Football Governance

Jeff Smith Excerpts

Monday 25th April 2022 Commons Chamber

[Jeff Smith (Manchester, Withington) (Lab)]

I thank the Minister for his statement and for advance sight of it. I also thank the hon. Member for Chatham and Aylesford (Tracey Crouch) and all those who contributed to her excellent and timely review of our national game.

I welcome the confirmation that the Government are supporting the strategic recommendations of the fan-led review. Labour has been calling for the plans to be fully implemented ever since the review was published and, in particular, for the independent regulator for English football, which is key to reform. But however the Government try to spin it, today’s announcement of a White Paper and further delay will come as a disappointment to fans.

The fan-led review was a rigorous and wide-ranging piece of work, based on engagement with every possible interest group alongside more than 20,000 individual fan responses to a survey, and supported by an expert advisory panel from the world of football. As the Under-Secretary of State for Digital, Culture, Media and Sport, the hon. Member for Croydon South (Chris Philp), rightly said when doing the media rounds this morning,

“there has been huge input from fans up and down the country”.

Eleven years after the Culture, Media and Sport Committee report, three years after the collapse of Bury, a year after the disastrous European super league proposal and five months after the publication of the fan-led review, we do not need further consultation or a road map. We need a clear timetable and new legislation to be included in the Queen’s Speech in 15 days’ time.

The need for urgent action is clear. Oldham Athletic were relegated from the English football league on Saturday after years of mismanagement ending in fan protests. Derby County are in ongoing crisis and were relegated from the championship this week—not because the players are not good enough, but because of bad owner management and governance. Those two historic clubs, founding members of the premier and football leagues respectively, have been hit hard because of reckless owners.

In the wake of the Ukraine war and sanctions, Chelsea are in limbo. Many supporters want the review recommendations to be incorporated in the club’s sale. The Government are missing an opportunity to embed fan representation, as recommended in the review, and give supporters a say on changes to the heritage assets of their club.

The Minister’s statement, although welcome, left some questions unanswered. The Minister could not rule out to the Select Committee recently that a regulator might be located within the FA. Can he do so now? We believe that it is vital for the regulator to be truly independent.

The statement confirmed that the Government are accepting all 10 of the strategic recommendations. That is good, but can the Minister confirm that the Government support the 47 detailed recommendations in the report? Perhaps more importantly, are there any that they do not support?

The announcement today will do nothing to break the impasse on the redistribution of funding. The fan-led review gave the Premier League and the EFL until the end of 2021 to work it out between them, but that has not happened: the bodies have not been able to come to an agreement for months. If they fail, the review proposes action from the regulator, but on the current timescale—unless the Minister can tell me otherwise—a regulator will not be in place until at least 2024. At what point will he intervene urgently to get the Premier League and the EFL to an agreement?

The dedicated review of women’s football, which was an important recommendation in the review, is really welcome. Can the Minister give any more detail on who will chair it, what timescale it might follow and how its recommendations will be taken forward in due course?

The Government have said all along, quite rightly, that they accept in principle the proposals in the review, so let us get on with it. We are already too late for Bury, Derby and Oldham. If further clubs go under or suffer because of delays to the implementation of the review, responsibility will rest partly on the Government’s shoulders. The Labour party is happy to work with the Government to find space for legislation sooner rather than later. The right result is already clear; we do not need extra time. For the future of our national game, let us see legislation in the Queen’s Speech and action as quickly as possible.

[Nigel Huddleston]

I thank the hon. Gentleman for his comments. May I put on record my thanks and gratitude for the genuinely positive and constructive tone that we have had from him, from the Opposition DCMS team and from Members across the House?

There is a clear cross-party intent to move forward. I can say definitely to the hon. Gentleman that there is no intent to delay: we want to move forward as soon as possible. A White Paper is not an unusual step to take in bringing legislation to the House. It will also give others the opportunity to make additional comments as we move to the final stages of what is one of the most fundamental transformations in English football.

It is important that we get this right. It is incredibly complex: we will be bringing in incredible rigour and discipline, particularly financial discipline, for clubs, which has not happened before. If we were expected to bring in regulation tomorrow, it could cause considerable difficulty for clubs that may not currently be in a position to prove the level of discipline and rigour in their finances that we would seek in a new world with more financial regulation. We have to do it at the right time and give adequate notice. That being said, we want to move at speed, and the team at DDCMS are all working on many of the aspects that the hon. Gentleman raises.

On many of the hon. Gentleman’s points, further details will be coming in the White Paper. In the next few weeks, we will also announce further details on the review of the women’s game; the game has some similar issues but many different issues, so it is right that there is a separate review. We will continue to put pressure on the Premier League and others to move forward in the many areas that the hon. Gentleman identified that do not require regulation. For example, we expect many entities to move forward in the areas of financial distribution, fan engagement and heritage assets. Football entities can continue to move those matters forward, and I am sure that the whole House will continue to bring pressure on them to do so. I thank the hon. Gentleman for his genuinely constructive comments and welcome the overall support that we are hearing from the Opposition.

Gambling-related Harm

Jeff Smith Excerpts

Tuesday 29th March 2022 Westminster Hall

[Jeff Smith (Manchester, Withington) (Lab)]

It is really good to see you in the Chair, Ms Rees. May I start by paying tribute to my hon Friend the Member for Swansea East (Carolyn Harris) for securing this debate and, more importantly, for her work over the years. She has been a brilliant campaigner on this issue and set out the problems very clearly in her speech, as did my hon. Friends the Members for Merthyr Tydfil and Rhymney (Gerald Jones) and for York Central (Rachael Maskell), who gave powerful speeches. I thank everyone who has contributed to the debate, particularly the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith). It is not often that I agree with every word he says, but I did today.

We have had a variety of contributions, but there is something that shines through—namely, the wide recognition and consensus that reform is needed. As we know, the Gambling Act 2005, which is the basis for regulation of gambling in the UK, has not been updated since it was passed. Today’s debate is a reminder of how unfit that legislation is in meeting the demands of the digital age. As we have heard today, the mental and physical health consequences of harmful gambling can be devastating in many ways. Many of us have met people who have been damaged, and whose families have been damaged, by gambling.

Aside from the cost to individuals, the Government’s own gambling-related harms evidence review showed that the cost to the Government is, at a minimum, at least £340 million each year. Despite that, it has now been two years since the Government committed to publishing a gambling White Paper. Meanwhile, someone with gambling-related problems dies by suicide every day. Government action is long overdue.

The experiences, the stories and the numbers speak for themselves, particularly when it comes to the rapid increase in online gambling practices. I want to particularly focus on that area, as many others have, given that it is the source of many of the harms that we have heard about today,

Among women in particular, online gambling is growing at an alarming rate. According to research by GambleAware, it almost tripled during the pandemic. We need only look at the data for 202-21 from GamCare’s national gambling helpline—it shows that 84% of calls made by individuals related to concerns about online gambling habits—to get a feel for the scale of the problem. It is a problem that we did not appreciate in 2005, but we must now address it and treat it as a public health issue. We need to do more to protect individuals against addictive and easily accessible games, and those protections must include safeguards and affordability checks, particularly for online slot and casino games, where the Government have been slow to act.

As I have said, change is long overdue. Only last week, my hon. Friend the Member for Sheffield Central (Paul Blomfield) led an Adjournment debate on the tragic death of his constituent Jack Ritchie, who was driven to take his own life after battling a severe gambling addiction. Jack saw his addiction begin at his local bookies at the age of 17 before moving onto online gambling. That kind of addiction can come very quickly and have devastating consequences.

Jack’s story is a familiar one. I met a group of former gambling addicts about a month ago and they were from a wide variety of backgrounds; as my hon. Friend the Member for York Central pointed out, gambling addiction can hit anybody. They had all followed that same pattern: starting to gamble and then getting into online gambling, and it destroyed their lives. Unbelievably, at the time, banks were prepared to give them loans to fund their gambling habit. It is a problem that we must get a grip on. The whole aim of gambling adverts, incentives and VIP schemes is to maintain or increase the spend of their so-called valuable clients. Those harmful schemes are addictive in nature and offer supposedly free stakes—as my hon. Friend said, there is no such thing as a free bet—to lure customers in. We need to do everything we can to make sure that people like Jack who are aware of their addiction have the tools and support available to help them through their problem.

Will the Minister give an indication of the Government’s thoughts on imposing a mandatory levy on all gambling operators? A levy would help to fund educational resources and treatment services for people suffering as a consequence of their gambling. Colleagues will, I think, be aware that there is already the legal power to impose a levy on the gambling industry; it is already there in legislation. The Government have always insisted that the industry should support harm-reduction work on a voluntary basis, but the current, voluntary system lacks consistency, transparency and accountability. The big five gambling companies have committed to paying 1% of their gross yields towards safer gambling initiatives by 2023, but the variation between online casinos and their donations is a concern. As the right hon. Member for Chingford and Woodford Green said, many of us do not trust that all the gambling companies will act to do the right thing. Labour believes that operators can and must do more to support vulnerable people.

