Charities (Protection and Social Investment) Bill [HL]
Lord Wallace of Saltaire Excerpts(8 years, 9 months ago)
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“Independent schools’ facilities: public benefit
In section 4 of the Charities Act 2011 (the public benefit requirement), after subsection (4) insert—“(5) Independent schools which are charities must engage actively with local communities and state schools with a view to sharing resources and facilities.
(6) The Charity Commission must publish guidance setting out the minimum that independent schools which are charities must do to comply with the duty in subsection (5).””
Lord Wallace of Saltaire (LD)
My Lords, we return to a simplified version of amendments which the noble Lord, Lord Moynihan, and I moved in Committee. Between the two stages there have been a number of discussions with the Minister, for which I thank him, and with the Independent Schools Council along with others. I must apologise to some of those with whom I was attempting to negotiate for much of Thursday and Friday morning, in that I happened to choose one of the few places in Oxfordshire where you cannot get mobile phone reception.
The context is clear: the rise in quality in resources and facilities at most—though of course not all—independent schools, which arises from their ability to raise fees and fundraise, along with endowments that many of them have, is in contrast with the decline in the resources and facilities of state schools, including their playing fields, music and drama facilities and specialised coaching and teaching of specialised subjects, which is unlikely to be reversed under this Government, since they are committed to shrinking government spending further, including on education. The second part of the context is the charitable purposes of independent schools, which are often rooted in their founding purposes in education for local communities. I am well aware that the Charity Tribunal in 2011 said that purposes can change, and indeed have changed—although they have not entirely been discarded. We discussed this earlier, with the question of housing associations. A housing association that changes itself into something entirely different would have its charitable status questioned. I remind noble Lords that the ruling of the Charity Commission says that schools can choose how they demonstrate public benefit, not that they can disregard public benefit.
The third part of the context is the increased awareness within the educational world of the importance of resilience and self-confidence as wider elements in education, although, unfortunately—and the Independent Schools Council made this point to me—Ofsted no longer pays any attention in assessing state schools to the wider elements of education that encourage resilience and self-confidence. There is a consensus on how important these things are to individual development. Best practice in the independent schools sector recognises this, and there are a number of excellent examples of partnership between independent schools and the local communities—and their schools—in which they are embedded. There are some examples of less good practice, however, which is why the amendment talks about engaging “actively”. One of the weakest points, in the statement agreed between the Independent Schools Council and the Charity Commission, is to say that there will be a new website through which state schools will have a facility to request involvement in partnership activities. We want independent schools to go out to find, explore, pursue and develop partnerships with their local communities and state schools.
The strongest point of the ISC and Charity Commission is the commitment to a research report, 12 months from the introduction of these changes, which will review data from the annual reports of charitable schools as well as the aggregated data that the ISC collects through its census. At present, the details of how that research project is developed will be agreed between the Charity Commission and the ISC.
We are all conscious of the problems of defining public benefit. The NCVO advice on this amendment repeats that too strict a definition of public benefit gets one into enormous problems—and I am looking at the noble Lord, Lord Hodgson, who has said this to me, and many others, many times. But the Charity Commission must monitor that public benefit of some sort is provided. If the Minister is to say that the Charity Commission is not capable of doing that at present, many of us would say that the Charity Commission have been severely constrained in recent years. Faced with a Government who are cutting public expenditure, this very important third sector may need more effective regulation as we have to depend on it more and more.
We hope that we can avoid going down the road to a further statutory definition of public benefit. What the noble Lord, Lord Moynihan, and I wanted to achieve through this process was a strong nudge to the independent schools sector to move in the right direction. It will help us not to divide in this House if the Minister can give us a number of strong reassurances—first, to make it clear to independent schools that they are expected to pursue and develop partnerships, not just to wait and see whether anyone applies. They should see this as part of the social responsibility that all charities should shoulder. Secondly, we should engage with the ISC and the Charity Commission on the terms of the research project to be conducted over the next 12 months and not leave the definition entirely to them. Thirdly, it is important to report to Parliament on the outcome of this research and arrange for it to be debated either through an Oral Statement or otherwise in government time.
I hope that that gives the Minister sufficient space to take us forward, not necessarily to any form of mandatory obligation but certainly to say that we have moved independent schools towards the active partnership with their local communities and schools that we all want.
Lord Moynihan (Con)
My Lords, I shall speak to the amendment on the important question of the relationship between independent schools’ charitable status and public benefit and the need for all schools, particularly those with charitable status, to work together with state schools and neighbourhood communities in their vicinity. I intend to concentrate my remarks on the dual use of sports facilities and coaching expertise, although the principles behind my support for progress towards closer educational partnerships extend to all the charitable objectives set out by Parliament in the Charities Act.
In moving a probing amendment in Committee, my intention was to consider the merits and disadvantages in moving from the flexibility of the current system to a more prescriptive approach, reflected in the amendment that we are considering today, which requires all independent schools to engage with local communities, particularly regarding the dual use of sports and arts facilities. A considerable benefit of Committee for me was the opportunity that it provided to delve deeper into proposed legislation and learn significant lessons from the in-depth experience found in this House and outside.
Following Committee, like the noble Lord, Lord Wallace, I have taken the opportunity to meet the Charity Commission, the Independent Schools Council and the Minister to consider how we can make further progress to promote engagement with all independent schools in receipt of charitable status that have the facilities and coaching expertise to engage with local communities and state schools to mutual advantage. I am particularly grateful to my noble friend the Minister, who has upheld his open-door policy to any Member of your Lordships’ House on this Bill.
I spoke in Committee about good practice and cited Tonbridge School as a leading case study of good practice in this country. Under the leadership of Tim Haynes, the head, the school has engaged with 27 primary schools in its vicinity. The reaction from children, parents and the local community can best be described as fulsome praise. His initiative has gone further than engagement through sport, with the subjects of music, drama, dance, chess, art, design, IT, creative writing, science, history, maths, modern languages and classical studies all featuring as part of that engagement. Above all, all independent schools, such as Tonbridge School, in showcasing their facilities, should look to work also with governing bodies of sport, local clubs and those responsible in the primary schools for the school sport premium. That comes with £8,000 for schools with 17 or more pupils, plus an additional £5 per pupil, which could be very useful to fund insurance, transport and related costs incurred as a result of these initiatives.
