Charities Bill [H.L.]

HL Deb 25 February 1992 vol 536 cc171-241

3.21 p.m.

Read a third time.

Clause 2 [The register of charities]:

The Minister of State, Home Office (Earl Ferrers) moved Amendment No. 1:

Page 2, line 20, at end insert: ("(2A) In subsection (2), after "so excepted" there shall be inserted "(other than one excepted by paragraph (a) of that subsection)".").

The noble Earl said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 2 and 56. These amendments anticipate the amendments in my name to Clause 3 which we shall discuss later. My amendments to Clause 3 will insert an income limit which will be based on the charity's income in the previous financial year. The reference to the previous financial year causes a problem in relation to exempt charities which have registered voluntarily, as they may do under Section 4(4) of the Charities Act 1960. In short, there is no consistent definition of "financial year" for the various types of exempt charity as they are regulated in a variety of different ways. There would, therefore, be a theoretical lacuna in Clause 3.

In looking at ways of overcoming this technical difficulty, and in the light of the amendments in the name of the noble Lord, Lord Richard, on Report, we have looked again at the rationale behind giving the commissioners discretion to allow exempt charities to register voluntarily.

Exempt charities are not subject to the jurisdiction of the commissioners and they are excused compliance with almost all of the 1960 Act and Part I of the Bill. In particular, they are not subject to the commissioners' powers to obtain information or to take action to protect charity property. Nor are they subject to the provisions in the Bill relating to the form, content and submission of accounts. The whole justification for exemption is that the charities concerned are already subject to systems of supervision which would make the commissioners' involvement superfluous.

Because their jurisdiction does not extend to exempt charities, it has been the commissioners' policy since the early 1970s not to register them voluntarily. In the light of the commissioners' development of the register as the basis for their supervisory and monitoring role, the argument for maintaining on the register charities over which they have no control seems to me to be weak. As a result of this Bill, and as a result of computerisation, the register will no longer consist of a list of institutions which are just charitable; it will become a list of charities which are open to public scrutiny and accountability and which are subject to the full supervisory powers of the commissioners.

I have, therefore, concluded that we should take this opportunity to remove the commissioners' discretion to register exempt charities. These amendments do that. They also cancel the registration of any exempt charity which the commissioners have not yet removed from the register. The commissioners fully support that approach, which is a logical extension of the policy which they have pursued for some years. These amendments also settle the technical problem that I mentioned in respect of Clause 3 because that clause applies only to registered charities.

I understand that some exempt charities may be a little worried at not being able to register voluntarily, and about the loss of their registered number. However, I do not think that they need be unduly worried. There are two steps which they may take in order to address that anxiety. First, there is no reason why documents that are produced by an exempt charity should not contain a statement along the lines of: "We are an exempt charity under Schedule 2 to the Charities Act 1960". Secondly, it is open to many exempt charities to take themselves out of the exempt category with relatively little fuss. Charitable housing associations, for example, which are registered under the industrial and provident societies legislation, are exempt charities by virtue of Schedule 2 to the 1960 Act. If they want to be registered charities and subject to the commissioners' jurisdiction, then their proper course is to take themselves out of the exempt category by ceasing to be industrial and provident societies. That would be quite straightforward. For those reasons, I hope that your Lordships will accept the amendments. I beg to move.

Lord Richard

My Lords, perhaps I may briefly express my disappointment to the noble Earl as regards this set of amendments, on which he has been untypically ungenerous. Throughout the passage of the Bill the Government have behaved with a degree of openness and receptivity to good argument and amendments which has been throughly commendable. I am sorry that in this case the Government have not been able to meet the views of, in particular, charitable housing associations, which are extremely anxious about this matter.

Earl Ferrers

My Lords, I understand the anxiety of the noble Lord, Lord Richard. He has been extremely generous in making such gentle remarks because I did not believe that he would be pleased about this matter. The noble Lord will realise that we are trying to keep a register of charities which are accountable to the Charity Commission.

On Question, amendment agreed to.

Earl Ferrers moved Amendment No. 2:

Page 3, line 8, at end insert: ("( ) Where an exempt charity is on the register immediately before the time when subsection (2A) above comes into force, its registration shall cease to have effect at that time.").

On Question, amendment agreed to.

Clause 3 [Registered charity's status to appear on official publications etc.]:

Earl Ferrers moved Amendment No. 3:

Leave out Clause 3 and insert the following new clause:

Status of registered charity (other than small charity) to appear on official publications etc

(".—(1) This section applies to a registered charity if its gross income in its last financial year exceeded £5,000.

(2) Where this section applies to a registered charity, the fact that it is a registered charity shall be stated in English in legible characters—

1. (a) in all notices, advertisements and other documents issued by or on behalf of the charity and soliciting money or other property for the benefit of the charity;
2. (b) in all bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed on behalf of the charity; and
3. (c) in all bills rendered by it and in all its invoices, receipts and letters of credit.

(3) Subsection (2) (a) has effect whether the solicitation is express or implied, and whether the money or other property is to be given for any consideration or not.

(4) If, in the case of a registered charity to which this section applies, any person issues or authorises the issue of any document falling within paragraph (a) or (c) of subsection (2) in which the fact that the charity is a registered charity is not stated as required by that subsection, he shall be guilty of an offence and liable on summary conviction to a fine not exceeding the third level on the standard scale.

(5) If, in the case of any such registered charity, any person signs any document falling within paragraph (b) of subsection (2) in which the fact that the charity is a registered charity is not stated as required by that subsection, he shall be guilty of an offence and liable on summary conviction to a fine not exceeding the third level on the standard scale.

(6) The Secretary of State may by order amend subsection (1) by substituting a different sum for the sum for the time being specified there.").

The noble Earl said: My Lords, in moving this amendment I shall speak to Amendments Nos. 46 and 48. We had a lively debate about these provisions during Report stage. Various anxieties were expressed. The noble Lords, Lord Allen of Abbeydale and Lord Harris of Greenwich, and the noble Baroness, Lady Hilton, were worried that the duty imposed went too far in catching the trustees of even the smallest registered charities. The noble and learned Lord, Lord Simon of Glaisdale, raised other difficult questions relating to the reversal of the onus of proof. I undertook to look at this clause again. I have done so and these amendments are the result.

As your Lordships can see, the amendments will limit the duty imposed by the new provision so that it applies only to those registered charities whose gross income in the previous financial year exceeds £5,000. The advantage in referring to the previous financial year is that we then avoid the possibility of an offence being committed when a charity's gross income unexpectedly exceeds £5,000 in a particular year.

In practice, the requirements should not present those charities whose income fluctuates on the borderline with too many problems because most of those charities are likely to want to indicate that they are registered in any event.

My second change makes liable for the offence the person who authorises the issue, or who issues the document, or in the case of a cheque, the person who signs the cheques. The offence, therefore, will catch only the charity trustee, employee, officer or promoter who is actually responsible for authorising the issue, or who issues or signs the documents in question. This change brings these provisions closer to those which relate to charitable companies, on which this clause is based; that is Section 349(3) and (4) of the Companies Act 1985 as applied by Section 30C(3) of the Charities Act 1960.

Some of your Lordships queried on Report whether creating a criminal sanction was appropriate in this case. I have looked at the possibility of an alternative sanction for non-compliance but I have been unable to find one which is effective. The Charity Commissioners are given a general power in the Bill to compel charity trustees to make good defaults in respect of certain duties which are placed on them, but that does not seem appropriate in this case.

There would seem to be little, if any, point in requiring a defaulting trustee, possibly some considerable time after the event, to write to donors, or potential donors or the recipients of other documents to alert them to the fact of the charity's registered status. The purpose of these provisions is to alert such people to the fact that they are dealing with a registered charity which is subject to the commissioners' jurisdiction and about which information and accounts can be obtained from the commissioners. Potential donors and others need that information before them when they are actually dealing with an approach from a charity and not at a later stage. I hope that the amendment meets with the approval of the House. I beg to move.

3.30 p.m.

Lord Simon of Glaisdale moved, as an amendment to Amendment No. 3, Amendment No. 4: In subsection (6), in line 1, after ("may") insert (", in consequence of change in the value of money,").

The noble and learned Lord said: My Lords, I am generally in agreement with the new clause proposed by the noble Earl and I am grateful to him for coming so far to meet the anxieties expressed at earlier stages. The first anxiety was that the clause as it stood in the Bill criminalised administrative omissions. The second was that it made those criminal offences offences of strict liability; in other words, a trustee was liable for the administrative omission whether or not he knew about it, much less had anything to do with it. The third is that the let-out to him was by reversing the onus of proof. It was not enough that he could prove that he had nothing to do with it but he also had to prove that he had taken all reasonable steps to prevent the omission occurring. The last matter to which the noble Earl referred specifically is that those provisions apply to the smallest charities.

It is obvious that the Government have practically met all the anxieties. Some remain, but it is a criminal offence and the Bill generally seems to be a bit slap-happy about criminalising conduct, particularly offences against bureaucratic requirements. But that is a small matter compared to the great change made in the clause. I welcome it and am grateful to the noble Earl for considering the representations made.

The amendment relates to subsection (6). That is a Henry VIII provision and says, The Secretary of State may by order amend subsection (1) by substituting a different sum for the sum for the time being specified there".

That sum is now £5,000. The importance of that provision can be realised from the fact that my noble friend Lord Allen of Abbeydale proposed at Report stage that the figure should be £25,000. That is a considerable change and identifies the importance of that provision.

The amendment proposes that after the word "may" there should be inserted the words, in consequence of change in the value of money".

Although that still remains a Henry VIII provision it is a concession and an easing which Parliament frequently, if not habitually, allows to a Minister. Anything beyond that is surely objectionable. The provision is not even subject to the more effective affirmative resolution procedure; it is subject only to the ineffective negative resolution procedure. In my submission the Secretary of State should be allowed to alter that figure in consequence of changes in the value of money. But if he wants to make a change which is, in effect, a policy change, he ought to come to Parliament for the usual parliamentary approval.

The noble Earl spoke also to two later amendments which relate to the powers of the Director of Public Prosecutions. As the clause was originally framed, that section and other provisions of the Bill could be prosecuted as offences only with the consent of the Director of Public Prosecutions. There was a good deal of discussion in that regard on the previous occasion. The noble Lord, Lord Renton, supported the excision of that clause, as did the noble Lord, Lord Richard. As I said, I was given some pause by the fact that the noble Lord, Lord Harris of Greenwich, on the whole approved of the clause. However that may be, as the clause now stands unamended there can be no possible reason for requiring the consent of the Director of Public Prosecutions; in other words, the sacrifice of the age-long liberty of the subject to set the law in motion without seeking the favour of any official.

I hope that the provision will now have general approbation. There are separate amendments dealing with the clause and there is no reason to require the consent of the director as it now stands. With regard to Amendment No. 4, I beg to move.

Lord Hailsham of Saint Marylebone

My Lords, before my noble friend on the Front Bench replies, perhaps I may ask either him or my noble and learned friend Lord Simon one or two questions relating to the meaning of Amendment No. 4. What is meant by and how does one define for the purposes of application in the courts a, change in the value of money"? Does it relate to the retail prices index, to which many of our definitions of inflation relate? Does it relate to any particular change in prices? If so, what other change in prices can it refer to? Does it relate to the interest rates charged by banks? What is meant by "money"? Is it sterling? Is it the value of money as a whole? Does the amendment relate to changes in the exchange rate and the value of sterling? For instance, is it tied to the dollar, to the deutschmark, to the yen or perhaps the rouble?

Exactly what are we being asked to do in preference to Henry VIII? I can only say, as no great supporter of that late lamented monarch who was not kind to his Lord Chancellors, "Good old Henry VIII"…

Lord Renton My Lords, I agree with everything that the noble and learned Lord, Lord Simon of Glaisdale, said, except in relation to his own amendment. He has overlooked the possibility that by writing these words into the new clause he may be fettering the discretion of the Secretary of State in a way which the noble and learned Lord might not welcome. For example, he referred to the fact that at an earlier stage of the Bill the noble Lord, Lord Allen of Abbeydale, had suggested that the limit should not be £5,000 which appears in the new clause on the Marshalled List, but £25,000.

Let us suppose that experience shows that £5,000 is too small a sum and that a larger amount should be inserted. Without the noble and learned Lord's amendment the Secretary of State could insert the larger sum, thereby pleasing the noble Lord, Lord Allen of Abbeydale. If the amendment confined the activities of the Secretary of State to, in consequence of change in the value of money

that would not be possible.

I have much sympathy with what my noble and learned friend Lord Hailsham of Saint Marylebone said as regards the meaning of a change in the value of money. However, I respectfully remind him that very frequently it is inserted into an Act of Parliament that a Minister shall have power to change an amount. Everyone has had in mind getting the sum in line with inflation. In my recollection the expression, change in the value of money

has not been used in statutes in order to enable the power to be used in that way. Therefore, I cannot support the noble and learned Lord's amendment although I welcome so much else of what he said.

Lord Cockfield

My Lords, without wishing to defend the precise wording used by the noble and learned Lord, Lord Simon of Glaisdale, perhaps I may say in response to my noble and learned friend Lord Hailsham of Saint Marylebone that this problem has long since been solved in Finance Acts, which are an erudite if somewhat obscure branch of the law. It is not very productive to try to resolve problems which have long been solved.

Lord Brightman

My Lords, without wishing to prolong the debate perhaps I may, in defence of my noble and learned Lord, Lord Simon, say that the wording he has used precisely reproduces that of Section 5(2) of the Charities Act 1985 which states: The Secretary of State may, if he thinks it expedient in consequence of changes in the value of money and so forth.

Lord Allen of Abbeydale

My Lords, as it has been pointed out that I originally suggested £25,000, I had better not pursue Amendment No. 4. I take this opportunity of saying that I am perfectly happy with the figure of £5,000 which was hit upon ultimately. I hope that the power might be retained to increase it if experience suggests that that is desirable, as the noble Lord, Lord Renton, said. On the whole I prefer Amendment No. 4 not to be accepted. The clause as proposed in Amendment No. 3 is a great improvement. I particularly welcome the change reversing the onus of proof, a point which I took at an earlier stage. There is one question I would like to ask. The amendments we have been discussing involve an alteration to Clause 55 which is concerned with proceedings. It states: No proceedings for an offence to which this section applies"— the provision that we have been discussing is one of them— shall be instituted except by or with the consent of the Director of Public Prosecutions". The question I pose is this. Obviously, the provision rules out private prosecutions. But does it mean anything more than that the prosecution should be undertaken by the Crown Prosecution Service, which works with the Director of Public Prosecutions? Or does it mean that in this particular category of offence someone has to produce a certificate showing that the director himself has approved the prosecution? This is the first time that I have come across this provision since we have had a Crown Prosecution Service. I shall be interested to know the answer.

3.45 p.m.

Lord Harris of Greenwich

My Lords, I echo what the noble Lord, Lord Allen of Abbeydale, said. A larger figure might have been better, but I very much welcome this amendment. It represents a significant improvement in the Bill and accordingly I thank the noble Earl for having met our anxieties.

Lord Morris of Castle Morris

My Lords, perhaps I may present the noble Earl with the full picture before he replies. As regards Amendment No. 4 and the definition of money and change of value, we on these Benches are quite content to consider this a private and domestic dispute between lawyers which we do not propose to enter. We welcome the general thrust of the amendments and the detail within them. As the noble and learned Lord, Lord Simon of Glaisdale, said, they meet the anxieties expressed by quite a large number of noble Lords at earlier stages in the progress of the Bill.

We are pleased to see that charities with a gross income of less than £5,000 are exempt from some regulations with which it would be difficult for them to comply. We would have liked to have had a higher figure, but we accept gratefully the limit of £5,000. The provisions made in Clause 3(2) (a) (b) and (c) would impose multitudinous requirements on small charities to the extent that in many cases it would be difficult for them not to offend before long. At Committee and Report stage we pleaded eloquently and long the cause of small charities. I am grateful to the noble Earl now that our plea has been heard to this extent.

Baroness Phillips

My Lords, as someone who has run a charity, I say to the Minister that it is surely unusual to talk about the gross income. When we are dealing with VAT or tax we talk about turnover. There is a great difference, which applies equally to charities. Therefore, I have great sympathy with the amendment which the noble and learned Lord has suggested. The value of money does change. It is not a good idea to include an amount in any Act of Parliament because next year the amount will not be worth the same in any event. I am very interested in the question of the gross income which is a very different thing when one considers the way the money is spent and the possibility of emerging with a profit at the end of the year. Perhaps the Minister can explain why there has been a change.

Earl Ferrers

My Lords, the new clause which I propose reflects the strong arguments made at Report stage by the noble Lord, Lord Allen of Abbeydale, and others. It raises the requirement for a registered charity to disclose that it is so registered on a variety of documents in respect of charities which have an income of £5,000 or less. The noble Baroness, Lady Phillips, was worried about the word "income" as opposed to the word "turnover". Income is fairly straightforward because it is what one receives. Income is probably part of it, but income itself is the money which one receives.

Under my amendment the Secretary of State is given a general power to amend the financial limit if he so wishes. I agree with my noble friend Lord Renton that if the amendment of the noble and learned Lord, Lord Simon of Glaisdale, were accepted it would fetter the Secretary of State. It is quite interesting because the noble Lords, Lord Allen of Abbeydale, Lord Harris of Greenwich, and Lord Morris of Castle Morris, all wished that the figure had been higher. But the Secretary of State, with experience of how this works, may wish to reflect the changes in the value of money. Or, in the light of his experience, he may wish to excuse a higher or lower proportion of the charities from the duties in Clause 3. That kind of flexibility is desirable.

The noble and learned Lord, Lord Simon of Glaisdale, said that the clause would not be using the effective affirmative resolution but only the ineffective negative resolution procedure. The fact is that the Secretary of State would have to come to Parliament and say, "This is what I intend to raise or lower the figure to", and he would have to get parliamentary approval. With the greatest respect to the noble and learned Lord, Lord Simon of Glaisdale, whenever a negative resolution is put down everybody always screams and says that it is absolutely terrible and that we ought to use an affirmative resolution, but it is a perfectly good parliamentary procedure and is used for matters of not enormous moment. This matter slots into that category.

Like the noble Lord, Lord Morris of Castle Morris, I do not propose to join in the argument between noble and learned Lords as to what the value of money means. Suffice it to say that if my amendment were accepted, and not that of the noble and learned Lord, that problem would not arise.

The noble Lord, Lord Allen of Abbeydale, asked why we wanted to use the Director of Public Prosecutions. There are criminal—

Lord Allen of Abbeydale

My Lords, I was not complaining about using the Director of Public Prosecutions. I was inquiring what the procedure would be when he is invoked.

Earl Ferrers

I see, my Lords. Perhaps my mind was taking me back to another stage of the Bill when some people were complaining about the use of the Director of Public Prosecutions. I apologise to the noble Lord if I misappropriated those thoughts to him. The fact is that there are certain criminal sanctions. It is only intended that those should be used in the most extreme cases. Before that is done the Director of Public Prosecutions would have to be consulted and the Crown Prosecution Service would then put into operation the prosecution, should there be one. That does not rule out private prosecutions. That can be done, but the consent of the Director of Public Prosecutions would have to be obtained before doing so.

For those reasons—

Lord Allen of Abbeydale

My Lords, I am sorry to pursue this comparatively small point. Obviously private prosecutions are ruled out, but in such cases does the prosecutor in court have to produce a document—rather like the Attorney-General's fiat in other circumstances—saying that the director has authorised a prosecution?

Earl Ferrers

My Lords, I cannot give the noble Lord, Lord Allen, the answer to that, but I shall find out and let him know.

Lord Simon of Glaisdale

My Lords, I propose with your Lordships' permission to postpone discussing the position of the Director of Public Prosecutions until we come to the two amendments which deal with that aspect. I propose at this stage to deal only with the amendment that I have presumed to move.