I hope that the Minister will also reflect on the huge increase in online gambling advertising, especially during live sporting events. That can lead to a normalisation of gambling among young people. I am keen to understand the Government’s thinking on how to tackle that—how they can create the evidence base to understand how that advertising affects gambling addiction and how that can inform future policy.

As the online space continues to develop—we are now looking at the issue of gambling in the metaverse, with the potential for virtual reality casino experiences and other experiences—we need to be looking ahead. I am keen to know what the Government are thinking in terms of plans to tighten up safeguards, with a view to the future and gambling in the metaverse. Obviously, we have the Online Safety Bill coming up. That is a matter for another day; we need the Minister to be clear and gambling-focused in his response today. There is currently a discrepancy between the regulation of physical gambling and the regulation of online gambling, with lower-harm games such as bingo being subject to tighter restrictions in some areas than addictive online betting. We need to know the specific steps that the Government are taking to ensure that there is parity. We have concerns that without action and a proper licensing process, the online space will continue to develop as a wild west when it comes to gambling products.

Most importantly given the extent of the issues and the problems that we have heard about, we need to know exactly when the gambling review is due to be published. With respect, we need a date. We have been waiting for a date for a long time now. What we need to see is a plan to tackle problem gambling that is fit for the modern age. There is clearly a political consensus on the importance of getting this right, on the need for reform, so the Minister can be assured of widespread support if the Government act effectively, listen and get the balance right.

[Jonathan Gullis]

On a point of order, Ms Rees. I am very grateful to you and to the Minister for agreeing to allow me to do this. I do apologise. Because my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) kept the clock ticking down on me, I was unable, and forgot, to draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests for the £540-worth of match tickets to Stoke City versus Fulham at the Bet365 stadium in January. I do apologise to Members for that.

Oral Answers to Questions

Jeff Smith Excerpts

Thursday 24th March 2022 Commons Chamber

[Mr Speaker]

Order. We only have seven minutes, and we are on topical questions. We need to be short and punchy, just to get some more Members in.

[Jeff Smith (Manchester, Withington) (Lab)]

Perhaps I ought first to declare an interest as a Manchester City fan who plans to attend the FA cup semi-final against Liverpool, but is it not wrong to hold that match between two north-west teams at Wembley on a weekend when there are no trains running from the north-west to London? What influence will the Government use to get the FA to sort this problem out, ideally by moving the semi-final to another venue? Is this not just further evidence that we need the voice of fans in football decision making, and that the fan-led review needs to be urgently implemented in full?

[Ms Dorries]

There were a number of questions there. We are working with the Department for Transport and trying to ameliorate that situation. It is an FA decision, so we are also discussing it with the FA. It is important that we get the fan-led review in place. We have agreed in principle to a regulator, and we hope to bring that forward as soon as possible.

Charities Bill [Lords]

Jeff Smith Excerpts

3rd reading
Tuesday 22nd February 2022 Commons Chamber

[Jeff Smith (Manchester, Withington) (Lab)]

I thank the Minister for his introduction. The Opposition are proud to support our charity sector, which does such fantastic work for individuals, communities and society. The contribution of charities to our society could not have been shown more clearly than during the coronavirus pandemic, as organisations and volunteers have done fantastic work to support vulnerable people around the country. We owe it to them to provide a legal and operational framework that is clear, efficient and manageable, especially for the large number of small charities with limited staff and resources, and that allows them to concentrate not on bureaucratic technicalities but on doing their work. During the passage of this Bill there has been agreement on all sides that the new measures detailed in it are important progress towards allowing charities to amend the ways they operate and making it easier for them to achieve their core purpose.

The Bill seeks to make a series of changes that will make it easier for charities to navigate the law and carry out their functions effectively, while retaining important safeguards. So the Opposition are pleased today to support the Bill, which takes on board the large majority of recommendations put forward in the Law Commission’s report and makes a number of significant changes for charities. It reduces red tape, including by making it easier for charities to amend their governing documents, such as through small changes to charitable purposes; and by making it easier to dispose of land efficiently, to use the resources of the charity more effectively and to avoid disputes over whether a trustee has been correctly appointed or elected.

I do not intend to detain the House for long, but I do wish to thank the Law Commission and the charity sector for their great work on the Bill. I thank the Lords for their careful scrutiny of what is quite a technical and involved Bill: they did a great job of scrutinising the measures in the other place. I am also grateful for the Minister’s engagement and particularly for his writing to me yesterday to set out an indicative timescale for the implementation of the measures in the Bill. I look forward to more detail on the implementation plan as it comes forward. With that, I am happy to offer the Opposition’s support on Third Reading.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.

Public Service Pensions and Judicial Offices Bill [Lords] (Programme) (No. 2)

Ordered,

That the Order of 5 January 2022 (Public Service Pensions and Judicial Offices Bill [Lords] (Programme)) be varied as follows:

(1) Paragraphs (4) and (5) of the Order shall be omitted.

(2) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings on the motion for this Order.

(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the motion for this Order.—(Mr Simon Clarke.)

Oral Answers to Questions

Jeff Smith Excerpts

Thursday 10th February 2022 Commons Chamber

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Chris Philp)]

My hon. Friend raises an important question, but we need to distinguish between broadcasters, or indeed newspapers, that are exercising editorial judgment, and social media platforms that are carrying content generated by other users. However, we will introduce shortly—in the coming weeks—an online safety Bill that will impose new duties on social media firms in connection with illegal content, content that is harmful to children and content, including disinformation, that is harmful to adults. I hope that will go a long way towards addressing the points that he rightly raises.

[Jeff Smith (Manchester, Withington) (Lab)]

I am afraid that the Minister’s answer to my hon. Friend the Member for Newport West (Ruth Jones) was far too vague. Musicians and orchestras are facing a touring crisis. We need an EU-wide cultural touring agreement that includes allowances for cabotage, carnets and customs rules. That needs to happen now, so what are Ministers doing to sort the problem as a matter of urgency?

[Julia Lopez]

We have been working closely across Government to deal with some of the cabotage issues. The issues around agreements with member states are being addressed on a bilateral basis. We have had great breakthroughs with Spain and are working closely with Greece, but most people can work in those countries for up to 90 days. I am happy to engage with the hon. Gentleman further on the issue.

Cultural Objects (Protection from Seizure) Bill

Jeff Smith Excerpts

Report stage
Friday 28th January 2022 Commons Chamber

[Jeff Smith (Manchester, Withington) (Lab)]

I will be brief; we have had an extensive debate this morning, ranging from Tutankhamun and Richard III to pubs and zoos, so I do not intend to detain the House much longer.

On Second Reading, my hon. Friend the Member for Wirral South (Alison McGovern) set out our support for the Bill. We think it is a sensible and proportionate measure that will provide useful safeguards for the ability of our cultural institutions—the British Museum and galleries, museums and libraries up and down the country—to stage the kinds of exhibitions that add so much to our cultural and tourism offer. We reaffirmed our support in Committee, and the Opposition support the measures before us today. It therefore remains only for me to congratulate the right hon. Member for Central Devon (Mel Stride) on bringing the Bill to this stage and to wish him success as it moves forward.

Women’s Football

Jeff Smith Excerpts

Wednesday 26th January 2022 Westminster Hall

[Jeff Smith (Manchester, Withington) (Lab)]

It is a pleasure to serve under your chairmanship for the second day in a row, Mr Twigg. It is good to see you here. It is a pleasure to respond for the Opposition in this debate. I congratulate my hon. Friend the Member for Sunderland Central (Julie Elliott) on securing it and on her excellent opening speech, as well as all hon. Members who have spoken.

It was especially good to hear my hon. Friend the Member for Batley and Spen (Kim Leadbeater) speak about the power of sport to bring people together and her experience as a new member of the parliamentary football team, noting the issues around girls’ participation. It was eye-opening to hear about the experience of women fans and the anticipation of abuse or sexism relating to female officials, which is an angle that I had not really thought of before. It was very interesting.

I also pay tribute to my hon. Friend the Member for Coventry North West (Taiwo Owatemi), who spoke about how women’s football taught her about communication and teamwork, which has stood her in good stead for her role in the Opposition Whips Office. I join her in thanking the unsung heroes who keep women’s football going—the volunteers. Importantly, she outlined the ordeal of Coventry United, which I will return to briefly.

As always in any debate on sport, my hon. Friend the Member for Islwyn (Chris Evans) gave us a lesson. The history of women’s football is a fascinating background to the issues in women’s football today.

I pay tribute to my hon. Friend the Member for Wirral South (Alison McGovern), my predecessor, for everything she did when she held this role before me. I agree with almost everything she said, although I am not sure about her team being the finest team on the planet—they are trailing in second place in the premier league at the moment. I agree with just about everything she said, including on the extra effort that we need to put in to support women’s football in this country.

