Financial Services Bill

Lord Garnier Excerpts

Committee stage & Lords Hansard
Wednesday 3rd March 2021 Grand Committee

I am sure that the Minister will defend the current state of affairs and tell us that the trade associations have somehow turned a new leaf and are now different from what they used to be. But the fact remains that the professional bodies have no independence from their members and cannot deliver robust and effective regulation. Just how many more supervisors of the supervisors will the Government create? Even if they do, they still cannot change the Nelsonian organisational culture of the accountancy and trade associations. The best way to move forward is to reduce drastically the number of AML supervisors, which is what Amendment 51A invites the Government to do.

[Lord Garnier (Con) [V]]

My Lords, I am grateful to my noble friends and other noble Lords who signed Amendments 81, 82 and 83, which, with Amendment 84, take our debate in a slightly different direction from the other amendments in this group. I also thank my noble friend Lady Penn and the Economic Secretary, John Glen, for meeting me last week to discuss my amendments and for his letter received at 11 am. As can be seen from the names of those noble Lords who signed these amendments, they are driven not by party-political motives but by a desire to make the law of corporate criminal responsibility fit for the modern age.

Reform of this aspect of the criminal law is overdue. The Government accept that. I will raise the salience of this question and remind this Government, as I reminded their predecessors, that the current state of the law does not take account of modern company practice. The difference between us in substance is not that there should be reform but what sort of reform and when. I am glad to have this opportunity to explain my concerns and I apologise in advance to noble Lords if, in speaking for too long, I try the patience of the Grand Committee.

This is not the first time that I have tried to encourage reform of corporate criminal liability. I was persuaded more than 10 years ago when studying American law that the way we deal with corporate criminal liability is outdated. I was then trying to work out how best to introduce deferred prosecution agreements, or DPAs, into this jurisdiction—they were enacted via the Crime and Courts Act 2013—and I became convinced that, in an era of large, international companies with hundreds of thousands of employees, with main, local and regional boards in many different geographical locations and with turnovers sometimes larger than the GDPs of some small countries, what had worked in the 19th century was no longer suitable in the 21st.

A company, although a separate legal personality, is an artificial construct and can commit a criminal offence that requires, for example, proof of dishonesty only through the agency of a human. In 1915, the then Lord Chancellor, Viscount Haldane, giving judgment in the case of Lennard’s Carrying Co., said that a corporation is

“an abstraction. It has no mind of its own any more than it has a body of its own”.

Our law required a human directing mind and will to fill that vacancy. Equally, whereas a human being convicted of bribery can be sent to prison, a company cannot.

At present our law requires prosecutors to satisfy the identification principle, which essentially asks whether a person can be identified as the directing mind and will of the company and is thus capable of fixing the company with criminal liability for the act or omission of that identified individual. The difficulty in satisfying the identification principle has led to cases where only individuals, but not their employers, have been charged. A recent example is the phone-hacking scandal. Another example of the difficulties caused by the identification principle were the cases involving Barclays Bank and some of its senior staff in 2018.

One hundred and fifty years ago, companies were mostly small concerns that traded locally. Of course, many businesses were not incorporated at all, but there were exceptions to that general rule. As British maritime power and commercial reach became increasingly global during the 18th century, and developed yet further through the 19th century, company structures became more sophisticated. Financial services, be it in banking, capital raising or insurance in the City of London, kept pace to enable these advances. That said, leaving aside mechanical advances, a milling business of 1900 was not all that different from a milling business of 1800; had the managing director of that milling company bribed someone in the late Victorian age, it would not have been difficult to determine whether he could be identified as the directing mind and will of the company so as to fix it with criminal liability for the corruption, in addition to any that attached to the director.

Although the identification principle received its then-highest judicial approval in the Lennard’s Carrying Co. case in 1915, that principle had been developed during the 19th century, when most English companies were run by fewer than half a dozen people. It is now plainly an inhibiting factor when prosecutors are considering cases involving large, complex companies with international and country boards, operating around the world. In 1912, the US courts recognised that the identification principle was not suitable in a modern industrial economy, whereas three years later our highest court affirmed it. It is time that we caught up.

Since 1912, an American company can be liable for a criminal offence committed by an employee in the course of his employment for the benefit of the company. The offence may also benefit the employee, but if it benefits the company it, too, is criminally liable. It is the criminal law equivalent of the concept of vicarious liability that we have in English civil law. It is not complicated but, plainly, each case of suspected corporate offending will be highly fact specific. I would like to have that system here, but it is not going to happen. I therefore look to the failure to prevent model, not least because it is now well established in our own criminal law.

In 2011, US federal prosecutors told me that they greatly admired the failure to prevent bribery offence in Section 7 of the Bribery Act 2010. They said that the United Kingdom led the world in countering corporate crime because of that new offence. More recently, the Criminal Finances Act 2017 introduced a corporate offence of failure to prevent facilitation of tax evasion. The noble Baroness, Lady Bowles, may talk about that in support of her Amendment 84.

In the case of Tesco Supermarkets Ltd v Nattrass in 1971, Lord Reid held that, in order for liability to attach to the actions of a person, it must be the case that

“the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company … If it is a guilty mind then that guilt is the guilt of the company.”

That case turned on whether a store manager who broke the Trade Descriptions Act was the directing mind and will of the company. He plainly was not, but Lord Reid’s words are relied on in pretty well every case where a company is charged with an offence because of what an employee is alleged to have done. As Lord Justice Davis said in the 2018 Barclays Bank case, large modern companies are complex organisations not so that they can avoid criminal responsibility but to facilitate their business operations. They cannot be expected to have a detailed knowledge of what every manager throughout the world is doing, or to be held criminally liable for everything that they do. I agree.

That will not happen under these amendments but, under the current directing mind and will test, corporations involved in wrongdoing face little prospect of prosecution. As a result, corporate compliance procedures in the UK could slip. One of the reasons why Section 7 was introduced into the Bribery Act was to improve corporate behaviour. It has had an important preventive effect. When companies face little consequence for failing to maintain procedures to prevent financial crime, the business case for putting resources into implementing these procedures becomes harder to make.

If the failure to prevent regime were to be introduced for other economic crimes, such as those in my amendments, the impact on corporate standards would be significant because it would focus companies’ attention on having the right measures in place to prevent the commission of these crimes. It would also help us to maintain our reputation for the highest standards of business integrity, as we refocus our attention on building trade links around the world and on a future outside the EU.

The failure to prevent offence carries strict liability for a commercial organisation: a bribe paid anywhere in the world by an “associated person” with the intention of benefiting the company will cause it to commit an offence, and the only defence is that it had in place “adequate procedures” to prevent bribery. An “associated person” is defined under the Bribery Act as a “person who performs services” for or on behalf of the organisation; this may include employees, subsidiaries and agents. This was intended to embrace the whole range of persons connected to an organisation that might be capable of committing bribery on its behalf. It may include joint venture partners or entities, depending on the circumstances.

Under the law as it is now, companies can be prosecuted for not having in place systems to prevent a predictable crime here or abroad. This approach has proved effective. There have been prosecutions under Sections 1 and 7 of the Bribery Act, but Section 7 has been used to greatest effect in deferred prosecution agreements. I declare my interest as a barrister in private practice who has acted for both the Serious Fraud Office and companies accused of offences under the Act, but my experience of cases where companies have failed to prevent bribery by their associates tells me that the Act is not just necessary but works both to catch and deter corporate criminal conduct. I suggest that it would work as well with the offences in these amendments.

On proper analysis, my amendments are not a radical departure from the current state of the law but a small extension of it. Government and Parliament created the failure to prevent regime a decade ago. I am doing no more than increasing its ambit beyond bribery and tax offences to a few more financial and economic crimes. My amendments are limited to the UK financial system.

