe that the figures put into the Bill are too small. When this question was debated and when the Small Charities Bill was originally published, there were a great many objections from certain people who said that it was a breach, if not of charitable law at least of the principles of charities, that the intentions of a benefactor should be extinguished; in other words, that while there was still money that could be spent the intentions of the donor should continue to be carried out.

I never felt that this was a very valid principle. Indeed, it was not accepted by the Goodman Committee, which was certainly not short of heavyweight legal opinion. The Goodman Committee recommended that small charities should be able to spend their capital within certain restrictions. The Select Committee of the House of Commons also recommended this; and it was accepted by the Government and by Members of another place when they considered the Small Charities Bill. However, it was clear that the Select Committee of your Lordships' House was considerably influenced by these arguments. They have breached the so-called principle that this should never be allowed, but they have, so to speak, reduced it to nothing by making the figures permitted miniscule.

I suppose that, having accepted that we might sin, they were trying to reduce the sin as much as possible, presumably along the lines of the principle laid down in the case of the housemaid's baby. But it seems to my noble friend and myself—we have considered this very carefully and we have consulted fairly widely—that the figures of £25 capital and £5 income are far too restrictive and will make life very difficult for a number of small charities. We have thought hard what the figures should be raised to. We have concluded that a capital sum of £100 and an income of £10 are about right, offer no serious risk of abuse and will be helpful.

Obviously, I cannot object to the principle of the amendments of the noble Lord, Lord Hooson. I would, however, venture to suggest, with respect, that he has put his figures rather high. I hope very much that in the circumstances, since both my noble friend Lady Trumpington and my noble friend Lord Colville made fairly helpful noises to me in winding up on Second Reading, suggesting that they might be prepared to go a little way beyond the original figures in the Bill, my noble friend will be prepared to accept these two amendments. I beg to move.

7.30 p.m.

Lord Renton

In supporting my noble friend Lord Maude of Stratford-upon-Avon, I merely wish to say that I am astounded at our moderation.

Lord Hooson

With your Lordships' permission, I should like to speak to my own Amendments, No. 43 and No. 47—and No. 44 as well—while speaking to this particular amendment.

[Amendments Alas. 43 and 47 printed earlier: col. 519.] Amendment No. 44: Page 6, line 42, leave out from ("less") to ("and") in line 44. I agree entirely with what has been said by the noble Lord, Lord Maude, on his own amendment, but I think that he has been far too moderate in his approach here. It seems to me that the problem tackled by the Bill is a proliferation of defunct or semi-defunct local poverty charities, and it is therefore important to attack the problem effectively. Of course, in this clause we are concerned only with the expenditure of capital. But surely it is necessary, considering the present value of money, to multiply the figures by 10. For example, the value of capital should go up from £25 to £250 and income should go up to £50.

This Bill is specific and fairly narrow in its scope, despite its very general Title. But I feel that it is too timid. I agree entirely with the noble Lord, Lord Maude, that this is a very important amendment he has moved; it goes to the substance of the matter. With his experience, he knows that this Bill has to proceed from this House to another place, where a perhaps much more robust attitude will be taken towards it. It is an important measure, provided we are not too over-cautious. Surely charity law is riddled with over-caution, at great cost to the public and to the original donors. The amount of time, effort and resources wasted in dealing with all the mechanics and laws relating to small charities is often disproportionate. Therefore, we ought to think in terms of the modern value of money. A capital value of £250 and an income of £50 is much nearer the mark; but, if I gave vent to my true feelings in the matter, it is still probably too modest.

I should like to mention briefly my amendment No. 44, which eliminates the exclusion of land from this subsection. Nothing could be more annoying and wasteful than for a small charity to have to hang on to a bit of land—under my amendment, land worth £250, or, under the clause as at present amended, £25. I ask your Lordships: how much land can you buy today for £25 or £250? It is time we took a slightly more realistic view of the value of money today.

Lord Denning

I should like to support all the amendments, but I am in favour of the figures which have been mentioned by my noble friend Lord Hooson.

Lord Airedale

It seems to me that when we are considering a matter of this kind we really ought to ask ourselves: what would the founders of this charity think about what we are here proposing to do to interfere with something which they ordained, probably many years ago? The trustees establishing a charity are very often extremely concerned with two points. One is the good, charitable work that they hope is going to be done. The other very often is preserving, they think for eternity, the memory of some local citizen whom they held in high regard, in whose memory this charity was established. Very often, I believe, it was only the high regard that was had for this person that enabled the trustees to collect the money to establish the trust and found the charity.

