Charities Bill [Lords]

Public Bill Committee, 4 July 2006.

Standing Committee A

Joan Humble (Labour, Blackpool North and Fleetwood)

I remind the Committee that there is a money resolution in connection with the Bill, copies of which are available in the room. As a general rule, adequate notice should be given of amendments. I and my fellow Chairman do not intend to call starred amendments, including any that may be reached during an afternoon sitting of the Committee. Given the weather forecast for today, hon. Gentlemen may remove their jackets. I call the Minister to move the programme motion.

Ed Miliband (Labour, Doncaster North)

I beg to move,

That—

(1) during proceedings on the Charities Bill [Lords] the Standing Committee shall (in addition to its first meeting at 10.30 a.m. on Tuesday 4th July) meet—

(a) at 4.00 p.m. on Tuesday 4th July;

(b) at 9.00 a.m. and 1.00 p.m. on Thursday 6th July;

(c) at 10.30 a.m. and 4.00 p.m. on Tuesday 11th July;

(d) at 9.00 a.m. and 1.00 p.m. on Thursday 13th July;

(2) the proceedings shall be taken in the following order: Clauses 1 to 6; Schedules 1 and 2; Clauses 7 and 8; Schedules 3 and 4; Clauses 9 to 12; Schedule 5; Clauses 13 to 30; Schedule 6; Clauses 31 to 34; Schedule 7; Clauses 35 to 74; Schedules 8 to 10; Clauses 75 to 78; new Clauses; new Schedules; remaining proceedings on the Bill;

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 4.00 p.m. on Thursday 13th July.

It is a pleasure to serve under your chairmanship, Mrs. Humble. The Committee has the privilege of considering a Bill that will make a real difference to the charities and people of this country. As I said on Second Reading, it has been well researched, having been the subject of the strategy unit report of 2002 and well examined by the Joint Committee. I welcome the fact that the programme motion will allow 20 hours of debate in Committee.

The Government will approach the Bill in a charitable spirit, listen to arguments that are made by hon. Members on both sides of the Committee and take on board those suggestions that make sense and which will contribute toward a better Bill. I am delighted to be ably assisted by my hon. Friend the Member for Erewash (Liz Blackman), the Government Whip. As a former teacher, she will ensure good order and behaviour—at least on our side. The Bill’s scrutiny will be improved by the Opposition spokesmen, the hon. Member for Cheltenham (Martin Horwood), who has direct experience of working in some of our major charities, and the hon. Member for Isle of Wight (Mr. Turner), who is well known for his diligence and attention to detail.

We also have a wealth of wisdom and expertise on the Government Benches, including that of my right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael), the former deputy Home Secretary, and my hon. Friend the Member for High Peak (Tom Levitt), the chair of the all-party group on the community and voluntary sector, and many other talented Members.

We all agree that the proper scrutiny of the Bill is an important service that Parliament owes to the charities of this country, so we on the Government side will keep our contributions short and to the point, so that all clauses of the Bill can be considered properly.

Andrew Turner (Conservative, Isle of Wight)

Mrs. Humble, it is a pleasure to serve under your chairmanship. As the Parliamentary Secretary said, the Bill is important and presents a huge number of opportunities for charities. We shall do our best to scrutinise it in an effective manner and not waste time. We are anxious to ensure that it is examined in an even fashion, not least because part 3 was not as vigorously scrutinised in another place as some other parts have been.

As a former teacher, I assure the Parliamentary Secretary that that qualification does not enable anyone to impose discipline on anyone else. It is far more a matter of personality than of former occupation. However, Opposition Members will do their best to scrutinise the Bill in the expected manner.

Clause 1

Martin Horwood (Liberal Democrat, Cheltenham)

I beg to move amendment No. 70, in clause 1, page 1, line 9, leave out subsection (2).

Joan Humble (Labour, Blackpool North and Fleetwood)

With this it will be convenient to discuss the following amendments: No. 1, in clause 2, page 2, line 22, at end insert—

‘(1a) the promotion of the efficiency of the police service or the advancement of welfare for police officers or former police officers and their dependants.’.

No. 2, in clause 2, page 2, leave out lines 26 and 27 and insert—

‘belief in a supernatural principle, being or thing and acceptance and observance of certain canons of conduct to give effect to those beliefs,’.

No. 53, in clause 2, page 2, line 34, leave out paragraph (d).

No. 3, in clause 2, page 3, line 7, leave out subsection (7).

Martin Horwood (Liberal Democrat, Cheltenham)

Mrs. Humble, I echo the comments of the other Front-Bench spokesmen and express my gratitude for your chairmanship, which I am sure will enlighten what may in some respects be a heated debate. I congratulate the Minister on the tone of his introduction to our proceedings and on his approach to the Bill generally. It is much appreciated. Like the hon. Member for Isle of Wight, I think that, although members of the Committee will undoubtedly disagree on certain matters, the general tone of the debate will be constructive and intended to improve the quality of the Bill.

Amendment No. 70 would remove subsection (2), which seems to lock inconsistency into charity law. That raises a general issue for many charities, particularly those membership and fundraising organisations that often confer minimal benefits, such as newsletters or membership of a scheme, in return for otherwise charitable donations, and which in the past have struggled with numerous definitions of what is and what is not charitable.

For example, let us suppose that a membership organisation or another organisation wished to launch a fundraising scheme—not a formal membership drive, but a fundraising scheme that is designed to attract members and which offers in return some modest benefit, such as visits to premises or a newsletter. The mere fact that it is a charitable organisation would not in the past have been sufficient to convince the Inland Revenue or Her Majesty’s Customs and Excise that the proposed scheme was fully charitable. It would have been necessary for the charity to go through another set of hoops to satisfy the Inland Revenue and qualify for gift aid, and through another, different set of hoops to persuade Customs and Excise that it should not carry VAT.

The merger of Customs and Excise and the Inland Revenue into Her Majesty’s Revenue and Customs seemed to offer the prospect of ironing out that type of inconsistency. That was an encouraging sign of joined-up government, but I talked to a fundraiser the other day who said that, if anything, the situation seems to have got worse since the merger. There is clearly an issue for the Government to address, if not through the amendment then by other means, and I would be grateful for the Minister’s comments.

Amendment No.1, tabled by the hon. Member for Isle of Wight would insert:

“the promotion of the efficiency of the police service or the advancement of welfare for police officers or former police offers and their dependants;”

That is a worthy cause, which should be regarded as charitable and which deserves our complete support. My only slight reservation is that we already have 13 heads of charity. If we added everything that we can think of, we could end up with a list that is hundreds long.

Alun Michael (Labour, Cardiff South and Penarth)

How would the hon. Gentleman support that amendment? As he said, it seems worthy of support, in theory and at first blush, but how would he deal with firefighters, those who man lifeboats and members of similar professions that provide a distinct and special service?

Martin Horwood (Liberal Democrat, Cheltenham)

That is a reasonable point. However, part of one of the new heads of charity is “the saving of lives”, which might encompass both of the right hon. Gentleman’s suggested examples. On the one hand, the amendment might seem to be over-egging the pudding somewhat, but on the other hand, this is probably the last opportunity that anyone has to add to the list of 13, and I have no problem with making it a list of 14. I would be happy to see the amendment made: it seems harmless if not entirely necessary, given that provisions for analogous charitable purposes might well have allowed the subject of the amendment to pass through as a charitable purpose.

Tom Levitt (Labour, High Peak)

I am intrigued as to whether we are going to have two weeks of debate on amendments promoted on the basis that they are harmless, albeit not entirely necessary. Will the hon. Gentleman clarify that that is not the approach he will be taking to the Bill as a whole?

Martin Horwood (Liberal Democrat, Cheltenham)

I am grateful to the hon. Gentleman for that intervention, which I am sure was made in the friendly spirit of the debate. In general, we should not seek to add unnecessary provisions, but as I said, this is the last opportunity to add to the list of 13. I see no problem with adding what the amendment proposes.

Amendment No. 2 is much more serious. It would replace the hard-negotiated provision that emerged from another place, which does not seek to define religion but does at least say that religion includes:

“(i) a religion which involves belief in more than one god, and

(ii) a religion which does not involve a belief in a god”.

That is quite an important and thoughtful provision in the Bill as it stands. The hon. Member for Isle of Wight wishes to replace it with what seems to be an attempt to define religion—a brave thing for a politician to do. However, there are many examples of religions that might not pass the test set out in the amendment.

Belief in a god is not the only critical factor in a religion. Many religions regard the universe and everything in it, including any beings such as gods or deities, as within nature and one part of a whole. Theravada Buddhism, Taoism and, arguably, many disciplines within Hinduism might present their beliefs as “all within nature”, so to them the idea of anything being supernatural would be meaningless. Amendment No. 2 would therefore be difficult for many eastern religions to accept.

I suspect, however, that the amendment is aimed not at eastern religions but at those people who have no belief in God. The important element of the amendment may be its removal of the reference to

“religion which does not involve belief in a god”.

In other words, it is aimed at those secularists and humanists who have religious instincts but do not believe in a deity. According to the last census, 17 per cent. of my constituents fall into that category. It is not for us, using the Charities Bill, to say that according to our definition such people do not have a religious belief. Humanists have strong ethical and moral positions on many issues and canons of conduct derived from moral and philosophical beliefs. To deny that they are religious in the same sense as people who happen to believe in a deity is insulting to their beliefs. They have a sense of awe and wonder at the universe and the natural world and take great inspiration from the majesty of nature and its processes. That they do not fall into the hon. Gentleman’s category of having

“belief in a supernatural principle”

does not mean that they are not religious in the sense that the Bill is trying to suggest.

Even some parts of the Church of England might have a problem with the amendment. Some dioceses might take issue with having to believe in a god as defined in the Bill. I can imagine a diocese losing its charitable status one day after the bishop reflects on his theology course and decides that he does not believe in God after all, or at least not in the sense that is popularly intended.

Many organisations, including devout religious organisations such as the Association for British Muslims, are perfectly happy with the current phraseology. The association wrote to me and, I suspect, to other hon. Members to say that the clause will remove the requirement that religion, in charity law, necessarily involves worship of a supreme being and will open the way for religion to be interpreted broadly and on international human rights principles. Before the Bill left the House of Lords, Lord Bassam accepted that worship was not a necessary component of religion in charity law. According to the Association for British Muslims, that appeared to be a satisfactory conclusion to the definition question, and the association went on to query the Charity Commission’s intentions in respect of implementing the clause sufficiently liberally.

The clause, which has commanded widespread support, was the subject of thoughtful negotiation. We should not overturn it hastily in favour of the idea of a supernatural principle, which is open to a lot of interpretation.

James Duddridge (Conservative, Rochford and Southend East)

I am unclear whether the hon. Gentleman’s main problem is with the deletion of lines 26 and 27, or with the insertion of the wording proposed in the amendment. The wording comes from Australian law, where it is used quite satisfactorily.

Martin Horwood (Liberal Democrat, Cheltenham)

One is probably intended to achieve the other. There is clearly a problem with trying to define religion using the term “supernatural principle”, which may well not apply to many religious traditions, whether they involve belief in a god or not. There is also a problem with taking out those two lines, which were thoughtfully negotiated and would guarantee charitable status for traditions that do not involve belief in a single god.

I am not attempting to demonstrate that my view on religion or the definition of religion, my interpretation of humanism as religion or even my interpretation of Theravada Buddhism or Taoism is absolutely correct. I am simply pointing out that the issue is a minefield into which politicians should not stray. The hon. Member for Isle of Wight would be wise to withdraw his amendment.

Andrew Turner (Conservative, Isle of Wight)

I am of course grateful for the hon. Gentleman’s unsolicited advice, but does he really mean it when he says that humanism is a form of religion?

Martin Horwood (Liberal Democrat, Cheltenham)

The existing charity law allows charitable status to the British Humanist Association, so I hesitate to contradict our learned judges in their judgment that humanism counts as a religion. There is an organisation that I believe calls itself the organisation of religious humanists—I do not remember the exact name—which has sought to attach to humanism certain ceremonials and rituals and some of the outward forms of traditional religion. The concept is a moveable feast, therefore, and we should hesitate before defining things too closely in the Bill. Existing charity law has been quite adequate in this respect and the new draft Bill provides satisfactory clarification.

We are also considering amendment No. 3, which appears to be intended to remove the clause that would make charitable purposes and public benefit retrospective. I need to listen to the arguments of the hon. Member for Isle of Wight before passing judgment on that. I suspect that amendment No. 53 is the chess amendment, which seeks to remove the requirement for physical exertion in schools as part of the definition of sport. I have a lot of sympathy with that. It might also apply to other, motorised forms of sport that might also pretty clearly count as sport. The Bill’s requirement of physical exertion seems slightly unnecessary, although if the brain is an organ and is exerted in the process of playing chess, that may be physical exertion of a kind.

We could consider an amendment that would define sport as anything that ever appeared in the old BBC programme “Grandstand”, which seemed to cover just about everything, but I suspect that the lawyers would not like that. However, I am sympathetic to the amendment and I look forward to the hon. Gentleman’s supporting comments.

Andrew Turner (Conservative, Isle of Wight)

I shall come to the amendment proposed by the hon. Member for Cheltenham at the end of my remarks, because it ties in well with my amendment No. 3. It is appropriate to start, however, with amendment No. 1, as he has offered his somewhat qualified support for it. It proposes the inclusion of the promotion of the efficiency of the police service and welfare of police dependants as a specified charitable purpose.

I am grateful to the Police Dependants Trust for giving me information on the amendment. The trust spends something like £1.9 million a year in support of police officers, former police officers and their families. It helps some 5,000 families, a number which the trust estimates to be approximately one fifth of the number of families that could be registered and that should perhaps be helped. It was set up after the tragic death of three police officers in Shepherd’s Bush in 1966, which I think was the first occasion when the murder of police officers made an impact on my growing intellect. My intellect may not have grown very far, but that event impacted on it at the time. The trust is a small and efficient organisation that was set up to support the welfare departments of a number of constabularies. However, other organisations would benefit from the amendment as well—many constabularies have their own police charities.

I am proposing the inclusion of the provision because there has been some concern in the trust that it may be excluded if it is not specifically included in the definition in clause 2(2). Its argument is that police officers occupy a unique position in British society as officers of the Crown, whose daily responsibility is to put themselves in harm’s way. I do not for a moment exclude those other representatives of emergency provisions, such as the fire service, the ambulance service and the Royal National Lifeboat Institution to which the right hon. Member for Cardiff, South and Penarth (Alun Michael) referred a moment ago.

Alun Michael (Labour, Cardiff South and Penarth)

Is not the answer the same in respect of the police as it is in respect of those organisations and professions, in that there is no obstacle to charitable registration under the Bill, as drafted? Indeed, is it not the case that the Police Dependants Trust is registered as a charity and there is no suggestion that it would cease to be so if the Bill were enacted?

Andrew Turner (Conservative, Isle of Wight)

I suspect that the same argument could be advanced in respect of clause 2(2)(l), which was added to the Bill in another place for the promotion

“of the efficiency of the armed forces of the Crown”

to be considered a recognised charitable purpose. That seems to represent a similar recognition of the particular role of the police in serving the community and putting themselves at risk.

Alun Michael (Labour, Cardiff South and Penarth)

Is not the argument that, having extended the provision to one particular activity, where do we stop? The hon. Gentleman seeks to extend matters in the same way. We could argue that, in another place, they went further than they needed to although a tradition in both Houses that goes back to almost the first Act of Parliament required that people practise with bows and arrows so that they were ready when they were called to the armed services. We could say that there is a long-standing tradition in the armed services that needs to be treasured in the same way that we treasure arcane and out-of-date legislation, and that it should stay rather than seeming to dilute and diminish the category that was added by their lordships.

Andrew Turner (Conservative, Isle of Wight)

Perhaps we need to reinstate a charitable purpose that had been a charitable purpose until the beginning of the 20th century in respect of the practice of defending oneself and one’s family by the use of arms. That charitable purpose has somewhat disappeared in recent years, but I do not believe that a distinction can be drawn except on the basis of antiquity. One of the things that the Bill is meant to do is to bring charity law up to date, so it would not do any harm to include the welfare of police officers and their dependants, particularly because the Home Office and the police force seem to be withdrawing from becoming involved in such work. That is not because of any malice, but because they want to focus their funds and resources on front-line policing. The funding of police welfare and its provision have suffered and there is a need for a charity such as that to remain involved.

One of the worries that has been drawn to my attention is that the charity commissioners have inspected some police welfare funds and advised them that they are in danger of not being recognised as charitable organisations. That is on the basis of those funds—those charities—making what they consider to be the best decisions about the deployment of their resources in the interests of their beneficiaries. The problem may be the application of the public benefit test that we shall come to later in our debate rather than clause 2, but I am worried—as is the Police Dependants Trust—that too tight a definition of the purpose of the charity could restrict the activities of the trust. It says that its chairman, Norrie Flowers, repeatedly approached the Parliamentary Secretary’s predecessors who were responsible for such matters and those at the Home Office for support for the amendment, but they did not agree with it.

The letter that I have received from the Charity Commission on its treatment of the Police Dependants Trust and similar charities—I am referring to a similar charity in this case—tells me that charities have certainly received formal reviews from the Charity Commission. The commission tells me that such visits are not inspections, but that they are designed to ensure compliance with the legal framework and to advise on good practice. The commission says that it was picking up on the charities because they did not apply a particular test when allocating resources in the interests of needy dependants of police officers and former police officers.

It is worrying that the Charity Commission is imposing such a restrictive test that the Police Dependants Trust and other charities fear that they may be squeezed out. Clause 1(1) states that

“ ‘charity’ means an institution which—

is established for charitable purposes only”.

That is why I believe that it is appropriate to include the Police Dependants Trust and other such organisations within the definition: they have been advised that giving a Christmas bonus to police widows is not a charitable purpose, because it does not involve an assessment of need, and that is why the trust has asked for the amendment. I think that it is frankly silly of the Charity Commission to be so pernickety in the way that they advise, inspect and review small charities, and to expect charities to be so pernickety as well. Nevertheless, that is the advice that the commission has given, and that is why I want the Bill to be amended.

As the hon. Member for Cheltenham said, amendment No. 2 is designed to introduce a clear definition of religion. Contrary to what he said about clause 2(3) being negotiated and agreed, the Committee that scrutinised the draft Bill said that more needed to be done about the definition of religion. The Committee made some proposals, but the reason for my definition is that confusion arises from the Charity Commission’s treatment of charities.

At present, the charity law definition of religion is inconsistent. On the one hand, case law generally indicates that the term refers to philosophies based on belief in, and worship of, a deity. In 1999, the Charity Commission rejected the Church of Scientology’s application for registration on that basis. On the other hand, it has registered organisations that promote multi-deity religions, such as Hinduism, and no-deity religions, such as some schools of Buddhism. I have no particular complaint about what is in clause 2(3); my complaint is about what is not in it, which is why I am proposing what I consider to be a better definition.

Ed Miliband (Labour, Doncaster North)

Modestly.

Andrew Turner (Conservative, Isle of Wight)

The reason I can do so modestly is that it is not my definition.

Martin Horwood (Liberal Democrat, Cheltenham)

If the hon. Gentleman is not concerned about what is already included in paragraph (a), why is he not proposing his amendment by way of addition rather than substitution?