To be successful, this must be a two-way process. Over the past few days, the Charity Commission has confirmed that it will relaunch and publicise the examples for schools of how to provide benefit for people who cannot afford their fees in its existing guidance, Public Benefit: Running a Charity, by sharing sports facilities. In a significant step forward, it will give new examples relating to sharing sports facilities, arts and music in the guidance Public Benefit: Reporting and in the example trustees’ annual report for “Anytown School”. A significant improvement in good practice should be achieved.
The problem I have with mandatory requirements is the one-size-fits-all approach. For example, many prep schools have to work to capacity to survive financially, even with charitable status. Some do not own their own sports facilities, others share and some are in need of significant upgrading. What is needed is for each school not only to follow best practice but, as the noble Lord, Lord Wallace, stated, for the Charity Commission to publicise it through its channels so that each school can tailor its public benefit accordingly and the House can debate the outcome.
The Charity Commission responded positively to the suggestion of a research report, in which I have more faith than the noble Lord, Lord Wallace. According to its guidelines, that report has to be published 12 months from the introduction of these changes. That research should provide us with a comprehensive picture of the extent of partnerships and enable this House to consider whether legislative steps are necessary, for example, when the next education Bill comes before us during this Parliament.
While there are challenges for independent schools with charitable status, the broader question we should also be debating applies not only to all independent schools but to the state sector, whether well-endowed with sports facilities or not. One of the greatest challenges we face in designing a long overdue and effective sports policy is the oft-quoted statistic about the percentage of our Olympic medallists from the independent sector. That reflects the need to do all we can, far more than at the moment, to identify talented youngsters in all our schools and provide ladders of opportunity for them to climb from primary school to podium.
In response to pressure from all sides of the House on this Bill, the Independent Schools Council has agreed to act by building a new website, Schools Together. The site is currently under development and should be ready to receive information from schools in the autumn term. It was not even on the agenda before Committee. I hope the site will be launched as soon as possible in the autumn. It must be two-way. The site absolutely needs to summarise what is on offer at all independent schools with charitable status and to include a facility for state schools to get involved in partnership activities. From the conversations I have had, I believe that independent schools will reach out to their community in this way by providing information and contact details of their partnership co-ordinators. State schools will be asked to request involvement in partnership activities. Since this is clearly the intent of all who have contributed to this debate at various stages, there should be no reason why all schools do not engage constructively. Once again, if the combined new commitments of the Charity Commission and the Independent Schools Council do not bear fruit in the way the House and the Minister have indicated, we should be able to produce legislative change through a wider education Bill.
I believe that these initiatives represent more than a nudge in the right direction. They are very significant steps forward and would not have happened had there not been the level of interest expressed in your Lordships’ House from all parties. They are tailor-made for the differences between schools and they avoid the cost and administration that a one-size-fits-all legislative approach would deliver. I believe that what I have sought to address constitutes a very strong example of how cross-party support for the interests of sport and recreation, including the arts and curricular subjects, for all children coupled with the promulgation of best practice can be and has been achieved. That is a rare outcome of negotiation between Committee and Report. I fully appreciate the strength of opinion expressed and I share it, but I believe that the changes we have been offered are far reaching and deserve support. I also believe they are for real. There is genuine consensus on this issue among all interested parties. I believe the approach offered will prove to all concerned that the proposed package will achieve even more with the good will of all involved than a one-size-fits-all amendment would deliver. For these reasons, I hope the amendment will not be pressed to a vote and that we can build on these important initiatives and regularly hold all those involved to account when it comes to the outcome of the research project and the website in a year’s time.
Lord Wallace of Saltaire
My Lords, this has been an important debate and a number of noble Lords, as well as the Minister, have said important things about what we need. I recognise that a number of noble Lords on the Conservative Benches have close links with the independent schools community. I trust that everything that has been said will be taken back and pursued further. I particularly welcome the point made by the noble Lord, Lord Moynihan, that we expect a positive response to all that has been said. If necessary when the research report comes out, if good progress and significant movement has not been achieved, we will clearly have to move further again.
We all recognise that charitable status is a privilege and that public benefit has to be part of the response to that privilege. We all also recognise that public benefit is very difficult to define and that there are many other areas, including religious groups, where public benefit can sometimes be extremely contentious. That is an issue to which we may well return during the course of this Parliament.
The research project is key, and I welcome the Minister’s response that we will be able to debate that report when it returns and see how thorough it has been and what it shows. On that basis, I am willing to withdraw my amendment. I am a liberal, not a socialist: I prefer co-operation and partnership to compulsion and the imposition of penalties. I would not vote for Jeremy Corbyn as my party leader. I want to see a strong and diverse charitable sector, including many schools founded as charities serving different purposes. However, it is also clear that schools that have been founded as charities have to pursue charitable purposes and demonstrate public benefit. That is what we have been calling for. On that basis, and on the basis that this discussion will continue with many of us on all sides of the House actively engaged, I am willing to withdraw the amendment.
Security: State Procession
Lord Wallace of Saltaire Excerpts(8 years, 10 months ago)
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Lord Wallace of Saltaire
To ask Her Majesty’s Government what assessment they have made of the potential security risks posed by converting former government buildings into privately owned hotels along the State Procession route between Buckingham Palace and the Palace of Westminster, including along Whitehall.
The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con)
My Lords, the former government buildings to be converted into hotels along the state procession route are Admiralty Arch and the Old War Office. The freeholds remain under government ownership in perpetuity and continued oversight and security measures will be implemented as part of the commercial arrangements with the private sector. Long-term protocols and operating procedures are agreed and built into both schemes. The security and intelligence services and the Metropolitan Police are closely involved in this process.
