Law Reform (Miscellaneous Provisions) (Scotland) Bill [H.L.]

HL Deb 20 March 1990 vol 517 cc255-307

6.45 p.m.

The Lord Advocate (Lord Fraser of Carmyllie)

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.— (The Lord Advocate.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ALPORT in the Chair.]

Clause 1 [Information as to recognised charities]:

Lord Macaulay of Bragar moved Amendment No. 1: Page 1, line 12, after ("Advocate") insert ("any").

The noble Lord said: Amendment No. 1 has been grouped with Amendment No. 6. For the convenience of the Committee it might be appropriate to add Amendment No. 2 to the group because it relates also to Clause 1.

The purpose of this part of the Bill, which deals with charities, is said in the Explanatory and Financial Memorandum to provide for the protection of charities in Scotland. The Bill deals with the regulation of charities. The long-term objective is to identify charities in Scotland, to provide a check on their activities and to provide information on those activities to the Lord Advocate in the public interest and to a lesser extent to members of the public. It is therefore important that no relevant information should be withheld from the Lord Advocate.

Amendment No. 1 is a one-word amendment. It releases the Inland Revenue from any restriction on disclosing to the Lord Advocate what might previously have been regarded as confidential information. With the amendment the clause would read: No obligation as to secrecy or other restriction upon the disclosure of information imposed by statute or otherwise shall prevent the Commissioners of Inland Revenue … from disclosing— (a) to the Lord Advocate, any information"—

instead of, as the clause now reads "information".

The purpose of that small amendment is to give statutory force to the requirement that the Inland Revenue must give "any" information requested by the Lord Advocate and not merely some information. It is important that the Inland Revenue should not be allowed to take advantage of any loopholes in the statute through which it might avoid disclosure of all material matters relating to the malpractices of charities which is what I understand Clause 1 (1) (a) strikes at. I have no particular reason to think that the Inland Revenue would behave in that way, but it can be, as we have all experienced, an awkward squad— if I may put it that way— with which to deal. It would be unfortunate if the absence of a statutory requirement led the parties into expensive litigation. The amendment will remove any doubt about that matter.

The purpose of Amendments Nos. 2 and 6 is to supplement the information in general which is already required to be given to the Lord Advocate and to any person who makes inquiries to the Inland Revenue. At the moment any person will be supplied with the name of any recognised body and the address last used by the commissioners for any communication. The amendments would add the words: and the names and addresses of places from which the said body claims, or has claimed, to operate and the names and addresses of any persons concerned, or claiming to have been concerned, in the management or control of the said body".

That is of some importance from the criminal point of view where suspicion exists of long-term fraud and where a far-reaching inquiry may be required. That is from the public interest point of view on the part of the Lord Advocate. That information will also assist a member of the public who may not be involved in a criminal investigation but may just wish to judge the status and quality of the charity to which he wishes to donate or from which he wishes to receive money. He may need to judge whether he wishes to become involved with that charity. I beg to move.

Lord Morton of Shuna

I hope that this amendment is not acceptable to the Government because it seems to me to be unnecessary. The purpose of the first amendment, I should have thought, was covered by the lines that follow, that it is restricted to information regarding misdemeanours, if I may put it like that.

I see no real point in the Inland Revenue being under a duty under the Act to give the names and addresses because without that information the Lord Advocate would certainly ask for and obtain it. The position is all covered. It seems to me that the Bill is complicated enough without adding to it.

The Earl of Balfour

I wish to say a word on Amendment No. 6. There are a number of charitable bodies where the trustees may be ex officio under the legislation for trusts in Scotland. I do not wish to go into detail but I belong to one society which is partly charitable. In the last 20 years we have had at least 10 different trustees. That is why I feel that Amendment No. 6 creates rather a complicated issue.

Lord Fraser of Carmyllie

I am sure that the noble Lord appreciates that on this clause it is important that the Inland Revenue should be discharged from the duty that it owes of confidentiality in respect of this information. As the noble and learned Lord, Lord Morton, indicated, the provision in Clause 1 (1) (a) is more than sufficient for my purposes.

There is a further consideration which will apply to the next amendment that we shall consider, Amendment No. 2, that the Inland Revenue does not hold all the information in the form that is set out in the amendment. It could not provide all the addresses that are suggested. The scheme we put forward is that the Inland Revenue should be relieved of the duty of confidentiality. Once the name and address of the body concerned has been acquired from the Inland Revenue, information can be obtained from the body itself of the kind which the noble Lord is considering and which is dealt with in the next amendment.

It may be a little obscure at this point but where, for example, the names of trustees are sought the information on the current trustees may not be with the Inland Revenue. If noble Lords turn to Clause 4 (3) there is reference to the Secretary of State determining what should be the contents of a report. Should there be any difficulties about obtaining these names and addresses, then steps could be taken by that route to ensure that the information is made available to members of the public.

As regards my interest in Clause 1 (1) (a), in regard to information it is important that the Inland Revenue should be relieved of the duty of confidentiality. I hope that the noble Lord will be prepared to withdraw his amendment.

Lord Macaulay of Bragar

I am grateful to the noble and learned Lord for that explanation and for his assurance to your Lordships' Committee that he is satisfied that he has sufficient powers under the clause. I take on board the points made by the noble Lord, Lord Morton, and the noble Earl, Lord Balfour. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

The Earl of Selkirk moved Amendment No. 3:

Page 1, line 16, at end insert— (" (b) to any person who is maintaining a register of bodies recognised as charitable with supporting information including the address, accounts and the names of trustees and the purposes of the trust").

The noble Earl said: The amendment examines the charity side from a slightly different angle. The central issue through most of the early passages in Clause 1 of the Bill is for the benefit of the Lord Advocate. I am not opposed in any way to the Lord Advocate obtaining information, but it is not the only side of a charity; there is another side. The side which I am trying to outline in Amendment No. 3 is that the charities available in Scotland should be better known so that people can obtain benefits from them or perhaps make a contribution to them.

I shall leave the curious position of charities in Scotland for my more learned colleagues to explain if at any time they wish to do so. I shall not attempt it myself. The only people who really know what charities exist are the Inland Revenue. Nobody else knows. I think it is important that the Inland Revenue should be free to pass on the information that I mention in the amendment; that is, information including addresses, accounts, the names of trustees and the purposes of the trust so that these can be put together in a register.

I do not say that my amendment is ideal for that purpose but it covers the issue. I should be happy to accept any amendment or make any change which my noble friend wishes to suggest, provided it goes towards making a Scottish register. That is important and it is in the interests of all trusts, all charities or whatever they may be, that this should happen. The provision is far-reaching; this has never been done before. I believe now is the opportunity for it to be established. I do not need to say any more at this hour. I beg to move.

Lord Mackie of Benshie

I have great sympathy with the purpose of the amendment. In a recent case I tried to help someone who was looking for support for a very good purpose. I had great trouble in finding out where anybody existed who could help. I failed miserably to obtain that help and I have no doubt that if there had been a register I should have been able to do something.

Lord Taylor of Gryfe

I wish to add my support for the purposes of the amendment. I have been a trustee of at least two charities in Scotland and believe that people who know their way around can generally find the appropriate charities to support their interest. However, the people who are perhaps in the greatest need do not necessarily know their way around the charities. As a result they fail to obtain the benefits for which the charities are available. In the circumstances, I hope that we can obtain some reassurance that a proper register will be available. It would be of great advantage to the people who require assistance.

Baroness Carnegy of Lour

I agree with the spirit of the amendment. I said on Second Reading that I felt that it was important to have a register in some form. I have since spoken to a number of people and also thought about it. I do not know whether my noble friend Lord Selkirk would agree, but what is needed is not just an enormous list of every charity in Scotland arranged alphabetically. That would be a confusing document. What is really needed is a list of the kinds of charities that people will want to look up, probably grouped according to interests. There would be charities interested in youth work, disabilities, old people, overseas aid and similar subjects. Such a register would have to be composed by a body which was capable of making this form of grouping. It would be necessary to anticipate what people were likely to seek when they consulted the register. I do not know how this situation could be arrived at— whether the amendment would cater for it. However, it seems to me that that is what is needed. It would not necessarily need to be a register of every single charity.

7 p.m.

Lord Cameron of Lochbroom

This amendment is grouped with Amendment No. 20 which stands in my name and that of the noble Lords, Lord Morton of Shuna and Lord Macaulay of Bragar. However, the debate has opened somewhat wider than Amendment No. 3 and it takes in the purpose which Amendment No. 4, which is in my name, also covers. It may be for the convenience of the Committee if I speak to that amendment and to the related Amendments Nos. 19 and 140.

As has already been pointed out, for the first time in legislation we are attempting to produce a scheme for supervision of charities in Scotland. It is important to realise that, as the Bill stands, what is proposed is merely the production of an index to be in the hands of the Inland Revenue. It is rather like a telephone directory in that if one does not know the name one is seeking it is of no use.

We can look South of the Border to what already exists in England and Wales. I take comfort from what is stated in the Government White Paper which followed the Woodfield Report. Chapter 3 of the White Paper deals with the register which is kept by the Charity Commissioners. One sentence of that paragraph encapsulates all that we have been talking about. Paragraph 3.4 states:

The Register provides potential donors and other interested members of the public with access to basic information on the existence of registered charities, their purposes and their administrative structure". We should observe the word "purposes". In that same part there is reference to the kind of volume of inquiries that such a register receives. It is said that the register includes in the order of 170,000 entries and that, the Commission has received roughly 30,000 enquiries a year from members of the public relating to information on the Register". That quite clearly indicates the scope of the interest of the public South of the Border.

I must draw the attention of the Committee to the fact that some Members of the Committee will have received a memorandum from the Law Society of Scotland on this matter. That memorandum makes reference to the fact that solicitors who administer trusts and who attempt to seek charitable bodies to which to make donations can find no reference point from which to begin their inquiries. The suggested index does not provide any such reference point. The inquirer is given no clue as to the nature of the body or bodies which he is referred to, even if he knows their names. Indeed the only information he can obtain which is of any assistance is through his own research thereafter by writing and paying fees to such of the recognised bodies whose names and addresses have been given to him. That is not sufficient and I venture to suggest that the commissioners of the Inland Revenue have that information. I cite Section 9 (1) of the Charities Act 1960 which provides that the commissioners of the Inland Revenue may furnish the Charity Commissioners, with information as to the purposes of the institution and the trusts under which it is established or regulated". Since at least 1960 the commissioners of the Inland Revenue have been accustomed to gather in that information.

In those circumstances it seems important to have a register in our own jurisdiction where the consultative document and the White Paper issued by the Secretary of State as the precursor to this measure suggest that of the order of 15,000 charities exist and that around 400 new charities each year are being established. Therefore, as the noble Baroness, Lady Carnegy, said, it is important that we should have a register. That register should be flexible.

What I have sought to do in Amendment No. 4 is to provide for the fact that the commissioners of the Inland Revenue cannot provide the register itself. Therefore, it must be provided by a body or bodies which have been designated by the Secretary of State. That is the purpose of Amendment No. 19. The flexibility there is that there may be more than one body which is designated to carry out that task. Therefore there may be a general register or one which is intended to reflect a distinct class or classes of charities.

The body which is designated to carry out that task, may be a voluntary body, such as the one of which I have the honour to be president, the Scottish Council for Voluntary Organisations. The noble and learned Lord on the Woolsack was my immediate predecessor as chairman of that body. The body may also constitute someone from within a government department. I believe that a registrar exists at the moment for educational endowments within the Scottish Office. It seems to me that the proposal would cover many of the anxieties which Members of the Committee have already expressed.

I now turn to another aspect of this matter which is encompassed in Amendment No. 20. In that amendment I seek to give powers to a specific authority, a local authority, to carry out a not dissimilar exercise. But here the division is not necessarily that of class but one of geography. It takes its origin and genesis from Section 10 of the Charities Act 1960. I make no bones about the fact that the amendment reflects precisely the terms of that section. In that section Parliament has already provided in England and Wales the basis upon which the index is to be prepared, and for the publication of that index as well as its availability for public inspection and other matters. It provides that a voluntary organisation may be used as an agent to provide the index.

The noble and learned Lord the Lord Advocate may counter that by saying, "Ah yes, but we have similar powers in the Local Government (Scotland) Act 1973". He may instance Sections 87 and 88. However, a careful perusal of those sections will reveal that that is not their purpose. They deal simply with the services offered by charities, among other bodies and do not deal with the basic point of information of the kind which is dealt with in Section 10 of the Charities Act 1960. Parliament recognised that as in the Local Government Act 1972 one finds precisely the same powers accorded to English local authorities. Therefore it cannot have been considered that those sections were simply duplicating what had already appeared in 1960.

I apologise for having taken up the time of the Committee, but I believe that this is a most important point. I entirely agree with what has been said by the noble Earl, Lord Selkirk, that this is a glaring omission in the Bill. It must be covered in some way and I have suggested another way of covering it which is not dissimilar to that which the noble Earl has produced. However, there is a sting in the tail in my Amendment No. 19. I am really leaving it to the Secretary of State to undertake the burden of this designation, and with it the hope that perhaps some money will be available from Government funds to enable that to be done.

We are looking to legislation which is intended for the future to regulate the whole of the charity scene. In my submission, powers of this kind are essential in such a Bill. When I come to Amendments Nos. 4 and 2C I shall consider my position in the light of the response of the noble and learned Lord the Lord Advocate to Amendment No. 3.