Amendment 81 says that a “relevant body”—in essence, a commercial organisation—commits an offence if a person associated with it commits an “economic criminal offence” in the course of using or providing financial services

“that might affect the integrity of the UK financial system.”

The expressions “relevant body” and

“the integrity of the UK financial system”

have the same meanings as in the Criminal Finances Act 2017 and the Financial Services and Markets Act 2000. For the purposes of this amendment, an economic criminal offence is defined by a list in paragraphs (a) to (g) of subsection (2) and includes, for example, conspiracy to defraud, theft and false accounting. As in the Bribery Act, there is a reasonable prevention procedures defence. “Reasonable” does not mean “perfect” so it is not a meaningless defence.

Amendment 82, which also has the same reasonable prevention procedures defence, defines an economic criminal offence as any of the approximately 50 offences

“listed in Part 2 of Schedule 17 to the Crime and Courts Act 2013”.

Those are offences that can be the subject of a DPA. Again, there is nothing radical there. Amendment 83 is in similar terms to Amendments 81 and 82, save that it relates to the failure to prevent a “criminal financial offence”, which is defined by the same list in the Crime and Courts Act used in Amendment 82 and a similar, but not identical, list of offences to that in Amendment 81. There is, again, a reasonable prevention procedures defence.

Clearly, we need laws that will make a real difference and deter crime. The approach taken in the Bribery Act and the Criminal Finances Act has proved its worth. Surely, it is now time to extend the tried-and-tested failure to prevent regime to the offences referred to in these amendments. Of course, I expect that they will be met by departments from the “Ministry of Paperclips” through to the “Department of Circumlocution”, as non-government amendments often are, with much sucking of teeth and earnest furrowing of brows. We have all heard the reasons why an amendment cannot be accepted, be it its drafting, its being in the wrong Bill, its public expenditure implications or its timing—and anyway, the Law Commission is about to look at this aspect of the law. I promise noble Lords that I wrote those words before I received the Economic Secretary’s letter this morning.

All Governments suffer from an aversion to ideas that they did not invent. That is not a criticism directed at my noble friend the Minister, I assure her, but of course this is an idea invented not by me but by government. Gordon Brown’s Labour Government introduced the Bribery Act, and David Cameron’s coalition Government took it on and ensured that it received Royal Assent. It had all-party support. Theresa May’s Government brought in the Criminal Finances Act 2017, to widespread acclaim. These amendments obediently follow those statutes. If the Financial Services Bill is not the right Bill for these financial offences, what on earth is? Surely, the Treasury can make a good case for adding these provisions, on financial and economic crime connected to financial services, to the Financial Services Bill. They will not cost money but, like DPAs, enhance our national economic reputation and, in the right case, see large fines flow into the Treasury.

Dunlop Review

Lord Garnier Excerpts

Monday 1st February 2021 Lords Chamber

[Lord True (Con)]

My Lords, I can certainly tell the noble Lord that we attach the profoundest importance to all parts of the United Kingdom, particularly Northern Ireland, to which he refers. I do not wish to go into what 1066 and All That would have called the unfortunate events of the weekend, but I assure the noble Lord that we believe that all action in relation to the protocol must be proportionate, and that discussions on this matter will continue.

[Lord Garnier (Con)]

My Lords, does my noble friend agree that if we do not make an effort, Scotland will become a republic separated from the United Kingdom, not because the majority—the moderate majority—want that, but because, to misquote Daniel O’Connell, England’s difficulty is Scotland’s opportunity? Are not the unionists from every part of the United Kingdom letting Ms Sturgeon—Glasgow’s de Valera—hold the floor because they fear confusing English nationalism with patriotic unionism, and are thus failing to make the powerful emotional and obvious economic case for the union?

[Lord True (Con)]

My Lords, in answer to my noble and learned friend’s opening remark about a republic, I cannot conceive that anyone would wish to remove Her Majesty the Queen as our Head of State. As for the other part of his question, everybody should advocate the United Kingdom and our union, and should have no fear in doing so. That goes from the lowest to the highest in the land, and in every corner of our kingdom.

Financial Services Bill

Lord Garnier Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Thursday 28th January 2021 Lords Chamber

[Lord Garnier (Con) (V)]

My Lords, this is a lengthy Bill, and although in some respects it is politically uncontroversial, there are many points of technical detail that the House will want to scrutinise closely. I can think of no better people to assist in our deliberations on the Bill than the two maiden speakers. My noble friend Lord Hammond of Runnymede made a superb speech. I hope that, having briefly sipped from the glass of independence in 2019 after nine years in the Cabinet, he will not lose the habit of free thinking, even though he has retaken the Conservative Party Whip. The noble Baroness, Lady Shafik, also made her maiden speech today. Her contribution to the study and practice of economics in a whole host of financial and academic institutions is inspiring, so I look forward to learning a good deal from her, as well as from my noble friend, in the future.

I am intervening in this debate to highlight a matter that is not in the Bill, but it ought to be. It is a subject that the noble Baroness, Lady Bowles of Berkhamsted, and the noble Lord, Lord Rooker, have touched on, and I gather that my noble friend Lord Hodgson of Astley Abbots may also speak about; namely, the need to expand the criminal law concept of failure to prevent crime, not least corporate financial crime. I have been thinking about the law on financial crime since the 2008 financial crash. I was the shadow Attorney-General for two years before the coalition Government came into office, and then the Solicitor-General in government. I developed the deferred prosecution agreement, or DPA regime. It was enacted through the Crime and Courts Act 2013. It is a regime that pragmatically and justly deals with corporate financial crime under the supervision of the courts. I will not go into the detail of the system now but, if I may say so, it works. I declare an interest not only as the Minister who introduced the system into this jurisdiction, but also as a practising barrister who, now long out of Government, appears in DPA cases.

DPAs are not, however, the end of the story. Financial crime is often thought of as the crime that does no real harm: no one gets killed, no bones are broken and there is no blood on the carpet. Equally, corporate offending is sometimes hard to visualise. But corporate crime and financial crime both cause great harm to people, to communities, to the economy and to our national reputation as a safe place to do business. Both are all too common and need to be investigated and dealt with effectively by the public authorities here and abroad. Financial crime is often, by the very nature of modern financial services, both international in its scope and committed electronically through corporate structures, albeit with a human mind and will behind it.

I hope, with other noble Lords, to expand on this theme in Committee, but for present purposes I shall say only this: Section 7 of the Bribery Act 2010 creates a corporate offence of failing to prevent bribery. It has been deployed successfully on several occasions and provides a model which can and should be replicated in other areas of financial crime. Furthermore, the Criminal Finances Act 2017 introduced corporate criminal offences of failure to prevent criminal facilitation of tax evasion. I suggest we should by this Bill expand the failure to prevent regime to cover at least some of the 50 or so financial or economic crimes that are available to be dealt with by DPAs listed in Schedule 17 to the Crime and Courts Act 2013.

Finally, we must reform the law relating to corporate criminal liability. The noble Lord, Lord Hendy, is right and I profoundly agree with him. I have been writing and speaking about the need to do this for years. The concept of the directing mind and will as the basis for corporate criminal liability, which the Americans abandoned before the First World War, worked for the small family businesses of the 19th century, but is now long outdated. Today, companies can operate in many different countries with national, regional and global boards and with hundreds of thousands of employees engaging in multi-jurisdictional trade in goods and services. Locating the directing mind and will of these vast conglomerates is difficult, if not impossible, and the current law does not reflect the reality of modern business life. It is an affront to common sense and justice. As in the United States, we need to introduce vicarious liability into our corporate criminal law.

EU-UK Trade and Cooperation Agreement

Lord Garnier Excerpts

Friday 8th January 2021 Lords Chamber

[Lord Garnier (Con) [V]]

My Lords, there is barely time to declare my interests in the register, not enough properly to welcome my noble friend Lord Wharton—although I warmly do so—and none at all to set out my TCA-related concerns about the Government’s Panglossian approach to the future of the United Kingdom, now very much in peril.