There are two questions. First, is it a meaningful amendment? Secondly, if so, is it a desirable amendment? So far as concerns its meaning, I am most grateful to the noble Lord, Lord Cockfield, and my noble and learned friend Lord Brightman. This is a perfectly usual statutory phrase. In addition to the examples that they put forward, it occurs several times in the Child Support Act of last Session and I very much think it occurs in this Bill. Perhaps I may also say that I am most grateful to the noble Baroness, Lady Phillips, for her support.

So much for the meaning of the phrase. I do not think that anybody would have the smallest difficulty in understanding what it means. The figure of £5,000 appears now in the Bill. If, due to inflation, the value of money is halved then the figure of £ 10,000 can quite reasonably be substituted. That is the sort of thing that Parliament would be ready to concede to the Secretary of State. But, over and above that, it is a policy change.

That brings me to the second argument of the noble Earl relating to the affirmative and negative resolutions. It is universally regarded that the affirmative resolution is a far more effective parliamentary control than the negative procedure. That is why the Select Committee on Delegated Legislation of 1972–73 laid down rigid criteria for cases where the affirmative resolution should be imperative. But the main reason is that the negative resolution procedure frequently does not come on for discussion in the other place; and when it does it comes on at a very inconvenient time.

On the other hand, when a regulation is subject to the affirmative resolution procedure the Government have to make time for its discussion in both Houses. Moreover, the need for that regulation then has to be explained. Conversely, in the negative resolution procedure, even in your Lordships' House, the Minister only replies at the end of the debate and there is no scope for seeing what are the real needs. Therefore, the fact that this change is subject to the negative resolution procedure should, in my respectful submission, cause your Lordships to be very wary about conceding any part which involves a policy change. The noble Earl did not gainsay that anything beyond a change in the value of money does involve a policy change.

However, with all the support I have had, the two noble Lords to whom I normally look for support took the opposite view. Therefore, I think on the whole the best thing for me is to ask leave of your Lordships to withdraw the amendment.

Amendment to the amendment, by leave, withdrawn.

On Question, Amendment No. 3 agreed to.

Clause 9 [Supplementary provisions relating to receiver and manager appointed for a charity]:

Lord Simon of Glaisdale had given notice of his intention to move Amendment No. 5: Page 10, leave out lines 17 to 25.

The noble and learned Lord said: My Lords, this amendment goes with Amendment No. 24 and I shall speak quite briefly to them both. I do not propose to move either, but since they have both been tabled and are therefore within the control of your Lordships' House I should explain why I do not propose to move them. It follows a discussion with the noble Earl. These two amendments seek to deal with what is, these days, a very common statutory formula—very common, but highly undesirable. Subsection (6) gives a general power to make regulations. The following subsection states that such regulations may, in particular, do x, y and z.

As a matter of common use of language as well as of logic, it is a particular of a generality. It is contained in a generality and there is no need to set out the particulars. In fact, these two amendments would cut out 20 lines of the measure, which is some benefit in a highly voluble measure.

The reason I do not seek to move the amendments is this. Although the matter was replied to by the noble Viscount, Lord Astor, when I raised it at Report stage, he subsequently wrote to me setting out a further reason—an afterthought, if I may say so—which raised a very important and controversial constitutional point. I did not agree with it as a matter of constitutional law but what was much more serious was that, if varied, it would have very wide repercussions all over the statute book.

Under those circumstances, having discussed the matter with the noble Earl, it seemed to us that it would be better not to discuss a matter of high constitutional principle on the Third Reading of a Bill but rather to give time for further consideration of the matter. I suggested that it was of such importance that it might be considered by the Law Officers. With that explanation, I hope your Lordships will be satisfied if I do not move either of these amendments.

[Amendment No. 5 not moved.]

Clause 18 [Dormant bank accounts of charities]:

4 p.m.

Viscount Astor moved Amendment No. 6: Page 17, line 25, leave out from ("transfer") to end of line 30 and insert ("to each of two or more other charities so specified in the direction such part of that amount or aggregate amount as is there specified in relation to that charity.").

The noble Viscount said: My Lords, in moving this amendment I should like to speak also to Amendments Nos. 25 and 26. These amendments owe much to the suggestions of the noble and learned Lord, Lord Simon of Glaisdale, that the Bill could be and should be shortened here without loss of clarity. During the debate on Amendments Nos. 28C and 28D I acknowledged that the wording of Clause 29(8) could be simplified and agreed that we would come forward with appropriate amendments at Third Reading. The amendments to Clause 29 fulfil that undertaking. Clause 18(2) is very similar in the direction-making powers it gives to the commissioners, though in a different context; that of dormant charity accounts. I thought it right, therefore, to make similar amendments to that provision, too. That is why they are grouped together. I hope that they will meet with your Lordships' approval. Perhaps I may add that the effect of the amendments together is to reduce the length of the Bill by a full 28 words. I beg to move.

Lord Morris of Castle Morris

My Lords, anything that reduces the length of the Bill by 28 words is to be welcomed. I am grateful to the Government for the care that has gone into the rewording of this clause. It clarifies the doubt which many of us felt about the phrase "the appropriate part". So far as I can see, it will not make any vast amount of extra work for the Charity Commissioners and it helps Clause 18 clear up the business of dormant accounts. Noble Lords may recall that that caused me some problems when I tried to squeeze in a reference to the Gillingham bus disaster fund on the question of dormant accounts. I am grateful to the noble and learned Lord, Lord Brightman, for his interest and for his guidance on that particular and, I must confess, marginal matter. I am most grateful for what he said to me. We on these Benches very much welcome the amendments.

On Question, amendment agreed to.

Clause 21 [Annual audit or examination of charity accounts]:

Lord Allen of Abbeydale moved Amendment No. 7: Page 20, line 33, leave out ("(or both)").

The noble Lord said: My Lords, in moving Amendment No. 7 I should like to speak also to Amendment No. 8. I know that I have raised this point twice before, but I really cannot let it go without a final appeal. When the noble Earl explained on Report why he could not accept the amendment the reasons he gave seemed to me so unconvincing and so unlike the noble Earl's normal persuasive style that I thought I must have misheard. I did not pursue the point then, but when I read Hansard, alas, I found that I had not misunderstood. Perhaps I may read briefly what the noble Earl said: 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—

this is the remarkable part— it might be construed that as both items have exceeded the limit and not just one item the charity need not he subjected to that regime".—[Official Report, 6/2/92; cols. 406–407.]

There seem to be three powerful arguments against that interpretation. The first is that it is contrary to common sense, if that has any relevance to the drafting of a statute. The second is that, to my mind, it introduces a possible ambiguity since it might be thought that the intention, however crudely expressed, was that the income and expenditure added together should exceed £100,000. But thirdly, all the legal opinion that I have received—I have consulted other high legal dignitaries as well as my two eminent noble and learned friends who have added their names to the amendment—is unanimous in the view that these words are not necessary. On this occasion the noble and learned Lord, Lord Simon of Glaisdale, and I are at one, and the fact that he has not put his name to Amendment No. 8 is of no significance at all.

At the Committee stage my noble and learned friend Lord Brightman went on record as saying that he believed he could say on behalf of his fellow Law Lords that the construction to which the noble Earl still clings would stand no chance of success whatever in this House. The defence of these words and of the views of the draftsman that the Government have so far put forward carries no conviction at all. The words would be better out of the Bill. I beg to move.

Lord Simon of Glaisdale

My Lords, I am very glad that my noble friend has moved this amendment again because, although these are only two words, they are beyond any reasonable argument unnecessary. It was said at an earlier stage that the words were needed to resolve a possible ambiguity which would arise if the words were omitted. So far as that meant a legal ambiguity, I entirely agree with what was said by my noble and learned friend Lord Brightman that such an argument is quite impossible of acceptance. A legal ambiguity only arises when words are reasonably capable of being understood in two senses. There can be no question of that in this case. But it is not really a legal question at all. It is, as my noble friend Lord Allen said, a matter of common sense and ordinary English language.

I ask the House to think of this situation. At the moment there are five all-rounders contending for three places in the lower middle order of the English test cricket side. Supposing some munificent benefactor said, "I will give £1,000 to any of you who has a batting average over 30 or a bowling average under 20". Two of the five have batting averages over 30 and claim and get the £1,000. Two have bowling averages under 20 and claim and get their £1,000. But the fifth has both a batting average over 30 and a bowling average under 20. What would happen if he were met with the argument, "Oh no, not a penny, I did not say `or both"? Such an argument would not only be hooted out of every court of law with derision and execration but out of every cricket pavilion. I beg the Government to use common sense in this matter and let us get on with serious matters with this Bill.

Lord Richard

My Lords, I am bound to say that I thought I had at least understood the Government's argument on the matter. However, after listening to the noble Lord, Lord Allen of Abbeydale, and the noble and learned Lord, Lord Simon of Glaisdale, I am now not even sure that I understand the Government's argument, let alone the Bill.

The Bill is clear to the extent that if a charity's gross income in the relevant financial year exceeds £100,000 then the subsection applies. I believe that that is all right. Moreover, if the charity's total expenditure exceeds £100,000 in any relevant year, then the subsection applies. I understand that. If the words "or both" are meant to mean that you add up the gross income and the total expenditure, each of which separately is under £100,000, but that if you put them together then you arrive at a figure which is over £100,000, the mere addition of the words "or both" does not seem to me to cover the position.

Alternatively, if the words "or both" are designed to achieve anything else, I have to say that I cannot for the life of me work out what it is that they are supposed to achieve. Therefore, I support the amendment. Perhaps the noble Earl will proceed slowly with his response so that we may understand it.

Earl Ferrers

My Lords, I shall proceed slowly because I want to be very careful with my words. I thought that we would be able to continue without having to discuss this amendment. I looked through the tabled amendments last night and asked whether the amendment now before us had been put down. At that time it had not; but, sure enough, the noble Lord, Lord Allen of Abbeydale, put it down at the last moment and there it was on the Marshalled List this morning.

I am bound to say that the noble Lord, Lord Allen of Abbeydale, is nothing if not tenacious. I say that because we had this issue in Committee and on Report. Noble Lords put their cases, as they have today, with great vigour and confidence. I should say that on each occasion, before coming to your Lordships' House, I have put a metaphorical wet towel around my head in order to understand the noble Lord's amendment, the drafting of the Bill and the difference between the two.

I am advised that, of the two views, the drafting in the original Bill is correct, all embracing and better than the wording of the amendment of the noble Lord, Lord Allen of Abbeydale. In short, the purpose of the amendment is to insert the words "and or" in the Bill. But, of course, there are no such drafting mechanisms. We therefore use the words "or both." Perhaps I may take first the analogy of the noble Lord, Lord Richard. If income exceeds £100,000, the accounts must be produced. If the expenditure exceeds £100,000, then new accounts must be produced. Or, if they both exceed £100,000, a new form of accounts must be produced.

It is a simple drafting matter. The noble and learned Lord, Lord Simon of Glaisdale, introduced a bowling and batting analogy into the debate. I followed it for a certain length of time, but then I became lost in the mathematics. Perhaps I may put forward another analogy which is closer to your Lordships. For example, if the noble Lord, Lord Allen of Abbeydale, tabled an amendment, I should be obliged to reply to it; and if the noble and learned Lord, Lord Simon of Glaisdale, tabled an amendment I should also be obliged to reply to it. But if they both tabled an amendment then, without these words, I might not be obliged to reply if they both spoke to the amendment. Therefore, it is what one might call "belt and braces".

I do not believe that it is a matter of earth shattering importance but, as the noble Lord, Lord Allen of Abbeydale, will keep picking at this bone, I am bound to tell him that I am advised that the Government's wording is the best. On Report, my noble friend Lord Renton said that Ministers are responsible for what goes into the statute. I am conscious that, as always, the noble and learned Lord, Lord Simon of Glaisdale, is very keen on economy of drafting, even though it takes much time and many speeches to achieve the economy that he seeks. Those two considerations are pretty alarming. Your Lordships' assistance over this particular issue, in what I might call the form of a battering ram, has been most helpful. As I have wearied over the difference and as I despair of ever being successful in persuading your Lordships that the Government's wording is correct—and as I was unsuccessful in persuading your Lordships before—I think the best thing that I can do is to lie down like a spaniel, wag my tail and accept the noble Lord's amendment.

Lord Allen of Abbeydale

My Lords, I can only say that I am much obliged to the noble Earl.

On Question, amendment agreed to.

Lord Allen of Abbeydale moved Amendment No. 8: Page 20, line 40, leave out ("(or exceed)").

On Question, amendment agreed to.

4.15 p.m.

Viscount Astor moved Amendment No. 9: Page 20, line 42, after ("who") insert: ("(a)")

The noble Viscount said: My Lords, in moving the amendment I should like to speak also to Amendments Nos. 10 and 11. On Report, in response to an amendment moved by the noble Lord, Lord Allen of Abbeydale, I undertook to bring forward my own amendment which would enable the Secretary of State to make regulations to allow auditors, who are not able to audit company accounts but who are currently able to audit charity accounts, to carry out a professional audit under Clause 21 of the Bill. The amendments before the House fulfil that undertaking. They will allow the Secretary of State to specify bodies whose members may, if the rules of the body so authorise, audit a charity's accounts. I have in mind, for example, members of the Chartered Institute of Public Finance and Accountancy. I commend the amendments to your Lordships. I beg to move.

Lord Allen of Abbeydale

My Lords, I believe that the amendments entirely meet the point that I was trying to make at an earlier stage. I am most grateful.

Lord Morris of Castle Morris

My Lords, we on these Benches welcome the revision. It widens the scope for the appointment of the auditor which will be a relief to many small or specialist charities. The body to which the person must belong under paragraph (b) should be specified in regulations so that the necessity of appropriate audit is properly preserved. Once again, small charities will be the main beneficiaries; indeed, they and we—or both—are grateful for the group of amendments.

On Question, amendment agreed to.

Viscount Astor moved Amendment No. 10:

Page 20, line 44, at end insert (", or (b) is a member of a body for the time being specified in regulations under section 22 below and is under the rules of that body eligible for appointment as auditor of the charity.").

On Question, amendment agreed to.

Clause 22 [Supplementary provisions relating to audits etc.]:

Viscount Astor moved Amendment No.11:

Page 22, line 3, at end insert: ("( ) specifying one or more bodies for the purposes of section 21(2) (b);").

On Question, amendment agreed to.

Viscount Astor moved Amendment No. 12:

Page 22, line 5, leave out from ("to") to end of line 8 and insert ("the making by him of a report on—

1. (i) the statement of accounts prepared for the financial year in question under section 20(1), or
2. (ii) the account and statement so prepared under section 20(3),

as the case may be;").

The noble Viscount said: My Lords, in moving the amendment I shall speak also to Amendments Nos. 13, 14, 15 and 16. The noble Lord, Lord Benson, at Report stage, put it to your Lordships most forcefully that it was misleading to talk in terms of a "certificate" in relation to the audit of accounts because it implied that the auditor (or examiner) was being asked to certify as to the accuracy of the accounts in question. That, of course, was never our intention.

Clearly, the terminology used in the Bill was inappropriate. My noble friend Lord Ferrers was pleased to accept the amendments in principle. We undertook to bring forward our own amendments to put matters straight, to remove the references to certification and, in the case of an independent examination, to substitute a reference to a report. We have done so. I therefore commend the amendments to your Lordships. I beg to move.

Lord Benson

My Lords, I am grateful to the noble Viscount for proposing the amendment. It clears up certain matters which were raised on Report. That expression of gratitude also applies in respect of Amendments Nos. 13, 15 and 16.

Lord Morris of Castle Morris

My Lords, we on this side of the House welcome the amendments. The unsatisfactory word "certification" has been replaced by the very much better word "report." That seems to us a welcome and sensible improvement.

On Question, amendment agreed to.

Viscount Astor moved Amendments Nos. 13 and 14:

Page 22, line 9, leave out ("certification by an independent examiner") and insert ("making by an independent examiner of a report in respect").

Page 22, line 10, leave out ("that section:") and insert ("section 21;").

On Question, amendments agreed to.

Clause 23 [Annual reports]:

Viscount Astor moved Amendments Nos. 15 and 16: Page 23, line 18, leave out from ("on") to end of line 21 and insert ("that statement of accounts or (as the case may be) on that account and statement;"). Page 23, line 23, leave out from ("the") to end of line 24 and insert ("report made by the independent examiner in respect of the examination carried out by him under that section.").

On Question, amendments agreed to.

Clause 24 [Special provision as respects accounts and annual reports of exempt and other excepted charities]:

Earl Ferrers moved Amendment No. 17: Page 23, line 36, at end insert: ("(1A) Nothing in sections 21 to 23 applies to any charity which—

1. (a) falls within section 4(4) (c) of the 1960 Act (certain charities with an annual income not exceeding £1,000), and
2. (b) is not registered.").

The noble Earl said: My Lords, in moving the amendment I shall speak also to Amendments Nos. 18 to 23. On Report, we had a debate, prompted by an amendment moved by the noble Lord, Lord Harris of Greenwich, about what accounting requirements should be placed by the Bill on the trustees of small charities. The noble Lord was especially worried about charities with an income of less than £1,000 which are excepted from the requirement to register with the commissioners. I said that I would look again at the position of those small charities. The amendments before the House are the result of that process.

The amendments simplify greatly the accounting requirements for charities which are excepted, which have not chosen to register and whose income is less than £1,000 a year. All that such charities will now be required to do under the Bill is to keep proper accounting records under Clause 19 and to prepare an annual statement of accounts under Clause 20. This annual statement of accounts will be in the simplified form of a receipts and payments account and a statement of assets and liabilities. The statement will not have to be sent to the commissioners.

I have looked carefully at the suggestion of the noble Lord, Lord Harris, that these small charities should be subject only to the general requirement to keep accounts in Section 32 of the Charities Act 1960. I have concluded, however, that Section 32 of the 1960 Act would impose an equal, if not greater, burden in comparison with Clauses 19 and 20 of the Bill. For example, the 1960 Act requires an income and expenditure account as opposed to the simpler receipts and payments account in Clause 20.

I remain of the view, however, that if an excepted charity registered voluntarily it should accept the duties which go with registration. My amendments therefore do not change the accounting requirements for excepted charities which have chosen to be registered. If these charities feel burdened by the additional requirements brought by registration it is of course open to them to remove themselves from the register.

The amendments to Clause 25 are consequential since excepted charities will continue to be subject to the requirement to make their accounts available to members of the public on request. That is an important element of public accountability which should not prove too onerous.

Lord Harris of Greenwich

My Lords, the Minister has met us more than half way and I am most grateful to him.

Lord Renton

My Lords, I certainly support the amendments but wonder whether my noble friend would be so good as to clarify one thing. Section 4(4) (c) of the 1960 Act as recently amended, to which reference is made in Amendments Nos. 17 and 18, states that the charities that are not required to be registered are, any charity having neither any permanent endowment, nor any income from property amounting to more than fifteen pounds a year, nor the use and occupation of any land". Of course £15 a year would be a ridiculous amount now and the phrase, an annual income not exceeding £1,000", is to be inserted by the amendment. Perhaps the Minister could be so good as to tell me—if he happens to have this information to hand—in what way that income has been increased from £15 a year to £1,000 a year as part of the definition of a "small charity".

Earl Ferrers

My Lords, I am thinking hard about the question that my noble friend has asked me. I am afraid that, despite the fact that he put his question so clearly, I did not understand it. Perhaps he will be kind enough to repeat it. He asked whether I could let him know how the figure of £15 had increased to £1,000. Was he implying that he wanted to know how much of that increase was due to inflation?

Lord Renton

My Lords, I am not asking how much of that is due to inflation. I am asking by what statutory provision the amount has been increased from £15 a year to a sum not exceeding £1,000 a year.

Earl Ferrers

My Lords, the answer to that is in Clause 2(4) (c), which permits that to happen.

Lord Renton

My Lords, I am very much obliged for that. I understand and am most grateful to the Minister.

On Question, amendment agreed to.