Lord Morton of Shuna

Perhaps I may briefly add a little to what my noble and learned friend has said in support of the necessity for an index of charities. The purpose of this part of the Bill is to assist charity— to assist people who wish to give money to charity and to assist those who are entitled to receive money for charity. However, it seems to me that the list— wherever it is held and whoever compiles it— is an essential item of any such provision. It also seems to me that it is quite easy for the Inland Revenue either to prepare the list itself, including the purposes of charities, or to make the information available to anyone who should receive it.

Under Clause 1 (7) of the Bill any charity which wishes to operate will require a certificate. Before issuing the certificate the Inland Revenue will have to be satisfied as to the purpose of the charity, otherwise it would not be a charity. Therefore, at the time of issuing the certificate the Inland Revenue knows the purpose of the charity. It can put that information onto computer or microfiche, or record it in some other way so that it is available. I should have thought that it was not beyond the wit of this Committee to suggest that since all the charities which are now recognised will want a certificate there is no difficulty whatever in producing a list of charities within the time which is no doubt to be allowed for this part of the Bill to come into force.

Lord Macaulay of Bragar

I should like to support what has been said by he noble Earl, Lord Selkirk, concerning Amendment No. 3 and by the noble and learned Lords, Lord Campbell of Lochbroom and Lord Morton of Shuna.

As has already been pointed out twice in Committee, the purpose of the Bill is the supervision and regulation of charities. The absence of a national register of charities leaves a large gap in the structure. I endorse the view that it should not be beyond the ingenuity of the Civil Service and others to get together and give Scotland a proper list of charities to which the public can have access. Such a list would allow the public to see readily what is going on in the charitable field so that they can make any inquiries they wish to the Inland Revenue in connection with alleged charitable activities by named bodies. Therefore, I support the spirit of Amendment No. 3.

I believe that the noble Earl, Lord Selkirk, recognised that Amendment No. 3 is rather widely framed. It would give to any person maintaining a register of charitable bodies the right to such information. That would mean that if 60 people decided to keep a register of charities in Scotland they could pester the Inland Revenue for details of the charities. That would lead to great duplication of effort. I believe that it would be more satisfactory if the amendments were taken on board by the Government and the matter was looked at seriously with a view to meeting the concerns that have been expressed in Committee.

The Earl of Balfour

I should like to make one comment on Amendment No. 20. The last subsection of the proposed new clause states that: A local authority may employ any voluntary organisations". Do we really want local authorities to take on board the job of maintaining an index? Local authorities might seek information from voluntary organisations. However, in many cases such organisations are run by people who are unpaid and provide their services voluntarily. Very often the only person in a charity who deserves to be paid is the secretary; that is the most difficult position to fill. I feel that the suggested new clause, "Index of local authorities", is not drafted satisfactorily.

7.15 p.m.

Lord Fraser of Carmyllie

As I believe has been appreciated, as the consideration of the amendment has proceeded we have ranged rather more widely than the matters encompassed by the amendment. The amendment and those which follow centre on the issue of whether or not there should be an index or register to facilitate greater access to charities in Scotland. While I do not accept my noble and learned friend's description of that as being a glaring omission from the Bill, it is primarily intended that there should be supervision of charities in Scotland which I believe we all appreciate has been a glaring omission from the law in Scotland for some considerable time.

The Government indeed symphathise with the idea behind the amendments that a directory or index of charities in Scotland would be very useful. As the noble Lord, Lord Campbell, indicated, there are some 15,000 charities in Scotland which have been recognised by the Inland Revenue. In the scheme put forward in this part of the Bill disclosure by the Inland Revenue of the names of those charities which it recognises is the key to unlocking the information which is essential in order to build up a directory. I suggest that that disclosure, combined with the requirement under Clause 4 for charities to publish an annual report and accounts, will enable anyone wishing to publish a directory to identify candidates for inclusion.

While it is no doubt correct, as the noble and learned Lord, Lord Morton, indicated, that if the Inland Revenue recognises a body as charitable it ought to know something about the purposes for which it is established. However, I should be cautious about suggesting that the Inland Revenue would necessarily have all the information that would be useful to those who wish to find out more about an individual charity. As the noble Lord, Lord Mackie of Benshie, indicated, there are often individuals who wish for very good reasons to have information about such charities. It is unlikely that the Inland Revenue would know when meetings of a charity were being held. More particularly, it would be unlikely to know the size of grants which a charity might make to individual applicants and the information that it requires of applicants for grants. We suggest that by providing a right for members of the public to obtain copies of a charity's objects directly from the charity itself, together with the information which it is suggested should be provided under Clause 4, there is a greater opportunity to provide a directory of charitable bodies which would contain the information that members of the public might want.

To do as the noble and learned Lords, Lord Morton and Lord Cameron, have suggested and require the Inland Revenue to release, in addition to names and addresses of registered bodies, a summary of their principal objects would be a major undertaking for the revenue. As I have indicated, it may well be that the information would not be very helpful. Prudent drafters of trust deeds for charitable purposes generally include two or three broad heads of charity to preserve, for good enough reasons, maximum flexibility for the trustees. As I understand it, in most instances the name of the charity is likely to be more informative than the objects of the trust itself.

It may help if prior to the first listing of charities all such bodies received a letter explaining the intention to publish. I hope that, given that suggestion, noble Lords might consider withdrawing their amendments. We are willing to consider including in the mailing a questionnaire, the completion of which would be voluntary, with a view to assisting the compilation by others of a directory.

I have asked Scottish Office officials to arrange further meetings with the Inland Revenue and the organisation to which reference has already been made— the Scottish Council for Voluntary Organisations— to explore the possible involvement of the SCVO in such a venture. The Inland Revenue will also consider, in the light of the volume of inquiries, making much more widely available copies of the microfiches containing the index.

As I indicated, it seems to me that it is a matter of first unlocking the information from the Inland Revenue and then seeing how we can best put together, without imposing it on the Inland Revenue, a directory which will contain all the information desired by those who have indicated their support for it.

Turning to Amendment No. 20, I appreciate that the noble and learned Lord, Lord Cameron of Lochbroom, has modelled his amendment on Section 10 of the Charities Act 1960, and has also made reference to the provision under Section 88 of the Local Government (Scotland) Act 1973. Although there may well be a duplication in England, it appears to me that, if any local authority in Scotland wished to take on the responsibility of providing a local directory in its local public libraries, for example, it is already so empowered to do.

My noble friend Lady Carnegy of Lour and the noble Lord, Lord Mackie of Benshie, envisaged that in a small district council such as Angus there are often a large number of small local charities. It would be helpful if that information were to be collated by the local authority— something that has not happened or has been difficult to complete in the absence of information from the Inland Revenue. I believe that that can be done, and it is an objective well worth pursuing.

Given the various bodies that are interested in that field, the correct way forward at this time is to have the further investigation and discussion that I suggested, to see whether a scheme can be properly developed which will allow that information to be made available. With that explanation, I hope that the noble Lords will consider that their amendments can be withdrawn.

Lord Kirkhill

Perhaps the noble and learned Lord can help me. I have asked this question before. Some noble Lords may have decided what they will do, or not do, with the various amendments that they have tabled. The noble and learned Lord has used such phrases as "We shall consider" and "We hope to discuss matters with". We want to know whether the Secretary of State for Scotland will be involved and whether he will designate a body.

Lord Fraser of Carmyllie

I do not suggest at this stage that there should be designation of a body, but I thought that I had given a pretty clear hint of a body that might be suitable for taking on just such a task.

Perhaps I may emphasise an important point which the noble Lord may not have picked up. Although the Inland Revenue is in possession of a considerable amount of information which might be useful to those who seek to put together such a directory, it does not have all the information that will be useful. For example, it might not know at any particular time who are the current trustees. It might not have had contact with a body for some time and information might therefore be restricted. The Secretary of State becomes involved as a result of the provisions in Clause 4. Clause 4 (3) states: The Secretary of State may, by regulations, prescribe— (a) the form and content of the balance sheet and income and expenditure account and of the report". I envisage that information would be provided within that report which would be of use to those who sought to make application to the charity for a grant.

Lord Mackie of Benshie

Perhaps the noble and learned Lord will help me on this point. A number of years ago, the citizens of Kirriemuir left money to provide a ton of coal a year for the poor of the parish and a pound a year to the local pipe band in addition to a number of other similar requests. Has that trust been registered?

Lord Fraser of Carmyllie

I do not know about that trust. It is certainly conceivable that it is registered and, from the noble Lord's description of the provision of fuel for the poor in Kirriemuir, it appeals at first blush that it has every possibility of being accepted as a charitable trust. However, once this part of the Bill is in place, it will be possible not only for organisations but for individuals to make inquiries and to discover whether it has been so registered.

Lord Carmichael of Kelvingrove

We are all grateful to a certain extent to the noble and learned Lord the Lord Advocate for his reply, but there is a feeling that he has for some reason or another failed to grasp the nettle. Why is it that in England the charity commissioners are required to keep that register whereas he has suggested that, in Scotland, local author: ties might do that? That puzzles me. Will the local authorities have power to demand from the Inland Revenue lists of all the charities in Scotland? The noble and learned Lord then went on to speak of the SCVO perhaps doing that job. As an outside, non-statutory body, would it have power to ask the Inland Revenue to supply the information?

The noble and learned Lord the Lord Advocate appears to be making rather heavy weather of the matter. There are books on the subject. I have been associated with a number of organisations which have looked for charitable donations. They are reasonably well indexed. The books list what I believe are called grocery charities and chocolate charities, for example. They are helpful as far as they go, but there is always a feeling that some charities might have been missed. As has been suggested, lawyers often look for places to which people wish to make donations. In addition, there is the possibility that good, reputable bodies, which need money for specific purposes, cannot easily find out where to go. A local authority might be suitable for the smaller charities such as the noble Lord, Lord Mackie of Benshie, mentioned. However, there is a plethora of larger charities, for example, universities and medical charities. There are all kinds of groups to which one could go.

Why can we not have a single register such as exists in England? It puzzles me that the noble and learned Lord the Lord Advocate is seeking a voluntary organisation for that purpose. One presumes that a grant would be made to the voluntary organisation for that purpose unless there was a charge for making inquiries, which I do not believe applies south of the Border. Perhaps the noble and learned Lord will enlighten me on that point. From what was said after the noble and learned Lord, Lord Cameron, spoke, other noble Lords seemed a little disappointed in the Minister's reply. I certainly was. I am sure that his intention is good. Will he not take back the amendment and consider it a little more thoroughly?

Lord Fraser of Carmyllie

I have told noble Lords that there are reasons for discussing the matter further. If the noble Lord consults the paper which we prepared before the legislation was introduced, he will see that we made it clear that we did not wish to go down the road of establishing a charities commission such as that which obtains in England at present. I think that those who have some familiarity with it will appreciate that the Charity Commissioners have had very real difficulties and have been subjected to considerable criticisms in recent years. A slavish following of that model did not appear to me to be the most appropriate way of proceeding.

What in my view is worthy of further exploration is whether there would be any value in somebody simply keeping a list— I see the attraction of someone drawing it together who has a real interest in charitable matters— precisely for the reason given by my noble friend Lady Carnegy. Simply to have a complete list of 15,000 charities in Scotland setting out their purposes might be of pretty limited value to those who wished to obtain grants from those charities.

It seems to be much more desirable— and this is why I think there should be much more opportunity given for discussion with a body like the SCVO— to have such a directory or register broken down, as my noble friend would wish, into charities that are interested in, say, overseas aid, mental health or whatever it might be. That might be of greatest value to those who wish to make application to those charities. It seems to me that that is the way in which this matter should be approached.

I should like to clarify one final point. When I indicated that local authorities might be involved, it would certainly be in duplication, if they so chose, of their own local authority. I do not suggest— I accept that that is the criticism that the noble Lord made— that it would necessarily be appropriate to make the only registers that one can get at the ones that are made up on a local basis. I am sure that the noble Lord could readily rattle off a considerable list of charities which had an all-Scotland or all-United Kingdom application and which are not simply there for a local purpose.

7.30 p.m.

Lord Morton of Shuna

The noble and learned Lord the Lord Advocate suggested that the need for this Bill was the supervision of charities, as if the majority of charities was some kind of group of delinquents. I suggested to him that what was needed was help for charities. It did not appear to me from anything said by the noble and learned Lord that he was taking any course other than being the teacher keeping the naughty boys in line.

However, the need is there. The charities which are doing a good job should be assisted to do a better job by having that type of list readily available. I cannot see the difficulty. The Inland Revenue will have to issue the certificate and therefore will have to know the charitable purpose. The Government should realise that it is a help to know which charities deal, say, with medical research, which deal with education, which tackle poverty and so on. That kind of basic division is of interest.

If the noble and learned Lord will take that point on board and consider putting out a list— as he appeared to suggest at Second Reading when he spoke about the Inland Revenue having all this information on microfiche— we can take the matter a little further without prolonging this debate.

Lord Fraser of Carmyllie

Perhaps I am bound to tell the noble Lord that regrettably supervision in Scotland has been sadly lacking. I do not in any way suggest that anything other than a tiny minority of charities in Scotland may be abusing their positions. At risk of repeating myself, I emphasise that we shall look very carefully at making much more widely available the information that is held on microfiche so that it is available to those who want access to it.

I believe that if there is to be a directory which is of value to people who seek grants and so on, as the noble Lord appears to want, then much more information will be needed. I see that the noble Lord shakes his head. However, I should have thought that the information contained in a report, such as the type of grants available and the amounts that will be given, would be just the kind of information that individuals want. In my time as a Member of Parliament, that is the information for which I was repeatedly asked. I was asked, "I know that there is such and such a trust. Is it worth my while applying? Will I only get £ 25 or a contribution that will make a significant difference?" I believe that it is that kind of information that would be very useful to the public in Scotland.