Andrew Turner (Conservative, Isle of Wight)

The reason is that I believe the amendment includes what is in paragraph (a). Technically, it deletes the paragraph, but the words of the amendment are inclusive of the definition in the paragraph. Not all religions believe in a god, or a supernatural being, but they do believe in a supernatural thing or principle. The hon. Gentleman suggested that humanism is a religion. That seems to me to be contrary to the tenets of most humanists, although I accept that there may be some who define humanism as a religion. The current definition, however, does not clarify what a religion actually is—we are left with a complete void on that. The amendment, as my hon. Friend the Member for Rochford and Southend, East (James Duddridge) said, is based on the Australian definition and defines religion as

“belief in a supernatural principle, being or thing and acceptance and observance of certain canons of conduct to give effect to those beliefs.”

Alun Michael (Labour, Cardiff South and Penarth)

I am not sure that it does. Surely the hon. Gentleman’s wording requires the impossible. It is essentially philosophically unsound and confuses beliefs and principles. One cannot give effect to a belief; one either believes something or does not. It is possible to act consistently with a belief or a set of principles based on a belief, but not to put a belief into practice. Therefore, his wording is entirely useless.

Andrew Turner (Conservative, Isle of Wight)

The right hon. Gentleman is clearly cleverer than the whole band of Australian lawyers and judges who found it a perfectly adequate definition. I congratulate him on his imaginative argument. He would probably be paid well at the Australian Bar for promoting it. Putting one’s principles into action is something that politicians try to do every day. I suspect that those with religious beliefs try to do so as well.

Alun Michael (Labour, Cardiff South and Penarth)

The hon. Gentleman has missed my point. Of course we try to put principles into action, but his wording requires beliefs to be put into action. A belief cannot be put into action; one either believes something or does not. Principles are put into action, as he reflected in the wording of his response to me.

Andrew Turner (Conservative, Isle of Wight)

As I said, the right hon. Gentleman might do well if he were looking for a career at the Australian Bar. It is my view—to avoid using a difficult word—that the definition is broad enough to cover polytheistic and atheistic religions and to indicate the boundaries of religion by requiring a belief in something supernatural.

Tom Levitt (Labour, High Peak)

As a non-believer, I am trying to come at the issue objectively, but I do not see how one can have an atheistic religion. It seems to me that a belief system must be based on some belief, but how will that be proven? If I adhered to a religion that I claimed included a belief in a supernatural principle, how would the hon. Gentleman’s amendment test whether the principle that I believed in was supernatural?

Andrew Turner (Conservative, Isle of Wight)

The hon. Gentleman goes down an interesting path. As a believer, I also find it difficult to believe that one can have an atheistic religion, just as I find it difficult to believe that one can describe humanism as a religion. I cannot answer his question, but I can say that the definition has served other common law jurisdictions well. It would have the advantage of allowing religious charities to carry out charitable activities in the practical expression of their belief, whether it is a belief in one god, many gods or indeed no god but another supernatural thing or being.

Martin Horwood (Liberal Democrat, Cheltenham)

As I said in my opening remarks, it is not just a question of belief in a god. It is also a question whether there is anything supernatural—outside or above nature. What does the hon. Gentleman regard as the supernatural principle in Theravada Buddhism?

Andrew Turner (Conservative, Isle of Wight)

I am not sufficiently well acquainted with Theravada Buddhism to answer that question. It would be a question for interpretation by the charity tribunal or the courts. I think that they will be inclined to take the natural understanding of the word “supernatural” in England at the time, and that most people would come to the same view of what is meant by it, although I accept that a minority might have a different view.

Tom Levitt (Labour, High Peak)

Does the hon. Gentleman intend it to be his amendment’s purpose to exclude what we might call the non-religious religions—those with humanistic, agnostic or atheistic views?

Andrew Turner (Conservative, Isle of Wight)

As charities with charitable purposes, certainly not. However, it is my intention that they should continue to be recognised under what has been called the catch-all phrase rather than under subsection (2)(c). Let me make it absolutely clear that that is my intention because it is curious that on the one hand, one should claim that one is humanist and therefore does not believe in religion and yet, on the other hand, claim that humanism is, of itself, a religion.

The British Humanist Association has made the case on human rights and other grounds for the equivalent treatment, within the same words, of humanism and religions. The Bill allows an equivalent treatment within the same clause and within the same section of the same clause. All it does not do is permit an equivalent treatment within the same subsection of the same clause because religions are under subsection (2)(c) and non-religions are included within subsection (2)(m).

The British Humanist Association has said that:

“putting humanism or any comparable beliefs under the catch-all head is not only insulting and discriminatory but is damaging because it gives religion its own head while relegating non-religious belief systems to the residual head, implying that they are not equivalent in kind or value.”

There is no such implication. They are both charitable purposes; that is what clause 2(2) says. All they are is charitable purposes of different kinds. Asserting that they are equivalent and therefore must be treated by the same words is no different from asserting that sport is a kind of religion and therefore it is insulting to the followers of football that that should be covered by subsection (2)(g) rather than subsection (2)(c). Therefore, I hope that the hon. Gentleman will understand that I have no particular down on humanism or humanists but it is curious that they should be described as religious.

Finally, I come to the point raised by the hon. Member for Cheltenham in respect of the letter from Mr. Rosser-Owen. That is an interesting letter because it clearly sets out the problem, which is that the Charity Commission’s interpretation of religion is inconsistent with case law. That is why we have to have something in the provision.

Normally, I would be happy to allow the common law to develop. Later on, I am sure that I will be telling the hon. Gentleman that he ought to allow the common law to develop. However Mr. Rosser-Owen has drawn our attention to the fact that the Charity Commission has said that they will continue to apply the old test, not withstanding the clear intention of the new provision. Its commentary on the religious head of charity says that:

“The advancement of religion includes many different faiths and belief systems involving belief in one supreme being, many or none, including, for example, Christianity, Judaism and Islam as well as Hinduism and Buddhism.”

That letter has been sent to hon. Members. That is reflected in the Charities Bill—I know because I have three copies—that states that the term religion includes

(i) a religion which involves belief in more than one god, and

(ii) a religion which does not involve belief in a god.

The criteria that we use to decide whether or not an organisation is advancing a religion, as that is understood by charity law, include the following. Do adherents have a belief in a supreme belief—that is a question that is addressed by my amendment—do adherents worship the supreme being? There is no obligation for worship in my amendment. Does the organisation advance the religion and is the organisation established for the benefit of the public? It is my view that the Charity Commission’s statements in paragraph 10 are contradictory with the case law and with the law as it is set out in the Bill.

Martin Horwood (Liberal Democrat, Cheltenham)

I am grateful to the hon. Gentleman and I hesitate to accuse him of selective quotation but that is what he is doing. The letter from Mr. Rosser-Owen specifically supports the existing phraseology in the Bill. Therefore to use it in support of his amendment, which removes that wording, is perverse, is it not?

Andrew Turner (Conservative, Isle of Wight)

The problem is that the Charity Commission is not applying the wording in the Bill. Despite the fact that the wording in the Bill is meant to be based on case law, as it has been established, the Charity Commission does not appear to be applying it. That is why it would be better to have a clearer definition of religion in the Bill.

I accept that we may be arrogant, unwise, incautious and hasty to attempt to resolve the problem. We may be arrogant, unwise, incautious or hasty to attempt to resolve this problem. However, this is what we are paid for; not to be arrogant, hasty, incautious or unwise, but to try to clarify the law where it is confused. That is my only purpose in tabling amendment No. 2.

I am grateful for the hon. Gentleman’s support for amendment No. 53, which deals with a pre-eminent absurdity in the Bill. Clause 2(2)(g) defines the advancement of amateur sport as a charitable purpose and subsection (3)(d) attempts to define what is meant by sport, which is,

“sport which involves physical skill and exertion”.

Hon. Members will recall that on Second Reading the hon. Member for Birmingham, Northfield (Richard Burden) asked the Chancellor of the Duchy of Lancaster about the inclusion and exclusion of certain activities and whether those constituted sport within the definition in the Bill. He said:

“A number of activities which common sense indicates are sports are often excluded from the definition of being sports by the Charity Commission, including angling, ballooning, billiards, pool, snooker, crossbow shooting, rifle shooting, pistol shooting, flying, gliding, motor sports and parachuting.”

He then declared an interest as a participant in one of those sports. The Chancellor of the Duchy of Lancaster answered, saying that the Charity Commission

“will be willing to consider any representations on what exactly the addition to charitable purposes will mean.” —[Official Report, 26 June 2006; Vol. 448, c. 26.]

It is all very well for the commission to consider representations after we have passed the law, but I am concerned that by passing it, we are excluding perfectly worthy activities.

I appreciate that mountaineering may require more physical exertion than parachuting—I understand that it is more difficult to go up than to come down, as some mountaineers have discovered to their cost—but the principle of the requirement to exert oneself in the interests of sport appeals to Victorian Corinthian attitudes that I thought were out of date in the modern Conservative party, not to mention the Labour party. The definition of “sport” is a little bit narrow. It would be better to leave a broad definition to the Charity Commission so it can apply the common understanding of sport.

I do not play chess because it involves far too much mental exertion. In my view, other activities, such as rifle shooting and clay pigeon shooting, involve physical exertion as well as mental exertion, but the Charity Commission has a different view. Judging by the shape of many of those involved in darts, it does not involve much physical or mental exertion. [Interruption.] I apologise to any hon. Members involved and, of course, I do not refer to those in the Newport Conservative club darts team on the Isle of Wight.

I hope that hon. Members will look favourably on amendment No. 53, which allows a bit more latitude, which is justified.

Helen Goodman (Labour, Bishop Auckland)

Before the hon. Gentleman finishes making his point about physical and non-physical sport, including chess and hang-gliding, why is his concern not covered by section 1 of the Recreational Charities Act 1958? The explanatory notes say:

“it is a charitable purpose to provide, in the interests of social welfare, facilities for recreation or other leisure-time occupation”.

Why is the hon. Gentleman not concerned about that?

Andrew Turner (Conservative, Isle of Wight)

Someone will have to furnish me with a copy of the explanatory notes. [Interruption.] I have been struck with inspiration, but not necessarily enough to answer. I am not convinced that there is sufficient meat in the explanatory note; if there had been, the Chancellor of the Duchy of Lancaster would have quoted it on Second Reading. I shall revert to the hon. Lady’s question when we discuss clause 5, if I catch your eye, Mrs. Humble.

Amendment No. 3 is a genuine probing amendment to find out exactly what clause 2(7) means. Subsection (7) was inserted by the Government in a House of Lords Committee sitting, during which Lord Bassam of Brighton said, in respect of his amendment No. 7 and of amendment No. 86, that

“The amendments are intended to make it absolutely clear that references to charitable purposes, or to institutions with charitable purposes in any enactments and documents, are to be taken as having the meaning given by the Bill in clause 2(1). The amendments are belt and braces measures, and do not change the law.”—[Official Report, House of Lords, 28 June 2006; Vol. 673, c. 150.]

The amendments appear to oppose amendment No. 70, to which the hon. Member for Cheltenham spoke at the beginning of the debate on this group of amendments. One of the amendments says essentially that there is no change in the definition of “charitable purpose” and other says that there is a change to the definition of “charity”. Will the Parliamentary Secretary explain how clause 4(6) and 4(7) on page 3 work alongside clause 1(2) on page 1? Perhaps he will also reflect on the advice given to me by the Charity Law Association, which is contained in Mrs. Hills’s enclosure number three in the letter of 13 June that I believe was sent to all Committee members:

“The canons of statutory construction state that a statute is always presumed to effect a change in the law. Thus, where there is expressed on the face of the Bill a statement which might appear to set out no more than the existing law, it is assumed to change the law.”

Lord Bassam did not appear to be aware of that principle when moving his amendment No. 7 on 28 June 2005. I hope that the Parliamentary Secretary can help us with that.

Alun Michael (Labour, Cardiff South and Penarth)

This interesting group of amendments demonstrates, to a great extent, the care that we need to exercise in seeking to amend the existing legislation and the Bill. It is not so surprising that it has taken a considerable time for the Bill to be advanced, because the greatest risk that we face is that slight changes that appear to have no great effect now will have unintended and devastating consequences further down the line.

I object strongly to the amendments on religion. I am sorry to disappoint the hon. Member for Isle of Wight, but I am neither an avid student of Australian law, nor have I been called to the Australian Bar, and I have not read about how its legislation is phrased, although I suspect that it may have been done differently. I object to the amendment because it would be a major change to measures that are believed to reflect to a great extent the present law and mean that we are not to have unintended consequences. I suspect that there would be considerable unintended consequences were we to accept the amendment, with changes that we could not entirely predict for a variety of organisations recognised by the existing law as engaging in religious activities.

My main point is that words are important. Even John Humphrys agrees—so it must be true—that it is essential that people take notice of the way in which they express themselves and the way in which they use grammar and words. The phraseology that the hon. Gentleman has proposed is logically and philosophically unsound. One does not put beliefs into practice; one acts consistently with beliefs. Principles for behaviour might be based on belief, particularly on the belief that there is a divine being who has expressed views about how believers should behave, whether on tablets of stone or in other ways. The fact that the phraseology asks people to put beliefs rather than principles into practice means that it is fatally flawed and therefore cannot have the consequences suggested by the hon. Gentleman unless we ignore the fact that it is philosophically and linguistically unsound.

On amendment No. 70, if we override other legislation in a Bill, we must be very careful to ensure that there are no unintended consequences. Most of us in the House have sought during debates over the years to deal with one principle adequately in one Bill so that the Bill overrides others and there is no doubt about what the law says. It is a temptation to anybody involved with a particular piece of legislation, but I advise against it. There is case law not only on charity law but on the definitions provided in other legislation, and the danger of unintended consequences is considerable.

I agree entirely about the need to avoid bureaucracy. The Charity Commission and Departments involved in charity, whether the Treasury or others, should simplify their behaviour and make it more consistent, but that is not simple to achieve. It is certainly not simple to put it into a piece of legislation and think that a requirement of uniformity has been brought about.

The issue seems to come down to one particular organisation, the Police Dependants Trust. The hon. Gentleman explained the valuable work done by the trust and smaller charities in a variety of police force affairs. As a former police Minister, I endorse entirely what he said about the unique position of the police in society, the value that they provide and the need to ensure that charities that assist police officers’ dependants can operate adequately, but again, we must be careful not to bring about unintended consequences. What things might those charities want to do that are not charitable according to the Bill?

That was the argument against including a specific clause on the armed forces. Because of their operation abroad, the historic circumstances in which they have been involved and indeed the increasing complexity of their international involvement, it was decided in another place to put the blindingly obvious into the Bill. Occasionally we must do so, but it should be resisted wherever possible, because it appears to exclude other possibilities. I am concerned that if we include the police, we might exclude references, which the hon. Member for Isle of Wight conceded are comparable, to organisations for firefighters, lifeboat personnel and other rescue workers.

Andrew Turner (Conservative, Isle of Wight)

The right hon. Gentleman asked what activities were deemed not to be charitable. The Charity Commission told me in a letter on 13 May:

“Amongst other activities, the charity gave an automatic gift to members of the force who were away from work on sick leave for more than two weeks and Christmas gifts of £50 to widows and orphans within the police community. These gifts were made without reference to the circumstances of the recipient. Although the object of the charity was to relieve need, the charity did not assess the extent of that need. The trustees of the charity were advised they must review their procedure for the award of such gifts to ensure that they fulfil a charitable purpose.”

The charity was doing wrong by giving a present to people at Christmas.

Alun Michael (Labour, Cardiff South and Penarth)

We do not know enough about the mischief that the Charity Commission was trying to tackle. I accept that if the circumstances are entirely and exclusively as he described them, it sounds a little bit odd. However, I suspect that there is more to it than that. I assume that the group of charities would have an intelligent conversation with the Charity Commission, which we all agree should be independent and able to undertake those discussions rather than Government Departments. His amendment would not change the situation one iota because the Charity Commission’s regulation of charities needs to be consistent. To have defined those bodies as charitable in terms of the 14 items would not mean that specific action could be undertaken by them without their having to account to, and be regulated by, the Charity Commission. The one mischief that the hon. Gentleman explained clearly in respect of the letter would not be affected by the amendment.

James Duddridge (Conservative, Rochford and Southend East)

Does the right hon. Gentleman agree that, rather than dealing with a specific case, the matter highlights a general anomaly? It might be that other public sector individuals should be bought within a definition. The hon. Member for High Peak asked whether we should cancel that if it clearly does a disservice. He was making the point that we cannot add a 13th, 14th or 15th. Perhaps we are talking about the wrong 13th, but there should be a 13th category.

Alun Michael (Labour, Cardiff South and Penarth)

No, the hon. Gentleman has missed my point entirely. Each of those additional categories is within the existing category, so there is not a problem in that regard. If the particular example cited by the hon. Member for Isle of Wight applied to police charities, there would presumably be a similar objection. By that I mean, the giving of gifts without the regard to need and that would apply to a variety of other charities under the 13 existing definitions. The hon. Gentleman is chasing the wrong rabbit down the hole or the rabbit down the wrong hole, depending on what view is held. Such a process would not have the desired consequence. It is not necessary.

I am sure that we agree with the hon. Gentleman on two points, the first of which is that the police are an extremely important group of people and that support should be possible. The Parliamentary Secretary can correct me if I am wrong, but the police would be covered entirely under the regulations. I am sure that my hon. Friend would have made himself available to satisfy the worries of police representatives. I am worried about the unintended consequences, what is included and what seems to be excluded. If we are accepting the reference to armed forces, we have gone far enough for the variety of international unique circumstances that apply.

As for the couch potato amendment No. 53, I counsel great care when redefining sport. Having spent considerable time discussing what is defined by some as a sport—the hunting of live animals—I have become well aware of all the arguments about whether activities are on one side or another of a particular line. The other sort of activities that have been referred to might qualify, as suggested by my hon. Friend the Member for Bishop Auckland (Helen Goodman), under educational, citizenship and community development or one of the other headings, but the definition of sport seems entirely sensible. It is surely reflective of the common usage of the word outside the media.

Peter Bone (Conservative, Wellingborough)

Does the right hon. Gentleman agree that chess is a sport? If so, it would fail the definition.

Alun Michael (Labour, Cardiff South and Penarth)

If the hon. Gentleman takes it that I am making a personal reaction—it is up to the Charity Commission to interpret the law—I should not have thought that chess was a sport. However, it contributes considerably both to educational and community development activities. Therefore, an organisation that promotes chess would not be ruled out from being regarded as a charity. Such an activity does not need to be defined as a sport in order for the charity legislation to deal adequately with it. That makes my point.

James Duddridge (Conservative, Rochford and Southend East)

I shall speak primarily to amendments Nos. 1 and 53. I support amendment No.1, not simply because the cause with which it deals is a worthy one, but because it highlights a potential inconsistency that has not been fully considered. I have come across further inconsistencies during the debate.

I thought that, in the amendment, we had a good example of a public service group coming together and supporting a public service. The right hon. Member for Cardiff, South and Penarth (Alun Michael) produced two more good examples: the fire service, which would indeed be within the public sector, and lifeboats, which are unfortunately not within the public sector. I had been thinking of urging the Minister to consider a specific provision covering not only police charities, but public sector charities to help people who have worked in the public sector. That would provide a great public benefit. I would specifically exclude companies that seek to get around pension arrangements by providing benefits through a charitable body. I support the amendment because it provides a good example, although I do not wish to see a 13th, 14th or 15th addition to the list.

I am aware that there are a large number of definitions of sport. Having done a sweep through the internet, I am further confused about what is and is not a sport. I am surprised that the Bill contains a definition of sport that refers directly to “sport”. I presume that one reason why clause 2(3)(d) states that

“ ‘sport’ means sport which involves physical skill and exertion”

is that there are many activities that involve physical skill and exertion that are not sport and that are difficult to define. I think most hon. Members would agree that sex, for example, involves physical skill and exertion, but clearly most people would not consider it a sport, or propose that it be subject to charitable relief—at least I would not. That highlights a problem of definition. Chess is a useful example because it shows that physical exertion is a factor, but not the only one—it is perhaps low on the scale.

