An amendment in the House of Lords to exempt charities from the scope of the lobbying bill was withdrawn yesterday after the Charity Commission wrote to peers saying it was not in charities’ best interests.

The report stage on part two of the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Bill took place in the House of Lords yesterday. Part two of the bill limits political activity by third parties in the run-up to an election, and charities say it will harm their ability to campaign.

Charity lawyer Lord Phillips of Sudbury had tabled an amendment to exempt charities from the scope of the lobbying bill altogether. Phillips said regulation of charities was unnecessary because their political activity was already regulated by the Charity Commission.

In response, the Commission wrote to members of the House of Lords on Tuesday outlining “concerns about the practical implications of a charity exemption” from the lobbying bill.

“We do not believe that, in the best interests of public trust and confidence in charities, an exemption for charities is the most appropriate method for the regulation of charities during an exemption period,” the letter said.

The Commission said an exemption for charities would increase its workload to a level it would not “have the capacity to absorb” because it had suffered a 50 per cent real term cut to its budget from 2007/08 to 2015/16.

Commission letter 'faulty'

Phillips said he believed the advice in the Commission’s letter was “faulty” and that it had since admitted as much. However he withdrew the amendment without a vote after other peers said the Commission’s opposition meant they would not vote for it.

Lord Low of Dalston, a crossbench peer who had sponsored the amendment, said that while he believed the Commission’s letter was “not robust enough to sustain any argument”, it had “rather blown the debate off course”.

Lord Rooker, a Labour peer, said he felt that there was “incompetence of a very high order by the Charity Commission”, and that “it does not do a very good job”, but that its opposition nonetheless meant that he would not vote for the amendment.

Lord Mackay of Clashfern, a Conservative peer who also sponsored the amendment, said that the government should look into the Commission’s claim that it did not have the resources to regulate political activity in the case of an exemption.

“It is a very serious problem if organisations set up to ensure that the law is observed in a particular area say that they do not have sufficient resources to do it properly,” he said.

A commission spokeswoman said: “Lord Phillips says our briefing was faulty and that we have accepted this. That is not the case. We are confident that our briefing is accurate.”