Lord Grimond

Am I right in thinking that such a registry is in existence, at least for England? It is a private enterprise registry which indicates where one can obtain grants for various purposes. Would it be worth inquiring whether that covers Scotland, or indeed encouraging a similar registry in Scotland?

Lord Fraser of Carmyllie

I do not know about any English one. I find it difficult to believe that it would have the full information, given the duty that is imposed upon the Inland Revenue not to reveal information. It cannot be all-revealing. There are many respectable and worthwhile charities which go out of their way publicly to make clear their purposes and what funds they have available.

The Earl of Perth

The noble Lord, Lord Grimond, is quite right. In England there is a charitable list. One could set up a charity and want it to be secret, but one cannot do things that way. One has to answer certain questions. I know about this in a very small way because my wife and I set up a small charitable trust. Very soon we had a request from the registrar to explain it, which is a voluntary procedure. The first year we paid no attention to it; the second year we found that we had to act.

I do not see why, if that has been the experience in England, the same should not happen in Scotland. All the information is there. As the noble and learned Lord the Lord Advocate said, it first has to be unlocked. He said that one could do that. But then— and I did not fully understand it— he spoke about having a meeting with the Inland Revenue and the charities. I do not know when he contemplates that meeting taking place. Will it be during the course of this Bill, in six months' time or when?

The other point that I would like to make concerns his words— I noted them very accurately— "anyone wishing to establish a register". Is that trying to dodge the fact that we are inclined to think that it should properly be done by the Scottish Office itself or some other body under the direction of the Scottish Office? I hope that he will be able to help us on those questions.

The Earl of Selkirk

I should like to thank the noble and learned Lord for supporting the purpose of this amendment. I think that we have to make somebody do it. But that is the problem. I do not know how far the Scottish Office is prepared to go. However, I see no reason why this should not be commercially viable. It is a book that many people want. Goodness knows the number of magazines and so on that come every day into our offices. It is quite appalling. This is something that could well be done. I could even give the noble Lord the address of someone who would do it but that would be in England.

Will the noble and learned Lord undertake to find out what the Scottish Office will do and whether the Inland Revenue is prepared to play? It would mean some work for them. I do not think that they would maintain the register themselves.

The noble and learned Lord said that a register is not of much use. However that depends on the editor. If the editor knows how to put it together he will turn it into a useful book which many people will want to have. I shall have no difficulty in withdrawing this amendment if my noble and learned friend will promise to look at these problems and bring forward a scheme to put a register into operation. I want him not just to talk about it but to do something. If he does, I shall be glad to withdraw the amendment.

Lord Fraser of Carmyllie

As I have already indicated, I cannot come forward with what the noble Earl wants as a complete scheme. I have repeatedly said that the information held by the Inland Revenue is held on a list or index— whichever word one wants to use— on microfiche in Edinburgh. That complete list will be available to anyone who calls at the offices and wishes to see it. I may be wrong but I should have thought that further information in greater detail was wanted. I urge that upon noble Lords. But I believe that there is better access to that information through other provisions. However, if it is simply a matter of obtaining the information from the Inland Revenue, large portions of which may be out of date or quite inaccurate, that information on the microfiche index will be available in Edinburgh.

Lord Mackie of Benshie

Is not the noble Earl, Lord Selkirk, asking the noble and learned Lord to go a little further in this respect and take charge of the indexing and the setting out of the list— that is, apart from just publishing the list itself?

Lord Morton of Shuna

Is not the difficulty about which we are talking that subsection (1) (b) of the clause does not permit someone like me to look at the list? It seems to me that it only permits me to ask about one particular charity.

Lord Fraser of Carmyllie

I am getting very close to the risk of being repetitive. I thought that I had just clearly indicated to the noble Earl that if he chooses to spend his leisure time at the offices of the Inland Revenue in Edinburgh, he will be able to see the listing of charities on microfiche. That may not be spelt out in the clause, but I would not have thought that that was truly a criticism of the drafting of the clause.

The Earl of Selkirk

On the understanding that the noble and learned Lord the Lord Advocate will take steps in this direction and produce something, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Karl of Strathmore and Kinghorne

I think that we have reached a convenient moment at which to adjourn. Perhaps I may suggest that we do not return until 8.30 p.m.

[The Sitting was suspended from 7.41 to 8.30 p.m.]

[Amendments Nos. 4 to 11 not moved.]

Lord Cameron of Lochbroom moved Amendment No. 11: Page 2, line 16, after first ("person") insert ("upon tender of such reasonable charge as the body may stipulate").

The noble and learned Lord said: I speak also to Amendment No. 67. This is designed to discover whether there may be a lacuna in the subsection referred to. It would be unfortunate if a person were able to complain to the Lord Advocate when he had requested information but had failed to tender the reasonable charge. When he had not so tendered it would be unfortunate that he should be able to complain. I beg to move.

Lord Fraser of Carmyllie

I accept the spirit of the amendment put forward by the noble and learned Lord. The amendment is introduced to ensure that a charity should not be in danger of being listed for failing to produce a copy of its trust deed until it has been paid for the reasonable cost of its production. With the undertaking that I shall bring forward an amendment to achieve that aim, I hope that the noble and learned Lord will withdraw the amendment.

Lord Cameron of Lochbroom

I am most grateful and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 12 not moved.]

The Earl of Selkirk moved Amendment No. 13: Page 2, line 22, leave out ("Court of Session") and insert ("court")

The noble Earl said: It seems to me that all cases should not necessarily go to the Court of Session, simply for reasons of expense. I should like to leave the choice to the Lord Advocate whether the case should to to the sheriff court or the Court of Session. The object of this amendment is to leave that choice entirely with him.

Lord Macaulay of Bragar

This amendment is grouped with Amendment No. 26, which is in similar terms, and also with Amendment No. 136 which covers the same ground. With the leave of the Committee, I speak to Amendment No. 136. That amendment makes an amendment to Clause 10 about where applications should be made. Instead of the Court of Session it suggests that in addition a sheriff court should have jurisdiction over the place in which the trust has its principal place of business at the time of the application.

This amendment relates to charities with an annual income of £ 1,000 or less. The clause refers to proposed expenditure of capital and enables the Lord Advocate to go only to the Court of Session to stop the expenditure within the terms of the clause. The general view taken is that with a trust income of £ 1,000 per annum or less there will not be much money in the fund in any event, and to restrict the access of any application, particularly an application at the instance of the Lord Advocate which the trustees may have to defend, may make great inroads into the trust funds. In fact, we are all agreed that the object is to preserve the trust funds.

Broadly speaking, this theme of Court of Session and/or sheriff court arises throughout this part of the Bill. It may save some time if the noble and learned Lord the Lord Advocate could indicate whether the Government are prepared to take away that issue of venue of applications and consider whether, where Court of Session appears, they will consider extending access to the sheriff court at the discretion of the trustees.

I appreciate that the suggestion covers amendments to Clause 8, but if the noble and learned Lord can give that undertaking in relation to Amendment No. 136 and other similar amendments, I should be prepared to withdraw them in the course of the proceedings.

Lord Fraser of Carmyllie

I am grateful to the noble Earl for bringing forward this amendment. The thinking of the Government is in line with that of the noble Earl and, indeed, that of the noble Lord, Lord Macaulay. In principle we accept these amendments. It is my intention to provide by amendment on Report for a choice of court in all cases where I have power to apply for an interdict or order. Those occur at Clause 1 (5), Clause 2 (3), Clause 4 (11) and Clause 10 (4).

I must make clear one proviso as regards Clause 6. In view of the complexity of the controls allowed for there and the serious nature of the penalties which may be imposed under that clause, the Government intend to insist that in relation to that clause specifically the jurisdiction of the Court of Session should remain exclusive.

The Earl of Selkirk

I am most grateful to my noble and learned friend and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 14 not moved.]

Lord Macaulay of Bragar moved Amendment No. 15: Page 2, line 23, after ("Advocate") insert ("or any person who has made a complaint in terms of subsection (4) above").

The noble Lord said: This amendment allows any person who has made a complaint under Clause 1 to make an application as well as the Lord Advocate. Since the Bill gives any person power to ask for the accounts, it seems illogical that he should not have the follow through power to take the matter to the court. I beg to move.

Lord Fraser of Carmyllie

The amendment seeks to provide that any person who has a complaint that a body has failed to provide under subsection (4) a copy of its founding deed may apply direct to the court to interdict that body or a person involved in the management or control of that body from engaging in any activity specified in the application to the court.

The subsection, as the noble Lord indicated, provides that I may apply to the court for interdict. I would not be in favour of giving this power to any other person. What needs to be appreciated is this

If there has been what might be described as a minor breach of what is required under the clause, in those circumstances under subsection (4) it would be open to me to require of the Inland Revenue that the failure be noted on the record held by it.

If under subsection (5) it were permitted for any other person to go to the courts, there is a serious risk of confusion. If it is a minor matter, the scheme is that it should be dealt with by noting; and if it is an issue of interdict, it should be left to me. Otherwise, it is not difficult to envisage a curious circumstance in which an individual might come before the court seeking interdict and the Lord Advocate of the day would come into court opposing it saying, "This is a matter that has been satisfactorily dealt with by way of a note".

Lord Cameron of Lochbroom

Before the noble and learned Lord sits down, perhaps he will confirm that nothing in this subsection will derogate from the common law, so that if an individual was able to show an interest, he would still be entitled to use the remedy of interdict if that were appropriate.

Lord Fraser of Carmyllie

So far as the common law is concerned, there is nothing in these provisions which is intended to deprive any individual in Scotland of the rights that he would have before the courts.

Lord Macaulay of Bragar

I am grateful to the noble and learned Lord the Lord Advocate for that explanation. But it seems to me to be a rather unusual state of affairs when one compares subsection (4) with subsection (5). In subsection (4) the Lord Advocate, on a complaint being made to him by such person, may direct that the fact of such failure shall be noted". However, the reason that this amendment was inserted was that when we come to subsection (5) there is no obligation, mandatory or otherwise, on the Lord Advocate to take any note of any desire on the part of the person who has complained to interdict the body or person presumably continuing in the activity complained of. That is why the amendment has been tabled.

Lord Fraser of Carmyllie

If the noble Lord wishes me to consider whether it might be made clearer that following on a complaint under subsection (4) I might take the more draconian step of approaching the court for an interdict, I shall undertake to consider that and write to him if necessary, to ensure that it is clear that such a complaint might lead the Lord Advocate of the day to take such steps.

Lord Macaulay of Bragar

I am grateful for that reply, and I am satisfied with that explanation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

8.45 p.m.

Lord Cameron of Lochbroom moved Amendment No. 16: Page 2, line 23, after ("body") insert ("if incorporated").

The noble and learned Lord said: When speaking to this amendment— if the grouping is correct— I should also speak to Amendments Nos. 27 to 29, 94 to 96 and 98.

What has been omitted from this provision is the recognition that many bodies which are charities are unincorporated and are not legal persons. The court therefore has no power to interdict them because the court can only interdict a legal person. My noble and learned friend and I sought to correct this by inserting "if incorporated". I raised this matter at Second Reading. The absence of an amendment dealing with it means that the noble and learned Lord the Lord Advocate does not consider there to be anything in it. However, I can assure him that my noble and learned friend and I consider there to be quite a lot of difficulty in it. I beg to move.

Lord Fraser of Carmyllie

I understand now for the first time what the noble and learned Lords are driving at. I confess that I had taken from it a rather different message: that they sought quite specifically to restrict powers of interdict to bodies which were incorporated, and they were not dealing with unincorporated bodies. That is clearly contrary to my intention. I wish to be in a position to take action against a wider range of bodies than that. Given the point that the noble and learned Lord raised, I shall look at that again. With the greatest respect, I am not entirely sure that I agree with what he says, but given the power of the heavy duo in the middle, I should like to look at this matter again.

Lord Cameron of Lochbroom

I am grateful to the noble and learned Lord for looking at it again. However, does he really think that either the Court of Session or the sheriff court can interdict a committee or a trust? The only way that can be done is to interdict the trustees or the individual members. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Morton of Shuna moved Amendment No. 17: Page 2, line 27, after second ("body") insert ("not being an exempt charity")

The noble and learned Lord said: This amendment should be grouped with Amendments Nos. 21, 23 to 25 and 141. It deals with exempt charities. In this amendment, they fit into two classes: one is Church charities, and the other is small charities.

The difficulty with regard to small charities is that there are many of them which are not registered with the In and Revenue because they do not see any need to do so. They raise their money by collections, by sales of work and so on. They are not interested in covenants. To put the whole paraphernalia of this part of this Bill on a committee which runs a sports day in a village each year, or something of that nature, is absurd. It is also absurd to put it on to a charity with a very small income because the whole income will be absorbed in the auditing of its accounts.

The small charity level we have suggested is one which has no permanent endowment or income from property amounting to more than £ 500 a year. That suggestion was merely plucked out of the air with some view on the similar provision in the 1960 English Charities Act, which has an exemption, and applying an inflationary table to that figure.