Martin Horwood (Liberal Democrat, Cheltenham)

Does the hon. Gentleman accept that a helpful definition might be that a sport involves a winner and a loser? That might exclude sex.

James Duddridge (Conservative, Rochford and Southend East)

I hesitate before speaking about sex, but I am more than happy to speak outside of the room. I understand that in some cases sex qualifies and in some cases it does not. I think I should move on before I trouble things further, because my wife pays due attention to what I say in the House.

There are a number of sports. Snooker and hang-gliding are out. Mountaineering is in but climbing is out, or perhaps it is the other way round—other hon. Members may be able to explain. It does not make an awful lot of sense, and I believe that it would make more sense to delete the provision entirely and leave the matter to the Charity Commission. It seems sensible that there be a variety of definitions of sport—sport as defined by the Olympic authorities would be very limited and would be different from sport as defined by charities and by local government, whereby certain areas are left aside for sporting activities. Although a sport might not be appropriate for the Olympics, or an appropriate use of public land, it might be appropriate for a charity.

Tom Levitt (Labour, High Peak)

I was going to intervene earlier but I thought I would let the hon. Gentleman dig himself a little deeper. He has now passed the sensitive part of his speech. He will be aware that sport is defined elsewhere in law besides in charity law. The Government have introduced the concept of community amateur sports clubs, which receive tax relief akin to, but different from, the tax relief that charities receive. Is he happy for sport to be defined in different ways, or is he asking for the question of what constitutes sport in the context of community amateur sports clubs and their tax relief to be re-opened as well?

James Duddridge (Conservative, Rochford and Southend East)

I was unaware of that initiative and therefore am not asking for that question to be reopened.

I simply want to achieve a degree of clarity in the Bill and deleting paragraph (d) as amendment No. 53 proposes would create greater clarity by leaving that definition up to the Charity Commission rather than seeking to define it—in a cack-handed way—in terms physical skill and exertion only. Motorsports is not covered by that definition: Michael Schumacher, who loses 2 litres of water in a race—I realise that he operates in a professional motorsporting environment—would disagree with that. The definition does not make any sense and I therefore support amendment No. 53, which would remove that definition and leave it up to the Charity Commission to decide.

Ed Miliband (Labour, Doncaster North)

We have had an illuminating, even entertaining, debate. For the benefit of the Committee, let me deal with the amendments as they appear in the amendment paper.

The first amendment in the group is amendment No.70, tabled by the hon. Member for Cheltenham. We urge the hon. Gentleman to withdraw it. The effect of subsection (2) is that where an enactment other than the Bill has its own definition of charity, that other definition is preserved. The problem with removing the subsection is that it would introduce uncertainty, for tax purposes in particular. Section 506(1) of the Income and Corporation Taxes Act 1988 contains its own definition of a charity, as follows:

“‘charity’ means any body of persons or trust established for charitable purposes only;”

The important point about that definition is that it applies throughout the UK, whereas the Bill applies only to England and Wales. If we made the Bill’s definition apply to the 1988 Act, which removing subsection (2) would do, the effect would be to exclude charities in Scotland and Northern Ireland from the tax benefits that would exist. Charities in those territories would no longer qualify as charities under the definition in the 1988 Act. That is obviously not the hon. Gentleman’s intention, but give that that would be the effect of his amendment, I hope that he will withdraw it. I will deal later with the point that the eagle-eyed hon. Member for Isle of Wight made about the possible contradiction between this clause 1(2) and clause 2(7).

Amendment No. 1, which stands in the name of the hon. Member for Isle of Wight and his hon. Friends, is about the police. The whole Committee agrees that police charities do an enormous amount of good work for police officers, ex-police officers and their families, and all of us want that work to continue. It is important to state that at the outset.

The purposes of the Police Dependants Trust are covered by clause 2(2)(m), which is a catch-all provision, and clause 2(4)(a) in combination. It is already charitable to provide welfare services which meet the identified needs of serving or former police officers or their dependants. We are confident that it will remain so.

When my hon. Friend the Member for Wythenshawe and Sale, East (Paul Goggins) was the Minister in charge of the Bill, he received a letter from Mr. Norrie Flowers, the chairman of the Police Dependants Trust, urging the Government to table an amendment such as amendment No. 1. Mr. Flowers listed some of the services that the Trust was thinking of providing and sought reassurance that they would be charitable under the Bill. However, those services were not described in detail, so my hon. Friend was not, at that point, able to state definitively whether they would remain charitable. As I understand it, Mr. Flowers was offered a discussion with the officials working on the Bill, which has not yet happened. However, I am keen to meet representatives of the Police Dependants Trust to discuss their activities; I also want to ensure that they meet my officials and Charity Commission officials for further discussions.

I think that it would be much better to avoid an amendment that would add a new category to the list of 13—a list that has already grown by three or four since the strategy unit recommendations. The main case has been made by my right hon. Friend the Member for Cardiff, South and Penarth: if we include the Police Dependants Trust or its activities in the Bill—worthy though they are—we shall inevitably face calls to extend the list to all kinds of other categories. I take the point made by the hon. Member for Rochford and Southend, East that one could have a catch-all public services category, but I fear that that would only provoke further calls for the inclusion of other categories and provoke further definitional problems.

We want to ensure that the Police Dependants Trust can continue its activities. I have not seen the letter from the Charity Commission but we shall consider it along with the specific issue raised by the hon. Member for Isle of Wight. The trust’s activities are obviously beneficial and important, but charity is about pursuing purposes to meet needs, and it is important that the Charity Commission—it is a job for that body—is satisfied that an activity is occurring to meet needs, and not for other purposes. I have no reason to believe that the activity the hon. Gentleman mentioned is not intended to meet needs and for genuine purposes, but we should examine that and I am happy to report back on Report. I hope that on that basis the hon. Gentleman will not press his amendment.

Clause 2 provoked an interesting and learned discussion. Let me deal first with what may be called the Australian red herring, because I have news about Australia that is important for the Committee. In 2003, the Australian Government published draft legislation for charity law reform, and there was a clause on religion that set out not a definition of religion such as the hon. Gentleman seeks, but a number of matters to which regard should be had in deciding whether or not a belief amounted to a religion. Those matters included the substance of the hon. Gentleman’s amendment. After a public consultation, however, the Australian Government decided not to proceed with the legislation, so there is not necessarily an Australian example for us to follow.

It may be helpful if I explained to the Committee the current charity law definition of a religion and some of the implications of the Bill. For a belief system to qualify as a religion it must have essentially two features: the first is a belief in a supreme being or beings, and the second is the expression of that belief through worship of the supreme being or beings. My understanding is that humanism is not included within the scope of religion, and that that will remain so after the legislation is passed. Humanism is covered by the charitable purposes in the catch-all provision, clause 2(2)(m), and societies for humanism are given charitable status on the basis that they contribute to the moral and spiritual improvement of the community. The Charity Commission ruled out the Scientologists, who have been mentioned in the debate, because apparently they do not have an act of worship.

Part of the confusion about the Bill arises from clause 2(3)(a), a provision which was amended following recommendations of the Joint Committee. The suggestion was that religion should include

“a religion which involves belief in more than one god, and...a religion which does not involve belief in a god”.

That does not include the humanists. That was put into the Bill in response to the Joint Committee’s worries that, otherwise, some of the nine major world religions, in particular, Jainism—because it denies the existence of God—would not be covered. The provision was drafted partly in response to concern about that, but it has caused some confusion.

The hon. Member for Isle of Wight asked how the Charity Commission was interpreting legislation in that area. It is my understanding that the Bill will not fundamentally change the definition of religion as it will be applied by the commission. Perhaps that is why it seems to the hon. Gentleman that the plan is to continue to implement the existing law. The purpose of the Bill in to clarify the law—to make clear the definition of religion and what is or is not included. That is the basis of the provisions on religion.

Andrew Turner (Conservative, Isle of Wight)

It would be unfair of me to ask the Minister a question that I could not answer if he asked it of me, so I shall not ask him, but I should like someone to tell me what is the supreme being in which Jains believe if it is not a god, which qualifies Jain organisations to be charities.

Ed Miliband (Labour, Doncaster North)

The hon. Gentleman is completely right. I do not know the answer to that question.

Martin Horwood (Liberal Democrat, Cheltenham)

Having spent a year in India, I might be able to assist the Minister. In several Indian religions, including Jainism, great respect is paid to prophets and to those interpreters of the world who are not divine, just as Buddha in Theravada Buddhism is regarded as having achieved nirvana or enlightenment, not divinity.

Ed Miliband (Labour, Doncaster North)

That certainly satisfies me. I am grateful to the hon. Gentleman for that explanation.

Tom Levitt (Labour, High Peak)

My hon. Friend will be aware from a previous conversation that my concern about the clause was not philosophical, but mathematical. Subsection (3)(a)(i) includes polytheism and subsection (3)(a)(ii) includes atheistic religions; there is, however, no specific mention of monotheistic religions. Am I right in thinking therefore that, when the clause says that “religion” includes those definitions, it does not exclude other definitions?

Ed Miliband (Labour, Doncaster North)

My hon. Friend is right. It important to say at this early stage in proceedings that the Bill will be built upon the common law definitions of a charity that have been built up over more than 400 years or so. The confusion in Committee might sometimes arise from the fact that we are building on that foundation. In the case my hon. Friend raises, a belief in the supreme being or beings and the expression of that belief through worship of a supreme being or beings is part of the common law definition of religion in terms of charitable purposes.

Peter Bone (Conservative, Wellingborough)

Is the Minister saying that nothing will really change in relation to religion in the Charity Commission’s administration? If so, why are we bothering to add the extra definition?

Ed Miliband (Labour, Doncaster North)

It would be wrong of me to say that that thought has occurred to me at any point during the past eight weeks when I have been learning the details of the Charities Bill. The answer to the hon. Gentleman is that we are undertaking a Herculean task, which is to set out a list of charitable purposes that can take forward the implementation of charitable status in the coming decades. We need to set them out as best we can in the Bill. His understanding is correct in that the definition of religion for charitable purposes has been established under law and it will not change materially.

Helen Goodman (Labour, Bishop Auckland)

One of my constituents, the former Bishop of Durham, said famously that the resurrection is not simply a trick with a bag of bones. My concern about the amendment tabled by the hon. Member for Isle of Wight is that he is trying, by including a reference to a supernatural principle, to come to a precise theological position on religion. It is not appropriate for the Committee to do that. Notwithstanding the fact that the Church of England is the established national Church in England, does my hon. Friend the Parliamentary Secretary agree that it is not appropriate for us to present definitions of religion that are too theological?

Ed Miliband (Labour, Doncaster North)

I agree.

Tom Levitt (Labour, High Peak)

Surely, the purpose of the Bill—the biggest review of charity legislation in the past 400 years—is seen in clause 2(2) and the other provisions are subservient to it. Clause 2(2) contains a list, established through case law and other sources, that will form the definition of a charity for the Charity Commission and others to use. The value of clause 3 is that it helps to define one of the words used in clause 2(2)—“religion”—the meaning of which has changed fundamentally over the 400 years since the concept of charity law was first produced. For the first 350 or so of those years, there would have been a narrow definition of the use of the word “religion” in the common law on charities: it would have meant Christianity and nothing else.

Ed Miliband (Labour, Doncaster North)

My hon. Friend makes an important point. We are trying to strike a balance between setting out principles that will take us forward and are flexible enough to accommodate changes in social circumstances over time. I hope that we are striking the right balance.

A number of concerns have been raised about the amendment tabled by the hon. Member for Isle of Wight. We are concerned that it would significantly widen the definition of “religion” when that is not necessary, and there is a risk of including some beliefs that perhaps ought not to be included. During a debate on a similar amendment in another place, my noble Friend Lord Dubs referred to “‘nutty’ religions”. However, we are more worried about irrational, bizarre beliefs of other sorts and about some perfectly respectable beliefs that, nevertheless, ought to have no place in religion. For the benefit of the Committee, the dictionary definition of “supernatural”, is that which is attributed to or thought to reveal some force above the laws of nature, or is magical, occult or mystical. Any belief founded on a principle of that sort could potentially qualify as a religion under the amendment. I am not convinced that that would be a good way for us to go. Palmistry, horoscopy and tree worship might qualify as religions under the amendment, although I am sure that that is not the hon. Gentleman’s intention. There is a danger that the breadth of the amendment might allow all kinds of practices to claim religious status. I hope that, on the basis of our full debate, including the exposure of the Australian red herring, the hon. Gentleman will not press his amendment.

On amendment No. 53, also tabled by the hon. Gentleman, I am sympathetic to the idea that there are all kinds of sports and that people have different predilections for sport and those should be accommodated in the law. However, by defining sport in the terms that we have used, we are retaining in essence an approach that has already been established by the Charity Commission. Chess is not allowable under the “other sport” category, but, having said that, chess organisations can come into charitable status in all kinds of other ways. More than a dozen chess charities are registered as charities, mainly under the advancement of education heading. For the benefit of the Committee, the other sports that are not considered to be covered by the definition are angling, ballooning, billiards, crossbow and rifle shooting, flying, gliding, motorsports and parachuting.

Given the debate, we should reflect on the argument that has been advanced. I am not convinced that simply taking out the relevant subsection is the right way forward, but I do take seriously what hon. Members have said. As my right hon. Friend the Member for Cardiff, South and Penarth said, we must avoid unintended consequences. We must not start a new argument about hunting, for example, or anything like that. We will go away and, in the spirit of charity, reflect on the matter and report back on Report.

The hon. Member for Isle of Wight, a former teacher, set me an exam question on amendment No. 3: he asked me explain the consistency between clause 1(2) and clause 2(7). The purpose of clause 2(7) is to ensure that wherever there is reference to charitable purposes in primary or secondary legislation or in any document, charitable purposes is to be construed in accordance with clause 2(1). A document includes, most importantly, the written constitution of every charity. Subsection (7) makes that apply to legislation and documents passed or created before the Bill, except where the context requires otherwise.

The purpose of the hon. Gentleman’s amendment, which is acknowledged is probing, is to ensure that the Bill’s definition of charitable purposes applies only in legislation and documents passed after the Bill. Let me give a few examples to illustrate the way in which the amendment would not be helpful. The first is to do with references to charitable purposes in legislation. Many pieces of legislation refer to charitable purposes, including the 1988 Act to which I referred earlier, which gives exemptions to charities from income and corporation tax on the income that they spend for charitable purposes. The difference between clause 1(2) and clause 2(7) is that the exception in clause 1(2) caters to, for example, tax laws applying to charities throughout the UK, whereas clause 2(7) is about achieving a common definition of charitable purposes. That is the distinction between them. I hope that clears up the confusion.

We are seeking a common definition of charitable purposes—as clause 2(7) ensures. However, we also want to accommodate the situation in which a different definition of charity applies in law and we might want to keep that definition. We are concerned that the reference to charity in the 1988 Act applies across the United Kingdom, but the Bill applies only in England and Wales. We do not want the charitable benefits to be removed from charities in Scotland and Northern Ireland. I hope that clears that point up for the hon. Gentleman and that I have successfully answered his exam question.

Andrew Turner (Conservative, Isle of Wight)

I am grateful to the hon. Gentleman for his answer. We must assume from his answer that the words “charitable purpose” do not appear in the 1988 Act and the word “charity” does. Otherwise, I do not see how what is appropriate for England in subsections (6) and (7) can be appropriate for the whole United Kingdom under subsection (2). Is the Minister saying that a charity whose charitable purposes are defined as its objective in its constitution will have to change its constitution to fit the definition in clause 2(1)?

Ed Miliband (Labour, Doncaster North)

Yes, but I am afraid that the hon. Gentleman was not correct on his original point. As I said earlier, section 506(1) of the Income and Corporation Taxes Act 1998 says that

“‘charity’ means any body of persons or trust established for charitable purposes only”.

It contains both the word “charity” and the phrase “charitable purposes”.

I am trying to explain, not very eloquently, that there will now be a common definition of “charitable purposes”, as the Bill will change the definition in the 1988 Act. The definition of “charity” in the 1988 Act is a UK-wide definition—importantly so, because taxes are a reserved and not a devolved matter—and must remain so. It must not come into line with the Bill’s definition of “charity”, because if it did so, it would apply only to England and Wales, depriving Scotland and Northern Ireland of the benefits of charitable status.

Tom Levitt (Labour, High Peak)

I am grateful to my hon. Friend for the clarity and consistency of his summary. He sets a high standard for the rest of the Committee. I am particularly grateful that he has rejected what we might call the Cheltenham principle throughout—the idea that a harmless but not entirely necessary proposal should be included simply on that basis. I hope for similar consistency throughout the Committee.

Ed Miliband (Labour, Doncaster North)

I thank my hon. Friend for his kind remarks, and I hope that the hon. Member for Cheltenham is not too wounded.

To make it clear why we hope that the hon. Gentleman will not press his amendment, I shall give a second example involving charitable purposes and documents, including charities’ constitutions. If an organisation is an existing, grant-making charity, its constitution might say that it can make grants to one or more charitable purposes as the trustees may from time to time determine at their discretion. It is important that that definition of “charitable purposes”—I think that he referred to this—is consistent with the Bill and not some other definition. That is the purpose of the clause under scrutiny. I hope that I have satisfied him on this rather difficult and arcane area, and that he will not press his amendment.

Martin Horwood (Liberal Democrat, Cheltenham)

I am grateful to the Minister for his explanation of the legal implications of amendment No. 70, and am therefore content to withdraw it. However, I hope that he will take account of the spirit of the amendment and the implication behind it, as well as the explanation that he gave to the hon. Member for Isle of Wight about his amendment. There is a risk that inconsistency will spread and proliferate throughout the legislation, making life complicated for the administrators and treasurers of charities.

Ed Miliband (Labour, Doncaster North)

I meant to cover the hon. Gentleman’s point about the Inland Revenue and the way that it administers the definition of “charitable purposes”. It is clear from my explanation to the hon. Member for Isle of Wight that there will now be a common definition of “charitable purposes”, which should be consistent in its administration.

Martin Horwood (Liberal Democrat, Cheltenham)

I am grateful for the Minister’s reply, but I will be extremely surprised if that is the practical result, because I suspect that the different definitions used by the different wings of Her Majesty’s Revenue and Customs will still exist. However, I am content to let him investigate that in his own time.

Andrew Turner (Conservative, Isle of Wight)

From his intervention, the Minister seems to be saying that the definition of a “charitable purpose” will be the same in Scotland as in England and Wales, although perhaps I shall be told that I have got that wrong. I certainly understood that the purpose of the amendment tabled by the hon. Member for Cheltenham was to bring the definition into line with that in Scotland. I accept that the Minister may be saying that the definitions are already in line, but as the issue of fee-charging charities is clearer in Scotland than in England, I do not see how they can be the same.

Martin Horwood (Liberal Democrat, Cheltenham)

The hon. Gentleman slightly misses the key point, which is that there are different definitions of “charitable purpose” and “charity” in different pieces of legislation that apply to the same territory. It is that inconsistency to which I am trying to draw the Minister’s attention, and I hope that he will address it in due course, even if not through the Bill.

Peter Bone (Conservative, Wellingborough)

I was not going to intervene on the hon. Gentleman, but the Minister has taken me by surprise with his statement that, for the purposes of Her Majesty’s Revenue and Customs, “charitable purpose” will have a common definition. I am sure that there will be a different interpretation for tax law; I should be very surprised if there were not.