Earl Ferrers moved Amendments Nos. 18 to 20:

Page 23, line 38, after second ("charity") insert ("or a charity which falls within section 4(4) (c) of the 1960 Act").

Page 23, line 39, leave out ("the 1960") and insert ("that").

Page 24, line 10, at end insert: ("( ) Any reference in this section to a charity which falls within section 4(4) (c) of the 1960 Act includes a reference to a charity which falls within that provision but is also excepted from registration by section 4(4) (b) of that Act (charities excepted by order or regulations).").

On Question, amendments agreed to.

Clause 25 [Public inspection of annual reports etc.]:

Earl Ferrers moved Amendments Nos. 21 to 23:

Page 24, line 29, leave out ("which is a company or an exempt charity,") and insert ("falling within any of paragraphs (aa) to (c) below,").

Page 24, line 33, at end insert: ("(aa) in the case of such a charity as is mentioned in section 24(1A), a reference to the statement of accounts or account and statement prepared in pursuance of section 20(1) or (3) in respect of the last financial year of the charity in respect of which a statement of accounts or account and statement has or have been so prepared;").

Page 24, line 37, after first ("charity,") insert ("a reference to").

On Question, amendments agreed to.

Clause 29 [Divestment of charity property held by official custodian for charities]:

Lord Simon of Glaisdale had given notice of his intention to move Amendment No. 24: Page 26, leave out lines 18 to 24.

The noble and learned Lord said: My Lords, I am so sorry. This is an amendment to which I spoke earlier when I said that, for the reasons that I had laid before your Lordships, I did not propose to move the amendment.

[Amendment No. 24 not moved.]

Viscount Astor moved Amendment No. 25: Page 27, line 20, after ("direction") insert ("in accordance with subsection (9)").

On Question, amendment agreed to.

Viscount Astor moved Amendment No. 26: Page 27, line 22, leave out from ("pay") to end of line 25 and insert ("to each of two or more other charities so specified in the direction such part of that amount as is there specified in relation to that charity.").

The Chairman of Committees (Lord Aberdare): My Lords, if this amendment is agreed to, I cannot call Amendments Nos. 27 and 28.

On Question, amendment agreed to.

Lord Simon of Glaisdale had given notice of his intention to move Amendments Nos. 27 and 28: Page 27, line 22, leave out ("the appropriate part of that amount") and insert ("such part of that amount as they may specify"). Page 27, leave out lines 24 and 25.

The noble and learned Lord said: My Lords, the noble Viscount kindly wrote to me to say that he was going to table Amendment No. 26, which covers the same ground as my Amendments Nos. 27 and 28 which I tabled on Report. I had not realised that the noble Viscount had tabled his amendment when I tabled mine. It would be quite unprofitable at this stage to canvass the respective merits of the two amendments, both of which make the Bill shorter than as presently drafted. I shall be quite content if my amendments fall in those circumstances and wish merely to express my gratitude to the noble Viscount for doing what he was good enough to say that he would do.

[Amendments Nos. 27 and 28 not moved.]

Clause 31 [Divestment in the case of property subject to Reverter of Sites Act 1987]:

Viscount Astor moved Amendment No. 29: Page 29, line 33, leave out from first ("the") to end of line 34 and insert ("relevant charity trustees (as defined in subsection (3A) below),").

The noble Viscount said: My Lords, these are purely drafting amendments. The commissioners may under the provision of this clause discharge the Official Custodian from his trusteeship at any time before or after the reversion takes place.

The use of the past tense in lines 34 and 39 on page 29 does not seem to me to be appropriate in the case of an order made by the commissioners under subsection (3) (a) of this clause because in such a case the discharging order is made before the reverter takes place. My amendments are merely designed to remedy this, but they also serve, I think, to make the provision easier to follow. I commend them to your Lordships. I beg to move.

On Question, amendment agreed to.

Viscount Astor moved Amendment No. 30:

Page 29, line 38, leave out from beginning to second ("the") in line 40 and insert: ("(3A) In subsection (3) above "the relevant charity trustees" means—

1. (a) in relation to an order made as mentioned in paragraph (a) of that subsection, the charity trustees of the charity in trust for which the land is vested in the official custodian immediately before the time when the order takes effect, or
2. (b) in relation to an order made under subsection (2) above, the charity trustees of the charity in trust for which the land was vested in the official custodian immediately before").

On Question, amendment agreed to.

Clause 32 [Restrictions on dispositions of charity land]:

Viscount Astor moved Amendment No. 31:

Page 30, line 36, leave out ("other than") and insert ("who is not— (i)").

The noble Viscount said: My Lords, in moving Amendment No. 31 I should like to speak also to Amendments Nos. 32, 57, 58, 59, 60 and 61.

As my noble friend Lord Ferrers indicated during Report stage, we have been looking again at the provisions of Clause 32(2) and Schedule 2 and we have realised from this that there is still a loophole in the provisions which relate to "connected persons". A "connected person" is a person or institution to whom the trustees of a charity may not dispose of charity land without first obtaining the consent of the commissioners. The purpose of requiring the commissioners' consent to such dispositions is to prevent trustees from disposing of property to a close relative or associate for less than its full value.

The amendments I now propose extend the provisions relating to "connected persons" in Clause 32(2) (a) to cover someone who is a trustee for or a nominee of a connected person. The amendments to Schedule 2 are consequential. I beg to move.

On Question, amendment agreed to.

4.30 p.m.

Viscount Astor moved Amendment No. 32: Page 30, line 37, after ("Act)") insert (", or (ii) a trustee for, or nominee of, a connected person").

On Question, amendment agreed to.

Earl Ferrers moved Amendment No. 33: Page 31, line 36, leave out ("subsection (7)") and insert ("subsections (7) and (7A)").

The noble Earl said: My Lords, I beg to move Amendment No. 33 and at the same time speak to Amendment No. 34. At Report stage, the noble Lord, Lord Chorley, argued that the requirements in subsection (6) of Clause 32, which provides additional safeguards in relation to the disposition of property held on specie trusts, would create an onerous burden for charities such as the National Trust which undertake a large volume of straightforward land transactions.

These amendments therefore empower the commissioners, on application by, or on behalf of, a charity or class of charities, to direct that subsection (6) of Clause 32 shall not apply. The commissioners will be able to make such a direction, if they consider it to be in the interests of the charity concerned, in relation to all dispositions by that charity, any class of disposition or in relation to any particular dispositions. I hope that this will meet the anxiety of the noble Lord, Lord Chorley. I beg to move.

Lord Richard

My Lords, I support this useful amendment. Perhaps I may ask for clarification that the commissioners will be able in effect to give a blanket exemption—if I may use that rather imprecise phrase—in relation to a body such as the National Trust without the National Trust having to make separate applications in respect of each land transaction.

Earl Ferrers

My Lords, the answer is that the commissioners can give either a blanket or an individual approval without separate applications being necessary if that is thought best.

On Question, amendment agreed to.

Earl Ferrers moved Amendment No. 34:

Page 32, line 3, at end insert: ("(7A) The Commissioners may direct—

1. (a) that subsection (6) shall not apply to dispositions of land held by or in trust for a charity or class of charities (whether generally or only in the case of a specified class of dispositions or land, or otherwise as may be provided in the direction), or
2. (b) that that subsection shall not apply to a particular disposition of land held by or in trust for a charity, if, on an application made to them in writing by or on behalf of the charity or charities in question, the Commissioners are satisfied that it would be in the interests of the charity or charities for them to give the direction.").

On Question, amendment agreed to.

Clause 33 [Supplementary provisions relating to dispositions of charity land]:

Earl Ferrers moved Amendment No. 35:

Page 33, line 16, at end insert: ("( ) Where—

1. (a) any land held by or in trust for a charity is sold, leased or otherwise disposed of by a disposition to which subsection (1) or (2) of section 32 applies, but
2. (b) subsection (2) above has not been complied with in relation to the disposition,

then in favour of a person who (whether under the disposition or afterwards) in good faith acquires an interest in the land for money or money's worth, the disposition shall be valid whether or not—

1. (i) (where subsection (1) of that section applies) the disposition has been sanctioned by an order of the court or of the Commissioners, or
192
2. (ii) (where subsection (2) of that section applies) the charity trustees have power under the trusts of the charity to effect the disposition and have complied with the provisions of that section so far as applicable to it.").

The noble Earl said: My Lords, I beg to move Amendment No. 35 and speak to Amendments Nos. 36, 37, 38, 39, 40 and 42. I must first apologise to your Lordships for the late tabling of these amendments. They are the result in part of representations made to my officials only last Thursday afternoon by the Law Society about the provisions of Clause 33.

Subsection (1) of Clause 33 requires any contract for the disposition of land held by, or on trust for, a charity to state that the land is so held together with certain other information. Subsection (2) of the clause requires trustees, when disposing of land held by, or on trust for, the charity to certify in the instrument by which the disposition is made that either the disposition has been sanctioned by the Charity Commission or the court or that the trustees have complied with the provisions of subsection (2) of Clause 32.

Subsection (3) of Clause 33 provides that where that certificate is given, the interests of the purchaser who acquires the land for money or money's worth are protected even if the facts stated in the certificate are subsequently found to be incorrect.

The Law Society pointed out that there appeared to be no equivalent protection for the purchaser of property who is unaware that the land is charity land and where the trustees have not certified the instrument as required by subsection (2) and, indeed, where they may not be able to do so. Where the land is unregistered, the purchaser will not be on statutory notice that the land is held on charitable trusts and therefore will not know that special considerations, including the need for a certificate, apply to the disposition unless he has actual knowledge that the land is so held.

It seems to me that the situation which I have described is unlikely to happen very often. Nevertheless, it is a worrying lacuna in the present provision since it does not seem fair that the purchaser for value without notice should lose the interest in the land that he has purchased. My Amendment No. 35 is designed to remedy that situation.

In examining the Law Society's query, we have looked again at the land transactions provisions in the Bill and, I regret to say, we have found other gaps or inconsistencies between the provisions.

The amendments to Clause 34, which refer to the restrictions on charging charity property, have two purposes. First, they restrict the scope of the provision to mortgages and charges over "land" as opposed to "property". The expression "property" would include such things as stocks and shares. It was never our intention to catch property other than land in this provision.

Secondly, my Amendment No. 39 inserts the equivalent of subsection (8) (a) of Clause 32 into Clause 34. This has the effect of ensuring that the provisions of Clause 34 override anything in the charity's trust and of disapplying the provisions of Clause 34 in relation to any mortgage or charge for which general or special authority is expressly given in or under any Act of Parliament or by a legally established scheme. The other amendments to this provision are consequential on these changes.

The provisions in the new clause for insertion after Clause 34 are intended to provide the same protection to those who lend money to charities and accept land held on charitable trusts by way of security as is provided by subsection (3) of Clause 33 and the new subsection in Amendment No. 35 to purchasers of land held on charitable trusts. The new clause makes the same provision to that provided in subsections (1), (2) and (3) of Clause 33 but in relation to mortgages. Subsection (5) provides the equivalent disapplication of subsection (1) of Section 29 of the Settled Land Act 1925 in relation to mortgages as subsection (5) of Clause 33 does in respect of other dispositions of land.

I am afraid that that is a rather technical explanation. I am sorry that I was unable to give your Lordships greater notice of the amendments. I hope that my explanation will clarify what they are about. They cover important matters. Purchasers or chargees of property which is held on charitable trusts need to be properly protected. The amendments are designed to ensure that they are, and I commend them to your Lordships. I beg to move.

On Question, amendment agreed to.

Clause 34 [Restrictions on charging charity property]:

Earl Ferrers moved Amendments Nos. 36 to 40:

Page 35, line I, leave out from ("no") to ("without") in line 3 and insert ("mortgage of land held by or in trust for a charity shall be granted").

Page 35, line 5, leave out ("the mortgaging or charging of any such property") and insert ("a mortgage of any such land by way of security for the repayment of a loan").

Page 35, line 7, leave out ("or charge").

Page 35, line 27, at end insert: ("(5) This section applies notwithstanding anything in the trusts of a charity; but nothing in this section applies to any mortgage for which general or special authority is given as mentioned in section 32(8) (a).").

Page 35, line 27, at end insert: ("( ) In this section— land" means land in England or Wales; "mortgage" includes a charge.").

On Question, amendments agreed to.

Viscount Astor moved Amendment No. 41: Page 35, line 27, at end insert: ("( ) Nothing in this section applies to an exempt charity.").

The noble Viscount said: My Lords, this is a simple amendment. It does no more than clarify the scope of Clause 34. The clause contains restrictions on the mortgaging or charging of charity land to ensure that trustees receive and consider expert advice when they borrow money secured on the trust property.

It was never our intention that exempt charities should be caught by Clause 34. Exempt charities fall outside the jurisdiction of the commissioners now and they will continue to do so when this Bill becomes law. Exempt charities are not subject to the restrictions on dealing with charity property in the Charities Act 1960; this amendment therefore maintains the status quo. I beg to move.

On Question, amendment agreed to.

Earl Ferrers moved Amendment No. 42: After Clause 34, insert the following new clause:

Supplementary provisions relating to mortgaging of charity land

(".—(1) Any mortgage of land held by or in trust for a charity shall state—

1. (a) that the land is held by or in trust for a charity,
2. (b) whether the charity is an exempt charity and whether the mortgage is one falling within subsection (5) of section 34, and
3. (c) if it is not an exempt charity and the mortgage is not one falling within that subsection, that the mortgage is one to which the restrictions imposed by that section apply;

and where the mortgage will be a registered disposition any such statement shall be in such form as may be prescribed.

(2) Where subsection (1) or (2) of section 34 applies to any mortgage of land held by or in trust for a charity, the charity trustees shall certify in the mortgage—

1. (a) (where subsection (1) of that section applies) that the mortgage has been sanctioned by an order of the court or of the Commissioners (as the case may be), or
2. (b) (where subsection (2) of that section applies) that the charity trustees have power under the trusts of the charity to grant the mortgage, and that they have obtained and considered such advice as is mentioned in that subsection.

(3) Where subsection (2) above has been complied with in relation to any mortgage, then in favour of a person who (whether under the mortgage or afterwards) acquires an interest in the land in question for money or money's worth, it shall be conclusively presumed that the facts were as stated in the certificate.

(4) Where—

1. (a) subsection (1) or (2) of section 34 applies to any mortgage of land held by or in trust for a charity, but
2. (b) subsection (2) above has not been complied with in relation to the mortgage,

then in favour of a person who (whether under the mortgage or afterwards) in good faith acquires an interest in the land for money or money's worth, the mortgage shall be valid whether or not—

1. (i) (where subsection (1) of that section applies) the mortgage has been sanctioned by an order of the court or of the Commissioners, or
2. (ii) (where subsection (2) of that section applies) the charity trustees have power under the trusts of the charity to grant the mortgage and have obtained and considered such advice as is mentioned in that subsection.

(5) In section 29(1) of the Settled Land Act 1925 (charitable and public trusts)—

1. (a) the requirement for a mortgage of land held on charitable, ecclesiastical or public trusts (as a "conveyance" of such land for the purposes of that Act) to state that it is held on such trusts shall not apply to any mortgage to which subsection (1) above applies; and
2. (b) the requirement imposed on a mortgagee (as a "purchaser" for those purposes), in the circumstances mentioned in section 29(1) of that Act, to see that any consents or orders requisite for authorising a transaction have been obtained shall not apply in relation to any mortgage in relation to which subsection (2) above has been complied with;

and expressions used in this subsection which are also used in that Act have the same meaning as in that Act.

(6) In this section— mortgage" includes a charge, and "mortgagee" shall be construed accordingly; land" means land in England or Wales; prescribed" and "registered disposition" have the same meaning as in the Land Registration Act 1925.").

On Question, amendment agreed to.

Clause 35 [Removal of requirements under statutory provisions for consent to dealings with charity land]:

Lord Stanley of Alderley moved Amendment No. 43: Page 35, line 41, at end insert: ("( ) In section 2(4) of the Education Act 1973 after "religious education in accordance with the tenets of the denomination concerned" there shall be inserted "and, for the benefit of the locality served or formerly served by the voluntary school at the premises that have gone or are to go out of use for such a school, use for other educational purposes".").

The noble Lord said: My Lords, with the permission of the House I shall also speak to Amendment No. 44. I start by thanking my noble friend Lord Ferrers, the Church lawyers and their officials and also my neighbour, the Bangor diocesan registrar and in particular the right reverend prelate, for all the time, trouble and letters they have written since Report on this subject. I am most grateful to them for their help as I fear some of my remarks on Report contained a certain inexcusable acidity.

The problem which this amendment addresses occurs when a church village school is no longer being used as a school and the diocese applies under Section 2 of the Education Act 1973 to the Secretary of State for permission to reallocate its resources. That usually involves a sale, although other methods can be used —for example, a long lease. The Secretary of State is then empowered to allocate the proceeds as he thinks fit within the terms of the trust. However, in most cases he will apportion three-fourteenths to the village and the rest to the diocesan board of education.

I believe it is correct to say that all parties, including the Church, are happy that in the great majority of cases some part of the benefit should return to the village. The problem is that on some occasions the village would like to receive a greater proportion than the three-fourteenths that I have mentioned. However, what is much more important, the village would like this benefit to be used for wider charitable purposes in the village, whereas the law and, I think, the Church—the right reverend Prelate will correct me if I am wrong on that point—insist that whatever the Secretary of State decides to allocate to the village must be used for denominational religious purposes. That is the nub of our disagreement. As the law stands, it is not possible for the village to use this fund for anything except narrowly defined religious education. Hence the fund is called the Sunday school fund and its trustees are usually rectors and church wardens. Our amendments would widen the uses to which the village could put that benefit.

The village case is supported by the report entitled Faith in the Countryside. Although I fully accept the Church need not act on that report, I hope members of the Church listened this morning to "Pause for Thought", in which the right reverend Prelate the Bishop of Southwark implored us, and in particular the Church, to listen more attentively and constructively. Perhaps if the bishops do not do so, they may be refused entry to Westminster Abbey to say their prayers. They were refused entry 100 years ago for failing to be tolerant.

My case is that, when these trusts were made, education covered a much narrower field than is the case today. The classics were about all our ancestors studied—

Lord Renton

And the Bible!

Lord Stanley of Alderley

My Lords, they also studied the Bible. In Wales, if one did not belong to the Church of England as it was then, one received no education at all. Education has a more essential and wider role to play in the village. I believe that in the village education should embrace such things as playgroups, adult study groups and physical and recreational education. I hope your Lordships will agree that these wider benefits should be made available. Our amendments would achieve that, but I suggest that allowing and indeed making the Church become more involved in those activities would be of great benefit to the Church, as the Archbishop's Commission on Rural Areas thought. Surely it is an essential tenet of the Christian faith to be involved in all the affairs of men and women. Certainly, when these trusts were founded in the 19th century, progressive churchmen agreed with that concept. Our amendments would enable that involvement to occur.

I realise I have cut a lot of legal corners. I am, thank God, a farmer and not a lawyer. I know that the right reverend Prelate will be able to explain the position of the Church. I wish him in particular to explain the flexibility he spoke of on Report at col. 428 of the Official Report. Will that flexibility allow the fund to be used elsewhere if it is not possible to provide a demand for a Sunday school? Will it allow and encourage leaseholds and, if so, what will qualify as a leasehold? Will it allow sale at a discount under a covenant? Must the premises be used for religious education, or do they merely have to he made available for that purpose? Will the Church encourage full consultation with the village before applying for a Section 2 order?

I conclude by putting a question to your Lordships. Were these educational trusts set up solely to provide religious education in accordance with the tenets of the Church of England, or were they also in part set up to provide education for the village? I hope noble Lords think—as I do—that some small part of that trust was intended to provide education for the village and that they will support these amendments, or at least the principle behind them. I beg to move.

4.45 p.m.

Lord Houghton of Sowerby

My Lords, I fear my support for the noble Lord may be counter-productive because I am too much on his side to be tolerant about this matter. The Church of England has enjoyed remarkable support from non-Anglican citizens over a long period of time. The Church of England could not have maintained its denominational schools without state support. It could not have retained its denominational exclusiveness in the educational system if there had been no state support. The Church of England has been amply rewarded—I would say almost extravagantly rewarded—by the tolerance of other people.