Lord Wallace of Saltaire (LD)
My Lords, does the noble Lord recall that when President Bush made a state visit to London, the entire Whitehall area was cordoned off, including to Members of Parliament? Does he also recall that the IRA, from within the area of Whitehall, managed to mortar No. 10? Further, he will remember that the bombing of the Brighton hotel, which affected Mrs Thatcher and others, was placed in the hotel some time in advance of the incident? Do the security services intend to vet positively all the staff of these hotels; has that been agreed? Will the hotels be closed to all visitors during state visits or will the visitors be vetted as well?
Lord Bridges of Headley
The noble Lord has raised interesting questions based on his own experience. I have looked into the clauses of the leases for both the Old War Office and Admiralty Arch and I am satisfied that they allow for appropriate access for both security and ceremonial purposes. The hotels will employ their own staff, and while the Government have not insisted on security clearances for each member of staff, it is obviously in the hoteliers’ interests to take their security checks on their staff into consideration. Furthermore, I should point out that both the Metropolitan Police and the security services are very involved, as always, in ceremonial processions and major events, and will continue to be so to make sure that security is upheld.
Charities (Protection and Social Investment) Bill [HL]
Lord Wallace of Saltaire Excerpts(8 years, 10 months ago)
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Lord Wallace of Saltaire (LD)
My Lords, I will follow the line of argument raised by the noble Lord, Lord Moynihan, which is that although we see islands of good practice within the charitable public schools community, we want consistency. Many public schools, as we all know, have origins as charitable institutions set up to provide facilities and education to their local communities. To some extent in recent years, links with their local communities have weakened; their facilities, however, have been transformed.
I fell out of state education by going to a choir school when my father’s employers very generously provided me with a scholarship to go to a school in north Oxford set up to educate the sons of the clergy. I remember practising my violin in what was then the school’s music wing, which was a bunch of wooden huts set up during the Second World War for some other purpose. St Edward’s School in Oxford now has a magnificent music wing, and a drama wing, funded by rising fees and contributions from grateful alumni over the years; so have, as we all know, a great many other private—or public, as we call them—schools across Britain. The facilities are there. However, facilities in many state schools have weakened. Specialised coaches and music and drama teachers are very often no longer on the staff. Sometimes the playing fields are not there; the specialised music and drama institutions are certainly not.
I declare an interest as the trustee of two musical education charities and the chair of Voces Cantabiles Music and the Gresham Centre. We have developed over the last 11 years partly through partnerships with a number of public schools: first, with Bedford School and the five schools of the Grey Coat foundation and, secondly, with Bradford College, Ardingly College and Rugby School. In all instances it has been a matter of providing access to the excellent facilities that these public schools have to primary schools and some secondary schools in the region—to bring people together, give them a different quality of experience and so expand their horizons and build their self-confidence. I place on the record our gratitude as a charity to the partnerships we have had with these public schools. However, as the noble Lord said, this is an island of good practice when what we want to see is consistency.
There are other areas of public benefit that some public schools provide very well but which others neglect. My son went to a state school and was a good enough mathematician to be entered in the maths olympiad. When he got into the last 20 of the British Mathematical Olympiad, he was one of only three state school pupils, because the quality of the teaching you get in public schools is so much better than in state schools. When they got down to the final six to go on to the International Mathematical Olympiad, all the pupils were from public schools rather than the state sector. That tells you something. He was then offered a place to study maths at the University of Cambridge, conditional on taking a further set of advanced papers that his state school was incapable of providing him with the coaching for. Happily, Westminster School provided a teacher from its excellent maths department who provided him with weekly tuition in the evenings for a full term, which got him through. That is anecdotal evidence of a partnership of this sort. Public schools that have a better-paid and better-staffed maths department should be thinking about key areas where they could be providing additional coaching for people from state schools at crucial periods in their careers. We are well aware that some public schools now sponsor academies: Wellington College has gone in that direction.
All that the amendment says is that public benefit is important and needs to be demonstrated. Where there are these excellent facilities, which have improved so enormously in recent years, they should be provided for these purposes wherever possible. We would like to see much more consistent advice given, and much more consistent expectation, that the privilege of charitable status should be reflected in the public benefit provided.
Lord Wallace of Saltaire
My Lords, I must remind the noble Lord that on the previous day that this Committee sat he made a very powerful speech about the need to define rather more clearly some of the elements in the Bill. He now seems to be arguing in entirely the opposite direction.
I recognise that the public benefit test has to be left relatively broad, and indeed both these amendments say so. I also recognise, with regard to the use of the word “fully”, that there are ways in which this amendment might need to be reconsidered.
All that we are attempting to do here is to make it clear that there is an expectation of public benefit, as we have both said. Different schools demonstrate that in different ways, and we all expect them to do so. I have to say that many of us are a little worried about a small minority of schools that now seem to have a large proportion of overseas students, for example, and have raised their fees to such an extent that they are a very long way from the original charitable purposes for which they were founded. If we are nudging them—nudging is, after all, one of the things that this Government are extremely keen on—in the right direction, it is this sort of wording that seems to be pushing them in that direction, and that is what we wish to do. I do not think that we are going down the route of politicisation; we are, however, reminding them—and providing them with some examples—that charitable status is a privilege and public benefit is an expectation.
Lord Hodgson of Astley Abbotts
I entirely agree that charitable status is a privilege. The question is whether that status is better enhanced by statute or by guidance. I am saying that the test should be made clear but it should be a Charity Commission guidance test rather than be put in statute, with all the inflexibilities and ancillary problems that may flow from that.
“Independent schools’ music and arts facilities: public benefit
In section 4 of the Charities Act 2011 (the public benefit requirement), after subsection (4) insert—“(5) Independent schools which are charities must engage fully with local communities and state schools with a view to sharing facilities for music, drama and arts.