Martin Horwood (Liberal Democrat, Cheltenham)

I suspect that the hon. Gentleman is correct and that the Minister may not be quite right. There is room to iron out some of the remaining inconsistencies, particularly those on the application of tax relief.

I turn to the amendments tabled by the hon. Member for Isle of Wight. He is on safer ground when talking about sport and policing than about theology. The general principle that he has advanced for some categories but not others is that the Charity Commission, the charity tribunal and the courts should be left to give the detailed definitions of some of the ideas and concepts. We should do that for religion as for sport, so I oppose the hon. Gentleman’s amendment No. 2, which seeks to insert what I think is a flawed definition of religion. On the same principle, I support his amendment No. 53, which would remove an equally flawed definition of sport. Under that principle, I hope that we would leave a bit more latitude to the court, the Charity Commission and the tribunal to deal with the detail.

At the risk of incurring the rapier-like wit of the hon. Member for High Peak, I should say that there is some value in taking a clause that might be contested in the courts in future—the hon. Member for Isle of Wight suggested that that was possible in the case of the charity for the police and their dependants—and putting it beyond doubt in the Bill. That seems reasonable. It would be no great sacrifice for us to add a 14th type of charity to the 13 already mentioned, especially as there will not be a great opportunity to add dozens more and we shall not open a can of worms in that respect. I beg to ask leave to withdraw the amendment.

None

Martin Horwood (Liberal Democrat, Cheltenham)

I beg to move amendment No. 71, in clause 3, page 3, line 21, leave out from ‘whether’ to end of line 23 and insert—

“a body provides or intends to provide public benefit, regard must be had to—

(a) how any—

(i) benefit gained, or likely to be gained, by members of the body or any other persons (other than as members of the public), and

(ii) disbenefit incurred, or likely to be incurred, by the public in consequence of the body exercising its functions,

compares with the benefit gained or likely to be gained by the public in that consequence, and

(b) where benefit is, or is likely to be, provided to a section of the public only, whether any condition on obtaining that benefit (including any charge or fee) is unduly restrictive.

(2A) It is presumed that a charity established to benefit the natural environment, or the living species within it, exists for the public benefit.’.

I should like to raise what is almost a point of order. We submitted two different amendments that have emerged as one. The first part of the amendment, which clearly relates to public benefit and the insertion of the Scottish guidance on its implementation, was separate from the last subsection (2A). I shall deal with that second provision first.

Our new subsection (2A) is intended to close what I think is a loophole in the Bill, so that the preservation of, or concern for the welfare of, species or elements of the natural environment, which cannot automatically be assumed to be for the public benefit, would nevertheless be considered charitable. Charities that are for the protection of the environment clearly qualify under clause 2, under the heads of charity. However, under the Bill, by contrast to previous charity legislation, they must also now pass the public benefit test. It is not clear to me how the preservation of an area of wilderness, such as the Antarctic or the Arctic, would be easily defined as for the public benefit. Likewise, we can imagine that the work of a charity such as St. Tiggywinkles, which looks after the welfare of hedgehogs, has no great implications for biodiversity or pet care that might indirectly benefit the public. What I wanted to achieve by the provision was to put the issue beyond doubt.

Helen Goodman (Labour, Bishop Auckland)

I am most sympathetic to the hon. Gentleman’s arguments. In a sense, to go back to the discussion that we had about religion, he is saying that we have moved on from the idea that the world is here simply for our pleasure and that we can exploit and use it. He is right if he is talking about whether all the value of the natural environment is to be measured in terms of the pleasure that we derive from it. Is that the point that he is making?

Martin Horwood (Liberal Democrat, Cheltenham)

I am grateful to the hon. Lady, who has made the point far more eloquently than I was doing. She is entirely right. The amendment is also intended to reflect the simple humane instinct to be charitable, which is relevant to the simple care of animals such as hedgehogs, where not even environmental benefit is at stake.

Alun Michael (Labour, Cardiff South and Penarth)

I am interested in the hon. Gentleman’s response to my hon. Friend, because it seems to me that the list in clause 2(2) very much reflects the developments that he was referring to. Paragraph (i), for instance, refers to

“the advancement of environmental protection or improvement”

and I also particularly welcome, as I did on Second Reading, the inclusion of animal welfare. It is clear that animal welfare cannot directly be the welfare of people. Is not it essential, however, that there should be a test to prevent an organisation’s simply saying, “We exist to serve the arts”—to take the arts as an example—“and therefore we are charitable”? There must be a test of whether the organisations will operate for the wider public benefit, and that is what the public benefit test is about. However, clause 2(2) surely covers the hon. Gentleman’s point.

Martin Horwood (Liberal Democrat, Cheltenham)

The right hon. Gentleman is right up to a point. The point about the list in clause 2(2) is that it is necessary but not sufficient to achieve charitable status. A charity must fall within it and be for the public benefit. Falling within the categories listed in subsection (2) and being for the protection of the environment is not sufficient for the achievement of charitable status. However, I agree that it is right that there should in addition be a public benefit test. Indeed, the rest of the amendment clearly shows that I should like a stronger public benefit test. I am simply trying to put beyond doubt certain categories of charitable activity that would not immediately show themselves to be for the public benefit, and to make it clear in the Bill that they are to be treated as being for the public benefit. I hope that that reassures the right hon. Gentleman.

Alun Michael (Labour, Cardiff South and Penarth)

Yes, I think that there is not a great difference between us, but we need to be careful about amending the Bill, because inclusion in clause 2(2) suggests that there is a public benefit in improving the environment and in animal welfare and so on. We regard those as part of what my hon. Friend the Member for Bishop Auckland called those we share the planet with. That brings those activities specifically within the ambit of charitable activity. We must not go the further stage of saying that because environmental benefit or any other aspect of the amendment is presumed, someone would be treated as a charity and no more questions would need to be asked.

Joan Humble (Labour, Blackpool North and Fleetwood)

Order. May I take this opportunity to remind all Members that interventions should be brief?

Martin Horwood (Liberal Democrat, Cheltenham)

I take the right hon. Gentleman’s point, but the point is worthy of an amendment to clarify it and to put it beyond doubt. I shall leave it at that.

The larger part of what has ended up as the amendment would insert into the Bill word for word the definition that has been adopted by the Scottish Parliament in the Charities and Trustee Investment (Scotland) Act 2005. That has a number of things to recommend it, as I said in my speech on Second Reading. First, there is the obvious benefit of consistency. The point was made in that debate that, with the devolution of powers, we do not have to have consistency—it is not necessary or compulsory in any sense—and I quite agree with that. I am a great supporter of the decentralisation of power and would not seek to impose either the English definition of public benefit on Scotland or vice versa. Nevertheless, there is an advantage to consistency where it can be adopted.

Since Scotland has gone through that process and adopted what seems to me to be a good set of guidance on how public benefit is to be implemented by the Office of the Scottish Charity Regulator, it would be an advantage to charities that operate both north and south of the border to have the same definition and guidance reflected in our Bill. There is also an argument in principle in favour of the Scottish test. I shall not repeat everything that I said on Second Reading, but I would like to make it clear that some of the attacks made on the clause at the time were not justified.

The measure certainly does not seek to attack private schools or other institutions that might be seen to be subject to it more than charities in general. It is about encouraging the best possible practice. That became clear in the Scots debate, when Donald Gorrie MSP set out the desired outcome, which I would recommend as well. He said:

“The position that I take, and which Liberal Democrats and, I hope, other people take, is that it should not be a blanket yes-or-no question as to whether fee-paying schools can be or must be charities. Each fee-paying school should have to demonstrate...that, in all the various ways in which it works, it provides a genuine public benefit—through its scholarships, through use of its facilities, through the training that it gives trainee teachers and through the work that it does in the community as a whole.”—[Scottish Parliament Official Report, 9 March 2005; c. 15113.]

Those sentiments were echoed by Labour Members and Ministers in the Scottish Parliament and were clearly not intended as an attack on the sector as a whole.

Now that the Scottish Act is law, OSCR has issued guidance on the public benefit test and its interpretation of it. That guidance makes it quite clear that the amendment is a moderate and reasonable proposal. It states:

“It is worth noting that the Act draws a distinction between disbenefit and unduly restrictive conditions (including any charge or fee). The mere imposition of charges or fees is therefore not to be considered a disbenefit: rather, the level of charges or fees must be considered in the context of the provision of benefit to a section of the public and the relative impact such fees, charges or other restrictions have.”

It goes on to say:

“The Act, in stating that a condition may not be unduly restrictive, accepts that there may be a certain level of restriction. The issue is whether any condition is unduly restrictive: in other words, whether it is excessively restrictive or restrictive in contradiction of moral or legal standards. The fact that a (prospective) charity provides benefits that will be charged for and will be provided mainly to people who can afford to pay the charges does not necessarily mean that the organisation is not set up for and does not operate for the benefit of the public.”

Andrew Turner (Conservative, Isle of Wight)

Can the hon. Gentleman tell me whether he thinks, in view of the fact that there is a reducing number of applications for higher education, that the fees charged by higher education institutions are unduly restrictive according to the definition that he has just read out?

Martin Horwood (Liberal Democrat, Cheltenham)

I think that I have spotted the trap that the hon. Gentleman has laid for me. I am not in favour of top-up fees of any description in higher education, but I did not say that they contradicted moral or legal standards in the way that OSCR describes. Top-up fees would certainly not exclude a British university from charitable status.

Ed Miliband (Labour, Doncaster North)

The hon. Member for Isle of Wight asks an interesting question, and the hon. Member for Cheltenham has given his answer. Perhaps he could say why he believes that top-up fees are not unduly restrictive.

Martin Horwood (Liberal Democrat, Cheltenham)

That is something that I happily leave to the court, the Charity Commission and the tribunal.

The purpose of the amendment is clearly simply to set a higher bar for the public benefit test. In a briefing to its members, the Independent Schools Council gives exactly the kind of advice that I would have wanted it to give on that point. It says that that is not actually a great risk to private schools that are seriously attempting to promote public benefit, and says:

“The Commission is primarily there to help charities stay within the law, rather than to penalise charities which are having difficulty delivering enough public benefit. If the Commission considers that a school is not delivering enough public benefit its first course will be to advise the trustees. The aim will be to repair the public benefit deficit within a reasonable timescale, and the Commission will advise the trustees in this process.”

It goes on:

“Loss of charitable status is very much the last resort. In most cases it would require two sets of intransigent trustees (which is hardly likely) for the Commission to invoke this ultimate sanction.”

It is clear that the Independent Schools Council, while lobbying against that stricter definition or guidance on public benefit, acknowledges in its advice to its members exactly what we are saying: that a stricter public benefit test will result in more public benefit, and in organisations such as public schools seeking to advance the public benefit more obviously and demonstrably.

Andrew Turner (Conservative, Isle of Wight)

How would the hon. Gentleman view this extract from the Charity Commission’s document, “Public Benefit—the Charity Commission’s approach”? Where charities are not delivering public benefit, the commission says more or less the same thing as the Independent Schools Council, but the document goes on to say:

“However, in extreme cases, where the trustees are co-operating with us but the organisation simply cannot in all the circumstances provide public benefit, our action might include removing the charity from the register and making a legal scheme where necessary to ensure that any charitable assets of the organisation will in the future be applied for other charitable purposes”.

Martin Horwood (Liberal Democrat, Cheltenham)

I am surprised by what the hon. Gentleman has read, and it would be useful to know the context of the extract, but presumably it applies to the law as it stands now. Is that correct?

Andrew Turner (Conservative, Isle of Wight)

I certainly assume so—save, of course, for the important distinction that the hon. Gentleman is supporting the abolition of the presumption of public benefit in education, which I find somewhat more difficult.

Martin Horwood (Liberal Democrat, Cheltenham)

I do not think that the hon. Gentleman’s quote from the Charity Commission necessarily invalidates what I have been saying. In fact, there are plenty of quotations—from the National Council for Voluntary Organisations, various representatives of the voluntary sector and, indeed, other commission documents—to suggest that there is still confusion under the current law; that, if the new public benefit test changes things at all, that confusion will remain and perhaps increase; and that therefore much more clarity is needed in the Bill. It is that clarity that I seek to provide through this amendment.

Andrew Turner (Conservative, Isle of Wight)

This is an interesting amendment, not least for the fact that it has two separate elements. When I read clause 3, I must say that I found it hard to believe in light of what the hon. Gentleman said on Second Reading. He asked me:

“Am I right in thinking that the hon. Gentleman is therefore retreating even from the position of his noble Friends in another place? They said that ‘all charities’ should ‘have to meet a public benefit test, no matter what their purposes are’.”—[Official Report, 26 June 2006; Vol. 448, c. 38.]

I misunderstood the hon. Gentleman completely because I thought at the time that he was concerned because he thought I was wrong to resist the abolition of the public benefit presumption. Now I know that it was not that he objected to the public benefit presumption—indeed, he is in favour of it in the appropriate circumstance—but that he was merely concerned about my welfare in the junior ranks of the Opposition Front Bench, in case I might inadvertently have stumbled and disagreed with my noble Friend Lord Hodgson.

Martin Horwood (Liberal Democrat, Cheltenham)

I think the hon. Gentleman is getting his presumptions mixed up and I apologise for the poor drafting of the amendment if that is the case. The presumption that I was attacking on Second Reading was a presumption that attaches to any specific one of the 13 heads of charities. I do not suggest that, under this amendment, any of them should not have to pass a public benefit test.

Andrew Turner (Conservative, Isle of Wight)

I am not sure that that statement is consistent with the amendment, which states:

“It is presumed that a charity established for the benefit of the natural environment, or the living species within it, exists for the public benefit.”

That is exactly the public benefit presumption—[Interruption.] The Parliamentary Secretary makes my point more quickly than I could. It’s a fair cop. I am pleased that the Liberal Democrats have gone away from their assumption that all presumption is bad presumption.

If I may assist the hon. Member for Cheltenham in answering the right hon. Member for Cardiff, South and Penarth who intervened in his speech, the mere fact that there is a presumption does not mean that that is the end of it. It means that it is the beginning of it; if a charity misbehaves, it can lose the benefit of that presumption as I believe happened at the Finsbury Park mosque. I am very pleased indeed that the hon. Gentleman has accepted that there is nothing wrong with presumption. I would find it difficult—he is shaking his head, so presumably I have misunderstood him.

Martin Horwood (Liberal Democrat, Cheltenham)

The hon. Gentleman has misunderstood me. I know there is a slight temptation when in a hole to stop digging, but I will attempt to explain the difference to him. If the amendment were accepted, a charity that qualified under clause 2 (2)(i), which refers to

“the advancement of environment protection or improvement”,

would still have to prove that it passed a public benefit test. It is the term “public” that my amendment sought to clarify, not “to unduly restrict”.

Andrew Turner (Conservative, Isle of Wight)

The lawyers would have a field day when they tried to tie up the words in the amendment with the words uttered in Committee. I suspect that the words in the amendment would take precedence, which is the normal procedure.

I was about to say that many charities and organisations in the Isle of Wight are, in my view, entitled to charitable status—for example, the Isle of Wight donkey sanctuary and the Isle of Wight bat hospital—which may not be charities, but which deliver exactly the kind of benefits, whether public or otherwise, that the hon. Gentleman seeks to secure. I am very glad that he does so and were the two parts of the amendment separate, I would be happy to support him. I hope he will be happy to support me when we come to amendments Nos. 4 and 54.

I would like clarity about what the rest of the amendment means. First, I assume that “members” in the phrase “members of the body” in the amendment does not mean the same as members in the sense of members of a company, but I am not quite sure. The members of a company are the directors; the members of a charity are the trustees.

Martin Horwood (Liberal Democrat, Cheltenham)

I am grateful for the intervention, but the hon. Gentleman is wrong. Members are not equivalent to trustees. There are membership organisations—such as the Alzheimer’s Society, the Multiple Sclerosis Society, the Royal Society for the Protection of Birds or the National Trust—whose membership is substantial but is not at all the same as the trustees, who are the governing body of the organisation. That is the distinction.

Andrew Turner (Conservative, Isle of Wight)

That was exactly why I raised the issue. I was not sure whether the hon. Gentleman meant members in the sense of the members of a company, who are the directors of the company, or members in the sense of members of the National Trust, who pay their five shillings or whatever and receive a glossy magazine every couple of months. Now I understand what the hon. Gentleman means by “members”. The amendment goes on to say

“or any other persons (other than as members of the public)”.

I think that he is saying that the Charity Commission should consider, in relation to whether a body is providing a public benefit, whether the members of the body gain more than other persons—that is, members of the public.

The hon. Gentleman argues that the Charity Commission should also consider

“disbenefit incurred, or likely to be incurred, by the public in consequence of the body exercising its functions”.

In introducing the amendment, he did not really say anything about that. I wonder exactly what kind of disbenefit he has in mind. What kind of disbenefit can a charitable nursing home confer on the rest of the world? What kind of disbenefit does a school confer on the rest of the world? Perhaps he could go into more detail. He said on Second Reading that he would be quite generous towards the independent sector, and I am trying to work out what exactly is covered up by the words “disbenefit” and “compares with the benefit gained, or likely to be gained, by the public in that consequence”.

Martin Horwood (Liberal Democrat, Cheltenham)

I can reassure the hon. Gentleman that there is no cover-up. In fact, a very public document, the guidance from the Office of the Scottish Charity Regulator, explains the matter in enormous detail. I shall not test your patience by reading it out now, Mrs. Humble, but perhaps in my closing remarks I can quote any passage that the hon. Gentleman is interested in that explains exactly how disbenefit is to be interpreted.

Andrew Turner (Conservative, Isle of Wight)

I look forward to that, as I am sure the rest of the Committee does. With any luck, we will then be ready for lunch. Before then, however, I would like to raise some other issues relating to the amendment, because the behaviour of the Charity Commission, the National Council for Voluntary Organisations and one or two other organisations in respect of this principle has been pretty odd. They started by saying that amendments were not needed. They now seem to have gone head over heels—I think that is the polite phrase—and decided that there is a reason for the principle.

In the Committee that scrutinised the draft Bill on 9 June 2004, Lord Foulkes, who was then a Member of this House, said that

“you have not suggested any definition of public benefit”.

Mr. Etherington, for the NCVO, said:

“Because there is an established common-law definition of public benefit in relation to the four existing heads of charity.”

Mr. Foulkes, as he then was, said:

“But that has been discredited”

and Mr. Etherington said:

“I do not believe it has been discredited.”

Later, under question 59, Mr. Etherington said that

“my own view is that public benefit established through case law has worked well in relation to the fourth head of charity. It is a flexible mechanism, it is a common-law mechanism and it prevents the common law from becoming sclerotic”—

that is a lovely word for someone who has lost their teeth—

“provided that there are adequate appeals mechanisms against which to check it”.

I am interested in why the NCVO and the Charity Commission have changed their position. I understand, of course, that one of their functions is to give advice, but it is odd that they are giving advice without explaining why they have changed their position in an area that is clearly the subject of substantial controversy. It would be helpful if they had explained why they changed their position. Initially, the Charity Commission took the view that the reversal of the presumption of public benefit would have no effect and then they changed their position.

I understand that there was a memorandum agreed between the hon. Member for Slough (Fiona Mactaggart), who was then a Home Office Minister, and the Charity Commission, which set out in some detail that the current law on public benefit would be preserved by the draft Charities Bill. It explained something else that I found particularly interesting, which was that the test of public benefit is not the same for each of those categories in clause 2(2). Where there is already a presumption of public benefit, is it the case that a new public benefit test has to be created? If not, what is the public benefit test given that it is not necessarily the same as the other public benefit tests? That may be why the Charity Commission has changed its position. The problem is that it does not say so. It says that the law on public benefit will evolve and develop over time.