Now, when a school is about to be dissolved and other arrangements made for the education of the children who attend the school, the question arises of who should have the money when the school premises and site have to be disposed of. Is that money to be used wholly for the purposes of Anglican schools elsewhere, or can it be divided between religious interests and those of the generality of citizens of the village?

I lived in a village where the villagers were mostly non-Anglicans. The patronage of the Church hierarchy served as a class distinction. The pew rents were beyond the purse of ordinary citizens. If one did not have one's own pew, one was not welcome in anyone else's pew. That was the case when I lived in a village in my youth. I am sure much of the spirit of the division between denominational school education and other education is still there.

It is monstrous to suggest that the whole of the proceeds in the cases we are discussing should be used for denominational expenditure simply because that is how the process started. I suggest that how it started is no basis for deciding what should be done now. That era is at an end except that denominational schools still receive state aid. What is more, to the utter dismay and horror of my family, support is now given to the Roman Catholic Church. If that is not an example of tolerance, I hope noble Lords can tell me what is. I speak as a member of a Nonconformist household whose members are bitterly resentful of the patronage, conservatism and disdain of Church of England churchgoers. I love to have an opportunity to vent my spite and the fruits of my historical inheritance upon the denominational educational system. I experienced that system and the remnants of it still exist.

I warmly support my noble friend opposite. I only hope that I have not ruined his case.

Lord Boardman

My Lords, I, too, support my noble friend and his amendments. Perhaps I may quote, as a precedent, experience in the village where I live. The schoolhouse of the church school became available and was sold. By agreement with the diocese, the local authority and the parish, the whole of the proceeds of that sale were placed in a trust for the educational benefit of the people of the village. That purpose is construed widely. It has enabled the trustees, who include the vicar, the churchwardens and members representing various interests in the village, to devote the funds to such purposes as buying books for young people going on to further education, to help the scouts in their work, and to provide various items for the village school, which still exists, which could not be provided by the educational fund. It has provided a great service to the village, which I feel sure justified the creation of the fund following the sale of the schoolhouse.

I hope that the spirit of my noble friend's amendments can be agreed by my noble friend the Minister and that trusts may be extended to include the proceeds of the sale of church schools.

Lord Hylton

My Lords, I hope that I shall succeed in making an irenic speech in support of the amendment, which was moved so well by the noble Lord, Lord Stanley of Alderley.

My father was an Anglican all his life. I happen to have been a Roman Catholic all my life. Nevertheless, I have served as a manager of a village, voluntary aided, Church of England primary school, (I believe that the managers have since been upgraded to governors). My three eldest sons attended that school. There is very little spirit of contention in that village. As well as functioning as a primary school the building has also provided a venue for such activities as the village Women's Institute, the flower show and a number of other purposes beneficial to the local community. I hope that it will continue for many years as a school and will not have to be closed.

However, one recognises that in some instances there are no longer enough children in a village to support a school, or perhaps a new school has been built in the next village and it is not possible to maintain two schools in the area. Closure of a school bears most severely on those villages which do not also possess a village hall. Having lost their schools, they may have no common meeting room for village purposes. That is a very difficult situation. In such cases there is a strong need for a venue for the type of function mentioned by the noble Lord, Lord Stanley of Alderley, such as pre-school groups, adult educational and recreational activities and other meetings. Therefore, I hope very much that the amendment will commend itself both to the Church of England and to the Government.

Lord Morris of Castle Morris

My Lords, I must first beg leave of your Lordships to correct the noble Lord, Lord Stanley of Alderley. He said that in Wales in previous centuries it was not possible to obtain a proper education if one was not part of the Church of England as it then was. I should be delighted to discuss with him at greater length, and in some other place, the superb work in the 18th century of Griffith Jones of Llanddowror and the circulating schools which he inaugurated and the spread, which has been widely documented in many books, of the Sunday school movement by Robert Raikes of Gloucester.

The amendment before us concerns the church village school. I am sure that the noble Lord is right in saying that the central question is where the greater need lies. It is difficult even for a fully paid up member of the Church of England like me to claim that religious educational needs in rural areas are growing at the same rate as secular educational needs. I find that I must support the amendments, for the reasons so lucidly given by the noble Lord.

It is clear that activities for educational purposes in villages or rural localities will increase in the years to come. Pre-school activity, physical education, extra-school activities, adult education and everything that it implies from small colleges through to the Open University—everything that is described in the French phrase, l'education permanente—suggest that the greater need in village localities will relate to the secular educational needs of the village. I cannot but think that they should be served so far as is possible by the re-use of this money in the way which the amendments propose.

The Lord Bishop of Guildford

My Lords, it may perhaps help if at this stage I try to respond to some of the points that have been made. I should like to express my gratitude to the noble Lord, Lord Stanley, with whom I have had conversations on this matter. I believe that in one sense there is no difference between us. As I explained to him, I come from a farming family and I have been rector of a country benefice in which a school was closed. Therefore, I know the difficulty to which the noble Lord alluded. Indeed, it touches a raw nerve whenever such a school is closed.

A school is not only a place of education. It is a focal point in the life of a community. It is a meeting place. Therefore, when that school closes a degree of the life of the community disappears. Inevitably the people left will wish to find a way of replacing what has been taken away from them. There is no doubt about that anxiety. I need to put before your Lordships, therefore, the dilemma in which we find ourselves and the way in which we try to relate to obligations and responsibilities.

I shall deal first with the responsibility in connection with religious education. Most church schools are held on trust and we have to honour trust law and obey trust deeds. The assets of a church school, as has already been pointed out, will have come over the years from a number of different sources. No doubt when such schools were founded, say 100 years ago, some of the money would have come from local people—local landowners and so on. Over the years, or even initially, it is likely that some of the assets will have come from grants from the National Society (Church of England) for Promoting Religious Education. I declare an interest as the present chairman of that body. They will also probably have received money from the Government and probably also recycled Section 2 money from other villages. Therefore, the assets will have come from a number of different sources; some local, some diocesan and some national. Therefore, we have to hear in mind that the money is not all local in origin.

It needs to be borne in mind that these schools are church schools, whether Church of England, Roman Catholic or Free Church. In the 19th century it was the National Society which was the principal agency for the founding of schools in England and Wales. Other schools were founded by the Free Churches through the British and Foreign Schools Society. Therefore, such schools were not Church of England by accident; they were and are Church of England schools by deliberate intent.

In 1944, as part of the Church/state bargain, it was agreed that money from redundant church schools should be recycled into the Churches' partnership in the Church/state relationship in order to maintain the Churches' part in the educational system of the country. The Church of England currently has 2,000 aided church schools, quite apart from controlled schools of which there are a greater number. The Roman Catholic Church has more aided schools than the Church of England. If there is to be a continued partnership between the Church and state in education, the money invested by the Churches in education needs to remain available as the position of schools changes in the light of changing circumstances. Therefore at the end of the day we must be clear that we are dealing with money held on trust for denominational religious education.

Having said that, I myself—I speak specifically for the Church of England—would wish to put alongside that the responsibility that the Church of England feels for the local community. We have always been a local Church and a community Church with doors open to the varied local concerns. Our view is that, provided we can do it without breach of trust, we should like to be able to meet local aspirations. I believe that we can do so in large measure within the existing law.

As the noble Lord, Lord Stanley, pointed out, when a school closes it is customary for three-fourteenths of the proceeds to be made available—the noble Lord said it was made available to the village, but more strictly it is usually made available to a local trust, of which the trustees are the vicar and the churchwardens —and usually required to be used for general religious education purposes. I regret that the phrase used is normally "Sunday school fund". I feel that we should abandon that phrase. It is largely misleading. For many people "Sunday school" still conjures up a picture of elderly spinsters telling Bible stories to small groups of children. There is a lot to be said for that but the world has moved on and that is not the way in which religious education, even of a denominational kind, is put into practice. We speak nowadays of "all-age learning". Many localities have holiday clubs in which children are given the opportunity for wide ranging activities of an educational kind but with a religious dimension. Those are the kinds of activities that are included in our understanding of religious education.

I was almost challenged, so to speak, by the noble Lord, Lord Stanley, to give examples of the flexibility that exists under the present law; and I am grateful to the noble Lord, Lord Boardman, who gave an example of that flexibility under the existing law. It is possible. At this point I must tread wearily because on the one hand the Secretary of State for Education has to make decisions about these matters and on the other hand the Charity Commissioners look carefully at us to make sure that we observe the trusts.

In the advice which the Church of England gives to dioceses and trustees of local schools—we are reissuing that advice and strengthening it—we always say that there should be local discussions at an early stage, in the hope of clarifying the local needs and seeing whether there is a way to meet them. Within the existing law we can give consideration, for instance, to leasing school premises to a local charity, with a reservation about using the school at specified times for religious education. If that is done, the reservation necessarily lowers the market value. That gives a degree of flexibility. We can, for instance, consider a sale to a local charity, provided that the capital is not immediately needed for Church schools elsewhere. A sale with restrictive covenants can be considered, so that if the building is subsequently resold the Church interest for religious education can have its appropriate share in any uplift value. Those are the kinds of ways that have been used and which we can continue to use and encourage, provided that we observe the terms of the trusts to which the money has been given and used over the years.

I am in some difficulty when it comes to the amendments. There seem to be two amendments. If I have understood the position correctly, they are alternatives; one has been moved and the other has not been moved. I have some difficulty in speaking to them.

Lord Renton

My Lords, perhaps the right reverend Prelate will allow me to intervene. It may help him if I mention that they are intended to be alternative amendments. That is what my noble friend Lord Stanley and I agreed, and I understand that the noble Lord, Lord Hylton, and the noble and learned Lord, Lord Denning, accept that.

The Lord Bishop of Guildford

My Lords, I am grateful to the noble Lord for that intervention. I understood the amendments to be alternatives. In that case it may be helpful to say—I hope noble Lords will forgive me if I put it in these terms —that the less damaging of the two amendments is the first one. I doubt whether it achieves its objective because it leaves untouched in the 1973 Act the dominant phrase of the clause; namely, that any reuse of sale proceeds must be to [enable] the denomination concerned to participate more effectively in the administration of the statutory system of public education". As I understand it, that phrase would still be left, controlling the rest of the section even though the amendments may be inserted at the end.

The second amendment appears to raise particular difficulties. If I read it right—I am sure that the noble Lord, Lord Renton, will put me straight on it—it provides that the premises of any school shall be used for educational purposes if the Secretary of State so directs. But it does not in any way alter the nature of the trust or the nature of the trustees. What would happen would be that the present trustees, who have been holding the building and using it for religious educational purposes, would find, whether they liked it or not, that they were operating for a totally different purpose. Without change of trustees and the agreement of those trustees to the change of purpose, we may be in some difficulty because the trustees may not be sympathetic to the use that the Secretary of state lays down.

The noble Lord may be able to help but I find particular difficulties with the second amendment. If, therefore, an amendment is to be made, I should certainly want to look closely at the first one. The examples that I and the noble Lord, Lord Boardman, gave indicate that already there is much more flexibility without breach of trust than people have hitherto recognised. I give such undertaking as I can, but I have to be realistic. These matters are not in the control of the General Synod Board of Education, of which I am chairman. These matters are in the control of local trustees and diocesan authorities. The only undertaking I can give, therefore, is to say that I am ready, as chairman of the Church of England Board of Education, to give such clear, firm encouragement and advice as I can to diocesan authorities to take very seriously the points which the noble Lord, Lord Stanley, quite rightly said are included in the report Faith in the Countryside, to which he drew particular attention.

On the basis of that explanation of the history of the circumstances and the present law, whose history differs slightly from that given by the noble Lord, Lord Houghton, I hope that the noble Lord will not find it necessary to press the amendment.

Lord Hylton

My Lords, before the right reverend Prelate sits down, perhaps I may ask a question which he or the Government will be able to answer. It concerns the public interest, in the sense of ratepayers' and taxpayers' interest, in Church of England schools. Ever since 1944 and perhaps before then, it has been possible for a substantial part of the cost of both repairs and improvements to be carried by the local education authority—in some cases up to 85 per cent. How is the public interest of the general population in that expenditure to be safeguarded for the benefit of the local community in the area served?

Lord Renton

My Lords, perhaps I may refer to my amendment before my noble friend Lord Ferrers replies to this important debate.

First, I hope that I shall please the right reverend Prelate by the proviso at the end of my amendment which in effect gives the trustees the last word, a veto, even over the discretion of the Secretary of State, in using the power which my amendment suggests he should have to use the assets and the buildings, for any educational, recreational or other purposes of benefit to people living in the locality". I hope in that way to set at rest the mind of the right reverend Prelate.

The Lord Bishop of Guildford

My Lords, will the noble Lord help me further? The amendment does not provide that the trustees shall decide whether there is denominational need. It appears to me to imply that the Secretary of State decides whether there is any local denominational educational need. If that is correct, that would surely involve the Secretary of State making a decision that he may not wish to make and, furthermore, might involve considerable negotiation which might be time consuming. Perhaps I have misunderstood the noble Lord.

5.15 p.m.

Lord Renton

My Lords, perhaps I may amplify the explanation that I gave. That proviso means that the terms of the trust have to be enforced. That is the same as saying that the trustees, who are bound by the terms of the trust, would have the last word.

Perhaps I may deal with several of the matters which have arisen. As the right reverend Prelate was good enough to say, there is a dilemma. As was pointed out by every single noble Lord who spoke, it is a worrying situation in those villages where the matter arises—and it arises fairly frequently all over the country. I have several examples in my former constituency. I live in a village in which there is a splendid new Church school. Other Church schools were closed down in neighbouring villages in order that it could be built. But it was built very largely with public funds. I should not like to hazard the exact proportion of Church money but it was, I believe, very small. If we were to decide the matter on who provided the money, we should bear in mind that, although the money was provided originally for a Church school, it did not normally come from the Church to any great extent; it came from parishioners, from people living in the village not all of whom were necessarily regular churchgoers, although I dare say that one could estimate that pretty well all of them were members of the Church of England or whichever denomination had built the school.

I sympathise a great deal with the right reverend Prelate; I happen to be a member of the Church of England. He emphasised the need for maintaining religious education in accordance with the terms of the original trust. But we have to bear in mind that throughout this century religious education was only a small proportion of the total amount of education provided in Church of England schools. That is a factor which we ought in conscience to bear in mind even though we are keen supporters of the Church of England.

The amendment in the name of the noble Lord, Lord Stanley of Alderley—which I support as an alternative to my own—and my own amendment are respectively the third and fourth attempts to put before your Lordships some way to resolve the dilemma. The method that I have adopted, I have to concede, would cover only a very small proportion of any cases which might arise. My amendment proposes that the Secretary of State should have a very wide power indeed. It provides that, the Secretary of State may make an order"— my amendment uses the word "may"—

requiring those premises to be used for any educational, recreational or other purposes of benefit to people living in the locality provided that he may not make any such order if the endowments of the trust on which these premises were held are needed for denominational education under such trusts". That gives to the right reverend Prelate the provision that he seeks on behalf of the Church. I have to concede that it would only be in a small number of cases, a very rare occasion, when the Secretary of State would be able to use his full power and find that he was not prevented by the terms of the denominational trust.

It is quite clear from the discussions that we had in Committee, on Report and in the debate today that there is a wide desire in your Lordships' House—I am sure that it is reflected throughout England and Wales —that something should be done to try to save premises which were Church schools or denominational schools of one kind or another but which have come into very wide and necessary use by villages. Some uses have been mentioned already. My noble friend Lord Boardman referred to scouts. We know that the Red Cross sometimes likes to use village schools, as do the Women's Institute and the Mothers' Union, which is indeed a Church organisation. Parish councils, parochial church councils and the British Legion are all good causes which the Church of England supports. If the premises are not available for those good causes, then one of the assumed wishes of the Church of England will be frustrated.

I most earnestly ask that my noble friend give further thought to the matter. If he supports either the very limited, modest amendment moved by my noble friend Lord Stanley of Alderley or my amendment, that would give some satisfaction but only in a limited number of cases. If, after negotiating with the Church authorities, the Government could find some more fulfilling, broader way of dealing with the problem, then all the better. I hope that we shall receive an encouraging reply from my noble friend on the Front Bench.

Lord Congleton

My Lords, almost everything that I had hoped to say has already been said, if not in Committee, on Report and this afternoon. I speak in support of the amendment tabled by the noble Lord, Lord Stanley, and I congratulate him on his persistence. He has spoken with eloquence and lucidity.

I speak as one who has lived in a small village in south Wiltshire for 32 years. I have been treasurer of a small parochial church council, manager of the village school and in a rather elevated fashion was for six years a member of the Advisory Board for Redundant Churches. Therefore, I claim an insight into the problems which beset the Church of England, of which I have been a member all my life, and the small parishes to which reference has been made. The right reverend Prelate the Bishop of Guildford was correct in saying that the Church acts within the law. The Charity Commissioners apply the law. The issue is in a bind of some kind.

There is widespread support for the wider use of former village schools. When I first went to live in my village there was a church, a chapel, a pub, a post office, a village hall and a school. We have lost the post office, the shop and the school—that may seem a strange set of priorities. Our village hall was an old First World War army hut. Because our community is resilient and resourceful it set about providing itself with a new hall. When the school was closed seven or eight years ago it was discovered that there was a residuary legatee. The school arose as a result of a benefaction by some 19th century munificence on the part of a local resident. To the heirs and successors of that benefactor went the school, and it was sold for a considerable sum of money. After several months I discovered what was happening and made an application to the residuary legatee for a contribution towards the new village hall, which was costing about £30,000 to build. I received what I suppose was a generous cheque of £25. That example is not entirely parallel with the sale of Church schools and the money reverting to the Church for educational purposes, but it is not entirely dissimilar.

I can only echo what has been said by those who have spoken in support of the amendment. I listened to the right reverend Prelate with great interest. He was being generous in talking about flexibility and so forth. However, I asked myself why we should wait upon the generosity of the Church of England in such issues when we had had the use of our schools for purposes other than religious education and general education for so many years. Have we not established some kind of right to have them and to use them in the way in which they have been used hitherto? I am not certain that it is right that we should be beholden in this way. The Church is correct and is within the law. The Charity Commissioners apply the law. As legislators it is our job to change the law if we think fit in order to meet changing circumstances and to bring it up to date.

I could go on—I have an enormous brief from ACRE, the charity which looks after rural matters —but this is not the moment to do so. Many of the points that are contained in my brief should be discussed between the diocesan board of education and the vicars and church wardens in their parishes. I support the amendments and I hope that the Minister and the right reverend Prelate will look at them with great care and sympathy.

Earl Ferrers

My Lords, I agree with my noble friend Lord Renton that this is an important debate. It touches upon issues about which many people are deeply anxious. I agree with the right reverend Prelate the Bishop of Guildford that the school is a focal point of the village. People mind about it, they like it and are worried and distressed when it is sold. We all wish to see resolved or at least minimised the difficulties, conflicts and sorrows caused by the sale of a school. I believe that all noble Lords agree with that.

However, we are debating the case of a school that has become redundant and must be sold. Denominational schools are set up as charitable trusts. If the school is sold for above the market price, it can be sold to anyone, and to anyone in the village provided that it is sold above the market price, and it can be sold to any charity. If that were so there would be no difficulty in those people who have enjoyed the school in the past enjoying it in the future, provided that they could pay for it.

If, on the other hand, the school is sold for below the market price, the original charitable trust—that is, the educational trust for which the school was built up —will be denied the full amount. Provided that the school is sold to a charitable trust within the village whose objects are the same as those of the school, that can be done. The original beneficiary of the charitable trust will receive less money but the building will be transferred to a similar charity within the village. That can be done provided that the commissioners agree.

