Lords Sitting of 6 February 1992

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Newcastle.): The LORD CHANCELLOR on the Woolsack.

Port State Control
Lord Murray of Epping Forest Lord Murray of Epping Forest asked Her Majesty's Government:
Whether they are satisfied with the operation of port state control in the United Kingdom and in the rest of the European Community.
The Minister of State, Department of Transport (Lord Brabazon of Tara): My Lords, we will only be satisfied when safety on ships of all flags is raised to the highest standard. The memorandum of understanding on port state control is proving very successful and is increasingly admired around the world. The United Kingdom has an excellent record in consistently exceeding the inspection target for foreign ships set by the memorandum. Elsewhere in Europe the overall inspection rates have been improving and are now close to target.
Lord Murray of Epping Forest: My Lords, I thank the Minister for that reply. I note his reference to the other ports in Europe and also to the great improvement registered in Britain. In order to compare the effectiveness of the system in other ports in Europe, can he direct my attention to any single table which shows comparative performances? I have not been able to find one. Can he confirm that Greece, Spain and Portugal are significantly below the 10 per cent. level compared with the 25 per cent. target and with what I think must now be well over 30 per cent. in the United Kingdom?
Lord Brabazon of Tara: My Lords, I cannot give figures for individual countries. The port state control secretariat publishes an annual report. Overall, the inspection rate in the region is over 20 per cent. and has been rising on average by about 1 per cent. each year over the past seven years. That is encouraging. We aim to reach a target which would mean that 80 per cent. of individual ships visiting ports in the region are inspected over a 12-month period.
The Earl of Halsbury: My Lords, will the Minister inform the House what the words "port state control"—three nouns in apposition—mean?
Lord Brabazon of Tara: My Lords, when a foreign ship comes into port it is inspected by the authorities in that country for a number of different things to make sure that it is complies with international safety conventions.
Lord Geddes: My Lords, is my noble friend aware that Sub-Committee I of your Lordships' Select Committee on Science and Technology has just completed—literally two days ago—its year-long
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inquiry into the safety aspects of ship design and technology and that the resultant report will, among other topics, deal extensively with port state control?
Lord Brabazon of Tara: My Lords, I am grateful to my noble friend for reminding the House of that. The Government look forward very much to receiving that report.
Lord Underhill: My Lords, will the Minister confirm that, although there may only be a limited number of foreign ferries involved, foreign freight ferries and some foreign roll-on roll-off ferries are covered by the control? If so, can he say how many of those vessels were inspected and what were the results? Secondly, does the operation of port state control extend to compliance with ILO Convention 147, which includes the social conditions of seafarers? The conditions of seafarers are vital for safety on board ships.
Lord Brabazon of Tara: My Lords, in answer to the noble Lord's first question, I cannot give a breakdown by type of foreign ships inspected by port state control. However, I can tell him that any kind of foreign ship is subject to port state control. I can also inform the House that working and living conditions, particularly mentioned in ILO Convention 147, are indeed one of the matters covered by it.
Lord Murray of Epping Forest: My Lords, I note the Minister's reference to the desirability of extending port state control wider than the memorandum of understanding. Does he accept that it is desirable to support the proposal of the secretary general of the International Maritime Organisation that it should be done on a world-wide basis and that the ILO might be given powers to audit the safety provisions and achievements of individual ports?
Lord Brabazon of Tara: My Lords, I note that recommendation. Port state control does not apply solely to European Community countries, as the noble Lord's Question suggests. It goes wider than that. Eleven EC members are part of it, together with Norway, Sweden and Finland. The Soviet Union was to have become a member, and I hope that Russia and the Baltic states will wish to join. In addition, the United States and Canada are active non-signatory participants. We would like to see similar arrangements operate in other parts of the world.

Dunkel Proposals: Impact
3.6 p.m
Lord Mottistone Lord Mottistone asked Her Majesty's Government:
What action they are taking to prevent damage to the competitiveness of exports of value added foodstuffs following recent proposals by the director general of GATT.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): My Lords, the Commission of the European Communities negotiates on behalf of the 12 member states in the GATT. We have made clear to the Commission and

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other member states that our main anxiety with the Dunkel proposals is very much the point which I believe my noble friend Lord Mottistone has in mind; that is, the inconsistency of the proposed reductions in internal support, border protection and export competition with one another.
Lord Mottistone: My Lords, are the Government taking steps to try to have the position of the Dunkel proposals clarified? I understand that no figures have been produced and therefore there is no balance sheet, as it were, to cover the pros and cons of the proposals. Is she aware of any other countries where processed foods of one sort or another may be as at risk as, we fear, are some of the processed foods in this country? Can we get some allies to try to dig something out of Dunkel?
Baroness Trumpington: My Lords, to answer the first part of my noble friend's question, the Commission has not produced such an analysis. Mr. Dunkel's proposals remain subject to negotiation. The council noted that a final assessment of the Dunkel paper would only be possible after and would be influenced by the outcome of further negotiations.
With regard to his second point, widespread anxiety was expressed at the last Agriculture Council. For example, both Denmark and the Netherlands pointed to the possible impact of the proposals on pigmeat and dairy products. The combined effect of Dunkel's proposals on imports and exports would also be significant in a number of Mediterranean sectors, such as wine, I believe.
Lord Cockfield: My Lords, arising out of the Question, can the Minister say who gets the benefit from the enormous sums of money disbursed under the CAP? It most certainly is not the farmers. Some of us would like to know who it is.
Baroness Trumpington: My Lords, all farmers get benefits from the CAP. Only some get direct aid.
Lord Gallacher: My Lords, does the Minister agree that the issues raised by this Question emphasise the importance of obtaining a settlement of agricultural matters in GATT negotiations before concluding present discussions about the restructuring of the CAP? Can she say whether the Commission accepts that proposition? Also, do Her Majesty's Government agree that growers of food and processors are mostly unaware of the Community's response to the GATT proposals, which leaves both those categories dangerously in the dark?
Baroness Trumpington: My Lords, it is difficult for me to get that information over except by the kind of question asked by the noble Lord today. We hope that it will be taken up by various trade journals and read, and the information thus disseminated. Indeed, I believe that the Commission is aware of its importance. However, it is Mr. MacSharry who negotiates with regard to the Dunkel proposals.
Lord Bruce of Donington: My Lords, instead of trying to elicit information on the negotiations by
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question and answer, as the noble Baroness stated, would the House not be better informed if the Government themselves set out a detailed memorandum explaining their attitude, the points at issue and their views on what the progress ought to be?
Baroness Trumpington: My Lords, the noble Lord has said it—"what the progress ought to be". We are one of 12 negotiating countries. The best we can do is to influence our colleagues from the other member states.
Lord Campbell of Alloway: My Lords, would it be wise for the United Kingdom to lay all its cards face up on the negotiating table in circumstances such as these when the future course of the negotiations cannot be known?
Baroness Trumpington: My Lords, we have made our views very clearly known. I understand that the Commission is well aware of our views and is taking them into account in the discussions on the Dunkel proposals. I cannot remember what the noble Lord asked after that.
Lord Stoddart of Swindon: My Lords, will the noble Baroness accept that some of us—I include myself—are puzzled about the answer that she gave to the reasonable question asked by her noble friend Lord Cockfield? Is she aware that farmers in this country and in many other parts of the EC—including France, where they riot—are not satisfied that they are doing well out of the common agricultural policy? Is she further aware that our net contribution to the Community's budget is £2,440 million, whereas Spain receives £1,750 million? Those matters need to be explained to ordinary people. If the noble Lord, Lord Cockfield, with his experience does not understand it, exactly who does? We need an explanation.
Baroness Trumpington: My Lords, the question asked by my noble friend Lord Cockfield was not on the same point that the noble Lord makes. But neither relates to the Question that we are discussing. I was being extremely broadminded in answering at all.
In case noble Lords are interested, I have remembered the second part of the question asked by my noble friend Lord Campbell of Alloway. Only the Commission can make proposals. The Commission proposes and the 12 countries concerned feed in their views and opinions and seek to get allies as hard as they can. Only a fool discloses his whole hand in the middle of negotiations. We have made our ideas known but we cannot propose such matters.
Lord Bruce of Donington: My Lords, in that case, will the noble Baroness please inform the House what the Government's views are?
Noble Lords: Order!
Lord Wade of Chorlton: My Lords, does my noble friend agree that the Dunkel proposals which are now on the table continue to support the export of commodity products but put a liability on the export of added value products? Does she accept that Great Britain's opportunity relates to added value products and that the proposal is against the interests of Great

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Britain? Is my noble friend also aware that, although the United States makes a great stand against export refunds, it is offering three years' credit for milk products that it will offer to markets outside the EC? That is a far greater incentive to export than the export refunds given by the CAP.
Baroness Trumpington: My Lords, I shall confine my reply to the first part of my noble friend's question which referred to the impact of an agreement on UK farming. An agreement would indeed mean continuing downward pressure as in recent years. The aims of the round make such action inevitable. We believe that the terms proposed will allow farmers time to adjust. My right honourable friend the Minister is working to ensure that the burden is equally spread. A cut of 20 per cent. in support does not mean a 20 per cent. cut in prices. Credit for reforms since 1986 will also apply.
Lord Williams of Elvel: My Lords, I am sorry to press the noble Baroness on the matter. However, the House does not appear to have the information that the noble Lord, Lord Mottistone, sought. Leaving aside the action that is being taken by the Government, will the noble Baroness at least undertake to put in the Library—I do not ask for the information across the Floor of the House—the Government's estimate of exactly what the damage would be to processed foodstuffs under the Dunkel proposals?
Baroness Trumpington: My Lords, I can tell the noble Lord what the present Dunkel proposals would mean. The internal prices would come down very little so that Community processors would continue to face higher raw material costs than their overseas competitors. But export refunds might be so constrained that they could no longer bridge the gap and the reduction in border protection would simultaneously expose processors to greater competition from imports.
We have put all those points to the Commission. We have had support from certain countries. The Commission has taken our points on board and is negotiating on the points that we have raised against the proposals as they now stand. I cannot say fairer than that.

No. 2 Marsham Street
3.17 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
When they expect to reach a decision on the future of No. 2 Marsham Street which at present houses the Department of the Environment.
The Minister of State, Department of the Environment (Baroness Blatch): My Lords, my right honourable friend the Secretary of State for the Environment is today announcing that the building at 2 Marsham Street is to be demolished.
Noble Lords: Hear, hear!
Lord Peyton of Yeovil: My Lords, I most warmly thank my noble friend for that reply which for a moment left me speechless. Will she accept my warmest congratulations on her part in this first step towards removing an eyesore and—this is not unimportant —on persuading the Treasury to abandon for once the short-term view, to which it is addicted?
Baroness Blatch: My Lords, first, I thank my noble friend for his congratulations. It is right to say that it has been a co-operative effort.
Lord Grimond: My Lords, perhaps I may associate my party with the hearty congratulations offered from all sides of the House to the Government on the major success of their policy. I also congratulate the noble Lord, Lord Peyton, and everyone associated with the matter, except the architect. May we know who the architect was? Is it a precedent that may be followed in other parts of London? Will a list of demolishable buildings now be provided?
Baroness Blatch: My Lords, I join with the noble Lord in thanking my noble friend Lord Peyton. He has kept a robust, downward pressure on the department to expedite matters. The architect was an in-house architect. I believe that his name was Mr. Bedford. He both designed and managed the building. It was in fact approved by the Royal Fine Art Commission.
Lord Strabolgi: My Lords, will the architect for the new building be chosen by competition so that the public have a chance to see what is proposed, bearing in mind the very poor quality of government buildings that for the most part have been put up since the war?
Baroness Blatch: My Lords, the noble Lord makes an important point. It is too early to say anything about a new building on that site or about what will happen on the site. The present Secretary of State is very much in favour of competition and therefore if there is to be a new building on the site, I believe that will be a way forward.
Lord Allen of Abbeydale: My Lords, what will happen to the present occupants of the building pending reconstruction?
Baroness Blatch: My Lords, a study will be carried out in relation to the people who presently work in the building. Not all may require a Westminster presence and it is possible that there will be relocations for those people.
Lord McIntosh of Haringey: My Lords, we too offer our congratulations to the Secretary of State on his momentous and welcome decision. Is there any truth in the story in this morning's newspapers that Arup Associates have advised that on that site it would be possible better to accommodate as many people in a building of between only nine and 11 storeys?
Baroness Blatch: My Lords, a study carried out by Arup was considered. However, I cannot comment on a specific part of that recommendation. If I can write in more detail to the noble Lord I shall do so. I believe

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that we are starting with a clean sheet in considering the future of this site and the Arup report will not be part of that consideration.
Lord Peyton of Yeovil: My Lords, will the Minister consider publishing the names of the members of the Royal Fine Art Commission who, back in the mists of time, approved this ghastly building, if only to warn their successors?
Baroness Blatch: My Lords, I hope that the information is in the public domain. I am afraid that I do not know the answer.
Lord Marsh: My Lords, will the Minister give the House an estimate of the cost of the site clearance and the demolition of the building, given the other calls on public expenditure in these difficult times?
Baroness Blatch: My Lords, I am afraid that I cannot do so. The building was in need of substantial repair and that was the starting point of the study which led to the view that it should be demolished. The costs of repairing the building considerably outweigh the sensible economics of replacing it.
Lord Orr-Ewing: My Lords, will my noble friend bear in mind that many people carry on business and live in the vicinity of the building? Its demolition will create a great deal of noise and dust and I suspect that it will take a long time. Will she bear in mind that other people will be affected by the manoeuvre?
Baroness Blatch: My Lords, my noble friend has made a serious point. Of course the demolition will have to be managed in a way that causes the least disruption to those living in the vicinity. On a note of slight cynicism, I suspect that this is the point at which the members of the committee for the preservation of Marsham Street will come out of the woodwork.
Lord Annan: My Lords, does the Minister agree that the Royal Fine Art Commission was in an impossible position during the 1950s and 1960s? At that time property developers demanded so much per square metre that no decent building could ever be erected. Had the Royal Fine Art Commission done its job properly, virtually no commercial building would have been built in London during the 1950s and 1960s. I believe that that was one of the reasons Sir John Betjeman resigned from the Royal Fine Art Commission.
Baroness Blatch: My Lords, it is true to say that that it was not the best era of all time for architecture. By and large the buildings which were then erected have not stood the test of time.

Speedometer Testing
3.24 p.m.
Lord Allen of Abbeydale Lord Allen of Abbeydale asked Her Majesty's Government:
Whether they will encourage garages to provide facilities for the testing of speedometers.
Lord Brabazon of Tara: My Lords, the regulations governing speedometers in use require only that they be kept in good working order. There is no evidence to suggest that they need to be checked regularly for accuracy and we could not justify encouraging garages to provide such facilities. Checks on the accuracy of speedometers can already be carried out at any of the 450 approved tachograph centres in Great Britain.
Lord Allen of Abbeydale: My Lords, is the Minister aware that it is not easy for the private motorist to discover the location of a tachograph centre? Am I right in believing that most speedometers are fast and that it is perfectly legitimate to have one which registers 79½ miles per hour, to be exact, when the actual speed of the car is only 70 miles per hour? With all the cameras with which we are threatened for checking speed, is there not something to be said for encouraging motorists to have a better knowledge of how fast they are travelling than the great majority possess at the moment?
Lord Brabazon of Tara: My Lords, the regulations state that the reading can deviate from the true speed of the vehicle by between 0 and plus 10 per cent. plus 4 kilometres per hour. It is therefore biased to prevent the speedometer from understating the true speed of the vehicle. In other words, the speedometer is allowed to register, say, 60 when one is travelling at 55 miles per hour but it is not allowed to register 60 when one is travelling at 65 miles per hour. Therefore, the error is all on the right side.
Lord Molloy: My Lords, does the Minister agree that the Question contains a serious element about the prevention of accidents? It is probable that the overwhelming majority of motorists do not know where to go if they are suspicious of their speedometer readings. Therefore, cannot some publicity be given to the matter so that the conscientious motorist can have his speedometer tested? The fundamental point of the noble Lord's Question relates to the prevention of accidents in addition to an undue and wrongful police summons when a speedometer is not working correctly.
Lord Brabazon of Tara: My Lords, as I said in my original Answer, there is no evidence to show that the situation creates a problem, certainly not one that might cause accidents.
Lord Underhill: My Lords, is it not the case that few motorists will know the details of the regulations referring to construction and use to which the Minister referred? Is it not the case that in the section giving advice to drivers before driving the Highway Code states:
"make sure that … your speedometer is in working order"?
How does the ordinary motorist know whether, before driving, his speedometer is in working order? Is it proposed that there should be discussions with the motoring organisations, traders and manufacturing organisations to ascertain whether the MOT can be revised and equipment can be standardised? I notice that the Chief Whip is questioning me but I have asked only two questions.
Lord Brabazon of Tara: My Lords, I am delighted to answer both questions. There is no fundamental problem. A motorist can easily check whether his speedometer is working reasonably merely by looking at it as he drives along, which I hope he will do frequently. There is no proposal to include the testing of speedometers in the MOT. The cost of the test would have to be increased substantially in order to cover the costs of procuring the specialised equipment, the time to train staff and the extra time to test each vehicle. That is simply not justified in road safety terms.
Lord Brain: My Lords, is the Minister aware that one of the major problems with speedometers is that they depend on the tyre pressure, the tyre wear, the load on the car and so forth? There can easily be an error of 5 per cent., usually minus, on the speedometer reading at any time.
Lord Brabazon of Tara: My Lords, that is as may be but I should not have thought that it would create too much of a problem.

Business
3.28 p.m.
Lord Hesketh: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lord Belstead will, with the leave of the House, repeat a Statement that is to be made in another place on the security situation in Northern Ireland.
It may also be for the convenience of the House to know that the Report stage of the Charities Bill will be adjourned at approximately 7 p.m. for about one hour and that during this adjournment the International Transport Conventions Act 1983 (Amendment) Order 1992 will be taken.
Lord Boyd-Carpenter: My Lords, as regards the Business of the House perhaps I may ask my noble friend whether it is intended to give noble Lords an opportunity to express, perhaps briefly and informally, their strong feelings of affection and devotion to Her Majesty on this the 40th anniversary of her accession. I understand that it is Her Majesty's wish that there should be no formal Motion and for that reason no formal Motion has been tabled. I also understand that by use of a procedural device another place is giving its Members the opportunity to say what your Lordships too might feel about this tremendous occasion. Can my noble friend say whether we shall be given an opportunity, however short and informal, to say something of the same on a matter on which your Lordships are unanimous in their enthusiasm?
The Lord Privy Seal (Lord Waddington): My Lords, we are grateful to my noble friend Lord Boyd-Carpenter for what he has said because he has given us the very opportunity for which he is asking. Your Lordships will wish to know that a message went from the Cabinet this morning conveying warmest good wishes to Her Majesty on the occasion of the 40th anniversary of her accession to the Throne. The
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message was in recognition of the incomparable contribution which Her Majesty has made to the life of our nation throughout her reign.
I am sure that those are sentiments which the whole House would wish to endorse. I know that I speak for all your Lordships if I express our congratulations to Her Majesty.
Lord Cledwyn of Penrhos: My Lords, on behalf of my noble friends, perhaps I may support the felicitous words of the noble Lord the Leader of the House and the noble Lord, Lord Boyd-Carpenter, about the 40th anniversary of Her Majesty's accession to the Throne. Her reign has been memorable in so many ways and marked with great changes and historic events. However, throughout Her Majesty has been a wise and dedicated Queen of these islands and we wish her many more years to reign over us.
Lord Jenkins of Hillhead: My Lords, we are all aware of today's anniversary. Probably most of us who are old enough remember what we were doing 40 years ago when we first heard the news of the death of his late Majesty. We thank Her Majesty the Queen for the focal point of sanity and stability over four fluctuating decades which she has provided. We hope that we shall be here to celebrate, perhaps more formally and even more rumbustiously, the jubilee in 10 years' time.
Baroness Hylton-Foster: My Lords, I am quite sure that all those sitting on the Cross-Benches today will wish to be associated with what has already been said. We all appreciate so much what Her Majesty has done in those wonderful 40 years and how much service she has given not only to this country but also to the Commonwealth. Many Cross-Bench Peers will have had the honour of serving Her Majesty. I am sure that they will be very sorry not to be here today. However, I know that they will wish to be associated with all the thanks and congratulations which have already been expressed.
The Lord Bishop of Newcastle: My Lords, those of us sitting on these Benches would wish to associate ourselves with all that has been said in the last few minutes. We all greatly admire Her Majesty and are grateful to her for her consistency, dignity and devotion to duty, and so much else besides.

Civil Rights (Disabled Persons) (No. 2) Bill [H.L.]
3.33 p.m.
Baroness Lockwood: My Lords, I beg to introduce a Bill to prohibit discrimination against disabled people on the ground of their disability; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Baroness Lockwood.)
On Question, Bill read a first time, and to he printed.

Sporting Events (Control of Alcohol etc.) (Amendment) Bill [H.L.]
Lord Dormand of Easington: My Lords, I beg to introduce a Bill to extend the maximum period for which an order under Section 3 of the Sporting Events (Control of Alcohol etc.) Act 1985 may remain in force. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Dormand of Easington.)
On Question, Bill read a first time, and to be printed.

London Underground (King's Cross) Bill
Read a second time, and committed to a Select Committee.

Business of the House
Lord Waddington: My Lords, I beg to move the Motion standing in my name on the Order Paper. This Motion is to dispense with Standing Order 44 for the specific purpose of taking the Stamp Duty (Temporary Provisions) Bill through its remaining stages in one day. Your Lordships will note that this Bill has been certified as a money Bill and the procedure has been agreed through the usual channels.
Moved, That Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with for the purpose of taking the Stamp Duty (Temporary Provisions) Bill through its remaining stages on Tuesday, 11th February.—(Lord Waddington.)
On Question, Motion agreed to.

Social Security Administration Bill [H.L.]
3.34 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, your Lordships will notice that there are five further Bills to be subject to the same Motion. They are closely connected Bills. It may be that your Lordships' Procedure Committee will be able to devise a somewhat neater procedure for dealing with such Bills than has been thought of hitherto.
It has become more common recently for parliamentary counsel preparing consolidations to prepare a series of Bills rather than a single Bill because of the size of the subject matter. That has proved convenient to users but it has meant that your Lordships are apt to be subjected to seeing me perform in a way which may not be particularly illuminating and which takes some time. It would be advantageous if we could find a way to simplify the procedure. I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(The Lord Chancellor.)
Lord Mishcon: My Lords, at once I associate myself with what the noble and learned Lord said in regard to the procedure on these matters. It is not just the
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mental agility of the noble and learned Lord which we have come to admire on recent occasions, but his athletic ability and the way that he dashes from one place to another. He always does that with great dignity.
On Question, Bill read a third time.
The Lord Chancellor: My Lords, I beg to move that this Bill do now pass.—(Lord Chancellor.)
Moved, That the Bill do now pass.—(The Lord Chancellor.)
On Question, Bill passed, and sent to the Commons.

Social Security Contributions and Benefits Bill [H.L.]
Read a third time, and passed, and sent to the Commons.
Social Security (Consequential Provisions) Bill [H.L.]
Read a third time, and passed, and sent to the Commons.
Social Security Administration (Northern Ireland) Bill [H.L.]
Read a third time, and passed, and sent to the Commons.
Social Security Contributions and Benefits (Northern Ireland) Bill [H.L.]
Read a third time, and passed, and sent to the Commons.
Social Security (Consequential Provisions) (Northern Ireland) Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Charities Bill [H.L.]
3.40 p.m.
Report received.
Clause 1 [Interpretation of Part I, etc.]
Lord Richard Lord Richard moved Amendment No. 1Z:
Page 1, line 23, at end insert:
(" "registered housing association" has the meaning conveyed by subsection 3(2) of the Housing Associations Act 1985;").
The noble Lord said: My Lords, I apologise to the noble Earl that this amendment was tabled late. I attempted to give the noble Earl and the Government notice of what it contained yesterday afternoon and I hope that the message reached him. It may be for the convenience of the House if when moving Amendment No. 1Z I speak also to Amendment No. 1A.
These are paving amendments to a series of other amendments which have not yet been tabled. Perhaps

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I may tell the House the position and the problem. The main thrust of the amendments is concerned with preserving the right of certain charitable housing associations to register with the Charity Commissioners. At first sight it is an unexceptionable proposition. But the Bill creates certain difficulties.
The Charities Act 1960 does not compel excepted charities to register but it allows them to register if they so choose. Those provisions are unaltered by the Charities Bill that we are considering. Excepted charities include exempt charities as defined by the Second Schedule to the Act. Paragraph (g) of the schedule—I am sorry that the matter is complicated but it concerns a slightly legal argument—refers to industrial and provident societies. Many charitable housing associations are constituted as industrial and provident societies and are thus exempt charities. Around 25 per cent. of those exempt charities have chosen to register with the Charity Commissioners.
Although the 1960 Act permits registration, it specifically excludes exempt charities, even though registered, from the supervisory powers of the Charity Commissioners. They are excluded from each of the powers and the latter are defined on a section by section basis. Because of that statutory exclusion there is no opportunity for exempt charities voluntarily to make themselves subject to the Charity Commissioners' powers.
The housing associations are disturbed by the proposal and the result of the legislation we are considering. The Charity Commissioners are naturally under pressure to exert their supervision over charities and in that respect their powers are enhanced by the Bill. Not unreasonably the commissioners have expressed anxiety that there are certain registered charities over which they have no control. Their original idea therefore was to say that those charities should be deregistered. It is that proposal which has caused the difficulty for housing associations.
Housing associations which are exempt charities are extremely disturbed by the proposal. They believe—I think there is ground for that belief—that loss of registration will have a range of damaging effects and detract from the effectiveness of their charitable work. One solution may be for charitable industrial and provident societies to convert into charitable companies or trusts. I suppose that is possible, but apart from the cost and the unnecessarily bureaucratic nature of doing so, there is a simpler way.
Instead of deregistering exempt charities or forcing them to alter their constitutions, the thrust of my argument is that the 1960 Act and the current Bill be amended so that where an exempt charity is registered it is subject to the supervisory powers of the Charity Commissioners. Exempt charities which remain unregistered will be totally unaffected.
In tabling the amendments the National Federation of Housing Associations tells me that it is confident of the support in principle of both the Charity Commissioners, with whom they have already discussed the matter, and the Housing Corporation. That is the point at which these somewhat obscure and almost incomprehensible amendments are directed. I shall be grateful if the Minister can give some
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indication of how the Government approach the problem, which is a real one, and if need be we can return to these proposals at a later stage.
The Minister of State, Home Office (Earl Ferrers): My Lords, I am grateful to the noble Lord for being kind enough to apologise for tabling these amendments late. They were tabled the day before yesterday and, as he realises, that is only a short time ago. That was a generous courtesy compared with the 20-odd amendments tabled yesterday. The noble Lord will realise that it makes it slightly difficult for us to understand the amendments, particularly when it is said that they are paving amendments for a lot of other amendments which the noble Lord did not find it suitable or convenient to table.
When I examined the amendments I wondered how they could operate without the paving amendment. The amendments will make sense only if Amendments Nos. 39 and 42, tabled by my noble friend Lord Mountgarret and the noble Lord, Lord Ennals, were to succeed. There would otherwise be no mention of registered housing associations in the Bill and therefore no need to define them.
Exempt charities are those listed in the Second Schedule to the 1960 Act. They are exempt from all aspects of the Charity Commissioners' jurisdiction, except that the commissioners may waive the disqualification of a trustee of an exempt charity from being a trustee under Clause 45 of the Bill. Exempt charities are therefore quite different from other charities, and deliberately so. They are exempt because they are subject to some other jurisdiction. It is unnecessary therefore to place them under the Charity Commission as well.
Exempt charities may be entered in the register at their own request and if the commissioners agree. Once registered of course they are registered charities but they are still exempt from the majority of the provisions which regulate a charity's affairs, particularly those which come under the Bill.
The Charity Commissioners' current policy is not to register exempt charities. Those which are currently registered are being removed from the register and the register will henceforth be a register of charities which are required to register—those which are subject to the commissioners' jurisdiction. The thrust of the Bill is to ensure that charities which are required to be registered should be registered and should disclose their registered status on various documents. The purpose of the disclosure is to alert people to the fact that they are dealing with a registered charity and that information can be obtained in regard to it at the Charity Commission; for instance, names and addresses of trustees, the accounts and so forth. That is what will happen to the charities which are registered. The commissioners cannot obtain that kind of information from exempt charities. It is therefore not appropriate for them to be registered.
Lord Richard: My Lords, I find that a somewhat disappointing answer. Indeed, I think it is right to say that that is not quite the attitude that the Charity