(6) The Charity Commission must publish guidance setting out the minimum that independent schools which are charities must do to comply with the duty in subsection (5).””
Lord Wallace of Saltaire
I will, if I may, very briefly second what the noble Lord, Lord Moynihan, has said. We will take this away and consider whether we should provide a different form of words. I have to say I was puzzled by the quotation from Ofsted—
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
Forgive me, but if the noble Lord is speaking, he must move his amendment at the end of his speech.
Lord Wallace of Saltaire
My apologies. I had not understood that that was the way Committee stages went. In that case, we will talk off the Floor. I will ask for the exact quote from Ofsted and we will return to this.
Voting: UK Overseas Citizens
Lord Wallace of Saltaire Excerpts(8 years, 10 months ago)
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Lord Bridges of Headley
My Lords, I believe that this is a matter that your Lordships and many others have discussed many times and will continue to do so, but, as I have said, we have set out our view on the European referendum. It will be based on the parliamentary franchise. However, I am sure that we will continue to have the debate that my noble friend wishes to have.
Lord Wallace of Saltaire (LD)
My Lords, do we have any idea how many British citizens there are overseas and how many of them are dual citizens of the United Kingdom and other countries? When I was in government I tried to find out figures on this and got estimates that varied between about 4.5 million and 6 million. Could the Government possibly aid us all by trying to get some accurate estimates, including of where they live and how many of them are dual citizens?
Lord Bridges of Headley
My Lords, I hardly dare say that my efforts will be greater than those of the noble Lord. What I will say, reading from my brief, which I am sure the noble Lord remembers, is that there are 5.2 million British-born migrants living overseas. I do not have a breakdown but I will certainly ask. I would stress that more than 105,000 British citizens resident overseas were registered to vote in the election—more than three times the previous highest number.
Charities (Protection and Social Investment) Bill [HL]
Lord Wallace of Saltaire Excerpts(8 years, 10 months ago)
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Lord Wallace of Saltaire (LD)
My Lords, my name has been mentioned in this debate and perhaps I should intervene. I spent a good two months of my life much preoccupied with this issue and I came away from it content with the law as it stands. It is quite clear that there is a line between advocacy—which is an entirely appropriate and proper part of what charities should do—and moving too close to party-political campaigning. This is not purely a matter of, as it were, good-works charities on what one might describe as the left, but also about think tanks on the left and on the right. I can think of one or two think tanks which have got quite close to the line of moving from research to a highly partisan presentation of the research they provide. Having worked for 12 years in a think tank, I am conscious of the lines that one has to draw.
In speaking to 50 representatives of different charities, I certainly came across the advocacy point. Some first- class charities raised public awareness of mental or physical conditions, the problem of women unnecessarily in prison and so on—all of which are entirely within charity law. I also came across a small number of organisations which appeared to want to get a little too close to party campaigning, including on one splendid occasion meeting a group of rather large charities, one of which said, “We do not want to have to register for this because the little old ladies who give us money would not want to know that we were doing it”. That seemed to be a recognition that they were indeed moving towards a line that they should not be too close to.
I am happy with a restatement of the position as it stands. I think we all accept that advocacy is a part of what charities do in furtherance of their charitable purposes, but that they should not move too far into the party-political area. Anyone who has been involved in the think-tank world knows how conscious they have to be that that is a line they should not cross.
Lord Judd
Does the noble Lord agree that this is not altogether simple? He and I clearly agree on this important matter, but it is not simple because if a charity finds itself strongly advocating a position and a political party is doing the same, that is open to misinterpretation. We have to be absolutely clear that the way in which the law is administered is also transparent. There have been arguments that campaigning should be curbed in the last year before an election. It is absolute nonsense for a charity, which feels strongly, passionately and morally obliged to put forward a case because it wants policy change, to have to lay off in the year of a general election. That would be condoning something they believe is wrong and that is not what any of us would want to imagine happening in Britain. It is very important that the Charity Commission is held to account; that the whims of a particular commissioner are not prevailing and that, from an objective, analytical position, very strict rules are fairly observed.
Lord Leigh of Hurley (Con)
My Lords, I declare my interest as a trustee of a number of charities, national and local, a former trustee of a care charity and, of course, as a senior treasurer of the Conservative Party. I broadly agree with the remarks made by the noble Lord, Lord Wallace of Saltaire. I remember the arguments on the then transparency of lobbying Bill; I was fairly new to Parliament, and I found myself for the first and only time being lobbied—on a lobbying Bill, as it transpired—by charities. However, I take issue with his remark, unless I misunderstood it, about the charities doing good works being broadly on the left. In the charities that I see, the donors’ register broadly replicates that of the Conservative Party, and there are many good-works charities on the right that are helping people to help themselves. I may have misunderstood.
Lord Wallace of Saltaire
As the chair of trustees of a musical charity, I would welcome the further conversation that we might have on that.
Lord Leigh of Hurley
I thank the noble Lord. I also think that I may have misunderstood the noble Baroness, Lady Hayter, when she talked about some charities not solely campaigning. My experience is that some charities are solely campaigning ones; in fact, I had personal experience of that only two weeks ago when a raven bird got stuck in my basement. In a moment of panic, and prompted by my young children, I was too frightened to address the issue myself so I rang the RSPB, thinking that that was a logical solution. The RSPB informed me that under no circumstances does it actually go out to assist birds in distress or in danger of damage; no, it is a lobbying charity. I was to either ring another charity or do it myself. In the event, I passed the buck to my wife.
My point is that there are charities that have evolved—some quite rightly, but some perhaps worryingly—into pure campaigning. The charities with which I am involved found the transparency of lobbying Bill helpful, in that it was clear that during the election we had to keep on the straight and narrow. On the boards of the charities with which I am involved sat a broad-array spectrum of political opinions, and it helped to ensure that we all abided by the Act and did not engage in political advocacy during the election.