One is then presented with the third problem: that is, what to do with a village school which is to be sold —thereby denying the original trust the full value of the sale—to a charity whose purposes are different from those for which the school was originally built. That is the position that we face with these two amendments. There is a fundamental difficulty in the suggestion that the original trust should have less than its normal proceeds, that the children who will be educated by the trust thereafter will be denied the full proceeds and that some other charity which has different objectives from the school will have advantage of the building.

I agree with the right reverend Prelate the Bishop of Guildford that the amendments may force the Secretary of State to make decisions which he does not wish to make. Furthermore, they will extend the powers of the Secretary of State over charities, which is a sphere in which he is not competent or suitably involved.

Although they adopt different approaches, Amendment No. 44 to be moved by my noble friend Lord Renton and Amendment No. 43 in the name of my noble friend Lord Stanley of Alderley both seek to achieve similar ends by different means. They seek to give the Secretary of State for Education wider powers under the Education Act 1973 to enable him to make fresh provision for the use of denominational educational endowments which would not reflect and perpetuate their denominational and educational character.

Although I sympathise with the intention behind these amendments, I wish to explain why in the Government's view neither is desirable in principle and how the existing law already provides for the needs of the local community to be catered for when a denominational school is closed. For the reasons which I gave in Committee, the approach proposed by my noble friend Lord Renton goes too far. To allow other local charities to benefit from the sale of discontinued denominational schools in the way in which my noble friend's amendment proposes would be to allow the primary educational purposes of the school trust to become subservient to other purposes. That would be unfair to those who stand to benefit from the continued use of the proceeds of sale for educational purposes.

It is in the interests of the children who formerly attended the discontinued school that the sale proceeds from that school should be used as far as possible for educational purposes and that the amount of those proceeds should be as large as possible. Furthermore, they should continue to benefit from the proceeds of that village school, as they benefited from the school before it was sold. I find it difficult to foresee the situation suggested by the amendment in the name of my noble friend Lord Renton where there will no longer be a need for the sale proceeds of a school to be used for educational purposes.

5.30 p.m.

Lord Renton

My Lords, before my noble friend moves on, perhaps he has overlooked the proviso at the end of my amendment which makes it clear that the denominational trust shall prevail over the discretion of the Secretary of State.

Earl Ferrers

My Lords, I daresay that it does, but that does not alter the basic argument, which is that when the schools are sold the proceeds should go towards the further education of those who would have benefited.

The amendment in the name of my noble friend Lord Stanley of Alderley takes a more moderate line. However, it seems to me that it too would run counter to fundamental principles of charity law by giving the Secretary of State power to apply the money from the sale of educational property in a way which was not in accordance with the denominational and educational character of the trusts in question.

The existing law goes some way to address the anxieties of local communities, even though the primary function of orders under Section 2 of the 1973 Act is to enable the sale proceeds from closed Church schools to be applied for the benefit of schools of the same denomination in a wider area.

The noble Lord, Lord Houghton, vented his spite on denominational schools. I believe that those were his fairly clear words. He said that what happened in the past belonged to the past and should not determine what happens in the future. With respect to the noble Lord, that is a way of totally disregarding charity law. How the school started and what tenets and trusts were made within which the school operates is of fundamental importance to what should happen to the money when the school is sold. One cannot say, "That money belongs to a charitable trust but let us pretend that it does not because this is a bore and we should like to use the money elsewhere". The noble Lord, Lord Houghton, is always extremely entertaining. He becomes worked up with his own enthusiasm and manages to make us worked up too. I believe, with respect, that he is misdirected on this occasion.

Where the Secretary of State makes an order under Section 2 of the 1973 Act he may under subsection (4) either authorise the diocese to use all of the proceeds of sale for the benefit of other voluntary schools in the diocese or make provision for the sale proceeds to be applied partly in connection with voluntary schools and partly in other ways related to the local area served by the school which has closed.

My noble friend Lord Stanley and the right reverend Prelate the Bishop of Guildford referred to Sunday school funds. Those funds usually represent three-fourteenths of the sale proceeds, but the Secretary of State can increase that proportion depending on the needs which are identified and the extent of the activity envisaged. But that must be educational and denominational. Sunday school funds, which are created at the request of the trustees and with the agreement of the Secretary of State, are currently created in respect of about 40 per cent. of the schools which are comprised in Section 2 orders. This local provision is invariably made in response to pressure from local interests, either via the diocesan authority or to the Department of Education direct.

All orders made under Section 2 of the 1973 Act authorise the assets to be applied "for appropriate educational purposes". That means for purposes in connection with the provision of religious education in accordance with the tenets of the denomination concerned. That properly reflects both the educational and the denominational nature of the trusts which govern Church schools. The amendment in the name of my noble friend Lord Stanley of Alderley would result in the denominational aspect of the trust being lost.

There is no reason in principle why the assets of those Sunday school funds should not be applied, if the trustees wish, to provide more broadly based educational activities which, while retaining an element of religious education, meet more closely the needs of the local community. It would be for the trustees to ensure that whatever they chose to do remained within the terms of the trust in question.

I understand that the Department of Education is considering proposals to alert the trustees of any school which is proposed for inclusion in a Section 2 order to the Secretary of State's discretion to create a Sunday school fund. Furthermore, the Board of Education of the Church of England intends to issue a publication highlighting the flexibility which Section 2 of the 1973 Act already offers. I think that those steps will do much to protect the needs of the local communities by ensuring that they have the chance to call for local provision if and when they so wish.

The noble Lord, Lord Hylton, referred to the funds which are made available by Section 2 orders. They are used to support the diocesan authorities' collective contribution to the 15 per cent. share which trustees and governors have in capital investment in respect of building projects associated with over 2,000 Church of England voluntary aided schools. That commitment by the Church of England during the 1990–91 financial year amounted to over £5 million, for which the corresponding contribution from public funds amounted to more than £50 million.

This is a difficult situation. I understand the anxieties which have been expressed. However, a balance must be struck between the needs of new and continuing voluntary schools and those of local villages. I agree with the right reverend Prelate the Bishop of Guildford that there is a good deal more flexibility here than is realised.

While I understand the reasons behind both the two amendments proposed by my noble friends, I believe that the existing arrangements offer the best way of dealing with those sometimes difficult and conflicting interests.

Lord Stanley of Alderley

My Lords, sometimes, but not very often, I wish I were a lawyer. However, I shall try to reply as quickly as I can.

I should like to address the point made by the right reverend Prelate, my noble friend Lord Ferrers and the noble Lord, Lord Congleton. I accept that the trusts cannot be used for a purpose other than that for which they were originally designed. Of course Parliament can change that. Indeed, I believe that Section 2 of the 1973 Act did just that.

I return to my original theme which I believe most noble Lords accept; namely, that the trusts should be widened to include education other than strictly religious education. I believe that the cy pres principle applies in the light of changing circumstances. If the law is as flexible as my noble friend and the right reverend Prelate say it is, I wonder why my noble friend will not accept the amendment. At one time I gained the impression that the right reverend Prelate was almost accepting Amendment No. 43, whereas his legal advisers believe it to be unacceptable because it does not comply strictly with promoting education according to the tenets of the Church of England. That shows the muddle that still exists.

I accept that the right reverend Prelate can only make suggestions to dioceses. I hope that he will make those suggestions because some dioceses, particularly the diocese of St. Edmunds and Ipswich, would like the law to be changed and I have a letter to that effect.

I should say to my noble friend Lord Ferrers that my amendment refers to what should be done with the money that is returned by the Secretary of State to the village, as opposed to the situation of a sale to another charity at less than the market value. I am worried that often the money is used for education which is not available to children in the village. Moreover, my amendment would not lose the denominational character of the trust. I have said before that I still try to be a member of the Church of England so I do not wish to detract from that.

I am grateful for the support and interest of all noble Lords on this, what I call "village" amendment. I believe that all who have spoken have accepted that there is a problem. Unfortunately, the right reverend Prelate does not feel able to accept the amendment.

I have to say that I am disappointed, for all the comments and discussions I had with the Church indicated a strong desire to show how flexible these trusts are. Sadly, the right reverend Prelate feels unable to accept this most moderate of moderate amendments—far too moderate for the noble Lord, Lord Houghton. The rector and churchwardens would be able to widen the benefit returning to the village. Perhaps there is a lack of trust between the diocese and the rector and churchwardens. I am sorry to say that there was when I was a churchwarden. It is perhaps a case of the spirit being willing but the flesh being weak. The flesh in this case is money, which has been a problem to the Church for a number of centuries.

I am grateful for the help given by my noble friend Lord Ferrers in trying to clarify the point. I hope that he will accept—perhaps he will nod—that his door is open in the future to representations from the village and the Church, should there be need for further clarification. I am not sure that he goes as far as that but we shall continue to rattle at the door of government and the Church as we have with dog registration. I can only hope that it is not an unregistered pit bull terrier that gets the right reverend Prelate. I shall be delighted at some stage in the future to discuss with the noble Lord, Lord Morris, the subject of Welsh education, particularly in Anglesey where there was a parliamentary row in the 19th century.

I should have liked to ask the opinion of the House in regard to the amendment. One day I am sure that someone will do so. I suggest that the Church should start listening and acting; otherwise, it may be saddled with something far more radical than this small amendment suggests. However, if I divide the House this evening and by chance win, it will result in the whole Bill being lost. I will not be responsible for that.

Therefore, with disappointment, but in confidence that with the goodwill expressed by the right reverend Prelate we shall one day solve the problem, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 44 not moved.]

Clause 43 [Small charities: power to spend capital]:

Viscount Astor moved Amendment No. 45: Page 42, line 22, leave out second ("their") and insert ("the").

The noble Viscount said: My Lords, this is a drafting amendment which makes the wording of subsection (4) of Clause 43 more clear and consistent. I beg to move.

Lord Morris of Castle Morris

My Lords, in the art and science of textual criticism in which I have exercised myself day and night for the past 40 years, it is well known that a misprint often goes undetected in many reprints if it makes any kind of sense. Countless manuscripts and printed texts will produce precisely this example of a reduplication of a word used as a kind of echo. In this case we have the words, in their opinion, impose on the charity obviously the correct reading, mistakenly put in as "their charity."

Clearly, the word "the" is correct. I am delighted to find such a neat example of a well attested textual corruption in the Bill and I am happy to support the correction.

On Question, amendment agreed to.

5.45 p.m.

Clause 54 [Restriction on institution of proceedings for certain offences]:

Earl Ferrers moved Amendment No. 46: Page 49, leave out line 23 and insert: ("(a) section (Status of registered charity (other than small charity) to appear on official publications etc.) above;").

The noble Earl said: My Lords, this amendment was spoken to with Amendment No. 3. I beg to move.

Lord Simon of Glaisdale

My Lords, although this amendment was grouped with the amendment concerning Clause 6, it raises quite different issues. I do not think that any consensus can emerge unless your Lordships consider the matter separately.

At Report Stage I sought to leave out the whole of the clause because it made the ancient and variable right of private prosecution dependent upon the favour of an official —the Director of Public Prosecutions. That evoked the support of the noble Lords, Lord Richard and Lord Renton, both former Home Office Ministers and both accomplished and experienced lawyers, the noble Lord, Lord Renton, in addition, having been the main director of the 1960 Act when it was going through the other place.

Earl Ferrers

My Lords, perhaps I can interrupt the noble and learned Lord. I wonder whether he is speaking to Amendment No. 47 rather than to Amendment No. 46. Amendment No. 46 was spoken to with Amendment No. 3.

Lord Simon of Glaisdale

My Lords, I am speaking to both. I do not wish to see Amendment No. 46 in the Bill at all. That applies the provisions as to DPP consent to the new Clause 6, substituted by the noble Earl in place of the former clause which aroused such general condemnation. I want to leave out paragraph (a) entirely and not include the wording of Amendment No. 46.

When I proposed the leaving out of the whole clause, it evoked assent, to which I attached great importance. However, the noble Lord, Lord Harris of Greenwich, to whom I generally look for support in these matters, in both Committee and on Report expressed a contrary view. I therefore withdrew the amendment. The matter is now rather different and more concentrated. The noble Earl kindly wrote to me at some length—I received the letter today—dealing with the general matter of DPP consent and explaining how he saw the specific provisions operating. That was extremely helpful and I am grateful to him.

There are two safeguards to the abuse of private prosecutions. The first is that it is always open to the Attorney-General to take over a prosecution and enter what is in technical terms a nolle prosequi—I must apologise for the barbarous way in which lawyers pronounce Latin. It amounts to a withdrawal of the prosecution on behalf of the Attorney-General, he having taken the case over. That is a safeguard against abuse. On the other hand, on the last occasion I ventured to remind your Lordships of the Glasgow rape case where the Lord Advocate, for perfectly good reasons, refused his consent to a prosecution. At that time it was believed that there were no rights of prosecution in Scotland. However, the complainant managed to revive, after a lapse of 150 years, the right of private prosecution. No one studying the case can doubt for a moment that without that justice would not have been done.

What has happened since the debate on Report is this. Previously, paragraph (a) applied to Clause 6 as it stands in the Bill at the moment. That was universally assailed, first, because it created a criminal offence for a mere administrative omission; secondly, because it made it an absolute offence—in other words, a trustee was liable merely as a trustee even though he knew nothing about the offence and could have known nothing about it; and, thirdly, because it reversed the onus of proof.

Presumably it was felt that that was so inherently likely to do injustice that private prosecutions without the consent of the Director of Public Prosecutions could not be countenanced. The position is quite different now. The noble Earl has rightly met those concerns by moving a new clause which meets with general approbation and which is subject to none of the matters that aroused anxiety. So the first question is: why is the consent of the director necessary in the event of this new clause? On this narrow issue I hope to enlist the support of the noble Lord, Lord Harris of Greenwich. It is only right that we should make the right of prosecution depend on the favour of an official if it is inherently likely that private prosecutions without that waiting on favour and in spite of the right of the Attorney-General to take over a prosecution and abandon it are liable to cause injustice.

There are certain crimes which in the middle of the last century were thought to fall into that category, mainly concerning perjury. However, this matter cannot possibly do so. The question I ask the noble Earl is this. Why is it necessary to provide assent as defined in this new clause to wait on the consent of the Director of Public Prosecutions if a private prosecution under his new clause is inherently likely to cause injustice, notwithstanding that the Attorney-General can take over the prosecution?

I do not know whether I am right in begging to move my amendment or whether I am merely opposing the noble Earl's amendment. I fancy that the latter is the proper course. If that is so, I beg him not to press this amendment.

The Deputy Speaker (The Earl of Listowel)

My Lords, I apologise to your Lordships. I should have pointed out that if Amendment No. 46 is agreed to I cannot call Amendment No. 47. We are now dealing with Amendment No. 46.

Earl Ferrers

My Lords, I believe that the noble and learned Lord, Lord Simon of Glaisdale, was quite correct in his procedural remarks and also as regards his factual remarks. He was opposing my Amendment No. 46 which he did in his characteristically robust way. If my amendment were passed, the noble and learned Lord's Amendment No. 47, as the Deputy Speaker has said, would not be called.

The noble and learned Lord does not like the criminal offence in Clause 3 concerning the disclosure of a charity's registered status. He has made it clear that in his view the failure to comply with the requirements of that clause should be merely an administrative failing and should not be subject to the whole rigmarole of criminal sanctions.

I do not know what sanction would or could be put in its place. In preparing the Bill I examined very closely what sanctions should exist for the various duties which are created in it. Whatever alternative to a criminal sanction one might concoct in this context, it would almost certainly be more cumbersome and expensive than a criminal sanction. Under the Charities Act 1960 the commissioners can compel trustees to make good various defaults. I cannot see the point in requiring a trustee to make good the default of omitting to give the statement which is required by Clause 3 as regards a cheque written six months ago. In any event, the noble and learned Lord believes that if there is to be a criminal offence in Clause 3 it should not be subject to the requirement of the consent of the Director of Public Prosecutions before a prosecution can take place.

My noble friend Lord Astor explained at Report stage and at some length why we consider that the Director of Public Prosecutions' consent is an important safeguard for the interests of trustees and others who work for charities. We still remain of that view and for good reason. Many people who help with charities are volunteers. They give up their time and give freely of their efforts without reward. We have to balance that against the need to create an appropriate sanction for the duties which are created in the Bill. Of course there are duties put on trustees. That is the only way in which one can control charities. The whole purpose of the Charities Bill is to control and regulate charities. Therefore, if people are going to default there has to be some kind of sanction against them.

It is right that the possibility of prosecution for an offence under the Bill and under the Charities Act 1960 should be a sanction of last resort. In order to ensure that it is a sanction of last resort there needs to be a safeguard. That safeguard is provided by the consent of the Director of Public Prosecutions.

An offence under Clause 3 could be a relatively minor breach. In that case in all probability there will be no need for a prosecution. An offence under Clause 3 could be merely one aspect of a much wider attempt by people who are involved in a charity to mislead the public. An offence under this clause would not therefore always be a minor affair. It is perfectly clear that where they are minor affairs they would not come to the attention of the Director of Public Prosecutions because prosecution would not be sought.

When we came to prepare the Bill we looked carefully to see whether it was possible to give the commissioners some kind of prosecuting arm. I came to the conclusion that that kind of provision could not be justified in cost terms. The number of prosecutions was likely to be relatively small, but they would still require some of the commissioners' staff to be trained in the criminal law where they have no expertise. I concluded that the most effective way would be to give the task of prosecution to the body which exists for that purpose—in order words, the Crown Prosecution Service. Offences can be prosecuted straightforwardly by it and that will accord with the Government's general concern to encourage the efficient running of the criminal justice system.

The commissioners' expertise and resources will be devoted to the investigation of charity affairs. They fully support the division of responsibility between them and the Crown Prosecution Service when it comes to the prosecution of offences. I hope that your Lordships will agree that that is the right way forward. Section 1 of the Prosecution of Offences Act 1985 provides that, where any enactment requires the consent of the Director of Public Prosecutions, any Crown prosecutor who is in charge of that case may take any step or give consent on behalf of the Director of Public Prosecutions. There is no need for a certificate of consent in any case except where the consent of the Attorney-General is required. Generally, the Crown Prosecutor has delegated to him all the powers of the Director of Public Prosecutions.

For those reasons, I hope that the noble and learned Lord, Lord Simon of Glaisdale, will see why we have these provisions in the Bill. I hope that he will find his way to agreeing that they are reasonable provisions.

6 p.m.

Lord Simon of Glaisdale

My Lords, before the noble Earl sits down, may I respectfully remind him that he has not answered my question. Are private prosecutions under his new clause so likely to cause injustice, notwithstanding the right of the attorney to take them over, that it is necessary to encroach the consent of the Director of Public Prosecutions?

Earl Ferrers

My Lords, I can only say to the noble and learned Lord that that is a protection which we think is correct. If there is going to be a private prosecution it should nevertheless have the consent of the Director of Public Prosecutions in order to make sure that there are no frivolous prosecutions.

On Question, amendment agreed to.

[Amendment No. 47 not moved.]

Earl Ferrers moved Amendment No. 48: Page 49, line 24, leave out ("that") and insert ("the 1960").

The noble Earl said: My Lords, this amendment was spoken to with Amendment No. 3. I beg to move. On Question, amendment agreed to.

Clause 57 [Interpretation of Part II]:

Viscount Astor moved Amendment No. 49: Page 51, line 29, leave out ("same meaning as in the Charities Act 1960;") and insert ("meaning given by section 46 of the Charities Act 1960 (as amended by the Companies Act 1989);").

The noble Viscount said: My Lords, our definition of "company" in Clause 57 was a little unpopular at Report stage. A number of your Lordships, particularly the noble and learned Lord, Lord Brightman, thought it could be made clearer in particular by making it explicit that the reference to the Charities Act 1960 was to that Act as amended by the Companies Act 1989. Like all your Lordships I want to make the Bill as clear as possible, therefore I have come forward with this amendment. I beg to move.

Lord Brightman

My Lords, I rise only to thank the Government for this amendment which resolves the difficulty to which I drew attention at Report stage.

On Question, amendment agreed to.