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Commissioners expressed to the housing associations in their discussions before the Bill arrived at your Lordships' House.
If they are registered now, although they are exempt, why on earth should they not continue to be registered exempt charities in the future? That is the simple point. I thought I understood the argument before the noble Earl rose. By the time he sat down I was not sure that I did. The noble Earl read from the piece of paper in front of him with that degree of assurance that a sinking man usually displays when he is grasping at a straw. If the noble Earl understood his answer better than I understood my brief, he is a better man than I am.
Earl Ferrers: My Lords, perhaps I may have the leave of the House, after that courteous response to my reply, to say that I understood the answer perfectly. The noble Lord asks why we need to register something that is exempt. The whole point of it being exempt is that it does not have to come under the auspices of the Charity Commission. The point of a register is to ensure that those charities over which the Charity Commission has jurisdiction are duly registered. People can go to the Charity Commission and find out the names and addresses of the trustees of the charities which are registered and cannot for those which are exempt.
Lord Richard: My Lords, I am not sure where that takes us. The difficulty that the noble Earl is not addressing is that it is not a question of registering de novo exempt charities; it is a question of charities which are at present exempt and which are also at present registered. In other words, it is not a question of doing something new but of preserving a situation which at present exists. In those circumstances I hoped that the Government would look at the amendment with some sympathy. Nevertheless, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 [The register of charities]:
Lord Houghton of Sowerby Lord Houghton of Sowerby moved Amendment No. 1:
Page 2, line 23, after ("charity") insert:
("( ) the names and addresses of at least three trustees of the charity.").
The noble Lord said: My Lords, this is a simple and small amendment but rather an important one. It deals with the registration of charities. Clause 2 of the Bill requires the Charity Commissioners to keep a register of charities. It amends the 1960 Act as regards what should go in the register. The clause provides that:
"The register shall contain the name of every registered charity and such other particulars of, and such other information relating to, every such charity as the Commissioners think fit".
My amendment proposes to add after the word "charity" in line 23,
"the names and addresses of at least three trustees of the charity".
The important words here are that there should be three names and addresses. The Charity Commissioners may seek further information under
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what I have just read for registration purposes. To ask for at least three names and addresses of trustees implies that for future registrations at least three trustees will be required. That is the underlying purpose of this amendment. I believe that two trustees is never enough and that one trustee is even less acceptable.
For registration purposes, to be regarded as a registered charity there should be at least three trustees. With great respect to my legal friends, there should also be a stipulation that of the three trustees not more than two should be acting professionally. As noble Lords are aware, trustees acting professionally can charge professional fees for their services. In the need for supervision of funds a lay voice can very often bring wisdom and experience. Nevertheless, for the moment I say that there should be at least three trustees.
In many ways this Bill does an enormous amount of good in tightening up the framework within which charities operate in this country. However, in some ways it does not do quite enough. The amendment provides one of the ways in which the administration of charities can be brought under tighter control. My fear about two trustees is that either they do not agree or that they agree too much under the domination of one or by agreement between two. My experience leads me to believe that a third trustee is almost indispensable if power is to rest in the hands of trustees. That is the effect of the amendment.
I hope that the Government will feel able to accept the amendment for future registrations. I do not know whether it is possible under subsection (3) (b) for the commissioners to stipulate three or any number of trustees. It may be that is not possible. That is why I want it to be in the Bill itself that at least three names and addresses should be registered. I do not believe that I need say any more. It is an added precaution in the search for integrity in the administration of funds.
Today we have genuine grounds for concern about the integrity of a great many people who are handling funds which do not belong to them. They are trustees. This work requires an unimpeachable standard of integrity and fair dealing. I do not believe that anyone should feel that there is a reflection here. It is merely that this provision fortifies the authority of trustees when there are three of them to take decisions. It is in that spirit that I hope that the Government will feel that it is a good idea and that the House will accept the amendment. I beg to move.
Earl Ferrers: My Lords, I am bound to tell the noble Lord that I find a little difficulty with his amendment. There are two technical reasons why I cannot advise your Lordships to accept it. The first is that the amendment refers just "trustees" rather than "charity trustees". If one uses the word "trustees" that could include custodian trustees, even the Official Custodian for Charities, who has no power or responsibility to manage the charity. The name of such a person is not likely to be of any use to any member of the public and would simply clutter up the register. When one considers that there are 170,000

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charities, simple mathematics will show that if we were to accept the noble Lord's amendment there would be a great deal of material going on to the register.
The second reason is that some charities have fewer than three trustees, so the commissioners would be unable to comply in respect of those charities with the requirement which the noble Lord's amendment introduces. I am thinking mostly of charities which have a corporate body such as a parish council or a trust corporation as their sole trustee.
Even if one gets through that hoop, I believe that the amendment is unnecessary on other grounds. Clause 23(1) of the Bill will require the trustees of all registered charities to prepare an annual report containing:
"such other information relating to the charity or to its trustees or officers as may be prescribed by regulations made by the Secretary of State".
The regulations will require the names of all trustees, and indeed some of the senior officers, to be given as part of the annual report. The annual report itself is required under Clause 23(6) to be sent to the commissioners each year; and the commissioners are required under Clause 25(1) to make the report available for public inspection. Therefore, the trustees' names will be in the public domain by virtue of being contained in the annual report.
The regulations to which I have just referred are not likely to require that the trustees' addresses be given in the annual report. I do not believe that there is great merit in requiring that their addresses should appear on the register. Most trustees would quite understandably give their address as that of the charity where the charity has an office and that address would appear on the register anyway. But to require trustees in all cases to give their private addresses would be an intrusion which would be difficult to justify. It could undermine the perfectly proper arrangements which trustees of larger charities commonly make to have all approaches made to them as trustees dealt with in the first instance by the charity's administrative employees.
There is another reason why I suggest that this amendment is not suitable. In a very few cases neither the names nor the addresses of trustees will be available to the public. For the sake of example, I am thinking of the trustees of a women's refuge who might be put in personal danger if their names and addresses were made publicly available. For that purpose, Clause 23(2) (b) allows regulations which are made under subsection (1) to enable the commissioners to dispense with that requirement that the information about trustees be included in the annual report.
I understand the concern of the noble Lord to have this information publicly available. From what I have said I believe that he realises that it is publicly available and that it is in the public domain other than in the kind of instance which I have just cited. I believe that that respects all the noble Lord's wishes.
4 p.m.
Lord Houghton of Sowerby: My Lords, I thank the noble Earl for that reply. I expected my proposal would relate to future registration. I was not seeking
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to impose this condition on charities already registered; that would be quite a big operation and put a lot of people to a great deal of trouble. But I thought it was a reasonable additional safeguard for the future. However, the Charity Commissioners will have some freedom to prescribe what they want from the trustees as a condition of registration. That and the report that they will have to make may have to suffice at the moment.
However, I feel that the benefits of charitable status should be conferred with fastidious regard to the conduct of charitable work. There are great benefits from registration as a charity. I remind your Lordships—because I shall refer to it again on another amendment—that every registration of a charity lays claim to part of the nation's revenue. A very large part of the nation's revenue is being relieved to bodies registered as charities. The amount of tax relief to charities at the present time amounts to billions of pounds. Indeed, the whole range of tax concessions shows how important this element is becoming. If one reckons charity relief, mortgage interest relief, vocational pensions contributions relief and relief of interest on pension funds from tax, there is stored up there not a redemption of a penny in the pound off tax, but a considerably larger amount.
Therefore, we cannot extend the benefits of registration, which are tangible and important, without laying down reasonable conditions under which that benefit shall be enjoyed. Otherwise, it becomes slack, and the registration of charities becomes the kind of thing to be sought, and obtained, without very much regard as to how things are to be run.
However, I shall not continue. I shall ask leave to withdraw the amendment and hope that the Charity Commissioners will take note of this short part of the debate.
Amendment, by leave, withdrawn.
[Amendment No. 1A not moved.]
Lord Simon of Glaisdale Lord Simon of Glaisdale had given notice of his intention to move Amendment No. 2:
Page 2, line 42, leave out from ("money") to end of line 2 on page 3.
The noble and learned Lord said: My Lords, this is to a great extent, but not wholly, a probing amendment. I am afraid that fortuitously this is the first opportunity I have had to move it.
I had a message a moment ago that this measure was required urgently on the statute book. The implications of that message were obvious: that your Lordships were required to deal with 168 amendments—many of them Government amendments—on a Thursday, with a break at seven o'clock. Under those circumstances, I shall not move this amendment, but I shall write to the noble Earl with my point and, if necessary, return to the matter at Third Reading.
[Amendment No. 2 not moved.]
Earl Ferrers Earl Ferrers moved Amendment No. 3:
Page 3, line 8, at end insert:
("(7) Section 4 of the 1960 Act, as amended by this section, and with the omission of repealed provisions, is set out in Schedule 1 to this Act.").
The noble Earl said: My Lords, in moving this amendment, I shall speak also to Amendment No. 160. I undertook in Committee to consider whether something like a Keeling schedule could be produced to show how Section 4 of the 1960 Act would look as amended. Members of the Committee felt that it would be more helpful if that could be done. These amendments to Clause 2 and Schedule 1 are the result of that consideration.
Your Lordships will see, set out in Schedule 1, the version of Section 4 of the 1960 Act which will be produced if the Bill becomes law in its present form. The words in bold type represent words added or changed by the Bill; the words in ordinary type are already in Section 4. I hope that your Lordships will find that helpful. I beg to move.
Lord Peyton of Yeovil: My Lords, perhaps I may very briefly express my warm appreciation and gratitude to my noble friend for this amendment. Had the Bill remained as it was, it would have been necessary for anyone seeking to ascertain what the law was to have four or five books in front of him, the contents of which were far from clear. This amendment to the schedule to which my noble friend refers contains the law as it will be after this Bill is passed. I am extremely grateful to my noble friend for what he has done.
Before I sit down, I should like to go further. It is not often that I say this sort of thing, but as a Member of the Public Bill Committee I should like to say to my noble friend how very much I appreciate the way in which he listened with care and reacted to the suggestions made by the Committee during the debates that we had. I hope that he will accept my grateful thanks and pass on a word of appreciation to his officials and his advisers, who must have laboured mightily in the work that they have done between the Committee stage and the stage at which we are now. I am most grateful to him.
Lord Simon of Glaisdale: My Lords, at Second Reading there were suggestions that the 1960 Act, which is the foundation of this Bill, should be made, together with the Bill, a Keeling schedule to this Bill. The noble Earl rightly said that the 1960 Act was far too massive for that way of dealing with it. My noble and learned friend Lord Brightman then put down a mini Keeling schedule, singling out Section 20 of the 1960 Act, as amended. Although that had never been done before, the noble Earl welcomed it.
Although it had never been done before, neither my noble and learned friend nor the noble Earl suffered from centipede syndrome. The noble Lord, Lord Peyton, put down a similar, in effect, consolidation of another section, but put it into the body of the Bill by his amendment. It would be untidy to have one mini Keeling schedule in the body of the Bill in the enacting clauses and another in the schedule. Therefore like the noble Lord, Lord Peyton, I very much welcome what has been done in this case. In other words, both mini Keeling schedules are in schedules to the Bill.
Lord Jenkin of Roding: My Lords, as one who did not serve or attend the Committee, I should like to say how delighted I was to see, when the Bill was reprinted for the Report stage, that there was a Keeling schedule in it. I have long been one who has sought to encourage governments—when I have spoken from the Opposition and encourage parliamentary draftsman, when I have been in office—to include Keeling schedules. They make the task of those who have to use the law a great deal easier. I am delighted that my noble friend has succeeded in persuading the draftsmen to do that on this occasion.
I have never understood why it is that among Parliamentary Counsel there seems to be a sort of presumption against Keeling schedules. However, such has been my experience—they do not like to put these in. Ministers have to use considerable influence in order to be able to persuade them to do that. My noble friend referred to "something like a Keeling schedule" and the noble and learned Lord, Lord Simon of Glaisdale, referred to a "mini Keeling schedule". I have always understood that there is only one kind of Keeling schedule and that it can apply to a whole clause or to a whole part of a Bill. I suppose—I have not checked the records—that a Keeling schedule can apply to a whole Bill. This is a Keeling schedule and we welcome it, but are there other kinds of Keeling schedule?
Lord Harris of Greenwich: My Lords, I do not know whether this is a mini Keeling schedule or a major Keeling schedule but I warmly welcome the fact that it has been introduced. I agree with everything said by the noble Lord, Lord Peyton. It will now be a great deal easier for trustees to appreciate their responsibilities. I am glad that the noble Earl has moved the amendment.
Lord Richard: My Lords, we on these Benches also welcome the amendment. It is not an easy Bill, to put it mildly, in any event. The amendment and the schedule make it marginally easier for people to understand it. We are grateful to the noble Earl for taking on board the points expressed in Committee and for coming back in the way that he has.
Earl Ferrers: My Lords, I am overwhelmed that noble Lords should be pleased with what the Government have done. That is an unusual scenario in which to find oneself and I hope that it continues.
My noble friend Lord Peyton was kind enough to express his thanks. I shall pass on those thanks to officials and to those who have advised me because it is they who were responsible for advising on what is a difficult matter. I am glad that we have been able to do something that has met with the satisfaction of the House. The noble and learned Lord, Lord Simon of Glaisdale, was against a Keeling schedule and wanted to see statutes in force altered, while others were in favour of a Keeling schedule. The fact that we have somehow managed to satisfy both ends of the spectrum gives me personal satisfaction. I hope that it will make the Bill easier to understand.
On Question, amendment agreed to.

Northern Ireland: Security Situation
4.12 p.m.
The Paymaster General (Lord Belstead): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Northern Ireland. The Statement is as follows:
"With permission, Mr. Speaker, I shall make a Statement about the current security situation in Northern Ireland.
"It is my sad duty to report that since the beginning of this month 12 people have died in circumstances directly related to the continuation of terrorism in the Province.
"The proscribed loyalist terrorist organisation, the Ulster Freedom Fighters, has admitted responsibility for two attacks, which have led to the deaths of six people. They include five, two of them teenagers, murdered in a bookmaker's office in Belfast yesterday. Two persons have been arrested in connection with the earlier UFF murder of a taxi driver at his home in North Belfast. Three persons were killed by an off-duty police officer in the Sinn Fein Advice Centre on the Falls Road. That officer subsequently took his own life. The IRA claimed responsibility for the murder of a bread delivery man in Dungannon and is believed to have been responsible for the attempted murder yesterday near Belleek of a dog warden, who was also a part-time member of the UDR. In this incident, one terrorist was killed. Following it, three persons have been apprehended by the Garda Siochana. In relation to all of these incidents vigorous follow-up action is in train and will continue.
"I know that the whole House will wish to join me in expressing sympathy to all those who have been so suddenly bereaved. Each of these deaths represents a personal tragedy. But each is also part of a wider tragedy in which the whole community, Protestant and Catholic, Unionist and Nationalist, shares. For let there be no doubt that the overwhelming majority of the people of Northern Ireland deeply abhor, and want no part of, the wanton destruction perpetrated by that tiny minority who, without democratic, moral or spiritual authority, have taken upon themselves the right to decide who should live or die.
"As we have seen in recent days, notably in the trade union rally in Belfast last Tuesday and in the unequivocal statement of leading Churchmen, this overwhelming majority of decent people is increasingly making its voice heard and its influence felt. And individuals are coming forward—making use of the confidential telephone and in other ways—to help the police prevent outrages and to apprehend the criminals. It is vitally important that this should continue. Terrorists—from whichever side they come—represent no one but themselves. The community has a vital role to play in making them realise that they will never achieve their objectives through violence.
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"But a particular responsibility for dealing with terrorism lies with the Government and the security forces. We will not shirk that responsibility. The House will recall the announcement last month of the arrival in Northern Ireland of substantial numbers of additional troops. The level of military reinforcement for the police will continue to be kept under review and further adjustments may he made.
"We will take whatever action is necessary to bring terrorism to an end. But we will not abandon the underlying principle of our security policy which is a determination to deal with terrorism under the rule of law. In accordance with that policy, the police supported by the Armed Forces have achieved, in the past few weeks, further significant successes. A very high proportion of intended attacks is being prevented or aborted. Substantial quantities of arms and explosives (some of it clearly intended for immediate use) have been seized. In these and other situations, important arrests have been made. There will be more seizures and more arrests. The House will recall that almost 400 people were charged with terrorist related crimes in Northern Ireland last year.
"Last week the leaders of the four main constitutional parties in Northern Ireland agreed that, at my invitation, they would meet to consider matters of common concern in the interests of all the people of Northern Ireland. No matter is of greater shared concern to the people of Northern Ireland and their political leaders than the present security situation. In view of this, and against the background of recent events, the Prime Minister has indicated that he proposes to invite the four leaders to a meeting with both of us to concentrate on that issue. This will ensure that at the highest levels of government we can hear directly from political leaders who understand and represent the views of the people in Northern Ireland who inevitably have borne the brunt of recent events.
"The security situation in Northern Ireland is a matter for serious concern; but it is not, and will not be allowed to get, out of control. That is my conviction and that of the chief constable. As the chief constable said yesterday, a number of new anti-terrorist measures have recently been introduced in Belfast. The House may be assured that, in the discharge of their responsibilities for security in Northern Ireland, the Government and the security forces will take whatever further measures are judged to be necessary and effective." My Lords, that concludes my right honourable friend's Statement.
4.18 p.m.
Lord Prys-Davies: My Lords, I thank the noble Lord, Lord Belstead, for repeating the Statement on the current security situation in Northern Ireland. On these Benches we wholly condemn the carnage and we express our sympathy to the bereaved and to those who have been injured. We stand squarely behind the Government's determination to deal effectively with

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terrorism, as set out in the Statement. Our hope is that the Statement will go some way to restore confidence in Northern Ireland.
We watched yesterday, as we have watched over the past month, with a feeling of revulsion the horrific scenes of carnage in Northern Ireland. The good news from Northern Ireland was the brave march against intimidation to which the Minister referred. It took place in Belfast last Tuesday and was organised by the Irish Congress of Trade Unions. That was good news. Yet at times we detect words of almost despair on the streets of Belfast. The violence is horrific, frequent and regular—regular in as much as it generates the fear that every act of violence will lead to retaliation. All that generates a fear that all that is most cherished and valued in civilised life is now being threatened. However, the Government are right to emphasise, as they do, that all is not lost and that the situation is not out of control.
In this situation I wonder whether it is possible for the Minister to elaborate a little more in public on the broad grounds on which the Government agree with the assessment of the Chief Constable that the security position is still under control. We do not question that judgment. But I have a feeling that if the Minister can elaborate further on the reasons for that assessment, his words could bring further comfort to the people of Northern Ireland and help to restore confidence.
The Statement discloses that a very high proportion of terrorist ventures in Northern Ireland last year were frustrated by the security forces. Perhaps I may ask the Minister one question on the relationship between the police and the security forces. Can he unconditionally reassure the House that there is a full, free and unimpeded flow of all relevant information and intelligence between the Army and the RUC, and vice versa? That question is prompted mainly by the mitigation evidence presented in the High Court in Belfast last week during the trial of Brian Nelson.
We wholeheartedly support the determination of the Government and the RUC to bring the murderers to trial. We note from the Statement that there were over 400 people charged last year with terrorist offences. That is good news. But if the information is available, can the Minister tell the House whether that figure is higher or lower than the number of charges made during the two preceding years? Further, can the Minister confirm whether the RUC is making satisfactory progress in the hunt for the murderers of the seven Protestant workmen killed on their way home from work a fortnight ago? Alternatively, are the inquiries running into unexpected difficulties?
We fully support the Statement. We appreciate that the Government may be under pressure from some quarters to produce a simple and quick solution. Of course, in a sense that is understandable bearing in mind the fact that the people of Northern Ireland have been suffering for 20 years. However, we do not believe that there is a solution which is likely to be enduring and which would bring peace and reconciliation to Northern Ireland.
Finally, it is for the political leaders in Northern Ireland, with encouragement from the Government
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and with the support of the political parties, to develop the political formula which can lead to an enduring political solution. Men and women who live and work and have their being in Northern Ireland are suffering under an intolerable burden. They are entitled to expect as strong as necessary political leadership. That is why we fully support the Government in their efforts to persuade the leaders of the constitutional parties in Northern Ireland to search for a political solution. We urge that those talks should proceed on the basis that they will continue, whichever party forms the next government.
Lord Holme of Cheltenham: My Lords, perhaps I may join the Minister and the noble Lord, Lord Prys-Davies, in expressing from these Benches our great sympathy and sorrow over these tragic events not only to the families of the bereaved, for whom these are indeed terrible days, but also to the whole community in Northern Ireland which bears with such stoic courage the succession of violent events. There cannot be anyone in your Lordships' House who does not feel sympathy for the ordinary people of Northern Ireland for what they have to put up with day in and day out.
It is becoming a very serious situation. I am sure that the Secretary of State was right to ask people not to lose their nerve in the face of such provocations. However, at the same time we must look with a very cold eye at what is happening. We have had an outbreak of machine gunning, gang warfare and multiple deaths on a scale that we have not seen for a long time, even in Northern Ireland. We should make no mistake about it, accustomed as we are to hearing about the horrors of the IRA: the UFF and the Protestant paramilitaries have a young and fanatical leadership which is growing in insolence every day and which is every bit as dangerous as the IRA.
Therefore we have two groups of people firing at each other across the streets and at the people of Northern Ireland. One response—it is the right response and one on which we fully support the Government's approach—is to do everything we can through security to make life safer for the people who live in Northern Ireland. I believe that the police deserve our congratulations, together with the Army, for the arms finds which have recently been made. That has been a considerable breakthrough. However, I should like to echo one question asked by the noble Lord, Lord Prys-Davies, about the Brian Nelson case. We need some reassurance, which perhaps the Minister will be able to give us, that relationships and liaison between the Army and the police in Northern Ireland are everything that they should be. Although this is not the proper time to go deeply into the matter, from reading reports of that case it seems that there is a question about the effectiveness of communications between the two branches of the security services.
The Government have our support in trying to do everything that they can on the security front. But of course the other response must be, as it has always been, political. The Government's strategy is to make progress on the social front, which they continue to do, to make progress where possible on security—and events in the past few months have, I believe, been

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setbacks—and to make progress on the political front on which ultimately any prospect for a lasting peace must depend.
We must recognise the fact that since the talks broke down last year violence has increased exponentially in Northern Ireland. There is a connection between the two. Into the vacuum of the hopelessness of no political progress and no meaningful peace talks it is inevitable that those who can offer violence should fill the gap and become the dominant theme. When the Secretary of State and his right honourable friend the Prime Minister meet the leaders of the four constitutional parties in Northern Ireland, I earnestly hope that on their agenda they have not only security, which perhaps the Statement implies; I would welcome the Minister's reassurance that the agenda at the meeting will be primarily political. The question for the leaders of the four constitutional parties is: when are they going to get down to meaningful talks again? In turn, the question for the Government, the Secretary of State and the Prime Minister is: how can they avoid a British general election getting in the way of a resumption of peace talks?
When the talks broke down last year I warned that a British general election could, as it did in 1974, have a malign effect on the resumption of talks in Northern Ireland. I fear that that is happening now. I fear that the prospect of an election makes it more difficult for people to settle down; indeed, the various parties may hope for a better outcome after the election. Perhaps I may say from these Benches—I hope that it applies as regards all sides of the House—that all parties are united in wanting the Northern Ireland parties to get together again. All parties are united in the maintenance of the Anglo-Irish Agreement unless and until the parties to it freely agree upon something better. There is no short cut available to either side as regards the troubles in Northern Ireland; in other words, there is no alternative to getting together to talk. I shall be most interested to hear what the Minister has to say about that. The Government can do much to make it plain that the time for talk is now.
Lord Belstead: My Lords, I am grateful to both noble Lords for their reception of the Statement. They gave unequivocal support for the action that is being taken against terrorism. The noble Lord, Lord Prys-Davies, asked me to give an assurance, and chapter and verse, that the security position is under control. First, a large number of charges were made last year. I believe that I said over the past 14 months. Nearly 400 terrorist-related offences were charged and brought to court. A considerable number of them are for murder and attempted murder. They show that the actions of the security forces are translated into charges brought to court.
The other point embedded in the Statement is that it is reckoned by the chief constable that as many as four out of five attempted or intended terrorist actions have to be aborted because of the high level of activity of the security forces. There is a huge amount of patrolling going on at present. A high level of manpower is involved in the Province. If we take the members of the Ulster Defence Regiment, the regular
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Army and the RUC, there are approaching 30,000 members of the security forces in Northern Ireland at present.
My answer to the noble Lord, Lord Prys-Davies, on the point about matters being under control, is that it is one thing for terrorists to kill innocent civilians in cold blood, but when they do so I believe that they know in their hearts that it will not help them attain their objectives.
The noble Lords asked me about the free flow of information between the Army and the RUC. The very greatest care is taken to see that there is a free flow of information to the police from the Army, and the other way around. That is extremely important. All the circumstances surrounding the Nelson case are being examined carefully, but it would not be right to say anything more today about intelligence matters.
The noble Lord, Lord Prys-Davies, asked to be assured that satisfactory progress was being made in the hunt for the murderers of the men who had been doing an honest day's work on a security force base and who were merely returning home in a large van and were blown up at the crossroads at Teebane. That hunt is being prosecuted with the greatest energy by the RUC, as indeed is the hunt for those who murdered in the appalling shootings that occurred in the Ormeau Road in Belfast yesterday.
Finally, in answer to the noble Lord, Lord Holme of Cheltenham, perhaps I may say that when, at the end of the Statement, I repeated the words of my right honourable friend that the Prime Minister has indicated that he proposes to invite the four party leaders to a meeting with himself and my right honourable friend the Secretary of State for Northern Ireland, that is to concentrate upon the security situation. It is important, and, I hope, a reassurance and at least a partial answer to the noble Lord's question, that that is in the context that the four main constitutional party leaders agreed a little while ago, when it was apparent that the talks were not going to proceed, that they would, nonetheless wish to meet the Government to consider matters of common interest, in the interests of the people of Northern Ireland. The noble Lord can assume that that will be an important and, I hope, fruitful meeting.
4.32 p.m.
The Earl of Longford: My Lords, does the Minister agree that, in the light of the recent trial, it is clear that the UDA is engaged in systematic assassination? Will he consider making that organisation illegal, like the IRA?
Lord Belstead: My Lords, the question of proscription is always kept under review.
Lord Fitt: My Lords, as one who has spent most of his political life in Northern Ireland, I am only too well aware of the terrible heartbreak and sorrow now prevalent in that community and of the great distress and despair that exists at the apparent unworkability of any political action taken recently. I am glad to hear the positive mention that the Prime Minister is calling together the four constitutional party leaders to talk

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about security. That is all that we can expect. I do not believe that there is the remotest hope of any political talks taking place in advance of the general election.
Security is by far the most important issue facing the people of Northern Ireland today. Is it possible for those four constitutional leaders, after they have had talks, to come out into the open and to call upon their constituents to give total and absolute support to the security forces, and to cut away all the ambivalence and ambiguity that we sometimes hear in their statements in relation to the security forces? Is it possible for the leaders of the four main Churches in Northern Ireland to call upon their people —the people who attend their churches—again, unambiguously, to (this is an awful word in the Irish political vocabulary) "inform" upon those people whom they suspect of being engaged in violence? The Minister stated that only a tiny minority of people support the violence. It is that tiny minority in the Catholic community and in the Loyalist Protestant community which is giving succour, support and protection to the men who are carrying out the murders. It is not a security problem only for the police, the UDR and the Army; it is up to the people who are giving the protection to inform upon those who they believe are carrying out acts of violence. We need the co-operation and an unambiguous statement from the four Church leaders and the four constitutional party leaders. If we could have those statements, I believe that they would go some way to show the honesty and integrity of those involved.
Lord Belstead: My Lords, no one could ask that question with more justification than the noble Lord, Lord Fitt. He has been an example to all by the brave and open way in which he has expressed himself today, and expressed himself and conducted himself when he was a representative for Northern Ireland in another place. He will be aware that there have been unequivocal statements of support for the security forces and for law and order from leading churchmen and the leaders of political parties in the past few days. I shall draw to the attention of my right honourable friends what the noble Lord has said. I hope that there will be others also who will see what the noble Lord has said in your Lordships' House.
Lord Hailsham of Saint Marylebone: My Lords, as one who belongs to a family with long connections with the Province, which none of us has ever forgotten, I join others in expressing the grief and indignation with which we have heard of the recent outrages. There is one point that I wanted to put to my noble friend. I was greatly heartened by one phrase in the Statement, and that was his reference to the rule of law. There are many people who, understandably and with every possible moral justification, demand the suspension of the rule of law. I was very much encouraged to hear my noble friend reassert his belief in it, because if, for instance, we were to consider reintroducing internment, which remains on the statute book as a possibility, we should remember that it has a bad track record in producing results.
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Internment involves the suspension of the rule of law. It involves the abolition, for the time being in a limited number of cases, of the due process of law; of the burden of proof; and of the work of the courts. It has not succeeded in the past. Whenever it has been introduced, it has had to be abolished within a measurable time. I was greatly heartened, in consequence, by what my noble friend said about the rule of law. I hope that we shall not go down that path unless necessity drives us to it.
Lord Belstead: My Lords, I am grateful to my noble and learned friend for what he said. The principle underlying our security policy is the absolute determination to bring terrorism to an end within the rule of law. I agree with him that that principle cannot be set aside. He referred to executive detention or internment. That option remains on the statute book, but it would be a very serious step indeed.
Baroness Ewart-Biggs; My Lords, like other noble Lords I should like to express my great sorrow at the sectarian killings that have taken place in recent days in Northern Ireland. I wish to give my heartfelt sympathy to the relatives and families of those who have been killed.
Against the tragic background of the Minister's Statement today, I welcome the news he gave that the Prime Minister has called together the leaders of the four constitutional parties in Northern Ireland. Does the Minister agree that a great anxiety to the people of Northern Ireland, and to us all, must be that the initiative has been seized by the men of violence and that they retain it? Therefore, the Government must welcome any kind of replacement of that initiative which has been seized by the gunmen.
Does the Minister agree that it would be important in the talks for matters of common concern to be placed before the four leaders? It is always the case that when constitutional issues are placed before them there cannot be agreement. Would it not be better, therefore, to keep the talks to matters of security, common interest, social issues and other issues of direct concern to them and not to risk the breakdown of the talks and the invaluable initiative that has been taken before they get anywhere?
Lord Belstead: My Lords, I am grateful to the noble Baroness, Lady Ewart-Biggs, for the sympathy which she expressed to those who have recently been bereaved. She asked me once again about the talks which were announced in the Statement. She will forgive me if I say that I cannot anticipate the agenda except that the Statement clearly proposes that the talks will concentrate on the issue of security. To the people of Northern Ireland that matter is at the top of their agenda. I join the noble Baroness in the hope that we shall find that the meeting will be a fruitful opportunity for leadership both from Downing Street and within Northern Ireland.