The Charity Commission also says in the memorandum that

“the principles in Re Resch are sufficiently clear to enable them”

—that is, the Charity Commission—to determine whether a particular educational charity is charitable. It then changes its position and we all get confused. Therefore, will the hon. Gentleman, in his summing up, speculate as to why the Charity Commission has changed its position?

I was most disappointed that a circular letter was sent round that the Red Cross signed. I thought that the Red Cross was above politics and political controversy, but Sir Nicholas Young signed that controversial document. At least, I thought it was controversial until the Liberal Democrats supported it. Now I realise that there is unity across the rest of the Committee and that it is probably not controversial at all. However, it sets out a position that few hon. Members appear to support, which is that we need a tighter definition. I speculate as to why that might be.

James Duddridge (Conservative, Rochford and Southend East)

The hon. Member for Cheltenham has tried several times to explain his complete inconsistency over putting forward a public benefit test, but has failed to do so in my mind. I will not be supporting the amendment. I would support it if it was part of a broader agreement by the Liberal Democrats to include the presumptive benefit for poverty, religion, education and health that previously existed. However, as they are throwing out those, I see no reason to bring in a public benefit test specifically for the natural environment, however worthy it is.

There has been much debate about large fees. In every case, there has been a leap from fee-paying to schools and education. I am interested to know from the Minister whether any significant organisations outside the education sphere will also be covered because I have not seen any real debate about fee-paying institutions above and beyond the education sector.

It is disappointing that the Government have taken a stance against independent schools. On Second Reading, Labour Back Benchers pressed the Minister to go further and be more restrictive of the education sector. [Interruption.] Did the hon. Gentleman want me to give way?

Tom Levitt (Labour, High Peak)

I may have looked as though I was raising my hand, but I was indicating that only one Labour Back Bencher made the argument that the hon. Gentleman is describing.

James Duddridge (Conservative, Rochford and Southend East)

I forgive the hon. Gentleman. I have got Hansard, but—I thought the hon. Member for Stroud (Mr. Drew) and another hon. Gentleman made the point and they referred referring to a larger level of support. However, I am more than happy to look at Hansard and talk to the hon. Member for High Peak after the debate.

Peter Bone (Conservative, Wellingborough)

Have not the Government missed a trick? Should they not be encouraging private education rather than restricting it?

James Duddridge (Conservative, Rochford and Southend East)

I agree. Given the wonderful new Labour phrase “direction of travel”, it is entirely inconsistent that there should be a blurring of the lines between the public and private sectors but that more is not being made of the charitable sector in independent schools and in the health sector. My hon. Friend makes a good point; the Government seem to be going in the opposite direction.

Martin Horwood (Liberal Democrat, Cheltenham)

The hon. Gentleman continues to portray the amendment as an attack on private schools, despite my assurances to the contrary. Will he explain why the head teacher of Dean Close school in my constituency, whom I quoted on Second Reading, supports stricter guidance on public benefit and says that his school has nothing to fear from it?

James Duddridge (Conservative, Rochford and Southend East)

I welcome that intervention, but I speak for myself not for the head teacher of a particular school. I am aware that the Independent Schools Council has taken a certain view. It has written to hon. Members saying:

“For each £1 of fiscal benefit, schools give back £3 in help with fees and other charitable giving, plus a further £2 in irrecoverable VAT”.

All that is on top of some £2 billion that the Government would have to spend to educate people in the public sector. Although I am not a lawyer, re Resch touched upon that issue. It seems that public schools have a clear public benefit, and the biggest benefit is that £2 billion.

Andrew Turner (Conservative, Isle of Wight)

I have never spoken to the head teacher of Dean Close school, but I recall that when the hon. Member for Cheltenham mentioned that institution on Second Reading, the public benefit appeared to be the use of its theatre. Similarly, the public benefit to be gained from other independent schools appears to be the use of their sports facilities—or even the rowing trenches that were built at huge expense near Slough. Is not the really important public benefit that is to be derived from public education that people are taught and that they learn—and that they and the nation are better as a result?

James Duddridge (Conservative, Rochford and Southend East)

My hon. Friend makes the point incredibly well. I agree that that is the overwhelming public benefit. However, that is not to say that there are not other public benefits.

I congratulate the Government on their general push to encourage fee-paying charitable organisations to demonstrate greater public benefit. Withdrawing the presumed public benefit is not right; there are other methods over and above the presumed public benefit that could encourage, if not compel, those schools to be more involved in the community. A number of points were made in the Chamber on those questions and what I have described would be a much better way forward than withdrawing the presumption of public benefit.

Tom Levitt (Labour, High Peak)

I was fascinated by the suggestion of the hon. Member for Wellingborough (Mr. Bone) that, because a group of organisations pays tax, they contribute to the public benefit. He said that the money that private schools contribute to the economy should be regarded as a public benefit. I therefore look forward to being classified as a charity because I too pay tax, although not to the same extent. The hon. Gentleman would extend public benefit rather further than do the clauses on charitable purpose that we have already considered.

During the 20 minutes of that six-and-a-half hour Second Reading debate that I was out of the Chamber, my hon. Friend the Member for Stroud spoke. I therefore accept that two Labour Back Benchers were expressing that view, not one. Another, whom I heard loud and clear, was my hon. Friend the Member for Selby (Mr. Grogan), although we seemed to reach some sort of compromise in our exchange. I shall return to that in a moment.

James Duddridge (Conservative, Rochford and Southend East)

Does the hon. Gentleman agree that Labour Back Benchers are pressuring the Government to do more in their attack on independent schools? That is one reason why the Parliamentary Secretary would be so clear, forthright and assertive towards that sector. Indeed a number of people hold similar views.

Tom Levitt (Labour, High Peak)

The hon. Gentleman should not believe everything that he reads in the newspapers. Certainly there are people who are opposed to public schools in principle. I was disappointed by the number of my colleagues who set their face so firmly against trust status arrangements for local authority schools, but I do not think that there is a one-to-one correlation between those two points of view.

As I said on Second Reading, I have been in the Labour party for 30 years and I am uneasy about the idea of private education. It seems to be intended to bring about privilege rather than pure educational value. That privilege is bought in a way that others cannot afford. Teachers who are very often trained at the public expense are then taken out of the state system and used in the private sector. Those are things that have worried people in principle on our Benches since time immemorial. But we are where we are. In the big church that we advocate on the Labour Benches we take many views on board.

Indeed, the private education system has produced some excellent and senior members of the Labour party. I am sure that it will continue to do so. But that does not mean that we all have had Pauline conversions. I accept that the private sector, especially in the field of special education, provides facilities that the state sector then buys into. That is very valuable. I think in particular of institutions such as the Mary Hare school in Berkshire that are provided on a scale which it perhaps would not be cost effective for the state to fund. The state then buys in so that people whose special needs necessitate it can be educated in the private sector. We are seeing the same in health with operations being bought from the private sector in order to fulfil public need and on a public service basis. In other words it is at no cost to the individual.

All those examples of partnership are valuable. This part of the Bill had a hugely disproportionate amount of scrutiny when it was in another place. I hope that we will not spend the same proportion of our time discussing public benefit. But this Bill is not about the status quo as far as public schools are concerned. I believe it is right to end the presumption that anything that has education in its purpose is automatically a charitable purpose. There has to be a demonstration of public benefit. I pay tribute to those schools in that sector that have already started taking those moral responsibilities seriously. Some public schools are allowing and encouraging the joint use, community use or shared use with other schools of drama facilities, sports facilities or wider school facilities. It may be for summer clubs during the holidays or to help students on pre-university courses. I welcome those examples of partnership.

If the Bill goes further along the road of promoting those partnerships and making sure that the use of those facilities which have hitherto only been the prerogative of the few and the wealthy few, by and large, it is, dare I say it, almost socialist in action and is therefore to be welcomed. The Bill is right that where the public benefit cannot be demonstrated and where there is total exclusion of the public from the use, then charitable status should be withdrawn. But I note that even if every public school were to fail on the public benefit criterion, only something like 4 per cent. of the income of public schools would be removed from them.

While 4 per cent. is useful for them to have and encourages them into the partnerships that we are advocating, it is not a death blow to them should it be removed. Nevertheless, it is important to have the opportunity to say that there is no public benefit from an institution and that its charitable status should therefore be removed.

Martin Horwood (Liberal Democrat, Cheltenham)

I am enjoying much of what the hon. Gentleman is saying and I agree with a great deal of it, but he might have been wrong on one point of detail. If a public school were by any chance to lose its charitable status, that would be a much more serious matter than just losing 4 per cent. of its income, because, as a non-charitable institution, it would not be able to use the charitable assets that it had accumulated. Charitable assets must remain charitable.

Tom Levitt (Labour, High Peak)

Yes, I had not thought of that aspect. I do not know what happens to an organisation’s assets when it loses its charitable status or whether they are affected in that way, but I am willing to take the hon. Gentleman’s word for it. I am not advocating that we should remove the 4 per cent., but that schools should behave in a way that guarantees that they continue to get it.

On this issue, I regard the Bill as progressive. I shall not dismiss the amendment tabled by the hon. Member for Cheltenham as upholding the Cheltenham principle, because it is important that we air these matters. Although we should not adopt the words that he has proposed, we have had a good debate on this subject. We should acknowledge the fact that the issue has undergone particular scrutiny in the other place, adopt the clause as it stands and move on.

Alun Michael (Labour, Cardiff South and Penarth)

I am grateful for the opportunity to make a couple of brief points, and I hope that we can use the debate to clarify beyond doubt the issue of the public benefit test. There has been a great deal of scrutiny of the provisions, and I hope that the Minister will be able to confirm my understanding of what is happening in them.

I understand why the hon. Member for Cheltenham has tabled the amendment. Essentially, he is saying that having included environmental benefit, for instance, in the list in clause 2(2), there is a danger that the consideration given to the public benefit might lead to it being ruled out again. I can see the point of that, and if we deal with these issues in everyday language, there would appear to be such a danger.

However, my understanding is slightly different. We are muddling up two issues. First, there is a series of specific benefits, which are recognised in the list of charitable purposes in clause 2(2). Environmental benefit, animal welfare and so on are clearly understood as charitable purposes. The public benefit test, therefore, must be a test of the extent to which those purposes are delivered and of whether the way in which the charity is acting is appropriate to delivering them.

However, it would be wrong—this is the fear that the hon. Gentleman is expressing—to return to the list and say, “You cannot identify individuals and groups in the community that get that benefit, so we can overturn its inclusion in the list.” That cannot be right and it cannot be the intention. The public benefit test does not, and cannot, allow the Charity Commission to question whether the charitable purposes listed in clause 2(2) are indeed charitable. From this point on, that must be a given.

The public benefit test relates to the extent to which the charity delivers charitable purposes consistently and appropriately, as against all the other tests of what is charitable, which is very clear, having been set out in previous legislation and in case law.

Andrew Turner (Conservative, Isle of Wight)

Perhaps the right hon. Gentleman will correct if I am wrong, but he is saying that if a cause occurs under clause 2(2), it is not only a purpose that has the potential to be charitable if it demonstrates that it is to the public benefit, but affects the way in which the Charity Commission will test whether it achieves the public benefit. The Chancellor of the Duchy of Lancaster has said that there has always been a view that public benefit ought to be able to be demonstrated. How does the hon. Gentleman think that the charity concerned could demonstrate that it is to the public benefit in this purpose; that is, to the advantage of environmental protection?

Alun Michael (Labour, Cardiff South and Penarth)

Let me put it in terms of animal welfare, since that has been the subject of debate over many years. The argument against animal welfare would be that it does not produce a public benefit, because it does not benefit people. The other side of the argument is that there is actually a public benefit to being concerned about the welfare of those with whom we share the planet. Therefore, a public good comes out of animal welfare that may not benefit human beings individually or as a group. That also applies to some of the charities on Isle of Wight, to which the hon. Gentleman referred earlier. Surely, by listing animal welfare, the definition has put beyond doubt the fact that there is a public benefit in pursuing it.

Similarly, there could be consequences in terms of the environment and national parks, with people going out for recreation and enjoyment, and so on, but the environment is mentioned in clause 2(2), which puts it beyond doubt that landscape and environmental benefit is a charitable purpose. Therefore, it cannot be said, using the test of public benefit, that that is not charitable. It would be wrong to have a presumption that any organisation that sets itself up, saying, “I am environmental”, is not subject to question through the “public benefit” test. Such organisations have to be asked, “Are you pursuing that charitable purpose appropriately and efficiently and have you passed all the other tests that are traditionally accepted as the ones that check whether a charity meets its purpose?”

The amendments may result in a danger that clause 2(2) could be revisited and overturned by the public benefit test. Surely, that cannot be the purpose. I am discussing the matter in that way because I hope that my hon. Friend the Parliamentary Secretary’s response might help us kill off that fear, which has created an enormous amount of the debate that took place in another place.

Debate adjourned.—[Liz Blackman.]

Standing Committee A

Roger Gale (Conservative, North Thanet)

I apologise to the Committee for not observing the normal courtesy of being with you for the first sitting, but I notice that you appear to have made good progress, probably because of rather than in spite of that.

Clause 3

Ed Miliband (Labour, Doncaster North)

Welcome to the Committee, Mr. Gale. It is a great pleasure to have you with us.

We had an interesting debate this morning on amendment No. 71 and issues relating to public benefit. I thought that it would be helpful to the Committee if I explained in the context of the amendment how public benefit will work under the Bill. Then I will deal with the specific issues raised by the amendment.

An organisation must satisfy two tests to be a charity: it must exist for a purpose under clause 2(2), and its purposes must be for the public benefit. To answer the question of my right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael), who is not in his place, the purposes listed in subsection (2) are capable of being for the public benefit but are not necessarily so. A trust to relieve the poverty of one family member is for the relief of poverty, but would not be deemed for the public benefit.

The key question with which amendment No. 71 is concerned is how public benefit will be defined. As set out in the Charity Commission document “The Public Character of Charity”, the public benefit requirement means that an organisation must do two things. It must provide a recognisable advantage for people at a level that reflects their need; that is the benefit element. In addition, the benefits must be provided to the public at large, or at least a sufficient section of the community; that is the public element. Those are the general principles that apply across the board, but they are flexible enough to be applied by the Charity Commission and the courts in different ways, depending on the charitable purpose that they are considering. A large mosaic of case law underpins those principles.

That brings me to the substance of amendment No. 71. I shall deal first with the second part of the amendment, which would introduce a presumption of public benefit for charities that benefit the natural environment or species within it. The Government do not believe that that is desirable or necessary, and not only because the hon. Member for Cheltenham (Martin Horwood) seems to be introducing a second Cheltenham principle, which is to support presumptions of public benefit in one respect but not at another. The amendment is undesirable because it singles out one charitable purpose. It is unnecessary because a charity established to benefit the natural environment or a living species can be deemed to provide public benefit on a number of grounds, not simply the prevention of extinction, which I think was the hon. Gentleman’s concern. For example, animal welfare charities are recognised as charitable not because the animals are necessarily threatened with extinction but because of a broader acceptance of the public benefit of avoiding cruelty and animal suffering. I understand that the Wildlife Hospital Trust to which the hon. Gentleman referred qualifies on that basis.

Environmental protection is acknowledged to provide public benefit because it improves the living conditions of humankind. The Government think that that part of the amendment is unnecessary.

Alun Michael (Labour, Cardiff South and Penarth)

My hon. Friend is making an important point on the issues that I raised this morning. Would it not be correct to say that just as animal welfare produces a public good because it is recognised to be of public benefit without necessarily benefiting individual human beings, environmental protection need not directly benefit individuals to satisfy the public benefit criteria?

Ed Miliband (Labour, Doncaster North)

That is correct to an extent. I do not think that my right hon. Friend was in his place when I said it, but is important to restate the point that purposes under clause 2(2) can be for the public benefit but are not necessarily so. The public benefit test is applied by specifically examining the individual charity and seeing whether it benefits a sufficient section of the public.

To illustrate that important point, I shall quote from the case of IRC v. Baddeley. Lord Somervell of Harrow, talking about a charitable trust, said:

“There might well be a valid trust for the promotion of religion benefiting a very small class. It would not follow at all that a recreation ground for the exclusive use of the same class would be a valid charity”.

The point I am making is that there is a general public benefit test: a sufficient section of the community must be benefited. That test is then specifically applied, and has been applied by the courts—there is a bedrock of common law on the matter—in different cases in different ways. My right hon. Friend looks quizzical, so I shall give way to him.

Alun Michael (Labour, Cardiff South and Penarth)

The difficulty is applying the same principles to a variety of the 13 categories that we have in the Bill. Let us stick with the animal welfare point for a moment. Does my hon. Friend accept that, in the terms that he used earlier, one does not have to show that members of the public benefit from the pursuit of animal welfare in order to show that it is charitable and in the wider sense of the term produces that “public benefit”? I think that I virtually paraphrased his words. If we were to paraphrase that in relation to others of the objects, surely it would explain the situation clearly.

Ed Miliband (Labour, Doncaster North)

I always hesitate to disagree with my right hon. Friend, but ultimately there must be some benefit to the public in order to show “public benefit”. It is pretty clear from established case law that animal welfare charities are deemed to provide public benefit, because there is public benefit in avoiding cruelty and suffering to animals and that redounds to the benefit of humankind. That is my understanding of the basis on which the courts have made their decisions. In a way, the meaning of public benefit is that it must provide benefit to the public.

Alun Michael (Labour, Cardiff South and Penarth)

I am sorry to intervene on my hon. Friend again, but surely the same must apply in relation to the environment. If it is accepted that the protection of the environment more widely produces a general public benefit, one would not have to show that a particular group, or number or proportion of the public benefit from that any more that one would in relation to animals. Surely the same test must apply.

Ed Miliband (Labour, Doncaster North)

There has to be a wider public benefit. It can be a collective benefit, for example, one that comes from preserving the environment or avoiding cruelty or suffering to animals. The point that I am making to my right hon. Friend is that ultimately we must come back to a benefit to the public in some form or another. That can be collective; it does not need necessarily to be about direct benefit to individuals. That is the point about animal welfare charities.

This is important to get clear, because in a way public benefit is the basis on which the Bill turns. We are rightly relying on the common law definitions of public benefit, which have built up over 400 years. The matter therefore takes some explaining and understanding, because the criteria have been built up over a number of years and apply in different cases in different areas.

I move on to the substance of the amendment proposed by the hon. Member for Cheltenham. It might not be specifically targeted at private schools—it might be more generally targeted—but one of the things he clearly has in mind is schools. I shall say something about the position relating to schools because I do not accept his characterisation, as I said on Second Reading.

The Bill is based on four principles. The first is that charities must show public benefit, and there is no free pass for any charity—that is the reason to get rid of the presumption in favour of education, religion and the relief of poverty. The second is that the Charity Commision will have the final say, depending on the circumstances of the individual charity, as has always been the case and has been demanded by the National Council for Voluntary Organisations and others. The third is that indirect benefit that is simply relief of the public purse should not be regarded as satisfactory. The fourth is that, as it stands, the Bill can raise the bar of what is required, while also raising the overall standard of education in this country.

The hon. Gentleman referred briefly to re Resch. As I said on Second Reading, I am not sure that I accept his characterisation. He seeks to introduce a clarification derived from recent Scottish law. On Second Reading, my right hon. Friend the Chancellor of the Duchy of Lancaster said, regarding the advisability of a clarification of the Bill:

“By trying to be more specific, we do not want to exclude organisations that should not be excluded. I hope that hon. Members, especially my hon. Friends, understand that we are determined that there will be a test of public benefit, which we expect to be meaningful, but that trying to identify matters too clearly frequently brings disbenefits that nobody anticipated.”—[Official Report, 26 June 2006; Vol. 448, c. 26.]