In many ways, these are good times for women’s football in England. The successes of the Lionesses in recent years—notably, taking third place in the 2015 World cup and then again making the semi-finals in 2019—have helped to boost the game’s profile, and growth in interest, spectators and participation have followed. The Women’s Super League has attracted record crowds, and we had 40,000 people watching the FA cup final at Wembley in December. Driven by the FA’s efforts, the participation of women and girls in grassroots football doubled between 2017 and 2020.

The hon. Member for Chatham and Aylesford (Tracey Crouch) referred to the increasing interest in Parliament on this issue. I would put that down partly to the general increase in interest in women’s football, but also to her work as an absolutely fantastic champion not just of women’s football, but of football in this country. I thank her for her work on the review and for her wider work on football.

As the country looks forward to hosting the Women’s Euros this summer, enthusiasm for the women’s game will grow, attracting more fans and inspiring budding footballers. I would agree that coverage on the BBC and on Sky has raised the profile of the game, with more and more people watching women’s football on TV, driving participation. I would echo the question from my hon. Friend the Member for Sunderland Central to the Minister about listed events, and I hope that he will respond.

In general, the future looks bright for women’s football, but as we have heard today, there are challenges. To build a future that is fair and works for players, staff and fans at all levels, some issues need to be addressed. That is a job for the FA and for leaders in football, but also for the Government.

Today’s debate was partly brought about as a response to the recent situation at Coventry United women’s team. The team narrowly avoided disaster thanks to a last-minute buyer, and I am pleased that Coventry’s players are going to be able to continue to earn a living playing the sport they love, but it should not have come to that. This was a full-time, fully professional championship club, but to the shock—complete shock—of the players and staff, they found themselves hours away from ceasing to exist.

Coventry is not the only example of the precarious nature of the existence of some women’s clubs. Just as the Women’s Super League was due to start in 2017, Notts County folded. In 2019, Yeovil Town dropped two divisions from the WSL as a result of financial problems. Leyton Orient cast aside its women’s teams last year, forcing the creation of London Seaward to ensure that the players could continue to play. Fylde women’s team was disbanded in 2020, only for the decision to be reversed some time later, and Holwell Sports Women FC in the fourth tier of the football pyramid announced that it would have to fold just at the beginning of this month. So there are challenges, and it is not just problematic governance and job insecurity that need to be fixed. There is great growth in participation, as we have heard, but there needs to be more work on encouraging people to participate and on breaking down the barriers.

In the professional game, when things go wrong women’s players are only eligible for support from the Professional Footballers Association if they have played in the top league of women’s football, leaving most women players with nowhere to turn. As we have heard, levels of pay across women’s football are generally low, with players often needing to work on other jobs alongside football to make ends meet. Many players, as we have heard, have poor access not just to pitches, but to the medical and fitness facilities needed to play safely. Employment contracts are often poor, short term and ill-suited to the specific needs of women. Generally there has been poor maternity support for women who wish to have children, although we have had encouraging news from my hon. Friend the Member for Sunderland Central about the potential change to that—so, fingers crossed.

Our women footballers deserve better. There is, of course, the issue of the abuse and harassment faced by women in the sport. Women in Football reports that almost a third of their members have experienced gender-based social media abuse, and that is one aspect of what many players have to endure. So there is progress, but more needs to be done.

We have had the excellent fan-led review of football governance, led by the hon. Member for Chatham and Aylesford, which the Government are still dragging their heels on responding to in full or implementing. That review called for a separate dedicated review of the women’s game, and that is really the key ask I have of the Minister today. We have had a number of asks, but I think the encompassing action for the Minister—I note that you want me to finish, Mr Twigg, so I will be brief—would be on that key ask. Given the complexities of women’s sport and the crises that have cropped up, a full review of the future of women’s football is urgently needed. The Government have said they would respond in full to the review in spring, but why the delay? Will the Minister clarify whether there is any truth in the rumour that the Treasury are the block on progress? The issues raised in the debate mean that a separate women’s review is needed, so why not get on with it? The Government have accepted in principle the fan-led review’s recommendation for an independent regulator. I repeat the request of other Members that the Minister should now endorse its call for a review of women’s football. That is what we need. Let us get on with it.

[Derek Twigg (in the Chair)]

I call the Minister, but I remind him that the hon. Member for Sunderland Central (Julie Elliott) will want a couple of minutes at the end to wind up.

Charities Bill [ Lords ] (First sitting)

Jeff Smith Excerpts

Committee stage
Tuesday 25th January 2022 Public Bill Committees

[Jeff Smith (Manchester, Withington) (Lab)]

It is a pleasure to see you in the Chair, Mr Twigg. I thank the Minister for his introduction.

The Opposition agree with the measures in clause 1. They will reduce bureaucracy and allow charities to focus on the work that they do, which is the essence of the Bill. Charities do great work for society and our communities. We owe it to them to provide a legal framework that is clear and manageable—especially for the large number of small charities with limited staff and resources—but with sufficient safeguards for charities and for the system. We also owe charities an efficient framework that allows them to concentrate not on bureaucratic technicalities but on doing their work, and the clause is an example of the proposed changes in the Bill that will allow them to do that.

I am going to make the same point that I made the last time the Minister and I were in Committee together, on the Dormant Assets Bill. There is a temptation for Opposition spokespeople to get up every time a clause is moved, essentially repeat the Minister’s remarks in brief and then say, “We agree,” but I will avoid that temptation. We agree with the Bill. It is well put together, we appreciate the safeguards in it, and we agree with the measures in it. The Bill is not controversial, so I will not respond to every clause; I will do so just in the few areas where we have particular points to make. Generally speaking, the Opposition are content with all the clauses.

The Bill is highly technical. It is the result of extensive consultation and discussion. I join the Minister in thanking the House of Lords for its scrutiny of the Bill and for looking thoroughly into the proposals. It is clear to me, having read the Hansard reports of all the Bill’s stages, that the Lords looked carefully at the detail in the Bill and explored some of the Law Commission recommendations that were not included in it. I referred to that on Second Reading, particularly with respect to clause 40—I know that the Minister has written to my hon. Friend the Member for York Central about that—and clause 43. Since that debate was had in the Lords, I do not intend to repeat it today.

I thank the Law Commission for its thorough work in bringing forward the proposals in the Bill. It is supported throughout the sector. I thank the charities sector for its engagement and advice. The Opposition have not tabled any amendments. It is customary for very few substantive amendments to be proposed to Law Commission Bills, so we have not tabled any. We did not feel strongly enough about any proposals that were included or missed out to necessitate an amendment.

Having made those introductory remarks, let me say that I agree with clause 1 and I hope that we will speed through the rest of the Bill.

[Nigel Huddleston]

I thank the hon. Gentleman for the tone that he has adopted throughout. He is absolutely right; my modus operandi in politics is, “If things aren’t party political, don’t make them so,” and that is very much the case with charities. I thank both Opposition Members and Government Members for all their work. There is a great deal of expertise here, and the Bill gets to us in a good place because of the level of scrutiny that has taken place. I am more than willing to take questions now or as the Bill progresses. I also commit to moving at speed, but respectfully, through the Bill. I appreciate the hon. Gentleman’s comments. I have broken his rule by standing up to say, “I agree”—I will try not to do that.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Amendments to constitution of CIOs

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Nigel Huddleston]

These clauses address some unnecessary administrative burdens, clarifying and simplifying the law around the buying and selling of charity land, and removing ineffective and burdensome statutory requirements.

Clause 17 clarifies which land held for or on behalf of a charity is affected by the requirements in part 7 of the Charities Act 2011. Clause 18 makes changes to the exceptions to those requirements. It also removes redundant provisions as a consequence of the repeal of provisions in the Universities and College Estates Act 1925.

Clause 19 removes the automatic requirement for charities to advertise the disposal of land as advised in a surveyor’s report. It instead allows trustees the freedom to consider a surveyor’s advice and decide the best choice for their charity.

Clause 20 lays the groundwork for secondary legislation to expand the range of advisers a charity can call upon when seeking advice on land disposals. The current restrictions on who can advise charities in land transactions place on charities unnecessary cost burdens that can be disproportionate to the value and complexity of the land disposal. Clause 20 anticipates future changes to expand the list of advisers, allowing charities to seek a more tailored approach to disposals of land, as trustees will have more flexibility to choose the most appropriate adviser for their transaction.

[Jeff Smith]

The Opposition agree with the clauses, which are sensible measures with sufficient safeguards that should produce a clearer and easier legal framework for buying, selling, leasing and mortgaging charity land.

We note that the Government decided to reject the recommendation to remove the statutory requirement to give public notice of land disposals. We are not against that decision, but I wonder whether there is scope for keeping that under review, and whether we might move from a less all-encompassing system, with a blanket rule for all disposals, to something more risk based. We do not propose that that should be part of the Bill, but I ask the Minister to keep that under review for future legislation.