Charities Bill [H.L.]
4.42 p.m.
Consideration of amendments on Report resumed.
Baroness Faithfull Baroness Faithfull moved Amendment No. 4:
After Clause 2, insert the following new clause:
("Legal responsibilities of Charity Trustees
After section 4 of the 1960 Act there shall be inserted—
"Legal responsibilities of Charity Trustees.
—(1) The Charity Commissioners shall prescribe a form to be signed and witnessed by all charity trustees on acceptance of the office of trustee.
(2) Such a form shall refer to the legal responsibilities of charity trustees, the method of appointment, retirement and removal of charity trustees applicable to that charity.
(3) The signed form shall be held by the charity concerned and a copy shall be held by the trustee concerned." ").
The noble Baroness said: My Lords, in moving this amendment I wish to apologise to my noble friend the Minister and to the House for putting down a new amendment on Report instead of at an earlier stage. The reason is that during the Committee stage I attended a meeting of the trustees of a charity of which I am a trustee. During the meeting various events took place which I shall not go into except to say that we were informed by the director of the charity that it had changed to become a company limited by guarantee.
Two points arose from that change. First, it was clear that a number of trustees in this country accept their position without knowing exactly what are their duties. I happen to have been fortunate in the past in having a brother who is a solicitor. When I became a trustee, he told me exactly what were my duties. However, I have come across many trustees who have no idea of their duties. Some believe that they are presidents and some patrons.
Recently I said to one person, "You know, you will be in trouble with that trust and, if you are, you will have to sell your house in order to meet the costs". I thought that person was about to faint, obviously having no idea of the financial responsibilities of a director.
By the same token, some directors of trusts have no clear idea of the duties of trustees. For example, I came across one trust where the director had not informed the trustees of them. Speaking for myself, I found that the Charity Commission had brought out an extremely good book on the duties of trustees. I had been a trustee for many years and had never seen it. Until a short time ago I did not know that it existed. Therefore, it seems to me important that trustees should know their duties and be clear about them. Equally, directors and secretaries of trusts should know them.
The amendment suggests that a simple form should be drawn up on the duties of a trustee. It should refer to the fuller book published by the Charity Commissioners and trustees should have to sign the form, perhaps in front of witnesses. The form should be in duplicate and kept by the trust as well as those who are trustees.
The National Council for Voluntary Organisations held a conference of trustees and the point was put to them. I understand that most of them considered this a wise suggestion to make to your Lordships and to the Minister. Two people said that they would not sign anything. However, whether or not people sign, they are still liable and the lack of signature does not make any difference, so the argument is not valid.
My noble friend may say that the drafting is not as good as it might be, but I believe that the intention is good because many trustees do not know their duties. Therefore, I beg to move.
Lord Morris of Castle Morris: My Lords, it is always a great pleasure to support the noble Baroness, Lady Faithfull, although with her customary eloquence she does not leave one much more to say.
A standard form such as she suggests implies generally accepted conditions and makes them more widely known than they are. We know that a great deal of the information is available, I suppose from the nearest branch of a public library. However, as the noble Baroness said, when most people accept the post of trustee they are not aware, and there is no wide public knowledge, of the depth of the responsibilities that trusteeship now requires. To be presented with such a form would bring one face to face with those responsibilities. Formal confrontation with them has a brisk and salutary effect just as when one is obliged to take an oath, sign a lease or even sign a cheque. People have eyeball confrontation with their responsibilities and there is no getting away from them. A document of this kind could be legally enforced, if necessary, to show that the person concerned had knowledge of the responsibilities undertaken.
Further, it would be an effective document of record, even as it stands. Some improvements may be possible in the drafting, but, as I said at Committee stage and it bears repetition, the law knows no higher status than that of trustee. That remark was made to me when I was much younger by an ancient lawyer in the city of York when I first took on a trusteeship. At that point he proceeded to read me the Riot Act about my responsibilities. That would be good for all of us. To have such a document would be effective in reminding one all the time that that information was on record.
There is a tiny trust in mid-Wales of which I became a trustee when I took up another office within the University of Wales. The post of trustee was an ex officio post. I was not aware that I had become a trustee until about 14 months after I had taken up the office which carried the trusteeship with it. As it happened, the post of trustee consisted of disbursing tuppence ha'penny a year to people who did, or did not, attend Sunday schools in four villages in the middle of Cardiganshire. Had I been negligent in my duties, I do not believe enormous suffering would have occurred. However, in such a case I would certainly have welcomed being presented, on becoming a trustee, with a document to record that I at that time had undertaken a trusteeship. Such a document would have recorded the facts. So far as I can see, nothing in

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the amendment of the noble Baroness would impose any great bureaucratic burden on anyone. I hope the amendment commends itself to the Government.
Baroness Phillips: My Lords, I, too, wish to support the amendment. I have been involved with charities for a long time. I am ashamed to say that I was a trustee of two charities before I suddenly realised—perhaps as a result of hearing someone speak in this House—the enormity of the task I had undertaken. Charities now seem able to become limited companies and they do not appear to be aware—unless they are limited by guarantee—that their trustees face such large responsibilities. As a movement, charities do not always inform the innocents that they try to rope in to help them of the responsibilities they face. It is important that a sound document should be provided to inform people of their responsibilities. This is a good amendment and I am sure the Government will accept it.
Lord Brightman: My Lords, I also support the spirit of this amendment. In the case of a private trust there will always be identified beneficiaries. A person who accepts the office of trustee of a private trust will appreciate his responsibilities towards those beneficiaries. There will probably be a family solicitor in the background who can explain the duties of the new trustee if the latter is unaware of those duties. However, the position is different in the case of a charitable trust. There will be no identified beneficiaries. The new trustee may well not appreciate why he is there and what he is meant to do. There may well be no solicitor in the background.
In the case of a local charitable trust, the position of trustee may well have devolved on the new trustee ex officio and he will be even less likely to appreciate his responsibilities. I believe something along the lines of this amendment is worth consideration.
Baroness Elliot of Harwood: My Lords, I wish to support the amendment. I have spent a great deal of my life as a trustee both of large public trusts, such as the Carnegie UK Trust, and also of private trusts. I am absolutely certain that the provision we are discussing is important and should be treated with the greatest possible respect. The amendment would be a successful addition to the Bill. I hope the noble Earl will accept it.
Lord Donaldson of Kingsbridge: My Lords, I, too, wish briefly to support this amendment. Like many other noble Lords I have been a trustee of all kinds of bodies, although I believe they have mostly faded out now. The matter I am never quite sure about that which the noble Baroness referred to earlier; that is, the position of a company limited by guarantee. I have always assumed that if one is a member of an executive committee of a company limited by guarantee and that company goes bust, one's maximum liability is £1. The usual limit of a company limited by guarantee is £1. There are clearly fraudulent practices which would enable people to get round this position and the
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position needs to be clarified as it is not at all clear at present. I do not know where we stand and therefore I certainly support the amendment.
Baroness Macleod of Borve: My Lords, I am a trustee of a number of charities. I am wholeheartedly in favour of the amendment, but I believe the drafting could be widened a little. I should add that one of the responsibilities of those who are appointed as trustees should be a requirement to attend trustees' meetings. Sometimes people take on the post of a trustee because they feel it is an important function—it is an important function in society—but they then find they have other meetings to attend or they are not particularly interested in being a trustee. Nevertheless, they still face certain responsibilities as trustees. Many trustees that I know of do not realise the responsibilities they have taken on as regards administering funds that have been collected by the charities concerned. I hope my noble friend the Minister will agree to insert this amendment into the Bill.
Viscount Brentford: My Lords, speaking as a solicitor I must say I have a great deal of sympathy with this amendment because from time to time trustees ask me what their duties are. This is a real problem and the amendment tries to meet it. However, I have a number of questions which I hope my noble friend the Minister will address. I should like to know how this provision would work in practice. There are, of course, ex officio trustees who may hardly even know when they have become become trustees. When new trustees are appointed to a small charity, will that charity remember to give the trustees the printed form? I should like to encourage the Charity Commission to provide this form. I have prepared a form which I distribute to trustees when they ask me about their duties but an officially prepared form from the Charity Commission would be a great support to trustees. However, I am not sure the amendment is the right way to deal with this matter.
Earl Ferrers: My Lords, the speech of my noble friend Lord Brentford was short but nevertheless it encapsulated almost every relevant point of the matter we are discussing. All of your Lordships are concerned that trustees should be aware of what they are taking on. The noble Baroness, Lady Phillips, said she has become a trustee on a number of occasions without realising what exactly she was taking on. I believe many people accept these positions of great responsibility without realising what they are taking on. I sympathise greatly with my noble friend Lady Faithfull who, through her amendment, is trying to sort out this matter.
Upon registration of a charity the Commissioners send to the trustees a comprehensive information pack about their duties and responsibilities. This also contains literature about other sources of advice for trustees and about providers of training for trustees. One recommendation of the NCVO report, Effectiveness in the Voluntary Sector, was that every new trustee should read a copy of the Commissioners' booklet entitled Responsibilities of Charity Trustees.

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My noble friend Lady Faithfull said that it is a good booklet. She expressed an anxiety, repeated by my noble friend Lord Brentford, when she said that new trustees are not automatically given a copy of the booklet. I believe it would be difficult to make that a legal requirement. However, trustees could ask for a copy of the booklet. Charities should make it their duty to give new trustees a copy of the booklet. Copies can he obtained from the Charity Commission.
The difficulty with the amendment of my noble friend is that it seeks to impose a duty without any sanction for non-compliance. My noble friend Lady Faithfull referred to a person who said he would refuse to sign a form. My noble friend told him it did not matter if he did not sign the form. However, we must ask ourselves what would happen if a new duty were imposed without any sanction for noncompliance. What is the point of placing an obligation on someone to sign a form if there is no sanction for not signing that form? Even if the form was signed it would not make any difference to the legal position of a trustee, so I find it difficult to advise your Lordships to accept the amendment, although I am deeply concerned that the spirit which lies behind it should be pursued.
I think the best way would be for us to get trustees to adopt the practice by encouraging them as opposed to compelling them. It is clearly in their own interests and those of the charity that they quickly become knowledgeable about what it is that they are taking on. It may be that a person who is not keen to learn about his duties and responsibilities should not be appointed to that position in the first place.
I reiterate my support for my noble friend's intention, which is most laudable, in tabling the amendment. However, for the reasons that I have given, I do not consider it would be suitable to put it into the Bill.
The National Council for Voluntary Organisations and the Charity Commission have set up a working party which will examine the question of training and support for trustees. We shall have to wait to see what its findings are, but I would hope that we would be able to support the implementation of its recommendations. That approach is the one most likely to lead to the proper understanding by trustees of their responsibilities rather than the amendment of my noble friend.
5 p.m.
Lord Beaumont of Whitley: My Lords, the noble Earl said that it was difficult to make it a legal requirement, but he does not appear to have produced any great backing for that statement. Perhaps he could explain to us in rather more detail why it is impossible and why a person cannot just legally fail to become a trustee.
Earl Ferrers: My Lords, some charities change their trustees fairly frequently. I suggest that it would be difficult to impose a duty on the Charity Commissioners to prescribe a form to all new trustees because the Charity Commissioners do not know at each time when all the trustees are going to be
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changed. As I have said, what would be the position of a person who is given the form but who refused to sign it? Under the amendment that would be part and parcel of a trustee's obligation.
I can only come back to what I said in the first place. It is difficult to make this a legal requirement either upon the Charity Commission or upon the new trustees. This is something which charities themselves ought to take into account.
Baroness Faithfull: My Lords, I should like to thank noble Lords who have spoken to the amendment. I fully appreciate what my noble friend the Minister has said, but it is somewhat nebulous. It might be right if everybody did what he said that they should do, but they do not. Up and down the country, particularly in view of the enormous number of small charities that have been set up recently—for instance, for the Romanian children—many people have taken on trusteeships. How can the gap be bridged? How can the trustees be informed by the Charity Commission or the people setting up the trust, who do not even know that such books exist on the duties of trustees? I understand the point that my noble friend the Minister is making, but I have to say that it is not really valid. There is no way of bridging the gap without something of the kind proposed in the amendment.
I apologise sincerely for having raised this matter at a late stage of the Bill. I shall withdraw the amendment, discuss the matter with my noble friend the Minister and then return to it at the next stage of the Bill.
Amendment, by leave, withdrawn.
Clause 3 [Registered charity's status to appear on official publications etc.]:
Lord Houghton of Sowerby Lord Houghton of Sowerby moved Amendment No. 5:
Page 3, line 12, after ("characters") insert ("and in the case of paragraph (a) of this subsection shall require to be stated also the names of the trustees of the charity").
The noble Lord said: My Lords, this amendment is complementary to the matter we have just been discussing. It is time that trustees taking on such responsibilities should be nailed down. There is too casual an approach to people to be trustees. I would have supported the amendment of the noble Baroness who has just spoken, but we are all under pressure tonight to make progress on the Bill.
My amendment is to reinforce the provisions of the Bill. Noble Lords will see that Clause 3 states:
"Where a charity is a registered charity, the fact that it is a registered charity shall be stated in English in legible characters—
(a) in all notices, advertisements and other documents issued by or on behalf of the charity and soliciting money".
So these documents are money documents, solicitation documents. Then there are conditions about the definition of the charity to appear on other bills of financial importance.
My amendment proposes that all notices, advertisements and other documents issued on behalf of the charity and appealing for money shall contain the

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names of the trustees; not their addresses; not limited to three but all of them, whether there are more or less than three.
This is a desirable attempt to bring the faceless trustees out of their obscurity and let people see who they are. This is of great importance in connection with charities which are making enormous effects in fund raising, which are endeavouring, by post and other means—by taking full-page advertisements in The Times, for example—to get financial support. Where they are soliciting money, the names of the trustees should appear in the advertisement or notice.
Your Lordships will have received many envelopes containing charitable appeals. I save them up every year, and they amount to a very large number, especially at Christmas. Who are they from? There is the name of the charity—which will now have to make clear that it is a charity, which the law does not require it to do at present. We know that that will carry certain obligations, but who is running the show? Who are they? We find on these appeals "Director of Fund Raising", "Finance Director", "Appeals Controller" and other members of the professional staff of the charity.
This is an industry and we might as well begin to call it an industry, just as the building society movement volunteered to call itself an industry. They now employ professionals in ever-growing numbers on ever-rising salaries because they are having to compete with commercial standards of pay for recruitment to positions of great importance in fund raising and administration. I shall not question any charity that might have to pay more money to get professional people than it would wish.
But that is not enough. We want to know who are the trustees who are running the show and who accept responsibility for it. If they want to communicate with us, let them do so and disclose themselves. I resent having appeals addressed to me by a bureaucrat in a charity suggesting that he has some special claim upon my emotional responses, my generosity and vulnerability. We are all fools when it comes to generosity, and one of the great features of our society is that we often feel happy to indulge in it.
This is an industry peculiar to Britain. We are one of the few countries in the world which have a charity industry. It began with Henry VIII when he dissolved the monasteries. Prior to that time, charity—which truly means the relief of poverty; it does not mean some of the responsibilities that charities are undertaking under the wider interpretation of the Charity Acts at the present time—was undertaken by the churches. The relief of the poor moved from the churches to charities and that is the origin of our charitable movement. It has grown ever since. We should now decide that it is a growing element in public affairs and that some stricter conditions should be applied when appeals for money are made to the public.
Some people in the charitable world have already suggested that there ought to be a charity tax; that we should get rid of the appeals and all the paper that passes through the post and so on and leave it to a
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charity tax. I regard that as complete nonsense. However, it is clear how people's minds are moving. We have certainly got to the point where people are asked to respond more freely to charitable appeals by having money taken out of their pay packets rather than taking it out of their pockets. What they never see they never miss—that is the clue to pay-as-you-earn, which is the biggest pick-pocket industry in the world.
In those circumstances we want to know who has his hands in our pockets. For that reason the trustees should come clean and let us know their names. They may have some significance; we may know who they are; we may give greater credence to the authority of their appeal if we know who they are; or we may find names that we do not know at all. However, I see every reason why trustees, in whose names appeals for money are being made, should be named. Directors of finance, fund-raisers and bureaucrats can play their part, but they are not the people responsible.
I sincerely hope that this amendment will be accepted. I emphasise in conclusion that it relates solely to advertisements and other documents issued on behalf of the charity and soliciting money—wholly to charitable appeals which are issued to the public soliciting money. I beg to move.
Lord Harris of Greenwich: My Lords, I have some doubt about the wisdom of the amendment. I understand the concern of the noble Lord, Lord Houghton, and sympathise with much of what he said. However, the practical problems involved in implementing an amendment of this kind are substantial.
The term "other documents" could certainly include any letter sent out asking for donations to a charity. I happen to be a trustee of a charity which probably has a turnover of two trustees a year. This amendment would mean that the stationery would have to be reprinted twice a year. One has to ask whether costs of that kind imposed on charities would be of any substantial public benefit. I am doubtful whether that would be so.
I could understand the proposition that the names of some trustees should appear; but it seems to me wrong, for the reasons I have indicated, that it should apply to all trustees. I am therefore very reluctant to agree to the amendment.
5.15 p.m.
Lord Jenkin of Roding: My Lords, I find myself in agreement with the noble Lord, Lord Harris of Greenwich, though I have much sympathy with the concern that lies behind the amendment. I should like to take the argument one step further. I recently had the privilege of being invited to join the council of a great charity and follow the noble Baroness, Lady Robson of Kiddington, as a member of the Imperial Cancer Research Fund board. It has hundreds of local branches all over the country which are constantly —and successfully—appealing for the huge sums which keep cancer research going. I am also on the council of the Guide Dogs for the Blind Association. It has 600 or 700 local associations, all of which make appeals to raise money for guide dogs for the blind.

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The consequences of passing the amendment would be that every time a new member of the council were appointed to the parent body, as it were, all the stationery, together with the appeal literature and all the documents with which local appeals are conducted, would have to be reprinted. The cost would be astronomical. It would make it very difficult for those bodies to replace a trustee who died or one who reached the distinguished age at which the rules of the charity may require him to stand down.
Quite honestly, although I understand the noble Lord's point, the large national charities—they are sometimes called the Big 10—which get together to consider their interests and so on, would be absolutely horrified if they found the amendment of the noble Lord, Lord Houghton, in the Bill.
Lord Swinfen: My Lords, I should declare an interest in this Bill as I work for a charity. I earn my living that way. I am opposed to the amendment. A large number of very small charities design documents intended to last for many years. They would incur excessive costs in reprinting those documents every time that a trustee changed. A number of other charities have many autonomous branches, each of which may have its own trustees. When a trustee of any branch changed, the documentation for that branch would have to be reprinted. It would put up the costs considerably.
I appreciate and quite understand the need for members of the public to be able to find out who are the trustees. That can quite simply be done by writing to the charity concerned which, as I understand it, would have a duty to disclose the names of the trustees but not necessarily their addresses.
Baroness Mallalieu: My Lords, we on this side of the Committee entirely understand and support the spirit of the amendment which, as I understand it, is that trustees should not only be responsible but be seen to be responsible and be seen by members of the public to be readily identifiable. However, we regret that we cannot support it, for the reasons which have already been given. It is obviously undesirable to create unnecessary or burdensome paperwork and to increase costs, particularly where many small charities are concerned. Difficulties are bound to arise when there are changes in the trustees. The documents which the amendment requires to carry the information would effectively relate to virtually all appeal documents of whatever kind. One can see the difficulties that would arise if the amendment were to be accepted.
As we heard in relation to earlier amendments, the position is that any member of the public can now discover the names of trustees from the register and have a means of access to it as soon as the charity is registered. Provided that members of the public are aware of that facility, it seems to us that it is not necessary to require charities to go to the expense that this amendment would involve.
Baroness Phillips: My Lords, before the Minister replies, perhaps I may offer a word of sympathy to my noble friend. We appreciate his reference to major
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industries. It is a little disturbing to find, on going into what is supposed to be a charity—I have been working voluntarily all my life—that the fund-raiser is collecting £40,000 a year. If that money had gone to the charity to start with, it would have been a lot of help.
Unfortunately, the noble Lord said that the trustees should be nailed down. That gave me a rather formidable feeling. I have run charities and had to persuade people to be trustees, explaining to them exactly what is involved. I know that one would never get them if they thought that their names would be emblazoned on the notepaper because lots of other people would also want to have them. I have found a good trick. I say that I am willing to be a patron. So far as I understand, a patron has no responsibility except for his name to adorn notepaper. Perhaps I should not say that in front of the Government who may then bring an amendment to include patrons in the Charities Bill.
Perhaps I may extend a word of sympathy to the noble Lord, Lord Houghton of Sowerby. We understand what he seeks to achieve, hut do not believe that the amendment meets the case.
Earl Ferrers: My Lords, I agree with the noble Baroness. We all understand what the noble Lord, Lord Houghton, seeks to achieve. However, for reasons explained eloquently by other noble Lords I do not believe that the amendment is suitable.
Clause 3 already requires registered charities to state that they are registered charities. They have to do that on a number of documents including, but extending wider than, fund-raising notices and advertisements. The reason is to make it clear to anyone reading one of those documents that the organisation which issued it is a charity and one which is on the commissioner's register. The reader will then be aware that he or she can find out much more about the charity by consulting the register.
One of the documents which will be open to public inspection on the register will be the annual report which has to be prepared by trustees. As I explained on an earlier amendment, it is the intention of my right honourable friend the Secretary of State that the regulations which he will make prescribing the contents of the annual report will require the report to list the names of the charity trustees. A person presented with a notice or advertisement soliciting funds for a charity will therefore have a clear route to the names of the trustees even if they are not immediately before him in black and white.
For those reasons I believe that the amendment is unnecessary. It could also be considerably troublesome to a number of charities. As my noble friend Lord Jenkin of Roding said, a few charities have a large number of trustees. The noble Lord, Lord Chorley, is present. He is a distinguished chairman of the National Trust. My understanding is that it has 52 trustees. Their names would have to be printed on all notices, advertisements and all other documents relating to the National Trust. One can imagine the problems that that would create.
A more widespread objection was identified by the noble Lord, Lord Harris of Greenwich, and my noble

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friend Lord Jenkin. Many charities have arrangements which require at least one or all of the trustees to stand down each year. Where the trustee body changed frequently, the documents which bore their names would also have frequently to be altered to avoid commission of the offence under subsection (3) of the new Section 4A. That would obviously be inconvenient and time consuming. As many noble Lords said, it would be costly.
While we all understand the reasons for the amendment, I hope that the noble Lord, Lord Houghton, will understand that it would be better not to put the provision on the face of the Bill.
Lord Houghton of Sowerby: My Lords, we have spent one half hour on a Statement in the middle of a debate which, we have had impressed on us, is urgently desired to be completed today. Therefore we must do our best.
The objections that have been raised have been grossly exaggerated. There are not that number of trustees throughout the country in many charities. However, I shall not argue with those who are trustees or who would not wish to receive the publicity that publication of their names might entail. I therefore beg leave to withdraw the amendment because I have a more important amendment to debate later.
Amendment, by leave, withdrawn.
Lord Allen of Abbeydale Lord Allen of Abbeydale moved Amendment No. 6:
Page 3, line 27, after ("charity") insert ("having a gross income in its previous financial year which exceeds £25,000").
The noble Lord said: My Lords, as this is the first time that I have spoken today, I begin by saying that I appreciate all that the Minister and his officials have done to meet a variety of points that we raised in Committee. I do not wish to waste time as we work through the shoals of amendments later by leaping up each time to say thank you. Perhaps this may be taken as a general expression of appreciation.
I have tried to limit the amendments that I put down at this stage in the hope of shortening the proceedings. With some reluctance I decided not to pursue the point that I raised on the clause in Committee about which I remain a little unhappy. However, I must raise one point. It is the subject of the present amendment, and relates to the creation of criminal offences.
It is one thing for a big charity with paid professional staff to be put under certain obligations. I go along with anything that tells against large-scale fraud. But it is quite another to impose these criminal sanctions on small charities. Let us take an example. If I am a trustee of a small charity which decides to give £50 to help someone to buy some special bedding, and the well meaning but not very efficient lady who has been dragooned into serving as treasurer forgets to put the name and number of the charity on the cheque, then apparently I am guilty of a criminal offence. It seems to me that the burden of proof is reversed and that to establish my innocence I have to prove that I took all reasonable precautions and exercised all due diligence to avoid the commission of the offence. We have an amendment on that point later.
At Committee stage, the Government argued that it was perfectly all right because the risk of prosecution was minimal since no prosecution under the Bill could take place without the consent of the Director of Public Prosecutions. However, to my mind that makes it rather worse. I have spent quite a lot of my career trying to persuade other departments not to use the criminal law for propaganda purposes. Yet we risk creating an offence, but say, "It is quite all right because people will not be prosecuted". It seems to me much better to except small charities from those onerous provisions and to take £25,000 as the dividing line which the Government propose in another context.
It is not as though small charities would then be acting in a void if there were complaints that they were not carrying out the requirements of the section. They would still remain subject to the discipline of the Charity Commission.
One special problem has arisen in relation to small charities. Some of them put their money into building societies in the hope of obtaining a slightly better rate of interest than the banks will pay. If they make a payment, the building society does not issue a cheque book but itself makes out the cheque and sends it to the happy recipient. I wish to have it on the record that charities which follow that procedure are not regarded as being in breach of the requirement that cheques purporting to be signed on behalf of the charity carry all those requirements.
I believe that the clause makes heavy weather of the procedure for small charities. It could well act as one further discouragement to anyone contemplating becoming a trustee. I beg to move.
5.30 p.m.
Baroness Hilton of Eggardon: My Lords, it is always a pleasure to support the noble Lord, Lord Allen, and in particular to support him in this amendment about which we argued in Committee. I was encouraged by what the noble Earl, Lord Ferrers, said earlier; that trustees should be encouraged and not compelled. That appears to be relevant in relation to this amendment.
There will be a considerable burden on small charities to understand the Bill, let alone to comply with some of its detailed requirements. In doing so they should be subjected to advice and encouragement by the Charity Commissioners rather than to the full force of the criminal law. It would be a considerable burden on the criminal justice system, which already is grossly overburdened, to pursue many minor errors of failure to include all the details on the various paperwork of charities.
The level at which one might consider a charity to be small is arguable. However, it is essential to exclude small charities from the intolerable burdens of bureaucracy. Subjecting trustees to criminal proceedings in such circumstances is using a sledgehammer to crack a nut. It is not appropriate and it would act as a deterrent. I have pleasure in supporting the amendment.
Viscount Brentford: My Lords, I am not totally happy with the wording of the Bill as presently drafted. Noble Lords may have the option of choosing the amendment tabled by the noble Lord, Lord Allen, or Amendments Nos. 7 and 8 tabled by the noble and learned Lord, Lord Simon of Glaisdale. I am more attracted to those of the noble and learned Lord, Lord Simon. To my way of thinking, £24,000 is a substantial income for a charity. The responsibility for making a trustee privy to default is more relevant. Therefore, I prefer to see this amendment withdrawn and the following two amendments accepted.
Lord Congleton: My Lords, I wish to speak in support of the amendment. I had not intended to speak, but this afternoon a piece of paper slipped out of the rest of my papers. Written on it was a quotation which I noted a few weeks ago. It is by Edmund Burke and reads:
"to love the little platoon we belong to in society, is the first principle … [indeed the germ] of public affections".
The little platoon to which I am pleased to belong is a small village community in south Wiltshire where I have lived for 32 years. My experience has been of small and medium-sized charities in that county and in the whole region.
Last week I was invited to a seminar in a small village in Wiltshire. Representatives of local voluntary associations and charities active in the county had also been invited. I arrived late expecting to find between 15 and 20 people in a small room around a table. I knew that we were to hear expert advisers. To my astonishment—I should have known better—60 people were in a room clearly designed to hold only 40. I was told that 25 people had been turned away. Most of those people were concerned with small charities in the county. Others were concerned with larger charities operating in the county, but they were interested in the provisions of the Bill. We heard from them and they heard from us.
On returning home, I reflected upon what I had heard and seen at that seminar in the middle of Wiltshire. I was struck, first, by the enormous number of people present. They were interested in the provisions of the Bill which will affect them if it becomes an Act. Secondly, I was struck by the fact that I am fortunate to be a citizen of a nation in which so many people are prepared to go about doing good things on behalf of their fellow human beings with no hope of reward or personal gain. In my view, such people are to be encouraged and supported in that.
There was last week in that room in the middle of Wiltshire evidence of immense good will. When reading the amendment, I reflected that it was directed to the smaller charities. One of the messages that the meeting appeared to be throwing up was, "Please, can we have fewer bureaucratic requirements thrown at us? Please, can we have less red tape? Please, can we be absolved from some of the more onerous responsibilities which the Bill appears to be throwing in our direction as smaller charities?".
I am happy to support the amendment. I think of the little army made up of little platoons in that room in Wiltshire. It was a volunteer army, which I am told is the best kind. Its members had no hope of personal
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reward and were not seeking personal gain. I repeat that in my view such people should be encouraged and supported in their good deeds and I am happy to support the amendment.
Lord Mottistone: My Lords, I wish to support the principle of what was said by the noble Lord, Lord Congleton. However, I am worried about one provision in the amendment; I too believe that £25,000 is too high and I should like to see a lower figure. Many of the charities in Wiltshire about which we have heard will probably have an income of less than £10,000 rather than up to £25,000. Therefore, I believe that the principle of the amendment is right but that the figure is too high.
The Earl of Erroll: My Lords, I wish to comment on what constitutes a small charity. I am chairman of the Royal Caledonian Ball which holds one ball each year. We take about £50,000 in ticket sales. A little more than half that amount pays for the expenses of the ball. Therefore we raise approximately £20,000 for the Royal Caledonian schools, the Queen Victoria schools in Dunblane and a few other charities. It is a one-off event and we have one part-time secretary who is paid a tiny honorarium. The services of other people are given voluntarily. I consider that to be a small charity but the amount of money handled briefly is fairly large.
Lord Harris of Greenwich: My Lords, in following the point made by the noble Lord, Lord Mottistone, if the Minister were to say that the Government would prefer a different figure, that would be acceptable to many noble Lords. However, I agree with the central proposition put forward by the noble Lord, Lord Allen of Abbeydale. I believe that it is unnecessary to use the criminal law or the threat of it against trustees of small charities. We can argue about the precise figure, but the principle of what was said by the noble Lord, Lord Allen, was entirely right. As he correctly said, there is the discipline of the Charity Commission as a fall-back position. However, I do not regard as an answer the suggestion that no proceedings will be commenced without the authority of the Director of Public Prosecutions. I hope that the Minister will be open minded. If he objects to the figure of £25,000 but is prepared to substitute another figure, many of us would find that acceptable.
Earl Ferrers: My Lords, perhaps I may say at the outset that I am grateful to the noble Lord, Lord Allen of Abbeydale, for the kind remarks with which he prefaced his address on the amendment. I greatly appreciate them. The purpose of the new Section 4A, which will be inserted in the Charities Act 1960 by Clause 3, is to alert people who see or handle any of the documents referred to—especially those who are being asked to give money to the charity—that the documents are produced by a body which is a registered charity. Where the statement appears it will immediately inform people that details about the body can be found in the central register of charities. That is the whole ethos behind the provision. It is just as important that that fact should be made known in the case of a small charity as in the case of a large charity.