There must be some point at which small charities are exempt. I do not claim that our figure is right, but there must be a point when it is not worthwhile to take this sort of issue. The Church is in a different position. It is different from almost all other charities in that it is the members of the Church who subscribe the money which is used to run the Church. That makes it different from charities concerned with prevention of the cruelty to children or the cruelty to animals organisations or the relief of poverty abroad, where one gives money to a charity and has no say in what happens to it. Anybody who is a member of a Church gives money to it and there is a regulated body which deals with it. The noble and learned Lord the Lord Advocate and I are both sons of the manse and we know the position in regard to the Church of Scotland. It has a special position in that it is, of course, protected by the Act of Union. It is also covered by the Church of Scotland Act 1921. One has the amazing situation in the Bill that, apparently, the Lord Advocate is assuming to himself a power to go to the Church of Scotland and inquire whether it is fulfilling its trust purposes. Moreover, any person can go to the Church of Scotland, or any other Church, and inquire about the deed constituting the trust. That may well be difficult, whether one starts with the Westminster Confession, or the Church of Scotland, or the Bible, or wherever. I do not think that that is intended.

There is also the statutory problem that I know has been raised and noble Lords will have seen what the Church of Scotland has circulated about the statutory powers which Parliament has given to the Church of Scotland, or recognised that the Church has always had in the 1921 Act. One would not have thought it necessary in a Bill to control charities to raise a Church/government conflict on powers. However, that is special to the Church for Scotland and the same issue arises in a different way with all the other Churches. Almost every minister or priest is, ex officio, the trustee of his parish fund, or congregational fund, however it is done. There is a statutory inside-the-church organisation. It seems that this is a necessary exception if this part of the Bill is to have any practical effect.

There is a matter of practicality. I am told that the number of trustees— of course, they change every year— for the Church of Scotland alone would be 65,000. By the time one adds all these elders and members of congregational boards and ministers, and changes them about each year, the eight people in the Lord Advocate's office who are supervising all this will be in some difficulty. As a matter of practicality, it cannot work. It is not necessary, and as the Procurator of the Church of Scotland suggested, quite absurd. Therefore, I hope the noble and learned Lord will undertake to take this away and reconsider it.

If he does do so, I would say that what is listed in the clause is far from complete if one compares it with the exemptions in the English Act, because that excludes, among others, universities and friendly societies and various other organisations. Clearly, if a little more thought had gone into the drafting of this Bill, and someone had looked at the English provisions, they might have thought of the difficulties that no doubt will arise. I suggest it is absurd that where Parliament has laid down— or the national Church has laid down by its legislative process— control of the accounting there should be another control added to it. I beg to move.

Lord Campbell of Croy

This group of amendments, so ably presented by the noble and learned Lord, Lord Morton, covers mainly the Churches but also includes, in paragraph (e) of Amendment No. 21, the very small charities. Perhaps I may say immediately that I agree with what the noble and learned Lord said in that respect and I hope the Government will have some arrangements for what one might call a de minimis principle so that there is a cut-off point for small charities.

I should like to deal with the main part of the amendment as I see it— exempting churches from these provisions. Of course, it is not only the Christian Churches because Amendment No. 21 refers to, or other body established for the advancement of religion". I therefore presume that synagogues, mosques and similar institutions are covered. The Christian denominations in Scotland have got together in this respect and clearly are worried about the effects of the Bill. As I understand Amendment No. 21, which is the effective amendment in the group, the exempted charities will be the Churches themselves, or their equivalents in other religions, but not trusts set up by the Churches unless they deal with buildings.

I declare an interest because I am chairman of a trust of the Nairn Church of Scotland parish church. I have sympathy with the aims of the group of amendments. I am sure that we would not wish the Churches and other religious institutions to be encumbered with unnecessary and time-consuming tasks and burdens. I also ask why they should be exempted from a system which is to apply to other respectable and respected bodies which need to keep administrative staff to a minimum; that is, other charities with which this part of the Bill is dealing.

The question raised suggests that the system proposed in the Bill will be a considerable burden to those who come within it. Therefore, I ask my noble and learned friend the Lord Advocate to consider carefully the position of the Churches and other religious institutions as they would be affected by this part of the Bill. Perhaps he will also tell the Committee whether he foresees a great deal of extra work being created by the Bill which might impose the burdens on the Churches which at present concern them.

To summarise, therefore, I agree entirely on the point about the very small charities and I hope the Government will consider that aspect. However, I am in two minds about exempting Churches because I understand their concern and I have a sympathy for the purpose of the amendment; but I am sorry to think that that has been caused by a feeling that the Bill will impose a heavy burden, because that burden will fall on other charities as well.

Lord Mackie of Benshie

I too am wholly in agreement with the purpose of the amendment. I believe that the Churches are a special case. The memorandum from the Scottish Churches Committee gives the members. They are enormously respectable: the Church of Scotland, the Roman Catholic Church, the Scottish Episcopal Church, the Methodist Church, the Baptist Union, and so on.

However, the wording of Amendment No. 21 refers to, any Church or other body established for the advancement of religion". There are some enormously suspect bodies of that sort. I give an international example; the church established by Mr. Moon in Korea, which now has a hereditary head appointed by himself. It raises enormous amounts of money by very doubtful means. Clearly such a church should not be exempted. In fact, that is exactly the sort of charity which should be looked at extremely closely. I do not think I need to say more. The Minister takes my point absolutely.

In addition, the phrase "any Church" is the wrong expression. The phrase should perhaps be "a Church recognised by the Lord Advocate". I do not know how it should be worded but certainly the present definition cannot be right.

The Earl of Balfour

I raise one further point. I do not want to pour cold water on the amendment tabled by the noble and learned Lord, Lord Morton, but I ask the Committee to look at the wording in paragraph (d) of Amendment No. 21: maintaining, repairing or managing ecclesiastical buildings". As I understand the position, the repairs and maintenance of such buildings are not usually considered in connection with the charitable side of its activities. If a church has a building and maintenance fund, that is subject to tax, as opposed to the welfare side of its activities. I hope that repairs can be exempted from tax. With all these wonderful buildings, be they art museums, churches or anything else, the cost of upkeep is an ever-increasing burden. As I say, as I understand the position they are not exempt from tax and certainly not from VAT, when necessary repairs have to be done.

9 p.m.

Lord Grimond

I have the greatest sympathy with this amendment and certainly with the very important point that has been raised about the churches. I certainly support what the noble and learned Lord, Lord Morton of Shuna, has said about them, subject to the provisos of my noble friend Lord Mackie. I hope that we shall not forget about small charities. I have some connection with them. We already have considerable difficulty in getting people to run them. I hope that this Bill will not impose any more and unnecessary burdens on them. If that happens, I am certain that we shall lose what voluntary aid we have. I am sure that the Minister will bear that in mind.

Lord Macaulay of Bragar

As regards small charities, Members on this side of the Committee support the amendment. The figure of about £ 500 a year seems to be reasonable. It has the added advantage, with reference to the earlier part of the debate, of excluding these small charities. The register that was discussed would become a little smaller. It would make it easier for the Government to establish their own records.

Amendment No. 21 raises real practical difficulties. One of those is that once an exception of this kind is made within the context of a Bill of this nature, there is bound to be set up some form of jealousy among other groups such as those mentioned by the noble Lord, Lord Campbell of Croy. People who are running a perfectly respectable charity might look at the exemption and ask themselves why another organisation should get it rather than them. That would seem to drive a hole in the protective wall, so to speak, and in the regulatory procedures.

If I may say so, the noble and learned Lord, Lord Morton, has not told us that the Church of Scotland is absolutely protected by the Act of Union and that the Act presents a bar to the burden of this kind of legislation being placed on it. Neither has it been indicated that there will be any particular administrative difficulty in the church dealing with the matters involved in the Bill. I refer in particular to the question of producing accounts and the deeds of trust and whatever may be required. Like other Members of the Committee, I have other reservations about this particular amendment. I shall listen with interest to what the Lord Advocate has to say in response.

Baroness Carnegy of Lour

There is one further point which has not been made. In attempting to differentiate between the churches and other charities and in saying why they are different, the noble and learned Lord, Lord Morton of Shuna, said that the Church of Scotland had a particular position. He referred to other churches as being somewhat different. He said that the churches were different to other charities because their members subscribed to the money which financed them.

I remind him and the Committee that bodies like the Girl Guides Association and the Scouts Association are entirely funded by their members paying subscriptions. I refer also to the Women's Royal Institute and many other organisations which I can think of. I do not believe that difference will wash. It is a very difficult problem. I can understand why the churches feel as they do. They also wrote to me. I am very sympathetic.

We have to be extremely careful what we do about this issue. It may be that the constitutional position of the Church of Scotland precludes the same treatment as that given to other churches. My own church, the Episcopal Church, and I should think also the Roman Catholic Church, is not in that position. I am not sure whether the law may treat them differently. I shall be interested to hear what my noble friend has to say on the matter.

The Earl of Perth

I want to make a few remarks on the question of churches. I believe that they are in a different category to other charities and that in some form or another that difference should be recognised. It is not so much a question of their being burdened by new responsibilities or anything else: the fact of the matter is that the parishioners of any particular individual group of churches will already discipline themselves. If something goes wrong one can be quite sure that the minister or the parishioners will know about it. They will put the matter right themselves.

I do not wish to put this in too derogatory a sense, but I feel sure that they will feel anxious if Big Brother is overlooking what they are up to. In some way or another the churches are almost locally governed already. That is particularly true in England and Wales. They follow very closely what is happening to their money and the charity which is given to them. I hope that fact will be taken into account in any amendment even if the amendment moved by the noble and learned Lord, Lord Morton of Shuna, is not accepted.

Lord Fraser of Carmyllie

Other than setting up a directory I believe that this is the most important point which arises during the Committee stage on Part I of the Bill. I hope I shall be forgiven for taking a minute or two to explain the position as I see it. I indicate immediately that I understand the aim of the new clause and the amendments and what lies being the idea; namely, that clearly very important religious organisations in Scotland may be afforded special treatment.

Officials from the Scottish Home and Health Department and the Crown Office recently held a useful and informative meeting with the Scottish Churches Committee. I understand that it has as its chairman and secretary the Church of Scotland, though the committee is by no means restricted exclusively to the Church of Scotland itself. The purpose of that meeting was to explore the problems which might arise if the Bill were to be applied in its entirety to religious bodies. It was the noble Lord, Lord Mackie, who put his finger on the great difficulty here.

While these many great and fine churches are central to our national life, if anyone wishes to set up a scam or a fraud it is not unknown for people to retreat behind the pursuit of a religious objective. I make no comment on any particular organisation but it is not unknown in the Crown Office to hear complaints of fraud and the like in relation to bodies which hold themselves to be religious. The noble Lord, Lord Mackie, is absolutely right in his appreciation that if any church or other body established for the advancement of religion were to be exempted, a coach and horses would be driven through Part I of the Bill. It would mean that anyone with an ulterior purpose would simply have to contain among a number of other purposes the advancement of religion. Part I of the Bill would not then apply.

I appreciate the fact that the Scottish Churches Committee which discussed these matters also understands the difficulties. It is right to place on record that it is also sensitive to the fact that religious organisations other than Christian ones might well be afforded a comparable degree of respect and arguably even privilege. It is important that these often unpleasant cult-like sects should not escape control. The noble and learned Lord, Lord Morton, referred to what is undoubtedly the special constitutional position in Scotland of the Church of Scotland. Like him, I am a member of that Church. But in the 1990s I have to confess that I would be very uneasy about conferring on the Church of Scotland exclusively a special status in dealing with these matters. There are equally fine and equally important other religious bodies in Scotland whose position ought properly to be recognised.

A distinction needs to be drawn between taking action to intervene in a church's affairs or to enforce compliance, and simply including the churches within the purview of those provisions concerned with disclosure, accounts and my right to investigate. I have in mind to consider before the Report stage government amendments which will enable major churches, both Christian and non-Christian, to function without fear of state intervention but which will retain appropriate control over lesser bodies with religious objects. I am aware that the Procurator of the General Assembly of the Church of Scotland has suggested that I might find myself in an invidious position if I were to exercise the powers vested in me under this part of the Bill and that I might have to appoint a minister to administer the sacrament in a parish. I do the best I can to reassure him that I have no such megalomaniac tendencies in that direction. They are difficult issues and I am sure that they are appreciated. I should like the opportunity to consider them further. In those circumstances I hope that the noble and learned Lord will agree to withdraw the amendment.

The noble Earl, Lord Balfour, referred to the maintenance of church buildings and asked about their eligibility for tax relief. Expenses which are in furtherance of religious objects— that would include buildings— are eligible for income tax relief. I think he must have had in mind the position regarding VAT. Value added tax is payable on such repairs and maintenance.

I turn now to the amendment concerned with small charities. I appreciate the de minimis point which is advanced in the amendment. But it would be inappropriate to approach it in the way suggested by the noble and learned Lord by fixing a figure on the face of the Bill. Powers given under Clause 3 (4) would allow for small charities to be exempted, for example, from accounting requirements. It is certainly intended that there should be very much less demanding requirements for such bodies. I would suggest, understanding what he is driving at, that that is rather a better way forward than the way that he has suggested.

Perhaps I may pursue one example that the noble and learned Lord gave. A single purpose charity that the law would recognise as a charity might not necessarily be a charity that wanted to hold itself out as a charity— which is at the centre of this Bill— and would not be one that would seek to have itself registered or recognised by the Inland Revenue.

9.15 p.m.