The TCA shows that the United Kingdom and the EU can behave with good will towards each other and agree. That is good, not only on its own but because the TCA exposes a lot of unfinished business, not least on technical barriers to trade. The agreement covers only part of the economic canvas and, to mix my metaphors, it is very much a curate’s egg.

Doing a deal on services is more difficult than doing one on goods, which is perhaps why so much has been left unfinished. Third-country access to the services arena is more complex than access for goods. We could not expect to replicate the same quality of access that both regulated and unregulated services enjoyed in the single market, but we will now see significant new barriers to UK services in the EU. Of course, the Government have for presentational reasons not spoken too much about this, understandably preferring to trumpet the provisions on traded goods, but these barriers need to be recognised and overcome.

Over 40% of our exports to the EU are in services, and 80% of the UK’s economy depends on services. The TCA’s eye-catching commitments to liberalise services are qualified by restrictions in the annexes. Our service suppliers will lose automatic rights to offer services across the EU. They will have to comply with a patchwork of separate host-country rules and may need to establish themselves in the EU to continue operating, and this will create expense and inefficiency. The level of market access will also depend on the way the service is supplied: there are four different “modes” which govern how the rules will apply to service supply. There is no time to explain them, but they will make things more difficult.

Furthermore, the TCA does not provide for mutual recognition of professional qualifications, a notable retreat from the current position. There will be no automatic right for a UK lawyer to advise even on UK or public international law in an EU state. I suggest that my noble friend Lord Frost and the Government as a whole have a lot more work to do, and I wish them well.

Outcome of the EU Referendum

Lord Garnier Excerpts

Monday 27th June 2016 Commons Chamber

[Mr Dominic Grieve (Beaconsfield) (Con)]

rose—

[Sir Edward Garnier (Harborough) (Con)]

rose—

[Mr Speaker]

The right hon. and learned Member for Beaconsfield (Mr Grieve) has only just started bobbing, but I think we should hear from him.

[Sir Edward Garnier]

A double bob.

[Mr Speaker]

Indeed. I call Mr Dominic Grieve.

[Mr Speaker]

Has the right hon. and learned Gentleman spoken for his chum as well?

[Sir Edward Garnier]

No.

[Mr Speaker]

Oh, well.

--- Later in debate ---

[Mr Speaker]

A single eloquent sentence from an illustrious QC? I call Sir Edward Garnier.

[Sir Edward Garnier (Harborough) (Con)]

In addition to the work that the unit of the Chancellor of the Duchy of Lancaster will be doing to look outwards to the European Union and our relations with it, will he also look at the preservation of the United Kingdom?

[The Prime Minister]

Yes.

Debate on the Address

Lord Garnier Excerpts

Wednesday 18th May 2016 Commons Chamber

[Sir Edward Garnier (Harborough) (Con)]

It is a pleasure to follow the hon. Member for Hackney South and Shoreditch (Meg Hillier). I might not agree with her commentary on the Queen’s Speech or the conclusions she reached, but I think that the thoughtful way in which she approached the several subjects she discussed was commendable. It was a commendable way to debate the Queen’s Speech, particularly from the Opposition Benches, because people tend to listen to Opposition Members when they speak carefully, calmly and without hectoring. She certainly was listened to by me, and I am grateful and very happy to follow her.

I am also happy to take this opportunity to thank my right hon. Friend the Member for Meriden (Mrs Spelman) and my hon. Friend the Member for Bracknell (Dr Lee) for starting our deliberations this afternoon with two first-class speeches. The speeches were different in style, but both were hugely amusing and insightful. They are to be congratulated on what they had to say and the manner in which they said it.

All Queen’s Speeches can be something of a curate’s egg; they tend to include a bit of detail, a bit of general aspiration and a bit of

“Other measures will be laid before you.”

I do not suppose that this Queen’s Speech is an exception to that rule. However, I am keen to highlight three areas that appeal to me and that I think will be of interest to the country as a whole. It does not matter to me that the Bills on which I want to concentrate have a bearing only on England and Wales, because I think that the theory and public policy behind them should be of interest right across the United Kingdom.

The first issue that I want to deal with is the anti-corruption summit in London and the follow-on legislation that will tackle corruption, money laundering and tax evasion. There is absolutely no question but that for far too long the police and public policy commentators have not given enough attention to white-collar crime, as it is sometimes called. Nobody dies, there is no blood and guts, and there are no obvious victims in so many cases of corruption, money laundering and tax evasion, but none the less these are serious crimes. If somebody went into a bank with a sawn-off shotgun and stole £10 million, we would all get rather exercised about it, and in the event of a prosecution and a conviction, we would expect the offender to be given a pretty handy sentence. Yet there seems to be a rather perverse sort of admiration for people who, through computer crime or through other clever tactics, launder money, evade tax or commit acts of corruption, in this country or abroad.

All these financial and economic crimes need to be borne down on with a sense of purpose, because they not only produce victims in this country—we see pension funds ripped open and lives ruined as a consequence—but damage the developing economies in countries where corruption is, to some extent, endemic. It was interesting for me to attend the Marlborough House talks last week. I did not go to the main summit addressed by the Prime Minister but to the event the day before addressed by the noble and learned Baroness Scotland, now Secretary-General of the Commonwealth, at which a whole host of people, including the President of Nigeria, spoke with one voice about the need to tackle corruption, not only because it is wrong in itself, but because corruption in their countries damages their development, damages their economy, and makes the lives of their people, particularly poorer people, altogether more difficult. I welcome the onset of this new legislation, not least because it ties into something that I did when I was briefly in government, which was to introduce deferred prosecution agreements that allowed corporate malefactors to be dealt with pragmatically and effectively.

I am not so happy about the second thing that I want to draw attention to, which is the sentence in the Queen’s Speech that reads:

“Proposals will be brought forward for a British Bill of Rights.”

This idea of a British Bill of Rights has been knocking around the lampshade like a demented moth for some little while, and it may well be that if it has an armour-plated head, it can carry on knocking itself around the lampshade for a good while longer. I really do think it is a waste of intellectual and political energy for this—to mix my metaphors—dead horse to be revived. Of course the European convention on human rights and its application in our own courts, and in the Strasbourg Court, can occasionally be rather annoying, but that is not the point. The point of the convention, the point of the Strasbourg Court and the point of applying the convention law in our own courts, right across the United Kingdom, is to ensure that the courts can protect the interests of the people—the citizens.

I am not going to get too apoplectic about this, because I find that life is far too exciting already without getting apoplectic about a British Bill of Rights, and I will wait until the consultation is over—perhaps my obituary will have been written by then—before I deconstruct it. However, I urge the Government to make the consultation very thorough and to consider long and hard whether this is worth the political damage and in-fighting that it may well cause. I think it was the right hon. Member for Moray (Angus Robertson) who said that there is no majority in this House, let alone in the other place, for a wholesale attack on the structure of human rights in this country. I suspect that he is right, but let us see what the Government come up with when they have finished consulting. I wish them all the best in their endeavours.

To come on to the meat of what I want to say— I promise to take just a little time, not far too long—I congratulate the Government on their prison reform proposals. One of the things in which I have become interested in the past 11 years is prison reform. When my right hon. Friend the Prime Minister became Leader of the Opposition in 2005 and rearranged the Opposition Front Bench, he invited me to become the shadow Minister for prisons, then shadowing the Home Office. I think that the right hon. Member for Delyn (Mr Hanson), who is in the Chamber, was the then Minister for prisons; if not, he certainly took on that role shortly after I became the shadow Minister.

