My Lords, Amendment 160 is very short and innocuous, but it is of significance in terms of its impact on the Bill in that it would remove charities from the scope of the Bill and the 2000 Act. Like everybody else, I must declare interests, which are largely to be found in the register, but I should add that I have been for 40 years a charity lawyer—if that does not sound a contradiction in terms—and have great sympathy with all those trying to get their head around the relationship here between charity law and electoral law because it is far from simple.
Thanks to the work of the Library staff, I got an insight into the debates when the 2000 Act was legislated. It is fair to say that charities got short shrift. In fact, during the passage of the 2000 Act, the awareness in the Chamber was pretty extraordinary and at no point did a clear statement on the impact on charities find its way into print. I am sure your Lordships will also have noticed that the vast majority of charities are as amazed as anyone that they have ever been part of the 2000 Act. Most of them went through the previous election in complete ignorance of that fact.
I fear that the misunderstandings that attend this Bill are not inconsiderable. I am afraid that that misunderstanding finds its way even into the Harries report, if I can so call it. I, like everybody else, greatly admire the energy and astuteness that has been put into this report and I agree with the vast bulk of it. I happen not to agree with recommendation 11 which is that charities should not be exempt from regulation. To make my point and because it is germane: recommendation 11 is preceded by three statements. The first—in favour of my amendment so to speak—is that the commission heard evidence from charities of the “disproportionate regulatory burden” on them registering as third parties. That burden is at the heart of my wish to see charities removed from this Bill and the 2000 Act.
There are two reasons given for the recommendation about not exempting charities. Incidentally, it is fair to say that the commission itself was made up of representatives of the charities sector and the non-charity NGO sector. The first reason is that,
“the regulatory system should not be structured such that the status of being registered as a charity could be a mechanism for avoidance”.
That is a little gnomic, perhaps, but were we to agree to take charities out of the Act and this Bill, the authors of the Harries commission report decided that this would represent a mechanism for avoidance. I beg to differ. Charity law and electoral law are in all essentials the same. Being bound by charity law rather than electoral law is not a soft touch. Indeed, some charities have made the point that they are afraid of not being part of the Bill—and therefore under the aegis of the Electoral Commission—because they fear that if left to the devices of the Charity Commission alone things might get rather more brutal than they already are.
The second reason given for that recommendation is that,
“campaigning with non-charities is so central to many charities’ activities”.
That is as if to say that if charities were not part of the Bill, they would not be able as they currently are to campaign with non-charities. Again, that is completely misconceived. The position of charities vis-à-vis joint campaigning—coalition campaigning, if you want to call it that—will not be affected significantly; in fact, I could not put my finger on any single difference between being outside and inside the Bill. I repeat: charity law on its own is very severe and, as I shall explain, very similar to electoral law on this point.
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Finally—and I had a word with the noble Lord, Lord Best, so he knows that I am going to mention this—a wonderful example of the misunderstanding generated by the Bill is the comments made by the noble Lord just before supper on the food campaign of the National Federation of Women’s Institutes. The NFWI is a charity; I acted for it for 20 years. The gist of the noble Lord’s remarks was that under the Bill, the NFWI would be in real trouble in running a campaign such as it has. Again, that is a complete misunderstanding. If charities remain in the Bill, the NFWI will be able to do in future exactly as in the past. The fact that we have a great deal of confusion around this aspect of the Bill is perhaps no surprise: the law is difficult and obscure. Indeed, one reason why I want charities right out of the Bill is to avoid the double confusion and complexity that will ensue if they remain within it, because they will then be subject to two completely separate branches of law: electoral law and charity law. Although, as I have said, they are very similar in essentials, you can none the less be quite certain, especially given the brouhaha surrounding the Bill, that all charities of any size will be extremely cautious.