I am particularly heartened by the comments from my noble friend Lord Hodgson of Astley Abbotts that he is taking further evidence on this issue. I rather hope that this can still be discussed at a later stage with that evidence, and I ask for the Minister’s comments on that.
Lord Hodgson of Astley Abbotts
My Lords, I have three amendments in the group, Amendments 18A, 18B and 20A, which follow the noble Baroness down the rabbit hole of definition. However, I have to say that the advice I am getting—I am not going to pretend that I drafted these amendments—is that the Bill as drafted does not do what it says on the tin. I should like to take a minute to explain why that is the case and why the Government should be considering amendments along the lines of these three. I am supported in this by members of the Charity Law Association.
Perhaps I may back up for a moment. We spent quite a lot of time in my review on social investment, which obviously presents tremendous opportunities if we can set it up right and make it work effectively. As I said at Second Reading, that is not just in terms of this country. We in the UK have done so much heavy lifting that we are in a world-leading position in this new area. We heard from my noble friend on the Front Bench at Second Reading that the Law Commission carried out a consultation on these and various other proposals to remove unnecessary impediments to the growth of social investment. That consultation ended in July 2014 and the commission’s final report underpins much of what lies in Clause 13. I do not doubt for a moment the Government’s good intentions regarding social investment, but there is a view held by specialists in this area that the current drafting of the clause—specifically, proposed new Section 292A—does not capture the results of the Law Commission’s consultation, which the Government have accepted and which I think this Bill was supposed to implement. It is worth quoting from the summary of its conclusions at paragraphs 6 to 8 of the report:
“6. We recommend that a new statutory power should be created, conferring on charity trustees the power to make social investments, so as to put the law beyond doubt.
“7. A social investment is any use of funds from which charity trustees seek both:
(1) to further one or more of their charity’s objects; and
(2) a financial return, which might include (i) income, (ii) capital growth, (iii) full or partial repayment, or (iv) avoiding incurring financial liability at a future date.
“8. We recommend that the new power should apply unless it has been expressly excluded or modified by the charity’s governing document”.
The consultation paper produced by the Law Commission contains a splendidly clear diagram of how this works and sheds light on what is a pretty technical area. At one end are the grants where the money is given and at the other end is investment where there is a financial return. But in between, close to a grant, there are what is known in the trade as programme-related investments, which support the charitable objectives of the charity but do not expect a financial return. As you inch towards financial investments by moving across the spectrum, you reach something known as mixed-motive investment, a title that I find quite appalling because a mixed motive sounds like an ulterior motive. I wanted to change it to “mixed-purpose investment”, but that was altogether a bridge too far and we are still stuck with the terrible title of mixed-motive investment. Never mind; we can leave that for another day.
There is concern among charity lawyers that the Bill permits programme-related investments but does not give an adequate statutory power to mixed-motive investment, which I like to call mixed-purpose investment. That is because of the general drafting, particularly the use of the word “directly”, of subsection (2)(a) of Section 292A to be inserted in the Charities Act 2011 under Clause 13. Charities may not always act directly to further their charitable purposes. They may do so through a third party, which may not be exclusively charitable.
I have received examples of how this might work. First, a diabetes charity seeks to invest in a company developing foods calculated to reduce the impact of diabetes on sufferers but which are available to the general public. The investment will achieve some mission benefit for the diabetes charity but the fact that the foods will be available more widely means that not all the activities of the investee will advance the objects of the charity because there is a commercial element. The object therefore will be advanced only in part, which is why we need to get the words “in part” in the rephrasing.
Secondly, a charity that has purposes to relieve unemployment wants to invest in a social firm in the construction industry that employs ex-offenders at risk of unemployment. Once employed, the individuals employed by the social firm are not charitable beneficiaries because they are employed. The investment by the charity and the social firm may in part relieve unemployment but it also, in part, advances other purposes and benefits individuals who are employed by the social firm.
The worry is that almost any situation in which a charity is investing in a non-charitable social enterprise—picking up the point made by the noble Baroness—such as co-operatives, community benefit societies or community interest companies, will likely involve mixed-motive investment and will likely advance the objects of the charity in part and not exclusively. Without adequate clarification of the power, the Government risk introducing a statutory power which fails to achieve the clarity and confirmation that they seek.
Quite simply, Amendment 16A deletes the phrase,
“directly furthering the charity’s purposes”,
and replaces it with,
“furthering one or more of the charity’s purposes in whole or in part”.
The examples that I have just given underline that. Amendment 18B would insert a new subsection at the end of what will become subsection (7). It would state:
“A relevant act of a charity may be carried out with a view to furthering one or more of the charity’s purposes in whole or in part for the purposes of this section even where the relevant act may not exclusively further one or more of the charity’s purposes”.
Finally, Amendment 20A would make an amendment to new Section 292C, to which we will come later, headed “Charity trustees’ duties in relation to social investments”. At the end of subsection (2) it would insert,
“having had regard to the degree to which the relevant act is expected to further one or more of the charity’s purposes in whole or in part, and the expected financial return”.
That is all quite complicated, technical and difficult but it has important consequences. However, the charity law sector is concerned that we need to bottom this out. I am sure that the Government accept that, and I certainly believe that we want to put the ability of trustees to make mixed-purpose, mixed-motive investments beyond statutory doubt. I am sure that my noble friend will not be able answer all this today but I hope that he can take on board the concern about the technical details. I think that they have been raised elsewhere with the Treasury and so on, and it may be that we will need to have a discussion about it. I hope he can see what the sector is driving at. The sector is merely wishing to ensure that what the Government want to achieve can properly be achieved by the Bill. Currently, it does not think that the drafting achieves that.
Lord Wallace of Saltaire
My Lords, I agree with much of what the noble Lord has said. Perhaps I may remind him that when I first went to a tutorial with him on charity law history, he said that part of the glory of charity law was that so many definitions were left loose.