Lord Morton of Shuna

Of course I shall not press the amendment until I see what the noble and learned Lord has said. I am grateful to him for answering the point raised by the noble Earl, Lord Balfour, about tax on the maintenance of church buildings. The amendment was specifically drafted with a view to include religions that were not Christian. I quite see that there may be some difficulties with certain groups of people who call themselves religions. However, the special position that I was attempting to put about Churches— I shall deal with the special position of the Church of Scotland later— is that they have rules and they have set government, set procedures. In many of the Churches this is done by legislation— quite often by private legislation through these Houses of Parliament. If they set down one way of doing accounts, for example, does this mean that under this scheme everyone has to produce two sets of accounts: one to fit one body, and the other to fit the other body of legislation?

Putting it shortly, the difficulty about the Church of Scotland is that Parliament recognised in the 1921 Act the Church of Scotland's position as having exclusive— that is exclusive from the courts— authority in matters of government and discipline in the Church. If the Bill goes through as it is one is going right into straightforward argument as to the constitutional levels between one and the other. I do not think anybody suggested that the noble and learned Lord was going to appoint a Minister. He was going to appoint a judicial factor who would have the duty of conducting sacraments, and that would be a very surprising idea. I would be interested to know whom he would select to do it.

This is a particularly fraught issue. It is an important issue. I hope that something constructive may come out of it. It is perhaps unfortunate that this part has come through with so little time for real thought among those with a crucial interest in it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Fraser of Carmyllie moved Amendment No. 18: Page 2, line 34, at end insert ("and a recognised body shall be entitled to describe itself as "a Scottish charity" ").

The noble and learned Lord said: Clause 1 (6) defines the term "recognised body", which is used throughout the Bill, as a body established under the law of Scotland or managed or controlled in or from Scotland, which has been given intimation by the Commissioners of Inland Revenue that tax relief will be due under Section 505 of the Act of 1988. The amendment makes clear that bodies which have been so recognised may represent themselves as Scottish charities.

This amendment takes account of representations which were made by the Law Society of Scotland— for which I am grateful— to the effect that as "charities" and "charitable" are used without definition throughout the Bill it is desirable to make plain that the legislation is concerned with the broad tax meaning of charity and not some common law concept. By stating on the face of the Bill that a recognised body is entitled to represent itself as a Scottish charity this intention is made evident. I beg to move.

Lord Morton of Shuna

I wonder what the point of this is. Why should anybody suggest that something that is recognised by the Inland Revenue and has a base in Scotland should never call itself other than a Scottish charity if it wanted to? Why does Parliament need to give it permission to call itself a Scottish charity? I rise not to suggest merely that this is unnecessary, but to ask the noble and learned Lord to explain what he asserted at Second Reading— if my memory is right at col. 210— that this made no change in the Scottish law of charity.

As lie will know, the recognition by the Inland Revenue means that it applies the English law of charity. What we are doing in this clause is to say that only a body established in Scotland which fits the English definition of charity can all itself a charity. Is this really what we are doing? What is left of the Scottish law of charity, which all the teachers of Scots law say is different from the English law? Where are we going?

There are various bodies which the courts have recognised in various litigations over the years as having; charitable purposes, but, because of the word "only" in the Inland Revenue legislation, they do not receive Inland Revenue recognition. Will it be an offence to call oneself a charity if one does not have recognition from the Inland Revenue? I believe that that is what the Bill's intention is. Can one get around that by saying, "Oh, our purposes are charitable"? If so, who will be able to understand the difference between saying, "I am a charity." and saying, "My purposes are charitable"?

Throughout the Bill we are missing any definition of what we talk about as a Scottish charity. We are missing any explanation as to whether anything of the existing old Scottish law of charity will exist after the Bill is passed, if it is passed.

The Earl of Selkirk

I agree with what the noble and learned Lord, Lord Morton of Shuna, has said. I do not know whether someone will ask the question, but may we have a definition? As far as I am aware, there are at least three separate forms of charity. They should be defined at some point. Perhaps my noble and learned friend will consider that matter.

Lord Fraser of Carmyllie

I should love to consider that point. However, I am reminded of the leading case or charity law in Scotland, The Glasgow Police Athletic Association, which came to this place back in 1952 and 1953.

Lord Morton of Shuna

Perhaps the noble and learned Lord will not mind me reminding him that was not a definition of the Scottish law of charity. It was a case which provided that one had to apply English law to obtain Inland Revenue exemption.

Lord Fraser of Carmyllie

If the noble and learned Lord had given me a moment, I should have given him the quotation, which was: It has never yet, for example, been found possible to define in generally accepted terms what is the precise meaning of a charity in Scottish law". If the noble and learned Lord goes back through the authorities he will find that their views are wide-ranging. One extreme is that the law of charity in Scotland is restricted to the relief of poverty. I believe that was in Baird's Trustees. It goes through to the late Sir Thomas Smith's explanation that in Scotland it was not uncommon to find that the word "charitable" is used as a synonym for "public trust". The noble and learned Lord will appreciate that there is no clarity of definition.

I suppose that we are altering the law of charities in Scotland to this extent: if there is to be a body that wishes to represent itself or hold itself out as a charity, it must secure that recognition by the Inland Revenue. However, I do not consider that there is anything in the Bill which, for example, would alter the power of the court, or the favour that the court in Scotland shows to charities, to ensure that a trust is not more quickly described as void for uncertainty because its objectives are charitable. That is unaltered. Nor indeed, when we come to the later parts of the provision, will the power of the court to apply its cy prè s jurisdiction be altered by what is contained in this part of the Bill.

Lord Morton of Shuna

Of course I accept that the cy prè s scheme has nothing to do with the matter, because a public trust does not necessarily have to be charitable, despite the late Professor Smith. We do not have a definiton of "charity". We could have one. What we now have is English Law.

The noble and learned Lord has not dealt with the point about what happens to bodies such as the Trades House of Glasgow. In the 1970 case it was held that its main purposes were charitable, but it could not obtain Inland Revenue recognition because that was not its only purpose. Will they commit an offence if they say, "We are a charity"? They do not do so up to now. But will they not commit an offence when they say, "Mainly, our purposes are charitable"? If so, does the noble and learned Lord think that the people of Scotland will understand the subtle distinction?

On Question, amendment agreed to.

[Amendment No. 19 not moved.]

Clause 1, as amended, agreed to.

[Amendments Nos. 20 and 21 not moved.]

Clause 2 [Non-recognised bodies]:

Lord Morton of Shuna moved Amendment No. 22: Page 2, line 41, leave out ("charity") and insert ("recognised body").

The noble and learned Lord said: This amendment raises the same issue as we have discussed before. Clause 2 (1) states: A non-recognised body shall not be entitled to represent itself or hold itself out as a charity.

The aim of the amendment, which is linked with Amendments Nos. 23, 24 and 25, is connected with the idea of an exempt charity. I shall not press the amendment but obviously the noble and learned Lord must work out for himself whether we are suddenly changing the meaning of a word in ordinary use and saying that it is an offence to use it unless a body has a certificate from the Inland Revenue.

The small committee which runs the local village sports day or sets up a little fund to redecorate a hall, or some similar activity, may well say, "We are a charity doing this; we are a charity for public benefit". Everybody will agree with that. Will the members of that committee be sent to prison for a month, or what will they do? How do we publicise the fact that people must suddenly appreciate that the dictionary meaning of "charity" has changed?

There is a big problem here on which we touched when we dealt with the last amendment. We are suddenly confining the word "charity" in Scotland to something which the Inland Revenue seems to understand but which is purely English law. Everybody who has been concerned with it says that it is so complicated that it cannot be defined, but they can define which body falls or does not fall within the definition. Therefore in order to obtain a reply from the noble and learned Lord, I beg to move.

Lord Fraser of Carmyllie

I do not think that I can usefully add anything to the debate which I have already had with the noble and learned Lord about what is or is not a charity in Scotland.

Perhaps I may restrict my observations to this amendment. I do not believe that it would be very relevant to the public in Scotland to be told that a body was a recognised body. People would wish to know whether or not it was a charity. That is exactly the complaint that comes from people repeatedly by asking, "Is this group or are these people those who responsibly represent a proper charity?" That is exactly what we are trying to do. We are trying to restrict those people who hold themselves out to be or represent themselves as being a charity. We hold them to the test that the Inland Revenue would apply. This may be an incorporation of English law into the law of Scotland, but I should have thought that the test set out in the case of Pemsel was what the popular mind would recognise as being a charity.

9.30 p.m.

Lord Morton of Shuna

I think most of us would have some difficulty in recognising someone as charitable who, for example, left his books to the officers' mess. However, the noble and learned Lord will discover from Pemsel's case that that constitutes an act of English charity. It surprises the Scots, but perhaps that does not matter. Surely the answer is to stipulate that a charity must be certificated, or some such provision so that to be recognised by the Inland Revenue a charity must have a certificate. I believe this is a serious problem which the noble and learned Lord and those who instruct him have not considered. All I can do now is to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 23 to 29 not moved.)

Lord Morton of Shuna moved Amendment No. 30: Page 3, line 6, leave out subsection (4).

The noble and learned Lord said: Clause 2 (4) states: any person concerned in the management or control of a non-recognised body which represents itself or holds itself out as a charity shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale".

I suggest that that provision is totally unnecessary as the common law can deal adequately with that matter. If someone was trying to obtain money that would constitute a case of fraud or attempted fraud, and if he was not trying to obtain money there is no point in the offence. It is unnecessary to add additional offences when the common law deals adequately with them. I beg to move.

Lord Macaulay of Bragar

This amendment raises an issue which arises in later parts of the Bill. Speaking from this side of the Chamber, I oppose the amendment. I think it is proper that if we are setting up a statutory code of conduct so to speak, people examining it should know precisely from reading the Bill just what they can or cannot do and what the penalties would be for contravening the provisions of the Bill.

The Earl of Balfour

With great respect to the Deputy Chairman, I should point out that if this amendment is accepted, Amendments Nos. 31 and 32 cannot be moved.

The Deputy Chairman of Committees (Lord Ampthill)

The noble Earl is perfectly correct. I apologise to the Committee. I should have mentioned that if Amendment No. 30 is agreed to, Amendments Nos. 31 and 32 cannot be moved.

Lord Fraser of Carmyllie

With that helpful indication, it will be apparent that I join the Opposition Front Bench in saying that I consider that if we are to have these provisions it is important that there should be some policing of them. We must therefore necessarily provide some sanctions. I think it is right that we should have those, although I would say to the noble and learned Lord that I accept that there will clearly be some circumstances where the common law would provide an offence under which to charge those persons who are representing themselves to be a charity. Nevertheless, in spite of that, as the noble Lord, Lord Macaulay, has said, I think it is still appropriate that we should have these policing powers.

Lord Carmichael of Kelvingrove

I wish to ask the noble and learned Lord a simple question. It has been suggested that one should be able to understand what is meant by the Bill by reading it, and also the penalties involved. However, I think I shall not be alone in not knowing exactly what level 4 is. I know the principle behind it, but for my own sake and perhaps for the sake of one or two other Members of the Committee, I hope the noble and learned Lord the Lord Advocate will tell us where we can find reference to the different levels. Perhaps he could also say, when they are changed, whether it is in line with inflation or for some other reason. It is a simple point but it causes some confusion.

Lord Fraser of Carmyllie

The matter arises under Amendment No. 31. Perhaps I may more appropriately reply to the noble Lord's question in connection with that amendment.

Lord Morton of Shuna

I am sorry that both the Opposition and the Government seem determined to create totally unnecessary offences. No doubt the courts will be able to deal with them as they see fit. On that basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Fraser of Carmyllie moved Amendment No. 31: Page 3, line 9, leave out ("4") and insert ("5").

The noble and learned Lord said: Clause 2 (3) provides that any person involved in the management of a body which has not been recognised which represents itself to the public as a charity shall be guilty of an offence. Clause 2 (4) sets the penalty at a fine, on summary conviction, not exceeding level 4 on the standard scale, currently £ 1,000.

In view of the amount of money which might be involved that could prove only a relatively minor deterrent. The amendment seeks therefore to provide for a fine up to level 5 on the standard scale (£ 2,000) or to imprisonment for a period not exceeding six months, or both a fine and imprisonment. As a further deterrent there is provision at Clause 6 (4) for further sanctions against the body by the court, on application.

The noble and learned Lord, Lord Morton of Shuna, said at Second Reading that he thought that the Bill contained too many offences— and he has just repeated that remark— and suggested that that would add to the difficulties in finding people to take on the task and duties of trusteeship. It might therefore be helpful to the Committee if I take this opportunity to comment on the various amendments which I should like to make affecting offences and penalties in the Bill and to explain the reasoning behind them.

Besides the provisions mentioned above, there are three other possible offences in the Bill, contained in Clauses 5 (7), 5 (8) and 7 (3). Clause 5 (7) provides that it shall be an offence to fail to comply with a court order to provide information to my nominated officer. Clause 5 (8) provides that a person who wilfully alters, suppresses, conceals or destroys any record which he is required to provide under this section will similarly be guilty of an offence. Clause 7 disqualifies certain persons.

I hope that the Committee will accept that those offences are reasonable. As I have said, it really is not possible to police any system or supervision without some sanctions. Such sanctions have an important role under the charities Acts in England and Wales. Trusteeship of a charity is an onerous task and should not be entered upon lightly. Those involved in trusteeships have nothing to fear from those provisions provided they operate in a trustworthy manner. I beg to move.

Lord Morton of Shuna

Can the noble and learned Lord explain whether, if there is a body of trustees and somebody in the trust represents that the trust is a charity, every trustee is guilty of an offence? That, as I read it, is how the clause is framed. If that is so, has he considered Section 3 of the Trusts (Scotland) Act 1921? If he has considered it, why has he not amended it?