They will be cautious because the boards of charities are volunteer boards, and if they step outside the confines of charity law, the consequences can be disastrous. It does not make any difference if it is a charity in
corporate form; the trustees are personally liable for any mis-spending of charity funds. It is very rare that the Charity Commission requires charity trustees to put their hands in their pockets, but that is the position. That is why this chilling effect, to which not much reference has been made tonight but which is generally accepted, is now running around the charity sector: the chill of concern that charities will be caught by the Bill in a highly complex, bureaucratic web which will curtail their activities come an election—indeed, come one year before an election.
There is no point in pretending that this does not have a severe and real effect. We have had it from a hundred lips tonight and outside this place. The Harries commission has had it. I have had it from the many charities and charitable organisations to which I have talked. The Government have had it. The charity sector is very worried. You can be absolutely certain that those charities which have paid staff—which is of course only about 5% of them, about a third of a million in this country—will be required to check with their lawyers and to make sure that every step of an election campaign is consonant with the provisions of this complex legislation. The waste of fees and time, the bureaucracy, the demoralisation, the diversion of philanthropic effort into playing safe in what is—I am sorry to keep repeating the word—a ludicrously complicated piece of legislation—most legislation is these days, and this is no different—adds up to a very worrying situation. In so far as there is reference in the commission report to disproportionate regulatory burden, that is a burden on the charities themselves.
My claim is that the inclusion of charities is wholly unnecessary because, first, charity law is strong and clear; it is a 500 year-old branch of law—only the Anglophone countries have a separate branch of charity law. Secondly, as I have said, the Charity Commission holds the sector to account as a very competent, long-standing regulator with good, solid legal skills. The commission produces guidance, as many noble Lords will know, on politics and campaigning and produces a supplement about campaigning during election time. That came out a couple of years ago, it will be updated in time for the next election and that guidance alone came to roughly 40 pages. The Charity Commission expects the sector to pay close attention to it and, by golly, it does. As a lawyer in the field—there are not many of us—I can tell you that we are constantly being asked by charities, “Is this all right?”, “Is that all right?” and “What does clause 27 of the CC9 guidance mean?”
The courts are extremely protective of charity law. There is no branch of English law that has the attention of the courts in quite the way that charity law does. Again, it is common knowledge that charities cannot have political purposes. It is as simple as that: no political purposes. Secondly, although they can engage in campaigning and politics, under CC9, they cannot engage in partisan campaigning and politicking—that is verboten, out. Many references have been made to the hazy line between what is in and what is out, between what is okay and what is not okay. I totally sympathise with that—it happens to have kept me in a reasonable living for 40 years, so I must not complain too much—but, seriously, there is no way of avoiding
it. With the sort of issues that the wording of any legal rule will involve, one cannot avoid, I am afraid, the complexity of interpretation of whatever line one draws and wherever one draws it in terms of what is permissible and what is not.
We have a situation here where we have regulation, we have regulators and there have been no complaints that I have been able to lay hands on, so to speak, concerning charities at the last election. It seems to me to be bizarre that here we are, unless we watch it, about to shackle the most highly regulated sector in our society, which is the only sector that exists within the constraints as to purposes that the Charity Commission lays down. Do not forget that charities have to behave and be exclusively for the public benefit. No charity can do anything that is not exclusively for the public benefit as defined by charity law. It seems not just unnecessary but almost perverse to shackle this sector, of all sectors, with two regulators when those in the NGO world that are not charities have only one regulator. The NGO world that is not charitable can have any purpose it likes, as long as they are not in breach of the law of the land, and can adopt any means it likes to pursue those purposes, as long as it does not involve criminality, and yet that branch of the NGO jungle, if we want to call it that, has a single regulator while the regulated and highly specific charity sector is to have two regulators, with all that that will mean in terms of demoralisation, expense, confusion, muddle and the rest. I hope that, before the day is done, we will accept all that and not proceed along the present path.
I will add just one point. I understand the dilemma of some organisations such as NCVO, which represents non-charitable as well as charitable NGOs. Indeed, the commission looked at the whole of the NGO sector, not just the charity sector. For the reasons that I have hurriedly advanced, I hope that, on Report at least, the House will take charities right out of the Bill.