The Prime Minister asked me to find out what was going on in the prisons of England and Wales, because the prisons world is, except to the few enthusiasts about such issues, an entirely secret world. Over the course of the next three or four years, I set about visiting about 65 of the 140 prisons, young offender institutions and secure training units in England and Wales. In all those prisons and places of custody, I found dedicated prison officers and hard-working senior management teams, including prison governors. They were all interested in doing a good job, but unfortunately the good things that went on in some prisons were not replicated in others. There was no general pattern of a sensible application of policy.

The inevitable problem that one saw as one went from prison to prison—this was quite easy to see whether one visited the big Victorian prisons of Manchester, Leeds, Wandsworth, Pentonville or Wormwood Scrubs, or more modern prisons such as Gartree in my constituency or Glen Parva, a YOI that straddles the border of my constituency and that of South Leicestershire—was that of overcrowding. Although the Government’s proposed measures are entirely laudable and welcome, nothing of lasting value seriously can be done to reform and improve the condition of our prisons and prisoners—and thus to make them fitter to come out into the community and lead sensible and straight lives so that they can look after their dependants and themselves, get a job and become tax-paying members of society—unless we stop overcrowding our prisons.

Overcrowded prisons lead to churn. Someone sentenced in Canterbury Crown court for a particular offence might go straight to Canterbury prison, but probably not if it still specialises in overseas prisoners, in which case they will probably go to a relatively local prison. If Canterbury Crown court sends 10 or 15 people to prison every day and the local prison does not have sufficient space to house the inflow of just-sentenced prisoners, they have to be moved from Canterbury to Lewes or Maidstone, but how do those prisons fit in the 15, 30 and 45 prisoners that have been sent there? They remove 15, 30 and 45 of their own prisoners and shove them down the line, so there is a metaphorical jumbo jet of prisoners going around England, moving from prison to prison. One could say, “Well, that’s just bad luck.” However, their records and education certificates do not move with them, so when Prisoner Jones goes from Canterbury to Lewes to Exeter to Bristol to Birmingham, his medical and educational records are three or four prisons behind him. It is bananas, it is incompetent, it is inefficient, and it is a waste of life and public money.

We do that because in the past, we had Governments who were good at talking about prison reform, but did not get round to doing it. Now we must, and I think we have a Government who will, because the Prime Minister and the Secretary of State for Justice are genuinely interested in this issue. If the Prime Minister, who has said that he will not serve another term after this Parliament, leaves nothing behind him other than real proof that what we do to prisoners and what we do within prisons can allow our prisoners to emerge from prison as better citizens—off drugs, able to read and write, having received the mental health treatment they required and fit for a job—he will have done a really wonderful thing.

I am biased. First, as I said a moment ago, in 2005 I became the shadow prisons Minister and went on a literal and metaphorical journey to find out what was going on in prisons. I also researched and wrote a paper called “Prisons with a Purpose”, which I hope has informed, to some extent, the discussion we are now having on prison reform. It is inevitable that, as Front Benches change, other people come in and want to do things their way, rather than the way of their predecessors, but I like to think, in a rather self-regarding way, that the paper I wrote has proved to be valuable. If, unconsciously or consciously, my successors have drawn on it to produce good policy, that is a good thing.

The other reason I am biased is that when I came out of government in September 2012, I was fortunate enough to be invited to become a patron of Unlock, a prisons charity, and a little while later I became a trustee of the Prison Reform Trust. It is a happy coincidence that my hon. Friend the Minister for Children and Families is sitting on the Front Bench, because his brother James has just become the chairman of the Prison Reform Trust, and the name Timpson and doing good things for prisons and prisoners run together. In a number of prisons—possibly in Liverpool and Manchester, and certainly in Wandsworth—Timpson workshops train guys who can then go out and work.

As General Ramsbotham, the unlikely but marvellous inspector of prisons, said, the three things that a released prisoner needs are a strong relationship—whether with their family, wife, husband or partner—somewhere to live and a job. The Timpson trick is to allow ex-offenders and ex-prisoners to set up shop, run it on their own and handle money. The business trusts those people and, in return, they pay back by earning money, supporting their families and providing a service to their customers. Yes, of course, the odd one fails, but the risk is worth taking. I hope the Government will feel encouraged by that example, and that they will feel that the public attitude towards prisons, prisoners and prison reform is not as conservative, with a small c, as old-fashioned or as ill-considered as many would have us believe. There is a fund of enthusiasm for good work in prisons, and I urge the Government to push hard for it and not to be upset by the occasional recidivist or the occasional disaster, because the overall direction of travel is good.

[Barry Gardiner (Brent North) (Lab)]

Will the right hon. and learned Gentleman take this opportunity to pay tribute to the mother of the Minister for Children and Families? I believe that she recently passed away. She was the primary driving force behind the amazing things that the right hon. and learned Gentleman has just talked about.

[Sir Edward Garnier]

Of course I will—I do not want to make this a Timpson-fest, but I am happy to pay tribute to the Minister’s mother. I was fortunate enough to meet her, and I was very sad when she died, as I know my hon. Friend the Minister obviously was.

That family’s story, which goes beyond the fostering of a lot of disadvantaged children and the setting up of workshops in prisons, demonstrates what private enterprises, charities and individuals can do to turn things around. If the Government can harness that work and borrow the enthusiasm and spirit of volunteers, charities, professionals in the probation world and so on, they can produce an understanding that going to prison is not the solution for a prisoner but part of a much longer journey. I have been a Crown court recorder and sentenced people to prison, and from reading their histories I know that they are often the children of prisoners or from broken families. They are often mentally ill, and they are largely illiterate and unable to function. I have sentenced people to community sentences who do not even know how to tell the time. They are told, “You are required to be at such-and-such a place at 10 o’clock next Friday, where you will meet the probation officer,” and they ask, “How many sleeps is that?” It is as rum as that.

I hope that the Government will push this agenda on with great enthusiasm. There are charities that do good work for the mentally ill and for prisoners, but we need to join things up so that ex-servicemen, for example, who are under the care of the Ministry of Defence and get into trouble when they leave the Army, can be properly treated by that Department and by the Department of Health, and do not fall through the gaps between the departmental budgets. As I have said, we have to deal with overcrowding and stop the churn, and we must be braver and have more releases on temporary licence—that issue was spoken about over the weekend.

I commend my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), the Chair of the Select Committee on Justice, for the Committee’s report. It sounds the alarm bells and tells a story, but that story has been told and told and told. Now it must stop being told and something must be done. I hope that when the next Queen’s Speech is given this time next year, Her Majesty will not need to say:

“My Government will legislate to reform prisons and courts to give individuals a second chance”,

because that work will already have started.

I will speak finally about another pet subject of mine. The law on sentencing in this country is incredibly complicated—I would say impenetrable. I resigned as a Crown court recorder because when I went on a judges’ refresher course last October at Warwick University, I discovered that three pieces of legislation were passed at the end of the 2010 to 2015 Parliament that I had never heard of—and I follow criminal justice legislation carefully. Ludicrous. Ludicrous of me, one may say. We must stop treating this place as a criminal justice sausage machine, concentrate, and pass sensible legislation that does not repeat itself, and allows the courts to do justice, protect the public and enable wrong to be set right. I hope that one way in which we can do that is by codifying the criminal sentencing law in one easy, though no doubt big, volume so that judges can see what the law is, what has been amended, what has been repealed, what is still there and what is not yet in force, rather than having to look at 25 different books or internet sites to find out the correct sentence. That is not much to ask of the Government, and perhaps they could start.

[Mr David Hanson (Delyn) (Lab)]

I appreciate the opportunity to contribute to the Gracious Speech debate. Like the right hon. and learned Member for Harborough (Sir Edward Garnier), I pay tribute to the right hon. Member for Meriden (Mrs Spelman) and the hon. Member for Bracknell (Dr Lee) for their contributions. It is a tough gig to undertake, but they did so with aplomb.