That is one danger in what the hon. Gentleman proposes. I shall explain why.

Scottish charity law is now based on a different legal framework than the law of England and Wales. Under the Bill, the public benefit test is based on “charitable purposes” as established in common law. Under the new Scottish law, the public benefit test is based on the activities of the bodies that seek to become charities, and the regulator has been given a large amount of power to make executive decisions about which charities meet the public benefit test. In a sense, the intervention of the hon. Member for Isle of Wight (Mr. Turner) on the hon. Member for Cheltenham illustrated that point. The hon. Member for Cheltenham is right to say that what “unduly restrictive” would mean is not a decision for him, but it will be a decision for the Office of the Scottish Charity Regulator. Clearly, that important decision has been taken. That is an overall perspective of some of the differences between English and Scottish law, and the direction of travel of the Scottish situation.

The amendment is basically in two parts, the first of which deals with the public benefit test and provides that the benefits must outweigh the disbenefits. That is already established in law and does not add anything. As I understand it, a 1947 case concerning the National Anti-Vivisection Society, with which I have a passing familiarity, established that the benefits must outweigh the disbenefits as part of the public benefit test. Therefore, that part of the amendment is unnecessary.

The second part of the amendment contains the wording “unduly restrictive”. That wording is not clear enough for us to be confident that it would improve the public benefit test in the Bill and would not have unintended consequences. Could we be sure, in the context of the law in England and Wales, that existing charities, such as museums that charge fees, would not be caught? I am sure that that is not the intention of the framers of the amendment, including the hon. Member for Cheltenham, but we are not confident that it is the best way forward. At best it would mean no change to the public benefit test that is carried out by the commission; at worst, it could have harmful effects. Perhaps that is why Lord Phillips of Sudbury said, in a letter to me, that the Scottish provision is not well drafted. That is consistent with what he said in another place a year ago—the Liberal Democrat Front Benchers should hear this. He said:

“It was pressed upon me that it might assist our deliberations to introduce some of the Scottish wording around this very issue. However, I rejected that out of hand because in this instance I believe that the Scots have got it plumb wrong”.—[Official Report, House of Lords, 28 June 2005; Vol. 673, c. 168.]

Liberal Democrat Front-Benchers might need to consult with Lord Phillips on that, but on this occasion at least, we agree with him that the amendment would not be helpful. We have not closed our minds to the possibility of improving the Bill, but any change must meet the true criteria set out by my right hon. Friend the Chancellor of the Duchy of Lancaster: that it provides a sound legal basis for the public benefit test and avoids any unintended or harmful consequences. On the basis of those explanations, I hope that the hon. Gentleman will withdraw his amendment.

Martin Horwood (Liberal Democrat, Cheltenham)

I shall take the second part of the amendment first regarding

“benefit to the natural environment, or the living species within it”.

I am encouraged by the sympathetic comments from the hon. Member for Bishop Auckland (Helen Goodman), the right hon. Member for Cardiff, South and Penarth, the Minister and others about the spirit of the amendment. There has been genuine concern about the risk of an organisation passing the clause 2(2) test as an environmental organisation, but going on to fail the public benefit test, because—I shall paraphrase the right hon. Member for Cardiff, South and Penarth—it might not always be possible to demonstrate public benefit when one cannot demonstrate a public who obviously and directly benefit. I am partly reassured by the Minister’s reply, but the risk still exists and there is still a need for clarity. Should the amendment be defeated, I invite the Minister to look sympathetically on the idea of introducing a Government amendment that might meet some of the same objectives. However, I advise him not to use “presumed”, as it is liable to misinterpretation.

The main body of the amendment is concerned with the Scottish public benefit test. The Minister suggested that four principles were being followed: first, that there is no free pass to pass the test, which is correct; secondly, that the Charity Commission has the final say; and thirdly, that the benefit is not automatically satisfied simply by the provision of education. I agree with those three principles, but there is doubt regarding the fourth—that the Bill will raise the bar. The legal opinion that I have heard is divided on whether the Bill will make any difference to charity law in terms of the public benefit test. The NCVO and the Charity Commission support that view in many of their comments.

The hon. Member for Isle of Wight questioned why the view of the Charity Commission, or the NCVO, or indeed the Liberal Democrats, since I have not reintroduced Lord Phillips’ amendment, might have evolved during the course of the long debate about this Bill. One obvious reason is the passage of the Scottish Act, because it sets a clear example of how a stricter set of guidelines on the public benefit test might work.

Let me answer a few of the hon. Gentleman’s questions about my amendment. He asked me to define or clarify what I meant by benefit or disbenefit. He kept on referring to them as my words, but they are the words adopted by the Scottish Parliament, so I can do no better than to refer to the Office of the Scottish Charity Regulator’s guidance on public benefit. It says:

“For example, if a charity relieves a person’s sickness or financial hardship, the person’s health or financial circumstances can be measurably improved. Such benefits could be described as tangible. On the other hand, intangible benefits may be more difficult to measure, but should still be identifiable. These can include, for example, many of the benefits of education or religion, or promoting appreciation of historic buildings. Both tangible and intangible benefits will be taken into account.”

I hope that reassures him, given some of his worries about whether the amendment would apply to the provision of education.

The hon. Gentleman also asked about the disbenefit. It, too, is explained more clearly in OSCR’s guidance, which says:

“Many of the everyday actions of organisations (and individuals) may cause a degree of harm to others, either directly or indirectly. This fact should not unnecessarily stifle the operations of charities. Where any disbenefit caused is due to reasonable and necessary actions in connection with the (prospective) charity’s purpose and is the inevitable and generally accepted result of such actions in the society in which they take place, then such disbenefit may be largely disregarded (for example, when a degree of harm to the public is caused (by road accidents and pollution) by charities that need to use cars in the delivery of services to their beneficiaries).”

Again, I hope that he is reassured that the emerging practice in Scotland is moderate and reasonable.

That is why I shall not withdraw the amendment but press it to a vote. I hope that the demonstration of the need for more clarity and a stricter public benefit test, which I think has been demonstrated, is reflected in the Bill.

The hon. Member for Rochford and Southend, East (James Duddridge) referred us to re Resch in the hope that it would provide clarity. My noble and learned Friend Lord Phillips of Sudbury is one of the few people who has probably read and understands re Resch and he said in the other place that

“A decent lawyer can make a good case for virtually any proposition on the basis of Re: Resch. If you have trouble sleeping, keep it by your bedside. I was amused that the briefing note that the Independent Schools Council sent to, I suspect, all of us, had the wonderful statement:

‘The Resch principles are in the law books for anyone to read’.

Indeed they are. Read, and read, and read ye may, but a certain conclusion you will not find”.—[Official Report, House of Lords, 7 June 2006; Vol. 672, c. 794.]

The confusion about the interpretation of re Resch which has prompted much debate, especially in the other place, underlines the need for clarity.

It is absolutely right that institutions that gain the benefits of charitable status clearly demonstrate a public benefit, perhaps more so than they have had to do in the past. That is the whole tone and direction of the Bill, which seeks to apply a public benefit test to all charities. Even the hon. Member for Isle of Wight’s noble Friend said in another place that all charities, whatever their purpose, should have to pass a public benefit test. I am simply trying to ensure in the amendment that the public benefit test makes some difference to the existing law and that the sort of direction in which the Independent Schools Council is encouraging its members to travel—to seek out ways imaginatively to promote public benefit more effectively—is the direction in which they go. Only stricter wording in the Bill will deliver that.

Roger Gale (Conservative, North Thanet)

Before we proceed to the next group of amendments, it may be for the convenience of the Committee if I indicate now that it has always been my custom and practice to allow a stand part debate either at the beginning of consideration of a clause or at the end, but not both. I understand that there has been a fairly substantive debate already on the clause and, that being so, it is unlikely that I shall be minded to allow a stand part debate. Hon. Members may therefore choose to use their ingenuity to raise, within order, any other matters that may arise during the next few moments.

Andrew Turner (Conservative, Isle of Wight)

I beg to move amendment No. 4, in clause 3, page 3, line 22, after ‘not’, insert

‘save in the case of subsections (a) and (c) of section 2(2),’.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss amendment No. 54, in clause 3, page 3, line 22, after ‘not’, insert

‘save in the case of section 2(2)(b).

Andrew Turner (Conservative, Isle of Wight)

It is a great pleasure to serve under your chairmanship again, Mr. Gale.

Both of the amendments resist the abolition of the presumption of public benefit which seems to be at the heart of the Bill. Amendment No. 4 refers to clause 2(2)(a) and (c) and amendment No. 54 to clause 2(2)(b). The principle embodied in the Bill is very simple: it is that there should be a level playing field and all charities should have to demonstrate public benefit, albeit that that principle was somewhat undermined by the arguments advanced by the hon. Member for Cheltenham in support of amendment No. 71. What is interesting is that the public benefit test seems to be different for many of the causes set out in clause 2(2). My intention in tabling the amendments is twofold. First, it is to tease out what the law is on public benefit in respect of each of the three charitable purposes. Secondly, it is to test whether it is to the advantage of the populace in general that charities should have to devote time and energy to demonstrating public benefit when to do so is otiose, as in the case of the relief of poverty, or impossible, as in the case of the advancement of religion.

I am told that, under charity case law, it is not those who engage in religious practices who are the public who benefit; the public benefit is the benefit that they bring to society by rubbing shoulders with those who do not so engage. In other words, people who engage in religious practices are presumed to become more moral and altruistic as a result, so the public at large benefit when they mix with such people. That is an ingenious interpretation. However, the Chancellor of the Duchy of Lancaster has said that

“all charities will have to show that they are for the public benefit...an organisation will have to show that it generates identifiable benefits that reach...a sufficiently large section of the public.”—[Official Report, 26 June 2006; Vol. 448, c. 25.]

What are the identifiable benefits from religion that reach a sufficiently large section of the public? If it were a case of rubbing shoulders, many religions, but not all, will be able to demonstrate public benefit.

Perhaps prayer brings comfort to those who participate in it, but I am worried about how we can demonstrate that it generates a public benefit. I said that on Second Reading, but I do not think that I received a satisfactory reply. Can we demonstrate that the prayer undertaken by people engaged in religion has made them more moral and altruistic? Is that what religions will be asked to demonstrate?

Helen Goodman (Labour, Bishop Auckland)

The hon. Gentleman may be aware that, in America, an experiment was carried out in which religious communities prayed for people who were ill. The people involved did not know whether or not they were being prayed for but, as it happened, those who had been prayed for did get better faster.

Andrew Turner (Conservative, Isle of Wight)

That is most encouraging for those who occasionally pray and even more so for those who pray more frequently. The case seems to be very much on the lines of the arguments over health foods—we might be able to demonstrate the statistics, but can we demonstrate the cause and effect? Perhaps I should not go down this road—in fact, I know I should not. I shall do so at another opportunity, Mr. Gale.

The difficulty is demonstrating that the prayer has the effect that the hon. Lady mentioned. If we are providing a place of worship and some comfort is taken by the people who attend the place of worship, is that providing a public benefit in that the place of worship is open to a fair number of people, or are we providing a private benefit? Is it sufficient that that group of the public should take comfort from prayer or is there also a requirement that that comfort be extended to other people?

That sounds highly academic, but what about people in religious groups who pray but do not rub shoulders with others? The Parliamentary Secretary assured me on Second Reading that,

“for religion, the obligation will not be onerous...making provision for people to attend acts of worship is clearly a public benefit.”—[Official Report, 26 June 2006; Vol. 448, c. 96.]

I should have mentioned that point earlier, because it was part of my earlier argument.

What about those who pray behind closed doors? There is a current television programme about women attending a convent of the Poor Clares. Few people have the opportunity to attend such a convent temporarily, because the Poor Clares are a contemplative order that operates mostly behind closed doors. What is the benefit to the public of the activity of the Poor Clares and, more significantly, how do they demonstrate it to the satisfaction of the Charity Commission?

Alun Michael (Labour, Cardiff South and Penarth)

Is not the hon. Gentleman in danger of taking us into a linguistic discussion when the answer is actually is given in clause 3? It says:

“In this Part any reference to the public benefit is a reference to the public benefit as that term is understood for the purposes of the law relating to charities in England and Wales.”

That refers specifically to what has built up in statute and case law over the years. The answer is already in law and the Bill ensures that it is enshrined and continued, which is better than having a fresh set of words putting it to one side.

Andrew Turner (Conservative, Isle of Wight)

I am grateful to the right hon. Gentleman for raising that point, because about three months ago that was the meaning that I understood was contained in the Bill. However, that interpretation has been sadly undermined, not least by the Parliamentary Secretary himself, who said that the Bill would

“raise the bar with regard to the contribution that”

private schools

“make towards the public benefit”.—[Official Report, 26 June 2006; Vol. 448, c. 97.]

He cannot say both, “This is the public benefit test and it is unchanged” and “We will use the processes in this Bill to raise the bar for the public benefit test.”

Alun Michael (Labour, Cardiff South and Penarth)

Surely, that is precisely what it does. By removing the presumption that the general legal definition—that which is understood in common law—applies to schools and other organisations that were previously presumed to have a public benefit, the clause does precisely what he says it does not do.

Andrew Turner (Conservative, Isle of Wight)

If by “raise the bar”, the Parliamentary Secretary meant “remove the presumption of public benefit”—[Interruption.] He is saying that he did. That makes it a lot easier.

I am concerned that the Parliamentary Secretary has given the impression to certain hon. and right hon. Gentleman on the Government Back Benches that he will require independent schools to demonstrate a higher level of public benefit than they have been required to do so far. I understand that, currently, there is a presumption and an act by the Charity Commission would be required to overturn that, but the test is the same whether there is a presumption or not. Under the current law, once the Charity Commission tested whether a charity was meeting the public benefit test or the presumption was ill-founded, it would apply the same test once the presumption was removed. I hope that I am making this clear for the Parliamentary Secretary, because he may shake his head if I am not doing so.

The Parliamentary Secretary is not raising the test. He may be raising the bar and abolishing the presumption, but he is not making the test more difficult. I have to leave it to him, unless he wishes to intervene.

Tom Levitt (Labour, High Peak)

I am trying with interest to follow the hon. Gentleman’s argument. Surely a presumption is a presumption, beyond which there is no further need for a test. The Bill says that we need organisations to justify their charitable status. The hon. Gentleman appears to suggest that Eton, Harrow and all such schools should not have to demonstrate their public benefit, but organisations such as the National Society for the Prevention of Cruelty to Children should have to.

Andrew Turner (Conservative, Isle of Wight)

The selection of examples makes the hon. Gentleman’s point, and I am sure that that is why he selected them. However, I am afraid that he is wrong. A presumption is a merely a presumption: in the absence of other evidence, we presume that public benefit is met.

A presumption, however, is not an insurmountable assertion; otherwise, the Finsbury Park mosque would not have been required to take action to preserve its charitable status. That mosque benefited from the presumption that the advancement of religion is a charitable purpose. There were complaints about how the mosque was used and the Charity Commission waded in to persuade those who run the mosque to act differently and bar certain people from using it for certain purposes. There was a presumption, but it was not irrebuttable. Once the Charity Commission had found that the mosque was not being used for public benefit, it asked the trustees to change their behaviour. They did.

I am asking whether the test in clause 3(3), to which the right hon. Member for Cardiff, South and Penarth referred, will be the same or whether it is of a higher level, first in respect of religion, as the right hon. Gentleman says, secondly in respect of the alleviation of poverty, on which nobody has uttered, and thirdly in respect of the advancement of education. If the test is the same, we are fine and dandy. However, if it is different, the assertion that subsection (3) guarantees no change in the test is false. I had not intended to go down that avenue, although it would be useful to do so. I am sure that the Parliamentary Secretary will respond helpfully to that point.

James Duddridge (Conservative, Rochford and Southend East)

Does my hon. Friend agree that the issue relates not only to the position directly after the Bill is enacted? The test could be ratcheted up year after year, both by Government-appointed charity commissioners and political pressure, and that would effectively be an extra tax on independent schools.

Andrew Turner (Conservative, Isle of Wight)

That has certainly been a concern. I accept, of course, that, in the Bill, the Charity Commission is deemed to be independent, but Ministers make the appointments. When we come to clause 4, I intend to discuss the process through which the public benefit test may evolve; that is certainly a concern of mine.

I go back to my amendment. The second example referred to by amendment No. 4 is that of the alleviation of poverty. As I said on Second Reading, I find it difficult to understand how it can be argued with any reasonable likelihood of success that a charity for the relief of poverty is not for the public benefit. On Second Reading, the Parliamentary Secretary said that

“if we take the case of a trust to benefit a few people in one’s immediate family, one might say that it was set up for the relief of poverty. However, there might be questions about whether it genuinely provided public benefit.”—[Official Report, 26 June 2006; Vol. 448, c. 96.]

There is a presumption that there is public benefit, of course—but it is rebuttable. In the case under discussion, such use of a trust would be excluded, because it would be so defined that its membership would be fixed, which means that it would be a private trust, not a public trust. A private trust cannot be for public benefit.

I accept that there may be cases in which the presumption is unreasonable, but those are cases in which the presumption is rebuttable. I do not want every charity whose object is the relief of poverty having to go out and demonstrate that it is relieving poverty in the way the Charity Commission intends, and thereby expend a huge amount of time and energy. I do not see how the abolition of the presumption can have any effect unless charities are asked to demonstrate what Ministers say that they want them to demonstrate: identifiable benefits. So every religious or educational charity—not just Eton and Harrow, but the Isle of Wight Steam Railway, which is an educational charity—will be asked to spend time and money demonstrating how it provides public benefit, when the Isle of Wight Steam Railway would far rather build an extension to join the island line from Shanklin to Ryde pier head.

Martin Horwood (Liberal Democrat, Cheltenham)

The hon. Gentleman seems to forget that the enormous majority of charities already have to demonstrate public benefit under current law, because the fourth head of charity requires it. Is he suggesting that the current requirement to prove public benefit is enormously onerous for all the thousands of charities that endure it?

Andrew Turner (Conservative, Isle of Wight)

I am not suggesting that. I simply do not know, but I do know that some charities have been caught, and I mentioned one earlier. I did not quote its name because the Charity Commission did not tell me the name, but I quoted the Charity Commission as saying that a particular charity that operates for the benefit of police officers’ widows and orphans was behaving inappropriately by giving them a Christmas gift of £50. I am quite happy to table the letter—or whatever one does with papers—so that hon. Members can read them.

Martin Horwood (Liberal Democrat, Cheltenham)

Since that organisation did not make its gifts to the widows of police officers on the basis of need, it would not meet the criteria in the hon. Gentleman’s amendment, which excludes the prevention or relief of poverty, and the advancement of religion. It would still have to pass the public benefit test even if his amendment were passed.

Andrew Turner (Conservative, Isle of Wight)

The Charity Commission would have to put that test to the organisation to demonstrate, but the commission would not have to ask every charity to demonstrate it. Many charities will demonstrate it perfectly adequately, but we will be asking charities—and the Charity Commission, for that matter—to expend a lot of time, effort and money, and, in the case of the Charity Commission, our money and our constituents’ money, in demonstrating something that it is unnecessary to demonstrate unless there is a prima facie case that those organisations are not conferring public benefit.

Alun Michael (Labour, Cardiff South and Penarth)

Does the hon. Gentleman not accept that any charity of any size produces a business plan—for its own internal reasons, never mind any external scrutiny—that demonstrates how it is pursuing its charitable objects and how it is therefore delivering public benefit? No extra work is required.