Clause 65 [Prohibition on conducting public charitable collections without authorization]:

Lord Allen of Abbeydale moved Amendment No. 50:

Page 63, line 5, at end insert: (" or (c) where regulations made by the Secretary of State provided for circumstances under which the need for a permit issued by a local authority under section 67 of this Act may be waived.").

The noble Lord said: My Lords, I sympathise with the general objective of this part of the Bill. However, having thought it over since the last stage I still believe that there is a case for considering some possible relaxation from the need for local authority permits, under Clause 67, for certain types of harmless and well-accepted activities. Last time I instanced carol singing, boy scouts cleaning cars, and collecting for jumble sales. Since then I have had a long and helpful letter from the noble Earl who points out that the requirements put on those people are not very onerous. All they have to do is to get a permit and keep accounts. He emphasises the drafting difficulties which I freely acknowledged the last time I spoke.

If I may say so I think that he somewhat overstates the problem in places. He says in his letter that it would be difficult to explain to promoters why, if they are simply collecting money from door to door, they would need a permit, but if they sang carols at the same time they would not. I should have thought that it was perfectly easy to explain the difference. I cannot help thinking about next Christmas if, as happened last time, three small boys come to my door singing carols to raise money for a project for the Egham Parish Church. Do I say, "Where is your permit? What arrangements are you making to keep accounts? Do you realise that if you are not doing it right you are committing a criminal offence?" Have I to say the same when neighbours come round collecting old newspapers for a local charity? My milkman has recently left a receptacle in which we can put milk bottle tops for a charity. Does he need a permit to do that?

The present law covers some of those activities, but I think there is general agreement that it is not enforced. I am slightly alarmed by the prospect which the noble Earl's letter conjures up. He says that the impetus of this fresh legislation, together with the publicity which will be given to the Bill once it becomes law, will change the position and ignorance of the law, both by those who collect and those who enforce, will be greatly reduced.

One of his arguments against my proposal is that there might be some inconsistency between different local authority areas. But how much more would that apply if prosecutions were more widely undertaken? The prospect of this being done on any consistent basis seems somewhat remote. As I said, I have not for a moment under-rated the difficulty of drafting and certainly the problems could well prove formidable. However, if we do not have powers on the lines of my amendment we cannot even try. I beg to move.

Lord Swinfen

My Lords, I should like to support the amendment so ably moved by the noble Lord, Lord Allen of Abbeydale. As the law stands, and as the Bill is drafted, regulations governing public collections would also apply, as he said, to the collection of goods. It seems ridiculous that the collection of goods for jumble sales, or old newspapers, by local groups such as the Women's Institute or boy scouts, should fall under this form of regulation. There are many hundreds of thousands of such collections throughout the country each year. Are my noble friends on the Front Bench really saying that sufficient resources will exist to regulate and police these activities properly? Surely there is enormous capacity here for the law to be brought into immediate disrepute. Is it not better to provide powers to the Secretary of State to enable him to waive the requirements in specific cases? I refer to the type of fund-raising activity, not the creation of waivers for every collection.

The Government might say that to do so would only create a potential loophole through which the unscrupulous could pass. No one wants that. I do not think that that will be the case. Indeed, new provisions regulating fund raising in Part II and Part III of the Bill will ensure that that cannot be the case. For example, if a rag and bone merchant wanted to distribute bags to people's houses, asking them to fill them with jumble and indicating that part of the proceeds would go to a charity, then that rag and bone merchant might be waived responsibility under the public collection regulations, but he would most certainly be regarded as a professional fund-raiser under the definition stipulated in Clause 57 in Part II. As such he would have to fulfil all the new requirements in that part of the Bill specifically designed to protect donors and voluntary organisations.

I do hope that my noble friend can see his way to accepting this amendment.

Lord Richard

My Lords, I said right at the outset this afternoon that, by and large, the Government's approach has been sensible and reasonable. Indeed, they have been accommodating on a large number of issues.

This is a Bill which imposes restrictions on fund-raising. It says that people who want to raise money have to go through certain hoops. It seems to me that there may be situations in which it is clearly absurd that the people who are raising funds should have to go through those hoops. The noble Lord, Lord Allen of Abbeydale, illustrated that quite dramatically by the case of the local waits who may be collecting for the local hospital, or what have you. Is it really necessary that they should have to go through all the rigmarole of getting a licence from the local authority to say that on Saturday 21st December they are entitled to go round the village singing carols and holding out their collection boxes?

This is a saving provision. One thing we are all agreed about in this Bill is that one cannot foresee all the eventualities that the Bill is likely to cover. In those circumstances I should have thought that to have a saving provision in the Bill which actually gives the Secretary of State the power to release some of the pressures that the Bill imposes is a power which, on the face of it, I should have thought the Secretary of State would rather like to have; otherwise he could find himself in the position of having to insist upon the procurement of a licence in circumstances in which most people looking at it would think that it is absolute nonsense that a licence should have to be procured.

For the life of me I do not understand why the Government cannot accept the amendment in the spirit in which it was offered by the noble Lord, Lord Allen of Abbeydale. It is a useful provision which the Secretary of State might at some stage wish to use.

Earl Ferrers

My Lords, since the previous stage of the Bill I have looked at this matter with considerable care because I knew that it would be all too easy for the noble Lord, Lord Allen of Abbeydale, to make fun of the whole thing, particularly with regard to carol singers. He did so, and very effectively too. The noble Lord, Lord Richard, said that he could not for the life of him understand why we could not accept the amendment. There is first a technical reason why I could not recommend the amendment to your Lordships. The wording is defective in that it allows the Secretary of State to make regulations specifying circumstances when the requirement for a permit should be waived but it does not go on to remove the need for a permit in those circumstances.

Apart from that technical objection, as I understand it the amendment seems to rest on a local authority granting a waiver in respect of an activity of the kind which is specified in the regulations, but if it is necessary for the charity or other group to apply to the local authority for a waiver, one then wonders why it should not apply instead for a permit as the provisions of Part III require.

There are substantive objections to the amendment. I understand of course why the noble Lord, Lord Allen of Abbeydale, has moved it. I think, however, that it would be difficult to make the system proposed in the amendment work —let alone fairly—in practice. It seems to me that what the noble Lord is proposing could have effects which may prove to be both as absurd as those which he has mentioned and indeed inequitable. I think that drafting the kind of regulations which this amendment envisages would be very difficult to accomplish without either creating absurdities or loopholes for the less scrupulous. It would be easy enough to specify carol singing as an exempt activity. But if one did so, the group which sings "The Holly and the Ivy" would be able to take advantage of the concession but the group which sang "White Christmas" would not because that is not a carol. It would be difficult to think of a more absurd situation than one in which the application of the criminal law depends on the classification of the items sung.

Likewise, it ought to be possible to cover what is known as bob-a-job week. But a detailed provision of this kind would create its own anomalies since similar activities by groups other than scouts would not be covered.

If the concession were limited only to certain groups, how would those groups be chosen? What criteria should the Secretary of State use to decide between competing interests? It seems to me that it would be wholly inequitable to discriminate between one charity, benevolent or philanthropic institution and another. If we went down this route, the waiver would have to be of general application. Your Lordships might agree with that and say that the regulations should be drafted widely. But the more widely they are drafted, the greater the risk that the exception might be used improperly.

The noble Lord, Lord Allen of Abbeydale, quoted my letter and lampooned it, as I thought he probably would. He said that it was absurd to require people singing carols to have a permit. What is proposed is no different from the law as it stands now. That is the position. If one takes carol singing as an example, one might well wish to exempt the choir of the local parish church, but we do not at the same time wish to open the door to unauthorised collections by some of the more dubious religious cults which advance the Christian faith. They too could enjoy the exemption if they sang a quick verse of "Silent Night" while rattling their tins or selling their newsletter.

The noble Lord, Lord Allen of Abbeydale, referred to milk bottle tops. The milkman has to have a permit to collect milk bottle tops. If the noble Lord's amendment were introduced, the milkman need not have a permit provided he sang a carol while he collected his milk bottle tops. My noble friend Lord Swinfen referred to the rag and bone merchant. The rag and bone merchant has to have a permit now, so we are not making the law any different from that which exists at the moment.

The amendment could lead to other inequities. One could have a group of people going down the street collecting money for the local cottage hospital. They need a permit if they do so. But across the road could be another group of people collecting for the same cottage hospital who are singing "0 Come All Ye Faithful" and thereby are excluded from the need to have a permit.

Exceptions seem at odds with what Part III is trying to do. It serves two purposes. First, it ensures that those who raise money or collect property locally are also accountable locally for what they collect. That is why it requires local authorities to give permission for public charitable collections and why the regulations to be made under the Bill will require promoters to keep proper accounts.

Secondly, Part III serves to ensure that public charitable collections do not cause a nuisance to the public as a result of their sheer number or the places in which they are conducted. Both of those purposes might be undermined by the system of waivers which are suggested by the amendment. Controls of this kind are in the interests of the charities affected since the system ensures that each group wishing to collect gets its chance and that the public—on whom most charities and other groups depend for money—is not alienated by being constantly asked for money.

A system of supervision along the lines of that which has been in place in Scotland since 1982 under the Civic Government (Scotland) Act of that year is not inappropriate. There is no exemption system and no waiver system in the Scottish legislation. I do not know of any evidence that the kind of activities mentioned by the noble Lord, Lord Allen of Abbeydale, are dying out north of the Border.

I realise that this is a difficult situation. I have tried to meet it, but all I can tell the noble Lord is that the suggestion which he proposes would lead to more complications than would be the case under the system proposed in the Bill.

Lord Allen of Abbeydale

My Lords, there is a quite good answer to a good many of the points which the noble Earl has made, but I do not propose to weary your Lordships with attempting to give it this evening as there is obviously no prospect of getting agreement to an amendment of this kind. I can imagine circumstances in which it might be possible to discuss this again in a rather different context.

I did not intend to lampoon—I think that that was the word the noble Earl used—his letter. I was merely taking what I thought was a good point on it. Nor was I naive enough to think that my drafting would commend itself to the draftsman even if the idea were adopted. I shall have a word with my milkman tomorrow. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 66 [Applications for permits to conduct public charitable collections]:

The Deputy Speaker (Lord Hayter)

My Lords, there is a misprint in the Marshalled List. The amendment should read: "Page 63, line 30, leave out from the second time the word 'area' is mentioned to end of line 31".

Lord Simon of Glaisdale moved Amendment No. 51: Page 63, line 30, leave out from the second time the word "area" is mentioned to end of line 31.

The noble and learned Lord said: My Lords, this amendment falls into the same class as the amendment your Lordships discussed earlier which concerned the words "or both". In other words, it concerns words which are palpably unnecessary in the Bill. I have not, however, retabled this amendment without taking account of the fact that that was not my view alone.

The subsection concerns permits for collections which have to be sought from a local authority. Subsection (4) states: Before determining any application duly made to them under this section, a local authority shall consult the chief officer of police for the police area which comprises or includes their area"— and then the words that are quite unnecessary— and may make such other inquiries as they think fit".

The first and obvious comment is that of course local authorities can make any such inquiries "as they think fit"; they do not need statutory authority to do so. The second is that the subsection itself envisages that the local authority may not be the only one.in the police area. There may be another local authority. Therefore the clerk of one authority can be expected to make inquiries of the clerk of the neighbouring authority. He does not need to have it written into the Bill to tell him that he can do so. The words are quite unnecessary.

In replying to the amendment on Report, the Minister made two points. He said, first, that the words are clear; and, secondly, that it is important that trustees should be able to read and see what are their rights. As to the first point, of course the words are clear; indeed, no one has gainsaid that. However, although they are clear, they are quite unnecessary. For example, one could write into a Bill the words, man means a human being of the male sex". Nothing could be clearer and nothing could be more unnecessary. So it is with this case.

The second argument was that the trustees should be able to read and know where they stood. The noble Lord, Lord Renton, answered that point. He said that this has nothing to do with the trustees; it has to do with the local authority, which knows perfectly well that it can make inquiries and does not need to be told that it can do so. In addition, local authorities know that it would be quite absurd to say, if they did make inquiries other than to the chief officer of police, that that would invalidate their dealing with the application. I hope that the Government have had time to think soberly about the matter. I beg to move.

Lord Renton

My Lords, I strongly support the amendment of the noble and learned Lord. The words are quite absurdly unnecessary. Indeed, they could create confusion in other statutes. I say that because someone may point to the words in the Bill and find that, in another statute about which inquiries may have to be made, the words, may make such other inquiries", were not included. The words are not only unnecessary, they are also potentially misleading. I hope that my noble friend will agree to accept the amendment.

Viscount Astor

My Lords, as I explained when we discussed the matter on Report, subsection (4) of the clause makes it clear that local authorities may, when deciding whether or not to issue a permit for a collection, make such inquiries, in addition to consulting the police, "as they think fit" in the circumstances. I thought that it would be helpful to spell that out.

The inclusion of a specific duty to consult the police might be taken to exclude a discretion to consult other persons or bodies. It would be undesirable if a local authority felt inhibited from consulting widely in view of the provisions in Clause 67 about conditions which may be included in a permit and those in Clause 68 about the grounds for refusal. Inevitably, therefore, local authorities will need to make inquiries before taking a decision on an application.

In answer to the trustee point made by the noble and learned Lord, Lord Simon of Glaisdale, people who are applying for a permit must be aware that the local authorities can make inquiries. We do not want it to be suggested that, because only the police are mentioned expressly, they do not have that power. The value of the words in the Bill is that they make absolutely clear the position about inquiries. They also rule out an argument that might otherwise appeal to lawyers advising local authorities that the existence of a specific duty to consult excludes discretionary powers to do so.

I do not think that the words are culpably unnecessary as the noble and learned Lord said. I beg to differ with him. Some may have argued in 1960 that the Charities Act of that year, so successfully taken through another place by my noble friend Lord Renton (aided and abetted by the noble and learned Lord, Lord Simon of Glaisdale), contained unnecessary detail. All one can say is that the provisions of the Act are beautifully clear to the reader as a result. We must all be grateful to both of them. In my very modest capacity, I am merely attempting to emulate their clarity.

Lord Simon of Glaisdale

My Lords, there is only one point which needs to be adverted to. The noble Viscount said that the inclusion of the duty to consult the chief officer of police might be held to imply that local authorities had no powers to consult anyone else. I can only say that that argument could not possibly succeed; indeed, no lawyer would ever advise a local authority that that was the meaning of the provision. I cannot therefore, I fear, congratulate the Minister on his reply. However, I can congratulate him on preserving parliamentary decorum by keeping a straight face while he gave the answer. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 67 [Determination of applications and issue of permits]:

Lord Simon of Glaisdale moved Amendment No. 52: Page 64, line 13, leave out from ("section") to ("and") in line 14 and insert ("71").

The noble and learned Lord said: My Lords, this is another short point regarding unnecessary words. The section referred to in the amendment has two rights of appeal; namely, those under subsections (1) and (2). That being so, all that is needed is to refer to the rights of appeal under "Section 71". It is quite unnecessary to say "Section 71(1)" or, as the case may be, "Section 71(2)". I beg to move.

Viscount Astor

My Lords, the noble and learned Lord moved a similar amendment on Report. I explained then that I thought that the Bill as drafted was clearer to the reader. I hope that he will forgive me if I rehearse that argument again. I do so because I think that it is right.

Several of your Lordships have raised points about making the Bill intelligible for trustees and others who will be regulated by it and who will use it. That must be a laudable aim. We have, therefore, tried very hard to make the wording as simple and helpful as possible. I believe that the term "helpful" is the most important part of my argument. The present wording of subsection (4) of Clause 67 is intended to be helpful. Clause 70 gives a right of appeal in two clearly defined circumstances: under subsection (1), where a permit is refused by a local authority; and under subsection (2), where the local authority attaches conditions to the permit or varies any such conditions or withdraws the permit.

With my wording of the provision, the applicant would have to be pointed by the local authority to the precise subsection where his right of appeal is to be found. Under the noble and learned Lord's amendment the provision would simply require a reference to Clause 71, without further help. I think that that is certainly less helpful than what we have proposed. I have said before that I understand the reservations about cluttering the statute book with unnecessary words, but I do not think that it is worth losing the extra clarity in the clause as drafted simply for the sake of losing nine or 10 words.

With a straight face and a straight bat, I must also advise the noble and learned Lord that, technically, I cannot accept his amendment because it refers to Clause 71, whereas it should refer to Clause 70. Nevertheless, my arguments still stand unchanged and I cannot recommend that your Lordships accept the amendment.

Lord Simon of Glaisdale

My Lords, I readily accept that anything that is put forward or sponsored by the noble Viscount, Lord Astor, is designed to be helpful. Further than that, however, I cannot accept his answer. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.30 p.m.

Clause 71 [Orders made by Charity Commissioners]:

Lord Richard moved Amendment No. 53:

Page 69, line 21, at end insert: ("( ) A benevolent or philanthropic organisation or cause, which does not qualify for exemption by the Charity Commissioners, may instead apply to the Secretary of State; and the Secretary of State shall have power to make any order which can be made in respect of a charity by the Charity Commissioners under this section, if he is satisfied that the benevolent or philanthropic organisation or cause meets all the requirements of this section except that its purpose is not charitable within the meaning of the Charities Act 1960.").

The noble Lord said: My Lords, we briefly discussed the substance of this amendment on Report. It is designed to fill a gap in the present law and we believe that it will be extremely helpful. As I understand it, the position now is that under the Bill a charity is entitled to apply to the commissioners for an exemption if it wants to have a nationwide, region-wide or large city-wide collection that spreads across several local authorities.

There is no problem, as long as the body concerned is a charity. The difficulty arises if the body is not a charity but an institution which may well have charitable or benevolent purposes, but which is technically not a charity for the purposes of this Bill or the 1960 Act. I refer, for example, to benevolent or philanthropic organisations or causes, and the one which springs most readily to mind is Amnesty International. It is not a charity. It is not registered as a charity and I do not think that it is capable of being registered as a charity. On the other hand, there is not much doubt that it is a benevolent or philanthropic organisation or cause. If the Bill goes through in its present form, should Amnesty wish to hold a national collection, it will have to get permission from each local authority in whose area it wishes to make the collection.

We are suggesting a simple proposition that, where an organisation is not technically a charity but is a benevolent or philanthropic organisation or cause, the Home Secretary should have the right to make the same kind of exemption order, subject to the same conditions in relation to that exemption order, as the commissioners can make in relation to a charity. The amendment states: the Secretary of State shall have power to make any order which can be made in respect of a charity by the Charity Commissioners under this section, if he is satisfied". In other words, the amendment would give the same protection —the same provisions would apply. The difference would be that a benevolent or philanthropic organisation would go to the Secretary of State for an exemption, whereas a charity would approach the Charity Commissioners for the exemption.

I have used the phrase three or four times today, but for the life of me I cannot see where, in rough justice, logic or common sense, that position can be refuted. I beg to move.

Lord Swinfen

My Lords, I, too, should like to support the amendment, to which I have put my name. Although I realise that it would benefit organisations such as Amnesty International, I am far more interested in assisting disaster appeals. I moved an amendment to that purpose on Report, but the Minister turned it down. Although he has gone some way towards helping us with his amendments, they do not address the particular and important case of those appeals that are not "charitable" under the meaning of this Bill and the Charities Act 1960.

Disaster appeals, which touch the emotions of the entire nation, are often established to help particular individuals or regions that have been affected by a calamity, such as the Armenian earthquake. Because of that, they quite properly cannot—and often do not wish to—qualify for charitable status. Consequently, as the Bill is currently worded, they are not eligible to apply for an exemption permit. However, your Lordships will understand that, by their very nature, the response that is required to national disaster appeals is always likely to be urgent, especially if they are efficiently to address the mood of the nation and to provide speedy and proper relief for the disaster and those affected by it.