[Nigel Huddleston]

I thank the hon. Gentleman for his comments. As we have seen in this tidying up of legislation and rules relating to charities, there is a need for constant and periodic review. We will of course take into account the views of the Law Commission and the Charity Commission, as well as the Opposition’s comments. If further tidying up is required in future legislation, we are always open to it.

Question put and agreed to.

Clause 17 accordingly ordered to stand part of the Bill.

Clauses 18 to 20 ordered to stand part of the Bill.

Clause 21

Advice etc from charity trustees, officers and employees

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Nigel Huddleston]

Part 3 of the Bill includes clauses 25 to 28, which relate to the Charity Commission’s power to direct a charity to change its name. The adoption by a charity of a name that is similar to another charity’s name, or that is offensive, can lead to the public being misled, donations being made to the wrong charity and reputational damage for individual charities and, indeed, the entire sector.

Clause 25 extends the Charity Commission’s existing power to direct a charity to change its name to cover working names. Working names are names that charities are known by, but which are different from their registered name. Comic Relief, for example, is a working name of a charity called Charity Projects. The change closes a loophole that would allow charities to continue to operate with an inappropriate working name. The definition of “working names” has been considered in great detail and clarifications have been added to the explanatory notes in response to questions and comments from the Charity Law Association.

Clauses 26 and 27 allow the Charity Commission to delay registering a charity on the basis of an inappropriate name. They also allow the Charity Commission to delay changing a charity’s name on the register in order to give enough time to address the issue properly. This is subject to a maximum delay period. Clause 28 ensures that the Charity Commission can also direct an exempt charity to change its name, as it can for charities that are not exempt. The Charity Commission would be required by the Charities Act 2011 to first consult with an exempt charity’s principal regulator before making such a direction.

This group of changes provides the Charity Commission with clear and effective powers in the rare cases where a charity adopts an inappropriate name. I commend the clauses to the Committee.

[Jeff Smith]

My hon. Friend the Member for Brighton, Kemptown jogs my memory in relation to the register of interests. I did declare in our Second Reading Committee that I am a trustee of the charity Drug Science. I perhaps ought to put that on the record in Committee as well.

The Opposition support the measures in clauses 25 to 28. They are sensible safeguards that will not only make life less bureaucratic for charities, but will actually have a role in protecting the public from being misled. They are important parts of the Bill. However, there was some concern from charity lawyers that, because the working name proposals were not part of the original report, they may not have been given as much consideration as other parts of the Bill—in terms of unintended consequences and so on. The Opposition support the measures in the clauses, but we would ask for some kind of post-legislative review to make sure that they are working correctly.

[Lloyd Russell-Moyle]

I rise generally to support clause 25, but I wish to put on record a note of caution about historic charities that might have competing or similar names. The Charity Commission must act with caution in those cases. My background is in youth organisations, of which there are a number that take the name “Scouts”. They might not be part of the official UK scouting group we know or be affiliated to the international World Organisation of the Scout Movement, but they are Scouts in the sense of the Baden-Powell scouting groups. The same goes for the Woodcraft Folk and others.

It is important that the Charity Commission does not act in a heavy-handed manner, but ensures that it is responsive and light-touch only when there is deliberate confusion taking place, not when a bigger organisation might just not like what a smaller organisation is doing, even though they have both been active for many years. I think it is important that the Charity Commission hear that. I am sure the Minister with his other hat on would agree with that as well.

--- Later in debate ---

[Nigel Huddleston]

The amendment removes the privilege amendment inserted in the Lords. For Bills starting in the House of Lords, a privilege amendment is included to recognise the right of this place to control any charges on the people and on public funds. It is standard practice to remove such amendments at this stage of the Bill’s passage through the House of Commons.

I also speak to clause 41 in this group. Clause 41 makes provision about the extent, the coming into force and the short title of the Bill. Clause 41 will come into effect on the day on which the Act is passed. Other provisions will come into force when the Secretary of State makes regulations by statutory instrument. The Department for Digital, Culture, Media and Sport will work with the Charity Commission on an implementation plan to bring the provisions into effect in stages after Royal Assent.

[Jeff Smith]

I will speak very briefly because this is really a technical clause. The Opposition agree with the Government’s amendment and with clause 41. The Minister referred to the implementation plan; Baroness Barran said at Committee stage in the Lords that the Government would publish an implementation plan before the Bill completes its passage through the House. Given that we are now at the end of the Committee stage and we do not yet have a date for Report and Third Reading, I will put on record my request to the Minister for an update on the progress of an implementation plan.

[Nigel Huddleston]

I note the hon. Gentleman’s comments. DCMS is working with the Charity Commission on the Bill’s implementation. We will announce further information in due course. If I am able to provide more information shortly, I will give it to the hon. Gentleman and others.

Amendment 1 agreed to.

Clause 41, as amended, ordered to stand part of the Bill.

Question proposed, That the Chair do report the Bill, as amended, to the House.

[Nigel Huddleston]

I would like to thank you, Mr Twigg, all the officials, stakeholders, the charities themselves, the Commissions and everybody involved in the Bill’s progress today. I thank the Opposition, as well as Members on this side of the House, for the co-operation and attention they have given to this very important Bill. It will make a meaningful difference to the charities impacted.

[Jeff Smith]

May I briefly echo the Minister’s comments? It is a highly technical Bill and an awful lot of work has gone on behind the scenes by the Law Commission, the Lords and the Clerks, which we should put on record. I thank all who have been involved, and also thank members of the Committee for their attendance today.

Question put and agreed to.

Bill, as amended, accordingly to be reported.

Charities Bill [ Lords ]

Jeff Smith Excerpts

Second reading committee
Tuesday 18th January 2022 General Committees

[Jeff Smith (Manchester, Withington) (Lab)]

It is a pleasure to serve with you in the Chair, Sir Gary, and I am pleased to speak on the Opposition’s behalf. I thank the Minister for his introductory remarks and echo his thanks to everyone involved in the passage of the Bill through the Lords and in cleaning it up into the good state that we see it today.

Like probably all of us in this Committee, I am a member or supporter of several charities. For the record, I refer the Committee to my entry in the Register of Members’ Financial Interests and note that I am a trustee of Drug Science.

The charity sector’s contribution to society could not have been shown more clearly than during the coronavirus pandemic, with countless organisations and volunteers doing fantastic work to support vulnerable people. Charitable groups and organisations have ensured that rough sleepers have had access to food and shelter, delivered food to those in need and supported the vulnerable and those who had to shield during the darkest days of the pandemic. I pay tribute to all volunteers and staff in the charity sector, which forms such an important part of our civil society. Charities play a vital role in our communities and will continue to be vital to Britain’s covid recovery in the months ahead.

During the Bill’s passage through the Lords, there was agreement on all sides that the new measures represent important progress towards allowing charities to amend how they operate and making it easier for them to achieve their core purpose. The Bill seeks to make a series of changes that will make it easier for charities to navigate the law and to carry out their functions effectively, while retaining important safeguards.

I will not repeat the detail that the Minister outlined, but the Opposition support the Bill, which takes on board the majority of the Law Commission’s recommendations and makes several significant changes for charities, reducing red tape and making it easier for them to amend their governing documents, such as small changes to charitable purposes, to dispose of land efficiently, to use their resources more effectively and to avoid disputes over whether a trustee has been correctly appointed or elected.

The Law Commission’s “Technical Issues in Charity Law” report, which informs the changes in the Bill, was published in September 2017. Labour backs our charity sector and backed the report. We wonder whether these changes could have been brought to the House more swiftly, but we are pleased that the Government have finally brought the Bill forward.

Approximately 169,000 charities are registered with the Charity Commission in England and Wales, with a combined annual income of over £83 billion. The sector employs 3% of the total UK workforce, and more than 944,000 trustees are supported by over 6.2 million volunteers. All those charities and the millions of people who support their work might have benefited if the recommendations has been brought into law more quickly, but the Labour party supported the Bill’s passage in the Lords and will of course be doing the same in the Commons. We do so because the recommendations will fundamentally make running a charity easier and more efficient.

Among other things, the Bill clarifies certain powers of the charity tribunal, expands the Charity Commission’s role to deal with misleading, offensive or duplicate charity names, allows charities to amend their governing documents or royal charters more easily, permits more flexibility in the use of permanent endowments and makes it simpler for charities to combine their operations.

The implementation of the Law Commission’s recommendations is estimated to deliver cost savings for charities of at least £28 million over a 10-year period. The uncertainties in the law and the unnecessary regulation that discourage participation, delay charities’ activities and compel them to spend money on expensive legal advice will be removed, which will make life easier for charities to fulfil their charitable purposes.