Andrew Turner (Conservative, Isle of Wight)

No, I do not accept that, any more than I accept that every business has a business plan. Perhaps they ought to have, but I am sure that not every Conservative association has a business plan. Mine does, as it happens, but I do not suppose that every constituency Labour party has a business plan. Of course, that is the way that things should be done in the best of all possible worlds, with an infinite number of staff who can spend their time on such matters, but charities are not like that. [Interruption.] I did not hear the right hon. Gentleman’s intervention.

Alun Michael (Labour, Cardiff South and Penarth)

I said that charities are a lot more business-like than the hon. Gentleman thinks.

Andrew Turner (Conservative, Isle of Wight)

Many are, but not all are able to act in the way that the right hon. Gentleman describes, and I am concerned that they will be forced so to act. If I can find the example that I was given earlier—well, I cannot find it, but I am sure that I will have an opportunity to quote it later during the Bill’s proceedings. Anyway, I received an e-mail from someone who claimed to be a lifelong Labour voter. I know that lifelong Conservative voters are those who are not going to vote for me at the next election; the same probably applies to this lifelong Labour voter. He has taken on the treasuryship of his local church, but complains that, even in the present circumstances, the Charity Commission is expecting far too much, and he says that it is not surprising that one cannot find people who are willing to take on such responsibilities. Although I accept that the other charities whose purposes are in the list are required to demonstrate public benefit, it would be better if we did not impose that requirement on lots of new ones as well.

Tom Levitt (Labour, High Peak)

As one spent three very enjoyable summers on the Isle of Wight in my student days, I certainly take the hon. Gentleman’s point about the valuable work of the Isle of Wight Steam Railway Co.

However, I wish to comment on the point raised by my right hon. Friend the Member for Cardiff, South and Penarth about the onerous nature of demonstrating that a charity is doing what it was set up to do. If I were asked to give money to one of those charities, I would want to know that it was doing what it was set up to do; if I were a trustee, I would expect some sort of annual report from the chief executive or the chairman; if I were an auditor, I would expect the audited accounts of the organisation to demonstrate that the charitable purpose is being met. All those things should really be being done now. The Bill raises the threshold at which charities have to register and so reduces the burden on smaller charities, but the hon. Gentleman is making a mountain out of a molehill in suggesting that there is any significant extra work for charities to do under the clause.

Andrew Turner (Conservative, Isle of Wight)

I cannot judge the size of the mountain, but we should remember that those charities that do not have to register are still obliged to demonstrate public benefit. As for the small charities, if I give money to the Isle of Wight bat hospital, I know where that money is going, because I can go to that hospital and see the bats; the same is the case for the Isle of Wight Steam Railway Co. There is a difference between a small, local charity and a large charity that requires auditors, business plans and goodness knows what.

I remind the Committee what happens when a charity is not delivering public benefit; that is particularly significant to an educational charity. The document from which I quoted earlier, “Public Benefit—the Charity Commission’s approach”, sets out what happens then. It states:

“our action might include helping the charity change its stated purposes or its activities so that it is benefiting enough of the public to show public benefit”—

that is fine—

“We might also use our regulatory powers to enforce change if the trustees are not co-operating with us, although we anticipate we would need to do this in only in a few cases.”

That, too, is excellent.

“However, in extreme cases, where the trustees are co-operating with us but the organisation simply cannot in all the circumstances provide public benefit, our action might include removing the charity from the register and making a legal scheme where necessary to ensure that any charitable assets of the organisation will in the future be applied for other charitable purposes close to any purposes that have ceased to be charitable.”

That suggests that there are some activities that will cease to be deemed charitable, and that the charities concerned will therefore lose their assets. I am worried principally that the abolition of the presumption of public benefit will put an additional burden on charities and on the Charity Commission that they are ill placed to meet.

Martin Horwood (Liberal Democrat, Cheltenham)

I would like to draw a little on my experience of being on the senior management team of a national charity that had to pass the public benefit test. The Alzheimer’s Society did not qualify under any of the first three heads of charitable purposes. The hon. Member for Isle of Wight seems to think that passing the public benefit test and maintaining the status of passing the public benefit test is some terribly onerous and difficult responsibility that involves lawyers’ fees and heaven knows what else. However, I have to say that in five years on that senior management team, the public benefit test did not bother us for one minute.

I am speaking about a charity that did not provide a benefit to the whole public. We were quite shamelessly restricting our services for the benefit of carers and people with dementia, so there is perhaps a case to be made that we were not providing a wider public benefit and that we restricted our services. However, most of us thought that if we had ever been challenged as to whether we were providing a public benefit, we could have dispatched the argument on one side of A4 faxed to the Charity Commission, which I suspect would not have wasted any more time on it than we would have done.

In the overwhelming majority of cases, charities will have little difficulty in passing the public benefit test or proving that they are capable of passing it, should they ever be challenged. I echo the words of the hon. Member for the Member for High Peak (Tom Levitt) when he says that a mountain is being made out of a molehill.

In the specific case of religion, the hon. Member for Isle of Wight seems to be concerned that it is difficult to demonstrate the benefit of prayer or religious activity. Through a precedent in case law, which I do not pretend to fully understand, even religious charities have to demonstrate some public benefit. It is probably because of the need to demonstrate that they are advancing religion as opposed to just practising it. For example, closed orders—I do not know whether the Poor Clares fall into that category, but I suspect that they do—do not now qualify as charitable organisations in charity law because they are practising religion behind closed doors for their own personal benefit. Therefore, that restriction already provides.

It is not beyond the hon. Gentleman’s faculties to demonstrate the benefit of prayer or religion in a wider sense. It could be argued that advancing religion for the general public might allow some members of the public to believe that they were gaining greater insight into the truth of life, the universe and everything; or that it might bring them greater comfort; or that it might even help them to recover from illness. It could be argued that encouraging them to perform an act of contemplation or meditation might bring peace of mind by the very process that they were going through. It does not seem difficult to demonstrate that religious charities could pass the public benefit test that is in the Bill.

I have some sympathy with the question that the hon. Gentleman put to the Government. Given the failure of my earlier amendment, we now have a public benefit test that advances little from existing charity law. However, for exactly that reason, given that most charities have no difficulty passing the test under existing charity law, they would have little difficulty in passing it under the Bill.

The test is designed to catch charities that are scams, in which there is obvious possibility of abuse or of the misleading or corruption of individuals by the organisation. Those kinds of organisations were failing the public benefit test before. On that front, the hon. Gentleman’s amendment poses a practical risk. He is taking the principles from previous Acts and applying them to a new Bill, which might have unintended consequences. By putting in a deliberate statement that there will be a presumption that religious charities will satisfy the public benefit test, he may bring in religious organisations that are incontestably religious—whether or not they believe in a supernatural principle, or one god or many—but that would not have passed a more general public benefit test.

I am sure that we can all think of the most extreme examples, such as the Aum cult who gassed the Tokyo underground, the Branch Davidian sect who committed mass suicide in Guyana many years ago, or Satanists who would presumably regard themselves as religious. Under that blanket presumption, which enables them to evade any further public benefit test, those type of organisations might seek to claim charitable status. That is an extreme and absurd version of the argument but there is a risk that there may be unintended consequences to his amendment that he has not considered.

On the general principle of the amendment, the hon. Gentleman’s arguments are simply wrong. One of the Bill’s great attractions is that it seeks to modernise the structure of charity law. It will remove the antiquated and almost stereotypical preference for the relief of poverty and the advancement of religion and education as charitable objects that are somehow proper, with everything else having to pass a second test. I thought that equalisation and levelling the playing field among all charities enjoyed enormously wide support in the sector. I am aware of no significant opposition even from religious charities, and the provision has been supported even by the hon. Gentleman’s noble Friends in another place. I repeat the words of Lord Hodgson of Astley Abbots on 28 June. He said that all charities should

“have to meet a public benefit test, no matter what their purposes are”.—[Official Report, House of Lords, 28 June 2005; Vol. 673, c. 154.]

The hon. Gentleman is arguing that particular categories of charity, including private schools such as Eton, Harrow and Winchester, should be put back in a privileged position. The list of charities that he would relegate to a secondary position is quite impressive. The RSPCA, the Dogs Trust, the Shakespeare Globe Trust, the Dartington Hall Trust, Help the Aged, Age Concern, Youth Music, the Royal Society for the Protection of birds, Alcohol Concern and even the Police Dependants Trust about which he spoke earlier would all be relegated to that secondary status. That is quite wrong in principle.

One of the best things about the Bill and the reason why it has commanded such wide support in the voluntary sector is that it moves away from that slightly mediaeval approach toward a level playing field for all charities in a modern context. I shall oppose the hon. Gentleman’s amendment if he presses it to a Division.

Ed Miliband (Labour, Doncaster North)

We have had a most illuminating debate, I think. The starting point is whether we agree with the overall principle that all charities, in return for receipt of public money, should have to show public benefit. The Government and the Liberal Democrat Front Benchers agree with that principle, but I am sad to say that the Conservative Front-Bench spokesman does not appear to do so.

James Duddridge (Conservative, Rochford and Southend East)

On a point of clarification, what exactly does the Minister mean by receiving public money? Does he mean receiving it by not being taxed? That is somewhat different—a flow of funds in the opposite direction. That is fundamental.

Ed Miliband (Labour, Doncaster North)

The hon. Gentleman can dance on the head of a pin if he likes, but there is a significant cost to the public purse as a result of charities’ preferential tax status. It is clearly a cost, and in my view such preferential treatment relative to other organisations must therefore be justified. That is obvious.

Rob Flello (Labour, Stoke-on-Trent South)

On a minor point, does my hon. Friend agree that the label “charity” also makes the public more willing to donate money than the label “not-for-profit organisation” might?

Ed Miliband (Labour, Doncaster North)

My hon. Friend makes an important point. Part of the Bill is about ensuring public confidence in the charitable brand. We cannot say that the public should have confidence in the charitable brand if a whole set of classes of charity is presumed not to have to show public benefit. That is the existing law.

The hon. Member for Isle of Wight asked about the nature of the test. That will be determined on the basis of common law, but it is clear that at the moment, various charities are essentially not scrutinised because of that presumption. That is how it works in practice. The Government think that that is wrong. We think that the RSPCA, Eton college and a religious charity should all provide proof of public benefit.

Angela Watkinson (Conservative, Upminster)

The Parliamentary Secretary might have received correspondence from various religious organisations on the subject. The Christian Institute expressed concern that the removal of presumption on the public benefit of religious organisations will give the commission

“greatly increased powers to reject the applications of religious bodies or even to de-register existing ones”.

Will the Minister reassure the Committee that the stringency of tests will not be greatly increased?

Ed Miliband (Labour, Doncaster North)

There is a difference. A test will be applied in practice that is not currently applied. The hon. Member for Isle of Wight quoted my point on Second Reading that it is clearly established in common law that the practice of religion and religious organisations is seen as providing a benefit to the public. It will be for the Charity Commission to make the final decision, and I cannot speak for it. That is a commonly accepted principle. It is clear that religious charities and organisations provide public benefit, and I see no reason why that should change. The hon. Lady can therefore reassure religious organisations.

Angela Watkinson (Conservative, Upminster)

I am not absolutely certain about the status of the commission’s position paper, “Public Benefit—the Charity Commission’s Approach” or about the relationship between that paper and the Bill. Religious organisations believe that the commission will distinguish between acts of worship and services in a public place and other forms of religious practice such as, for example, missionary work and the alpha course. Will the commission distinguish between acts of worship and services and other forms of religious practice? There is a concern that if public worship is not included, religious organisations might encounter difficulties under the Bill.

Ed Miliband (Labour, Doncaster North)

Reassurance can be offered on the point about missionary work, which has been raised before.

Let me return to the argument. There will be a public benefit test for every charity, and that is right. There is a specific issue about fee-charging charities, because they have to show that they provide benefit to a sufficient section of the population, and it will be for the commission to implement the provision in practice. My concern about the hon. Gentleman’s amendment is that, essentially, he seeks to provide a free pass to certain charities. His concern is probably motivated by independent schools, but the Conservative party is on its own not only in this Committee but in relation to independent schools. They welcome the Bill and say that it is the right thing to do.

I have a letter from Jonathan Shephard, head of the Independent Schools Council, to my right hon. Friend the Chancellor of the Duchy of Lancaster. It is important for the Committee to hear it. He says:

“Presumption of public benefit will be removed. This is of prime importance. Until now, the presumption has been that a body established for charitable purposes (including education) is charitable. This is (broadly) irrespective of performance. Now that the presumption is being removed, there will be no place for the lazy charity.”

Mr. Shephard goes on to say that in evidence to the Joint Committee, chaired by my right hon. Friend the Member for Darlington (Mr. Milburn), he referred to the fact that some charities needed to pull their socks up. He said that they will now have to do so, because of the removal of presumption, and the likely annual audit and return of public benefit that they will be required to provide.

I agree with Mr. Jonathan Shephard. Many private schools do incredibly good work with the state sector, but as he said to me, we aspire to ensure that as many schools as possible rise to the standards of the best in co-operation with the state sector. We are trying to break down the divide between private and state schools. That is important, and I would have thought that the Conservative party would welcome it. The Bill, by removing the presumption, will help to ensure that it happens. Mr. Jonathan Shephard of the Independent Schools Council, which represents the private schools, after all, agrees. He thinks it is a good idea. In fact, he has said that it is a very good Bill, so I cannot for the life of me see why the hon. Gentleman is worried. There will be a test, and the bar will be raised, because the test was not being implemented in practice before.

Andrew Turner (Conservative, Isle of Wight)

The Minister has now said something illuminating—not that most of what he says is not illuminating. He says, “because the test was not being applied properly before”.

Ed Miliband (Labour, Doncaster North)

I said “implemented”.

Andrew Turner (Conservative, Isle of Wight)

I am sorry. The Minister used similar words. If that is what he is asserting, we are beginning to understand his point, but if the test was not being applied properly by the Charity Commission when it had only to look at cases that were brought to it, how on earth will it be applied properly to every charity in all three categories when it has to go systematically through every charity? Is the Minister saying that it was pure luck that the Charity Commission found the Finsbury Park mosque, applied the test and found that it failed?

Ed Miliband (Labour, Doncaster North)

The hon. Gentleman is bringing up all kinds of different issues. The Finsbury Park case was not about public benefit but we should not go down the Finsbury Park road because it will confuse an already somewhat confused picture.

My point is simple: at present there is a presumption of public benefit for educational, religious and anti-poverty charities. As I said on Second Reading, that presumption has, in effect, meant a free pass for charities in those categories. There should not be one law for one set of charities and another law for another set. It is right that every one should have to pass a public benefit test and that is what will happen. There is no great revelation in what I have said; it will be for the Charity Commission to implement that test and we will discuss in clause 4 how that will be done.

The hon. Member for Upminster referred to the illustrative material for this Bill that was published by the Charity Commission. When the Bill is enacted, it will publish general draft guidance for consultation with stakeholders, individuals and the public and that is the right way to go. It will then consider specific groups of charities and it will be for the Charity Commission and the chief charity commissioner to implement the proposal in practice, which is right. It is not for politicians to do so.

Several questions were asked about the precise test of public benefit and they are very legitimate questions. If my answers have been somewhat inadequate on the matter of the specific test for individual charities, it is because there is a body of case law that has been built up over time. On the advice of the National Council for Voluntary Organisations and other major charities, we made a decision on public benefit to stick with a flexible definition that was defined in common law.

That does not make things simple; it makes them incredibly complicated, especially for people who are not lawyers. We could have said, “For every charity and for every possible purpose, we politicians will provide a public benefit test,” but that would not have been the right way to proceed. However, the implications are that we have to rely on the wisdom of the courts and the Charity Commission. When enacted, the Bill will be implemented on the basis of the established body of law.

The amendment is misconceived. It troubles me, because it puts the hon. Member for Isle of Wight and the Conservative party outside the mainstream of opinion on the matter. I still do not fully understand the motivation behind the amendment; it is right that all charities should have to pass the public benefit test and I urge the hon. Gentleman to ask leave to withdraw the amendment.

Andrew Turner (Conservative, Isle of Wight)

I am grateful to the Minister for the way in which he has responded to the amendment. The motivation is to scrutinise the consequences of the Bill. I am by nature someone who is concerned when everyone agrees because it may mean that we have scrutinised the proposal insufficiently.

I am particularly concerned about the imposition of an additional responsibility on small charities. I originally intended to table one amendment that would have overturned the abolition of the presumption in all three cases. As a result of what Ministers said on Second Reading, I decided to table two separate amendments because if the independent schools think that it is all right, I see little point in arguing on their behalf that it is all wrong. However, I have certain concerns about the position of Mr. Jonathan Shephard and the independent schools, to which I shall return.

As my hon. Friend the Member for Upminster has suggested, I am concerned that the consequence of the abolition of the public benefit would be onerous and would establish a higher level of test. The Minister has persuaded me that it will not establish a higher level of test in the cases of the abolition of poverty and the advancement of religion.

The reasons why people are concerned are set out, as my hon. Friend mentioned, quite well in the Christian Institute paper. It stated:

“’‘Public Benefit - the Charity Commission’s approach’ is very secular in tone. It states that that public benefit must be assessed ‘in the light of modern conditions’ and that keeping up with ‘modern society’ is required if a charity is not to have its charitable status revoked.”

It was noted that that is contained in paragraphs 15, 23 and 24 of the Charity Commission document.

In the nature of things, some people who are religious think that there is something wrong in modern society and that not everything is right about it, and they point out that major religions are not modern and that one cannot interpret belief in the light of modern society. Plenty of people will do that, some of whom are in the Episcopal Church in the United States of America, but others do not, some of whom are in the Anglican Church in Nigeria. Without going too far down that road, such people are concerned that they will be told to modernise in order to comply with the new thinking of the Charity Commission. The Minister has gone some way towards setting my mind at rest.

Ed Miliband (Labour, Doncaster North)

The Charity Commission has had a rough time today. There is no sense in its guidance that modernisation means somehow abandoning the religious principles that these organisations rightly want to uphold. In fact, my hon. Friend the Member for High Peak made the point that, hundreds of years ago, such provisions might have been applied only to Christian organisations. Now, we are talking about a wider set of religious purposes. That is what modernisation surely means in this context.

Andrew Turner (Conservative, Isle of Wight)

We may find that modernisation involves some of the religions to which the hon. Member for Cheltenham rightly referred disparagingly, so I hope it does not. I accept what the Minister is saying, but I hope that he will accept that the reason for scrutinising these passages with care is because we need to understand the consequences of invoking them.

I hope the Minister will also accept that although the cost to the public purse, by his definition, of the independent schools is about £100 million, they put considerable additional money back into society in the form of scholarships and so on. I am sure that he will accept that. Although the overall cost of charities to the public purse is in excess of £2.8 billion, there is a value of what charities do in return for it. Perhaps it is a value that has not been quantified; perhaps it is impossible to quantify. In talking as I think the hon. Member for High Peak did about the cost to the public purse of charities, we should recognise, as I know the Minister does, that there is a benefit to the public purse of charities as well.

I am not arguing for a free pass to charitable status for charities; I am arguing that it is a more efficient way of regulating—it might be more efficient in the case of all charities, but this is the position we are discussing—to have a system whereby a charity that fulfils the basic qualifications can be deemed charitable unless someone says, “Look here, that organisation is not doing its job properly” than to have one where charities have go through certain hoops before they are allowed to become a charity.