The noble Lord, Lord Nathan, chaired a committee of the National Council for Voluntary Organisations, which reported in April 1990. The report stated: At a time when the voluntary inclination to support others is perhaps at its highest, it is important that the administrative structures, the powers and the accountability of these appeals are beyond reproach. It continued: We are also concerned, in the case of appeals which—for wholly legitimate reasons—decide not to seek charitable status, as to what mechanisms exist for the regulation of the manner by which money may be solicited and distributed. The amendment, which was ably moved by the noble Lord, Lord Richard, is one way out of the morass into which I fear the Government are driving philanthropic bodies which promote urgent appeals in response to disasters. I hope that the Minister will be able to accept the amendment.

Lord Harris of Greenwich

My Lords, so do I. We have been round this track on two previous occasions —first, in Committee and secondly, on Report. Like the noble Lord, Lord Richard, I have found the Government to be extremely accommodating on this Bill. Therefore, I find it all the more puzzling that they have set their face against this proposal. At the moment, as we all recognise, there is no problem because the matter is dealt with by the Home Office. Under the new arrangements, as, again, we are all aware, the problem for charities will be dealt with by the Charity Commissioners, but those organisations that are not charities will have to go to literally hundreds of local authorities. For the reasons that I set out in our two previous debates on this proposal, this does not seem a sensible way to proceed.

Putting to one side the question of disaster appeals, with which the noble Lord, Lord Swinfen, has just dealt, the noble Earl, Lord Ferrers, said in our last debate on this matter that the problem would not be so difficult for Amnesty International because it has two "subsidiary charities". However, as the noble Earl will now be aware, those two "subsidiary charities" —if I may so describe them—deal with very limited areas of work. One deals with research and the other with the victims of human rights abuses.

I do not want to repeat the arguments that we have put forward previously, but I must advise the noble Earl that I think that it would be a very great pity if the amendment were not accepted because the effect of resisting it would be, first, to make it infinitely more difficult for disaster appeals to work successfully and, secondly, to damage profoundly the fund-raising activities of Amnesty International—and, as a result of the activities of that organisation, many people are alive today who would otherwise be dead.

Earl Ferrers

My Lords, as the noble Lord, Lord Harris of Greenwich, so abruptly put it, we have been round this track twice before, in Committee and again on Report. I explained when we discussed the matter on Report why I felt that we could not make the change which the noble Lord, Lord Richard, and others seek.

There are good reasons for that. The first is technical and one on which I do not rest too much of the argument. I do not believe that the amendment as drafted would work. It would allow a benevolent or philanthropic cause to apply for an exemption order. I do not see how a cause could make an application: only a person—whether natural or legal—could do so. The amendment was presumably intended to be inserted at the end of Clause 71. However, the amendments insert the provision at the end of Clause 72 which concerns the power to make regulations. I do not rest much of the argument on that assertion; these are nevertheless factual, technical matters.

However, there are arguments and good reasons why I feel I cannot advise your Lordships to accept the amendment. Under the existing law—Section 3 of the House to House Collections Act 1939—an organisation may seek an exemption order from the Secretary of State where it pursues a charitable purpose throughout the whole or a substantial part of England and Wales. A charitable purpose, in this case, means any charitable, benevolent or philanthropic purpose whether or not it is charitable within the meaning of any rule of law. The exemption order, if granted, allows the organisation to carry out house-to-house collections without obtaining a licence from the individual local authorities in whose areas it wishes to collect. There is no equivalent exemption order provision in respect of street collections.

Part III of the Bill introduces a single system for controlling all types of public charitable collection. So exemption orders will be available in respect of all types of collection for charitable purposes, whether they are house-to-house collections, street collections or whatever. That is an extension of the existing concession.

One must remember that the exemption order system is a concession. It is discretionary. It will not be available to just anyone who applies. Given that the provision is designed to help charities collecting on a national scale, the potential sums which may be raised through collections authorised by such orders are very large. It is right that those holding such orders should be subject to the closest possible scrutiny. We therefore think it right to transfer the responsibility for granting these orders to the Charity Commissioners. They are the people who have the powers and who know about the bodies. At the same time we seek to restrict the availability of the orders to charities.

The Home Secretary has no means of policing the operations of those to whom he grants exemption orders. Nor does he have any power to investigate their suitability for the concession concerning the need to obtain a licence in each area. So he cannot tell whether an applicant for an exemption order is likely to act responsibly. This has been a source of concern for some time. The Bill gives us the opportunity to tighten up. The Home Secretary has no powers to investigate the organisation in question or to scrutinise its internal controls and administration or to remedy any deficiencies, should these be brought to his attention.

The Charity Commissioners have such powers but they are of course limited to charities. The commissioners have no jurisdiction over non-charitable organisations, whether they are benevolent or philanthropic bodies, and have no means of calling them to account. If we extend the jurisdiction of the Charity Commissioners to those bodies, we should be effecting a fundamental change in their role. So it would not be right to give the Home Office supervisory powers in this area either.

I do not see that non-charitable bodies will be seriously disadvantaged by limiting the availability of exemption orders. They will still be able to carry out a national appeal. There are many ways in which money can be raised other than by a public collection for which a permit is necessary. All of them are open to the non-charitable appeal. Donations can be invited through newspapers or the broadcast media. These are, indeed, often the preferred methods. No permit is required for any of them.

All charities will be able to obtain exemption orders; it is only the benevolent and philanthropic institutions which will not. The noble Lord, Lord Harris of Greenwich, said that people will have to run around the countryside applying to many different local authorities. However, our information is that all the existing exemption order holders are charities. There was one which was held by a non-charitable body, Amnesty International. It lapsed last year. So far as we can discover, that is the only non-charitable body which has had an exemption order in the past. Thus, we are not withdrawing something which has been eagerly sought. It has hardly been sought at all. My noble friend Lord Swinfen and the noble Lord, Lord Harris—

Lord Swinfen

My Lords, I wonder whether my noble friend will allow me to intervene. Will he enlarge on the small number of exemption orders that he says exist? Do the organisers of disaster appeals know that they need to obtain an exemption order? What have the Government done to publicise that fact?

6.45 p.m.

Earl Ferrers

My Lords, anyone who carries out public appeals must know what the law is. I am not aware that the public benevolent or philanthropic institutions are not aware of the law. It is up to them to be aware of it.

Both the noble Lord, Lord Harris of Greenwich, and my noble friend Lord Swinfen expressed concern about disaster appeals. I can only repeat what I said during the earlier stages of the Bill. So far as I can discover, no applications for exemption orders have been received from those who organise a disaster appeal. My understanding is that those appeals are usually made via the television or radio or in newspapers. As the appeals have to be organised quickly, I doubt whether a series of public collections held on a national scale would have much appeal to their organisers.

My noble friend Lord Swinfen referred to Amnesty International. My officials have spoken to representatives of the non-charitable body which previously held an exemption order about their anxieties. The officials understand the body's disquiet at not being able to take advantage of the new system for exemption orders. However, there is a balance to be struck here between public accountability and private inconvenience. While I have some sympathy with its position, I do not think it is right to extend the concession—for that is what it is—to a body which is not subject to the degree of supervision which is appropriate and which can be provided by the commissioners.

I reiterate that we are extending the existing concession and introducing a better system for supervision. That aim would not be attainable if the noble Lords' amendments were accepted. It would be a pity if we lost that in trying to cater for what does not at the moment seem to be a real problem.

Lord Richard

My Lords, I do not follow the noble Earl's last remarks. Why should we lose the provisions? How does this amendment eat into the structure of the rest of the Bill in relation to charities? If it is passed and the Home Secretary is empowered to grant an exemption order for a benevolent organisation, why should that somehow bring down the edifice in relation to charities? There is no connection at all between the two.

I do not share the noble Earl's sanguine view that there will be no effect on disaster appeals. The information that I have leads me to exactly the opposite conclusion, which is that there certainly will be an effect on national disaster appeals if the organisers of those appeals do not belong to a charity but to a benevolent organisation. I suspect that what will happen is that organisations will go ahead with appeals. No doubt the Government will then have to decide whether or not they should be prosecuted for not having a licence. If we reach that stage, we shall get into a mess. In all the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Morris of Castle Morris moved Amendment No. 54: After Clause 75, insert the following new clause:

("Transfer of undertakings

The Undertakings (Protection of Employment) Regulations 1981 shall have effect subject to the amendment specified in Schedule 6 to this Act.").

The noble Lord said: My Lords, on behalf of my noble friend I wish to speak to this amendment and to Amendment No. 63. It is refreshing to be able to say that at least we have not been round this track two or three times already. I did rather spring the matter on the Government at Report stage and I am grateful for the prompt attention they have given it.

Since the amendment was put down, my noble friend and I have both received a letter from the noble Earl which deals with the present position. We found it a great help. I am grateful for the detailed work which has already been done on the small bombshell which I felt obliged to drop at such a late stage. We are pleased to learn that the Government are not unsympathetic to the difficulties which charity workers may face. I am obliged to the noble Earl for pointing out in his letter that charity workers are not entirely without protection in such circumstances. I should be grateful if he could confirm that this complex matter remains under active consideration by his department and others. Perhaps he might be able to give some indication of when that consideration may be complete. In responding to Amendment No. 54 and Amendment No. 63, the noble Earl may be able to banish all my fears. I beg to move.

Earl Ferrers

My Lords, the noble Lord is correct to say we have not been round this track two or three times before; we have been round it only once before. I am sympathetic to the concerns that are behind the amendments standing in the name of the noble Lord, Lord Richard, just as I was sympathetic to them when he first raised them on Report. There is a technical reason why this amendment will not work, but I need not labour your Lordships with that reason.

I turn now to the substance of the amendment. As I understand it, the 1981 regulations excluded non-commercial ventures in the genuine belief that the Treaty of Rome, from which the acquired rights directive stems, did not cover such undertakings. This was because of the essentially commercial nature of the treaty.

The point at issue is whether it is right now to maintain the distinction between commercial and non-commercial undertakings. I think it is fair to say that charity workers are not entirely without protection in such circumstances. For example, Schedule 13 of the Employment Protection (Consolidation) Act 1978 provides for continuity of employment for the purposes of redundancy and other service related statutory entitlement where there is a transfer of an undertaking. Though effectively superseded by the regulations for commercial undertakings, this provision still applies to noncommercial bodies. I would, however, agree that the regulations range wider in their effect.

I do not believe it would be appropriate to seek to amend the regulations in this Bill. These amendments raise important issues which go much wider than the scope of the Charities Bill and the implications require careful consideration. My right honourable friend the Secretary of State for Employment is, however, aware of the concerns that have been raised and is presently considering possible amendments to the regulations.

The noble Lord, Lord Morris of Castle Morris, asked when consideration of this matter would be complete. I am afraid I am unable to make any commitment on that matter at this stage. However, I hope a solution will be found in the near future which will satisfy the concern of the noble Lord.

Lord Morris of Castle Morris

My Lords, I am grateful for the noble Earl's comments. These are important issues and I apologise once again for raising them at such a late stage. I note the technicality to which the noble Earl refers. I am grateful for the explanations and the assurances he has given. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 76 [Regulations and orders]:

Lord Simon of Glaisdale moved Amendment No. 55: Page 71, line 7, leave out subsection (4).

The noble and learned Lord said: My Lords, this is a new amendment. I am sorry it has not been tabled earlier. It is a short amendment. It seeks to remove subsection (4) of Clause 76 of the Bill. I shall read out that subsection so that its quality may be appreciated. It states that before making any regulations under various sections, the Secretary of State shall consult such persons or bodies of persons as he considers appropriate".

My question is a short one. If that subsection were omitted, what is the very worst that could happen? I beg to move.

Viscount Astor

My Lords, I find myself in rather an odd position as regards this amendment. I believe various other noble Lords will find themselves in a similar position. As the noble and learned Lord, Lord Simon of Glaisdale, said, his amendment seeks to remove subsection (4) of Clause 76 which was inserted in the Bill (as a government amendment) a mere seven days ago. It was widely welcomed by noble Lords on Report. My amendment was made to address the concerns put forward by a number of your Lordships and others that the Government should consult before making the regulations specified in the subsection.

We tabled the amendment on Report purely as a result of the concerns that noble Lords had expressed in Committee. Of course the Government will consult before making these regulations. To that extent I agree with the noble and learned Lord that these words may be unnecessary. But it is frequently the practice in legislation to ensure that consultation takes place by placing Ministers under a duty to consult—that is the important point—even if it is left to their discretion to determine who should be consulted.

I am sure noble Lords will understand when I say that I cannot recommend they accept this amendment. As I have said, my amendment was made purely to address the concerns that were raised in Committee.

Lord Simon of Glaisdale

My Lords, I believe this is the last of my amendments at any stage of the Bill to which the noble Viscount will reply. Therefore I wish to say how grateful I am for the tone of his replies. As I suggested on Report, it is a pleasure, having been in another place a colleague of his father, to see the present noble Viscount performing so successfully on the Treasury Bench. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 1 [Sections 4 and 20 of the Charities Act 1960, as amended]:

Viscount Astor moved Amendment No. 56: Page 72, line 8, after ("excepted") insert ("(other than one excepted by paragraph (a) of that subsection)").

The noble Viscount said: My Lords, this amendment was spoken to with an earlier amendment. I beg to move.

On Question, amendment agreed to.

Schedule 2 [Meaning of "connected person" for purposes of Section 32(2)]:

Viscount Astor moved Amendments Nos. 57 to 61: Page 76, line 37, after first ("any") insert ("connected"). Page 77, line 1, leave out ("a person") and insert ("any such connected person as is there mentioned"). Page 77, line 2, after ("if') insert ("the person or institution in question"). Page 77, line 3, leave out ("he"). Page 77, line 5, leave out ("he").

The noble Viscount said: My Lords, these amendments were spoken to with Amendment No. 31. I beg to move.

On Question, amendments agreed to.

Schedule 4 [Amendments of Charitable Trustees Incorporation Act 1872]:

Viscount Astor moved Amendment No. 62: Page 84, line 28, after ("charity") insert (", in trust for that charity,").

The noble Viscount said: My Lords, this is purely a drafting amendment which makes clear that the effect of an order under subsection (3) of new Section 12A of the Charitable Trustees Incorporation Act 1872 to dissolve an incorporated trustee body is to vest the body's property in the trustees of the relevant charity to be held in trust for that charity. I beg to move.

On Question, amendment agreed to.

Schedule 6 [Minor and consequential amendments]:

[Amendment No. 63 not moved.]

An amendment (privilege) made.

6.58 p.m.

Earl Ferrers

My Lords, I beg to move that the Bill do now pass.

We have reached the end of an interesting and, I hope, fruitful journey. Some of us thought at various stages of the Bill that the end might not appear. Nevertheless we have reached the end. It would be uncharitable of me—I use that word in the widest sense—if I were to delay your Lordships more than is necessary at this final stage of the Bill. However, I felt I should trespass on your Lordships' time for a few minutes to thank all noble Lords who have taken part in these debates.

Our discussions have been peculiarly well informed. As usual, your Lordships have brought to bear a wealth of knowledge and experience which has been channelled towards making the Bill as good as we can get it. I am glad to say the debates have been free from acrimony. At times they have even had a touch of humour. That is what one would expect in your Lordships' House, particularly in the context of a Bill which is mercifully free from party politics and which has, I am glad to say, received such widespread support. Your Lordships have done much to expedite consideration of the Bill, for which I can only be grateful. The prospect of having this legislation on the statute book has also been welcomed by the charity world.

The noble Lord, Lord Richard, and the noble Lord, Lord Harris of Greenwich, who have led from the Benches opposite have sought to amend the Bill in a most helpful, constructive and understanding manner. Some cryptic and partisan observers might say that that was surprising. Whether or not it was surprising I can only say that their attitude was refreshing and most helpful and I am very grateful to both noble Lords. I quite expected that the noble Lord, Lord Harris of Greenwich, would find some way of bringing into the context of the debate the Nepalese military band in full ceremonial dress, but we were denied that intellectual luxury. I have though a funny feeling that we shall live to hear of that another day, as well as the Icelandic baby. His contributions were welcome nonetheless.

The noble Lord, Lord Morris of Castle Morris, and the noble Lord, Lord Beaumont of Whitley, too, have contributed considerably to our deliberations. The noble Lord, Lord Morris of Castle Morris, reverted for support, characteristically, to Holy Writ. He quoted from St. Paul's Epistle to the Ephesians. On the same wavelength I can only refer him to the First Epistle of St. Paul the Apostle to the Corinthians, Chapter 13, where, he will remember, there abides faith, hope and charity. I would observe to the noble Lord only that in the next few weeks he will need a great deal of faith and much hope. But whatever the outcome, I hope that he will remember that the most important quality is charity.

The noble Baroness, Lady Mallalieu, made a distinguished debut on the Front Bench opposite during the Report stage. With her quiet measured tones she injects a formidable legal gimlet approach into legislation and her expertise will be both respected and admired in any debate—charitable or otherwise —in which she gives us the pleasure of her participation.

I have been particularly grateful too for the contributions to our debates from the noble Lords on the Cross-Benches, where there lies a rare depth of experience and expertise in charity matters. Throughout our debates that has been both impressive and at times somewhat daunting.

The noble Lord, Lord Allen of Abbeydale, brought all of his Home Office experience to bear with great effectiveness. He has been either incisive or stimulating, and sometimes both. He has been a formidable protagonist in these debates, and he spent much time gently—and at times not so gently—encouraging the Government to bring forward this legislation.

The Bill has also gained much from the attentions of the noble and learned Lord, Lord Brightman, whose knowledge and experience of charity law are widely respected. His short, incisive interventions, whether in the Chamber, in discussion or in writing, have been immensely helpful.

The noble and learned Lord, Lord Browne-Wilkinson, also added to our debates in a way which reflected the distinction which is concomitant with being a distinguished member of the Chancery judiciary. I now understand why the noble and learned Lord was called with affection a "Treasury devil".

There have been other contributions from the Cross-Benches which have been memorable for a number of reasons, not least from the noble and learned Lord, Lord Simon of Glaisdale. Both my noble friend Lord Astor and I have felt the lash of the noble and learned Lord's penetrating arguments and his disapproval of anything he did not like.

I shall let your Lordships into a secret. My noble friend Lord Astor issued a simper of complaint to me the other day when we were outside the Chamber. He said that the noble and learned Lord, Lord Simon of Glaisdale, had called him a Nazi. "Oh, no he didn't", I said; I assured my noble friend that the noble and learned Lord had only called him a Gauleiter. My noble friend complained that that was in effect the same thing. I know that that was only a momentary flight of fancy on the part of the noble and learned Lord, who was really complaining in a colourful way that he did not like being rushed. I hope that he considers that he was not rushed. He certainly gave the Government much about which to think, and I thank him for that.

I should also like to say how much I appreciated the many helpful contributions which we received from the Episcopal Benches. The right reverend Prelate the Bishop of Worcester spoke with great knowledge and concern on a number of amendments in Committee. He put the subject of the liability of trustees firmly on the agenda, and there will be many who will thank him for that achievement. The right reverend Prelate also considerably concentrated our minds on what happened when you were in a hot air balloon: were you on the churchyard, in it, or above it—or in the grave? And what were you doing there anyhow? And was it charitable? As a result of the right reverend Prelate's intervention we may not have answered those questions but at least we succeeded in defining a churchyard.

The right reverend Prelate the Bishop of Guildford has been enormously helpful on the questions of education which we discussed today. His views and the views of the Church have been immensely valuable.

Our debates have been an interesting experience. I am glad to say that we have had to endure a minimum of Divisions. Commonsense, understanding and a willingness to accept sound arguments from all sides of the House have seen to that. We have all been genuinely concerned to see that, however this Bill eventually emerges from your Lordships' House, it will be in the best possible form.

We also had the unusual but on the whole (at least in this case) successful experience of the rarely used Public Bill Committee. It will be a forum which your Lordships will perhaps use more often in the future. That remains to be seen, but with this Bill and in these circumstances it seemed to work well.