Probably they thought, in their wisdom (and who are we to disagree with them?), that rather than erect some elaborate tombstone or memorial it was better to establish a charity and to do good work. What would the founders be likely to think about saying that as soon as the endowment falls to £100 then the time has come when the charity can be terminated and the memory of this person shall no longer live in the minds of people in the locality? An endowment of £100, well invested, will produce £10 a year; and one bears in mind that Parliament has said that £10 at Christmas time is a worthwhile gift to an old-age pensioner.

Although the welfare state looks after a great many of the poor people who until recently had to rely upon charity, I am quite sure there are in various localities many people who are not within the net of the welfare state and to whom a gift of £10 or £10-worth would be very welcome indeed. The kind of example I have in mind is some bed-ridden, elderly, poor person, whose television set has broken down and who can ill-afford to pay the cost of repairs.

In asking ourselves the question, "Would the founders of the charity have agreed to terminating the charity when it ceases to be worth more than £10 a year?", I do not believe we can say with any confidence that the founders must have agreed to the course which we propose. When it comes down to £25, which was the figure the committee decided upon, after much deliberation, I think one can say with much greater confidence that the founders might well have been content that when the endowment had fallen to that level perhaps it was not worth continuing the existence of the charity. I am sorry to disagree with my noble friend Lord Hooson about this, but I hardly think this will be an occasion for newspaper headlines about a tremendous split in the ranks of the Liberal Party.

Baroness Faithfull

I should like to support the noble Lord, Lord Airedale, in what he has said, for a slightly different reason. Speaking as a social worker, I can say that very often I know that a small amount of money will make a great deal of difference to somebody who is needing something that does not fall within the terms of reference of supplementary benefit or other state benefits. I know it is very difficult sometimes to find just a little money to put right quite a little thing which is nevertheless going to mean a lot to some person who cannot afford it.

Baroness Ewart-Biggs

I should like to support everything that the noble Lord, Lord Airedale, and the noble Baroness, Lady Faithfull, have said. I, too, believe there is a certain sanctity in the wishes of the founders of a charity being respected. Very often there could have been something highly symbolic about their wishes in creating a certain charity. This is something that, to my mind, the benefits of raising the level could not justify. For this reason, and also the reason that if a principle is to be breached then the breach should be kept as small as possible, I am unable to support this amendment.

Lord Brightman

I should like to say a few words on the Select Committee's approach to Clause 4. The committee were very deeply divided at one time as to what was the proper monetary limit to put into the clause. There was a great deal of discussion and a great deal of disagreement. In the end we came to the view—which perhaps on the surface might be thought a little surprising—that we should keep the sum as low as we possibly could. The type of considerations which we had in mind were that as a general rule the problems of trustees of a very small charity would be able to be solved by an amalgamation under Clause 3. Clause 4 is really a last resort where the charity fund is so small that it would be unreasonable to put the trustees to all the expense and trouble of trying to find a suitable transferee charity unless one were close at hand and easily identified. So we thought that we could safely keep the sum specified in Clause 4 down to a low figure.

I should also mention that to avoid overburdening the resources of the Charity Commission—which was always in the forefront of our mind—Clause 4 does not contain any safeguards at all against an erroneous use of the power, save only that unanimity is required among the trustees. There is no provision, such as is found in the other clauses, for public notice; there is no provision for concurrence by the Charity Commissioners in the resolution which is passed. That is by design because the sum upon which we decided in the committee was such a small sum that we thought that it could safely be left to the trustees and that it would be unreasonable to burden the Charity Commissioners.

If the sum in Clause 4 is increased substantially, then a case will arise for requiring publicity, and the concurrence of the Charity Commissioners. So all in all we felt that the best course would be to keep the sum a small one justifiably to exempt the charity trustees from advertising what they intended to do and to exempt the Charity Commissioners from the burden of looking at this very tiny distribution of money.

So far as land is concerned, I suggest that it is correct under Clause 4(1)(a) to exclude "land or interest in land". Land is not susceptible to division among beneficiaries or payment out to a single beneficiary. If the trustees held a small piece of land and were going to exercise their power under Clause 4 to distribute the capital, inevitably they would have to sell the land. So it would seem reasonable to us to except land from Clause 4 and let the power apply to the proceeds of sale of that land, which then will be known, and no question of valuation for the purposes of exercising the Clause 4 power will be needed.