However, in supporting the Bill, I ask the Minister to clarify why the Government did not accept all the Law Commission’s recommendations. In particular, recommendation 40, which states that

“it should be possible to obtain authorisation to pursue ‘charity proceedings’ under section 115 of the Charities Act 2011 from either the court or the Charity Commission in circumstances where the Charity Commission would face an actual or apparent conflict of interests”.

[Rachael Maskell (York Central) (Lab/Co-op)]

My hon. Friend is making an excellent speech. I too wanted to pick up on recommendation 40, because the Government’s response refers to non-legal remedies without setting out what they are. As a result, how to seek proper restitution must be made clear to trustees and charities.

[Jeff Smith]

I am grateful to my hon. Friend for making that point, and I hope that the Minister will respond in his summing up. The sector was widely supportive of the suggestion, which would provide reassurance for those seeking authorisation and ensure that the Charity Commission is not compromised when making judgments in such cases.

Will the Minister also expand on the Government’s decision not to adopt recommendation 43, which sought to remove the requirement that the Charity Commission obtain the consent of the Attorney General before making a reference to the charity tribunal on a question concerning charity law or its application to a particular case. Organisations from across the charity sector share the view that the Charity Commission is well placed to highlight potentially challenging issues within charity law and that the current requirement for consent presents an unnecessary barrier to ensuring that issues of charity law can be considered and addressed by the tribunal.

On the topic of the Charity Commission, Members will have seen the Digital, Culture, Media and Sport Committee’s hearing last Tuesday regarding the rather shambolic appointment—and now resignation —of Martin Thomas as chair of the Charity Commission. It is remarkable that the appointments system did not pick up the allegations of inappropriate behaviour, despite the charity in question formally reporting the incident to the very regulator that Martin Thomas was appointed to head up, so perhaps the Minister will set out how the Government plan to tighten the system to avoid a similar situation.

As I said earlier, the changes set out in the Bill mean that charities can spend less time jumping through excessively bureaucratic hoops and more time focusing on their core mission. They will also help to protect the public by, for example, stopping them being misled by a charity that deliberately adopts a name similar to that of another charity. We accept that phased implementation will allow charities to put processes in place to manage the new regime.

Like the Law Commission and the Charity Commission, Labour supports the sensible measures in and principles of the Bill and recommend that it be read a Second time.

Dormant Assets Bill [ Lords ] (First sitting)

Jeff Smith Excerpts

Committee stage
Tuesday 11th January 2022 Public Bill Committees

[Jeff Smith (Manchester, Withington) (Lab)]

It is a pleasure to see you in the Chair, Ms Ghani.

I will be very brief. It can be a temptation in Committee for the Opposition spokespeople to get up and repeat what the Minister has said, and say, “We agree”—so, we agree. [Laughter.]

In the section on insurance assets, there is a lot of potential to use money for good causes. We therefore support all the clauses in this section and indeed in the other sections in part 1, so we will not repeat the fact that we think these clauses are generally appropriate safeguards and appropriate processes to go through to ensure that these assets are used in the right way. We support this clause and future clauses.

[The Chair]

As there seems to be agreement, Minister, do you wish to respond?

--- Later in debate ---

[Nigel Huddleston]

Thank you, Ms Ghani. Clause 19 is an important clause. It provides a power to the Secretary of State or the Treasury to bring additional asset classes within scope of the scheme, as we alluded to earlier. That might include ones that have already been proposed for inclusion but whose suitability needs further exploration, new ones, or ones where dormancy has not yet been identified as an issue. The power also enables the Secretary of State or the Treasury to amend the current asset classes so that they can cover new types of assets, and make consequential amendments.

This clause allows the Secretary of State or the Treasury to amend part 1 of the Bill or the 2008 Act by regulations for that purpose, and makes further provision about what such regulations must and can include—for example, identifying when dormancy exists and ensuring that the owner has a right to payment against an authorised reclaim fund. It provides that the Secretary of State or the Treasury may make regulations to enable participants to convert a dormant non-cash asset into cash in order for it to be transferred into the scheme where the asset’s terms do not provide for this. It then makes further provision about the use of this power—for example, that it can be used only with a view to the cash being transferred into the dormant assets scheme.

The clause also ensures that all assets currently in scope cannot be excluded or have their associated definitions of dormancy altered using this power. Finally, it provides that any regulations made under the power must be approved by both Houses of Parliament.

[Jeff Smith]

As the Minister says, this important clause goes to the heart of the Bill and what we are trying to achieve with it, and we supports its aims. Like the Minister, I welcome the millions of pounds that could go to good causes as a result of the assets that we have just agreed, as well as those that could be agreed as a result of the clause.

Having seen the success of the scheme, we want to build on and expand it. We agree that it makes sense to give the Secretary of State or the Treasury the ability to expand the potential of the fund not by bringing back primary legislation, but by consulting—that is important—and proposing new assets to add to the scheme by regulations. We welcome the approval and the important oversight of those regulations by both Houses of Parliament. Indeed, the clause has the potential to save future generations of MPs from sitting in a future Bill Committee for another dormant assets Bill. [Laughter.]

We particularly welcome the measures as a first step towards the potential inclusion of future pension assets in the legislation. May I press the Minister a little more on that? I think the Minister agreed in principle to the inclusion of additional pension assets, but my hon. Friend the Member for Pontypridd asked for an indication on when those might be included, because we are keen to expand the fund appropriately. The Minister talked about a mechanism for that inclusion, but he did not want to put a commitment on the face of Bill. It would be nice to know what sort of timescale we are looking at for including future pension assets.

The clause really goes to the heart of the Bill’s purpose: how can we expand the good work the scheme has done, and what other assets can we use to benefit good causes? People have talked about all kinds of different assets that could be included in future, including foreign currency cash balances, empty properties, national savings, proceeds of crime, trust funds and lifetime ISAs, which the hon. Member for Glenrothes mentioned.

We are keen for all those ideas to be explored to build on the good work of the scheme, and we hope to hear in future suggestions that we have not yet discussed. We agree that the Government should be free to explore them, and we believe that the Bill contains appropriate safeguards and oversight, so we welcome this clause.

[Peter Grant]

It is important to place on the record that I—and, I hope, every Member of Parliament—have a very strong presumption against the concept of Henry VIII powers. It should be an important principle that when Parliament passes primary legislation, only Parliament should be allowed to change it by actively and positively choosing to do so.

In this particular circumstance, the proposed solution is appropriate because it is very tightly constrained. As the hon. Member for Manchester, Withington, pointed out, there are strict limits on the circumstances in which and the process by which the powers can be used. Just as a lot of careful drafting has had to go into the extensions to the scheme that are included in the legislation, it is important to recognise that none of us knows what kinds of financial assets people will hold in 10 or 15 years’ time. People might have significant amounts of money in assets of types that we cannot imagine. For those circumstances, secondary legislation is the more appropriate way to bring those assets in scope.

There are two fundamental requirements in the Bill that have to stay there. First, if Henry VIII are being used, the scheme must always be entirely voluntary, and secondly, the owner must always retain the absolute and indefinite right to come back and reclaim assets that are rightfully theirs. As long as those two requirements are in the Bill, I think that, on this very rare occasion, the use of Henry VIII powers is appropriate and justified.

--- Later in debate ---

[Nigel Huddleston]

Clause 20 introduces a means for the reclaim fund to transfer additional surplus money from the alternative scheme back to the participant to be distributed to its chosen charity, in accordance with section 2 of the 2008 Act. The alternative scheme enables firms with balance sheets below £7 billion to transfer an agreed proportion of dormant account funds to the reclaim fund, and nominate a local or aligned charity to receive the surplus. As it has with the main scheme, Reclaim Fund Ltd may review, in time, the proportion of assets it reserves from the alternative scheme on an ongoing basis and, where prudent, reduce reserve rates to release surplus funds.

Currently, such surplus funds from the alternative scheme can go only to the National Lottery Community Fund. Clause 20 will ensure that the funds are directed to charities of the participants’ choice for the benefit of local communities, in line with the principles of the alternative scheme. Aside from this, the alternative scheme will remain as it is. I commend clause 20 to the Committee.

[Jeff Smith]

Labour supports the provisions in clause 20 relating to the alternative scheme, which enables eligible smaller building societies and banks to support local causes of their choice. It is right that, if an authorised reclaim fund remodels the proportion of funds that it reserves for reclaims, any surplus money should go back to organisations participating in the alternative scheme, to be distributed to their chosen local charities.

We actively encourage authorised reclaim funds to assess whether a greater proportion of the fund could go to good causes, based on what we now know about how many people are likely to reclaim their assets and how they can manage their funds. That is the intention of Labour’s new clause 2, which we will discuss later. We support measures in the Bill that will allow that to work in practice.

[Nigel Huddleston]

I do not have much further to add. I know that this topic will be debated later in Committee, but I completely agree with the principles that the hon. Gentleman outlines.

Question put and agreed to.

Clause 20 accordingly ordered to stand part of the Bill.

Clause 21

Unwanted assets

Question proposed, That the clause stand part of the Bill.