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My noble friend Lord Brentford said that he was worried about the figure of £25,000, as did the noble Lord, Lord Harris of Greenwich. My noble friend Lord Mottistone said that in Wiltshire there are many small charities. I do not know whether there are many small or large charities in Wiltshire, Hampshire or anywhere else. However, I can tell my noble friend Lord Brentford that if Amendment No. 6 were accepted, 76 per cent. of charities would be excluded from the requirement to state that they were registered charities. That is far too high a proportion. I do not believe that the requirements of the clause will be unduly onerous or costly. Sufficient time will be given before the clause is brought into force for existing stocks of various documents to be exhausted and new ones bearing the required statement to be ordered. Many charities already put that statement on most of their documents.
Lord Allen of Abbeydale: My Lords, I wonder whether there is a misunderstanding. I do not suggest that those charities should be exempt from the ethos of the clause and the requirements about giving information. I am concerned as to whether there should be the backing of criminal sanctions for the small tiddlers.
Earl Ferrers: My Lords, I understand that. Of course, when a requirement is put into a Bill, it carries some sanction. The noble Lords, Lord Allen of Abbeydale and Lord Harris of Greenwich, dismissed the fact that the Director of Public Prosecutions will be involved before any prosecution is entertained. That is to ensure that no prosecution is brought frivolously or that prosecutions are brought willy-nilly.
The noble Lord, Lord Allen of Abbeydale, said that he has spent much of his time trying not to put into Acts of Parliament laws which cannot be enforced. I say with the greatest respect to the noble Lord, Lord Allen, that that is precisely what his amendment will achieve because it merely exempts the trustee of a charity from prosecution. It is unsatisfactory to have a duty which cannot be enforced.
The noble Lord, Lord Allen, referred to building society cheques. If those cheques are made out by the building society, they are not issued by the charity and will not have to carry the charity's name. I hope that that will satisfy the noble Lord on that point.
Lord Swinfen: My Lords, Section 4A(1)(a) states:
"in all notices, advertisements and other documents issued by or on behalf of the charity".
Surely a building society cheque would be issued on behalf of the charity.
Earl Ferrers: My Lords, I do not believe that that is so because it will be issued on behalf of the building society. That is from where it emanates.
I return to the basic point made by the noble Lord, Lord Allen. I realise the anxieties expressed by the noble Lord, Lord Allen, and other noble Lords. If there are to be registered charities, then the registration should apply equally across the board whether the charities are large or small. However,
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your Lordships have expressed anxiety on this matter and I am prepared to look at it again. I cannot give an undertaking that I shall reach the conclusion which some of your Lordships would like me to reach but I shall consider the matter.
Lord Allen of Abbeydale: My Lords, I am obliged for that answer. Perhaps I may just dispose of the building society Perhaps I may just dispose of the building society point. I was concerned as to whether that would be covered by paragraph (b) rather than paragraph (a). I am content to accept the assurance given by the noble Earl which is now on the record. Therefore, that point is disposed of.
As regards the reference to the amendments tabled by my noble and learned friend, it seems to me that they deal with a somewhat different point. I rather sympathise with the amendment concerned with reversing the burden of proof, but those amendments do not meet the point which I have been trying to meet with this amendment.
I take the point that £25,000 may be too high and may exempt too many charities. However, I am left, with the whole of my Home Office upbringing, feeling extremely uneasy about creating a criminal offence but saying in the same breath that care is being taken that no one will be prosecuted in the area which we are discussing. Perhaps the Government will think again about this. I shall think about it again and we may have further discussions before the next stage of the Bill.
Earl Ferrers: My Lords, perhaps I may try to ease the anxiety of the noble Lord, Lord Allen of Abbeydale. If one exceeds the speed limit, one is guilty of a criminal offence. However, it is for the Director of Public Prosecutions to decide whether or not to proceed on such a matter. Not everyone who exceeds the speed limit is prosecuted. The purpose of inviting the Director of Public Prosecutions to take account of such matters is to ensure that only those deserving of prosecution will be prosecuted.
Lord Allen of Abbeydale: My Lords, I shall refrain from inflicting upon the House a lecture on speed limits. That is a subject on which one could speak eloquently. I take the point that there is no requirement in the road traffic Acts that prosecutions for exceeding the speed limit can be launched only by authority of the Director of Public Prosecutions.
However, I remind the House that there is another sanction of obligation on the Charity Commission so that we are not leaving this matter in a void. However, there is no point in pursuing this issue further and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.45 p.m.
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 7:
Page 3, line 30, after second ("charity") insert ("who has been responsible for or privy to such act or default").
The noble and learned Lord said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 8, 10 and 11, although Amendments Nos. 10 and 11 fall if Amendment No.

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9 is accepted. The same point arises also on Amendment No. 93A and so on in Clause 60, although they have not been grouped together.
I tabled this amendment in Committee and my first duty is to apologise to the Committee that I was not there to move this and other amendments. The reason is purely human frailty. I was concerned in two other Bills and I did not believe that I could manage parliamentary proceedings from 10 o'clock in the morning until 11.30 at night. However, I am grateful to those who moved the amendments which they thought should be discussed in Committee. In this case, the amendment was moved by the noble Lord, Lord Renton, and supported by the noble Lord, Lord Swinfen. I am grateful also to the noble Viscount, Lord Astor, who replied on that occasion on behalf of the Government. To know the views expressed makes my task very much easier.
This clause raises fairly fundamental constitutional principles and profound questions which go to the root of our system of criminal justice, as has already been indicated by my noble friend Lord Allen and the noble Viscount who spoke on that amendment.
Indeed, I pray in aid a great deal that has been said on the amendment in the name of the noble Lord, Lord Allen. The noble Earl, Lord Ferrers, indicated that he would consider further the amendment which has just been withdrawn but, in so far as he did not accept it, it reinforces the argument for the amendments to which I am speaking.
The two fundamental objections to the clause are first, that subsection (3) establishes guilt by association; and, secondly, subsection (5) reverses the normal onus of proof, as has already been pointed out by my noble friend Lord Allen and the noble Lord, Lord Harris.
With regard to subsection (3) the amendment causes the Bill, from line 30, to read,
"every charity trustee of the charity who has been responsible for or privy to such act or default shall be guilty of an offence".
Subsection (4)—the one reversing the onus of proof—is then unnecessary and the onus, by subsection (3), is restored to its normal place; namely, the prosecution. The other two amendments are drafting consequentials on the ones that I have mentioned and I shall not go into them.
When the noble Viscount, Lord Astor, replied he made three points which were also raised by the noble Earl, Lord Ferrers, in regard to the last amendment. The first is the enforcement of the new duties imposed on trustees. I profoundly agree with that but it by no means follows, as was pointed out by my noble friend and the noble Lord, Lord Harris, that the criminal law should be invoked to enforce those duties. The second argument concerned how to prove responsibility and privity; the third was to rely on subsection (4) as a means of defence.
Perhaps I may begin with the first objection; namely, imposing guilt by association. That was not covered on the last amendment. As your Lordships know well, a crime in this country is not committed merely by failure to carry out the duty imposed by law. Something additional is necessary and that is a mental element. Most frequently it is the element of intention
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but sometimes, alternatively, it is recklessness or serious negligence, or—and this is most relevant here—the definition of a crime may often contain the word "knowingly". It is because subsection (3) obviates all those mental elements, and specifically "knowingly", that it is so objectionable.
It is true that there are certain crimes which are sometimes called crimes of absolute liability where no mental element is required. A good example is the offence of selling liquor to someone under age. It is not only the barman with knowledge who is responsible, but also the owner of the public house. In essence the law says, "This is a serious social evil. You receive the profit from the bar; it is your business to see that no offence is committed. We will not accept the answer that somebody else did it without your knowledge". Obviously that fundamentally differs from this situation. Although we all want to see a duty imposed on the trustees, nobody would say that it is a serious social evil demanding strict liability nor, most importantly, do trustees receive any profit which may charge them with liability.
The second objection was that it would be difficult to prove responsibility or privity. I do not know why it would be more difficult here than in many other cases where responsibility is placed on a person charged with an offence. The instance of the criminal law that occurs to me to be most near this one occurs under the Merchant Shipping Act. It is an offence for a ship owner to allow his ship to put to sea in an unseaworthy condition, knowingly or with responsibility and certainly with privity. It has been laid down that privity in that case means either knowledge or deliberately shutting one's eyes to what is there to be seen—in another branch of the law it is called connivance. With all respect, therefore, I cannot accept that there would be any real difficulty in proving privity in that sense, or responsibility.
Subsection (4) concerns the onus of proof, and the ground was well covered on the last amendment. For good reason it is only rarely reversed in our law. It is reversed when it is a serious matter and peculiarly within the knowledge of the person charged with the offence, when in fact the circumstances raised are presumption of guilt. A common example is the charge of living on immoral earnings. Where a man is charged with that offence it is sufficient to prove that he was living with a prostitute. It is then for him to explain that he was not living on her immoral earnings.
Perhaps another case worthy of mention and which shows that the present case is in contradistinction is when a person is found in possession of stolen goods. It is then for him to explain that they were acquired innocently. The fact raises the presumption. That is under statute and the noble Lord, Lord Richard, will know it as the "Dirty Dogs Act".
It seems to me that none of the three arguments stands up to examination. We are concerned with a serious inroad upon our traditional criminal principles. I beg to move.
Lord Morris of Castle Morris: My Lords, we on these Benches are in sympathy with the amendment so lucidly and carefully set forth by the noble and learned

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Lord, Lord Simon of Glaisdale. But looking at it in the wider context of the entire Bill, in essence it is perhaps a matter of asserting a proper balance. For example, I strongly support the thrust of subsection (3) which brings home to all trustees the responsibility of their office. Indeed the last time that I rose in this Report stage was to assert the importance of those responsibilities. But the amendment seems to temper that terror with an appropriate degree of common sense. The penalty should be commensurate with the offence; the punishment should fit the crime.
For example, subsection (4) reverses the normal burden of proof, as the noble and learned Lord, Lord Simon, has said, which, although it is not unprecedented—we have had several examples in the past few weeks quoted in aid—is at least unusual and must be regarded in our law as a very powerful instrument to be used on very special occasions. To use that reversal of proof on this occasion for this purpose is rather like taking a drop-forge steam hammer to crack a rather small peanut.
For example, it would be possible for a trustee to be, say, on his lawful occasions in Australia when an order for money or goods is improperly issued on the authority of some other trustee. He would then be liable for all the penalties which are spelt out in these subsections, the wording of which is grave, solemn and sonorous:
"every charity trustee of the charity shall be guilty of an offence … all due diligence to avoid the commission of the offence".
All noble Lords who are learned in the law will know of the power of the phrase "all due diligence". Many a poor person has squirmed in our courts trying to prove that he did indeed exercise all due diligence on an appropriate occasion only to find that he was required by the law to exercise himself day and night in order to prove all due diligence. It is a little unfair that such fierce penalties should descend on people who have not done anything improper. The words in the noble and learned Lord's amendment,
"are responsible for or privy to",
get the balance about right.
6 p.m.
Lord Jenkin of Roding: My Lords, my noble friend Lord Ferrers agreed that he would look at the last amendment again. I find myself persuaded by the arguments of the noble and learned Lord, Lord Simon of Glaisdale. I raise a point with the utmost diffidence because my experience of the law was a very long time ago. I have a recollection that as part of the rules of evidence, if a fact is peculiarly within the knowledge of one particular party then the burden of proof is on him to prove that. That is the position of subsection (4). It would be very difficult for the Charity Commissioners to have to prove the degree of knowledge of a trustee.
If the offence has been committed, it is not unreasonable that it should rest on the defendant to satisfy the court that he did all that was required. As I say, I suggest that with great diffidence. The circumstances that the noble Lord, Lord Morris of Castle Morris, has described—that the trustee should
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find himself liable and would hope that the Director of Public Prosecutions would recognise that there was reason for not prosecuting—suggests a piece of legislation that I would not be happy to see on the statute book.
I ask my noble friend Lord Astor to look at this matter again and to say that it is so closely related to the previous amendment that they can be looked at together in the light of the arguments of the noble and learned Lord in moving the amendment. That might well be helpful.
Lord Beaumont of Whitley: My Lords, I agree with the noble Lord, Lord Jenkin, on the last point. The Government have not sorted out what they should be doing as regards sanctions in the obligations that they are putting into the Bill. On the one hand, they reply to the noble Baroness, Lady Faithfull, concerning her proposed new clause that it is not acceptable as it is because no sanctions apply to it. On the other hand, they are so keen to have sanctions where matters are added that they are putting in criminal sanctions which have very little place at this stage of the Bill. Of course there should be criminal sanctions for fraud, but in dealing with such matters there is no place for criminal sanctions at all. I entirely agree that the two amendments should be studied together; namely, the one currently under discussion and the one which the noble Earl has said that he will look at.
Lord Browne-Wilkinson: My Lords, perhaps I may add a word in support of my noble and learned friend's amendment. I had always understood that the criminal law exists to punish conduct which is evil and culpable. There are occasions when there is no other way of producing a sanction when absolute liability is imposed. That is in serious cases when there is no alternative. In this case I cannot see that there is any need to impose a criminal sanction suggesting culpability. The noble Lord, Lord Houghton, has already nailed the volunteers for voluntary work; this clause would seem to hammer them as well as nail them.
As I understand it, the Charity Commissioners will have powers under the Act to deal with failures to comply with the requirements of Section 4A. All that is needed, consistent with a proper constitutional approach to human liberty and freedom, is a criminal sanction when the trustee has been at fault and not an absolute liability. I ask that this issue be reconsidered as a matter of justice.
Viscount Astor: My Lords, as the noble and learned Lord, Lord Simon, said, he tabled this amendment at Committee stage and it was moved by my noble friend Lord Renton. I answered the amendment then and I shall attempt to do so again today. In doing so I hope to show my noble friend Lord Jenkin that the arguments are rather different from those attaching to the previous amendment and that there are rather different circumstances.
The new provision to be introduced by Clause 3 provides an important new duty on trustees of registered charities—that is, to ensure that certain types of document issued by or on behalf of their

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charity include a statement that the charity is so registered. That will represent a signal that the charity in question is subject to the supervision of the commissioners. It will also signal to those entering into business or legal transaction with the charity that particular legal considerations apply.
The provision in Clause 3 is important and I believe that noble Lords agree that there should be an effective sanction for non-compliance. The noble and learned Lord, Lord Simon of Glaisdale, is however concerned about the wording of the existing offence in the Bill. The noble and learned Lord's amendments would limit the commission of an offence under this clause to those trustees responsible for or privy to the act or default in question. I am not sure how the courts will be able to tell whether a particular trustee is responsible for, or indeed privy to, a default which may consist of the omission of the required statement from a particular invoice issued by the charity. It does still seem to me to present an impossible task.
It seems to me also to be right that the law should treat trustees as collectively responsible for defaults in respect of their statutory duties. In this way trustees will be encouraged to establish a regime where any document issued by the registered charity soliciting money or other property states the fact that the charity is registered. However, a defence is provided by subsection (4) in respect of a trustee who can show that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence. In this way, the new provision will not punish trustees where they have done all that they can to ensure that the law is complied with. However, that sets a higher test than that proposed by the noble and learned Lord. I believe that the test is an appropriate one.
The noble and learned Lord referred to Amendment No. 93A which is not grouped with these amendments. However, the arguments are very much the same on this amendment as they are on the later amendment. It may help the noble and learned Lord if I say that now. We believe the wording of the provision as it stands to be appropriate to achieve a wider liability under the provision as it is drafted.
Lord Richard: My Lords, before the Minister sits down perhaps he will answer one question. He used the phrase that we should make the trustees "jointly liable", or some such phrase. At any rate the concept of joint liability by all the trustees was implicit in his justification for the clause. Does not the Minister realise that we are not talking about civil liability for the trustees? We are talking about a criminal offence. Does not the Minister feel that the idea of having joint liability for a criminal offence, in circumstances in which one individual can be convicted of that offence even if he does not know anything about it, is going a little too far?
Viscount Astor: My Lords, the trustees are responsible for putting a regime in place. That is the important point and, as I said, it is something we want to encourage. I have also said that there is a defence provided by subsection (4) in respect of a trustee who can show that he took all reasonable precautions.
Lord Simon of Glaisdale: My Lords, I am most grateful to all your Lordships who have contributed to this debate. The Government must realise that the overwhelming, possibly unanimous, sense of your Lordships' House is against them on this matter. The noble Viscount did not even give a promise of reconsideration. Surely it must give the Government cause to reflect when my noble friend Lord Allen says that what is proposed is grossly against Home Office tradition. So it is.
The noble Viscount used the words "collective responsibility". That again is something one does not wish to hear in the mouth of a Home Office Minister. It is all right, I suppose, for the Nazis to wipe out the whole village of Lidice because an act of terrorism has been committed. Collective responsibility of men, women and children is not the principle of our law. In withdrawing the amendment I ask the Government to consider all that has been said in this debate. Every opinion has been against them, including the great authority of my noble friend Lord Allen that I pray in aid. I ask that there should be further consideration. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 8 not moved].
6.15 p.m.
The Deputy Speaker (Lord Skelmersdale): My Lords, in calling Amendment No. 9 I must inform the House that if it is agreed to I cannot call Amendments Nos. 10 or 11.
Lord Coleraine Lord Coleraine moved Amendment No. 9:
Page 3, leave out lines 38 to 43.
The noble Lord said: My Lords, in moving Amendment No. 9 I shall speak also to Amendment No. 94. These amendments reflect anxieties which have been expressed to me by the Law Society concerning those who advise charities, or those who advise the professional fundraisers of charities, whether they be solicitors, barristers, accountants, or other professional people who give advice for fees, or voluntarily, over long and unsociable hours. Under those provisions such people seem to run the risk of assuming criminal liability where I very much doubt that to be the intention of the Government.
I should like to make clear to the House, as I have to my noble friend, that these are purely probing amendments. I say that because I am not suggesting that the subsections referred to in the amendments should be left out. As I understand it, the clauses imposing criminality follow the sort of clauses which one finds in consumer protection Acts. Having listened to the previous two debates I am not certain that it is appropriate to apply this kind of criminality to the trustees of charities. However, I say most strongly that it is not my intention to express any such opinion in a formal way during the course of this debate.
The form used in the clauses and in the consumer protection Acts is that the organ grinder—that is to say, in this case the charity trustee, the professional fundraiser or the commercial participator—is put under a strict liability, subject to what is generally

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known as a due diligence exemption. In this case I see two classes of organ grinder's monkey: the employees of the organ grinder, with whom I am not now concerned, and the advisers of the organ grinder. They are both made liable.
The specific phrase in the clause to which my attention has been drawn, and which seems to impose the liability, is that to be found in subsection (5) of the new Section 4A which states:
"Where the commission by any person of an offence … is due to the act or default of some other person".
The words to which I refer are "act or default". What is worrying the Law Society is that people who might otherwise come forward to give advice to charities whether for fees or voluntarily, may be badly deterred by those words. They will feel that if they give the wrong advice, or if they fail to give advice, the words will catch them. The idea that solicitors or other professionals who give wrong advice, or fail to advise, should come within the purview of the criminal law is not one that immediately appeals.
I can envisage the sort of answer that one might give to my proposition. I expect to hear that the words "act or default" are often interpreted in this kind of legislation as meaning wilful or wrongful act or default. I can see that that is the case. I also expect to be told that "default" may not necessarily be equivalent to omission or failure to act. That also is the case in some of the consumer protection cases. However, I do not think it right to take the fact that it may he the law as being a good reason to put into the Bill something which will have the effect of deterring those who might otherwise come forward to give their advice.
Anyone who is connected with or knowledgeable about the position of the advice professions will be aware that over the past 20 years or more the giving of advice, whether for a fee or voluntarily, has within the law and the development of the law become rather more hazardous.
I hope that my noble friend will feel able to show sympathy for this point, which is a new one that has only recently been brought to the attention of the Law Society. Perhaps it may be possible at a later stage to bring forward, or accept, an amendment to cover the point. I beg to move.
Lord Richard: My Lords, I support the amendment. Following on from the previous debate perhaps I may say that the Government have got themselves into a tremendous muddle so far as concerns the criminal law in its application to the Bill. I am sorry that the Minister was so unforthcoming in his answer to the previous debate. It was with considerable reluctance that I heard the noble and learned Lord, Lord Simon of Glaisdale, beg leave to withdraw his amendment. For the first time since I came to the House I was tempted to shout "No". But there it is.
I find subsection (5) extremely difficult to understand in the context of the whole of the new section. I shall go through it in stages as I see it and no doubt the Minister will tell me whether I am right or wrong. As I understand it, an offence is committed if some documents are put out which do not have on
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them what they are required to have under Section 4A(1) (a). Once that has happened, prima facie, under subsection (3) every charity trustee is liable. They are liable on summary conviction and it looks as if it is an absolute offence. It is a defence for the charity trustee to show that he took all reasonable precautions and exercised all due diligence to avoid the commission of the offence. How does he do that? He does that presumably by invoking subsection (5). In many circumstances he would invoke subsection (5). He would show that the offence which has been committed was due to,
"the act or default of some other person".
That exonerates the trustee and moves responsibility on to the other person. However, it is still, as I understand it, an absolute responsibility.
Subsection (5) goes on:
"that other person shall be guilty of the offence".
The other person does not have the defence of "all reasonable precautions" and "all due diligence" which is available under subsection (4) to the trustee when the trustee is being charged under subsection (3). It seems to me that all that subsections (4) and (5) have done is to move the absoluteness of the offence away from the trustee and on to another person who may have taken all reasonable precautions and exercised all due diligence. That cannot be right. If that is the effect of the subsection—on the face of it it looks as if it is—the Government have got themselves into an almighty muddle. The Minister should take the amendment away, having regard to the opinions expressed in all parts of the House during the previous debate and in relation to this one, and look at it again.
Viscount Astor: My Lords, my noble friend Lord Coleraine has talked to officials in my department and has been kind enough to explain his concerns to them. We do not see how advice from solicitors given to trustees could render them vicariously liable for either of these offences granted their subject matter. Both clauses place clear duties on trustees, in the case of Clause 3, and professional fund raisers and commercial participators, in the case of Clause 60. If the trustee, fund raiser or commercial participator fails to meet these requirements he is guilty of an offence. If the requirements are not met because someone else has failed to carry out their instructions then that other person is guilty of the offence.
It is important to say that if one puts duties on someone one must also put in place sanctions if he does not carry out those duties. I understand my noble friend's narrower concerns. I hope—to paraphrase the noble Lord, Lord Richard—that I have been able to give a more unmuddled reply than usual to those concerns. We do not think that his worries about advice from solicitors can render them liable for these offences. We shall look again at the points that he has made but we do not think that this is a problem. I hope that what I have said will go some way to satisfying my noble friend.
Lord Jenkin of Roding: My Lords, before my noble friend sits down, is he also prepared to look at the highly persuasive point made by the noble Lord, Lord Richard, that the defence in subsection (4) would not

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apply to the other person? Even accepting my noble friend's point about solicitors, if some other person who has undertaken to do it has not done it but for good reason, that defence should be open to him. I think that the noble Lord, Lord Richard, is right. I do not think that it is under the Bill as drafted.
Viscount Astor: My Lords, as my noble friend Lord Jenkin said, we are talking about the same thing. By looking at one part of it I would be happy to look at the effect on someone else. Although I say that we will look at it, we do not think that it is a problem. However, we shall look carefully at all the points that have been made.
Lord Simon of Glaisdale: My Lords, is the noble Viscount saying that he will look at the whole clause, because that is what is required?
Viscount Astor: My Lords, I am not saying that. I am saying that we shall look at the points raised by this amendment, which is a rather narrower point than the whole clause which we discussed during the debate on the previous amendment.
Lord Coleraine: My Lords, I leave aside for the moment the wider considerations raised by the noble Lord, Lord Richard, and discussed by my noble friend Lord Jenkin and the noble and learned Lord, Lord Simon of Glaisdale. I thank my noble friend the Minister for saying that he will take away this matter and think about it further. I heard him refer to the kind of liability that I saw advisers assuming to be vicarious liability. It is no such thing. We are not talking about vicarious liability. We are talking about the case where, if a solicitor perhaps fails to give advice as to the correct insertions in notices and advertisements, the charity trustee is liable. The charity trustee perhaps says, claiming the due diligence defence, "I consulted my solicitor and was not told about this". The solicitor is then directly liable under subsection (5) of new Section 4A. A real concern is being expressed and I hope that it may be possible to meet the point in some way. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 10 and 11 not moved.]
Clause 6 [General power to institute inquiries]:
Lord Houghton of Sowerby Lord Houghton of Sowerby moved Amendment No. 12:
Page 5, line 28, at end insert:
("( ) In subsection (1) after the words "for particular purposes" there shall be inserted the words "including power to investigate any complaint made by a member of a subscription society or a donor to a society or trust which is a registered charity alleging serious negligence or misconduct, default or mismanagement of the administration of the society or trust to the detriment of the complainant or prejudicial to the interests of the charity."").
The noble Lord said: My Lords, this amendment is of fundamental importance. It seeks to extend the area of jurisdiction of the Charity Commissioners for actions of intervention or inquiry into the affairs of a particular charity. These powers have at different times undergone considerable strain because the Charity Commissioners take a strict view of what their powers of intervention are. They are dependent almost
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wholly on financial irregularity or internal conditions which may threaten the position of the charity. They are quite different from what I might describe for the purpose of this amendment as the role of an ombudsman.
This amendment amounts to an ombudsman for charities. It is not that one should necessarily be appointed but that the Charity Commissioners should have the power to appoint an investigator for particular matters. Those particular matters are within the scope of what I think would be the role of an ombudsman for the charitable field.
One of the things which is almost completely absent from the charitable industry is democracy. There is virtually no democracy in charity. If one thinks about it, it is money very often vested in the hands of trustees who may begin to make appeals to the public for the purposes for which the charity was created. Those appeals widen, support grows and more and more money goes into the charity.
I can think of several enormous charities which began in that way. No democracy, no subscriber control and no beneficiary intervention comes into operation. Sole control rests in the hands of the trustees. Under existing law they are not bound to render accounts to the Charity Commissioners, but they will be required to do so from now. Under existing law they are not bound to make an annual report to any one, not even to their subscribers, but under the new Bill they will be obliged to issue such a report. Their obligations do not go beyond supplying a copy to someone on request, whereupon a reasonable charge may be made. That leaves difficulties and disputes in charities in a very difficult and unsatisfactory position.
There are some member societies which have constitutional membership and subscriptions paid. In those charities provision is made for a structure which could be called a reasonable measure of democracy. For example, there is, first, the National Trust—and we know what difficulties beset that organisation at present over fox-hunting; secondly, there is the RSPCA which, many years ago, was almost split down the middle over fox-hunting; and, thirdly, there is the Family Planning Association which certainly was not split over fox-hunting, but which was split over another moral issue which caused a good deal of difficulty in parliamentary circles of late. I refer to the termination of pregnancies. I am not aware of any other charities of any size or importance, besides those that I mentioned, which have a so-called democratic constitution. All the rest are presumably bound by trust deeds and run by trustees.
Where does the complaints procedure come into the matter? How can you complain about a charity for either the way it has treated you or the way it is operating? The fashion in recent years has been to erect alongside almost every institution in Britain the office of a person known as an ombudsman or, stronger still, a commission which may have the rights of oversight on difficulties arising in institutions. I refer to the building societies. They have a commission. Trade unions also have a commission. Moreover, there are government departments all of

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which are in the system of the Parliamentary Commissioner, with which I was involved on its introduction.
We have an ombudsman for local authorities and there is one for the National Health Service. There are also consumer councils for former nationalised industries, such as electricity, coal, gas, telephones and public utilities. The whole of our institutional life has now produced this network of referees to deal with disputes which may arise internally within those important elements in modern societies and for which other remedies do not exist.
There are no such referees for charities. They are in a world of their own with a great deal less charity in it than one would expect. The ill-will and antagonism that charitable work creates in some areas is beyond comprehension. I can assure your Lordships of that; indeed, I have had experience of it. I have had experience of all such organisations, including trade unions, building societies, the three charities which I mentioned and others which are now in the system of ombudsmen.
There should be some remedy for those who feel that they have been ill treated by charity. There are some notable cases which appear in press articles from time to time. If one reads an article in the Independent of 16th November 1991, one can see fully publicised the difference of opinion between Miss Mary Moore and the Henry Moore Foundation. I need not enlarge upon it because the full story is told in the newspaper. I am in correspondence with Mary Moore because I happen to have been a lifelong friend of her father. Henry Moore and I joined the Army in 1916, and we were friends until he died at the age of 88. He withstood my appeal to stay alive until 90 so that we could celebrate that anniversary together.
In the organisations that have members, the question arises as to whether there is the power of expulsion, the power to refuse subscriptions or the power to refuse entry. It is pretty well established that most of those societies have the right to refuse entry and the right to refuse the renewal of subscriptions. But what about the right to expel? Here we come to the RSPCA. I am bound to mention the name because I have given the society notice that I must do so. The question of the right of expulsion without satisfactory means of appeal has created bad blood in the RSPCA for a very long time. It has involved court action—unsatisfactory means of obtaining redress in the circumstances—and there is deadlock in particular cases at present.
There is no one to consult. There is no one to suggest that the treatment of a member is contrary to a sense of justice or fairness. I want to open the door of the Charity Commissioners to intercede, if they see fit to do so, in disputes and difficulties which arise in charities which, while not of serious import to the public, have a grave effect upon the internal harmony and efficiency of the organisation involved. The amendment would give the Charity Commissioners the power—no more than that—to make appointments as regards inquiries for particular purposes. That is of great importance. We cannot leave the
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charity industry in a world of isolated activity, calling upon the public for money, and handling millions of pounds subscribed by the public, without fulfilling some obligations to those who are sustaining its activities.
The very nature of charity work, and charity composition and constitution, precludes people from intervening. There may be nothing for it but to have a row, a scandal, a court case or something of that kind. That leads to a great waste of resources. Some charities have wasted a great deal of money in the courts. In those circumstances, we must ask the Charity Commissioners to be willing to assume powers of intervention and intercession which go beyond the boundaries of their existing powers.
The amendment does not force anything upon the Charity Commissioners. It merely extends the area of their jurisdiction. If that extension of their jurisdiction is rejected, some alternative way of dealing with the problem must be found. That is why I believe that the Bill should be enlarged to give the Charity Commissioners an additional area in which to render good service to charities and to those who work in charities.
I hope that I shall receive a favourable response to my suggestion. If it is not taken up, I can assure your Lordships that it will not lie down. Some remedy will have to be found so that we cease to waste charitable money on disputations which conciliation, advice or help would probably overcome. There is nothing worse in public life than disputes which lead people on either side to take positions of no retreat. They then join battle, give the lawyers a picnic, and the courts work which drags on and on, as has happened in recent years. I beg your Lordships to give serious consideration to this proposal. The amendment can be refused only if it provides so many difficulties that the Charity Commissioners could not cope. The Charity Commissioners will have a great deal to do in times to come. I beg to move.
Lord Peyton of Yeovil: My Lords, it had not been my intention to intervene in the debate on the amendment, but I should like to take the opportunity just to remind your Lordships that this is a Bill which enjoys the general favour and support of noble Lords from all sides of the House. There are 168 amendments on the Marshalled List. We have now reached Amendment No. 12. I need say nothing beyond giving those facts to indicate the need for some expedition.
Lord Moyne: My Lords, time would be saved if the Government were to accept the amendment.
Lord Richard: My Lords, if your Lordships will forgive me, I shall not follow the mathematical speech of the noble Lord, Lord Peyton of Yeovil. I want to say just two words about the amendment. When I first read it, and then read Section 6 of the Charities Act 1960, I am bound to say that the amendment did not seem to add any extra power to the powers already available to the commissioners by virtue of the 1960 Act. It is clear that that is not only what my noble friend Lord Houghton has in mind. He is worried