Today’s debate is very general, so I want to make some general comments before focusing on the same issues that the right hon. and learned Member for Harborough raised about prisons. As ever with a Gracious Speech, there are things on which we can agree. I look forward to the measures on tackling radicalisation in prison and generally. I think that they will contribute to putting in place a framework to reduce radicalisation and to stop young people from all communities turning to warped views of the Muslim faith, or indeed, as happened in Mold in my constituency, radical activity based on a national socialist view of the world. It is important to consider those measures in detail and to support them.

Like my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), I have a lot of time for the Investigatory Powers Bill, not least because I have spent three months considering the draft Bill in detail with several hon. Members and putting in place measures to ensure that the state can have access to the information that it needs to stop paedophilia, terrorism, money laundering and other criminal activities, but also building in protections. The Bill was before the House in the previous Session and I look forward to its progressing with some amendments in this Session.

I cannot argue—nobody could—with measures to support and honour the military covenant. As a former Northern Ireland Minister, I look forward to further progress on the Stormont House agreement. The Prime Minister’s activities on anti-corruption and money laundering are welcome. We will see the proof of the pudding in due course, but there is broad support in the House for tackling tax evasion and corruption.

Although I am an Opposition Member, I will not dismiss all aspects of the Gracious Speech, because there are things in it that we should examine. However, some issues leap out about which we have real concerns. The right hon. and learned Member for Harborough coined a phrase, which will become welcome across the House: the current British Bill of Rights is “a demented moth” banging its head against a light.

[Sir Edward Garnier]

Lampshade.

[Mr Hanson]

The right hon. and learned Gentleman corrects me. I want to ensure that the facts are correct, so I take his point. I share his concern that we will throw away the Human Rights Act, which a Labour Government passed in the 1997-2001 Parliament, and replace it with a British Bill of Rights, which throws away our commitments to the European Court in Strasbourg. That does not just throw away our commitment to being part of the wider European Union; the European Court of Human Rights covers countries that are currently not in the European Union, such as Russia, where we face potential challenges. We are sending the wrong signal by ditching the Human Rights Act.

Panama Papers

Lord Garnier Excerpts

Monday 11th April 2016 Commons Chamber

[The Prime Minister]

I agree with the first half of the hon. Gentleman’s question: there is a value in privacy. That is why I think we need a balance between what is disclosed and what is not disclosed. I have tried to set out the way forward today. On the hon. Gentleman’s point about private service companies, the Chancellor had something to say about that in the Budget. There is a case, particularly where public money is involved, for making sure that people declare these arrangements in the proper way. The changes that the Chancellor has spoken about will make sure that whether someone chooses to have a private service company or chooses to be self-employed, the amount of tax that they pay will be much more similar.

[Sir Edward Garnier (Harborough) (Con)]

I welcome the Prime Minister’s announcement that there will be a new criminal offence applying to corporations that fail to prevent their representatives from criminally facilitating tax evasion. That reflects the failure to prevent bribery offence which already exists under the Bribery Act 2010. There are nearly 40 other economic crimes listed in the Crime and Courts Act 2013, which are susceptible to deferred prosecution agreements. Will my right hon. Friend have discussions with the Ministry of Justice and the Law Officers to make sure that we can add not only the tax offence that he refers to but those other economic crimes, so that they can be dealt with under the “failure to prevent” system?

[The Prime Minister]

My right hon. and learned Friend has much expertise in this area. I think the point he is making is that as we set out these economic crimes—the Home Secretary has led the charge to ensure that we address this issue properly—we make sure that they are properly publicised, properly understood and then properly prosecuted. We need to make sure that the National Crime Agency and the Serious Fraud Office work together in the way that I know he was keen to see when he was doing that job.

Charities (Protection and Social Investment) Bill [Lords]

Lord Garnier Excerpts

Tuesday 26th January 2016 Commons Chamber

[Anna Turley]

I am afraid that I am nearly at the end of my speech, so I will finish.

The lobbying legislation looks to many in the sector too much like another deliberate and shameless act by a Government who are too scared to debate their record or to be open to scrutiny and challenge. The health of our democracy depends on people’s right to campaign on the issues they care about. The 2014 Act was an attack on our democracy. It limits the rights of charities to fight for important causes. It has left expert organisations that have a vital contribution to make to public debate unsure whether they are allowed to speak out. We seek to protect the right of charities to have a loud and respected voice in our democracy. I commend new clause 3 to the House.

[Sir Edward Garnier (Harborough) (Con)]

I congratulate the hon. Member for Redcar (Anna Turley) on her first speech from the Dispatch Box in the Report stage of a Bill. She gave a thorough explanation of her case on behalf of the official Opposition, although I am not entirely sure that I agreed with all of it. No doubt she gave it a lot of thought. She certainly gave us the benefit of her views.

I will not follow the hon. Lady up and down the badger setts of England and Wales, if that is all right with her, but I will speak to amendment 1, which stands in my name. I will do so, with the greatest of respect, in a slightly less aggressive way than her, although there is nothing wrong with aggression when one has something decent to say. I must declare an interest, as is indicated on the Order Paper, because I am a patron of Unlock, the charity that seeks to help people with convictions, and a trustee of the Prison Reform Trust. Both positions are unpaid.

I became interested in prison issues, the rehabilitation of offenders and so on when the Prime Minister, then the Leader of the Opposition, appointed me in the middle of the last decade as shadow Minister with responsibility for prisons and probation. As a consequence of that appointment, I visited about 65 of the 140 or so prisons, young offender institutions and secure training units throughout England and Wales. It became apparent to me—it was not a new idea, in that others had discovered it previously—that one of the things that contributes to the high levels of reoffending among those people who have been sent to prison and come out again, particularly among youngsters, is that they do not have a job or somewhere settled to stay, and that they have, to put it loosely, relationship problems. If we can do something to help people to form strong, stable relationships with families, partners or others, and if we can find them somewhere stable to stay and live, and if we can help them to get training or work, the chances that they will reoffend and go back to prison are very much reduced.

As a consequence of the voyage of discovery that I went on from 2005 or so until I was appointed shadow Attorney-General in 2009, I wrote a paper called “Prisons with a Purpose”. I hope that the Secretary of State for Justice—I see his Parliamentary Private Secretary, my hon. Friend the Member for Newark (Robert Jenrick), sitting in his place to my left—is picking up many of the ideas that I and my right hon. Friend the Member for Arundel and South Downs (Nick Herbert) pushed forward in that period of opposition.

I suppose it is not a surprise that I have become attached to the Prison Reform Trust and to Unlock, but in speaking to my amendment 1, which is long—it is set out on page 5 of the amendment paper—I invite the Government to have a little think about the disqualification or waiver procedure that applies to people with criminal records, either in so far as they may be trustees of charities that have an interest in looking after ex-offenders, or in so far as they may be employees of those charities.

I hope that the framework of the amendment is clear in itself but, if I may—I will be as quick as I can because I know that my right hon. Friend the Member for Cities of London and Westminster (Mark Field) and other right hon. and hon. Members wish to catch your eye, Madam Deputy Speaker—I hope he and the House will forgive me if I take a little time in setting out what I intend to do. I should confess at the outset that I am very grateful to the Prison Reform Trust in assisting me in preparing for today’s debate.

The purpose of my amendment is to require the Secretary of State to lay before Parliament, before clause 9 comes into force, a report on the impact of the extension of the disqualification framework on people with criminal records who are trustees of, or who are employed by, charities that work with or employ ex-offenders. I intend to urge the Government to provide us with further clarification of the impact of the extension of the disqualification framework on people with criminal records and charities that work with or employ ex-offenders. The amendment also provides an opportunity for the Minister to outline in more detail how he and his Department intend to conduct the review of the waiver process to ensure that people with criminal records who are existing employees or charitable trustees, or who are seeking or intend to seek employment or a trusteeship in a charity, are not unfairly discriminated against.