[Nigel Huddleston]

The dormant assets scheme requires participants to have attempted to reunite an asset with its owner before it can be classed as dormant and transferred to the scheme. When reunification efforts are successful, the owner may decide that they no longer want their asset. That could be, for example, because the asset is of low value and the owner does not want the administrative effort of reclaiming it—such as, say, £5 in a deposit account, a share worth £2 and so on. Clause 21 enables these unwanted assets to be donated to the scheme. The owner must declare that no other person has a right in or over the asset, and an authorised reclaim fund must consent to the transfer. Finally, this clause provides that unwanted assets cannot be reclaimed from unauthorised reclaim funds, given that they have been donated by the owner.

[Jeff Smith]

I am starting to do what I said I would not do. We agree with the clause, and think that it will encourage more charitable giving, resulting in more money going to the scheme and meaning more money for good causes. We support the clause—I am going to stop repeating and agreeing.

[The Chair]

Agreement is good, Mr Smith.

Question put and agreed to.

Clause 21 accordingly ordered to stand part of the Bill.

Clause 22

Third party rights and interests

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Jeff Smith]

Briefly, this clause and the following two are essentially tightening up the arrangements for the management of the scheme, and we are very happy with them. In some cases, they are firming up in legislation what is already happening in practice. We think these provisions have an appropriate level of processes and safeguards and we support them.

[The Chair]

I assume, Mr Smith, that you will not be commenting on the next two clauses as you have made your contribution now?

[Jeff Smith]

That is correct.

Question put and agreed to.

Clause 22 accordingly ordered to stand part of the Bill.

Clause 23

Arrangements between reclaim fund and institutions

Question proposed, That the clause stand part of the Bill.

[Nigel Huddleston]

I have no problem with the Opposition agreeing on things—it is quite nice to hear. I think that it speaks to the broad support for the Bill, and therefore it is important that we get on record that there is such agreement in so many areas of the Bill.

Clause 23 introduces requirements on the reclaim fund and participating institutions to have appropriate arrangements in place before the transfer of funds into the dormant assets scheme. The Government want to ensure—as do the Opposition—that only genuinely dormant assets are transferred into the scheme. The clause therefore specifies that the agreements must require participants to take steps to reunite asset owners with their lost assets. The requirement is not new, but making provision for it in the Bill will strengthen existing practices that have ensured the scheme’s success over the past decade.

Question put and agreed to.

Clause 23 accordingly ordered to stand part of the Bill.

Clause 24

Effect of insolvency etc of institutions

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Nigel Huddleston]

Clause 26 names RFL as the authorised reclaim fund and provides the Treasury with the power to add, substitute and remove the name of reclaim funds from the Bill in the future, should that be required.

[Jeff Smith]

We accept the definition of authorised reclaim fund and Reclaim Fund Ltd being conferred with that status. It makes sense, I guess, for the Treasury to be able to add or remove companies as appropriate or as required. Can the Minister clarify as to whether he foresees that being used only in the event of Reclaim Fund Ltd ceasing to function or becoming insolvent, or whether he would wish to give several companies at a time the status of an authorised reclaim fund? If it is the latter, what are the merits of that process?

The clause also gives the Treasury the power to specify which assets a reclaim fund can manage through secondary legislation. We agree that is necessary but believe that any changes must be made following a proper and timely consultation and in line with the overarching principles of the Bill. That is the intention of amendment 5 to clause 29, which we will discuss shortly.

[Nigel Huddleston]

The hon. Gentleman is right; we will discuss some of those features later on in the Bill. The definition of an authorised reclaim fund came into effect under the 2008 Act. Since then, RFL has been the only company to fulfil that function and therefore plays an integral role in the scheme’s success. In recognition of that and given RFL’s new status as a Treasury arm’s-length body, the clause names RFL as the only current authorised reclaim fund for the purpose of the dormant assets scheme. Naming RFL as the only authorised reclaim fund in that way prevents additional competing reclaim funds being set up without Treasury consent and ensuring that the reclaim fund for the scheme is fit for purpose and is essential in maintaining the principle of customer protection.

The clause allows the Treasury to remove RFL as an ARF in the future, in case RFL ever became unable or unwilling to fulfil the function of a reclaim fund. It also enables the Treasury to add the name of a new reclaim fund to the Bill, should another reclaim fund ever need to be set up in the future for circumstances which, again, we may not be aware of at the moment. The clause also gives the Treasury the power to specify which assets a reclaim fund is responsible for managing. As for some of the other features mentioned by the hon. Gentleman, we will discuss them later.

Question put and agreed to.

Clause 26 accordingly ordered to stand part of the Bill.

Clause 27

Treasury loans

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Nigel Huddleston]

The hon. Gentleman is correct. The Treasury loan replaced the protection established through clause 27 of the Bill, which RFL can use if it becomes, or is likely to become, unable to meet its claims. Therefore, that protection is in place between clauses 27 and 28.

Question put and agreed to.

Clause 28 accordingly ordered to stand part of the Bill.

Clause 29

Distribution of dormant assets money for meeting English expenditure

[Jeff Smith]

I beg to move amendment 5, in clause 29, page 22, line 11, at end insert—

“(1A) An order under subsection (1) must be consistent with criteria published by the Secretary of State setting out the principles to be used when making a determination as to whether restrictions, or no specific restrictions, are to be applied to distributed dormant assets money for meeting English expenditure.

(1B) Prior to publishing the criteria under subsection (1A), the Secretary of State must consult on the purposes for which the dormant assets money may be distributed, and the criteria to be applied therein.

(1C) A consultation under subsection (1B) must conclude not more than 3 months after it is announced.”

This amendment would require the Secretary of State to publish and apply criteria to be used when determining the purposes for which dormant assets money can be distributed. The criteria must be the subject of a consultation which must last no longer than 3 months.

I will also speak briefly to amendment 4, which stands in my name and that of my hon. Friend the Member for Pontypridd; to Government amendment 1; and to amendment 3, which stands in the name of my right hon. Friend the Member for Kingston upon Hull North.

Amendment 5 is a probing amendment to test the nature of consultation. The Secretary of State is committed to consultation on the social and environmental focus of the English portion of the funds before making changes to the causes that could be supported by the scheme via secondary legislation. Labour supports the need for consultation: we want to ensure that it is carried out thoroughly and properly, but also promptly. Progress on expanding the dormant assets scheme has been slow over the years. The scheme has worked well, but given that it was set up in 2008, it has taken a long time to come forward and be expanded. We want to make sure that more good causes can benefit more quickly, so we do not want further delays, which is why we support a quick, broad-based consultation when there are proposals to bring new assets forward. We think that the consultation should conclude no longer than three months after it has been announced.

We are also conscious that “social and environmental causes” could mean a number of different things to different people. It could be argued that the lobbying work of a political think-tank could be defined as advancing a social or environmental cause and so, too, could the spending of a Government Department, but I think we would all agree that those would not be appropriate uses of this money. To clarify those issues, amendment 5 requires that the Secretary of State uses the consultation period to define criteria for future uses of the fund, and publishes and keeps to those criteria. We agree that specific causes should be decided upon based on consultation and responding to need, but those decisions can be focused and guided by set principles that will ensure that inappropriate causes are not set up to benefit by the Government of the day, whoever they may be.

Labour is conscious that the four organisations that have so far benefited from the scheme in England, which are Big Society Capital, Access—the Foundation for Social Investment, the Youth Futures Foundation and Fair4All Finance, have all done a really good job. We want those organisations to be able to continue carrying out their important work, so can the Minister assure us that in the event of the Government making future changes to how the money should be spent, those organisations would have nothing to fear, and can he put on record that the broad aims of the scheme remain the same?

I also want to address Government amendment 1. We are disappointed that the Government are proposing to remove the sections relating to community wealth funds. The amendments that were made in the Lords allow the Secretary of State to include community wealth funds—

[The Chair]

Order. We are moving on to amendment 1 later. Do you want to wait for that discussion?

[Jeff Smith]

I thought we were doing amendment 1 as part of this group.

[The Chair]

We are just doing amendment 5 to clause 29.

[Jeff Smith]

I beg your pardon; I thought we were debating them all together. In which case, I will—

[The Chair]

You could just sit.

[Jeff Smith]

I will sit down, yes. [Laughter.]

[Peter Grant]

I feel a bit of a charlatan: after debates on 28 and a half clauses, we finally come to a vote, but it is on something that, ethically, I should not vote on, because it applies to England only. I will make a couple of comments by way of friendly advice to colleagues from all sides of the House before they consider this amendment and others.

First, as the hon. Member for Manchester, Withington mentioned, a fixed amount of money is available to distribute, so any additional purposes can only be implemented if the existing purposes get less money. Allowing new organisations to bid for money can only mean existing organisations run the risk of less funding. That does not mean that that should not be done, but we need to understand the implications. Secondly, it is important to distinguish between the good purposes for which the funding is used and the interests of the organisations that will either deliver the services or administer the funds. Understandably, someone involved with an organisation will think that organisation is the best in the universe at doing a particular thing, but that will not always be the case; there may sometimes be circumstances where a different organisation could deliver the benefits more effectively.