I ask the Committee to let the compromise figure reached by the Select Committee stand. This is only a pilot scheme; it is not intended to be more than that. If, at the end of the day, it is found that it works or that it has deficiencies and so forth, then primary legislation can be introduced which will take that into account.

Lord Allen of Abbeydale

I should like briefly to make two points. First, there were those on the committee who expressed the view that there should be no Clause 4 at all, that the only way forward should be via the Clause 3 procedure which explains, I think, the nature of the compromise which my noble and learned friend has just been expounding.

The second point is really a small, practical point, but it is worth mentioning. There is an obligation in the 1960 Act on trustees who wind up a charity to tell the Charity Commission. Whether the trustees who wind up the small charities will discharge that obligation any more satisfactorily than all the other obligations they fail to discharge must be very doubtful. If the scope of this clause were too wide, the effect on the register and its continuing inaccuracy could be quite considerable.

7.45 p.m.

Baroness Trumpington

It might be helpful at this stage if I set out briefly the Government's view on this amendment, the case for which has been so persuasively argued by my noble friends Lord Maude and Lord Renton. The Government's support for the Bill promoted in the first instance by my noble friend and by my noble friend Lord Renton is well known to the Committee. The Government appreciated, however, that much of the evidence submitted to the Select Committee did not favour the Bill, and that the Select Committee were not able to commend the Bill as it stood. The Government consider that this amendment is a reasonable one in these circumstances and agree with my noble friends Lord Maude and Lord Renton that the limit could be raised to £100 without seriously threatening the pool of charitable capital.

The administration of a charity with an income worth less than £10 a year may be an unproductive burden. Under the provisions of this Bill as it stands the trustees of charities with endowments worth very little will have to find another charity whose trustees would be prepared to continue the administration of these very small funds.

Your Lordships' Committee will appreciate that brokerage charges are such as to deter trustees from moving out of small holdings in unsuitable stock. Moreover, in the case of small amounts of capital representing permanent endowment, such as those received from the redemption of rent charges, brokerage charges (a minimum of £7) can render worthless such endowments.

We think it should be left to the good sense of the trustees of charities whose endowment is worth £100 or less to consider whether their best advantage lies in spending their capital on the purposes of the charity or seeking amalgamation, given the cost of that amalgamation. It seems desirable also to have an income limit of £10 which is consistent with the value of the endowment. Therefore, we welcome the amendment.

I turn to Amendments Nos. 43 and 47 which have been tabled by the noble Lord, Lord Hooson. Your Lordships will appreciate that the higher the figure goes at which charity trustees may expend capital, the more controversial the Bill may appear to be. There is no clear criteria to determine what the limit should be and it is a matter of judgment whether the limit should be as high as £250. The Government are content to leave that judgment to the Committee.

As regards Amendment No. 44, which is also tabled by the noble Lord, Lord Hooson, and which relates to land, we do not believe that it would be appropriate that charities with an interest in land should be allowed to use the provisions of this clause. We think that they should continue to be subject to the requirements on the disposal of land in the 1960 Act, to guard against the possibility that land is sold at below its proper price.

Lord Renton

I am sure that your Lordships' Committee is grateful to my noble friend Lady Trumpington for what she has just said. It seems to me that what she has put before your Lordships' Committee is the kind of wisdom which we have learned to accept from Home Office Ministers through the ages. But I should just like to make the comment that those who are opposed to the amendment moved by my noble friend Lord Maude of Stratford-upon-Avon have produced arguments which are really arguments against having Clause 4 at all. If we are to have Clause 4, I suggest that it should be realistic. To have the figure of £5 as the gross income included in it is quite absurd. The sum of £5 for one hour's work is now the rate for many semi-skilled workers, and we are referring here to an annual income. It is quite ludicrous. I appreciate what my noble friend has said about going too high and what was said by the noble and learned Lords on the Cross Benches about the administrative burden that might be placed on the Charity Commission if we went too high. But using what my noble friend Lady Trumpington has called "our judgment", I should have thought that our best judgment is to accept the two amendments moved by my noble friend.

Viscount Colville of Culross

As the sponsor of this Bill, I had hoped that I would be allowed to have a few words, but I have waited until I have heard the rest of the debate. There is perhaps not a great deal to be said, except for an explanation as to why it is that I am unpersuaded by those who wish to increase these limits. I am glad that I have at least one friend on these Benches.

I started off as a member of the Select Committee with no views at all upon this subject. I knew the history of the legislation in both Houses and I knew that my noble friend's Bill had passed through another place at least once, and I rather think twice. But there then started to develop the whole dynamic process of the Select Committee.