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about, and it is something that should be studied and considered seriously, whether there should be some kind of independent grievance mechanism—if I can use some of the modern jargon—in relation to the charities world.
The amendment is limited to,
"a member of a subscription society or a donor";
in other words, one has to be a member or a donor before one is entitled to complain. That may be all right in terms of an amendment to Section 6 of the 1960 Act, but in terms of setting up a grievance procedure, I am not sure that that provision is comprehensive enough.
This is a major issue which, as far as I am aware, we did not debate on Second Reading or in Committee. Instead of having a major debate on this matter tonight, if the Minister undertook to come back on Third Reading—not necessarily to accept the amendment—we could have a considered discussion of the merits of my noble friend's proposal with which, I am bound to say, I have some considerable sympathy. It relates to whether there should be some kind of grievance procedure; what sort of grievance procedure it should be; to whom should it be available; who should judge the grievances; and what, if any, sanctions should be available. That might produce a healthier charities' world. If the Minister would accept that suggestion it might also produce a shorter debate.
6.45 p.m.
Lord Simon of Glaisdale: My Lords, I want to say a word about the intervention of the noble Lord, Lord Peyton, with whom, for many years, I have generally found myself in agreement. Your Lordships have a constitutional function. If legislation is not properly scrutinised by your Lordships, it will not be scrutinised at all. It is denying your Lordships' role in the Constitution that we should have a list of amendments like this on a Thursday. We embarked upon the Bill at about 3.30 p.m. We had a Statement which took half an hour, and we shall have an adjournment for an hour in order that we may refresh ourselves from the exhaustion of the Bill.
We want to see the Bill on the statute book, but we have a supervening duty to scrutinise it properly. I should have much more sympathy with the Government if they had shown the slightest resilience, and the slightest respect for the overwhelming view of your Lordships, on the clause which introduces guilt by association and the reversing of the onus of proof. It is strange to find a Home Office Minister using the language of a gauleiter in respect of collective responsibility. We have a responsibility here. We are not to be regarded as a legislative sausage machine just churning through government legislation.
Lord Harris of Greenwich: My Lords, I do not intend to become involved in the merits of the amendment, but I should like to follow the point made by the noble Lord, Lord Peyton of Yeovil. He spoke for the overwhelming majority of the Members of the House in that we want to make decent progress on the legislation. We have the central duty, which has been identified by the noble and learned Lord, Lord Simon
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of Glaisdale, not merely to accept whatever the Government may say when amendments are moved. That would not be our position.
All I would say to the Government in relation to what the noble and learned Lord, Lord Simon of Glaisdale, has just said, is that in future, when there is overwhelming feeling in all parts of the House in favour of a particular proposition, I hope that the Government will see their way to saying that they will at least reflect upon the matter before Third Reading. Otherwise, we shall spend an unnecessary amount of time discussing the Bill, and that would be injurious to the Bill.
Earl Ferrers: My Lords, the noble and learned Lord, Lord Simon of Glaisdale, said that it was the duty of your Lordships to scrutinise legislation. He is entirely right. He said that it was not the business of the House of Lords to churn out government legislation like a sausage machine. Any scrutiny of the amendments to the Bill on the Marshalled List today shows that that is precisely what your Lordships have not done. We have not been churning government legislation out like a sausage machine. We have been trying to understand the anxieties of your Lordships and meeting them wherever possible.
The noble and learned Lord suggested that my noble friend was like a gauleiter, but in my noble friend's defence I have to say that I thought that was being a little too hard because he is not a gauleiter, nor am I, and the Home Office does not consist of gauleiters.
The point made by the noble Lord, Lord Harris of Greenwich, is fair. My noble friend said that lie would consider the matters about which your Lordships are worried. What he did say—and I believe that he was quite right—is that the Government's view was that the proposed course suggested by the noble and learned Lord on previous amendments was not correct. However, of course we intend to consider what your Lordships have said and it would be a discourtesy not to do so.
My noble friend Lord Peyton suggested moving on and my noble friend Lord Moyne said, in a slightly simplistic way, that if the Government would accept the amendment, everything would be easy. However, that would not have addressed the problem which stimulated my noble friend's intervention. He was merely trying to point out that there are about 160 more amendments which we hope to cover tonight. Any expedition on the part of all noble Lords would be desirable. While it is important to legislate properly, it is also important to ensure that the legislation is passed. It would be a pity if too much undue scrutiny resulted in the legislation not being brought about.
Perhaps I may be as concise as possible. The noble Lord, Lord Houghton of Sowerby, expressed concern, but the commissioners already have power under Section 6 of the Charities Act 1960 to do what he proposes in this amendment. Under Section 6 they may,
"institute inquiries with regard to charities or a particular charity or class of charities, either generally or for particular purposes".

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They may institute such an inquiry into any charity which is not an exempt charity. The commissioners' power of inquiry could scarcely be wider than it already is and it certainly allows them to conduct inquiries in the circumstances set out in the noble Lord's amendment.
The noble Lord, Lord Richard, referred to a grievance procedure but that is going further than the amendment would require. It also goes further than the Charity Commissioners require. If an organisation is a charity, it is up to that organisation to organise its own methods of dealing with grievances at annual general meetings where it has an opportunity. If there is mismanagement or fraud, of course the commissioners can intervene. But if there is a dispute about the charity's operations and policy, without any suggestion of wrongdoing, the commissioners do not have such a power to intervene; nor do they have any locus. This could be an issue for discussion, but it goes wider than the context of the Bill.
Lord Houghton of Sowerby: My Lords, regarding business, I restrained myself during the Committee stage because I had so much to do with the preparation of the Bill. Much that I did bore fruit when the Bill was produced. The matter I now raise has been burning into my soul for a long time. I wondered whether I should let the Bill go through without voicing what I believe is a serious grievance in a growing industry of importance to the public. It is the public I am thinking of here. Although they are probably not directly involved in the grievance problem, the public are interested in being assured that societies that ask for their money and use it in ever-increasing amounts should be well run, efficient, free of corruption and trouble and that everything is conducive to the best use of their money in the interests of the purpose they support.
I wish to help. I do not know how much we can accomplish between now and 11 o'clock but the noble Earl is commendably bringing forward a great deal on behalf of the Government. I do not wish to prolong the debate on the amendment and shall not permit it. I shall withdraw the amendment for the time being since the problem has been ventilated. I have not wasted the time of your Lordships' House, if I may say so, in ventilating the problem because it is a grievous matter and gives rise to much trouble.
It is now left for conversations with the Charity Commissioners on what they believe to be within the range of the powers they already have under the 1960 Act. If they already have the powers then one might suggest that it is only gilding the lily to give them more, but I do not wish to raise such matters. I should like to see those powers used, if the commissioners have them. I know of no occasions when they have used them where matters were sufficiently serious to require their intervention.
There is now a new chairman and a new outlook in the Charity Commission, with a wider scope for its activities and judgment. I shall withdraw the amendment and ask Mr. Guthrie what he feels about the debate and what he has in mind to do about the
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issue. I could enlarge upon it ad lib and he will understand the difficulty. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 [Power of Commissioners to obtain information and documents]:
[Amendments Nos. 13 and 14 not moved.]
Clause 8 [Power to act for protection of charities]:
[Amendment No. 15 not moved.]
Clause 9 [Supplementary provisions relating to receiver and manager appointed for a charity]:
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 15A:
Page 10, leave out lines 12 to 20.
The noble and learned Lord said: My Lords, I can be brief in moving this amendment. The whole of subsection (7) of the new Section 20A (in Clause 9 on page 10) is completely unnecessary. The background to the amendment concerns the state of our statute book. In 1975 the Renton Committee on the preparation of legislation remarked on the prolixity of statutes. The statute book then ran to three volumes. Ten years later, fewer statutes ran to five volumes and that was mainly due to the increasing prolixity in the preparation of legislation. The format was then enlarged, but even with the larger format, in two years the statute book returned to five large volumes, which are expensive for consumers. It is therefore incumbent on us to make sure that we do not inflate the statute book with completely unnecessary formulae.
Subsection (6) of the proposed new Section 20A states:
"Regulations may make provision with respect to",
and so on. Subsection (7) states:
"Regulations under subsection (6) above may, in particular".
Neither of those provisions is mandatory; both are discretionary. Quite obviously a particularity is merely a particular of the generality that goes before. The Secretary of State simply does not need those words. That being so, it is our duty at any rate to shorten the statute book a little. Even the smallest relief by the tapping of merely a fluid ounce of the dropsical liquid that informs our legislation is not to be deprecated. I beg to move.
Lord Jenkin of Roding: My Lords, I concur. I need add no other words except to say that the provision in the Bill is totally otiose.
Viscount Astor: My Lords, under the new Section 20A to be inserted in the 1960 Act, the Commissioners can appoint a receiver and manager where the administration of a charity has completely broken down, or where its property is at risk. Regulations made under subsection (6) may make provision governing the appointment and removal of receivers and managers; their remuneration from the income of the charity concerned and their reports to the Commissioners.
The purpose of subsection (7) of the new Section 20A which this amendment would remove is to specify particular actions which regulations may authorise the Commissioners to take. There are three of them: to require security from a receiver and manager for the

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due discharge of his functions; to set the level of remuneration of a receiver and manager and to disallow any part of that remuneration in the circumstances specified in the regulations. I take account of what the noble and learned Lord has said. However, we feel it is important to put beyond doubt that the Commissioners may be authorised in this way to take steps which may be essential if the appointment of a receiver and manager is to achieve its purpose.
Lord Swinfen: My Lords, before my noble friend sits down, I hope I may point out that the regulations as proposed under subsection (7) (a) are covered under the regulations proposed under subsection (6) (a). Those under subsection (7) (b) and subsection (7) (c) are covered under those mentioned in subsection (6) (b). I entirely agree with the noble and learned Lord, Lord Simon of Glaisdale, that subsection (7) is totally unnecessary.
Lord Simon of Glaisdale: My Lords, I am grateful for the support of the noble Viscount and the noble Lord, Lord Jenkin. I am sorry I stigmatised the previous speech by the noble Viscount as that of a gauleiter. This time he did not reply like a gauleiter. However, he replied in the manner of a Minister, taking no account of the speech that had been advanced in favour of the amendment. It comes back to the point that has been made by the noble Viscount, Lord Brentford. If one gives a general power, that includes every particular power. Either subsection (7) goes beyond the general power—it does not—or it is unnecessary. I am afraid that point was not met. However, it would be absurd to divide the House on a point of statutory construction and I therefore shall reluctantly withdraw the amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Cavendish of Furness: My Lords, I beg to move that further consideration on Report on this Bill be now adjourned. In moving this Motion I suggest that the Report stage begins again at five minutes past eight.
Moved accordingly, and, on Question, Motion agreed to.

Social Security (Mortgage Interest Payments) Bill
Brought from the Commons; read a first time, and to be printed.

International Transport Conventions Act 1983 (Amendment) Order 1992
7.5 p.m.
Lord Brabazon of Tara Lord Brabazon of Tara rose to move, That the draft order laid before the House on 19th December be approved [8th Report from the Joint Committee.]
The noble Lord said: My Lords, the purpose of the proposed order, subject to the approval of your Lordships' House, is to amend Section 1 of the
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International Transport Conventions Act 1983, in order to take account of amendments to the convention concerning international carriage by Rail, known as COTIF, to which the United Kingdom is a signatory. The amendments are set out in Command Papers 1689 and 1690.
COTIF was signed on behalf of the United Kingdom on 9th May 1980. It brought together a number of earlier conventions dealing with various aspects of the international carriage by rail of passengers, luggage and goods. The purpose of these conventions was to create a uniform system of carriage law for international through traffic by rail.
Section 1 of the International Transport Conventions Act 1983 gave effect to COTIF—in the version published in English in Command Paper 8535—in the United Kingdom. The amendments before your Lordships tonight are the first to be promulgated since the 1983 Act. They were drawn up by a revision committee in accordance with the provisions of the convention. The UK played a full part in the revision committee and the Government fully support the amendments.
Amendments adopted by the revision committee automatically come into force for member states one year from the date of their notification to member states by the central office which administers the convention. On that basis, the amendments adopted by the revision committee in December 1989—and which are contained in Part I of the protocol reproduced in Command Paper 1690—came into force for the UK on 1st January 1990. On the same basis the amendments adopted by the revision committee in May 1990—and which are contained in Part I of the protocol reproduced in Command Paper 1689—came into force on 1st June 1991.
The amendments make detailed changes to the rules applying to the international carriage of passengers and freight. Several of them update the limits on the compensation payable by the railways in certain circumstances, such as the loss of registered luggage, to take account of inflation. Others remove references to categories of service formerly provided by some continental railways but which have ceased to exist. Many are less comprehensible to the layperson and concern the detailed and complicated procedures followed by the railways in these matters.
As I explained earlier, Section 1 of the International Transport Conventions Act 1983 gave effect in the UK to COTIF as reproduced in Command Paper 8535. It is therefore necessary to amend Section 1 to refer to the convention as it now stands, by introducing references to Command Papers 1689 and 1690.
Section 8 of the 1983 Act provides for Her Majesty the Queen to make appropriate amendments to the Act by Order in Council where the Government have agreed to a revision of the convention. Before Her Majesty can be recommended to make such an order, a draft must be laid in Parliament and be approved by a resolution of each House. I beg to move.
Moved, That the draft order laid before the House on 19th December be approved [8th Report from the Joint Committee.]—(Lord Brahazon of Tara.)
Lord Underhill: My Lords, I am certain noble Lords are pleased to have received that explanation of the order. The convention establishes rules and is an excellent example of the type of co-operation which is so essential for the regulation of the international transport of passengers, goods and other materials. As a member state of the convention, we naturally have an obligation to accept the amendments to which the noble Lord referred.
The Labour Party fully accepts the Act and the amendments to which the noble Lord has referred. I was pleased to note that undertakings have been given by both British Rail and the Northern Ireland railways that on the appropriate date they will carry into effect the amendments to which the noble Lord has referred. We hope the order will receive the full approval of noble Lords.
On Question, Motion agreed to.
Lord Cavendish of Furness: My Lords, I beg to move that the House do adjourn during pleasure until 8.5 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.10 to 8.5 p.m.]

Charities Bill [H.L.]
Consideration of amendments on Report resumed.
Clause 18 [Dormant bank accounts of charities]:
Earl Ferrers Earl Ferrers moved Amendment No. 16:
Page 18, line 2, leave out ("one that") and insert:

("(i) a transaction consisting in a payment into the account, or

(ii) a transaction which").

The noble Earl said: My Lords, I beg to move Amendment No. 16 and speak to Amendment No. 17. In Committee the noble and learned Lord, Lord Brightman, expressed concern that the powers which were given to commissioners by Clause 18 did not go far enough. This amendment addresses that concern. It will allow bank or building society managers to volunteer information to the commissioners about any charity account which has received payments into it in the last five years but which would otherwise be dormant for the purposes of Clause 18.
I should explain that this new provision is not expressed as a duty on a bank or building society or its managers because such a duty would be unenforceable. However, it will greatly assist the commissioners in their programme of local reviews of charities. In the course of such reviews the commissioners will provide lists of charities in a particular area to local banks, which will then be able to provide information on dormant bank accounts.
The amendment will not enable the commissioners to require banks and building societies to provide them with information about this wider category of account. The reason for that restriction is that the banks and building societies themselves use a definition of dormant account which is very similar to that in Clause 18(8) (a); it does not take account of payments in. If the commissioners were able to require information about this larger category of account, as they will be able to do in respect of accounts which are
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dormant within the present definition of Clause 18, it would place a much greater burden on banks. Identifying relevant accounts would necessitate substantial alteration to banks' and building societies' existing record-keeping and computer systems. This would be expensive and time-consuming and I doubt whether the likely return would justify it.
I have also considered very carefully the proposal that Clause 18 should give the commissioners power to deal with an investment which generates income paid directly into a charity's bank account. I said in Committee—and after consideration I think it is correct—that the commissioners already have a range of powers to deal with moribund charities and whatever property they may have. For example, they can appoint new trustees or make a scheme to give new life to the charity or to vest its property in another charity. As they have these existing powers, I do not think it necessary to provide parallels to them in Clause 18.
I hope that these amendments will meet the concern expressed by the noble and learned Lord, Lord Brightman.
Lord Brightman: My Lords, I am most grateful to the noble Earl for moving this amendment. It takes the place of the amendment which I moved and withdrew before the Public Bill Committee, and it meets the point which I had in mind.
Lord Morris of Castle Morris: My Lords, these Benches also welcome this amendment. We are grateful for the care and concern that the Government have given to it since the Committee stage. However, I am not entirely satisfied that I fully understand the wider implications of Amendment No. 17 which has been grouped with this amendment, especially the second paragraph of it. I should welcome any clarification of what would now be defined as a dormant account.
I have one particular instance in mind—I apologise to the House and to the noble Earl for bringing it up without having been able to give him advance notice. The reason for that is quite simple: its relevance struck me only this morning. The case is that of the Gillingham Bus Disaster Fund which, as your Lordships may recall, was a tragic event which took place on 4th December 1951. In darkness, a column of Royal Marine cadets was marching down Dock Road in Gillingham on the way to a boxing tournament. A double-decker bus ploughed into them, killing 24 and injuring others. The mayors of Gillingham, Chatham and Rochester set up a fund, whose given objects were:
"to defray the funeral expenses, to care for those who had been disabled and to assist such worthy cause or causes … as the mayors may determine".
Donations came from all over the world and several things were done. But since the boys had no dependants, the money could not be used up and there was a great deal of wrangling over it. At a High Court hearing, Mr. Justice Harman ruled that the fund was not a valid charitable trust and that the money must be returned to the donors. Thus, he started what has been described as the biggest manhunt in British legal

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history. It is said that there were something like 3,000 individual payments to the fund and the total number of subscribers was put at 250,000.
Today, that fund stands at £7,702.70, without interest. Claimants for their money back would receive interest calculated back to the year of the High Court judgment. The snag could be that, since Mr. Justice Harman ruled that the fund was not a valid charitable trust, it could be said that the Charities Bill cannot be applied to it. Morally and for all practical purposes it was a charity and present publicity for this Bill has renewed concern in all the Medway towns after all these years.
Is that a dormant account? Can it come in any way within the scope of this clause or Clause 19? I apologise again for bringing up this matter without notice. It is an important issue and this seems to be the only time that I can bring it up. I should be grateful for any clarification which the Minister can give, either now or by letter or at a later stage.
Earl Ferrers: My Lords, perhaps I can try the first two of the noble Lord's options. I shall certainly consider his point and it would probably be best to write to him in detail about it. The short answer is that it is probably not a charity but was set up for benevolent or philanthropic purposes, which excludes it from being a charity and the rigours of the Charity Commission.
The noble Lord asked what was a dormant account. A dormant account is something out of which there has been no payment for the last five years. Banks have that régime and can locate the account easily. However, where payments are made in, it is also possible to find examples of accounts which have had payments in but not payments out. The reason that the amendment is so expressed is so that the banks can readily identify dormant accounts and yet can supply to the commissioners, if they wish, the information on the accounts into which money has been paid without obviating their professional charge not to divulge information.
I hope that I have explained the position to the noble Lord but I shall write to him about the Gillingham matter.
Lord Brightman: My Lords, perhaps I may just interject briefly. I remember the Gillingham bus disaster case very well indeed. It was found not to be a charitable trust. It is not a dormant fund. It does not come within the Charities Bill at all. Mr. Justice Harman found in effect that it was not a valid trust at all. He did not consider whether it could have been validated on the basis that it was merely a mandate to pay out the money to the persons who fell within the terms of the appeal. That point was not dealt with at all. It is questionable whether the decision was correct in the light of later cases. However, it does not enter at all into the consideration of this clause.
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 17:
Page 18, line 24, at end insert:
("( ) For the purpose of determining the matters in respect of which any of the powers conferred by section 6 or 7 of the 1960 Act (power of Commissioners to institute inquiries or
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obtain information) may be exercised it shall be assumed that the Commissioners have no functions under this section in relation to accounts to which this subsection applies (with the result that, for example, a relevant institution shall not, in connection with the functions of the Commissioners under this section, be required under section 6(3) (a) of that Act to furnish any statements, or answer any questions or inquiries, with respect to any such accounts held by the institution).
This subsection applies to accounts which are dormant accounts by virtue of subsection (8) (a) above but would not be such accounts if sub-paragraph (i) of that provision were omitted.").
On Question, amendment agreed to.
8.15 p.m.
Clause 20 [Annual statements of accounts]:
The Deputy Speaker (Baroness Lockwood): My Lords, I should point out that if Amendment No. 18 is carried, I cannot call Amendment No. 19.
Earl Ferrers Earl Ferrers moved Amendment No. 18:
Page 19, line 23, leave out ("£10,000") and insert ("£25,000").
The noble Earl said: My Lords, there was a certain amount of discussion in Committee about the fall in the content of accounts and about the annual income figure which should separate those charities which are allowed to prepare simpler accounts, such as a receipt and payment account, from those which are required to produce a full income and expenditure account.
Several Members of your Lordships' Committee felt that the present dividing figure of £10,000 was too low. I was urged to increase it to £25,000. At the time I did not undertake to reconsider the matter but I thought that, in view of the concerns that had been expressed, I should nevertheless do so. After careful consideration, I have come to the conclusion that an increase in the figure from £10,000 to £25,000 is justified. The amendment therefore effects that increase. I beg to move.
Lord Ennals: My Lords, my interest in this matter is as a member of the council of the National Association of Almshouses. The amendment subsumes the much more modest amendment which stands in my name. It will be widely welcomed and I greatly appreciate the noble Earl's consideration.
Viscount Mountgarret: My Lords, as the mover of the amendment in Committee, perhaps I may say to my noble friend how grateful I am for this amendment. We had a very interesting debate in Committee and I had the impertinence to put the amendment to a Division, which was lost by one vote. I am very grateful to my noble friend for reviewing the matter. In the light of the arguments put forward he has decided to table this amendment. I am sure it will commend itself to the House.
Baroness Hilton of Eggardon: My Lords, I merely add that the amendment is warmly welcomed on this side of the House. I am grateful to the Minister for acceding to our arguments in Committee.
Lord Swinfen: My Lords, I also am grateful for the amendment. I had a similar one at Committee stage but the figure was £35,000 as opposed to £25,000. It is extremely difficult to find the right figure and I am happy with this one. I am sure that the charity finance

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directors' group, which briefed me at Committee stage and at this stage of the Bill, will also be happy. I thank the noble Earl for considering the matter.
On Question, amendment agreed to.
The Deputy Speaker: My Lords, Amendment No. 19 is pre-empted.
Lord Benson Lord Benson moved Amendment No. 20:
Page 19, line 42, leave out subsection (7) and insert:
("(7) Requirements prescribed under subsection (1) shall, where so specified, apply to a charity which is a company in addition to any accounting requirements applicable to the company under the Companies Act 1985.").
The noble Lord said: My Lords, this amendment stands in my name and the names of three other colleagues in this Chamber. It can be dealt with quite quickly. I am told that nobody knows how many charities there are in the country and that there are believed to be 171,000, of which approximately 150,000 are unincorporated, and approximately 20,000 are charities which are companies. In speaking to this amendment I speak not only on my own behalf; I represent the views of the Institute of Chartered Accountants in England and Wales, of which body I am a member, the Institute of Chartered Accountants of Scotland, the Institute of Chartered Accountants in Ireland (Ireland includes the northern Province and the Republic of Ireland), the Chartered Association of Certified Accountants, the National Council for Voluntary Organisations and the charity finance directors' group. All those bodies are in daily touch with charities. They represent the views of the charities with which they are in communication every day of the week. The troops under my temporary command are normally docile and amenable. However, on this issue they are militant and armed to the teeth with every known equipment. They are unanimously in favour of the amendment.
In the dialogue which has preceded the hearing today, the Government have made it clear that they are not prepared to budge and they do not wish to approve the amendment. It appeared as though a confrontation situation was arising. However, in the dialogue that has taken place recently it seems that some consensus may be found.
The Government have accepted the position that there must be level playing fields for charities which are companies and charities which are unincorporated. I understand that the noble Earl, Lord Ferrers, will make a statement that there is power under Section 257 of the Companies Act 1985 to make regulations which will require charities which are companies to provide the same information as will be provided by unincorporated charities under Clause 20 of the Bill. If the statement which the noble Earl is able to give is firm enough to assure us that those regulations under Section 257 of the Companies Act will be brought into play, I shall beg leave to withdraw the amendment.
It is important that the regulations made under Section 257 of the Companies Act are contemporaneous with regulations which will be made under
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Clause 20 of the Bill. If not, there will be chaos in the interregnum period and that will be damaging to everyone concerned.
Lord Harris of Greenwich: My Lords, I have put my name to the amendment. I agree with everything that the noble Lord said. I understand that we shall have a helpful statement from the noble Earl. I have a copy of the letter which he sent to the noble Lord, Lord Benson, in particular in relation to Section 257 of the Companies Act.
I hope that the noble Earl will address himself to the crucial question raised at the conclusion of the noble Lord's contribution. Will the Government take contemporaneous action with regard to any regulations which may be made under the Bill? As the noble Lord, Lord Benson, rightly said, it is essential that that should be done, otherwise there will he a high state of confusion. The Government have indicated that they are prepared to move in that direction, but we want an assurance on that specific point. I hope that the noble Earl will be in a position to give it.
Lord Swinfen: My Lords, I too have put my name to the amendment. I defer to the noble Lord, Lord Benson, on the accounting side because he has far more experience and much greater skill on that aspect.
It is extremely important that there is a level playing field for charities. Under the Companies Act charitable companies do not have to give any details as to their administrative expenses or their fund raising and public relations costs. Under the Charities Bill, charities that are not incorporated as companies have to give that information. It therefore makes it extremely difficult for the donating public to be able to judge between the work and efficiency of a charity that is unincorporated and one that is incorporated.
The charity world in general—I include incorporated and unincorporated charities—all want a level playing field. It is essential. I hope that my noble friend will be able to give a satisfactory undertaking on the point.
Lord Morris of Castle Morris: My Lords, on these Benches we support the amendment for all the reasons that have been given.
Earl Ferrers: My Lords, I have never before been more apprehensive when making an intervention in a debate than when it is held that I shall make a statement.
First, I understand the anxieties of the noble Lord, Lord Benson, because he was kind enough to come to see me, as did my noble friend Lord Swinfen. The anxiety is that the law should not allow charities which choose to become companies to report on their accounting and financial affairs in a less vigorous way than that which is required for unincorporated charities. There is nothing between the noble Lord, Lord Benson, or indeed anyone else, and me on that point. Where we differ is on how that consistency in accounting standards is to be achieved.
The amendment before your Lordships subjects charitable companies to two sets of accounting requirements—those which are contained in regulations made under the Bill; and those which are