As I say, I do not intend to vote on clause 29 or any of the amendments. I am quite happy now to sit back and watch my friends from England decide on the best way for England to copy the excellent practice that has been in place in Scotland and Wales for a number of years.

[Nigel Huddleston]

I thank the hon. Members for Pontypridd and for Manchester, Withington for tabling amendment 5. I hope to be able to reassure them that the Bill, as introduced, already broadly accomplishes their desired effects, and therefore that the amendment is not necessary. I also appreciate the comments from the hon. Member for Glenrothes, who highlights that Scotland does indeed have greater flexibility at the moment. One purpose of the Bill is to rectify that, so that England can also have some flexibility in how future moneys are disbursed.

I should probably give the warning, or caveat, that while we all expect—in fact, we are very confident—that large amounts of money will be raised through the expansion of the scheme as proposed in the Bill, we of course cannot commit 100% that entities will receive a certain amount of money. We do not currently know how much will be distributed. No individual entity can bank on having a specific amount, although historically the scheme has raised more money than forecast. We cannot plan on that, but I think we are all confident that significant amounts will be raised.

I will give a brief overview of how the scheme works, in the context of amendment 5. The current system works by industry participants voluntarily transferring funds to the dormant assets reclaim fund, the body that administers the scheme, which reserves 40% of these funds in order to meet any future customer claims, with the remaining 60% of surplus then released for social and environmental purposes via the National Lottery Community Fund, the named distributor of dormant assets funding in the UK. It apportions the money among the four nations and then distributes it in line with legislation and any directions given to it by relevant Ministers or Departments.

The devolved Administrations can decide on the focus of their funding so long as it is within the parameters of social or environmental purposes, as the hon. Member for Manchester, Withington mentioned. In England, expenditure is ringfenced for initiatives focused on youth, financial inclusion and social investment through section 18 of the 2008 Act. Currently, funding flows from the National Lottery Community Fund to four independent specialist organisations that work across the three areas. Clause 29 introduces new section 18A to be inserted into the 2008 Act, replacing the current section 18, as the hon. Member for Pontypridd mentioned, which will enable the Secretary of State to consult on the purposes of the English portion and to then set the purposes through an order.

Amendment 5 has three core objectives: first, that there should be considered thought behind choosing the future purposes of dormant assets funding in England; secondly, that the public should be consulted before those purposes are set and should be able to have their say on the logic behind the purposes; and thirdly, that the consultation should not push progress into the long grass but must be proportionate and efficient. I understand the intent of the amendment.

Over the last decade, the scheme has been working to level up the communities that need it most,, supporting frontline organisations to tackle deprivation, developing strong social infrastructure and initiatives at local level, and directing funding to some of the most left-behind areas of the country. Those are some of the broad criteria by which the scheme has distributed funds in England. Those principles have operated successfully within the overarching three purposes set for the English portion to date: tackling youth unemployment and financial exclusion and investing in the nation’s charities and social enterprises. Part of the unique strength of the scheme in England is that the funding has been distributed through four specialist organisations. Within the boundaries of appropriate governance systems, those independent organisations have been free to determine the most impactful and appropriate ways to deliver on their missions, including deciding what criteria to apply and when. We are proud of the impact they have had, and echo the numerous supportive comments made by hon. Members on Second Reading.

The scheme has built a compelling evidence base for these types of intervention and we are committed to ensuring that it continues to benefit the people and communities who need it most. We are also committed to affording everyone a fair opportunity to have their say on the purposes for which funds can be distributed. Proposed new section 18A(6)(a) of the 2008 Act provides that the Secretary of State must consult the public about

“the purposes for which, or the kinds of person to which”

the English portion should be distributed before an order can be laid. The first of those consultations will be launched as soon as possible after Royal Assent; we estimate that it could be as early as this summer. The Government will set out our thinking in that consultation document, and we are committed to inviting all those with an interest to have their say.

In the other House, noble Friends of the Member for Manchester, Withington pressed the Government for a commitment to open the first consultation for at least 12 weeks. We agree that is a proportionate amount of time and have already committed to that. I assure hon. Members that we share the ambition to ensure that the money is released as efficiently as possible. We have no intention of delaying the impact we all want the scheme expansion to have. I am grateful for the spirit of collaboration the House has shown in helping us to achieve that ambition. For the reasons I set out we are not able to support the amendment.

[Jeff Smith]

I thank the Minister for his comments and his reassurance that the Government will continue to uphold the principles and “unique strength” of the current ways of working. Given those assurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Nigel Huddleston]

I beg to move amendment 1, in clause 29, page 22, line 12, leave out subsections (2) to (4).

This amendment removes provisions relating to community wealth funds that were added to the clause at Report stage in the Lords.

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While we are committing to including community wealth funds as an option in the consultation, we have said and will reiterate that we will not predetermine the outcomes. The Government amendment will ensure that the consultation remains an open and fair opportunity for people to have their say in how this important funding stream can have the best impact in England.

[Jeff Smith]

I thank the Minister for his comments. We are disappointed that the Government are proposing to remove the subsections relating to community wealth funds. The amendments made in the Lords that allow the Secretary of State to include community wealth funds as recipients of funding had cross-party support and have generally been welcomed by the sector.

The provisions specify that money from the dormant assets scheme can go toward a community wealth fund to

“support the provision of social infrastructure to further the wellbeing of communities suffering from high levels of deprivation”.

I am surprised that the Government want to remove a measure that empowers communities and surely goes to the heart of the alleged levelling-up agenda. There are Members on both sides of the Committee who represent areas that will benefit from this kind of initiative. The most deprived areas often have the weakest third-sector capacity and infrastructure, which adds to a cycle of disadvantage. Community wealth funds aim to halt that cycle. They are aligned with the aims of the levelling-up agenda and have the potential to transform communities and lives.

Community wealth funds give real power to local people to support local priorities and capacity building. The noble Lord Bassam, who moved the amendment, said that

“the proposal could act as a powerful tool in boosting deprived areas, putting small sums of money in communities’ hands so that they can invest in the facilities or services that would have the most local benefit—perhaps subsidising a community hall, running adult learning classes, supporting skills and training hubs and sports facilities, and improving digital connectivity.”—[Official Report, House of Lords, 16 November 2021; Vol. 816, c. 168.]

We see the amendment as part of the levelling-up agenda and a way of empowering communities, as well as an opportunity to trial new and innovative ways of funding.

I note that the amendment itself was a compromise. It simply allows the Secretary of State to include community wealth funds. In Committee in the Lords, there was a more substantial proposal to include local trusts. Because the Government said there was still work to do on the proposals, the amendment was passed, and it is essentially permissive. The decision on when to move forward is with the Secretary of State, which makes it all the more disappointing that the Government want to block what I think is quite a modest and sensible measure.

I thank the Minister for his comments on the consultation. I am grateful for his commitment that the community wealth fund will be an option to consider in that first consultation; that is good news. However, we believe that this is an important measure, and we would like to see the principle of it written into primary legislation. As my hon. Friend the Member for Pontypridd said, the principles of this Bill and the 2008 Act are generally too broad to guarantee that the community wealth fund is included; the principle must be framed in primary legislation. I therefore urge Members to reject the Government’s amendment, notwithstanding the welcome comments from the Minister on the consultation.

They always say that the first rule of politics is to learn to count. I appreciate that the Opposition might not defeat the Government on this one, so as a greater compromise, I also urge Members to support the cross-party amendment, which I think the Minister has effectively accepted as the right way forward. I leave it to my right hon. Friend the Member for Kingston upon Hull North to speak to her amendment.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Ghani. I rise to oppose Government amendment 1 and commend amendment 3.

As we know, Government amendment 1 removes the provisions to create a community wealth fund as a means of tackling deprivation and building social infrastructure in left-behind communities. The Bill was amended in the other place to include those specific provisions. As we know, that amendment enjoyed significant cross-party support, including from Lord Hodgson from the Conservatives, Lord Bassam and Baroness Lister from Labour, Baronesses Kramer and Barker from the Liberal Democrats, Baroness Bennett from the Greens, and the Lord Bishop of Ely.

I oppose Government amendment 1 for two reasons. First, the Bill, as a piece of primary legislation, is an excellent opportunity to set out clearly not only the mechanism for the acquisition of dormant assets, but some of the priorities for their distribution. It is worth noting, as my hon. Friend the Member for Manchester, Withington just set out, that the clauses inserted by the other place are permissive, allowing the Minister and the Government if they so wish to enable the creation of funds to be established for community wealth funds.