We began to consider the other provisions which now appear in Clauses 2 and 3, and at the same time it became apparent that there is in the country—and there is also some in the Select Committee—virulent and absolutely sincere opposition to the dissipation of the capital of charities, and that this would be a major sticking point for a large number of people who otherwise would be extremely interested in getting this legislation through Parliament.

As one listened to the witnesses and the reasons they gave, one could not but respect the wisdom and the sincerity which they brought to bear upon the subject. I am bound to say that it had an effect upon me. I thought to myself that it might be all right to have, as the noble and learned Lord, Lord Brightman, has said, a small trial exercise to see what would happen. The evidence clearly showed that there are some extremely tiny charities and, although £5 may be a very small amount, there are some charities where the annual income is about 75p or even 50p and where, by this time, the capital value is tiny as well because of the erosions that took place when the capital was invested in undated gilts during the period before the Trustee Act 1961 was passed.

Therefore, I find myself in a position where I am absolutely bound to agree with all the other members of the Select Committee that we should not go above these figures and, so far as I am concerned, I am afraid that I shall have to ask the Committee to express an opinion on the matter because I could not accept any of these amendments.

Lord Maude of Stratford-upon-Avon

My noble friend Lord Colville of Culross has been unpersuaded by the arguments that we have adduced. I am afraid that I remain unpersuaded by the arguments which he and other noble Lords have adduced because, as my noble friend Lord Renton said, virtually all the arguments have been against the principle of Clause 4 as such. I really find the Select Committee's conclusions very strange.

As to the principle of Clause 4, as I said, this has been approved by the Goodman Committee, by the Commons Select Committee, by the Government and by the Members of another place, and, as we have heard from my noble friend Lady Trumpington, is still approved by the Government today. That really is a pretty formidable set of sponsors for the idea that the principle of Clause 4 is sound.

The Select Committee clearly did not believe that the principle was sound and they were very unwilling to go any distance at all with it. So they rather hesitatingly dipped one toe in the water and said "All right, we shall have this principle accepted but we shall make a nonsense of it by making the figure very low". The noble and learned Lord, Lord Brightman, said that £5 a year and £25 were compromise figures. My goodness, what sort of a compromise is a figure of £5 a year as the annual income of a charity? It was obvious that they were as anxious as possible to ensure that this principle was never applied at all.

In view of the weight of the argument that there has been in previous years in favour of making this change, I do not believe that simply to leave this at this point would be satisfactory. I do not think that this is the right hour in the Committee to have a Division, but I must say that my noble friend and I are not prepared to drop this matter. We shall return to it at the Report stage and if we cannot secure the approval of my noble friend Lord Colville, and if we cannot reach some sort of compromise in the meantime, we shall feel bound to ask for the opinion of the House. In the meantime, I beg leave to withdraw the amendment.

Lord Airedale

Before the noble Lord sits down, as a member of the Select Committee I do not think he has been quite fair to the Committee. We were confronted with a great deal of evidence from people who we regarded very highly and who were very expert, who were extremely anxious that the endowment figure should be very low indeed. I think that the report of the Committee only reflects the Committee's decision, based upon serious evidence given to us by a great many people whose wisdom and knowledge we respected very highly indeed.

Lord Maude of Stratford-upon-Avon

Yes, but with respect perhaps I may point out to the noble Lord that views on the other side were expressed with a great deal of force to the Goodman Committee and to the Select Committee of another place. Moreover, as I have read the evidence, there were a number of bodies, as well as individuals, in favour of keeping the principles of the Small Charities Bill, and they made these points to the Select Committee. The evidence against was not overwhelming.

Lord Allen of Abbeydale

Perhaps I may intervene and remind the noble Lord that he himself took the point earlier on that the whole position has changed since the days of Goodman because of Clause 3. Goodman was looking at an entirely different situation.

Lord Maude of Stratford-upon-Avon

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 43 and 44 not moved.]

Viscount Colville of Culross moved Amendment No. 45: Page 7, line 1, leave out ("last").

The noble Viscount said: This is a drafting amendment to make Clauses 3 and 4 consistent. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 46, 47 and 48 not moved.]

Viscount Colville of Culross moved Amendment No. 49:

Page 7, line 22, at end insert— ("(5) This section does not apply to a charity falling within paragraph (g) of Schedule 2 to the Act of 1960.").

The noble Viscount said: This is the exempt charities point in Clause 4. I beg to move.

On Question, amendment agreed to.

Clause 4, as amended, agreed to.