Clause 9 and the policy behind it are entirely worthy and understandable. We clearly do not want people who are engaged in terrorism to be using charities to move money around or to hide their outrageous behaviour; that is not controversial, but one problem might be the unintended consequence of the clause on people whom the Government may not want to impact. One has only to read out clause 9(5) to realise that someone who comes within

“Part 1 of the Terrorist Asset-Freezing etc Act 2010…or…the Al-Qaida (Asset-Freezing) Regulations 2011”

is not someone whom we want to be involved in charities. That is not a problem, but I am concerned about the unintended consequence of that perfectly understandable and worthwhile clause.

--- Later in debate ---

[Mark Field]

We probably know more about Roman law than trust law from our time at university, but as I recall, it was indeed in 1602 and thereafter, during James I’s time, that charitable heads came into play. That is not unimportant to the debate. There has been a lot of radical change quite recently, which has upset the very essence of what charities should be about, as my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) pointed out.

[Sir Edward Garnier]

Clearly, I need to take my right hon. Friend around with me in a knapsack, particularly when I am speaking in the Market Harborough Conservative club. He is just the chap they want to hear more from.

To return to the serious point we are discussing, a longer period to enable charities, the Charity Commission and the Government to work out how best to move forward with the clause 9 provisions would be to the advantage of all. That would enable us to get rid of any glitches and look out for any Heffalump traps that may be lying there for the unwary.

My hon. Friend the Minister was very kind and met me in his Department with his officials on Tuesday 19 January. It came across to me that he was in listening mode and that the Government are very likely to move towards me to some extent. If he does, that would be very helpful. If he is able to say so on the Floor of the House, that would be even more helpful. That would enable me to do what I promised him and not press my amendment to a Division. I am here to try to produce clarity and better legislation. If he and I can do that together, in partnership, then everybody goes home happier.

I would like to touch briefly on a number of the paragraphs in my amendment. There are 11 areas specified. I appreciate that the Government have tabled their own amendment, which to some rather limited extent alleviates some of my concerns, but to be honest with my hon. Friend the Minister, the Government will need to go a little bit further than amendment 3 if all the concerns the charities I speak for, or have some connection with, are not to have their worries continue.

Subsection 23(a) deals with the first problem area:

“the number of people employed by charities who will be affected by the extension of the disqualification framework to cover senior management positions”.

For reasons of time only, I will not set out extensively the arguments that apply here, but we are concerned about an absence of detail so far expressed in Committee or in any other public pronouncements made by the Government in relation to this particular impact. I urge the Government to do a bit of work to see how many people employed by charities will be affected by the extension of the disqualification framework insofar as it relates to senior management positions.

Subsection 23(b) relates to

“the number of people who are trustees of, or employed by, charities who will be affected by the extension of the list”.

Again, will the Government please have a think about this and recognise that it is not a negligible problem? This is not just a whinge from a trustee of the Prison Reform Trust. This is quite an issue, which needs to be thought about. The impact of clause 9 needs to be considered in co-operation with the charities and the Charity Commission, so we can get this right for the long term.

I will provide just one example in relation to paragraph (b): a glitch caused by an unwitting failure to consider the Rehabilitation of Offenders Act 1974, as reformed in 2014. Under the 2014 amendments to the 1974 Act, rehabilitation periods for a convicted person were to some extent reduced. For example, an individual convicted of a sexual assault is sentenced to three years in prison. Assuming the individual does not reoffend, that conviction will become spent seven years after the end of the sentence. However, they will remain subject to the notification requirements indefinitely, with a right to review after 15 years. Under the Bill as currently drafted, the individual would automatically be disqualified from being a trustee for at least 15 years and potentially for the rest of their life. Under the 1974 Act, as amended, once an individual has been convicted, if they remain conviction-free for a defined period of time they are legally recognised as being rehabilitated. That is just a simple discrete example of where the Government, the Charity Commission and the charities sector need to get together and see how best to move forward.

Subsection 23(c) relates to

“the impact of the new disqualification framework on former offenders who are seeking, or intend to seek, employment in the charitable sector, including on their recruitment, retention, career prospects and long-term rehabilitation and resettlement”.

I made this point in general at the outset of my remarks. The one thing we, as people interested in reducing recidivism, need to concentrate on is getting people back to work, or getting people into work—of course, many people in prison have never been in work. If we want to get them back or into work, we need to reduce the barriers to that as sensibly as we can.

Subsection 23(d) relates to



“the impact of the new disqualification framework on former offenders who are currently employed in the charitable sector, including on their retention, career prospects and long-term rehabilitation and resettlement”.

That is the same point, but with a different shade.

Subsection 23(e) deals with

“the impact of the new disqualification framework on people with criminal records who are trustees or employees of charities which are partners in, or are contracted by, community rehabilitation companies (CRCs) and its impact on the successful running of those organisations”.

In line with Government policy under the coalition Government in the previous Parliament, community rehabilitation companies have been set up. They are contracting with charities to deliver rehabilitation and probation services. It would be a pity if good policy was undermined by making it much more difficult for ex-offenders to work with more recent offenders in order to rehabilitate them. Again, we need to think very carefully and collectively about that.

Subsection 23(f) deals with

“the effectiveness of the existing waiver process provided for under section 181 of the Charities Act 2011”.

Charities have significant concerns regarding the effectiveness of the existing waiver application process and the ability of the Charity Commission to administer the additional applications that will result from the introduction of the new framework without any additional resources. In the past six years, the Charity Commission processed only six waiver applications. The Government suggest that this shows it is effective in granting waivers but that fails to recognise the disproportionately low numbers of waiver applications compared with the number of trustee positions and the estimated number of people with unspent convictions for existing disqualifying offences. Once one has expressed the point, I hope its obviousness becomes clear to the Government. Again, the charities I speak for, the Charity Commission and the Government need to sit around a table and thrash out how best to deal with that. As we say, six to 12 months is not long enough for that to be achieved.

Subsection 23(g) deals with

“the impact of the new disqualification framework on the number of applications for waivers to the Charity Commission”.

It must follow, surely, that the extended disqualification framework is highly likely to increase the number of waiver applications, not simply as a result of the extension but of an increased awareness of the framework that will inevitably flow from the production of guidance and general awareness raising. The Government, however, have not provided any assessment of a likely increase in waiver applications as a result of the extension of the disqualification framework. More troubling is that the Minister has confirmed that no additional resources will be provided to the Charity Commission to administer the waiver application process. The obvious inference is that the process will slow down and become more sclerotic. I hope it will not, but let us discuss the matter and iron out the problem in advance.

--- Later in debate ---

[Wes Streeting]

I am grateful for the opportunity to reaffirm some of the concerns expressed in Committee that have not been addressed, but which will be addressed by the amendments tabled by my hon. Friend the Member for Redcar (Anna Turley).

I have had a long association with several different charities in a professional context, as a member of staff, as a volunteer and as a donor, whether through a regular standing order or money in the tin. Going back to earlier comments, I think that people know what they are signing up to when they support charities, whether it is a charity’s campaigning effectiveness or its direct work with beneficiaries. We ought to pay tribute to the remarkable work that our large and diverse voluntary sector does, from the largest to the smallest of charities.

In my constituency, we have a variety, from Barnardo’s, headquartered in Barkingside, through to smaller branches, such as the Barkingside branch of the Royal British Legion. There are also other charities such as Hopes and Dreams, set up by volunteers to help children with life-threatening or life-limiting conditions to enjoy experiences that enrich their lives at a difficult moment for them and their families. These are remarkable people doing remarkable work.

It is disappointing, therefore, that the voluntary sector, particularly in recent times, has been in the headlines for the wrong reasons and for what I would describe as the misdemeanours of the few, however large and significant they might be. It is also disappointing to hear the unnecessary condemnation of far too many. Hon. Members and others in the media have used intemperate language to bash a charity sector that does a remarkable amount of good and which should be cherished and celebrated, not derided and denigrated.