That helps to set out the current thinking of this Parliament—that we recognise the importance of community wealth funds, and that we would like to see Government investment in that area. If the distribution of dormant assets is not identified with clear markers at this stage in proceedings, after so many years of discussion and debate, that would be a missed opportunity.

I do not believe that the Minister is correct in claiming that secondary legislation is the most appropriate mechanism for deciding on the distribution. We all understand that there is limited opportunity for debate on secondary legislation, and there is, of course, no opportunity to amend it. That means Parliament’s role will be limited to rubber-stamping the Government’s proposals.

With the expanded scheme expected to generate close to £1 billion of new funds for good causes, decisions about those causes are important and should be subject to proper debate and scrutiny in Parliament, rather than just introduced in secondary legislation. I know that Members across the House will want an opportunity to make the case for funding for their own constituencies and for many other good causes—of course they will; of course we all will.

I would argue that the creation of a community wealth fund is a matter of some importance to the Government themselves, with their levelling-up agenda for the most disadvantaged and left-behind areas. We hear so much about that from the Government, and it is really in their interest to have that on the face of the Bill.

There is, of course, a precedent here. It should be noted that the first causes to benefit in England—social investment, financial capability and projects for young people—were all written into the original 2008 Act. I therefore believe that it would be beneficial to keep provisions relating to the community wealth funds in this Bill to make clear what the money will be used for, and that it is the clear will of Parliament. I know the Government do not want dormant assets to be used to supplement their day-to-day spending, but without direction and clarity in the Bill, that could be one unintended side effect. We need a very clear direction of travel, which clause 29 currently provides.

The second reason I oppose the Government’s amendment to remove the provisions for a community wealth fund is that any consultation process on how assets should be distributed could take some time. In his opening remarks, the Minister referred to the summer and talked about a 12-week consultation period, so it seems likely that the rest of 2022 will be gone before we get to the point of any secondary legislation being brought to Parliament.

If the Government really are serious about their levelling-up agenda, keeping the provision for community wealth funds in the Bill is an opportunity that helps the Government. The community wealth fund commands broad support. Polling research shows that the proposal would have support among senior leaders in the financial services industry, whose endorsement the Government have said is key. Were the fund to remain written into the Bill, the Community Wealth Fund Alliance could start the process of securing match funding and planning to get money into the most left-behind communities as soon as possible after Royal Assent.

I ask the Minister to reconsider on the basis of those arguments. I genuinely believe that this measure would assist the Government with one of their flagship policies.

I move on to amendment 3, in the name of my hon. Friend the Member for Sedgefield (Paul Howell), my co-chair of the all-party parliamentary group for “left behind” neighbourhoods. If amendment 1 is passed, amendment 3 offers an alternative approach, as it would require the Government to

“specifically consult on the merits of establishing a community wealth fund”.

As drafted, the Bill was silent on the purposes that the cash from this next wave of dormant assets would be spent on. As we know, the Government estimate it could be as much as £900 million. As I just set out, that lack of clarity contrasts very clearly with the original legislation, the Dormant Bank and Building Society Accounts Act 2008. The causes that would be supported—social investment, financial inclusion and projects for young people—were very clear in that legislation, so it makes sense to me, given the amount of money at stake and the enormous contribution that the dormant assets scheme will make to good causes, that the matter of where the money is spent should be debated in and ultimately determined by Parliament.

In response to efforts to assist the Government by putting in the Bill powers to establish pilot community wealth funds, the Minister is arguing that the Bill should not cover the specifics and set out the purposes that the funding should be directed to, and that such important detail should be left to the secondary legislation, albeit informed by public consultation. I note what the Minister has committed to do. He said that the community wealth fund would be a part of the first round of consultation, but I would like to push him a little further. Will he meet me and the others who are advocating the establishment of a community wealth fund halfway? Amendment 3 is probing at this stage. I am not going to force the issue to a vote today, but I want to test the Minister further on whether he might be minded to include the community wealth fund as a named and clearly identified object category in that first consultation by putting it in the Bill, if not at this stage, perhaps on Report.

The noble Lord Parkinson, the Under-Secretary of State for the Department for Digital, Culture, Media And Sport in the other place, said

“the Government will consider including community wealth funds in the first consultation launched under Clause 29.”—[Official Report, House of Lords, 16 November 2021; Vol. 816, c. 192.]

The Minister has reiterated that commitment today, but I would like a bit more reassurance from him. I hope we might be able to persuade him to go one small step further and to confirm that it would be written into the Bill, which would be really helpful. That would give those of us in the House who have advocated for this proposal a great deal of comfort, and I think it would be a really popular measure for the Government. It is clearly established as a principle that dormant assets should be used for good causes—in other words, for voluntary and community action, independent of the state—and the voluntary and community sector has already signalled its support for the community wealth fund.

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Amendment 1 agreed to.

[Jeff Smith]

I beg to move amendment 4, in clause 29, page 22, line 41, at end insert—

“18B Distribution of money for meeting English expenditure: Requirement to report annually

(1) The Secretary of State must lay before Parliament an annual report detailing how dormant assets money has been distributed in England.

(2) The first report under subsection (1) will be laid 12 months after—

(a) any restriction imposed under section 18A(1)(a) of that Act comes into force, or

(b) the provision in section 18A(1)(b) of that Act comes into force,

(3) A report under subsection (1) must include—

(a) how much dormant assets money has been distributed,

(b) the causes to which money has been distributed, and

(c) the Secretary of State’s assessment of the value for money of the expenditure.”

This amendment would require the Secretary of State to report annually on how monies from the Reclaim Fund have been spent in England, including an assessment of the value for money of this spending.

This is another probing amendment, and would require the Secretary of State to report annually on how moneys from the Reclaim Fund have been spent in England, including an assessment of the value for money of the spending. The Labour party believes in the values of transparency and good value for money. Annual reporting on the spend would help to demonstrate whether the funds were being used effectively and for good causes, as intended. It would allow better scrutiny of which causes were being supported and the impact they were having. It could also help to inform future changes that the Secretary of State might want to make through secondary legislation, and would clearly show what is being delivered in practice. We urge the Minister to take this suggestion on board.

[Nigel Huddleston]

I thank the hon. Member for Manchester, Withington for the amendment and his contributions to the debate so far. As numerous reports are already conducted on the distribution of dormant assets funding, including annual reports from the National Lottery Community Fund and each spend organisation in England, I hope to reassure the Committee that amendment 4 is not necessary.

To date, in England, dormant assets funding has been distributed through the National Lottery Community Fund to four independent specialist organisations. The spend organisations’ operations are regularly reviewed by the Oversight Trust, an independent organisation that ensures accountability and transparency around each of the spend organisations’ activities. The Oversight Trust commissions quadrennial reviews of each organisation to examine their effectiveness in delivering against their respective missions.

As the main distributor of dormant assets funding across the UK, the National Lottery Community Fund already publishes annual statements on the impact of the scheme, alongside annual reports conducted by each of the spend organisations and the quadrennial reviews published by the Oversight Trust as the parent body. There are also annual reports by Reclaim Fund Ltd, the scheme’s administrator. Another review will be published as part of the overall scheme within three years of the Act passing and every five years thereafter. That is on top of the annual reporting I have outlined.

We feel that that is the most appropriate route to avoid placing repetitive, cumbersome and unnecessary further requirements on the organisations entrusted with dormant asset funding. With that explanation of the existing reviews, I hope the hon. Member will withdraw the amendment.

[Jeff Smith]

I thank the Minister for his comments and I appreciate the fact that he has outlined the number of reviews that currently take place and the excellent work of the Oversight Trust and the various organisations involved. The Bill does give Parliament flexibility in terms of a way forward. We think that these reports should directly inform Parliament, which is why we proposed annual reports to Parliament. However, having listened to the Minister’s comments and assurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 29, as amended, ordered to stand part of the Bill.

Clause 30

Periodic review and report to Parliament

Question proposed, That the clause stand part of the Bill.

[Nigel Huddleston]

Clause 30 provides that the Secretary of State must review and report on various aspects of the dormant assets scheme on an ongoing basis. That will ensure momentum for further scheme expansion, greater transparency over the use of funds, and reporting on how the principle of additionality has been met. The results of the review must be laid in a report before Parliament within three years of the Bill receiving Royal Assent and every five years thereafter. The report must also include information about the uses of dormant assets money, including the principle of additionality, and will build on reports already published. I commend clause 30 to the Committee.

[Jeff Smith]

We do not oppose the broad principle of reviewing the scheme. We support a wide-ranging review of all aspects of the scheme, which is why we tabled amendment 4 regarding annual reviews. Holding a review more frequently than the proposed three and subsequent five years would be beneficial, and I ask the Government to look at that in future. However, we will obviously not oppose the clause.

[The Chair]

That is very welcome, Mr Smith.

Question put and agreed to.

Clause 30 accordingly ordered to stand part of the Bill.

Clause 31

Regulations: general

Question proposed, That the clause stand part of the Bill.