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contained in the Companies Act—even where that double requirement serves no useful purpose. We do not believe that that is satisfactory. Some charitable companies may choose to prepare their accounts as required under the Companies Act but in a form which takes account of the statement of recommended practice (which is commonly known as SORP 2) for charity accounts. But that is quite different from being obliged to comply with the Companies Act requirements and with the requirements of the Bill, and to be subject to two sets of penalties for failure to comply.
It is possible that once the regulations which are required under the Bill have been made, they may prove to be broadly similar to those governing charitable companies. But we could not guarantee that they would always remain so. Future changes could lead to conflicting requirements and therefore to considerable extra burdens on charitable companies.
I believe that there is an alternative means of achieving our common end. It is to use existing powers in the Companies Act 1985 to create an accounting regime which could be tailored specifically to charitable companies and which would be equivalent to that for unincorporated charities.
There are already certain types of company to which the common accounting requirements of company law may not be suited, and the law recognises that. For example, banks and insurance companies prepare their accounts according to a modified regime which is provided by the Companies Act 1985 as amended by the Companies Act 1989. The Secretary of State has power under Section 257—to which the noble Lord, Lord Benson, referred—of the Companies Act 1985 to modify the accounting provisions of that Act in order to establish special accounting regimes for different classes of company. There is no reason in principle why such a modified regime could not be established for charitable purposes.
The Secretary of State will consider sympathetically any detailed proposals which may be put forward to ensure that charitable companies are subject to accounting provisions which are just as rigorous as those for unincorporated charities.
Once the regulations for unincorporated charities have been drafted, as they will have to be, we shall look carefully at the two sets of requirements to see whether a modified regime for charitable companies would then be desirable. I can assure the noble Lord, Lord Benson, that I shall be looking at that as a matter of urgency. But he will understand that that cannot be done until the regulations for unincorporated charities have been drawn. If there is found to be a need for that regime, I shall ensure that the two regimes are brought in contemporaneously. I hope that that will satisfy the noble Lord and others who are anxious. I believe that that is the best route to take.
Lord Benson: My Lords, I am grateful to the noble Earl, Lord Ferrers, for making that announcement and that concession. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.30 p.m.
Clause 21 [Annual audit or examination of charity accounts]:
Lord Allen of Abbeydale Lord Allen of Abbeydale moved Amendment No. 21:
Page 19, line 44, leave out ("(or both)").
The noble Lord said: My Lords, as this is a drafting amendment I rise to move it with diffidence. However, it is a matter on which I feel fairly strongly. Under the clause a charity is caught if its gross income exceeds £100,000, and its total expenditure exceeds £100,000. One would have thought that if both items exceeded £100,000 the charity would be caught twice over. That makes one wonder what on earth the words, tucked away as they are in brackets, actually mean.
In Committee the noble Earl explained that a charity whose income and expenditure exceeded £100,000 in the same year might argue that the audit requirements did not apply. The noble and learned Lord, Lord Brightman, promptly said that he believed that he could say on behalf of his fellow Law Lords that such a construction would stand no chance of success whatever in this House. Notwithstanding that positive opinion—I am sure that the noble and learned Lord still holds that opinion—these words remain in the Bill.
I can imagine some court sitting in the future puzzling over why the words were included and perhaps reaching the conclusion that the intention of the clause, however crudely put, was that the income and expenditure added together should equal £100,000. I believe that far from putting the matter beyond doubt, as the draftsman claims, the provision introduces a note of ambiguity. I cannot see that the words add anything. On the basis that we should not put into the statute provisions that are unnecessary I wish to see them deleted. I hope that the Government will pay attention to the points made. I beg to move.
Baroness Hilton of Eggardon: My Lords, we on these Benches agree entirely with the noble Lord, Lord Allen. The construction appears to be exactly as he stated. The provision is more misleading as it stands than it would be if the words were removed.
Earl Ferrers: My Lords, I am bound to say that I have dreaded dealing with this amendment. We dealt with it in Committee and I must agree that one needs a wet towel around one's head in order to understand it. Perhaps I can do my best to explain it to the noble Lord, Lord Allen. The Bill reads:
"Subsection (2) applies to a financial year of a charity … if the charity's gross income or total expenditure (or both),
fulfil certain conditions. The idea is that if the income is more than £100,000, or if the expenditure is more than £100,000, or if both are more than £100,000 the charity must prepare different forms of accounts. Without the words "or both" it might be construed that as both items have exceeded the limit and not just one item the charity need not be subjected to that regime.
I have taken the proposal back and considered it. I am persuaded—indeed, the parliamentary draftsman is persuaded, which is more important—that the words are desirable because they remove the

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ambiguity. I hope that I have satisfied the noble Lord, Lord Allen of Abbeydale. I can see a look of enormous satisfaction on his face and I hope that he will agree with me.
Lord Swinfen: My Lords, before my noble friend sits down I wish to ask whether it would be better English if in order to achieve the aim the final line were to read:
"if either the charity's gross income or total expenditure",
leaving out the words "or both" which appear in brackets? I believe that the way in which the Bill has been drafted is extremely convoluted.
Lord Allen of Abbeydale: My Lords, I am totally unpersuaded by the reply. The omission of the words leave no ambiguity whatever, whereas their inclusion leave open the possibility of ambiguity. However, I shall not waste the time of the House and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 22 not moved.]
Lord Allen of Abbeydale Lord Allen of Abbeydale moved Amendment No. 23:
Page 20, line 11, at end insert ("or who is eligible in accordance with regulations made by the Secretary of State.").
The noble Lord said: My Lords, the aim of the amendment is not to contest the principle of professional audit but to increase the flexibility of the regulators to decide who may carry out such audits. It appears to me that the case for the amendment is put in the 1989 White Paper rather better than I can put it. It states:
"The Commissioners would also have a power to make regulations allowing exceptions to the audit requirements where they were satisfied that adequate audit arrangements already existed. An exception could be made, for example, where there were corporate trustees such as the trust companies of the major banks, which have their own internal inspection and audit arrangements, or where one of the trustees was a local authority and the accounts were audited by an auditor appointed by the Audit Commission".
I understand that some of the audits concerning, for example, Action with Communities in Rural England are carried out by retired accountants or local authority qualified auditors. It is a pity that we should change the law so that in future they could not have such audits carried out by perfectly competent people without charge or for only a modest fee but would have to find the thousands of pounds which would be needed to carry out professional audits. I beg to move.
Viscount Astor: My Lords, I understand that there may be auditors who for some reason are not eligible to audit company accounts but who may be qualified to audit charity accounts. On the understanding that the amendment will be withdrawn I am happy to give the noble Lord, Lord Allen, an undertaking to introduce at the next stage a government amendment that has the same effect as his amendment.
Lord Allen of Abbeydale: My Lords, with that assurance I am happy to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Astor Viscount Astor moved Amendment No. 24:
Page 20, line 17, leave out from beginning to ("or") in line 18 and insert ("have the requisite ability and practical experience to carry out a competent examination of the accounts,").
The noble Viscount said: My Lords, the amendment introduces a different definition of an independent examiner. The independent examiner is the person who must examine the accounts of those charities which are not required to have their accounts audited by a professional auditor. In Committee criticism was made of the present definition in Clause 21(3). A number of noble Lords considered that it was drawn so as to require the examination to be carried out by a professional accountant or auditor. That was not our intention and my noble friend undertook to see whether the definition could be altered to remove any possibility of misunderstanding. The kind of person we are aiming at is, of course, the bank or building society manager, the local authority treasurer, the retired accountant and similar persons. I hope that your Lordships will agree that the new definition fits the bill, and I beg to move.
Lord Allen of Abbeydale: My Lords, that entirely meets the point raised in Committee. I am most grateful.
On Question, amendment agreed to.
Clause 22 [Supplementary provisions relating to audits etc.]:
Lord Benson Lord Benson moved Amendment No. 25:
Page 21, line 17, leave out sub-paragraph (iii).
The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 26, 27 and 28 because they deal with the same subject.
These are technical matters of wording and from the dialogue preceding Report stage I understand that the Government will accept the principle set out in those four amendments. However, as is the way of things, they would like to use their own wording in expressing the principle. If I have correctly stated the position as regards those four amendments, I shall ask the leave of the House to withdraw Amendment No. 25 and I shall not move Amendments Nos. 26 to 28.
Earl Ferrers: My Lords, I am aware that the mention of a "certificate" issued in relation to the audit of accounts may have alarmed members of the accounting profession. Perhaps I should explain, as I did in Committee, that it was never our intention to require an auditor or an independent examiner, to certify as to the accuracy of the accounts which he has audited. That would place an inappropriate task on him. He would simply have been certifying to the fact of having carried out the audit or examination. However, I accept that the use of this terminology has caused anxiety in some circles and may be misleading. I am pleased to say therefore that I accept the amendments in principle.
I understand that there is a small drafting change necessary to the amendments on Clause 22. Therefore, if the noble Lord will withdraw the amendment, I shall make the necessary changes at the next stage of the Bill.
Lord Benson: My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 26 not moved.]
Lord Richard Lord Richard moved Amendment No. 26A:
Page 21, leave out lines 23 to 26 and insert:
("(d) entitling such an auditor or independent examiner to require, in the case of a charity, information and explanations from past or present charity trustees or trustees for the charity, or from past or present officers, auditors or independent examiners or employees of the charity;").
The noble Lord said: My Lords, this is a modest amendment to add a provision to paragraph (d) of Clause 22(1). At present that states that:
"The Secretary of State may by regulations make provision … entitling … an auditor or an independent examiner to require … information and explanations from past or present charity trustees or trustees for the charity, or from past or present officers or employees of the charity".
It has been put to me that in the course of his work an independent examiner may need to request information from a past, or indeed present, independent examiner. The clause needs to be amended to incorporate that entitlement.
It may be that the income of a charity may increase or decrease. Accordingly, it is possible to progress from an independent examination to an audit and vice versa. Therefore, provision should be made for an auditor to request information from a previous independent examiner. I beg to move.
Lord Morris of Castle Morris: My Lords, I only wish to add that we could envisage that there may be situations in which an auditor does not enjoy a wholly constructive relationship with the charity's trustees who, we accept, should be the primary source of his information. It would be helpful for an auditor of that kind to have a statutory right to ask for information from past auditors or examiners. By adding the words "auditors or independent examiners" to this subsection, we are striving to do no more than to add to the belt and braces with which he is already equipped, a piece of rope just in case.
8.45 p.m.
Earl Ferrers: My Lords, obviously, we want auditors or independent examiners to have access to as wide a range of information as possible about the charity which is being audited or examined. I do not believe that the inclusion of past auditors or examiners in the list of people set out in Clause 22(1) (d) is right.
The duties of an auditor or an examiner relate to the accounts for the year which he is auditing or examining. He should obtain information and clarification about those accounts from the charity trustees either directly or via the employees. They áre responsible for the accounts and the accounting records. They should answer the questions. The auditor or examiner is not entitled, when looking at the accounts which are being audited or examined, to look behind previous years' accounts. Those earlier accounts are not his responsibility unless he has audited them also.
However, if the auditor or examiner cannot obtain proper answers from the trustees, he should report the
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matter to the Charity Commissioners. Their information-gathering powers enable them to obtain any information in relation to a charity, other than an exempt charity, from any person who may have relevant information. Therefore, it would be not be right for the Bill to include past auditors.
Lord Richard: My Lords, I hear the noble Earl's explanation and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 23 [Annual reports]:
[Amendments Nos. 27 and 28 not moved.]
Clause 24 [Special provisions as respects accounts and annual reports of exempt and other excepted charities]:
Lord Harris of Greenwich Lord Harris of Greenwich moved Amendment No. 28A:
Leave out Clause 24 and insert:
("Special provision as respects accounts of exempt and other excepted charities
. Nothing in sections 19 to 23 applies to any exempt charity or any charity excepted by section 4(4) of the 1960 Act (charities not required to be registered); but section 32(1) and (2) of the 1960 Act (general obligations to keep accounts) shall continue to apply to any such charity.").
The noble Lord said: My Lords, we spent some time on this issue in Committee. On many of the issues which we debated on that occasion I understood the Government's position even when I did not agree with it. However, on this matter I found it quite difficult wholly to understand the line which they took.
The purpose of the amendment is to deal with the smallest charities which exist; that is, charities with perhaps an annual income of £300, £400 or £500 per year up to a maximum of £1,000. The amendment is designed to remove the obligation on those exceptionally small charities with an income of less than £1,000 per year, first, to keep accounting records in accordance with Clause 19; secondly, to produce an annual statement of accounts in accordance with Clause 20; thirdly, to have an annual audit or examination in accordance with Clause 21; and fourthly, to prepare an annual report in accordance with Clause 23. In other words, the purpose of the amendment is to leave those exceptionally small charities under the present and far lighter regime of the Charities Act 1960.
The arguments in favour of the amendment are self evident. First, the bureaucratic implications of the Bill as it stands are truly remarkable. As I have indicated, we are talking about thousands of charities with perhaps a total income per year of £200, £300 or £400. Why do we require this massive bureaucratic regime to be imposed upon them?
There is already widespread anxiety about the obligations on trustees of charities and there may be some reluctance—I do not wish to overstate the matter—by people to volunteer. That would be greatly exacerbated if the smallest charities, of the kind which I have described, were brought within the new regulatory framework.
Furthermore, small charities with an income of less than £1,000 per year which have registered voluntarily will not be able to comply. I take one example. That

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will affect a large number of branches of the Women's Institute. What conceivable public advantage can there be in imposing requirements of that sort on small branches of the Women's Institute, particularly when, if there is not compliance, criminal sanctions would apply for a breach of the Act.
Lastly, and perhaps most important of all, what will happen when those thousands of returns begin to arrive at the Charity Commission? Who will read them? Will officials be given the responsibility of carefully analysing the returns of a small branch of the Women's Institute in the North-East of England or wherever it may be? As we are well aware, the problem is that the Charity Commission has been scandalously under-resourced for a substantial period of time. The noble Earl will no doubt say, as he said in Committee, that the Government have increased the resources available by a substantial amount. That is true. But that is in the context of a situation where major new responsibilities are being imposed on the Charity Commission.
In my view, the consequence of allowing the Bill to remain in its present form is that those thousands of returns will have to be submitted, with the consequent risk in regard to the trustees of a breach of the criminal law if they fail to do so. There will be no machinery within the Charity Commission to analyse the returns.
The amendment would represent a substantial improvement in the Bill. I hope that the noble Earl, notwithstanding the position he took in Committee, will see the advantage of proceeding in this way. We all want a satisfactory regime for large charities. The question here is different. It is whether we insist on the same regime for charities with a minuscule annual income. That is why I tabled the amendment. I beg to move.
Lord Richard: My Lords, I share the bewilderment of the noble Lord, Lord Harris of Greenwich, in regard to the Government's attitude to the amendment. When one looks at Section 4 of the 1960 Act one sees that subsection (4) says,
"The following charities are not required to be registered, that is to say—

(a) … exempt charity;

(b) any charity which is excepted by order or regulations;

(c) any charity having neither any permanent endowment … nor the use and occupation of any land",

and whose income does not exceed in aggregate more than £1,000 a year. The Government have already accepted that charities with an income of less than £1,000 a year are in a separate category and are to be classed with exempt charities. We see in Clause 24 of the Bill that exempt charities are indeed relieved from the obligations in Clauses 19 to 23 but those whose income does not in aggregate amount to more than £1,000 a year are not relieved. For the life of me I cannot see why not. It is absurd that there should be erected this enormous bureaucratic edifice in relation to charities whose income in some cases will be minuscule.
Perhaps I may add an additional point to those made by the noble Lord, Lord Harris. If the Government have their way, small charities—those with an income of under £1,000 a year—will have to
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pay for the privilege of filing returns which, as far as I can see, will be put into a cupboard, if one large enough can be found, to gather dust. Not only does that seem to be an imposition but it is verging on impudence.
I hope that the noble Earl will say that it is an issue he will reconsider. Logic and common sense are on the side of the amendment and I am happy to support it.
Lord Moyne: My Lords, I simplistically support the amendment but only with the practical knowledge of a small trust for a scouts' hall in the local village of which I am, whether I like it or not, a trustee because I own the house. With me as a trustee is the chairman of the parish council and the rector, who is kind enough to act as secretary. We have a few investments bringing in a few hundred pounds—under £1,000. It would be absurd for any complication to rest on us and our poor rector as a result of the Bill.
Earl Ferrers: My Lords, Clause 24 does three things. Exempt charities which are not within the commissioner's jurisdiction but are subject to other, often statutory, regimes are relieved of the accounting requirements provided by the Bill. Excepted charities, which are not registered voluntarily, are relieved of the duty to prepare an annual report and submit it to the commissioners, but they are subject to the rest of the accounting regime. Excepted charities which have chosen to register must prepare and submit an annual report and they are also subject to the rest of the accounting regime. The amendment would have the same effect as regards exempt charities but it would relieve excepted charities, whether or not they have chosen to register, from all the duties of the accounting and reporting regime.
The purpose of this part of the Bill is to ensure that there is an adequate accounting regime for all charities and one which is appropriate to their circumstances. Exempt charities are outside the jurisdiction of the commissioners and have their own, usually statutory, framework for their supervision. Excepted charities are subject to the commissioners' jurisdiction. The only difference between them and other charities is that they do not need to register. It is right that they should keep detailed accounting records, prepare annual accounts, comply with the requirements as to the form and content of those accounts and be subject to audit or independent examination. If an excepted charity is not registered, there is no reason for the commissioners to receive an annual report or accounts. Excepted charities which are not registered are therefore relieved of that requirement unless the commissioners so request.
That is the philosophy behind the clause. I understand the anxiety expressed by the noble Lords, Lord Harris and Lord Richard, about charities which have an income of less than £1,000 a year. We are willing to look at the matter again. If an excepted charity chooses to register, then in my view it should do what other registered charities do and report to the commissioners. If it does not opt for registration then perhaps that is a different matter. I shall certainly reconsider the point to see whether we can meet the anxiety expressed.
Lord Harris of Greenwich: My Lords, I am grateful to the noble Earl. That is most satisfactory. I believe he recognises that there is anxiety in many parts of the House over the point. Apart from anything else, given the many new major responsibilities which will be picked up by the Charity Commission, it is desirable to remove from them a wholly unnecessary burden of work. I welcome the noble Earl's reply. If he would like informal discussions between now and Third Reading I am sure—I was going to say "my noble friend" Lord Richard, but that may place us in difficulty—the noble Lord, Lord Richard, and myself will be glad to meet the noble Earl to discuss the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 29 [Divestment of charity property held by official custodian for charities]:
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 28B:
Page 25, leave out lines 18 to 33.
The noble and learned Lord said: My Lords, if your Lordships look at page 25 it will be seen that this is a point we have covered before and I can therefore deal with it shortly.
If one says that such-and-such a body may direct X and Y and then go on to say, "without prejudice to the generality of what has gone before", the same body may, I repeat, direct A, B and C. Then it must follow that the particularity falls within the generality. It is unnecessary to set out the particularity here running to 16 lines. In this Bill I believe that runs to several pages and in the statute book the formula runs to dozens of pages.
I do not expect the noble Viscount to believe me because I said, although in the Pickwickian sense, that he had been speaking in the tones of a gauleiter ordering the destruction of Lidice. He was told the same thing by the noble Viscount, Lord Brentford, and by the noble Lord, Lord Jenkin of Roding. Therefore, I emphasise that what I have said really must follow. I beg to move.
9 p.m.
Viscount Astor: My Lords, here we are again on a similar amendment to one that was dealt with before. Although my noble friends Lord Brentford and Lord Jenkin may have seemed to agree with the noble and learned Lord, luckily for me they did not use quite the same terms as he did. As I said before concerning an earlier amendment, the list of what directions may be included by the commissioners under this clause is not exhaustive; it is not the point to make it exhaustive. The noble and learned Lord may well consider that it is unnecessary to amplify the general power to give directions by the inclusion of such specific examples.
I do not agree. It is important to put beyond doubt that the commissioners may authorise the Official Custodian for Charities in this way to take steps which will be essential to the orderly and efficient divestment of charity property held by him. I hope that I have addressed the point made by the noble and learned Lord, as indeed I hope that I have addressed the point made by him on an earlier occasion. I suspect that he
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is not going to agree with me. I say again that it is not our intention to clutter up the Bill with unnecessary lines. However, we thought it important to spell out what the directions are. As I have said before, the list is not exhaustive.
Lord Simon of Glaisdale: My Lords, it is quite obvious that we are going to go on inflating the statute book. On a previous occasion, but not on this point, I mentioned Lidice. On this occasion another military situation comes to mind. Oliver Stanley once described Glenville Hall as showing that indomitable courage in defence of an indefensible situation that has led to some of the most glorious disasters in the history of the British Army. The dear shades of Glenville Hall have come to inform the noble Viscount. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 30 [Provisions supplementary to s.29]:
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 28C:
Page 26, line 22, leave out ("the appropriate part of that amount") and insert ("such part of that amount as they may specify.").
The noble and learned Lord said: My Lords, this is a different point, but a very short one. It concerns a question of drafting. The amendment is to make paragraph (b) read:
"to pay such part of that amount as they may specify to each of two or more other charities so specified".
That is shorter and, as far as I can see, it means exactly the same thing. I beg to move.
Viscount Astor: My Lords, the noble and learned Lord, Lord Simon of Glaisdale, has suggested that the Bill as drafted can be simplified by the amendments that he has moved. Clause 29(8) (a) and (b) is drafted in such a way as to make it clear that the commissioners' direction may specify both the charities to benefit and the amount each charity is to receive. The wording also makes it clear that the amount to be distributed under the direction need not be divided in equal shares between the charities concerned.
In making directions under this provision the commissioners will have regard to the purposes of the dormant charities and the purposes of the recipient charities. In some circumstances it may not be appropriate for each recipient charity to receive the same amount. The wording of the noble and learned Lord's first amendment does not make entirely clear that the commissioners may give each of the charities mentioned in paragraphs (a) and (b) a different proportion of the total amount.
Nevertheless, I accept that the subsection may be simplified. I am prepared to take the matter away and tidy up the drafting before the next stage of the Bill. I hope that that will show the noble and learned Lord that I can be easily persuaded by reasonable argument. Therefore, I hope that the noble and learned Lord will withdraw the amendment. We shall bring one forward at the next stage.
Lord Simon of Glaisdale: My Lords, I did not quite catch what the noble Viscount said. Did he say that he accepted the amendment in principle and that he would himself bring forward an amendment?
Viscount Astor: My Lords, I apologise to the noble and learned Lord; I did indeed say that.
Lord Simon of Glaisdale: My Lords, I agree that the drafting makes clear exactly what the noble Viscount said and so does my draft. It achieves exactly the same object and effect but much more shortly. The noble Viscount said that the draft I put forward does not make clear that the commissioners may distribute in unequal shares.
Lord Stanley of Alderley: My Lords, will the noble and learned Lord give way? My noble friend on the Front Bench has accepted your amendment in principle.
Lord Simon of Glaisdale: My Lords, I am very much obliged to the noble Lord. I apologise to the noble Viscount for my deafness. I am very much obliged for his response. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 28D not moved.]
Clause 32 [Restrictions on dispositions of charity land]:
Earl Ferrers Earl Ferrers moved Amendment No. 29:
Page 29, line 37, after ("(3)") insert ("or (4A)").
The noble Earl said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 30 and 34. In Committee there was some anxiety that the regime which was imposed by Clause 32 on trustees for disposals of charity land should be more flexible in the case of short leases. I accepted then that the arguments in favour of relaxing the regime to short leases were strong. I have no wish either to be inflexible or to saddle trustees with undue and burdensome requirements which are simply not justified by transactions at hand. These amendments therefore introduce a less strict regime for those kinds of leases.
On the other hand, we need to ensure that trustees act responsibly in the administration of their trust. Therefore, their duty to get the best rent available on the grant of a lease is properly reflected in these new provisions which will replace Section 29 of the Charities Act 1960. For leases of seven years or less these amendments will allow trustees to take advice more appropriate to the transaction concerned from someone who need not be a qualified surveyor but who they reasonably consider has the appropriate expertise to give them advice before deciding whether the terms are the best available. Such advice need not be in the form of a written report.
We have had to settle on a length of lease to which a less strict regime will apply. I have suggested seven years. Any longer period will attract the need for advice from a qualified surveyor and the need to advertise if so advised. Leases of charity land range enormously in their variety. They may be very simple, such as an occasional letting, or a temporary letting
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for residential purposes to a very complex building lease. Leases of quite short duration may also attract statutory security of tenure which may endure for a period well beyond that which was originally granted. The term of a lease may therefore not necessarily be a good guide to the quality of the advice which is required in a given case.
I consider seven years to be about right, taking all these factors into account. A lease of more than seven years represents a disposition of a substantial interest in a charity's property which would continue to attract the stricter regime. I beg to move.
Baroness Mallalieu: My Lords, we on these Benches welcome the concession that these amendments represent. In the spirit of brevity which is now prevailing I shall say no more.
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 30:
Page 29, line 39, leave out ("Those requirements are that") and insert ("Except where the proposed disposition is the granting of such a lease as is mentioned in subsection (4A),").
The noble Earl said: My Lords, I beg to move.
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 31:
Page 29, line 48, at end insert ("and").
The noble Earl said: My Lords, in moving Amendment No. 31 I shall speak also to Amendments Nos. 33 and 35.
In Committee some concern was expressed that charities with large bodies of trustees, who may meet infrequently and may also carry out large numbers of property transactions in a year, might have difficulties in complying with the requirement in subsection (3) (d) of Clause 32 for a disposition to be approved in advance by a duly constituted meeting of the trustees.
I can see the weight of that argument. I have no doubt that it is right that trustees must have the final responsibility for approving the terms of any sale and in seeing that the new statutory requirements have been complied with. But this need not be at a meeting of the trustees. The governing instrument of the charity may contain powers to delegate certain functions of the trustees to a committee of their number. We see no reason why the trustees should not set the policy for disposals and then delegate decisions in this area to a committee of their number who would report back to the trustee body at regular intervals.
I see no difficulty in removing the requirement in subsection (3) (d), and this amendment does that. I beg to move.
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 32:
Page 30, line 2, leave out ("of the proposed agreement") and insert ("on which the disposition is proposed to be made").
The noble Earl said: My Lords, the noble Lord, Lord Allen of Abbeydale, questioned during the Committee stage whether the provisions of Clause 32 are intended to cover sales by auction. My noble friend Lord Swinfen asked whether it covered sales by tender. The answer to both those questions is in the affirmative.
My amendment to Clause 32(3) (c) is designed to put this beyond doubt. In practice it will allow trustees or a sub-committee of the trustees under delegated powers, when selling by auction or tender, to set a reserve selling price on the property which is to be sold. I beg to move.
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 33:
Page 30, line 3, leave out from ("charity") to end of line 5.
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 34:
Page 30, line 18, at end insert:
("(4A) Where the proposed disposition is the granting of a lease for a term ending not more than seven years after it is granted (other than one granted wholly or partly in consideration of a fine), the charity trustees must, before entering into an agreement for the lease—

(a) obtain and consider the advice on the proposed disposition of a person who is reasonably believed by the trustees to have the requisite ability and practical experience to provide them with competent advice on the proposed disposition; and

(b) decide that they are satisfied, having considered that person's advice, that the terms on which the disposition is proposed to be made are the best that can reasonably be obtained for the charity.").

The noble Earl said: My Lords, I beg to move.
The Lord Bishop of Newcastle: My Lords, I should like to thank the noble Earl for his action on these matters. This amendment is related to an amendment proposed in Committee by the right reverend Prelate the Bishop of Worcester concerning short leases. I am certain that the new clause before us now and that which we shall consider in a few moments will be of real practical benefit to Church trustees and to others besides. I thank the noble Earl for his kind assistance in these matters.
Earl Ferrers: My Lords, I am grateful to the right reverend Prelate.
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 35:
Page 30, line 19, leave out subsection (5).
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 36:
Page 30, line 35, after ("if") insert:
("(a)").
The noble Earl said: My Lords, in moving this amendment I shall speak also to Amendment No. 37. In Committee, in response to an amendment moved by the right reverend Prelate the Bishop of Worcester, I agreed to look at whether we could mitigate the provisions of subsection (6) of Clause 32 in the case of short temporary lettings by trustees. That provision requires public notice of a disposal of charity land which is held under its trusts subject to some specie use. I have considered this suggestion carefully and I have concluded that the balance of the argument is in favour of disapplying the requirements of subsection (6) in the case of short leases of less than two years. This amendment therefore excludes leases of up to two years from the effect of subsection (6).
The principle that public notice should be given in these cases is a right one and trustees should be
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required to consider representations if made. However, I do see that where such property is only temporarily vacant pending the appointment, say, of a new beneficiary or for some other reason, to insist on the rigour of public notice could be counterproductive. I beg to move.
On Question, amendment agreed to.
9.15 p.m.
Earl Ferrers Earl Ferrers moved Amendment No. 37:
Page 30, line 37, at end insert ("; or
(b) the disposition is the granting of a lease for a term ending not more than two years after it is granted (other than one granted wholly or partly in consideration of a fine).").
On Question, amendment agreed to.
Lord Chorley Lord Chorley moved Amendment No. 37A:
Page 30, line 37, at end insert ("; or
(bb) the Charity Commissioners are satisfied, on the application of any charity, that it is requisite that public notice should not be given to such dispositions of land by that charity as may be specified in an order made by the Commissioners and such an order may:

(i) include such conditions as the Commissioners think fit;

(ii) be expressed to have effect without limit of time, or for a specified period only;

(iii) be revoked or varied by a further order.").