Lord Lea of Crondall
My Lords, I tabled this amendment to help clarify what Clause 13 is not, as much as what it is. I would like to ask the Minister how widely this clause can be interpreted. I do not want to wake up one morning and find that it means something quite different from what I thought it meant. I would like to clarify that it is not an opportunity to open up a further shift towards helping taxpayers invest, with socioecononomic income distributional consequences, in private education rather than public education. I do not think anyone would deny that that is a consequence of the charity status of public schools in this country. I repeat that my purpose is to ensure that we all put our cards on the table as to what is going on here and what may be open to interpretation. We do not want to wake up one morning in four years’ time and say, “Well, people kicked the ball through that goal and you did nothing about it. Are you stupid or something? You didn’t keep your eye on the ball”.
I do not know how we are going to avoid the spectre that I am talking about but I will put my question to the Minister in two parts. First, will he comment on my anxieties or analysis of what this may lead to? Secondly, if he wants to reassure me—not me, I am sure he does not wake up in the middle of the night and think, “I’d like to reassure the noble Lord, Lord Lea, of something”; but if he wanted to reassure people—that this does not have any wider consequences in the sphere that I am talking about, what is wrong with this amendment? The answer can only be that it is redundant or offensive. I would like to know which it is. Is it redundant or is it offensive and if so, why? I beg to move.
Lord Wallace of Saltaire
My Lords, the noble Lord, Lord Moynihan, and I both have amendments down for Monday’s Committee sitting which relate to the issue of public benefit and public schools, and specifically the provision of their facilities for use by others. We all know that this is a delicate and sometimes politically controversial issue. What I want to say on Monday—although I realise with horror that I am supposed to be speaking in a debate on Gaza at the same time—is that now that private schools in Britain with charitable status have some wonderful sports, music and drama facilities, the question of how far they make them available to their communities is one that we cannot entirely ignore.
It happens that a charity which I chair has benefited from very good partnerships with a small number of public schools which do this precisely because it demonstrates that there is a public benefit, and I am sure that the noble Lord, Lord Moynihan, will be saying much the same thing. We will return to this issue on Monday, but one has to be careful not to go on an all-out attack on schools with charitable status. Nevertheless one would wish to insist that public benefit does mean what it says in this and other areas. As I say, we will return to these matters on Monday.
Baroness Hayter of Kentish Town
My Lords, I want to add little to what my noble friend Lord Lea has said, but it is a question that needs a serious answer. It does not take much imagination to see how such investment could be used by certain facilities to further enhance the advantages they already have, and therefore a serious response is needed. We look forward to hearing it.
Defence Review
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Lord Wallace of Saltaire (LD)
My Lords, the exact timing of the post-election strategic defence and security review is for the incoming Government to decide, but preparatory work is under way across Whitehall. Noble Lords will be aware of the latest edition of Global Strategic Trends, published by the Ministry of Defence. This and other papers feed into the confidential national security risk assessment, which will in turn inform the next national security strategy and the subsequent strategic defence and security review.
Lord Empey (UUP)
My Lords, the Minister will be aware of the widespread concern, both inside and outside Parliament, that, with the lack of defence capability, we face widespread political and security turbulence, not only in eastern Europe, but in other areas, such as the Middle East. I appeal for this process to be truncated. This is a matter of urgency because of the clear gaps in our capability. We cannot hide them or sweep them under the carpet: they are there. This review is the mechanism that can start the process of filling the gaps. I appeal to the Minister to ensure that his right honourable friends in the other place understand that that is the feeling I believe to be widespread throughout the United Kingdom and that this needs to be brought forward as a matter of urgency.
Lord Wallace of Saltaire
My Lords, I disagree with the noble Lord in a number of ways. It is important not to rush too far and too fast into this. The question of what forces we want for what ends remains relatively open. The noble Lord’s Question referred to the situation in Europe as the reason why we had to rush. The last time we were in a direct conflict with Russia we bombarded Helsinki and laid siege to Sevastopol. I do not think that is what we want to do this time.
Lord West of Spithead (Lab)
My Lords, the Minister will be aware that RUSI has calculated that next year, 2015-16, we will spend 1.88% of our GDP on defence. I also have from the House of Commons Library its post-Budget calculations, which show that we will be spending 1.5% of our GDP on defence by 2019. Does the Minister not think it a disgrace that, having lectured the whole of Europe about coming up to 2%, we are planning and working on a basis of not hitting 2% in future?
Lord Wallace of Saltaire
My Lords, we will hit 2% this year. My understanding is that, on current trends, we will hit 2% next year. What happens after that is a question for the SDSR and for the next comprehensive spending review, which the new Government will take through. I am sure that the question of the need for more frigates will be high on the agenda for any SDSR.
Lord Spicer
My Lords, why are we so hooked on 2%? Surely we may want to spend more.
Lord Wallace of Saltaire
My Lords, I am sure that some will want to spend more but, as all noble Lords are aware, the number of calls on public expenditure is large and the amount of revenue available is relatively limited.
Lord Rosser (Lab)
The previous Government produced a Green Paper in early 2010 to promote discussion on future defence strategy and inform the work on a strategic defence review after the 2010 general election. Why have this Government not sought, in the same or a similar transparent way, to engage the public in general, and relevant stakeholders in particular, on the options and considerations to be taken into account in the strategic defence and security review, which is now scheduled to be finalised in just nine months’ time?
Lord Wallace of Saltaire
My Lords, as the noble Lord knows, there has been a great deal of discussion on preparations for the next SDSR. He will have seen the new House of Commons Defence Committee report. The Government have responded to various reports from the Joint Committee on the National Security Strategy, and there have been a number of conversations between officials, Ministers and various think tanks around London. I have certainly taken part in those and I think that the noble Lord has as well.
Lord Palmer of Childs Hill
My Lords, the report suggests that the departing part-time chairman of BAE Systems was paid £211,000, plus £5,000 for a chauffeur, for three and a half months after he ceased his board duties. Can the Minister confirm that the defence review will ensure that these obscene costs are not recharged to the taxpayer?