Clause 5 [Financial limits for classification of certain small charities]:

8 p.m.

Viscount Colville of Culross moved Amendment No. 50: Page 7, line 25, leave out from beginning to ("by") in line 27.

The noble Viscount said: I am not sure about this amendment. If anybody objects to the amendment I shall be happy to withdraw it. It takes away the signpost, as it were, which is to guide the Secretary of State in the exercise of his powers in raising the financial limits under Clause 3 of the Bill. It may well be that members of the Committee would prefer to see the signpost left. If so, I should be happy to withdraw the amendment, but for the moment I beg to move.

Lord Allen of Abbeydale

I should prefer to see this signpost remain. It gives some indication of the reasons why these powers should be used, and I hope that the Committee will accept the noble Viscount's offer.

Viscount Colville of Culross

I see no opposition. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Colville of Culross moved Amendment No. 51: Page 7, line 31, at end insert ("and").

The noble Viscount said: Amendments Nos. 51 and 53 go together.

Amendment No. 53: Page 7, line 32, at end insert ("or either of those sums").

What is being done is to provide that the Secretary of State's powers to increase the financial limits in Section 18(5) of the 1960 Act and in Clause 3(2) of this Bill shall be exercisable by statutory instrument. The point is that he can do it either conjointly or separately, and this amendment makes that clear. I beg to move.

On Question, amendment agreed to.

Lord Hooson moved Amendment No. 52: Page 7, line 32, leave out ("section") and insert ("sections 2(1) and").

The noble Lord said: There is a typographical error in the printing here which emanated, I regret to say, from me. I meant to refer to section 4(1) and not to section 2(1). The noble and learned Lord, Lord Brightman, referring to the financial limits in Clause 4(1), suggested that they might be changed later, after an experimental period, by primary legislation. Bearing in mind the difficulty of obtaining primary legislation on a narrow subject like that, I thought it proper that the Secretary of State should have the same right to adjust the figures there as he has in relation to Section 3(2), and that is why I put down this amendment. With your Lordships' permission, if one can read 4(1) for 2(1), I beg to move the amendment.

Viscount Colville of Culross

I am afraid that I was wholly misled by the mistake. I thought this was consequential upon an earlier amendment that the noble Lord had put down. Now that I understand what he is saying, I am afraid there is no way in which this amendment can live with Clause 5(2). It sets different criteria and is hopelessly inconsistent. For that reason alone I hope he will not persevere with it.

There is another point, and it is a point of substance. It is plain that we are going to come back to the whole question of limits, and I am bound to say that there is an alternative route to the setting of a figure in the Bill. One could of course remove (if I may put it in shorthand) the inflation-linked criteria for increasing the amount of money by order under Clause 4 and use the same formula that applies to Clause 3 and Section 18(5) of the other Act. That is what the noble Lord is suggesting; but it would be an amendment of substance which perhaps ought to be considered as an alternative to some of the other increases in absolute terms which have been discussed in the course of the afternoon.

As we are inevitably going to come back to this at another stage, perhaps it might be better if the noble Lord were to leave it for this evening, bearing in mind that it can be stirred into the general melee next time.

Lord Hooson

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Colville of Culross moved Amendment No. 53: [Printed above.]

On Question, amendment agreed to.

Clause 5, as amended, agreed to.

(Amendment No. 54 not moved.)

Clause 6 [Interpretation.]:

Viscount Colville of Culross moved Amendment No. 55:

Page 8, line 3, leave out ("either— (i)")

The noble Viscount said: I am afraid that this looks the most awful muddle, but as a matter of fact it is an attempt to clear up what is a rather difficult technical problem, which is the definition of a "local charity for the relief of poverty". The Bill as it stands, in Clause 6(1)(b)(i), refers to a charity's area of benefit falling within a single area of local government greater than a parish". But these expressions are not clear. Parishes are not universal in England and Wales. They do not happen in urban areas, and there are not any anymore in Wales. A single area of local government could be a district or a county.

It is desired, however, that as long as the area of benefit of a charity falls within a county or within Greater London it should be covered by this Bill. This series of amendments will make it clear that if the charity's area of benefit is, or falls within, the area of no more than five adjoining parishes, or a county, or Greater London, it will be covered by the definition.

Then Clause 6(1)(b)(ii) refers to a charity established (wholly or mainly) for the benefit of one or more parishes". This could be construed as placing no limit at all on the area of benefit of a charity short of nationwide, so that that would be a failure properly to define "local charity for the relief of poverty". It might include a charity which is in no sense local.