Like my hon. Friend the Member for Redcar, I am concerned that the warnings mechanism in the Bill does not carry a right of appeal. When I was a chief executive of a charity, had I received a warning from the Charity Commission for any aspect of our work, I would have taken it very seriously, and I would have expected trustees to take it very seriously too, yet we have heard in Committee and on Report today that the commission may issue warnings for what are relatively minor infringements—I even hesitate to use the word “offences” —of guidance. There is a difference between best practice and regulation. Of course, we expect charities to uphold the letter of the law, but there is also a great deal of best practice out there, and we should not necessarily be slapping warnings on charities for falling short of best practice, when a more informal route might result in a better outcome.

I particularly welcome the new clause dealing with the disposal of assets. In Committee, we talked about the origins of the Government’s proposals around what might be described as the disposal of assets. We were talking about the seizure of assets, particularly in relation to their proposals for housing associations and right to buy. I am happy that housing associations and the Government are moving forward on the basis of agreement, but we should be in no doubt about how the Government reached that position: not through negotiation or evidence-based argument, but through threats, bullying and the cajoling of housing associations, with the threat that if they did not comply and work with the Government on right to buy, the latter would simply legislate for it. To me, that seems to go against the very essence of the Charitable Uses Act—sometimes referred to as Elizabeth’s law—which was referred to earlier. Indeed, I must apologise to the right hon. Member for Cities of London and Westminster (Mark Field): it was, in fact, an Act of 1601, and I would not want people to review the record and find that they were inadvertently misled on this issue.

[Sir Edward Garnier]

Is the hon. Gentleman angling for an invitation to the Market Harborough Conservative club?

[Wes Streeting]

What a kind invitation. Were the Conservative majority in Harborough slightly more marginal, I would be happy to visit on many occasions, but will have to pass this time and focus on matters closer to home and my majority.

Going back to the Charitable Uses Act of 1601, there is a long established principle that donations, bequests and legacies given to charities really ought to be used for the purpose that their donors intended. What my hon. Friend the Member for Redcar has set out in new clause 2 would give people the confidence that they could donate to charities or leave bequests to them knowing full well that independent charities would not be compelled

“to use or dispose of their assets in a way which is inconsistent with their charitable purposes.”

I therefore strongly endorse new clause 2, and I am glad she has tabled it for discussion this afternoon.

The final area I want to focus on is campaigning. As someone who has been a charity campaigner—both professionally and through my voluntary contributions to the work of charities—this is an issue I feel strongly about. As I said in my earlier intervention, I am still at a loss to understand the problem that the gagging law was trying to solve, because Charity Commission guidance has always been clear that charities cannot campaign for party political purposes and certainly cannot use charitable funds for the purposes of party political campaigning. It would therefore be completely unlawful for a charity to say around a general election, “We completely disagree with the Conservative party’s policy on x, and would therefore encourage you to vote for one of the other parties,” or, “The Labour party policy on y is inconsistent with the views of the charity, and therefore you should vote for another political party.”

What has always been perfectly in order and, I would argue, desirable is for charities to be an effective voice for civil society and to ensure when policy is up for debate, whether during our deliberations in this House, in one of the devolved Parliaments or Assembly, or in local authorities up and down the country, that they can draw on their wisdom and experience, and the evidence base they gather—through desk research, commissioned research or, more often than not, their direct experience of working with their beneficiaries—to make sure that decision makers are well informed.

That is a real benefit to our democracy, and I am afraid that the cries from those on the Government Benches—that this change has not had a chilling effect—are simply untrue and unfounded. Whereas the Conservative party is usually found in this Chamber arguing against red tape, the gagging law has had completely the opposite effect. Indeed, I am aware of campaigners and finance officers in charities having to sit there with their spreadsheets prior to the last general election and try to calculate whether something would be a constituency spend or a national spend, whether a collaboration with other charity partners would be workable within the law or where spending would be apportioned. I am afraid that the gagging law has imposed real and unnecessary burdens on charities. If people are concerned about how charities are spending their money, they should certainly be more concerned about the amount of time and money they might spend complying with unnecessary Government regulation than they should ever be concerned about whether they are sending briefings to Members of Parliament or asking parliamentary candidates to sign up to specific pledges or causes.

It really sticks in the throat that lots of Members of Parliament are very happy to turn up to photo ops at their party conferences or out in their constituencies with the Guide Dogs or children at a local youth club, or to go along and see all the great work an animal rights charity does—they are happy to issue press releases and enjoy the photographs—but when those charities come back to talk about the impact of their voting record or public policy they have supported or might consider supporting, suddenly this is considered a huge inconvenience or, even worse, people want to argue that it is illegal.

--- Later in debate ---

[Mr Wilson]

I can see the trap that the hon. Gentleman is setting for me, and I am not going to walk into it. I have further comments to make on the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act, but I thank him for his attempt, lame though it was.

Some people who are currently trustees or senior managers will be caught by the extension of the disqualification provisions. Although the number of waiver applications is likely to increase, we do not think that a significant number of people will be affected by the changes. I would be surprised if it ran to more than the low hundreds, based on the commission’s experience under the existing disqualification regime.

I recognise the concerns that have been raised by my right hon. and learned Friend, and I am happy to commit to producing a report on our assessment of the impact of the disqualification changes. I will deposit it in the Library of the House before the commencement of the automatic disqualification provisions in clause 9. I cannot promise that we will cover every point listed in amendment 1, but I will ensure that we provide a very detailed assessment, as he has requested.

I want to ensure that the disqualification powers in the Bill protect charities from individuals who present a known risk, while at the same time providing for the rehabilitation of offenders and a way back into charity trusteeship or senior management on a case-by-case basis. That strikes me as both fair and proportionate.

[Sir Edward Garnier]

I thank my hon. Friend for his very welcome assurances. I much look forward to the discussions that will follow this debate, as do those I have been speaking with and for today.

[Mr Wilson]

I thank my right hon. and learned Friend for those kind words. We will certainly work very closely with those organisations.

Amendment 13 seeks to empower the Charity Commission to disqualify several trustees in cases of collective failure. In Committee, I explained that the Charity Commission already has the power to act in such circumstances and, indeed, has done so in cases relating to systemic governance issues. There is no reason why the Charity Commission could not take action against all the trustees of a charity where it was appropriate, proportionate and in accordance with the principles of best regulatory practice to do so. For that reason, I do not support amendment 13.

Amendment 14 would give the Charity Commission the job of consulting on and publishing guidance on how it assesses “unfitness” in relation to the power to disqualify, as set out in clause 10. We discussed a similar amendment in Committee and, although I agree with its intended effect, I do not believe that it is necessary. When the Bill was introduced in the other place, the Charity Commission published a well-received document setting out its initial thoughts on how it would exercise the disqualification power. The document highlights the broad categories that the commission would consider, namely honesty and integrity, competence and credibility. It gives various examples of the sorts of specific conduct that it would take into account. I explained a number of those examples in Committee and do not propose to repeat them today.

The Charity Commission has further committed to develop and consult on its initial thinking in draft guidance on how it would operate the power to disqualify. All of that will happen before the power to disqualify is commenced. As with any commission guidance, it will be kept under regular review to reflect changes in legislation or tribunal findings. On that basis, I do not see that amendment 14 is necessary.

Amendment 15 was previously proposed in Committee by the hon. Member for Redcar. The Charity Commission already considers only conduct that is “relevant and serious”. If it were to take account of other conduct, I would expect any resulting disqualification order to be thrown out by the charity tribunal on appeal. Besides that, the amendment should not be passed because the inclusion of the words “relevant and serious” in condition F would pose potential unintended consequences.