Lord Wallace of Saltaire
My Lords, I was not aware of the issue that the noble Lord has just raised. The next security and defence review will certainly look at how to squeeze the most out of the defence procurement process.
Lord Lexden (Con)
Returning to current spending, will the £25 million allocated in the Budget to military veterans be extended to former service men and women in Northern Ireland?
Lord Wallace of Saltaire
My Lords, I am assured that it will be extended to Northern Ireland and that the MoD is quite clear that this is a UK scheme and not just a Great Britain scheme.
General Elections: Peers’ Exclusion from Voting
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Lord Naseby
To ask Her Majesty’s Government what proposals they have to review the exclusion of life Peers from voting at general elections.
Lord Wallace of Saltaire (LD)
My Lords, the Government have no plans to review in this Parliament the long-established legal incapacity that prevents Peers who are Members of the House of Lords voting in a general election.
Lord Naseby (Con)
Is this not extraordinary when society is calling for votes at 16 and for felons; when every single Member who is a life Peer in your Lordships’ House has already voted in a general election; and when not one of the 189 upper Houses in the IPU precludes Members from voting? Has not the time come for my noble friend to recognise that it is time for a change? The claim that a Member of the House of Lords already has a voice in Parliament, and that therefore it is right to deprive him or her of having that voice heard through an elected representative in the Commons, no longer has validity as we do not have a voice on money Bills—the very central feature of our democracy, epitomised by “no taxation without representation”.
Lord Wallace of Saltaire
My Lords, the noble Lord, Lord Naseby, is a Conservative and has taken very Conservative views on the reform of this House. I would have hoped that he would therefore agree with the statement of Lord Campbell, as Lord Chief Justice in 1858, that by,
“an ancient, immemorial law of England … Peers sat in their own right in their own House, and had no privilege whatsoever to vote for Members to sit in the other House of Parliament”.—[Official Report, 5/7/1858; col. 928.]
Lord Dubs (Lab)
My Lords, I cannot believe that the Minister is saying things that he actually believes. Will he concede that this House passed a Bill to give us the right to vote in elections which was blocked by some dissident Whips or other people at the far end for no good reason, and that it is offensive that, when the voters of Britain have a chance to express their views, we are not allowed to? Surely, it is time for the Minister to say that if he had a chance and was Minister for long enough, he would do it.
Lord Wallace of Saltaire
My Lords, the noble Lord, Lord Dubs, and I would very much like to introduce a more rational and modern approach to the second Chamber, but we will have to do that in an overall way. There are many anomalies in our voting system. The position in which citizens of the Irish Republic and the Commonwealth can vote in British parliamentary elections is also quite extraordinary, but has a long tradition behind it.
Lord Cormack (Con)
My Lords, I thank my noble friend for asserting his Conservative instincts in answering this Question. Would we not be better employed in seeking to persuade all those who do have the vote that it is their civic duty to use it?
Lord Wallace of Saltaire
My Lords, I have spent considerable time over recent weekends and when visiting universities and colleges doing exactly that, and I hope all other Members of this House do the same.
Lord Foulkes of Cumnock
Thank you. Does the Minister recall that the coalition agreement says that membership of this place should reflect of the share of the vote at the last general election? If the Liberal Democrats poll the 8% that they currently have in the polls, there will be only two ways to resolve the position after the next election—either by creating 450 new political Peers or by half the current Liberal Democrat membership seeking retirement. Which would he recommend and, if the latter, would he lead by example?
Lord Wallace of Saltaire
My Lords, I note that so far there are 11 names of current Peers on the list of those who have expressed their intention to retire at the end of this Parliament: they include no Members from the Labour Benches.
Lord Brown of Eaton-under-Heywood (CB)
My Lords, does the Minister agree that, whatever the arguments justifying the banning of Members of this House generally from voting in general elections may be, there can be no justification in respect of those who are disqualified? I speak on behalf of five erstwhile colleagues of mine in the Supreme Court who, when they were exiled across the Square, lost their vote and their voice here. They are totally disfranchised, and so too is the Lord Chief Justice. Can the Minister justify that?
Lord Wallace of Saltaire
I would have to look closely at the 1999 Act to be assured that they remain disqualified. I was not aware of that.
Baroness Brinton (LD)
My Lords, do not the questions that we have heard in the past few minutes demonstrate exactly why we need complete reform of the arrangements for your Lordships’ House, to ensure that we have an effective bicameral system appropriate for the 21st century?
Lord Wallace of Saltaire
My Lords, there is a very strong case for substantial constitutional reform. I fear—as I hope others may fear—that there may be a low turnout and an indecisive result at the election. That may at last push us towards a larger scheme of constitutional reform.
Lord West of Spithead (Lab)
My Lords, does the Minister not agree that sometimes it is better not to change things? One hundred and five years ago today, their Lordships of the Admiralty decided to issue a second typewriter to each battleship. Then we had 38 battleships; today we have hardly any ships and thousands of word processors.
Lord Wallace of Saltaire
My Lords, the first reference I have to Peers not voting comes from an Act of the reign of King Henry VI, but I regret to say that I have not been up the Tower to check that it is there.
Lord Trefgarne (Con)
My Lords, has the Minister observed that the Question refers to life Peers? Why did it not include hereditary Peers? Have we no rights in this matter?
Lord Wallace of Saltaire
My Lords, as the noble Lord knows, under the 1999 Act, hereditary Peers who are excluded from this House—not including the 92 who are here—are allowed to vote.
Baroness Farrington of Ribbleton (Lab)
My Lords, the Minister has been asked about reform of Parliament and the situation of a bicameral reformed Parliament. Would he agree that, de facto, we now have a unicameral system in which the House of Commons, by legislative right, ultimately gets its way? Who would arbitrate if there were two equal Chambers in Parliament?
Lord Wallace of Saltaire
My Lords, I would not agree with that, but I think that the noble Baroness and I had better have a long conversation with an authority such as the noble Lord, Lord Norton, on the subject.