The noble Lord said: My Lords, the purpose of this amendment is to provide a mechanism for dealing with an unreasonable and unnecessary burden that Clause 32(6) will impose on certain types of large property-owning charities, but without destroying the purpose of the subsection.
I have particularly in mind the case of the National Trust. As its chairman, I therefore have an immediate interest to declare even though it is of a distinctly non-pecuniary nature. At this stage I should like to thank the noble Earl and his officials who have helped us at earlier stages of the Bill on a number of points. However, there remains this one issue which I hope we are on the way to resolving. It would appear that not only the National Trust is concerned about Clause 32(6); the Royal Society for the Protection of Birds would also be adversely affected.
The problems so far as concerns the National Trust can be put quite simply. The statutory objects of the trust are to own and manage property for conservation. The great bulk of that property is held inalienably; that is to say, it may never be sold. In this respect the National Trust and the National Trust for Scotland are unique in this Bill. The trust is now a very large landowner and I feel that I should give some figures to demonstrate the problem. We own, for example, more than 6,000 inalienable cottages; we have more than 1,200 farm tenancies and there are wayleaves, easements and so forth. Altogether we estimate that we have about 10,000 separate let properties that would be affected by subsection (6). Properties are let for relatively short terms—the cottages, typically, for eight years.
What all this means is that we are dealing with up to 1,000 dispositions, to use the phrase, a year. In other words, we would be required to issue about 1,000 public notices every year. That would involve heavy expenditure in advertising, in staff time, which

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is expensive, and in management delay. And one is bound to ask: to what end? These are matters—I emphasise this—of routine property management in almost all cases of modest size; for example, cottage lease renewals. I find it hard to believe that advertising would serve in this respect any useful purpose.
I submit that the requirement is unreasonable and surely not what was intended when drafting this part of the Bill. Its administration would be onerous and, perhaps more to the point, would divert resources from our proper charitable objects. I repeat, all that is in respect of inalienable property which is property which cannot be sold in any event.
I do not seek to challenge the principle of subsection (6), nor am I seeking special treatment. I am concerned that this degree of detail—and subsection (6) is only one example—in primary legislation is a rather awkward strait-jacket. It prevents the evolution of regulation according to changing circumstances and social attitudes. After all, it may be another 30 years before we have another Charities Bill.
I suggest that my amendment will help to introduce a modest degree of flexibility on one particular but vexatious point. On application by a charity, it would allow the Charity Commissioners to exercise a discretion to modify subsection (6) on whatever terms and conditions they see fit to impose. Nor, so far as I can see, is the amendment breaking new ground. All it does is to echo the provisions of the Bill, in much the same wording, regarding public collections where Clause 72 gives similar discretionary powers to the Charity Commissioners. That is, I submit, a proper function of a regulatory body. I beg to move.
Baroness Mallalieu: My Lords, we on these Benches support the amendment of the noble Lord, Lord Chorley. It seems that impracticability and expense are the unwanted side-effects of Clause 32(6). In light of the detailed argument put forward, I hope that the noble Earl will feel able to reconsider the matter and allow a degree of flexibility.
Earl Ferrers: My Lords, I am grateful to the noble Baroness, Lady Mallalieu, for putting forward that point. I shall certainly consider what she said. I shall also consider the remarks made by the noble Lord, Lord Chorley. However, I should like, first, to congratulate the noble Baroness on her position on the Front Bench. I believe that this is the first occasion upon which she has spoken from the Dispatch Box. Her reputation has gone in advance of her. We know of her great expertise in the legal sphere. All I can say is that I am even more alarmed at finding her with the noble Lord, Lord Richard, than I was when it was just the noble Lord on his own; and, indeed, that was a frightening enough experience for any one person. Nevertheless, we are delighted to see the noble Baroness operating from the Dispatch Box.
Perhaps I may just explain the point behind subsection (6) of Clause 32. It provides additional requirements to be undertaken by charity trustees in disposing of land held in specie; that is, on trusts which specify the purposes for which the land must be used
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within the overall objects of the charity. Such land is often central to the existence of the charity and the disposition could therefore radically alter the nature of the charity and its ability to provide continuing benefits.
It is right that trustees should be subject to additional safeguards to ensure that the charity's property is not disposed of in an improper way. That is what subsection (6) sets out to do by ensuring that trustees give public notice of their intention to dispose of the property in question, and so on.
I understand the concerns expressed by the noble Lord, Lord Chorley. However, I can tell him that we have no wish to create an additional safeguard in Clause 32(6) to smother legitimate property management by charity trustees in red tape. The noble Lord was kind enough to forewarn me some two days ago of this amendment; indeed, we talked about it. However, I hope that he will understand that in the time available I have been unable to give full consideration to his concern. Nevertheless, it is a matter of importance and I shall see that the matter is addressed before the next stage of the Bill.
Lord Chorley: My Lords, I thank the noble Earl for his reply. I certainly accept at least the spirit of subsection (6) and the argument about land in specie. I should also apologise for not being able to converse with him earlier on the matter. However, that was not entirely my fault.
If it is thought necessary for good administration to sort the wheat from the chaff, I cannot believe that it is beyond the wit of the Minister's draftsman to find a formula. Various possibilities spring to mind. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Ferrers Earl Ferrers moved Amendment No. 38:
Page 31, line 2, at end insert ("; or
(c) to the granting, by or on behalf of a charity and in accordance with its trusts, of a lease to any beneficiary under those trusts where the lease—

(i) is granted otherwise than for the best rent that can reasonably be obtained; and

(ii) is intended to enable the demised premises to be occupied for the purposes, or any particular purposes, of the charity.").

The noble Earl said: My Lords, I shall speak also to Amendments Nos. 40 and 41. The amendments will exclude from the provisions of Clause 32 leases of property to beneficiaries of a charity for occupation under its trusts. They address concerns raised by your Lordships in Committee and by a number of charities which provide subsidised accommodation for their beneficiaries.
I undertook to consider those representations.
A number of charities have trusts which provide for leases to be granted to beneficiaries who occupy charity property in furtherance of its objects. Such charities may provide charitable relief housing for the poor or others disadvantaged in society. Very often such leases are for less than a market rent.
It would be entirely inappropriate for the provisions of Clause 32 to apply to those cases. The clause is designed to ensure that the trustees obtain the

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best price when disposing of charity property. Where the lease is to a beneficiary of the charity, that criterion clearly should not apply. I beg to move.
Lord Moyne: My Lords, I hope that I may again be forgiven for asking a simplistic question, but as a trustee of a large charitable housing trust whose duty it is to provide houses for people on low incomes at the lowest possible rents and which has to walk on the knife edge between secure rents and assured rents, the situation can often be complicated because by trying to provide houses at low rents we may have to go below market prices. The wording of the provision fills me with alarm, although in its context it may not mean what I believe it to mean.
Earl Ferrers: My Lords, the wording should not fill my noble friend with alarm. The amendment would allow the beneficiary of a trust to pay a rent which is lower than the market rent.
On Question, amendment agreed to.
Viscount Mountgarret Viscount Mountgarret moved Amendment No. 39:
Page 31, line 8, at end insert:
("( ) Nothing in this section shall permit the sale, lease or other disposal without an order of the court or of the Commissioners of any land and buildings held in trust for use as and for almshouses unless such land and buildings are held by or in trust for a charity which is a registered housing association.").
The noble Viscount said: My Lords, I turn now to the question of the disposal of land in relation to almshouse charities. I should like to speak also to Amendment No. 42. I agree in principle with Clause 32 as it stands in relation to charities as a whole, but almshouses are in a rather special category. Their assets—their sites, buildings and so forth—could on paper be extremely valuable, but the income derived therefrom is probably small by virtue of the fact that their endowment is probably not as great in real terms today as the originator intended.
Secondly, the retired people who live in the almshouses are not called upon to contribute as much in weekly maintenance as they might otherwise do because they would be caused financial hardship. The result is that the trustees of such charities find themselves in a difficulty because they have valuable assets but little income with which to maintain the buildings.
There are some trustees who have known, lived, loved and worked among almshouses and for whom they are their raison d'être. However, one can foresee a possibility that in the future trustees who are there by definition under the deed of trust or who are appointed ex officio have little connection with the place. They may say, "We would be doing ourselves a great service if we were to dispose of our buildings and our assets. We will collect a large capital sum and generate an enormous amount of income which we can distribute among the poor and needy". It all sounds right and proper in some ways and people would benefit financially.
Nevertheless, I suspect that many residents of almshouse charities would far rather have a secure roof over their heads and pass the remainder of their days in the area where they were brought up and
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which they have known all their lives than find that there is a risk of having to move elsewhere. They may have to live in what to them would be a rather impersonal building and they would merely benefit to the tune of filthy lucre which would supplement their existence.
I believe it would be good if the Charity Commissioners were not only empowered but were directed under the Bill to keep a watching brief over the actions of trustees who might wish to sell or put up for mortgage—which is one stage before selling—property in relation to almshouse charities. There is no great onus; the trustees have a duty and within the law they can do all kinds of things. Nonetheless, it would be helpful if the provision could be continued, under the system that exists at the moment, where the Charity Commissioners need to keep a watching brief and need to give their approval to such proposals. I beg to move.
9.30 p.m.
Lord Ennals: My Lords, I wish to add a few words to the cogent arguments put forward by the noble Viscount, Lord Mountgarret. When looking just at almshouses, the first point to take into consideration is that the residents are especially vulnerable because of their age and financial circumstances. Secondly, almshouses provide independent homes, usually for life or until a resident goes into a nursing home, hospital or some other place.
The amendment seeks to provide a degree of security on which the almshouse resident can rely. It is an essential feature that the residents do not have security of tenure and therefore the sale of a building or the acquiring of a mortgage, with which the second amendment deals and which inevitably involves the risk of a sale, is threatening to the security of almshouse residents. It is from the point of view of the residents of the almshouses that I put forward the argument in favour of Amendment No. 39 and the second amendment dealing with mortgages.
Lord Morris of Castle Morris: My Lords, I have listened carefully and, I hope, sympathetically to what has been said. However, with regret, I have to say that I find it less than easy to accede to the arguments put forward by the noble Viscount and my noble friend. Almshouses have special and peculiar problems. Almsmen and almswomen are vulnerable and frequently aged people, and are especially at risk in terms of charity law. But so are many other categories of charities. Church schools, for example, present difficult problems and whole categories of housing associations have special difficulties.
I am afraid that this evening I have heard nothing that convinces me that in respect of this part of Clause 32 almshouses have established a unique claim for special treatment.
Lord Harris of Greenwich: My Lords, I take the same view. As the noble Viscount knows, I warmly supported him when this general issue came before the Public Bill Committee. However, I am uneasy about establishing a special statutory position for almshouses as distinct from the many other worthy bodies

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who could claim the need for some special statutory assistance. I do not wish to close the door on this approach, but I start from a position of being more than a little sceptical. I shall be interested to hear the noble Earl's comments.
Earl Ferrers: My Lords, I appreciate the anxiety that my noble friend Lord Mountgarret and the noble Lord, Lord Ennals, feel as regards almshouses and the residents within them who are the people for whom the almshouses were in the first instance provided. However, I agree with the noble Lord, Lord Morris of Castle Morris, that no argument has been put forward this evening to suggest that the trustees of almshouse charities should be considered differently to any other charitable trustees.
In these amendments we are being asked to treat the trustees of almshouse charities as people who cannot, unlike other trustees, be trusted to deal with their property in accordance with the requirements set out in Clauses 32 and 34. The amendments will not prevent the trustees from disposing of almshouses. They will merely require that the Commissioners give consent to the disposal. The Commissioners cannot prevent trustees from dealing with their property in the way that they consider best serves the interests of the charity. If the disposal of the almshouses would best serve the interests of the charity, the Commissioners cannot prevent the trustees from disposing of the almshouses. The Commissioners can only prevent the trustees from disposing of the almshouses if, in so doing, the trustees are transgressing the legal duties of their charitable trust. If the trustees have decided to sell then they cannot, and ought not to, be interfered with in exercising their discretion as trustees.
The requirements in Clauses 32 and 34 have been designed to replicate as far as possible the requirements that the Commissioners currently insist on from trustees. Indeed the purpose of these clauses is to allow trustees, when they dispose of land, to continue doing what they now do but without the need to involve the Commissioners as supervisors of every transaction. Most trustees are competent to be left to their own devices in this way and I do not believe that there is any reason why almshouse trustees, among all trustees—the noble Lord, Lord Morris of Castle Morris, mentioned this—should be singled out as needing the continued supervision of the Commissioners. I do not believe that there is any real danger of the trustees of an almshouse charity acting in a way, with respect to their property, which would fundamentally prejudice the interests of their beneficiaries.
Property of any charity which is held upon trusts stipulating that it is to be used for the purposes of the charity will in any case be subject to subsection (6) of Clause 32 where it is sold or leased for more than two years. This subsection requires the trustees to give public notice of any disposal, inviting representations to be made to them. The trustees must consider the representations before proceeding with the disposal.
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As most almshouses will be subject to this requirement, almshouse trustees will already have to go through more hoops than other trustees.
One of the fundamental themes of this Bill is that wherever possible trustees should be allowed to exercise the duties of their office without undue bureaucratic interference. I fear that my noble friend Lord Mountgarret is pushing in the other direction with this amendment. I hope therefore my noble friend will appreciate that this matter is best left unaltered.
Viscount Mountgarret: My Lords, I am grateful to my noble friend for such a concise and detailed reply to the point I tried to make. I am not entirely sure that I quite follow the point that at present almshouse trustees can dispose of their properties without the positive agreement of the Charity Commissioners. However, I stand to be corrected on that point. I am sorry but I have forgotten exactly the point the noble Lord, Lord Morris of Castle Morris, made. It is clear, however, that this matter has not found favour in all quarters. In Committee we discussed other aspects of this matter and my noble friend has considered the arguments we made. Perhaps there could be a further reconsideration of this issue. It is a safety valve which I think is necessary, However, at the end of the day if the House and my noble friend in particular and his advisers feel that this point is unnecessary I will not push it. Therefore I withdraw the amendment. I am grateful to my noble friend for his kindness in looking into it.
Amendment, by leave, withdrawn.
Clause 33 [Supplementary provisions relating to dispositions of charity land]:
Earl Ferrers Earl Ferrers moved Amendments Nos. 40 and 41:
Page 31, line 18, leave out ("subsection (8) (a) or (b)") and insert ("paragraph (a), (b) or (c) of subsection (8)").
Page 31, line 21, leave out ("either of those provisions,") and insert ("any of those paragraphs,").
On Question, amendments agreed to.
Clause 34: [Restrictions on charging charity property]:
[Amendment No. 42 not moved.]
Clause 35 [Removal of requirements under statutory provisions for consent to dealings with charity land]:
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 43:
Page 34, line 14, at end insert:
("(2A) For the purposes of section 2(1) of the Education Act 1973, "new provision" may, on the application of the relevant diocesan authorities, or of the trustees, or former trustees, of the school concerned, or of not less than six persons over eighteen years of age residing in the relevant area of benefit include—

(a) the sale of the school at less than the best price obtainable in the open market to a charity operating in that area of benefit and whose purposes serve it;

(b) the use of part of the proceeds of any sale for a charity operating in that area of benefit and whose purposes serve it.

(2B) Subsection (2A) above shall apply only where the purposes of the charity referred to in paragraphs (a) and (b) above include the provision of a village hall or community centre, the education or development of those of pre-school

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age, activities for the development of young people or other educational purposes for local benefit and where the Secretary of State is satisfied that—

(a) the local community would be disadvantaged as a result of the sale of the school at the best price obtainable in the open market, and

(b) the premises had been used for charitable purposes other than purposes of a school for the benefit of the local community, or

(c) there are charitable educational purposes, other than use as a school, for the benefit of the local community that could continue to be served by the premises.

(2C) The amount of any discount or proceeds of sale to be so used shall be determined in the light of the circumstances above and the original nature of the trust.").
The noble Lord said: My Lords, I hope—perhaps I should say pray—that it will be a privilege to move this amendment on behalf of those who have put their names to it but who are unable to be present tonight.
The purpose of the amendment is to make it possible that when a village school becomes redundant and is put up for sale some of the proceeds can, if the Secretary of State is so minded, be kept in the village for similar purposes. If my noble friend is able to accept that objective, I should be happy to accept redrafting.
A similar amendment to this was moved by my noble friend Lord Renton on 10th December. To sum up that discussion, my noble friends Lord Renton and Earl Ferrers agreed to disagree on the grounds that it was too widely drafted. If I had been allowed my way—and I suspect I would have been supported by the noble and learned Lord, Lord Denning—I should have stuck to the hard line, keeping all the money for any cause whatsoever in the village; but I was persuaded, not least by my noble friend Earl Ferrers, that such a line was unreasonable. I should like to put on record the time and trouble that my noble friend has taken and the number of letters that he has written to try to explain the problems of the Home Office over this amendment. I am grateful to him.
The amendment before your Lordships this evening is a very moderate one. It spells out quite clearly that any benefit remaining in the village would have to be for similar educationally based charities; and that the local community would be disadvantaged by the sale of the school; and that the school had previously been used for charitable purposes other than as a school. Those conditions are contained in items (a), (b) and (c) of the amendment. I hope that your Lordships will read them carefully. They are very narrowly drawn.
The original money for many, if not most, church village schools was raised in the village for the benefit of education in that village. Broadly speaking, the trusts are of three kinds: one, those that were for education only and for no other purpose; two, those that were for education in the village; and three, those that were for education and for other purposes for the benefit of the village.
As far as the last is concerned, I accept that the Charity Commissioners may, if they wish, divert all—the word is "all"—of the proceeds of that sale back to the village. I believe that that fact of all or nothing is a deterrent, and that it perhaps frightens the church education authorities who feel they are going to lose all so they have to keep everything. My amendment would rectify that all-or-nothing approach. However,
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because of the Education Act of 1973 it is not possible to keep in the village any of the proceeds of the first two types of trusts which this amendment also addresses.
In practice that results in all the money leaving the village, maybe for the capital cost of some faraway school which no member of that village does or even can attend. That just cannot be right. That was just not in the mind of the original donors, many of whom, I suspect, are your Lordships' ancestors. I suspect that they are listening now from below—who knows but that some of them may be listening from above.
This amendment would correct that blatant injustice by allowing the Secretary of State for Education to sell the school at less than its market price to a similar village charity—I have already spelt out the meaning of the word "similar"; it cannot be the local disco club—or allow some of the proceeds of the sale to be retained, again for similar purposes, in the village.
I suggest that this is a very mild amendment which only allows and does not force the Secretary of State to direct that some of the proceeds should remain in the village, so helping to prevent further rural decay and allowing the village to become a viable, living, working unit. That point was forcefully made by the report Faith in the Countryside which my noble friend Lord Prior so ably produced. This amendment is in line with the recommendations of that report, but milder.
I hope therefore that your Lordships will feel able to support this modest amendment, not least because the loss of a village school can be the final blow to a village that may already have lost its pub, its farm, its shop, its church and its rector, so leaving no place for people to meet and get rid of their problems. I beg to move.
9.45 p.m.
Lord Houghton of Sowerby: My Lords, this is not only a mild amendment, it is a virtual giveaway. I do not think that the indulgent tones of the noble Lord are justified when one considers that the Church has had the school for probably a century. An enormous amount of maintenance has come from the state and yet it has been a denominational school. The Church of England has cornered religion to its own advancement and then required the state to maintain its schools. When they are sold, like a property developer the Church retains all the proceeds for some purpose removed from the village. Surely to heaven—should I say heaven?—it can spare more than a little for the good of the village which it is about to leave. I do not suggest that it is a voluntary leaving, but the school will be left behind and presumably some people will be disadvantaged on that account.
Certainly I support the amendment very much. I wish that the noble Lord who moved it had shown a little more aggro in his claim.
The Earl of Gainsborough: My Lords, like the noble Lord who spoke to it so eloquently, I should like to support the amendment. No doubt some of your Lordships have been in the situation of owning

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property in villages and have been associated with those villages going back many generations. It is very important to remember that, if we are not careful, nice country communities will be left to become entirely dormitory areas.
Some of the buildings have been in use for many years for educational purposes. If they are now redundant because they are not adequate for those purposes, they will be lost to the villages unless some such provision is made. The noble Lord, Lord Stanley, indicated that the wording of the amendment may have to be changed. If some wording could be found to achieve his aim, which was so well supported by the noble Lord, Lord Houghton, I feel that this House and the noble Earl will do well to give it some consideration.
The Lord Bishop of Guildford: My Lords, I have considerable sympathy with the amendment. I was rector of a small country village at the time when the village school was closed. The result was not only a shift in transport arrangements with children being bussed to another village, but the removal of one of the last focal points in the village. It irretrievably changed the dynamics of that local village. I am quite clear that the amendment touches a raw social nerve.
However, I do not believe that the amendment as it stands is acceptable. In moving it the noble Lord, Lord Stanley, stated that it was in line with the recommendations of the Archbishop's Commission's Report Faith in the Countryside. However, in some regards the amendment goes far beyond what is recommended in that report. The details of the report have not necessarily been accepted by the Church of England. However, the report recommended that such provision should apply to rural areas. The amendment as drawn applies across the board and is as applicable in inner cities as in plush suburbia.
The report suggested that the diocese, which includes the parish, should put forward certain proposals. The amendment suggests that the procedural ball could be set rolling by six local people. The report recommended that the sale proceeds might in part be made available for the continuance of Christian mission. However the amendment goes well beyond that by stating that the sale proceeds might go to a charity. With due respect to the noble Lord who moved the amendment, it does not state that it should be only for educational charities. I believe that it allows for social charities, commendable though those are.
I have a further anxiety. The Secretary of State for Education will be required to exercise a responsibility which goes well beyond what he might consider appropriate to his office.
I believe that there is more flexibility in the present arrangements than is often recognised. When the Secretary of State makes a Section 2 order a proportion of the sale proceeds of a redundant school quite properly goes to the continuation of education elsewhere in the locality. Where it can be shown that the former school was used for Sunday school, or other such activities, the Secretary of State is normally likely to approve that 3/14ths of the sale proceeds
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—which sounds to me rather like what used to be called a vulgar fraction—can be used for a local Sunday school charity which can be created at the time of the closure. When the trust deeds or the previous practice allow, and when there is no urgent need for additional money for church schools in the diocese, it is possible for the diocese to put forward proposals which release quite a proportion of the proceeds to the local community. That has been done in a number of cases. One way forward, where the trust deeds make it possible, is for the building to be leased to the local community.
There is more flexibility than is often recognised. But at the end of the day most cases are governed by the trust deeds which make it clear that the assets are for church educational purposes or, as the 1973 Act puts it, to enable the Church of England or any other religious denomination to participate more effectively in the administration of the statutory system of public education. That need remains because Church and state are in partnership in the education system of this country. I do not wish to see money given for educational purposes being alienated for other uses, however laudable.
Noble Lords may like to know that discussions have been taking place about the matter. A forthcoming publication from the Church of England Board of Education will draw attention to the flexibility that often exists in the present arrangements and will make suggestions about how those concerned can make approaches in the hope of moving towards a settlement which more readily meets the educational requirements of trust deeds and local aspirations. That may not always be possible because of the trust deeds. However, we are trying to ensure that where there is flexibility that is more widely known. I have no doubt that the issue is real. But, for the reasons that I pointed out earlier, the amendment as drafted is far too wide and would land us in considerable difficulties. I hope that for those reasons, and for others, it will be resisted.
Lord Richard: My Lords, I rise to support the amendment. At one stage I approached the whole subject with a fairly open mind. However, the more I have listened to the debate the more—I shall not say the more convinced I am—there appears to be considerable merit and force in the argument put by the noble Lord, Lord Stanley. It appears to be right that in the circumstances which the amendment covers some provision should be made to ensure that at least part of the money raised should remain in the village for the benefit of the villagers. I should find unacceptable a contrary view.
Perhaps the drafting of the amendment is not as felicitous as it could be. I see the noble Lord, Lord Stanley, nodding his legal head in agreement. However, the noble and learned Lord, Lord Denning, is the second signatory to the amendment. If it were drafted by the noble and learned Lord I should not have one word to say about it, yea or nay.
The amendment is important. In some ways it is one of the more important that we have discussed

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tonight. I hope that the noble Earl will help the House. If not it may be an occasion on which the opinion of the House must be sought.
10 p.m.
Earl Ferrers: My Lords, I could not help being amused when the noble Lord, Lord Richard, said that perhaps the drafting of the amendment is inadequate and that my noble friend Lord Stanley nodded his head in assent. Earlier my noble friend advised your Lordships to read the wording of the amendment most carefully because it had been drafted most carefully. One cannot have it both ways.
I understand the problem. It is a vexed question. I understand the views of those people who believe that if a school built some years ago by a benefactor for the education of the children of the village is no longer required and must be sold then the people of the village should profit from the sale. There are two points to be made; two strands of charitable feeling. The first is that the school was built to educate the children and the second that the school was built for the village. One must therefore ask: what is the trust under which the charity operates? It is for educational purposes. The argument goes that if the village or the authorities cannot maintain the school in the village and the school must be sold, the proceeds should be put towards the education of the children who will no longer be educated in that village but in some other village. Therefore, the proceeds of the sale of the school ought to go to the continuance of the children's education.
My noble friend's amendment takes a different slant. If, for instance, the school must be sold it will be up to the trustees who sell it to obtain the best possible price. If they do so the school can be sold to anyone inside or outside the village. In his amendment my noble friend suggests that there could be reasons for the trustees of the school to accept a price lower than the market price. If such a price is offered, and it is proposed to accept it, by a charity which has the same purposes as the charity which owns the school the school can be purchased by that new charity at less than the market price with the consent of the Commissioners. However, if it is to be purchased by a charity which does not have the same purpose as the original charity which owns the school, the Charity Commissioners cannot give their permission.
My noble friend seeks to say, "Here is a school which is to be sold. It is to be sold for less than the market price so the charity originally set up for educational purposes will receive less than it should do and, another charity, which is used for purposes other than educational purposes, can benefit from that."
My noble friend's amendment states that provided the new charity has education as one of its purposes, it should be allowed to purchase the building at a price which is lower than the market rate. I do not believe that is fair. My noble friend may wish to consider the example of an organisation in the village which uses the church or school as a day-care centre for the elderly. That may be the purpose of the building during the day, but it may be used later For
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educational purposes. It is not right that that charity should be allowed to purchase the building at below the market rate.
I understand the anxiety that it should be possible to sell a discontinued school at less than the market price to a charity which serves that same locality but which does not have the same, although it could have similar, purposes. The difficulty is that whereas at present the school must be sold for educational purposes, this amendment provides that the charity which would benefit by virtue of the purchase at less than the full value may have purposes other than educational ones.
The amendment refers to a charity whose purposes include:
"The provision of a village hall or community centre, the education or development of those of pre-school age, activities for the development of young people or other educational purposes for local benefit".
The children who formerly attended the discontinued school must of course be educated elsewhere locally. It is in their interests and the interests of the locality generally that the sale proceeds of their former school should be used as far as possible for educational purposes and that the amount of those proceeds should be as large as possible.
The amendment raises complex issues which I do not believe should be tackled in the Bill. Even if that were to prove desirable in the future, it would be necessary to ensure that the interests of the church bodies are fully taken into account and that proposals are drawn up in consultation with them.
The right reverend Prelate the Bishop of Guildford pointed out in a carefully argued speech that the Bill does not have the general agreement of the Church. Moreover, although the Archbishop's Commission's report suggested this provision, that does not mean that the report has been accepted by the Church. He quite correctly drew attention to the fact that if my noble friend's amendment is accepted, it will give the Secretary of State for Education powers which greatly exceed those which he has at present by virtue of the fact that the amendment would allow the proceeds of sale of a building presently used for educational purposes to be used for educational and other purposes.
There is no evidence that the Church authorities support the amendment. The right reverend Prelate does not support it. The Diocesan Board of Education is worried that without an increase in the sums raised from the sale of former church schools, their ability to provide education in rural areas will be severely affected.
For all those reasons, my noble friend's amendment would be a mistake. I can see why he has tabled it, and I understand his anxieties as regards those people in the past who have given money for the purposes of village education. However, to suggest that the sale of a village school should be permitted at less than the market rate in order to provide the village with a building to be used for other than educational purposes, and that therefore it would be possible to benefit from the purchase at less than the market rate, would not be fair. I ask my noble friend seriously to consider that.
Lord Stanley of Alderley: My Lords, I thank noble Lords for their support. I did not go far enough for the noble Lord, Lord Houghton, but too far for my noble friend on the Front Bench. With regard to the drafting, I must say to the noble Lord, Lord Richard, that the amendment was looked at by the noble and learned Lord, Lord Denning, who thought it was brilliant. Whether that makes it so is another matter.
I must deal with the points raised by the right reverend Prelate. If he believes that the diocese is prepared to send money back to the village, as he said, then I cannot see why he opposes the amendment. It would make it much easier. It would also make it easier that it does not have to take all or nothing. If he wants to exclude the towns, I do not mind; let him table an amendment at Third Reading and exclude towns.
I do not believe that the right reverend Prelate has read Faith in the Countryside. Page 268, under "Recommendations", states,
"Projected Charity legislation should amend Section 112 of the Education Reform Act 1988 to permit the Department of Education and Science on application by a diocese to allow a school to be sold for a sum lower than the market price to a charity whose activity serves the area originally covered by the school, or to allow part of the proceeds of sale to be used for other charitable purposes for the benefit of the locality".
I do not understand what the right reverend Prelate is saying.
The Lord Bishop of Guildford: My Lords, perhaps the noble Lord will allow me to intervene. I have read the report. If he looks back to the text, of which the recommendation at the end is a summary, he may agree that the words I quoted are in the text of the report and the brief summary does not include all the matters in the text.
Lord Stanley of Alderley: My Lords, I have no intention of delaying the House by going into the whole of the report. However, if the right reverend Prelate wishes, I shall be more than happy to do so. I suggest that the recommendation and summary was rather longer than the point he brought out in the text.
My second point, in response to the right reverend Prelate and your Lordships, is that the Churches are not of one mind. The right reverend Prelate may say that, but not all the bishops agree, let alone the clergy. I do not believe that he speaks on behalf of the Bench of Bishops; if so, where are they? Perhaps we shall see later.
The right reverend Prelate may not like me saying this but I fear that his attitude is selfish in the extreme. It ignores the needs of local people on the ground. That is why the pews are empty. It may be that the right reverend Prelate does not mind. I happen to mind. I am a former church warden and believe that this is one of the reasons it is happening. It is failure to understand the situation at the grass roots. That may be an unkind comment to make to the right reverend Prelate, but it must be said occasionally. The pews are empty.
I am minded to divide the House because there is no way forward unless my noble friend on the Front Bench is prepared to consider bringing the matter back at Third Reading. I still believe that there is a
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difference of opinion. Many of the remarks my noble friend made in regard to the way the provision may be used are covered in (2B) (b) and (c) of the amendment. They also cover the point made by the right reverend Prelate.
Perhaps my noble friend will indicate whether he is prepared for me to bring the amendment back at Third Reading.
Earl Ferrers: My Lords, my noble friend asks whether I am prepared for my noble friend to bring the amendment back at Third Reading. My noble friend can bring it back if he wishes. I am happy to talk to him between now and then. However, I cannot give him any guarantee that I shall change my mind—not because I am obstinate but because I believe my noble friend is wrong.
The amendment says,
"the Secretary of State is satisfied that—
(a) the local community would be disadvantaged as a result of the sale of the school at the best price obtainable in the open market".
When a building is put up for sale, and involves an educational charity, it is not for the Secretary of State to determine that that charity should receive less than the market price. I can understand that my noble friend is concerned about this matter. If there is a way in which I can satisfy him and his requirements I shall do so. I shall be happy to talk to him about it. However, I am bound to tell him that he is wrong. His sentiments are entirely worthy; he wants to see the village helped. One has to deal with the matter of trust law. If the trust is for education, one cannot very well put the funds towards something that deals with day care for the elderly, although it might also deal with education. I am prepared to talk to my noble friend if that is what he wishes.
Lord Stanley of Alderley: My Lords, that is a better answer. I believe that our interests are the same. If my noble friend talks to me between now and Third Reading I believe that he will see that my amendment always brings the subject back to education but he says that the amendment does not. We are on the same side. We must get the position right. Bearing in mind that it is very late and that I do not wish to divide the House because it would not be a good show, I shall bring the matter back at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 37 [Amendment of Trustee Investments Act 1961]:
Earl Ferrers Earl Ferrers moved Amendment No. 44:
Leave out Clause 37 and insert the following new clause:
"Relaxation of restrictions on wider-range investments
.—(1) The Secretary of State may by order made with the consent of the Treasury—

(a) direct that, in the case of a trust fund consisting of property held by or in trust for a charity, any division of the fund in pursuance of section 2(1) of the Trustee Investments Act 1961 (trust funds to be divided so that wider-range and narrower-range investments are equal in value) shall be made so that the value of the wider-range part at the time of the division bears to the then value of the narrower-range part such proportion as is specified in the order;

(b) provide that, in its application in relation to such a trust fund, that Act shall have effect subject to such

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modifications so specified as the Secretary of State considers appropriate in consequence of, or in connection with, any such direction.