This series of amendments therefore seeks to make it clear that the area of benefit for the charity, when that charity was originally established, was or fell wholly within the area of one or more parishes specified in the trusts. It is a complicated matter. It caused a great deal of difficulty in the Select Committee. The draftsman has helped me in applying his mind to it, and I hope that we now have it right. I beg to move Amendment No. 55.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 56: Page 8, line 7, after ("Wales") insert ("(in this section referred to as "the area of benefit")").

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 57:

Page 8, line 7, leave out from second ("and") to end of line 12 and insert—

1. ("(i) the area of benefit is, or falls wholly within, the area of not more than five adjoining parishes or of one county or of Greater London, or
2. (ii) the area that would have been the area of benefit when the charity was originally established was, or fell wholly within, the area of one or more parishes specified in the trusts.").

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 58:

Page 8, line 13, leave out subsection (2) and insert— ("(2) In this Act. "appropriate local authority", in relation to a local charity for the relief of poverty, means any local authority for an area which is the area of benefit or within which the whole or any part of the area of benefit falls, being the council of a non-metropolitan county, metropolitan district or London borough or the Common Council of the City of London.")

The noble Viscount said: As the Bill stands at the moment the local authority that was going to be consulted about questions of charities for the relief of poverty was to be dealt with by means of subsequent legislation. What has happened since is that there have been discussions with the local authority associations and, as I think was always intended by the Select Committee, it has been agreed that the appropriate local authority is likely to be the one with the social services functions because it would be they who would be the most interested in other sources of money for the relief of poverty.

Therefore, in country areas it will be the county. That will include Wales. Although it is appreciated that some of the counties in Wales are very large, nevertheless the advice is that it still ought to be the social services authority in Wales; and in metropolitan counties it will be the district. That now goes into the Bill; and in London it will be the London borough or, in the city, the Common Council of the City. That clears it up and puts it into primary legislation. I hope that noble Lords will think that this is the right solution, and I beg to move.

On Question, amendment agreed to.

Viscount Colville of Culross moved Amendment No. 59: Page 8, line 20, leave out paragraph (c).

On Question, amendment agreed to.

Lord Denning moved Amendment No. 60:

Page 8, line 23, at end insert— ("( ) "charity trustees" has the meaning in section 46 of the Charities Act 1960 (namely, the person having the general control and management of administration of the charity) and, in addition, in any case when it appears to the appropriate local authority that the trust is dormant or inactive, such additional persons as appear to the appropriate local authority to be suitable to act as trustees;")

The noble and learned Lord said: This is an attempt to deal with one of the real difficulties in enforcing this Bill. The Select Committee drew attention to dormant and inactive trusts. In paragraph 49 the committee said: Of the 144,000 registered charities … only about 10,000 render accounts to the Commissioners". The rest are dormant or obsolescent. About the others the committee gave a particular example of the position in Humberside. An investigation carried out between 1978 and 1979 found 120 inactive charities with balances of accumulated income of £107,000. That shows that a great many charities do not operate, the trustees have died, and no new ones have been appointed, or the present trustees do nothing and are completely inactive, they do not register accounts or anything of that kind.

What is the machinery in the Bill to persuade those people to do their duty? As far as I can see it is the complicated machinery whereby a member of the public, if you please, under Clause 1 has to know about the charity, has to put it before the Charity Commissioners, who in turn have to hold an investigation and inquiry. Then they may make a scheme and in that remove the trustees or appoint new ones. It is a long, complicated machinery for dealing with this enormous problem of dormant and inactive trusts.

My amendment is intended to provide an easy, simple solution. When the appropriate local authority, which has a social services committee, finds that no accounts have been rendered and nothing has been done by the trustees, what are they to do? Are they to go to the commissioners for an inquiry? Why not? Let them have the power to appoint a banker or solicitor, or both, as trustees of that small local charity. They are sure to appoint good trustees, such as a banker or solicitor, who would do the work voluntarily. In every small village one can find bankers or solicitors ready to work as trustees and look after the affairs to see that they are in order.

My amendment, instead of having to go through the long complicated machinery that I have mentioned, being initiated by a member of the public, would allow the appropriate local authority, after collecting all the details, to bring a trust back to life again. It would be said, "Let us appoint our friend so-and-so, a banker, or our friend so-and-so, a solicitor, who will see that the thing is kept in order". That is the objective of my amendment. I do not know whether it is acceptable, but I think that thought should be given to the matter of how to bring dormant and inactive trusts back to life and keep them going.