House of Commons Commission Bill
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Lord Wallace of Saltaire (LD)
My Lords, in moving that the Bill do now pass, I thank the noble Baroness the Leader of the Opposition for her support in allowing this modest Bill to make progress in such rapid time; other noble Lords who have given tacit support; and my noble friend Lord Tyler for his support and engagement on the wider governance issues. Noble Lords will recall that the Bill will assist the other place in improving its governance arrangements by making the necessary legislative changes to the House of Commons Commission arising from its review of the issue. I beg to move.
Electoral Register
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Lord Kennedy of Southwark
To ask Her Majesty’s Government what action they are taking to maximise the number of people on the electoral register before the deadline of 20 April by which people must register to vote in the General Election on 7 May.
Lord Wallace of Saltaire (LD)
My Lords, the Government have invested £14 million over two financial years to support activities to maximise the number of people on the register. In 2014-15, this includes £6.8 million divided among electoral registration offices across Great Britain according to levels of underregistration. Up to £2.5 million will be used to fund wider activity, including working with national organisations to reach underrepresented groups, such as young people, students, Armed Forces personnel and overseas voters.
Lord Kennedy of Southwark (Lab)
My Lords, I declare an interest as the chair of the All-Party Parliamentary Group on Voter Registration. I hope the noble Lord’s response to my Question will move beyond the “We’ve all got a role to play” response that I often get from him. My Question asks specifically what action the Government are going to take in the next month to address the 7 million of our fellow citizens who are not on the register. How can we get those people on so that they can actually vote in the general election?
Lord Wallace of Saltaire
My Lords, it is up to all of us, not just the Government, to make sure. I was with the noble Baroness, Lady Royall, and the noble Baroness, Lady Perry, at UCL the other week. We all three made the point that it was extremely important that students both register and vote, and we should all be repeating that message each time we go to a college, university or school. The noble Lord will have seen the Electoral Commission’s announcement of its pre-election campaign earlier this week. That is another dimension of this. There will be advertising online and in the media. The Government are very happy that in February a million new applications came in to register. We expect there to be a similar surge in the last few weeks before the closing date, as there was in 2010. We are not at all complacent, but as the election gets closer, we expect interest to rise and we expect the 2.7 million applications which have come in since last December to be added to by, we hope, another million.
Lord Cormack (Con)
My Lords, as there are penalties for not registering, can my noble friend explain to me—he has failed to do so in the past—why we do not move towards compulsory registration?
Lord Wallace of Saltaire
My Lords, the noble Lord, Lord Maxton, has also asked me this question on a number of occasions. We would be moving towards a different relationship between the citizen and the state. In Denmark, Finland and Germany, there is a national population register. If you are on a national population register, you are automatically also on a voting register. It is also used for welfare, taxation and a range of other questions. That takes us down the road towards national identification numbers and national identity cards. We will have to have that debate in the next Parliament. It is not the tradition in this country.
Lord Roberts of Llandudno (LD)
My Lords, I congratulate the Minister on the backing he has given for organisations such as Bite the Ballot, of which I am the honorary president. I hope that the new voters exercise their vote on 7 May. After 7 May, it will be important to have a proper analysis of exactly what went wrong with individual registration as against the previous form. I am told that many constituencies have many fewer registered voters than in the past. Whichever Government are in office, will they urge the Electoral Commission to come to grips with this question very soon?
Lord Wallace of Saltaire
My Lords, after the election, the Electoral Commission, which is an excellent organisation, will of course examine the successes and weaknesses of the transition to individual electoral registration. We have guaranteed that this will come back to Parliament—there will be a report to Parliament on how the transition to individual electoral registration has gone. I emphasise that this has not been a failure. Applications are still coming in. Two-thirds of applications since last June have been online. We are doing everything we can to ensure that more people who have not yet registered, or who are registered in the wrong place, register before 20 April.
Lord Wills (Lab)
My Lords, the Electoral Commission has said that between March and December last year 920,000 people disappeared off the electoral register. This is clearly going to have an impact on the outcome of the general election. Will the Minister say what impact he thinks it will have?
Lord Wallace of Saltaire
My Lords, I have just emphasised that nearly 3 million have applied to register since December. There is movement on and off the voting register all the time, as the noble Lord well knows. We are doing everything we can to make sure that movement in the next few weeks, as over the past three months, continues to be positive.
Lord Grocott (Lab)
My Lords, since this is all about establishing the identity of people who are eligible to vote, at this stage in the Parliament, five years in, will the Minister acknowledge that one of the numerous mistakes this coalition Government have made—it would take too long to list them—was the early decision to get rid of national identity cards, which would have solved this and many other problems relating to migration and other matters about which this Government have made such a mess?
Lord Wallace of Saltaire
I thank the noble Lord for his normally generous comments. The sheer heavy weight of the Labour Government’s ID proposals seemed to me and many of my colleagues to make it an unavoidable failure. There is a debate about the shift to a digital relationship between the citizen and the state, which we will have to have, and about convenience against privacy, which we need to have as we move forward. My right honourable friend Francis Maude and others working on the Government Digital Service have made a good deal of progress in that regard.
Lord Lexden (Con)
Does the Minister have any information about the growth in the number of 18 to 21 year-olds on the register?
Lord Wallace of Saltaire
Since 1 December, some 700,000 16 to 24 year-olds have applied to register. We do not have an exact figure on what proportion that is because the figures on how many 16 year-olds will be eligible to vote in the election are not exact because we do not have all their birthdays.
Lord Greaves (LD)
My Lords, do the Government have an estimate of the extent to which the reduction in the number on the electoral register as reported last December is due to a reduction in multiple registrations?
Lord Wallace of Saltaire
My Lords, it is highly likely that that is the case, particularly with students not being registered both at home and at university. That is one of many difficulties in assessing the completeness and accuracy of the register.
House of Commons Commission Bill
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Lord Wallace of Saltaire (LD)
My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.