I have no doubt that your Lordships' helpful contributions have produced a better Bill than the one with which we started in November. In some respects your Lordships may have wished to have gone further than did the Government, and that was evident this evening. However, I hope that the final product is acceptable to us all. More important, it is welcomed by the charitable world. There may not be many opportunities to reform charity law in the next 30 years. I have said on a number of occasions that we are doing important work in breathing fresh life into this part of the statute book. For your Lordships' help in that I express the approbation as well as the thanks of the Government.

Our debates were enriched by your Lordships' considerable experience in many areas. My noble friend Lord Swinfen brought to bear his experience in raising funds for charities, and he has done much to ensure that the provisions of Parts II and III of the Bill will not only provide protection to those who give to charities and to the charities themselves but that they will take into account the many diverse ways in which charities seek to raise funds.

My noble friend Lady Faithfull brought to our debates a concern for and a knowledge of the interests of the trustees of charities. She raised a number of matters which lie at the heart of what the Bill seeks to achieve, and I am grateful for my noble friend's contributions. For once—and peculiarly—she did not vote against the Government, at least at Report stage. I am grateful for that. It would of course have been too much to expect my noble friend to have accepted such a dirigiste regime for the whole of the Bill—and she suffered a few flights of fancy during the Committee stage—until she saw the light. I wondered whether she would, but she did, and I am grateful for that.

My noble friend Lord Stanley had a few problems relating to education. There is nothing new in that. He set a hare running and pursued it with characteristic determination. Although he did not catch it, I hope that he found that our sympathies were not too far apart.

My noble friend Lord Peyton of Yeovil began by being a trenchant critic of the Government but he has proved particularly generous in his appreciation of all that goes on behind the scenes, and I am most grateful for that. I am sure that many readers of the Bill when it becomes law will be grateful that my noble friend was able to convince me of the benefits of a Keeling schedule. I do not know—and your Lordships did not decide—whether it is a mini Keeling schedule, a major Keeling schedule or a maxi Keeling schedule. Whatever it was I am sure that it will prove very helpful.

My noble friend Lord Mountgarret spoke eloquently on behalf of almshouses and their trustees. If ever—and God forbid—my noble friend should fall upon hard times there will, I am sure, be a place for him among the almshouses for whose concerns he showed such a robust interest.

I am also grateful to my noble friend Lord Astor who has shared the burden and heat—and interest—of the Bill for the Government. I valued his gallant stand in the ring with the noble and learned Lord, Lord Simon of Glaisdale, and others. He may have emerged bloodied—but he was always unbowed. His work both in your Lordships' House and behind the scenes was invaluable.

Many other noble Lords took part in the deliberations. I like to think, and I am sure that noble Lords will agree, that whatever amendments have been made to the Bill they were all made with considerable care and after much thought. They were made with one pursuit in mind; namely, that they should make an improvement to the Bill. The one guiding light that seems to have shone through all our debates has been your Lordships' efforts to make the Bill as good as possible. I hope that it will prove to have been time well spent.

I believe that the Bill will make a remarkable and substantial contribution to the law on charity and charitable activities. It has been 30 years since the law was last changed. It may be another 30 years before it is changed again. It can therefore be said that your Lordships have played a significant and important part in trying to change and formulate the law on charities for the future. I hope and believe that it will prove to be a success.

Moved, That the Bill do now pass.—(Earl Ferrers.)

Lord Richard

My Lords, I shall try to follow the example of the noble Earl, without offering perhaps quite the same sweep or tour d'horizon of the Bill that he gave us.

I start by making two points. I agree with the noble Earl; I believe that the Bill has been a success. First, it has been a success because Members of your Lordships' House who know a great deal about the subject—certainly far more than I do—took an active interest in the passage of the Bill. Not only that, the pressure groups involved and the various interests and organisations concerned were assiduous in their briefings of almost all noble Lords who were interested in the subject and particularly Members of the Committee. As the noble Earl said, there were examples of sterling loyalty from people backing the Government including the noble Baroness, Lady Faithfull, and the noble Lord, Lord Peyton. That made for an interesting Committee. The information that was before noble Lords when we discussed the Bill was considerable. We were perhaps better informed on this Bill than we may have been on one or two others.

Secondly—it gives me great pleasure to say it—on the whole the attitude of the Government was accommodating. When the Government, the Opposition, the Cross Benches, the experts and the charities world all want a Bill, it would have been rather sad if we had messed up the situation and not given them the Bill.

The Bill that has now emerged at the end of a fairly lengthy process is a better document than the one with which we started. The input from—I nearly said the Opposition but I saw the noble Baroness, Lady Faithfull, looking at me—non-governmental noble Lords and from various organisations, being met (as it was) with a great degree of accommodation from the Government, on the whole produced a very good Bill.

I agree with the noble Earl that the experiment of the Public Bill Committee on this particular Bill was indeed a success. A lot of work was done there which otherwise would have taken up a great deal of time on the Floor of the House. The acid test of whether that experiment worked was the length of time that the Bill took on Report when it came hack to the House after having been in Committee. I believe that we were one-and-a-half days on Report after six days in Committee. That did not seem to be excessive. I believe that the experiment was a success.

I thank in particular the two Ministers who have been responsible for the Bill. Contrary to what the noble Viscount, Lord Astor, told us today, it is not a clear Bill. This Bill, which to a lawyer is almost incomprehensible, is to a layman a snare. I am grateful to the noble Viscount for his attempt to clarify the situation so that on this side of the House we were at least clearer about it at the end than we were at the beginning.

Finally, I should like to thank the noble Earl who has been in charge of the Bill. I have probably said enough about him already tonight. He deals with Bills in his suave and terribly effective manner at the Dispatch Box. He brushes aside arguments but does it in such a way that one cannot possibly take offence, even when one's favourite amendment bites the dust. On behalf of the Opposition I thank him for the way in which he approached the Bill. It is an important Bill and a good one. I hope it has a speedy passage.

7.15 p.m.

Lord Harris of Greenwich

My Lords, I believe that we all agree that this is a good and useful Bill, which has been considerably improved both in the Public Bill Committee, at Report stage and today. I certainly join the noble Lord, Lord Richard, in thanking the noble Earl and the noble Viscount for having been so accommodating. In so doing I also express the thanks of Members from all parts of the House to Home Office officials who have had to work extremely hard on the Bill, not least when they were confronted last Thursday afternoon by a letter from the Law Society which led to some quite complicated amendments being tabled yesterday. I think it is right to refer to their hard work in terms of putting through the Bill.

On most issues the Government have been extremely accommodating. The Bill is not without blemishes. There are one or two issues on which I feel that it would have been better if the views of those who were not Ministers had been accepted. However, that would always be true in the passage of any Bill through Parliament.

Like the noble Lord, Lord Richard, I believe that there are two reasons why the Bill will be as useful as I believe it will be. First, it has received all-party support. I am old-fashioned enough to believe that all-party support is a rather good idea when trying to get important legislation through Parliament. The second reason is because we had a Public Bill Committee. Inevitably that was an experiment. Some previous experiments have not worked, but I believe that on this occasion it certainly did work. It enabled a number of Members of this House, who have expertise in that area—not including myself, I may add—to participate in a constructive way in the discussion of legislation.

Undoubtedly, the Government were defeated on one or two more occasions than would have been the case if the Bill had been taken through a Committee of the Whole House. Given that the Government, with very good grace, have accepted all those defeats bar one, it indicates again the useful role played by the Public Bill Committee. I hope that in future we shall be prepared again to experiment with the idea. Certainly the Bills will have to be of a non-partisan character. I believe that the proceedings have been a success. I repeat, that is one of the reasons why this Bill has emerged in a far more satisfactory form than when it was introduced in this House.

Like the noble Earl, I seriously considered raising the cases of the Nepalese military band and the Icelandic baby, but those who are not experts on the provisions of the Asylum Bill will probably not be aware of the high quality of the jokes being exchanged between the noble Earl and myself. Again, I should like to thank him for the constructive role that he played in the passage of this Bill. He deserves the gratitude of the whole House for the attitude that he adopted throughout the proceedings.

Lord Renton

My Lords, having had the responsibility of piloting the 1960 Act, with the help of the then Solicitor-General, who is now the noble and learned Lord, Lord Simon of Glaisdale, I should like to congratulate my noble friends on the Front Bench on their tremendous achievement in getting this Bill through the House. They are both laymen and they had no help from any law officer. They showed patience and good humour and were receptive to ideas. As has been said, as a result it is a better Bill.

The 1960 Act remains the principal Act but it has been brought up-to-date and has the important addition of an attempt to deal with unscrupulous fund-raisers. To that extent in itself the Bill is fully justified. But altogether, in my opinion, it is a wise and necessary Bill.

My noble friend Lord Ferrers quoted St. Paul with regard to faith, hope and charity. I should just like to add: In faith and hope the world may disagree But all mankind's concern is charity.

Lord Houghton of Sowerby

My Lords, I am trying to be happy about this Bill. Some of us have been involved in it for so long that a little of the satisfaction of getting the Bill through is lost upon us. Certainly it is lost upon me. The all-party group that has prepared the Bill over the years went through four Home Secretaries. There was no indication at that time from any quarter that the Government attached any serious importance to a Charities Bill. We cannot congratulate the Government on their initiative. A good deal of the work was already done for them before they decided to take the matter up. However, I certainly join in the felicitations and the happy congratulations and comments that are usual on these occasions which the Government well deserve. The noble Earl and the noble Viscount, Lord Astor, have been amiable, patient and helpful and have done a splendid job.

However, something has to be done, in my judgment fairly soon, to relieve the intolerable pressure on the Home Office. That obsolete bundle of tricks has to be broken up to give its Ministers any chance of giving proper attention to the contentious matters that the Home Office has to deal with. The noble Earl deals not only with this Bill but with others of high complexity and difficulty. With the pressure upon them, Ministers at the Home Office are not able to give proper attention to the matters that come to them.

There is a suggestion in the Labour Party's approach that a separation of some functions of the Home Office may be made. To have a Secretary of State for Home Affairs in the Government at the present time is an absolute antiquity of ministerial division. No wonder that on one occasion a Home Secretary raised objection to taking the consideration of delinquent children away from the Home Office because if that were done and the matter were given to the Department of Education the Home Office would be left with nothing but crime, prisons and illegal entry.

The Home Office is the dustbin of Whitehall. No wonder there was a dustbin in the dangerous dog advertisements. When a matter cannot be given to other departments, and is floating around, it is given to the Home Office. However, I must not go on.

We have devoted ample time to small charities in the Bill. I notice that much of our time has been taken up by claims for relaxation of the supervisory and regulatory provisions of the Bill. Some claims have been misplaced. On the basis of tolerance and reasonableness, I believe that we have achieved a fair balance. However, if the Bill had been under consideration when some of the events of recent weeks took place, we should have felt that we had to pay more attention to the growth of money power in the big industry of charities. We have not touched that aspect. Mark you, my Lords, I believe that we were very wise to delete the old Clause 2 and not to have religious cults getting in the way of so much useful work that we otherwise had to do. After an hour on the only residual religious topic, noble Lords will realise the position that we would, or would not, have reached had we kept the old Clause 2. But someone has to tackle that question before long. We cannot wait another 30 years—at least I cannot—for another Bill to deal with some of the major problems that confront us.

We have done nothing to alter the structure of the growth of money power in the hands of charitable bodies which they are showing they can use to dangerous lengths in their dealings with Parliament. They have been doing so in recent days. A cautionary note must be struck. The matter needs to be watched. It is not right that Members of Parliament should be described as animals to their constituents and to the general public with everyone being advised to see what sort of animal is representing them in Parliament. That I object to. Similar pressures that are now being placed on Members of both Houses amount to a sense of coercion and possibly of intimidation. I believe that we have to watch those issues carefully in the days to come.

Some bodies are handling large sums of money. One charity alone boasts of having spent £130,000 in newspaper advertising and other forms of advertising in recent days on the hunting controversy. That is a new development in the field of charitable pressure upon the legislature.

Some charities have no subscribing membership. They hold no annual general meeting. They have had no obligation, until the present Bill to publish accounts or an annual report. That will certainly change. But what have they been doing? They have appealed for money. Much of the money comes from tendentious publicity and those bodies have not until now been accountable for the money that they have received. There have been TV and radio appeals without clear definition of what is to happen to the money. An appeal to the public to subscribe large sums of money could amount to a reduction in taxation if translated into fiscal terms. That is a possible danger. We have to find some way of improving the control of such bodies. There is little or no democracy in the world of charity today. Some charities which handle large sums and receive substantial government aid have no democratic control whatsoever from any body. In those circumstances we are bound to ask ourselves whether all that money, going into so few hands of management and accountability, is to be left to the present ad hoc and undefined system. I feel very disturbed about it.

I turn to Clause 6 of the Bill upon which I asked questions relating to internal problems arising in charitable bodies which threaten gravely the unity, the economic administration, the use of funds and so on. I accept the assurance that the noble Earl has given that such matters that I referred to on Report regarding internal disputes within charities, or challenges as to what trustees are doing, are now within the scope of the Charity Commissioners. We have a Trades Union Commission, a Building Societies Commission, a Broadcasting Standards Council, a Broadcasting Complaints Commission, a Race Relations Commission, an Equal Opportunities Commission and regulatory bodies for companies and financial operations. In those circumstances it is not without cause that we ask for the powers of the Charity Commissioners to be firmly established and exercised. I hope that the Charity Commissioners, with the Bill in their hands, will adopt a firmer and more public stance on charitable matters. The Bill raises their prestige, their powers and their capacity for supervision and regulation. I hope that we shall see good results from that.

I shall test the attitude of the present Charity Commissioners. The new chairman is not a sidetracked former civil servant, which helps to gain a new initiative. I shall put to him matters which are of considerable importance to the charitable world and to the well-being of some of the large charities. We cannot be completely indifferent about what may be happening inside large undertakings which have important funds at their disposal and considerable power and influence in various directions. We must make an attempt to intervene and to avoid difficulties—

Baroness Faithfull

My Lords—

Lord Houghton of Sowerby

My Lords, I am about to conclude. I have taken up too much time already and I apologise to the noble Baroness. I am under a certain amount of strain at the moment. That is what I have to say. I hope that my words have not been ominous nor raised matters which have disturbed the pleasure of noble Lords at having completed the Bill.

There is no doubt that we have done a good job of work, but it is not finished. Changing circumstances will make further changes necessary, otherwise one day the Government will wake up to a situation which they did not anticipate. With their customary dash and verve they will come forward with emergency legislation, asking Parliament to pass all stages in one day. That is their remedy for lack of foresight and courage in dealing with problems which other people can foresee but which they cannot.

I am sorry to finish on such a note. However, it is no good being a Member of your Lordships' House unless one can speak one's mind on the affairs of the day. It is with grateful thanks that we have completed a good job and I shall try to gain from it the greatest satisfaction possible.

7.30 p.m.

Lord Allen of Abbeydale

My Lords, I wish briefly to thank the noble Earl and the noble Viscount for their courtesy, patience and good humour throughout our proceedings and for their readiness to listen to argument, as was demonstrated even today. The many changes made to the Bill mean that it is a much better Bill. We often claim our abilities as a revising Chamber but, when put to the task, we can do well with Bills which are introduced here.

To my surprise, I agree with noble Lords who said that the Public Bill Committee worked pretty well. However, I believe that it can be used only for a Bill which is non-party political, such as this one. There was a long interval between Committee and Report, but when at last Report stage came, it was, at one-and-a-half days, not as prolonged as I had feared. That was by no means out of the ordinary for a Bill of 70-odd clauses. It is worth noting that after all the proceedings the Bill has only two more clauses than it started with.

There is not a great deal of controversy left. I still believe that the Government are wrong in what I might describe as the "Amnesty International" clause, but there it is. We still have to see the regulations, on which we have been assured that there will be wide consultation. We still have to see what will happen about the accounts of charities which are also companies and about the whole issue of limited liability. I cannot help recalling that throughout our debates we have never discussed Europe and the fact that our charity law is unique in the Community. I wonder whether in the future developments will make it necessary to look again before another 30 years have gone by at some of the issues which we have dealt with.

There is a great deal to be done about informing and training trustees. I hope that the Government will back up the work of the NCVO and the other organisations in their efforts in that regard. It will be interesting to hear in due course the Government's ideas about a timetable. I hope that this set of measures can be added to the list for consideration for consolidation.

Looking back at all the debates that we have had throughout the years, this is quite a moment, now that we are sending the Bill on its way to another place. It has been a long time coming but in the end it will be a good Bill. If passed into law it will do much to restore integrity to the charitable world. By increasing confidence and trust, one hopes that it will increase charitable giving.

Lord Simon of Glaisdale

My Lords, even though it is late, I wish to add a word about the Public Bill Committee. In my respectful submission, it would be unsafe to place too much weight on its undoubted success on this occasion. First, a wonderfully well-qualified Committee was appointed to deal with the measure. I doubt whether noble Lords could think of any other constituted committee of this House which can match in quality that Committee or point to one so attuned to a Bill. Secondly, there were disadvantages in the procedure. It meant that any noble Lord who was interested in this Bill but who was concerned with another could have attended the Public Bill Committee only if he were prepared to put up with a parliamentary day beginning at 10 a.m. and lasting until 11 p.m. I am glad to see the Opposition Chief Whip in his place—I hope he is wincing at the thought of 11 o'clock at night!

Thirdly, certain people were missing from the membership of the Committee. Your Lordships had the great advantage of having as a Member my noble and learned friend Lord Brightman. However, three other great equity lawyers were unable to attend because their attendance would have disrupted the judicial work of your Lordships' House. Fourthly, I fear that the availability of Public Bill officers would, on the principle of Parkinson's Law, merely invite a greater weight of legislation being imposed on your Lordships. Therefore, although the Committee was a wonderful success so far as I could judge, we ought to be wary about drawing conclusions.

Lord Swinfen

My Lords, I thank my noble friends on the Front Bench for the way in which they have listened to the arguments and have met them as the Bill has made progress through this House. I believe that more changes have been made to this Bill as a result of the arguments put forward than have been made to any other Bill with which I have been connected during the 15 years that I have been a Member.

When the Bill came to this House Parts II and III were a nightmare for the charities. However, the charities wanted the Bill; they wanted proper regulation. As a result of the changes that have taken place, a Bill which, from the fund-raising point of view, began its life as totally unworkable is now one with which charities as a whole can live. I am grateful to my noble friends for the changes that have been made. Perhaps my noble friend Lord Ferrers will pass on to his officials my thanks and those of other noble Lords.

I do not know how many of your Lordships know —it is not normal to discuss officials but I shall do so this evening —that during the Christmas Recess, between the Committee and Report stages of the Bill, government officials had five meetings with fundraising officials from the charity world. When the Bill was in Committee and on Second Reading the Government's advisers knew nothing about fundraising. They had two meetings at which they were taught fund-raising: one was held on a question-andanswer basis; the other meeting was held to go through the Bill. If a similar process could be arranged on other Bills of a rather specialist nature that would help the work of Parliament in general.

With regard to the Public Bill Committee, on the Pilotage Bill some years ago I was in a similar position as I was on this Bill in that I moved a large number of amendments in Committee. At the Report stage of that Bill the whole of the business which was conducted in Committee was gone through again, mainly by those noble Lords who had not been able to attend the Committee stage. I fear that that is a danger.

There is also a severe disadvantage for Members of your Lordships' House who earn their living and are normally working, at any rate during the mornings. As the Committee stage took place in the morning, as it did on this occasion, it meant that a number of noble Lords who attended were not doing their jobs and, therefore, could not earn their living or had to let down employers. That is a disadvantage for those who are younger and who are not retired.

On the whole the Bill has been considerably improved. I thank my noble friend for the way in which the Government have listened and responded to the arguments.

Earl Ferrers

My Lords, I thank in particular the noble Lord, Lord Harris, and my noble friend Lord Swinfen for what they have said about those who have supported the Government behind the scenes. It was a mammoth operation and their remarks will be greatly appreciated. I commend the Bill to the House.

On Question, Bill passed, and sent to the Commons.