Lord Cameron of Lochbroom

Perhaps I too may put two questions to the noble and learned Lord the Lord Advocate. He mentioned further offences in the Bill, particularly those in Clauses 5 (7) and 5 (8). Clause 5 (7) simply makes a criminal offence of what is plainly a contempt of court. The civil courts have a speedy way of dealing with those who fail to comply with any order which has been made. It seems to me to be otiose to add a criminal sanction as well, particularly as that would involve the necessity of raising further proceedings rather than dealing with the failure to obtemper the order in the particular civil process in which the failure appears.

My point in relation to Clause 5 (8) is a matter of criticism of an amendment which appears under the name of the noble Lord, Lord Macaulay. It bears to be an offence by any person who wilfully alters any record. That is a deliberate alteration of a record which he may be required but is not necessarily required to furnish.

I fail to understand how any criminal offence can be committed by wilfully altering something which, at the end of the day, one is never required to furnish or transmit under Clause 5. It appears to me that perhaps that offence, which I suspect is intended to preserve the deliberate destruction or alteration of records for which a requirement has been made, is a more understandable offence, although I should have thought that it might have been dealt with under the common law. I raise those points at this time because it may save time later.

Lord Macaulay of Bragar

The amendment standing in my name is Amendment No. 66 and the same principle applies. Perhaps I was reading it slightly differently from the noble and learned Lord, Lord Cameron of Lochbroom. I was reading the word "may" in the sense of having been required in terms of the subsection because it follows on from the requirement by the nominated officer and the subsequent failure. My amendment states: Any person who wilfully alters, supresses, conceals or destroys any record which he may be required to furnish". If it is meant to be a consecutive, chronological series of events, the word "may" could be changed to "has been". I shall be interested to know what the noble and learned Lord the Lord Advocate has to say on the matter. I should have said that, as a matter of consistency, I again hold to the principle that statutory sanctions should be imposed within the framework. No doubt the common law can run alongside it, but it does not do any harm to have that provision as part of the Bill.

Lord Fraser of Carmyllie

We are moving quite widely around the provisions regarding offences. I hope that I have followed them all as I should have done. I take the point made by the noble and learned Lord in respect of Clause 5 (7) that failure to comply with an order of a court would attract a sanction from that court. I might look at that point again. I see what the noble and learned Lord was driving at.

On Amendment No 66, to which we appear to have drifted, I again take the point made by the noble and learned Lord. As I understand it, Clause 5 (8) would allow for an offence to have been committed whether or not there had been a requirement. However, if that is not clear, I wish to clarify it and shall look at it again.

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendment No. 32: Page 3, line 10, at end insert ("or to imprisonment for a period not exceeding 6 months or to both such fine and imprisonment").

On Question, amendment agreed to.

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

Lord Morton of Shuna

Perhaps I may raise the question of this clause standing part of the Bill, although I know that we are trying to make progress because of delays on the other matters. However, the noble and learned Lord the Lord Advocate did not deal with the issue— I am surprised at the noble Lord, Lord Macaulay, agreeing so heartily with this point which I tried to raise in dealing with Clause 2 (4) — that someone will apparently be guilty of an offence because someone else has done something about which he does not know. That person will have done nothing. If one person in a trust holds out that the trust is a charity, all trustees are, according to subsection (4), guilty of an offence and liable to go to prison. Is that what the Government intend? I cannot ask the Opposition whether that is what they intend. It seems a surprising intention. It is quite contrary to Section 3 of the Trusts (Scotland) Act 1921, which states that a trustee is liable only for his acts and not for the acts of others. Is that truly what the Government mean, or has the whole question of criminal intent gone and this is an absolute offence if somebody does it?

9.45 p.m.

Lord Fraser of Carmyllie

Perhaps I may briefly answer that question. First, however, I should apologise to the noble and learned Lord. He raised this matter in the last amendment and I omitted to answer him. One has to understand the scheme that we are setting up. If one is to hold oneself out as a charity, one has to go to the Inland Revenue and secure the recognition that is allowed for under this Bill. The terms used are: any person concerned in the management or control of a non-recognised body which represents itself or holds itself out as a charity shall be guilty of an offence". It is absolutely right that if one is to be part of a body which is not recognised, one should ensure that there are not others in the management or control of that body who are holding it out as being a recognised body.

Lord Morton of Shuna

I may be being obstinate. I am sorry; no doubt I am. However, there are trusts which meet once a quarter. There are trusts which have ex officio trustees in them and they have a director. If the director by mistake says, "We are a charity", do all the trustees find themselves automatically liable to imprisonment for something for which they have had no responsibility and could not avoid because someone else did it? If that is what the Government intend, so be it. It is quite draconian. Do we really want to discourage everybody from ever becoming a voluntary trustee for any form of charity or public trust?

Lord Macaulay of Bragar

Perhaps I may make one observation. The noble and learned Lord, Lord Morton, said that I endorsed this clause with enthusiasm. I must say that I was endorsing the principle of having statutory offences within the Bill, not necessarily with enthusiasm but as being necessary. Having heard what the noble and learned Lord had to say about the use of the word "concern", I must express some reservations. I should like to think about what it entails. The use of the word "which" governs the body rather than the person— any person who holds the body out as a charity. That may be the point which the noble and learned Lord, Lord Morton, is making. Speaking for myself, having heard the argument, I can see some substance in that criticism.

On Question, Clause 2, as amended, agreed to.

Clause 3 [Duty to keep accounting records]:

Lord Grimond moved Amendment No. 33: Page 3, line 12, leave out ("or control").

The noble Lord said: This is a purely probing amendment to which no doubt all Members of the Committee, and certainly all legal Members, know the answer already. However, I should be grateful to the noble and learned Lord the Lord Advocate if he could just clear my mind on this point, which arises several times in this Bill and has already come up in discussion on a previous clause.

What is meant by "control"? Our last debate may have some bearing on this matter. The clause says: any person concerned in the management"—

I take that to be the director, the executive committee, the secretary and so forth— or control".

I suppose that the control of a charity normally rests in the trustees. But all charities do not have trustees. If there are no trustees, who exercises the control? By joining whatever body or office exercises control, one is taking on considerable responsibilities and may become liable to certain penalties. I took on what is normally called the presidency of a certain charity. Before I knew where I was I found myself summoned to appear before the Court of Session. It had nothing to do with charity. I was summoned for wrongful dismissal. I said, "It is nothing to do with me". They said, "You are the president of this outfit" I had some difficulty in wriggling out of that situation.

It is not only a question of fault in the management of the charity itself; there are other responsibilities. I am sure that the Government can easily tell us what the word "control" means here. Of course it may differ from body to body, but I think it is essential that those who are taking on charitable work for the highest motives should be made aware of what they are letting themselves in for. I would never join another charity now without being quite certain about what I was supposed to be doing. Therefore I ask the Government, at least for my sake, to make clear what the word "control" means in the Bill. I beg to move.

Lord Fraser of Carmyllie

If the amendment moved by the noble Lord, Lord Grimond, was to be allowed it would restrict the duty to maintain accounting records and prepare annual accounts to those concerned with the management of a charity. This is narrower than the requirement under the Bill which lays the duty on those concerned with the management or control of the body. If restricted to management there may be a risk that a situation could arise where the managers have been dismissed leaving only the controllers in place. I concede that that may not be a very likely situation, but it may be prudent to retain the words "or control" against the possibility of unscrupulous controllers dismissing managers to avoid any obligation being imposed by the provision. It is for that limited purpose that the wording has been used.

Lord Grimond

I am much indebted to the noble and learned Lord the Lord Advocate. However, my mind is still not clear on the matter. Who are these controllers who are in control if the management is not responsible in this respect?

Lord Fraser of Carmyllie

I do not think I can elaborate on the response I have just given. As I indicated, it may be that people would seek to delegate the management to someone else, although they were effectively in control. However, if the noble Lord's amendment was allowed, thus restricting the provision in this way, only those responsible for the management would suffer.

Lord Mackie of Benshie

Perhaps the noble and learned Lord could be a little more explicit on the matter. For example, would the noble Lord, Lord Grimond, as honorary president of a charity, be liable for such matters? It is quite important that we should be told what sort of office bearers would be liable.

Lord Fraser of Carmyllie

I do not want to protract the argument any longer than I need to, but I do not think that I can give a check list of what offers the noble Lord ought to accept. It would be for him or anyone else who became involved in such organisations to determine whether the office he assumed was one which imposed upon him some degree of control or, alternatively, management. The purpose of the provision is that one should not be able to escape from one's responsibilities by appointing managers and then pulling out of the organisation.

Lord Grimond

I am most grateful to the noble and learned Lord the Lord Advocate. I cannot say that I am convinced by his arguments or that my mind is much clearer. Nevertheless, as it is late at night, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees

Before calling Amendment No. 34 I should remind the Committee that if it is agreed to I cannot call Amendment No. 35.

Lord Morton of Shuna moved Amendment No. 34: Page 3, line 17, leave out from ("time") to end of line 20.

The noble and learned Lord said: The amendment deals with accounts and in a sense it is linked with amendments to which I shall be speaking at a later stage. However, perhaps I may leave speaking to those amendments until that time. Subsection (1) (b) is really unnecessary, if accounting records disclose with reasonable accuracy at any time the financial position of the body at that time. At that stage, before one starts to look at what annual accounts are to be produced, that is all one needs. Therefore I suggest that it is unnecessary in this part of the clause to include paragraph (b) which deals with the balance sheet and expenditure account. The main argument about accounts is dealt with by Amendment No. 43, to which I shall speak later.

Lord Fraser of Carmyllie

The amendment moved by the noble and learned Lord seeks to remove the requirement under Clause 3 (1) (b) which requires bodies to keep accounting records enabling them to meet the accounting requirements specified in Clause 4. The maintenance of proper and adequate accounts is central to the Bill's object of ensuring that charities are publicly and openly accountable for their actions. The removal of the requirement at Clause 3 (1) (b) would be in effect to permit charities to keep records in any way they chose irrespective of whether they were capable of enabling compliance with the requirement at Clause 4. This would have a seriously detrimental effect on the effectiveness of the Bill.

I hope that that is a sufficient reply to the noble Lord although I agree that the more important point on accounts arises in relation to the amendments which he has tabled. I hope that he will accept that his amendments are inferior to those which I shall move.

Lord Morton of Shuna

If one looks at Amendment No. 43 one can see that I am there abolishing balance-sheets and income and expenditure accounts. Therefore, I do not want them in in Clause 3 (1) (b). Having given that sort of warning shot, I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Fraser of Carmyllie moved Amendment No. 35: Page 3, line 18, leave out ("balance sheet and income and expenditure account") and insert ("statement of accounts").

The noble and learned Lord said: With the leave of the Committee, I shall make reference also to Amendments Nos. 44 and 45, 47 to 50, 53, 57, 59, 61, 63 to 65, 68 and 71. Amendment No. 44 introduces a phrase, "statement of accounts" which it defines in terms of the existing Clause 4 (1) (a), (b) and (c). It thus paves the way for the introduction of the lower level of accounting requirements thought essential for the smaller charities. Consequently, there is a new definition of accounts which has the effect of removing the rather lengthy references to: balance sheet, income and expenditure account, and report

which occur in various places throughout the clause. There are consequential amendments to change these references to the shortened form "statement of accounts". One of those consequential amendments is Amendment No. 35.

The amendment also introduces the important proviso at subsection (1B) which we are seeking to introduce which will enable my right honourable and learned friend the Secretary of State for Scotland to prescribe different accounting requirements for classes of recognised bodies.

Amendment No. 45 is an important amendment because it enables my right honourable and learned friend to give to such classes of recognised bodies as he may prescribe— and we particularly have in mind here small charities— a choice of preparing either full accounts in accordance with the provisions of subsection (1A) or of producing a simple statement of balances and a receipts and payments account in accordance with (1B). Whichever kind of account the body elects to prepare, the accounts will be required to include a report as to their activities having regard to their charitable purposes.

I would bring to the Committee's attention the fact that by the terms of subsection (2) the balance sheet and income and expenditure accounts are required to show a true and fair view. This is not required in the case of the modified accounts under (1B), "true and fair" being an accounting term of art.

Subsection (3) enables my right honourable and learned friend to make regulations which prescribe the form and content of the statement of accounts, any additional information required by way of notes to the accounts, and requirements as to auditing the accounts. I wish to make clear that it is the Government's intention that there should be a threshold above which it will be a requirement for accounts to be examined by a professional auditor while those below the threshold will only require examination by an independent examiner.

Lord Morton of Shuna

Perhaps I may add Amendments Nos. 43 and 46 and others in the name of my noble and learned friend Lord Cameron and myself to the rather lengthy list given by the noble and learned Lord so that we can discuss them all at the same time.

The amendment relates to the type of accounts, and it seems to me that there is an issue of principle. We shall have to look at the detail and perhaps come back on the issue of principle. If one has the lower level of accounting suggested in Amendment No. 45— which is what, in essence, we sought to set out in Amendment No. 43, both having reports and statements showing income, expenditure and assets— there is no difficulty with regard to audit.

That is what we set out in Amendment No. 43; and, as I understand it, what is set out in Amendment No. 45 is the normal account charge and discharge system that trusts use. They are normally audited by fully qualified chartered accountants. Why is it necessary to insist on Companies Act type of accounting? That is the purpose of Amendment No. 43. Certainly larger charities will use that form of accounting anyway. Why is it not sufficient merely to have simple accounts? Other organisations, for the most part, are already companies limited by guarantee; they come within subsection (12) of Clause 4 and therefore already account in that way. Why do we need to add this additional cost to charities so that in effect the charitable purpose becomes the benefit of chartered accountants? On the whole they do fairly well and there is no need for this rather exotic level of accounting.