Including those words in the disqualification power could cast doubt on all the Commission’s other powers that do not contain them. The exercise of those other powers, such as the power to remove a charity trustee or the power to direct a charity, already depends on conduct that is both relevant and serious, even though those words are not included in the criteria for exercising the powers. I do not want there to be the risk that the other powers could be interpreted as not requiring relevant or serious conduct in order to be exercised. Although I understand and sympathise with the aims of amendment 15, I hope the House will understand why I do not believe that it is necessary and how it could inadvertently reduce the bar for the exercise of the commission’s other powers, which I would not support.

Amendment 5 is another relatively modest Government amendment that was suggested to us by rehabilitation charities. As I said in relation to the amendment tabled by my right hon. and learned Friend the Member for Harborough, we are keen to work with rehabilitation charities to ensure that the Bill does not undermine their important work.

To make a disqualification order against a person, the Charity Commission will have to meet one of six conditions, from A through to F, alongside a number of other things. Condition B is that the individual has been convicted outside the UK of an offence against a charity or involving the administration of a charity which, had it happened in the UK, would have automatically disqualified the individual. As it stands, the commission can take into account only an overseas conviction that is not spent under the law of the territory where the conviction took place. It was pointed out to me that it would be fairer and more proportionate if the limitation related to the UK rehabilitation period for an equivalent UK sentence, rather than the rehabilitation period of the overseas jurisdiction. I agree that that would be more proportionate, and amendment 5 makes the necessary change.

My right hon. Friend the Member for Cities of London and Westminster (Mark Field) ingeniously managed to speak about independent schools. He made an important point about the variety of ways in which independent schools provide public benefit. There is not one single way to achieve public benefit and the Charity Commission would certainly not direct any independent school that there was.

New clause 2, proposed by the hon. Member for Redcar, represents an attempt to reinsert a provision that the Government removed in Committee. Let me explain why the Government oppose it. It was described by several peers in the other place as sending a signal of opposition to the Government’s plans to legislate to extend the right to buy to tenants of housing associations. That message has been received, considered and responded to. Extending the right to buy to tenants of housing associations is a manifesto pledge on which the Government were elected and are committed to deliver. It will mean that up to 1.3 million more families in England get the chance to own their own home while at the same time ensuring the replacement of housing stock.

We listened to the concerns raised. Rather than legislating to implement the policy, we reached a voluntary agreement with housing associations which will implement the policy while protecting the independence of housing associations.

EU Council

Lord Garnier Excerpts

Tuesday 5th January 2016 Commons Chamber

[The Prime Minister]

First of all, I send the hon. Gentleman’s constituents my sympathy for the flooding that they suffered. Let me say that we will do everything we can, including through the Bellwin scheme, to make sure that his council is fully reimbursed for all the emergency measures that it had to take. We will also make sure that we put in place the flood prevention measures and investment that are coming down the track.

I have looked very carefully at the question of EU funding; we looked at it previously in 2013. It takes a very long time to get hold of any money and it is very uncertain whether you get it. Indeed, you end up paying for it in many ways as well. I think it is quicker and better to give people the help they need from our own resources.

[Sir Edward Garnier (Harborough) (Con)]

Beyond the talks that my right hon. Friend is co-hosting next month, what other discussions are his Government and the other European Union Governments having with functioning Governments around the Mediterranean to inhibit terrorists who disguise themselves as refugees from Asia, the middle east and Africa?

Charities (Protection and Social Investment) Bill [Lords]

Lord Garnier Excerpts

Thursday 3rd December 2015 Commons Chamber

[The Minister for the Cabinet Office and Paymaster General (Matthew Hancock)]

I beg to move, That the Bill be now read a Second time.

Every hon. Member will know of a charity or charities doing extraordinary work in their constituency, as will you, Mr Speaker. Many have served or will serve as patrons or trustees. They may even have subjected themselves to ritual humiliation to raise money and awareness. I have dressed up as a sumo wrestler, carried a pedometer for a week and even lost two stone to race a charger around the Newmarket July course. Charities channel the best of our instincts against the worst that life can inflict, whether that is sickness of mind and body, entrenched poverty or natural disaster.

So often, charities lead the way for us in Government to follow. Long before there was an Education Act, an NHS or a welfare state, charities that knew people could not wait had set up hospitals, schools and almshouses. Today, their compassion and kindness are matched by ideas and innovation. When Paula and Robert Maguire posted their first ice bucket challenge video, they expected to raise about £500 for the Motor Neurone Disease Association, but the campaign went viral, many of us joined in and they ended up raising £7 million. Let us look at Bristol Together, a social enterprise that buys and refurbishes properties and employs ex-offenders to carry out the work: that social investment is transforming lives.

The Government are committed to a flourishing civil society. We have protected the budget of the Office for Civil Society, we are expanding the brilliant National Citizen Service and we are rolling out more locally designed social impact bonds. Along with those opportunities, there are challenges. Perhaps more than any other kind of enterprise, charities trade on their reputation. Scandals of poor governance or unscrupulous fundraising undermine public trust, tarnishing the vast majority of charities that are well run and seek only to do good.

[Sir Edward Garnier (Harborough) (Con)]

I could not agree more with the opening remarks of my right hon. Friend in describing, to use an awful expression, the charitable landscape. I am a patron of Unlock and a trustee of the Prison Reform Trust. Both organisations have concerns, which I hope he can allay, that this much needed legislation might make it more difficult for them—bearing in mind that the subjects that interest them are prisons, prison reform and the condition of prisoners—to have among their trustees people with criminal convictions. The point is obvious, but I am sure that he can deal with it.

[Matthew Hancock]

I can give some assurance to my hon. Friend—

[Matthew Hancock]

Sorry, my hon. and learned Friend.

[Sir Edward Garnier]

Right honourable.

[Matthew Hancock]

My right hon. and learned Friend. If he would like to raise it any further, I could continue. I commend the two charities of which he is a trustee for their work. While protecting charities through the Bill, we will of course seek to support the good work that excellent charities do. The Bill proposes extra restrictions for those with unspent convictions. However, the Charity Commission will be able to waive those restrictions and, as with almost all the extra powers of the Charity Commission, it will be possible to appeal to the charity tribunal. I hope that he is reassured by the safeguards that are in the Bill, and that we can work with him to ensure that they are applied properly to charities that work in the important area he mentions.

[Sir Edward Garnier]

My right hon. Friend has been extremely clear and helpful. May I make him an offer? I know of his success at Newmarket racecourse. There is a very good racecourse, Leicester racecourse, in my constituency. If he would ever like to run there, he should let me know.

[Matthew Hancock]

I very am grateful for that unexpected invitation. I am dearly tempted. I hope that Unlock and the Prison Reform Trust will work with us to ensure that the Bill passes in a form that supports the important work that they do.

On the broader question of supporting the reputation of charities, by one measure trust in the sector is at a seven-year low. It is in all our interests that we have a strong, confident and thriving charitable sector.

The purpose of the Bill is twofold: first to tackle the challenges and then to unlock new opportunities. The main provisions of the Bill fall into three main areas: first, strengthening the Charity Commission’s powers, including over trustee disqualification; secondly, the regulation of charity fundraising; and, thirdly, the new social investment power for charities.

Let me turn to the Charity Commission’s powers. The purpose of the Charity Commission is to ensure that each of the 164,000 charities in England and Wales pursues its charitable objectives. Set up in 1853, it has done a century and a half of good work, but two years ago the National Audit Office and the Public Accounts Committee found that it was failing in its core duty. In particular, they found that it was not doing enough to tackle the abuse of charitable status. The NAO made a series of recommendations to improve the commission’s effectiveness.

The coalition Government published proposals for new powers based on those recommendations. Following a public consultation, the draft Protection of Charities Bill was published. Pre-legislative scrutiny and the Bill’s passage through the House of Lords have resulted in further refinement. I thank all the Members, peers and others who have improved the Bill that is before the House today. These measures are just one part of a wider programme of reform, aimed at turning the Charity Commission into a tough, clear and proactive regulator.