Martin Horwood (Liberal Democrat, Cheltenham)

The hon. Gentleman must realise that efficiency is not the only issue at stake. A private preparatory school in my constituency without great grounds or theatre facilities struggled to think how it might pass a future public benefit test, and it decided to share one of its music teachers with local state schools. That was a laudable response, but that step is being taken only as a result of the possibility of a public benefit test. Can the hon. Gentleman possibly be arguing against that?

Andrew Turner (Conservative, Isle of Wight)

I happen to think that education is a public good. It does not matter that I benefit from the education, because the world benefits from my being better educated. In fact, it would probably benefit if I were better educated. The Chancellor of the Exchequer says that education is a public good: that is the argument he puts forward for taxing us to put money into schools. That is the argument advanced by the Make Poverty History lobby for paying for more people to be educated in the developing world. Education is a public good, and that is a benefit. I accept and am glad that the school that the hon. Gentleman mentioned is doing something rather more useful than building rowing trenches near Slough to demonstrate public benefit. It is important that children are educated. It does not matter if some can afford a better education for their children than others; it is good that they are educated.

Ed Miliband (Labour, Doncaster North)

I fear that, although he is trying to close the divisions, the hon. Gentleman is opening them up. Mr. Jonathan Shephard says that the indirect benefit that private schools provide in relief to the public purse is not enough, in his view, to justify their charitable status. That suggests that education on its own is not enough; in his view there needs to be co-operation. Does the hon. Gentleman disagree?

Andrew Turner (Conservative, Isle of Wight)

I did not think that that was what Mr. Shephard was asserting. I thought that he was saying that there should be additional benefit, not that education was an indirect benefit. I think that that is so, although I cannot speak for him. My view is that it is beneficial if more people are better educated. That should be enough to justify an educational organisation being charitable.

Ed Miliband (Labour, Doncaster North)

No doubt Jonathan Shephard will be pleased about his role in this Committee. The question and answer document issued to Members of Parliament by independent schools asks,

“Is indirect public benefit through savings to the taxpayer enough to meet public benefit requirements?”

The answer is:

“Indirect public benefit is not enough on its own to ensure charitable status. There are many reasons...which support the charitable status of independent schools, of which indirect public benefit, though a very large benefit, is only one. Savings to the taxpayer, however large, will not be enough on their own to make a school (or hospital, or retirement home) charitable.”

That is Jonathan Shephard’s view and that of the Independent Schools Council.

Andrew Turner (Conservative, Isle of Wight)

I am sorry; I misunderstood the Parliamentary Secretary. That is Mr. Shephard’s view. However, we are not talking about the indirect benefit of savings to the taxpayer, but the direct benefit to the public of more people being better educated. That is the benefit.

Tom Levitt (Labour, High Peak)

Will the hon. Gentleman give way?

Andrew Turner (Conservative, Isle of Wight)

If the hon. Gentleman really thinks that it is worth it.

Tom Levitt (Labour, High Peak)

If he is arguing that all education, however or wherever it is delivered and whoever it is delivered by, is by definition a public benefit, notwithstanding how restrictive it is regarding the number of people who can engage in it, would he say that state schools should have charitable status? Should a company providing supply teachers, or individuals who set themselves up as private piano teachers, have charitable status? If he is saying that education must always in every context have charitable status, he will make spending commitments for a future Government that will be impossible to keep.

Andrew Turner (Conservative, Isle of Wight)

Many state schools have charitable status. For example, all grant-maintained schools were exempt charities. I do not know whether the same is true of foundation schools, but I suspect that that is so. My argument is that education is a public good, and that is generally accepted. I was not asserting that, just because someone says that they are educating, there should be the irrebuttable presumption that it is charitable. It is the rebuttable presumption that matters.

We are at the end of a useful and interesting debate—at least, it was interesting to me—and I beg to ask leave to withdraw the amendment.

Clause 4

Andrew Turner (Conservative, Isle of Wight)

This will be short.

Ed Miliband (Labour, Doncaster North)

Promises, promises.

Andrew Turner (Conservative, Isle of Wight)

Well, my contribution will be. Some months ago, members of the Bill team at the Home Office gave me the benefit of their advice on the process in respect of the guidance on the operation of the public benefit requirement. I should like to read out my understanding of what that is and ask the Minister whether I have it right.

An organisation can become a charity if it comes under one of the charitable purposes listed under clause 2(2) and meets the public benefit test. Despite the desires of the hon. Member for Cheltenham (Martin Horwood), there is no presumption that any purpose is for the public benefit. Public benefit will not have a statutory definition and will continue to be interpreted according to case law.

The Charity Commission must issue guidance on the meaning of public benefit, and that will be updated when necessary. That guidance is not legally binding; I understand “guidance” to mean that charities must have regard to it and take account of it when deciding what they will do, but that they are not obliged blindly to follow it.

The commission’s objective is to promote awareness and understanding of the operation of the requirement that a charity must be for the public benefit. Before the commission issues guidance, it must undertake a consultation process. Charity trustees must have regard to any guidance published by the commission when they make decisions to ensure that their activities remain for the public benefit.

On 9 February 2005, Baroness Scotland told the Grand Committee in another place that the commission

“will have to explain in its guidance what the public benefit requirement is—in other words, the nature and meaning of the requirement...it will have to explain in its guidance how it proposes to operate or apply the requirement in practice to charities of various types and characteristics...it will have to carry out the public and other consultation mentioned in Clause 4”—

she omitted to say that it would presumably have to take account of the response to the consultation—

“Fourthly, it will have to disseminate the guidance”—[Official Report, House of Lords, 9 February 2005; Vol. 669, c. 103.]

I have put my point in those terms because I find it difficult to describe the process off the cuff. Does the Minister think that I have it right, and does that include a change to the public benefit test, as set out in clause 3(3)?

Ed Miliband (Labour, Doncaster North)

My understanding is that the hon. Gentleman is right. If his information came from formerly Home Office, now office of the third sector, officials, I am sure that it is right. [Interruption.] The letter did not come from them. Nevertheless, the hon. Gentleman’s description of the process is broadly right.

The clause gives the commission a duty to carry out whatever public and other consultation it thinks appropriate before issuing the guidance. My understanding is that the commission is very keen to provoke widespread public discussion about the nature of public benefit in general and how it will be applied. That is a good idea.

A number of hon. Members, including my right hon. Friend the Member for Cardiff, South and Penarth, emphasised on Second Reading that they expected the commission to take into account views expressed in Parliament about how it should approach the whole process. I agree with that too.

The commission has published its illustrative guidance; we can expect that only to be illustrative before the Bill becomes law because, as the hon. Gentleman emphasised, the process is new for the commission, and it is important that it undertakes it well and properly. In the guidance, the commission says that it will interpret the public benefit requirement in the light of three criteria: case law, modern conditions and the removal of the presumption of public benefit. It says that after the Bill is enacted, it will issue a new version of the guidance as an exposure draft for public consultation. Having published that overall guidance, it will, as I said, look at specific areas. It is for the commission and the chief commissioner to move forward on that basis. I hope that that is helpful for the hon. Gentleman.

Andrew Turner (Conservative, Isle of Wight)

That is indeed helpful. I should also acknowledge that my research assistant wrote the letter, not the Home Office.

Ed Miliband (Labour, Doncaster North)

On that basis, I propose that the clause stand part of the Bill.

Peter Bottomley (Conservative, Worthing West)

First, I apologise for not being here earlier, but I have just come back from a meeting of the Organisation for Security and Co-operation in Europe in Brussels, and the train was delayed. I am especially sorry to have missed the consideration of clause 2, which links to this clause.

Clause 4 is about guidance on the public benefit requirement. There have been several recent communications from Churches Together in Britain and Ireland asking what guidance will be given on the public benefit test for religion when the presumption that religion is a public benefit goes. I am not suggesting that the Minister can necessarily give a full and detailed answer about what the Charity Commission will put in its guidance, but he should offer to go into rather more detail either now or on Report.

First, the Minister should say how the Charity Commission will be expected to deal with non-religions, such as the British Humanist Association, which might carry out some of the functions normally carried out by churches or faiths, but which, by definition, are clearly not religions. Secondly, he might wish to liaise with the Charity Commission—the body to which the clause relates—to put together detailed considerations on how the commission will respond to Churches Together in Britain and Ireland and other organisations, including parts of the Muslim Council of Britain, which have made representations. He and the Charity Commission might have had time to consider them, but if they have not, it is important that they make it clear that there is no intention of excluding one of the great faiths of the world, Islam, from providing the public benefit that it clearly does.

I do not want to get on a late debating train on the issue of education, but most of us who support arts organisations—whether performing arts or others—think that, as long as it is not for profit, the question of art not being a public benefit is not a problem. Quoting too much from the Independent Schools Information Service on the question of whether education is a public benefit puts weight where it should not be. The Charity Commission should be able to say that education is of direct benefit and, if and when the direct benefit is not sufficient, it should specify when an indirect benefit would be needed as well.

Roger Gale (Conservative, North Thanet)

Order. The hon. Gentleman places me in a slightly difficult position. I fully appreciate, as does the House, that hon. Members have duties in other places, but the hon. Gentleman will find that much of what he has just raised was covered in earlier debates, and it might be to his advantage to study Hansard and then return to the issue. I am not seeking to curtail the debate, and if the Minister wishes to respond briefly to the points that have been raised in the spirit in which they have been raised, he may of course do so. Strictly speaking, however, they fall outwith the scope of the clause stand part debate.

Ed Miliband (Labour, Doncaster North)

I have great respect for the hon. Member for Worthing, West (Peter Bottomley), so I will definitely respond.

Let me briefly cover the hon. Gentleman’s point about religion and the public benefit test. He is completely right that religious organisations need to be given reassurance and confidence that those that have charitable status will continue to enjoy it and that the Bill does not affect their status. We can give them that assurance in broad terms. The hon. Gentleman’s comments about the handling of specific religious organisations will also have been heard by the Charity Commission.

Peter Bottomley (Conservative, Worthing West)

I understand your remarks, Mr. Gale, and I shall not try to detain the Committee. In the early part of my speech, however, I asked whether the Minister would consider whether services that were offered by an openly non-religious body and which were often also provided by faiths could be regarded as charitable. That is not a test question or a trick question, but a serious issue, which deserves some thought.

To respond to the Minister’s kind remarks, let me add that he might want to consider between now and Report whether relying on Charity Commission guidance is sufficient to deal with the point that I raised. Giving an assurance is one thing but, if it were not given in clear guidance by the Charity Commission and it is not in the primary legislation, there will still be apprehension.

Roger Gale (Conservative, North Thanet)

Clearly, the Minister has heard what the hon. Gentleman has said.

Clause 5

Andrew Turner (Conservative, Isle of Wight)

The hon. Member for Bishop Auckland referred to the clause some moments ago. My worry, which arose before she raised that matter, is that a

“registered sports club established for charitable purposes is to be treated as not being so established, and accordingly cannot be a charity.”

I understand, of course, that, if the club were registered under the Recreational Charities Act 1958, certain provisions would apply to it, but if a club—as is now possible and has been so in the past—becomes a charity by virtue of its sporting activity and then becomes a registered sports club, what is the position of its assets? When an organisation ceases to be a charity, it loses its assets. What will be the consequences of that treatment of a sports club that is a charity, but which then chooses to register under the provision?

Lynda Waltho (Labour, Stourbridge)

I draw attention to subsection (3) because I am particularly worried about the proposal to omit miners welfare trusts from the special provisions category. I am sure that right hon. and hon. Members have experience of such trusts. I have a miners welfare association in my constituency. The Beech Tree Miners Welfare Association in Wollescote provides great assistance to miners, ex-miners, their families and widows. It assists with matters like aids and adaptations. It is its centre of the community. Most community events take place there, such as family weddings. It is a polling station. It runs youth clubs and has all sorts of recreational facilities for the whole community. It is most definitely of great benefit to the community, so I am greatly worried that it is to be omitted. Will my hon. Friend the Parliamentary Secretary reconsider the special provision to ascertain whether it is necessary to omit miners welfare association charities?

Peter Bottomley (Conservative, Worthing West)

Before the Minister responds, I wish to say that the notes on the clauses do not make clause 5 clear. I was not sure whether to read subsection (3), under which miners’ welfare trusts are omitted, without submitting it as an exception to the change that the clause makes or whether in light of the fact that they will cease to be charities. My guess is that it is the first assumption rather than my second, but no doubt the hon. Gentleman will be able to the help the Committee about that.

Subsection (4) states:

“A registered sports club established for charitable purposes is to be treated as not being so established, and accordingly cannot be a charity.”

If a club had charitable status, should not the clause read “ceases to be a charity”? If so, what will happen to the assets or does that apply only to those charities and clubs that purport to be registered after the Bill becomes an Act?

Let us consider an organisation that is not a club, such as the British Olympic Association. Is that charitable? If so, how do we know whether it is covered under the Bill?

Ed Miliband (Labour, Doncaster North)

It is a great joy to respond on the clause, which is a bit of a rag-bag, sweeping up matter on part 1. I shall really excite the Opposition by saying that part of the clause is motivated by a desire to be compatible with the European convention on human rights. I thought that that would cause some gasps. Let me explain what the clause does, because as the hon. Member for Worthing, West said, it is not clear.

The first part of the clause, up to the end of subsection (2)(b), deals with the problem that the Recreational Charities Act 1958 makes it charitable in certain circumstances to provide recreational leisure time facilities either for the public as a whole, or for women only, but not for men only. That element of discrimination arguably makes the Act incompatible with the ECHR. Subsection (2) therefore makes it charitable to provide recreational leisure time facilities for men only as well as for women only, or for the public as a whole. The only alternative to that would have been to rule out women-only charities, which we feared could adversely affect women’s institutes, among others. In order to comply with the principle of non-discrimination, we have allowed for men-only charities. We know better than to take on the WI.

James Duddridge (Conservative, Rochford and Southend East)

A bright future.

Ed Miliband (Labour, Doncaster North)

Indeed. Subsection (3) deals with miners welfare trusts. I note the concerns of my hon. Friend the Member for Stourbridge (Lynda Waltho) on this issue, and I promise that I will report back on this matter on Report, and that I will make further inquiries into it. The provision is being repealed because it is also seen as being incompatible with the ECHR, because it discriminates in favour of a certain occupation as against members of other trades or professions.

Before members of the Committee become alarmed, I should point out that there has been extensive consultation with the Coal Industry Social Welfare Organisation on this issue to find a way to enable the 330 miners welfare trusts to continue their good work. As the consultation took place before I became a Minister, I shall meet representatives from CISWO and other miners welfare trusts. We will do further research on the position of such trusts, and I will report back, as my hon. Friend asks, on Report. Miners welfare trusts that allow entry to people other than miners will not be affected and will continue to qualify. I think that in practice—I have to be careful what I say here—other organisations should also qualify as having charitable purposes with little effort, but we need to research that. Further work must be done, and I will report back.

The final part of the clause deals with sports clubs. Subsections (4) and (5) prevent a sports club that is registered as a community amateur sports club, or CASC, from also being a charity. That is because CASC status and charitable status are meant to be separate options for small, community-based sports clubs, because there are different tax and regulatory regimes for CASC organisations. We certainly do not want to get rid of CASC status, because it has been widely welcomed in the amateur sports club community. Given the different tax and regulatory regimes, clubs could not be covered by both the CASC and charities regimes. Hence, the slight ugliness of this part of the clause.

As to what happens to organisations that might transition from one to another, my understanding is that it will continue to be possible for a CASC to move to charitable status and vice versa, which is exceptional in charity law. I hope that that reassures the Conservative spokesman and the hon. Member for Worthing, West.

Peter Bottomley (Conservative, Worthing West)

This is a serious issue and it is useful for the Committee to hear the background to the sports club change. Incidentally, I am sure that the Committee will welcome what the Parliamentary Secretary, Cabinet Office said about the miners trust, but he may want to get his experts to look at organisations that are not clubs and do not have premises, such as associations of people who have retired from work in the Royal Mail, local government, national civil service and so on. I suspect that there is no problem because the provision may be tied to property, but if I am wrong the Minister may want to help the House with a statement or some words on Report.

On community sports clubs, if they started as a charity and had it written into their articles that if they ceased to be a charity they would be required to yield up their assets to another organisation, they might be involved in turning into a completely new organisation with extra costs as a result of this legislative change. If the Parliamentary Secretary has time, it would be worth him double checking that he will not force innocent bodies into paying a lot of money to lawyers to go through a change of form. If that can happen automatically, the Committee and, later, the House will accept what he said, but it might be worth double checking that to be sure.

The Minister may also want to clarify the position of recreational charities with premises and those who provide activities that may not take place on their own premises. I have no doubt that in tax law the community sports facility concession is equivalent to that available to charities with perhaps some change on VAT. He may want to check that it is not tied to premises and that others will not be caught unnecessarily. I am not accusing him of being malevolent, but the matter is tricky and words of assurance do not work if all the possibilities and circumstances of those involved have not been checked.

Roger Gale (Conservative, North Thanet)

Hansard may record that that was an intervention and not a speech. At this stage, I admonish all hon. Members to keep interventions relatively brief.

Ed Miliband (Labour, Doncaster North)

Thank you, Mr. Gale. The hon. Gentleman obviously knows far more than I do about community amateur sports clubs, which play an important role. My understanding is that if a charity wants to become a CASC, it can start a new CASC and pass its assets over. The new CASC would then have charitable purposes without being a charity but would have all the benefits of charitable status.

Peter Bottomley (Conservative, Worthing West)

This will be brief. Unless there is a provision in the legislation dealing with CASCs that allows a charity to pass its assets to an organisation that is not a charity, the Minister may be providing more reassurance than the legislation provides. It would be helpful if he could clear up the matter—if not today, then soon.

Ed Miliband (Labour, Doncaster North)

I certainly do not want to go any further in trying to clear it up today. I will return to the matter on Report to clarify the precise position relating to the transitional issue between CASCs and charities that are sports clubs.

Clause 6

Andrew Turner (Conservative, Isle of Wight)

Hon. Members may have observed that amendment No. 5, which I thought was a jolly good amendment, was not selected for debate.

Roger Gale (Conservative, North Thanet)

Order. I am absolutely certain that the hon. Gentleman is not going to challenge the Chair’s selection. The sad fact is that, whether he likes it or not, amendment No. 5 was defective, which is why it was not selected.

Andrew Turner (Conservative, Isle of Wight)

I was about to confess as much, Mr. Gale. It was defective. None the less, this is the clause on which we debate the accountability of the Charity Commission. On Second Reading, the Parliamentary Secretary, kindly said:

“Labour Members are sympathetic to the notion that there needs to be rigorous Select Committee scrutiny of the work of the Charity Commission. The Home Affairs Committee has a lot on its plate.”—[Official Report, 26 June 2006; Vol. 448, c. 98.]

The hon. Member for Ealing, North (Stephen Pound) then intervened and took him down a completely different avenue, so the Parliamentary Secretary was unable to say what I anticipated: that he accepted that it was a jolly good suggestion, and that he would incorporate it into the Bill forthwith, by means of an amendment of his own. He did not have the opportunity to do that, but I give him that opportunity now.

A number of representations have been made that there should be parliamentary scrutiny of the Charity Commission. The Joint Committee said, at paragraph 181:

“The other side of independence from Government is that the Commission should be accountable to Parliament. We were concerned that more needs to be done in this regard. There seems to us to be an ‘accountability gap’.’

Paragraph 186 went on to

“recommend that the Home Affairs Select Committee have an annual evidence session with the Charity Commission.”

The Joint Committee made further recommendations, too. I support that recommendation; indeed, I went slightly further, and proposed specifically—

The rest of the debate is in Hansard.