There is also no need for the Secretary of State to classify the standard of accounting. It is part of a scheme which is becoming more complicated and more onerous for people who are taking on these jobs largely unpaid and largely in their spare time. If the noble and learned Lord and the Government want to abolish voluntary charities and people acting as trustees, they are going the best way about it. It seems to me that they are taking far too heavy a hammer to crack this particular problem.

10 p.m.

Lord Cameron of Lochbroom

Perhaps the noble and learned Lord the Lord Advocate can set out whether the Government, in the regulations proposed for accounts, would have in mind following the spirit of the statement in the White Paper Charities: A Framework for the Future. It states that the Government believe that all statements of accounts should give details of grants made by charities out of their income or property, and that in particular they should disclose the names of institutional beneficiaries together with the amount of grant paid.

If that is considered to be important for openness, which is what is said in the paragraph concerning England and Wales in the White Paper, perhaps we should know what the Government policy is for Scotland in that regard.

Lord Fraser of Carmyllie

The noble and learned Lord has added a further amendment to the very lengthy list which I considered might be appropriate. I agree that it might be helpful if I deal with it now by commenting on what he has said, on Amendment No. 43 and others that come with it.

I have spoken to the amendments which I considered should be accepted. However, it might be helpful if I were to stress that the type of accounts which Clause 4 will require is based on the Standard of Recommended Practice Reports (SORP) which was prepared by the Accounting Standards Committee and which is contained in their SORP No. 2 report on accounting for charities. At the same time the committee issued an accompanying guide, Accounting by Charities: A Companion for the Smaller Charity — I emphasise the word "smaller".

Over the past few months an informal committee of accounting experts and officials, including officials from the Charity Commission, the Home Office and the Scottish Office, have been giving detailed consideration to these reports and it is our intention to have similar legislative requirements North and South of the Border. If the amendments I have put before the Committee are accepted, that will provide for the production of accounts complying with those recommended. The amendment tabled by the noble and learned Lords will make that more difficult to achieve.

I should like to confirm, however, that much of the detail included in the noble and learned Lords' amendments will be covered in the regulations which my right honourable friend the Secretary of State will make under the provisions of Clause 4. I understand that it is my noble and learned friend's intention to circulate these regulations in draft form to interested bodies for comment before they are laid.

There is one important point in the noble and learned Lords' amendments on which I should paticularly like to comment. Subsection (2) of the amendment requires disclosure in the report of any institutional beneficiaries and the identity of the recipient. It is the intention of my right honourable friend the Secretary of State to include such a requirement, but this will have to be subject to qualification. Some charities involved in giving international relief have pointed out that disclosure of such information could in certain circumstances put the lives of their agents at risk. This is a particular risk in cases where international aid may be going to both sides engaged in a civil war. It is not difficult to think of one country where that is happening. Clearly, that is a point that will have to be carefully considered in drafting regulations.

I singled out that point because I do not think that there is a great deal between us. That example seems to me to indicate how carefully regulations will have to be prepared, following the best accounting advice.

The Earl of Selkirk

Does my noble and learned friend recognise that there is a terrible problem of accounting? Some people are good at accounts. I happen to be very bad, and I know it. This can make a big difference. It is all very well to talk about accountants. I have a great respect for them. They are well trained. However, there are many small bodies for whom the simpler the requirement, probably the more honest it is. The noble and learned Lord has taken that point because to go back to the standards we had previously is not absolutely necessary in certain cases.

Lord Mackie of Benshie

As I said previously, nearly all the small bodies with which I am connected have their accounts audited by a friendly bank manager or a solicitor but not necessarily by a firm of accountants. Some form of accounting does take place in small bodies.

Lord Fraser of Carmyllie

I am grateful for that observation. I suggest that a choice might be given to a trust or the trustees because they may have friendly people who can help them to present their accounts in the best possible form. At the same time provision should be made for smaller charities to do this without the same degree of accounting detail that might be necessary for, say, a very large charity— one can think of a number— whose income and capital runs into thousands, if not millions, of pounds. In such circumstances clearly such large charities should be subjected to the most strenuous of accounting requirements.

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendment No. 36: Page 3, line 27, after ("preserved") insert (", without prejudice to any requirement of any other enactment or rule of law,").

The noble and learned Lord said: Clause 3 (3) requires a recognised body to keep accounting records for six years from the date on which they are made. The amendment is simply a saving provision of the general law. I beg to move.

On Question, amendment agreed to.

Lord Morton of Shuna had given notice of his intention to move Amendment No. 37: Page 3, line 27, leave out ("for six years from the date on which they are made").

The noble and learned Lord said: We have made this clause rather longer than it need be. Not having opposed the previous amendment, I do not think I can move this one. The sense is the same except that the Government have taken three lines to say something for which I would have taken one line.

[Amendment No. 37 not moved.]

Lord Fraser of Carmyllie moved Amendment No. 38: Page 3, line 30, after ("where") insert ("and the person is by whom").

The noble and learned Lord said: Clause 3 (4) presently empowers my right honourable friend the Secretary of State to make regulations prescribing the place where accounting records are to be kept. In the interests of clarity the amendment seeks to empower my right honourable friend also to prescribe who shall keep the records; for example, the trustees or the agents of the trustees. I beg to move.

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendment No. 39: Page 3, line 31, after ("bodies") insert ("including bodies which have been wound up or have ceased to be active").

The noble and learned Lord said: Clause 3 (4) enables my right honourable friend the Secretary of State to prescribe by regulation where accounting records should be kept. Typically that will be at the address of any of the trustees or the treasurer of a trust or at the office of an agent. The amendment ensures that the regulations may extend to the records of bodies which have been wound up or which have ceased to be active. The purpose of this amendment is to ensure the obligation under subsection (3) to preserve the records for six years continuously beyond the winding-up of a body. I beg to move.

Lord Morton of Shuna

Does the noble and learned Lord really mean that the trustees of a trust which has been wound up will have to keep the records? They will have ceased to be trustees at that point. I read the subsection to mean that the trustees had to send the records somewhere so that they would be available. It seems an extraordinary suggestion that the regulations are to say that some poor trustee will have to keep the records of an organisation which has ceased to exist and that he will have to do so for six years or longer.

Lord Fraser of Carmyllie

The purpose is not to impose this duty on any particular trustee but indicate the type of places where the records might be kept. That might be either with the trustee or, as I have indicated, with the treasurer. I anticipate that in such circumstances the greatest likelihood is that the records will gather dust in some solicitor's safe.

On Question, amendment agreed to.

Lord Cameron of Lochbroom moved Amendment No. 40: Page 3, line 32, after ("that") insert ("any such recognised body or").

The noble and learned Lord said: This amendment is to provide for more flexibility in what the Secretary of State may do by regulations. In any individual case which may be special he can provide for exemption as well as in a class or classes case. I beg to move.

Lord Fraser of Carmyllie

As the noble and learned Lord has clearly indicated in moving this amendment, there is already provision to exempt classes of a recognised body from the requirements of this section. I cannot conceive of any circumstances where he might wish to exempt any particular body other than possibly the Church of Scotland, which we discussed in connection with another amendment. If that is what is in mind, I rest on what I said earlier; namely, that we have to look at the matter in a broader context.

Lord Cameron of Lochbroom

I am not going to press the matter. Perhaps the noble and learned Lord might wish to consider the matter. We are making provision for legislation which is to cover all kinds of situations which we cannot perceive at the moment. I believe that this is a flexibility which is available in the English Act. I do not press the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Cameron of Lochbroom moved Amendment No. 41: Page 3, line 34, after ("section 4") insert (" (1) (a) and (b) ").

The noble and learned Lord said: The purpose of this amendment is simply to provide that exemptions shall not apply to the provision by a recognised body— that is to say, one which would appear on the register or index— of a report. That is linked up with something which the noble and learned Lord the Lord Advocate said earlier today in relation to where information is to be obtained. He said that material regarding the purposes of a recognised body might not be available from the Commissioners of Inland Revenue, but that it could be obtained through the medium of a report from a recognised body. In that event it would seem to be self-defeating that the Secretary of State could then kick away the prop— which would be the only means whereby the interested body or party could find out what the purposes of the recognised body were.

There might be an answer to this but I should be grateful if the noble and learned Lord could give an explanation. I beg to move.

10.15 p.m.

Lord Fraser of Carmyllie

The effect of this amendment would be to restrict the exemptions which my right honourable friend the Secretary of State for Scotland could make with respect to Clause 4 to the preparation of a balance sheet and income and expenditure account. As I have already indicated, under my Amendment No. 44 I shall be seeking the approval of the Committee to provide a choice for smaller charities to prepare accounts which will not comprise a balance sheet and income and expenditure account. It may be that my right honourable friend will wish to exempt classes of bodies from that requirement too. That might fit in with what the noble and learned Lord, Lord Morton, indicated with regard to the smallest of charities. The acceptance of this amendment would preclude that.

Lord Cameron of Lochbroom

I shall read what the noble and learned Lord has said. I simply observe that Clause 4 provides for the preparation by a recognised body of three things, two of which are concerned with accounting and the third of which is a report on the activities of the body, having regard to its charitable purposes. It would seem unfortunate that that should be exempted. I can understand the exemption in relation to accounts. However, I do not take the matter further. I beg leave to withdraw the amendment on the understanding that the noble and learned Lord will consider this.

Amendment, by leave, withdrawn.

Clause 3, as amended, agreed to.

Clause 4 [Annual accounts and report]:

[Amendments Nos. 42 and 43 not moved.]

Lord Fraser of Carmyllie moved Amendments Nos. 44 and 45: Page 3, line 37, at end insert ("a statement of accounts. (1A) Subject to subsection (1B) below, the statement of accounts of every recognised body shall comprise— "). Page 3, line 41, at end insert— (" (1B) As regards such class or classes of recognised body as the Secretary of State may, by regulations prescribe, a recognised body may elect that in respect of any financial year its statement of accounts shall, instead of the requirements of subsection (1A) above, comprise— (a) a statement of balances as at the last day of the year; (b) a receipts and payments account; and (c) a report as to the activities of the body, having regard to its charitable purposes.").

On Question, amendments agreed to.

[Amendment No. 46 not moved.]

Lord Fraser of Carmyllie moved Amendments Nos. 47 to 49: Page 4, line 2, leave out ("balance sheet and income and expenditure account and of the report") and insert ("statement of accounts"). Page 4, line 6, leave out ("and") and insert ("statement of balances,"). Page 4, line 7, after ("account") insert ("and receipts and payments account").

On Question, amendments agreed to.

The Deputy Chairman of Committees (Lord Cocks of Hartcliffe)

I have to tell the Committee that I need to call Amendment No. 51 before I call Amendment No. 50 because of infelicity in the marshalling.

[Amendments Nos. 51 and 52 not moved.]

Lord Fraser of Carmyllie moved Amendment No. 50: Page 4, line 12, leave out ("balance sheet and income and expenditure account and report") and insert ("statement of accounts").

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendment No. 53: Page 4, line 16, leave out ("balance sheet and income and expenditure account and report") and insert ("statement of accounts").

On Question, amendment agreed to.

Lord Macaulay of Bragar moved Amendment No. 54: Page 4, line 18, leave out ("10") and insert ("3").

The noble Lord said: Amendment No. 54 refers to the period within which the recognised bodies have to produce their accounts for the preceding financial year. Clause 4 (6) allows the recognised body up to 10 months from the close of the financial year to have the balance sheet, income and expenditure account and so on prepared. Under Clause 3 the obligation on the bodies requires them to keep accounting records showing from day to day all sums of money received, and so on, and the record of the assets and liabilities of the body. It seems to me that 10 months is an extraordinary time to allow a charity to produce proper accounts.

The amendment is designed to reduce the period within which the information can be made available to the public and to anyone wanting the information to three months rather than 10. I do not say that three months is exactly right, but a leeway of 10 months after the end of the financial year, particularly in relation to any unscrupulous people running charities for the wrong reasons, gives these people ample time to depart with, or dispose of, the assets of the body and flee outwith the jurisdiction. I beg to move.

Lord Fraser of Carmyllie

Ten months is not a period that was selected at random, as it were. It is the period permitted for the production of accounts under the Companies Acts. Larger charities are as large, or larger, than many companies. On that basis it was considered reasonable that they should have the time to prepare their accounts. I would certainly suggest to the noble Lord that the three-month period that he has suggested was a tight period. If 10 months has been the accepted period in relation to companies legislation, I would suggest that it is the one that we ought to hold to here.

Lord Mackie of Benshie

In fact in three months there is plenty of time to skip— if he wants to— as well as 10 months.

Lord Macaulay of Bragar

I am obliged to the noble Lord, Lord Mackie of Benshie, for that observation. That was precisely the point I was trying to make, but perhaps I made it rather badly. I am not very happy about the proposition of equating charities, particularly the charities that might be under investigation, with large companies. I shall not press the amendment, but the Lord Advocate may wish to give the period some further consideration between now and the Report stage. I beg leave to withdraw the amendment.

Amendment by leave, withdrawn.

Lord Macaulay of Bragar moved Amendment No. 55: Page 4, line 19, leave out ("Lord Advocate") and insert ("the court, on the application of the recognised body shall, on cause shown").