(2) Where, before the coming into force of an order under this section, a trust fund consisting of property held by or in trust for a charity has already been divided in pursuance of section 2(1) of that Act, the fund may, notwithstanding anything in that provision, be again divided (once only) in pursuance of that provision during the continuance in force of the order.
(3) No order shall be made under this section unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.
(4) Expressions used in this section which are also used in the Trustee Investments Act 1961 have the same meaning as in that Act.
(5) In the application of this section to Scotland, "charity" means a recognised body within the meaning of section 1(7) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990.").
The noble Earl said: My Lords, in moving this amendment I shall speak to Amendments Nos. 45, 152, 153, 156, 157 and 158. Amendments Nos. 44 and 45 introduce my own versions of Clauses 37 and 38. Amendments were moved in Committee by the noble Lord, Lord Harris of Greenwich. I hope that these versions will meet the concerns expressed in Committee.
Amendment No. 45 replaces Clause 38. It is no more than a refinement of the existing Clause 38 and achieves substantially the same effect. The regulations may prescribe limits on the proportion of a charity's property which may be invested in particular investments; and the regulations may require that trustees obtain advice before investing in particular investments, as they may now be required to do under Section 6 of the 1961 Act. The power in the new Clause 38 is a special power for the purposes of Section 3 of the 1961 Act. As such it attracts the modifications to Section 2 of the 1961 Act set out in the second schedule to that Act.
The second schedule to the 1961 Act modified Section 2 of the Act so as to allow charities or other trusts having special powers of investment to divide their funds into three parts: a narrow range, a wider range and a special range. Funds from both the narrow and the wider range parts can be converted into special range property and then invested in accordance with the special powers of investment. Once regulations have been made by the Secretary of State, charity funds can be converted into special range property and invested in accordance with those regulations.
Orders and regulations made under Clauses 37 and 38 respectively will be made by statutory instrument subject to the affirmative resolution procedure. The provisions of both clauses extend to Scottish "recognised bodies" within the meaning of Section 1(7) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990. It seems to me only right that charities in Scotland should be able to take advantage of the new arrangements too.
The amendments made to Clauses 77 and 79 are consequential, the ones to Clause 79 being occasioned by the change in the extent of the new provisions. I hope that the new clauses will meet with your Lordships' approval. I hope that they will also meet
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the concerns of the noble Lord, Lord Harris of Greenwich, which he expressed in Committee and for which he produced an amendment.
Lord Harris of Greenwich: My Lords, it would be ungracious were I not to say that I welcome the fact that the Government have now accepted the decision of the Committee which was taken against the advice of the Government. I believe that we had the noble Lord, Lord Peyton, with us on that occasion. I believe that by a significant majority the Committee came to the conclusion that the restrictions that had been imposed on trustees for many years as regards the issues covered in these amendments had been extremely damaging. They had cost the charities several hundred millions of pounds. The fact that the Government have now accepted the decision of the Committee is a matter that we should welcome.
The noble Earl had the rather unhappy task at Committee stage of appearing as advocate for the Treasury because it is their business and not that of the Home Office which we are discussing. Therefore, in addition to thanking the noble Earl, as I do, I should also like to thank the Economic Secretary. Without his support we would not be having these amendments before us today. The entire charity world will be delighted that the decision of the Committee has been accepted by the Government. I am most grateful to all concerned for having made this important amendment to the law.
Lord Peyton of Yeovil: My Lords, I should like to confirm that I did indeed agree with the noble Lord, Lord Harris, on that occasion. I agree with him now and join with him in thanking my noble friend.
Baroness Mallalieu: My Lords, we too on these Benches join in thanking the noble Earl and welcome the new Clauses 37 and 38.
On Question, amendment, agreed to.
10.15 p.m.
Clause 38 [Regulations for investment of property of charity]:
Earl Ferrers Earl Ferrers moved Amendment No. 45:
Leave out Clause 38 and insert the following new clause:
"Extension of powers of investment
.—(1) The Secretary of State may by regulations made with the consent of the Treasury make, with respect to property held by or in trust for a charity, provision authorising a trustee to invest such property in any manner specified in the regulations, being a manner of investment not for the time being included in any Part of Schedule 1 to the Trustee Investments Act 1961.
(2) Regulations under this section may make such provision—

(a) regulating the investment of property in any manner authorised by virtue of subsection (1), and

(b) with respect to the variation and retention of investments so made,

as the Secretary of State considers appropriate.
(3) Such regulations may, in particular, make provision—

(a) imposing restrictions with respect to the proportion of the property held by or in trust for a charity which may be invested in any manner authorised by virtue of subsection (1), being either restrictions applying to

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investment in any such manner generally or restrictions applying to investment in any particular such manner;

(b) imposing the like requirements with respect to the obtaining and consideration of advice as are imposed by any of the provisions of section 6 of the Trustee Investments Act 1961 (duty of trustees in choosing investments).

(4) Any power of investment conferred by any regulations under this section—

(a) shall be in addition to, and not in derogation from, any power conferred otherwise than by such regulations; and

(b) shall not be limited by the trusts of a charity (in so far as they are not contained in any Act or instrument made under an enactment) unless it is excluded by those trusts in express terms;

but any such power shall only be exercisable by a trustee in so far as a contrary intention is not expressed in any Act or in any instrument made under an enactment and relating to the powers of the trustee.
(5) No regulations shall be made under this section unless a draft of the regulations has been laid before and approved by a resolution of each House of Parliament.
(6) In this section "property"—

(a) in England and Wales, means real or personal property of any description, including money and things in action, but does not include an interest in expectancy; and

(b) in Scotland, means property of any description (whether heritable or moveable, corporeal or incorporeal) which is presently enjoyable, but does not include a future interest, whether vested or contingent;

and any reference to property held by or in trust for a charity is a reference to property so held, whether it is for the time being in a state of investment or not.
(7) In the application of this section to Scotland, "charity" means a recognised body within the meaning of section 1(7) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990.").
On Question, amendment agreed to.
Clause 39 [Powers to delegate trustees' powers]:
Earl Ferrers Earl Ferrers moved Amendment No. 46:
Leave out Clause 39.
The noble Earl said: My Lords, with this amendment I am seeking to remove Clause 39. I do not want to appear cavalier but there are good reasons why the clause should not appear in the Bill. It is a general rule of equity that trustees must act in person and that decisions concerning the charity must be taken by the trustees acting together. They can always invite some of their number, or an employee or agent, to look into particular matters connected with the charity and to make recommendations to them, but the decision as to whether or not to act on the recommendations is for the trustees to take together.
In the context of investments, responsibility for the management of a charity's funds rests with its charity trustees alone. Under the existing law the trustees may, perfectly properly, enter into suitable arrangements for the provision of investment management services by stockbrokers or other agents who specialise in this field and who can pay any reasonable charges for these services out of a charity's income, but the final responsibility remains with the trustees and cannot be delegated.
By suitable arrangements I mean that the trustees decide, in consultation with their investment agents at the outset and at regular intervals thereafter, what the
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charity's investment objectives are. They agree a general strategy for achieving them. It is then for the agents to decide upon particular investments, and appropriate times, for purchase and sale (acting in accordance with the trustees' investment policy and within the discretion which the trustees may have given them). They must report at regular intervals on the current state, past performance and future prospects of the fund as a whole.
I think that these existing arrangements provide for a sensible and appropriate degree of delegation of trustees' responsibilities in the sphere of investments. To go further would be to undermine the fundamental responsibilities of trustees for the administration of their trust. For those reasons, I think that Clause 39 is both undesirable and unnecessary.
Lord Richard: My Lords, I should not like to put it as high as saying it is undesirable and unnecessary, but in view of the noble Earl's previous concessions it would be churlish and rather foolish of us to insist upon the inclusion of Clause 39.
Lord Harris of Greenwich: My Lords, that represents my view as well. I speak for an all-party majority in this respect in Committee; we have won 90 per cent. of our case and it would be unreasonable for us to insist on the other 10 per cent. On the basis of that I do not oppose this amendment.
Earl Ferrers: My Lords, I am indeed grateful to the noble Lord, Lord Harris, for his generosity in granting 10 per cent. I am glad that I have been able to meet your Lordships over the concern that has been expressed. I hope that, on reflection, your Lordships will agree that Clause 39 is best taken out for the reasons I have given. I beg to move.
On Question, amendment agreed to.
Clause 43 [Small charities: power to transfer all property, modify objects etc.]:
Viscount Astor Viscount Astor moved Amendment No. 47:
Page 37, line 10, leave out (", by a unanimous resolution,").
The noble Viscount said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 48 to 51. Amendments Nos. 47 and 48 fulfil an undertaking which I gave in Committee. The provisions in Clause 43 allowing the trustees of most charities with an annual income of £5,000 or less to transfer their property to another charity or charities or to modify their objects or trust provisions will play an important part in improving the effectiveness of local charities. As the Bill stands, a unanimous resolution is required if the trustees of a charity are to be able to act as I have just described.
There was much debate in Committee about the effect of this requirement where a single trustee can in practice exercise a veto over the plans of his colleagues. I accept the strength of this argument and agree that such a scenario would be unacceptable. These amendments therefore change the requirement to one of a two-thirds majority of those trustees who vote on the resolution in question.
Amendments Nos. 50 and 51 achieve exactly the same result in respect of resolutions made under Clause 44, which provides for the expenditure of

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permanent endowment by charities with an annual income of £1,000 or less. Amendment No. 49 is purely to improve the drafting of Clause 43. The phrase "any such charity" is used in subsection (3) and it is not entirely clear to what description of charity the word "such" refers. It refers in fact to any charity to which Clause 43 applies by virtue of subsection (1). My amendment will make this plain. I beg to move.
Lord Harris of Greenwich: My Lords, as the noble Viscount rightly said, we spent a fair amount of time on this issue in the Public Bill Committee. I welcome the fact that the Government have accepted what I think was the overwhelming majority view that it would be quite wrong to allow a situation to arise whereby a single recalcitrant trustee could in fact prevent action of the kind that is dealt with in the clause. We have accepted for many years majority verdicts in criminal trials, so it would seem to me bizarre if a single trustee could negative the views of his colleagues. On that basis I very much welcome the amendment.
Baroness Faithfull: My Lords, I thank the noble Viscount for bringing forward the amendments. Like the noble Lord, Lord Harris, I am grateful for what the Government have done.
Lord Morris of Castle Morris: My Lords, never let it be said that the Government—gauleiters or not—are unable or unwilling to take note of good arguments presented to them and to change their mind. Early in the progress of the Bill, particularly in Committee, we talked about this issue long and hard and the arguments about the perils of demanding a unanimous decision were powerfully put. I am happy that they have been found acceptable. It is true, is it not, that one dissenting voice can wreak havoc disproportionate to its influence?
I once had the job of preparing a government report on libraries. Librarians are even more contentious and difficult people than most. Never until I was obliged to try to get a unanimous decision out of them had I felt the full force of the tyranny of the threat by one stubborn backslider to present a minority report. Charities, and small charities in particular, will welcome these amendments. We thank the Minister for the consideration that he has given to them.
On Question, amendment agreed to.
Viscount Astor Viscount Astor moved Amendments Nos. 48 and 49:
Page 37, line 30, at end insert:
("(2A) Any resolution passed under subsection (2) must be passed by a majority of not less than two-thirds of such charity trustees as vote on the resolution.").
Page 37, line 31, leave out ("any such charity") and insert ("a charity to which this section applies").
On Question, amendments agreed to.
[Amendment No. 49A not moved.]
Clause 44 [Small charities: power to spend capital]:
Viscount Astor Viscount Astor moved Amendments Nos. 50 and 51:
Page 39, line 27, leave out (", by a unanimous resolution,").
Page 39, line 30, at end insert:
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("(2A) Any resolution passed under subsection (2) must be passed by a majority of not less than two-thirds of such charity trustees as vote on the resolution.").
The noble Viscount said: My Lords, I spoke to these amendments with Amendment No. 47. I beg to move.
On Question, amendments agreed to.
Clause 47 [Limitation of liability of trustees]:
Earl Ferrers Earl Ferrers moved Amendment No. 52:
Leave out Clause 47.
The noble Earl said: My Lords, this amendment was considered in Committee. It deals with limiting the liability of trustees of unincorporated charities. I said then that I fully appreciated the concerns in the charity world that had led to its introduction. However, I also said that it raised complex and controversial issues. For a number of reasons, I think that it should not continue in the Bill.
The intention of Clause 47 was to limit the personal liability of the trustees of unincorporated charities in a similar way to that which exists for trustees of charitable companies. However, I am not sure that it adds much, if anything, to the existing law. Provided that they act properly, the trustees of unincorporated charities are entitled to meet any debts and liabilities of their charity from any assets of the charity which do not form the permanent endowment. The question of the trustees being personally liable only arises, therefore, where the charity does not have enough income to meet its liabilities and where they can only be met by using funds which are part of the permanent endowment of the charity.
Under the present law, trustees may use a charity's permanent endowment in that way by order of the commissioners or of the court. Therefore, the trustees are protected now. The question of trustees becoming personally liable only arises where, even taking into account the permanent endowment, there are insufficient assets to meet the liability in question; in other words, where there is still a balance owing to creditors even after all the assets have been exhausted. There are, however, other ways in which the existing law protects trustees over this point.
Trustees can, for example, specifically limit their personal liability under any contract into which they enter so that their liability does not exceed the extent of the assets of the charity. Provided that the obligations under the contract have been properly met, the liability of the trustees will be confined to the assets of the charity.
The law allows charity trustees to take out insurance, at the charity's expense, against liability for acts which are properly undertaken in the administration of a charity or which may be undertaken in breach of trust by honest mistake. That kind of insurance would allow the liabilities of a charity to be met without the trustees becoming personally liable for them.
I do not think that Clause 47 will add to these existing protections. Indeed, it may make things more difficult for trustees. For example, the clause limits the liability only of those trustees who have met all of the statutory requirements which have been placed on them. That would include the new provisions for

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accounting and reporting to the Charity Commissioners which are in the Bill. If a trustee was in breach of any of those requirements, whether that was due to oversight or even honest mistake, his liability would no longer be limited. That would certainly not be in the trustee's interest.
The new clause is also undesirable because it would adversely affect the position of third parties who enter into contracts with charities. Insolvency and bankruptcy law provides protection to third parties who deal with companies which cannot meet their proper liabilities. It enables competing claims against the company's assets to be marshalled and prioritised. Creditors of an unincorporated charity have no such protection. To create it would involve considerable consultation both within government and outside it. Third parties would not willingly see that final avenue of redress closed. It would be very complex and would be by no means uncontroversial.
I realise the understandable anxiety which lies behind Clause 47. But it raises very complex issues and does not fully address all of the implications of what it sets out to achieve. It may actually prejudice the position of trustees and would certainly prejudice that of third parties dealing with charities. All of these issues need to be tackled in a more considered way, and the Government intend, after the Bill completes its course, fully to examine the nature of the existing problem and to try to explore the options and implications of addressing it. I beg to move.
The Lord Bishop of Newcastle: My Lords, I hope that the House will bear with me if I set out the background to the clause, the deletion of which has just been moved by the noble Earl, Lord Ferrers. Clause 47 has its origin in an amendment to the Bill tabled in the name of the right reverend Prelate the Bishop of London. That amendment was moved in Committee by the right reverend Prelate the Bishop of Worcester. In the Public Bill Committee it was recognised that an important question of principle had been raised. That issue of principle is by no means confined to charities connected with the Church of England but it applies to charity trustees generally.
After full discussion, the Committee voted to accept the clause. I am grateful to the noble Earl, Lord Ferrers, for his courtesy in writing to the right reverend Prelate the Bishop of Worcester to explain in detail why he proposed to move the present amendment to delete the clause from the Bill. I have studied his letter with care, and I listened with equal care to his speech; nevertheless, I still feel obliged to speak against the amendment.
The clause does not affect the liability of trustees for breach of trust or in cases where they have acted improperly or imprudently in some way. The problem it addresses is that of the unlimited personal liability of charity trustees who contract or deal with third parties, even where the trustees have acted properly and reasonably in all respects, and have fulfilled all their statutory obligations. I shall give an example. The trustees of a charity, after taking proper professional advice, enter into a building contract of some kind, and a problem arises over the site or other
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difficulties occur which result in the cost being much greater than was expected. The trustees may then be personally liable to the contractor for the whole sum involved, even if it means that they have to realise their personal assets or become bankrupt as a result.
Another hypothetical example is that of the trustees of an inner city project which employs staff and depends upon a government grant. Application for a grant is made in, let us say, February; in March indications are given in good faith that the grant will be available; but in June it happens that the grant is not, after all, forthcoming. I gather that there have been such cases. The trustees are then liable in full for salaries, overdrafts and redundancy payment; that is, as with the previous example, if the charity has no means to meet them.
Nowadays, charitable trustees are expected to undertake programmes, employ people, enter into commitments from one year to the next, provide homes for the homeless, and so forth. They enter into major commitments to further their charity's objects. The unlimited personal liability from which they suffer means that people with the necessary skills, experience and other personal qualities are increasingly reluctant to accept office as trustees. The position is often much more difficult for people of modest means who are charity trustees by virtue of some other office that they hold.
Where people have accepted office as charity trustees they may well be deterred from entering into ventures which may put them at serious risk, even where such ventures would be of great value in promoting the charity's objects and would benefit the community which the charity exists to serve. The trustees of unincorporated charities should surely have the same protection as that enjoyed by the trustees of charitable companies.
It has been contended that where trustees incur such obligations they may well be able to claim an indemnity from the charity's assets. However, the real issue arises where those assets are insufficient. It has been suggested that the trustees might insure against that risk. However, even if that were possible at the charity's expense—I gather that there are technical problems here in some cases—it would involve an extra drain on the charity's resources. What is more important, I understand that it may well be difficult, at any rate in the case of smaller charities, for trustees to obtain suitable insurance cover.
Another possibility mentioned was that the trustees might exclude their personal liability by a contract with the third party. Whether that is a real option in practice must depend upon the strength of the trustees' negotiating position. Surely the central question is, as the Public Bill Committee recognised, who is to bear the loss in such a case. Is it to be the charity trustee who, in the nature of things, is likely to be acting for the good of the community, or is it to be the third party? The third party will normally be acting, perfectly reasonably, on a commercial basis in order to make a profit. The third party, under the Bill, will be able to discover the charity's financial position

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beforehand so that he enters into dealings with it with his eyes open. The third party will often be in a much better position to insure against the risk.
Clause 47 is intended to answer that question in favour of the trustee. It may well be that the precise wording could be improved, that supplementary provisions could be added and that the whole matter deserves much more thorough reconsideration. But I hope it will be possible for the noble Earl and his colleagues to bring forward amendments to deal with these points, if necessary in another place, during the passage of the Bill. Failing that, perhaps he would be willing to give a firm commitment on the Government's behalf to the principle behind the clause and to engage in consultation during the passage of the Bill on how to overcome any detailed problems.
Today charities are being urged as never before to play an active role in furthering the good of the community in many ways. The Bill helps towards that end. To do that, charities need suitably qualified men and women who are willing to act as trustees and to make positive decisions to further the charities' aims.
In my opinion, Clause 47 would overcome or provide a way of overcoming a considerable obstacle to achieving these objectives. Therefore, subject to any undertaking given by the Government of the kind that I suggested, I must, with regret, remain opposed to the amendment.
Lord Peyton of Yeovil: My Lords, I should like briefly at this hour of the night to congratulate my noble friend on shortening the Bill to this extent. I understood him to say that any trustee who behaves honourably and properly and without gross negligence will have sufficient protection without Clause 47. I should like him to repeat what I thought he said. Perhaps the right reverend Prelate did not entirely catch it.
I only add that I cannot believe that anyone contemplating taking on the duties of trustee of a small charity would be likely to be encouraged into taking on those duties simply because of Clause 47. I doubt whether he would even read it.
Viscount Mountgarret: My Lords, despite the excellent speech of the right reverend Prelate, I have to say that I support my noble friend in suggesting that this clause should be removed from the Bill. That is notwithstanding the interesting fact that it was put in during the Committee stage. It is interesting because I always thought that it was the custom that once something was decided in Committee it was not right to overturn it. However, I understand that procedures are slightly different when the Bill is taken in Committee off the Floor of the House.
I believe I am right in saying, but I am open to correction, that the accountability of trustees is covered by the Trustee Act 1925. Therefore I see no reason why any different accountability should be written into this Bill when, after all, if someone is a trustee they are a trustee. Whether it is of a charity or anything else, it is the same. A trustee must always
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behave in a prudent fashion. He must always ask himself what a prudent man or woman would do under certain circumstances.
If something is to be done outside the trustees' knowledge in a specialist sphere, they go to professional advisers who are paid substantial sums of money for their advice, by which they stand. Presumably the trustees are insured against taking that advice but the advisers give their advice to the trustees. If the trustees act upon it in good faith, there is no way in which they can be endangered by it. Therefore I do not see that if the trustees behave in a prudent fashion, taking sound advice on the matters put before them, there is any need for this clause, having regard to the Trustee Act which covers all matters of trusteeship.
Lord Brightman: My Lords, I also support the amendment. It is a well accepted principle of our law that if persons carrying on an activity wish to limit their personal liability they should incorporate a company with limited liability to engage in that activity, which they can readily do at minimum expense. In the case of a charity, it will be a company limited by guarantee. I do not see any reason why charity trustees should be an exception to that principle.
Earl Ferrers: My Lords, I am most grateful to the noble and learned Lord for that brief and penetrating intervention. He is entirely right. I say that with the greatest respect. Trustees are in the end liable. If the trust is not incorporated to limit liability, in the end the trustees are liable. I remember the amendment that was moved in Committee by the right reverend Prelate the Bishop of Worcester and the concern that was expressed at that time. A number of people have expressed concern to me at either the inclusion or the deletion of Clause 47 since then.
The right reverend Prelate the Bishop of Newcastle is quite justified in expressing those fears again today. He referred to a building contract that trustees had entered into which might prove to be more involved than they had expected and which might bankrupt them. However, it is the duty of trustees to act prudently. The right reverend Prelate correctly said charities are being urged to play a wider role in the community nowadays than ever before, but they still have to act prudently. If they incur liabilities they cannot meet, it is slightly unfair to suggest that the poor unfortunate third party who has undertaken the building work, the wiring or whatever has no recourse as regards recouping the expenditure he has incurred because the right reverend Prelate would like the liability of trustees to be limited.
Consideration has been given to the rights of redress of third parties. My noble friend Lord Peyton asked me to reaffirm that a trustee who operates prudently has nothing to fear. I did not use those words and those are not the words my noble friend used. But I could not even use them in a general way because in the end, if all the liabilities are not met by the assets, if the charity concerned is unincorporated the trustees are liable.

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However, these are complex matters and I have considered them carefully between Committee and this stage of the Bill. They raise issues which contain implications that cannot be clarified between Report and Third Reading or the Bill going to another place. The Government intend, after the Bill has completed its course, to examine fully the nature of the existing problem and to explore the options and the implications of addressing it to see whether we can surmount the problem to which the right reverend Prelate has referred in such a way as is not deleterious or offensive to other people who have an interest in this matter. It is a complicated matter but I can assure the right reverend Prelate that it will be considered.
Lord Richard: My Lords, before the Minister sits down, I hope I may make one point. Clause 47, as currently drafted, has two parts as it were. Clause 47(1) states that the total liability of the trustee,
"shall be limited to the value of all assets of that charity".
That is one point and I have heard what the noble Earl has to say on that. However, subsection (2) states that any charity trustee,
"shall be entitled to be indemnified in respect of any claim … arising out of any obligation incurred as trustee, out of any assets of the charity".
Subsection (3) states:
"Subsections (1) and (2) hereof shall only apply where—
(a) the conduct of the trustee was … reasonable; and"
he had at all times,
"complied with all statutory requirements of a registered charity".
The Minister may well say—as he has done—that he does not think liability should be limited to the value of all assets of a charity in the case of a legitimate claim of a third party against the charity. I hear that argument and there is some force in it, but what of subsection (2) and the indemnity? For the life of me I do not see what is wrong with that. If a trustee has been reasonable and has behaved properly, honourably and prudently—one may use whatever desirable adverb one wishes—why should he not be indemnified out of the assets of the charity? Even if the noble Earl will not look at subsection (1), will he not look at subsection (2)?
Earl Ferrers: My Lords, subsection (2) as it is represents the existing law. This is provided in the Trustee Acts of 1925, and the only exception is on endowment. That can be dealt with by the courts and the commissioners; so that particular part is already covered by the existing law.
On Question, amendment agreed to.
Clause 51 [Contributions towards maintenance etc. of almshouses.]:
Viscount Mountgarret Viscount Mountgarret moved Amendment No. 53:
Page 44, line 2, at end insert:
("( ) The trustees of an almshouse charity shall not, however, be authorised without the approval of the Charity Commissioners or the court to charge to any duly appointed resident of an almshouse such sum by way of contribution as, taken with the contributions payable by other residents, exceeds the amount required in order to meet the costs of maintaining the almshouses of the charity concerned and essential services therein.").
The noble Viscount said: My Lords, this
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amendment and Clause 51 relate directly to weekly maintenance contributions made by residents of almshouse charities.
I entirely accept the clause at it stands in so far as it relates to the amount of contribution being required from trustees or administrators of an almshouse charity to meet the costs of overheads, running maintenance, repairs, and so on. I am not sure that this clause goes quite far enough in that it gives a free hand to the trustees or the administrators to make whatever charge they so wish in their wisdom, for whatever purpose, to the inhabitants. At present, one can increase weekly maintenance contributions only by reference to and with the approval of the Charity Commissioners.
Again, I sing my old song: I still believe that the Charity Commission has an enormous part to play in the assistance and guidance, or as watchdog - call it what you will - of the administration of almshouse charities. But we have reached the hour of the night when it is becoming very plain to me that my noble friend does not really want to accept the fact that the Charity Commission is going to overrule or try to direct the actions of trustees. That may be so, and I am probably a lone voice crying in the wilderness, but I think there should be some safeguard to protect inhabitants of almshouses from trustees who may on the face of it be perfectly erudite, honest and above-board, but who could be viewed as being somewhat opportunist in putting on unnecessarily high contributions in order ostensibly to improve their property beyond what is actually necessary.
I should like to think that the Charity Commission is involved, and an increase in the weekly maintenance contributions over and above that which is necessary for the basic upkeep should not be allowed without its approval. I beg to move.
Lord Morris of Castle Morris: My Lords, having been unconvinced by the previous arguments made on behalf of the almshouses, I am now very happy to find myself much more sympathetic to the proposals in this amendment.
The intention of the amendment seems to be to defend the weak and the vulnerable from any possible exploitation. That is a principle to which we should all agree if possible.
Earl Ferrers: My Lords, my noble friend is very keen on almshouses, and we return to them again in this amendment. When the noble Lord, Lord Morris of Castle Morris, rose and said that last time he was not convinced by my noble friend's argument I thought he was going to say "Nor am I this time". I was disappointed that he did not do so.
Almost all almshouse charities are governed by schemes which are made by the Charity Commissioners. Where an almshouse charity has power to require residents to pay maintenance contributions, that power is contained in the scheme; otherwise the trustees would not be able to impose the charges in the first place. Almshouse schemes contain a standard form of wording—I shall not weary your Lordships by quoting it at length—which empowers the trustees to require residents:

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"to contribute a weekly sum towards the cost of maintaining the almshouses and the central services therein".
It is quite clear from that that the contribution of each resident must be put towards the maintenance cost. That means that the trustees have no power at present—let alone in the future—to require contributions in excess of the amount needed for maintenance costs. My noble friend's amendment is therefore not necessary because it seeks to prevent the trustees doing something which they are not allowed to do anyway.
Almshouse schemes usually go a step further. They specify that whatever the amount charged to a particular resident may be, it is to be put towards the maintenance and the amount shall not be such as to cause hardship to the resident. Almshouse charities are basically charities for the relief of poverty. This provision is necessary to prevent any possibility that a resident's poverty may be increased rather than be relieved through residence in an alsmshouse.
On a wider point, there is no earthly reason why the commissioners should continue to be involved in approving the level of almshouse maintenance contributions, unless one believes that almshouse trustees cannot be trusted to set the level of contributions themselves. I do not believe that. Almshouse charities at present are unique among charities in being subject to the commissioners' control over charges or fees which are payable by the beneficiaries. The need for the commissioners' approval was introduced in 1951 and is now quite out of keeping with the principle that trustees should be given the freedom to manage their charities without
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excessive bureaucratic interference. The commissioners will always be pleased to advise the trustees of any charity on any matter which affects that charity. I do not think that my noble friend's amendment is necessary.
Viscount Mountgarret: My Lords, I am grateful to my noble friend for his reply but I am not 100 per cent. happy with it. If what he says is right and it is not necessary to prohibit any increase in weekly maintenance contributions, because in a scheme the deed lays down that it is purely for maintenance and so on, I begin to wonder whether there is any need at all for Clause 51.
It is now too late at night to go into this matter in detail, or indeed to test any opinion. I shall read what my noble friend has said. I note the support given by the noble Lord, Lord Morris of Castle Morris, and I ask leave to withdraw the amendment for the moment, reserving the right to come back perhaps at Third Reading when there has been an opportunity to digest what has been said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 54 not moved.]
Viscount Astor: My Lords, I beg to move that consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at seven minutes before eleven o'clock.