8.15 p.m.

Lord Brightman

I hope that your Lordships will not think that the machinery, if it can be called that, set up by Clause 1 is either long or complicated; if it is, then the Bill is failing in its purpose. It is intended to be very simple and to enable a member of the public, probably a resident in the locality, to bring the matter to the attention of the Charity Commissioners, so that they can take the simple action open to them.

The effect of the proposed amendment causes me some misgivings. It would have the effect of giving to a local authority power to appoint additional trustees if the local authority thinks that the trust is dormant or inactive.

There are possibly two objections to dealing with the matter in that way. First, there is a possible political objection. Ought county councils, which are primarily political bodies, to be given power, first, to decide whether the local charity is dormant or inactive, and, secondly, to decide who should be the trustees of that charity if the local authority considers that it is not doing its job?

There was strong evidence before the Select Committee that county councils are not appropriate bodies to be given a substantial say over local charities, because of their political standing. That was spelt out in paragraph 53 of the report.

There is a possible second objection to dealing with the matter in the way proposed. There will inevitably be a confusion of responsibility between the local authority and the Charity Commissioners. If the charity is inactive or dormant, the probability is that it has defaulted in the filing of accounts as required by the 1960 Act and by the Bill. If that is so, the Charity Commissioners are likely to be activated by an interested local resident, so that they will have powers, under Section 18, to appoint additional trustees or new trustees. Are we to have two concurrent powers of appointing new trustees running side by side, one power in the local authority and the other in the Charity Commissioners? I suggest that that concurrency of powers is not practical or desirable.

I do not suggest that the Bill is perfect. It is difficult to formulate a Bill which will compel all trustees to be active and efficient in the discharge of their office. We on the committee thought that the only practical way of dealing with the matter was that which we set out in Clause 1. I suggest that this amendment is not really a practical way of meeting the problem, that it will cause confusion, and that it is better to leave the Bill in its present form.

Lord Hooson

When two Titans disagree it poses great difficulties for your Lordships' Committee. But having heard the two contributions we have just listened to, I find myself attracted by the argument of the noble and learned Lord, Lord Denning, for this reason. If we have so many inactive and dormant charities in the country, what process will get them reactivated? The suggestion made by the noble and learned Lord is rather more robust in its approach and I favour the appropriate local authority having this right. Personally, I should have preferred the local authority to have been the district council because it is so much closer to the people, but it does not have a social services department. I suppose technical problems might arise, but I feel that the noble and learned Lord, Lord Denning, is on the right track. I am not sure that his amendment has been as carefully considered as he might have liked to consider it in setting down the proper machinery to achieve his objective.

Baroness Faithfull

I had intended to speak to the Question, That Clause 7 stand part, but, in the light of this amendment and of what the noble and learned Lord, Lord Denning, has said, perhaps I may speak now. My mind was running in the same direction as that of the noble and learned Lord, Lord Denning, but arrived at a different solution. I was going to "not move" an amendment that asked Her Majesty's Government whether they could consider monitoring this Act over a period of time. We have had the Nathan Report, we have had the Select Committee of the Commons, we have had the Goodman Report—and, following all those three reports, in some cases Acts were passed but were not implemented or certain sections of them were not implemented. I was going to draw the attention of the Committee to that and to suggest that Her Majesty's Government might consider monitoring this Bill by asking, for instance, a polytechnic or a university such as Brunel University, which is running a course for trustees at the moment, to monitor this Act when it is passed, over a period of, say, five years. I did not put down an amendment because I thought it would be something that the Government just might consider.

Lord Maude of Stratford-upon-Avon

Briefly, I must say that I thought that the first argument adduced by the noble and learned Lord, Lord Brightman, was absolutely conclusive against this amendment. I think it would be quite disastrous that a local authority which was run on party political lines and controlled by a political majority should have the powers that are suggested in this amendment. I can see a great deal of controversy and resentment rising out of it if this amendment were to go through.

Viscount Colville of Culross

I wish that I could find myself in a greater area of agreement with the noble and learned Lord, Lord Denning, than has happened on the Committee stage of this Bill. But I, too, have to join in objection to what he is proposing. I do not want to repeat what has been said before but, on the political point, if Members of the Committe would like to look at paragraph 53 of the Select Committee's report, which gives the references to the evidence in the bigger Blue Book, I think they will see that there is a point of great substance in what has just been said and has been endorsed by my noble friend Lord Maude.

