A new charity labelling system should be introduced to make it clear if they are registered or government-funded, a debate on the second reading of the Charities (Protection and Social Investment) Bill heard yesterday.

Lord Borwick (pictured), a Conservative peer, suggested that the voluntary sector should have a similar system to the private sector whereby publicly held companies attach “plc” to their name.

“At present there is no equivalent of a label such as ‘plc’ for charities: no simple badge that they are registered and doing their job properly. I suggest that charities could put the letters ‘RC’ after their name, standing for ‘registered charity,’” he said. “Such a label would show the country that they are in the good category.”

He then said that charities which receive more than 50 per cent of their income from government should not be able to use the new label.

Referencing the Institute of Economic Affairs’ report about ‘sock puppet’ charities earlier this year, he said: “There is a host of differences between a well-funded charity, funded by the government, and an individual helping people themselves… I propose that government-funded charities should use, if they want, an acronym such as “GFC”, but be refused the right to be called registered charities.”

Borwick also criticised campaigning charities.

“Charities such as Oxfam do not help themselves when they talk about things that do not seem to be in their remit,” he said. “Oxfam, among others, produced lots of content during the last Parliament about austerity, including a mocked-up film poster of ‘The Perfect Storm’, featuring a list of coalition policies.”

The Charity Commission investigated Oxfam over the poster and concluded that it “could be misconstrued as party-political campaigning”.

Baroness Brinton, Liberal Democrat, said that his proposal “jars rather”.

“In recent years, many charities have started to receive funding from the public purse — not just from government, but from local government and from the National Health Service — to deliver services to a particular community that that charity may understand well," she said.

"Indeed, many people who have said that it should be not just the state that delivers those services have welcomed the expertise of a large charity or a small charity that can provide something relevant,” she added.

In response to the suggestion, Lord Bridges of Headley, parliamentary secretary for the Cabinet Office, who introduced the Bill, said: “I simply point out that it is an offence to call yourself a charity if you are not; and as regards charitable income, charities must now declare income from central and local government in their accounts.”

'Introduce Olive's Law'

A number of members of the House of Lords took the opportunity to air their views, and suggested that an 'Olive's Law' be introduced to regulate charities, or at least force charities to sign up to follow existing codes.

Baroness Hayter of Kentish Town, said: “I regret the government’s failure to live up to its promise to provide call-barring facilities to the particularly vulnerable, but while cold calling from a charity might elicit a donation, it could be at the expense of the trust that people have in charities.”

She added that: “The existing self-regulation is not working.”

Hayter said: “A third of fundraising charities are not even members of the Fundraising Standards Board. We will investigate how we might use the Bill to strengthen the commission’s role in ensuring that charity fundraising is properly regulated.”

She suggested that they look at ways to force charities to sign up to the Institute of Fundraising’s Code of Fundraising Practice and join the FRSB or give the Charity Commission stronger powers.

“Olive’s Law, or at least getting all charities to be regulated by the FRSB, would be a lasting testimony to this woman’s lifetime of work for charity,” she said.

The Earl of Lindsay, who is chair of the United Kingdom Accreditation Service suggested introducing an accreditation system to improve “confidence in the governance of charities and the fitness of trustees to perform their duties”.

“Current discussions with a number of relevant parties in the sector are exploring whether agreed standards, underpinned by accredited certification or inspection, might be a useful and robust means by which the quality of a charity’s governance or the calibre of a trustee can be demonstrated to a donor, a regulator, or indeed the public interest” he said.

Second reading of the Charities (Protection and Social Investment Bill)

Introducing the second reading of the bill in his maiden speech in Parliament, Bridges said: “Charities must earn the public’s trust and generosity. They must never take it for granted. The vast majority of charities know this full well and are run responsibly and competently. It is in their interests, and the interests of society as a whole, that the charitable sector is properly regulated.”

It will give the Commission a raft of new powers including the ability to disqualify and ban individuals from being trustees and wind up a charity.

Members of the House of Lords yesterday agreed on the principles of the bill.

Baroness Haytner led calls to strengthen the power to disqualify trustees further to include sex offenders.

“It is surely right for the Commission, in regulating trustees, to have a duty to safeguard and protect children and vulnerable adults,” she said.