The noble Lord said: This amendment relates to the same subsection. It is designed to remove the Lord Advocate's discretion to allow a further period of time and to put that discretion in the hands of the courts. There must come a time in the regulation and supervision of charities when the Lord Advocate should not be allowed to stand alone making important decisions which might affect not only the future of the company but people affected by the activities. If the amendment is agreed to, the phrase the "Lord Advocate" would disappear and the Bill would read: Where any recognised body fails, within 10 months, or such longer period as the court, on the application of the recognised body shall, on cause shown allow … ".

The purpose of that provision is to put the obligation on the recognised body which has failed to come up with the accounts within what the noble and learned Lord the Lord Advocate considers a reasonable time; namely, 10 months. The body should be forced into the courts so that people with an interest in what is happening within the charity that has failed to produce the accounts within 10 months following the end of the financial year will have a chance to hear in public why such a simple accounting exercise has not been complied with. I beg to move.

Lord Fraser of Carmyllie

While I accept that the amendment is not strictly consequential upon the previous one, I had anticipated that if the noble Lord had been successful in achieving a three-month period he would have wanted this further arrangement, before involving the courts, to allow a further extension if the three-month period could not be met. It is a somewhat unnecessary amendment which goes against the thrust of his earlier amendment. It would allow for a further extension by the court rather than restricting power to me where a 10-month period is allowed for under subsection (7). If the body cannot do it within 10 month;;, it is appropriate that the matter should be left to the Lord Advocate to deal with without necessarily involving the courts. It is merely a matter of administration.

Lord Macaulay of Bragar

I am grateful to the noble and learned Lord the Lord Advocate for that explanation. If the charity is to have a leeway of 10 months, it is difficult to see what criteria the Lord Advocate might apply when judging whether an extension should be allowed, what the length of that extension might be and the reasons for it. With the greatest of respect, that is something which the court, being neutral in the matter, might be better fitted to determine rather than to leave the decision to be made by the parties who have failed to comply with the legislation and the Lord Advocate who may be interested in investigating the body.

It may be counter-productive if the Lord Advocate comes to suspect that the body is up to no good if then he is asked to allow that same body a further period of time to produce accounts which might never be produced if the time is allowed. The amendment is in a similar position to the previous one. It is put before the Government for consideration. They may wish to give it further thought between now and Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 56 not moved.]

Lord Fraser of Carmyllie moved Amendment No. 57: Page 4, line 20, leave out ("balance sheet and income and expenditure account or report") and insert ("statement of accounts').

On Question, amendment agreed to.

[Amendment No. 58 not moved.]

Lord Fraser of Carmyllie moved Amendment No. 59: Page 4 line 23, leave out ("balance sheet and income and expenditure account or report") and insert ("statement of accounts'').

On Question, amendment agreed to.

[Amendment No. 60 not moved.]

Lord Fraser of Carmyllie moved Amendment No. 61: Page 4, line 26, leave out ("balance sheet and income and expenditure account or report, as the case may be") and insert (a "statement of accounts").

On Question, amendment agreed to.

Lord Cameron of Lochbroom moved Amendment No. 62: Page 4, line 29, leave out subsection (8).

The noble and learned Lord said: There is just one point I wish to raise with regard to the amendment. In the subsection— I use the words in line 41— there is provision that the persons, responsible for the management or control of the body shall be personally liable jointly and severally for the expenses incurred

in preparing a balance sheet and income and expenditure account by a person appointed by the Lord Advocate. It is not clear who those persons are who are to be personally liable. Is it intended that they should be the persons referred to in subsection (7)? I merely observe that the requirement in subsection (7) is persons concerned in the management or control of the body and not persons responsible for the management and control of the body. I do not know whether that difference of wording tends to have any importance or whether it is a reference back to subsection (8) (c): any person concerned in the management or control of the body to give … such information".

It would be unfortunate if it made those persons who are not the same as those in subsection (7) responsible for the expenses incurred in a failure to carry out a requirement. I ask in the spirit of inquiry; I do not intend to press the amendment. I beg to move.

Lord Fraser of Carmyllie

The noble and learned Lord is correct that subsections (7) and (8) should be the same.

Lord Cameron of Lochbroom

I am happy, and I have no doubt that this can be put right at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10.30 p.m.

Lord Fraser of Carmyllie moved Amendments Nos. 63 to 65: Page 4, line 29, leave out ("balance sheet and income and expenditure account") and insert ("statement of accounts"). Page 4, line 31, leave out ("do so") and insert ("prepare a balance sheet and income and expenditure account, or, in the case of a body to which subsection (1B) above applies, if it appears to such person more appropriate to do so, a statement of balances and receipts and payments account"). Page 4, line 32, leave out from ("for") to end of line 33 and insert ("that purpose").

On Question, amendments agreed to.

Lord Macaulay of Bragar had given notice of his intention to move Amendment No. 66: Page 4, line 44, at end insert— (" () Any person who wilfully alters, suppresses, conceals or destroys any record which he may be required to furnish or transmit under this section shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale or to imprisonment for a term not exceeding 3 months or to both").

The noble Lord said: This amendment was dealt with at an earlier stage. I do not propose to press it at this time of night. However, I ask the Government to take note that there is apparently no penalty in Clause 3 in relation to destroying or concealing accounting records. The importance of accounting records is that they often constitute valuable evidence not only for obtaining a conviction but for clearing an innocent party in the running of a charity. It may be that the Government will give consideration to inserting a similar provision as appears in Clause 5 (8), subject to the reservations which were expressed in the debate earlier on.

[Amendment No. 66 not moved.]

[Amendment No. 67 not moved.]

The Deputy Chairman of Committees (Lord Cocks of Hartcliffe)

I have to call Amendment No. 69 before Amendment No. 68 because of incorrect marshalling.

[Amendment No. 69 not moved.]

Lord Fraser of Carmyllie moved Amendment No. 68: Page 5, line 3, leave out ("balance sheet and income and expenditure account") and insert ("statement of accounts").

On Question, amendment agreed to.

[Amendment No. 70 not moved.]

Lord Fraser of Carmyllie moved Amendment No. 71: Page 5, line 12, leave out ("balance sheet and income and expenditure account and report") and insert ("statement of accounts").

On Question, amendment agreed to.

[Amendment No. 72 not moved.]

Clause 4, as amended, agreed to.

Clause 5 [Powers of Lord Advocate to investigate charities and to suspend trustees]:

Lord Macaulay of Bragar moved Amendment No. 73: Page 5, line 29, after ("purposes") insert ("including a reasonable complaint by a person having an interest, financial or otherwise, in the administration of the aforementioned bodies").

The noble Lord said: This amendment might conveniently be dealt with together with Amendments Nos. 83, 85, 91 and 99 which deal with the same type of amendment in different parts of the Bill.

The purpose of the amendments is first to widen public interest in the operation of charities, and to encourage the public to take an active interest in any suspected misconduct or mismanagement of a charity as indicated in the Act. It is to widen the class of persons who, having suspicion or proof of such misconduct or mismanagement which is reasonably based, may take that information to the Lord Advocate for his consideration and, if necessary, investigation; further, to enable the complaint, if deemed reasonably based, to be investigated, thereby ensuring that the cost of investigating does not fall on the individual with the suspicion. I appreciate that the wording of the amendment may not be satisfactory in the use of the phrase, having an interest, financial or otherwise",

as that is always a difficult phrase to interpret. However, its aim is really to highlight the fact that a person need not be a donor or a recipient in connection with a charity to have an interest or otherwise in it. Someone may have a connection with similar charities or societies in the same field— for example, charities concerning children, animals, housing or other matters— and have an interest in seeing that the similar charity is properly run. I beg to move.

Lord Fraser of Carmyllie

I appreciate that the amendment of the noble Lord is intended to be a clarifying amendment to make clear that I may make inquiries in consequence of a complaint from a person having an interest in the body. However, the clause provides that I should be able to act on information from any source, be it a person with an interest in the charity, the Inland Revenue or whoever it may be.

As I have said, while I appreciate the purpose behind the amendment, it is in my view unnecessary as regards the powers that I require. However, it may be worse than that. It might be construed as restricting my ability to make inquiry generally or as a limitation of particular purposes only to where the complaint is from a person with an interest in the body.

As I understood it, the noble Lord also considered it helpful to make some comment on Amendments Nos. 83, 85, 91 and 99. The basis of Clause 6 is that the court may take various actions on application by the Lord Advocate. These powers are sought specifically to enable me to act in the public interest. If we were to accept the amendments tabled by the noble Lord, members of the public would have a direct power to ask the court to act. In asking the court to act, I would be bringing before the Court of Session— as I indicated, I would hold it at that— information received from members of the public or that as Lord Advocate I had received from the Inland Revenue in terms of Clause 1 (1) (a).

In many instances I would have carried out full and thorough investigations under Clause 5. I very much fear that if we extended these particular powers to members of the public it could lead to some overloading of the court and could detract from the structured approach which I believe we have sensibly adopted in Clause 6. I am concerned that confusion would be more than likely to arise as there is no obligation in the amendment for service upon me of a copy of the application. In those circumstances, I invite the noble Lord to withdraw the amendment.

Lord Macaulay of Bragar

I am obliged to the noble and learned Lord the Lord Advocate for that explanation. However, I should say that the purpose of the amendments was not to allow members of the public direct access to the court. Perhaps it is not happily worded but the reasoning behind the amendment was to allow members of the public to feel free to approach the Lord Advocate so that he may take up a complaint and follow it through, whether under Clause 5 or 6. However, having heard the explanation that the noble and learned Lord has given, I appreciate particularly the argument in relation to restriction. Perhaps we shall have to give the matter further consideration if that approach is to be pressed. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Morton of Shuna moved Amendment No. 74: Page 5. line 44, after ("any") insert ("wilful").

The noble and learned Lord said: This amendment seeks to add the word "wilful" to line 44, where there has been any wilful misconduct. There can of course be accidental misconduct or unintentional misconduct, depending on one's view. If these draconian measures are to be taken, in my view they should be taken only if one can say that there has been deliberate misconduct rather than a failure to act, so to speak. That is the purpose of the amendment. In Part II of the Bill there is a frequent use of the word "wilful" where it is quite clearly appropriate. In my view, it would be equally appropriate here.

I should also like to speak to Amendments Nos. 76 and 77. They are rather different in a sense. Amendment No. 77 is purely consequential on Amendment No. 76.

As presently written the Bill gives power to the Lord Advocate to suspend a person involved in the management of a body. The amendment suggests that he should apply to the court and the court should make the decision as to whether or not the suspension is appropriate. For that rather draconian power there should be supervision of the Lord Advocate and that supervision should be undertaken by the court. I beg to move.

Lord Fraser of Carmyllie

A balance has to be struck between protecting the individual and protecting the assets of the charity and the public who support it. It may be of little comfort to either the charity or the public if money is frittered away through incompetence and I was unable to act because such action is not "wilful". The object of my having powers to suspend by order is to enable me to act immediately in order to protect the property of a charity or a purported charity. The purpose of that suspension might be to establish whether or not that action was wilful.

My powers are, however, very limited. I may only suspend for 28 days, during which time I am able to undertake investigations. If I wish the person to be suspended beyond that period or to seek more permanent remedies, I must apply to the Court of Session. I acknowledge that that is absolutely right. I believe that those powers strike a reasonable balance between protecting the public interest and protecting the rights of the individual concerned. They are powers that will not be exercised lightly, but they appear to me to be necessary powers if I am to meet effectively my responsibility to act in the public interest.

Lord Morton of Shuna

I recognise that a balance has to be struck. As the noble and learned Lord is well aware, he can get to the court at any time. Within recent years he has gone to the court at an even later hour than this in the evening in order to obtain an interdict. Therefore if any Lord Advocate wished to go to court for a temporary suspension he could do so without any great difficulty. I should hope that the noble and learned Lord might reconsider whether he has the right balance. In the hope that he will at least look at the issue, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Macaulay of Bragar moved Amendment No. 75: Page 5, line 47, after ("property") insert ("including its funds").

The noble Lord said: Amendment No. 75 adds the words "including its funds" after the word "property" in this clause. It is intended to provide clarification. It might be considered superfluous and that the word "property" includes funds. However, the word "property" is not defined in the Bill. It might be safer for all concerned, particularly if the Lord Advocate is to take the actions which have just been discussed, if it is made clear that the funds are included in property. Usually, the greatest assets requiring protection are the funds rather than property, which many charities do not have. I beg to move.

Lord Fraser of Carmyllie

This amendment seeks to extend "property" in Clause 5 (2) (a) (ii) to include "funds". To give effect to this amendment, similar consideration would need to be given to the use of the word "property" throughout Part I of the Bill. I consider that "property" is wide enough to include "funds" and on that basis I would invite the noble Lord to withdraw the amendment.

Lord Macaulay of Bragar

I am obliged for that explanation. However, I still think it might be worth while, as on so many other clauses, at this stage to give consideration in the absence of a definition to including the word "funds" in this clause and if necessary throughout the Bill. But, in the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 76 to 78 not moved.)

Lord Fraser of Carmyllie moved Amendment No. 79: Page 6, line 41, leave out ("3") and insert ("5").

On Question, amendment agreed to.

[Amendment No. 80 not moved.]

Lord Fraser of Carmyllie moved Amendment No. 81: Page 6, line 45, leave out ("4") and insert ("5").

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendment No. 82: Page 6, line 46, leave out ("3") and insert ("6"). On Question, amendment agreed to. Clause 5, as amended, agreed to.

The Earl of Strathmore and Kinghorne

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

House adjourned at fourteen minutes before eleven o'clock.