The second matter that arises directly out of that is that the noble and learned Lord, Lord Denning, said that he thought that what the local authority would do would be to appoint the friendly neighbourhood banker or accountant. But, as a matter of fact, I do not think that they would. I think that there are some local authorities who would appoint members of the Finance Committee; and you might get a very different result indeed. I am not putting this on any party political lines. It could happen in any party which was running a local authority. I make no difference whatever between the parties. Then you would get politicisation.

The other thing is this. Granted—and it is indeed granted—that one wishes to do something about charities which are defunct, dormant and completely inactive, how is the local authority going to be in a better position than anybody else to find out about it? The Select Committee tried to see if the banks were prepared to assist with the provision of any information about funds that they might hold for charities either nationally or on an individual basis. They said that they certainly could not assist on that; that it was a private matter between themselves and their clients. The same would apply to solicitors or accountants who were holding money for a charity which was defunct. Quite frankly, a local authority is in no better position than anybody else to get at the truth about these matters or to root out the funds which ought to be used.

I absolutely agree with the noble and learned Lord, Lord Denning, that something ought to be done about this, but I am afraid that I do not think that this is the way to do it. I really suggest that if anybody does obtain information—and this would include a local authority, because we have already discussed the fact that they are persons who can use Clause 1—they can go to the Charity Commissioners and get the new trustees appointed and get the money back into action and working again. I would suggest to the committee that the arguments of the noble and learned Lord, Lord Brightman, covered the field so thoroughly that we ought to be content to leave the Bill as it is without adding a complication which I believe could be dangerous.

Lord Denning

I would deplore the thought that politics would come into the appointment of any trustees of a little charity but, on the other hand, if there was evidence before the Select Committee that it does, I should regret it but it would be a point against my amendment: I agree as to that. But I do hope that something can be done to bring these dormant and inactive charities to life. The one method which appeared—and that is why I am sorry that my first amendment was not taken up—was that if the appropriate local authority is the body to get the accounts and is the body to publish the information, then, for goodness' sake, let it (when the thing is dormant or inactive) put the matter before the Commissioners and get the Commissioners to make the scheme—and I hope that it will not be long and complicated—and remedy all these cases.

I hope that the discussion will have been of this value: that it will attract some notice to the question so that in all further publicity which is given to the matter, the attention of the appropriate local authority can be drawn to the importance of dealing with dormant and inactive charities so as to remedy the position. Also I should like very much, as the noble Baroness, Lady Faithfull, has said, for the position to be monitored over the ensuing five years so that we can see whether it really works. On that, I would withdraw the proposed amendment.

Baroness Trumpington

Before the noble and learned Lord sits down, I wonder whether I may reply to my noble friend Lady Faithfull and to the noble and learned Lord, Lord Denning, as to the remarks about monitoring. I would say that the Government will look carefully at the suggestion by both speakers that the way that this Bill works in practice should be monitored. As my noble friend is aware, the commissioners, who report to Parliament annually, will themselves be a valuable source of information on how the Bill works out. I hope that that is useful to both my noble friend and the noble and learned Lord.

Amendment, by leave, withdrawn.

[Amendment No. 61 not moved.]

Clause 6, as amended, agreed to.

Clause7 [Citation, etc.]:

Viscount Colville of Culross moved Amendment No. 62: Page 8, line 40, at end insert ("and different days may be appointed for different provisions and for different purposes.").

The noble Viscount said: If this Bill should ever get on to the statute book, it would be hoped that a great deal of it would come into force immediately. There are, however, provisions for making regulations under Clause 1 and it could therefore be that a slight delay would ensue. Therefore, different commencement dates should be provided for in the way that this amendment does. I beg to move.

On Question, amendment agreed to.

Clause 7, as amended, agreed to.

Schedule 1 agreed to.

Schedule 2 [Section 3]:

Viscount Colville of Culross moved Amendments Nos. 63, 64 and 65:

Amendment No. 63: Page 10, line 10, leave out ("last preceding financial year") and insert ("preceding accounting period").

Amendment No. 64: [Printed earlier: col. 515.]

Amendment No. 65: [Printed earlier: col. 515.]

The noble Viscount said: I wonder whether at this time of the evening I may move these three amendments en bloc. Amendment No. 63 is consequential upon No. 45 and Nos. 64 and 65 are consequential upon Nos. 30 and 32 to which the Committee has already agreed. I beg to move.

On Question, amendments agreed to.

Schedule 2, as amended, agreed to.

Remaining schedule agreed to.

House resumed: Bill reported with the amendments.