A clause to enable the government to set up a statutory fundraising regulator, or hand responsibility to the Charity Commission, if self-regulation fails, was added to the Charities Bill yesterday.

The new clause (clause seven) was added to the Charities (Protection and Social Investment) Bill yesterday, at the final reading of the Committee stage of the Bill, while two other clauses were withdrawn. These were a clause to give the Commission power to make representations, and a clause which “would require independent schools to engage with their local communities and state schools to share resources and facilities”.

The new clause which has been added to the Bill could, if exercised, “require mandatory registration and compliance with a specified fundraising regulator or for fundraising regulation to be carried out by the Charity Commission”.

The amendment would extend existing powers in relation to fundraising regulation to compel charities to comply with the requirements and guidance imposed by the fundraising regulator. It will also allow the government to require charities to be registered with a body for the purpose of regulating charitable fundraising.

Rob Wilson, minister for civil society, said the power would be a “vital safeguard to ensure that self-regulation is given a proper chance to succeed”.

Wilson said of the new power - which would allow the government to invoke statutory regulation by mandating the Charity Commission with that task - that he hopes he would never have to use the power as it would mean self-regulation had failed.

But he added: “However, the seriousness of the abuse in the past year or so and the impact it has had on public trust in charities has made it clear that a robust backstop is needed to ensure that the public feel that they can give with confidence and to prevent the same sorts of scandals being repeated.”

Peter Kyle, Labour MP for Brighton and Hove, responded to Wilson asking him to acknowledge that the government, not just charities, “played a role in undermining public confidence in charities last year”.

Anna Turley, shadow minister for civil society, said that her party “believe that state regulation should be a last resort when self-regulation has failed, but these powers give self-regulation the opportunity to succeed, while ensuring that there is proper back-up should the new arrangements fail to deliver satisfactorily”.

Charities and political campaigning

The clause which would have given the power to make representations, proposed by Turley, would have enshrined in legislation the right of charities to undertake political campaigning activity was read for the second time, before being withdrawn.

Peter Kyle stated that there is ample charitable law stating that charities exist to serve their beneficiaries. He said: “They do not exist to serve special advisers or any other part of society; they exist to support their beneficiaries. That is the beginning, the middle and the end of the story as far as charities are concerned.”

A recent example came up of the Badger Trust’s chief executive, Dominic Dyer, organising rallies in the lead-up to and during the general election, and emailing all its supporters using the charity’s computer system in advance of the Labour party’s manifesto launch on rural communities.  In the email he said that he had contributed to the manifesto and asked supporters to attend the launch event and support it.

Turley said that “surely consultation is a positive thing”, to which Wilson responded: “Is the hon. lady really arguing that it is ok for a charity to email its members and ask them to attend a party political launch event? Can I just be clear on that?”

Turley responded by saying: “I think that is perfectly acceptable, if people want to go to any party political event and offer their views. They may go to it and disagree with the party and challenge it.

“As far as I am concerned, we are in danger of separating politics from the realities of campaigning and policymaking. Politics has to be open and accessible and must not exist in a vacuum. Many people are deeply involved in politics, from councillors and MPs to activists; there is not a small box for people to sit in because they are in one category but not another.”

Jeremy Lefroy, Conservative MP for Stafford, said that “since the general election I have not received one single representation from any charity about a so-called 'chilling effect' on their work during the election campaign”.

Turley responded saying that “perhaps they have given up hope and they may have some despair”. She reiterated her point that the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 “did stop charities from campaigning—they say so themselves—and caused unnecessary cost and confusion”.

She said: “The Lobbying Act was an attack on our democracy. It hits charities and campaigners and limits their right to fight for important causes while allowing professional lobbies to escape scrutiny. It has left expert organisations that have a vital contribution to make to public debate unsure whether they are allowed to speak out. Governments should not be afraid of criticism or lively debate.

“As the old saying goes, politics is too important to leave to politicians. We seek to protect this right of charities to have a loud and respected voice in our democracy. I commend the new clause to the committee.”

Wilson said that he supports charities’ right to speak up for their beneficiaries, whether he, as the minister with responsibility, or the government like it or not. But, he said, the new clause is “unnecessary”.

Turley said that they would not press the new clause to a vote because they wanted to return to it at report stage.
But she added: “I fundamentally disagree with the minister’s claim that he is trying to protect the sector’s independence. Its independence to speak with its true voice and commitment is what the new clause is about.”

Charitable status of independent schools 'outdated'

A new clause to require independent schools to engage with their local communities and state schools to share resources and facilities was brought up and read for the first time. The clause, which called on the Charity Commission to publish guidance setting out the minimum that independent schools which are charities must do to comply with the duty in subsection, was again proposed by Turley.

She said on this: “It is simply not appropriate that while the social and financial advantages to independent school pupils persists, they are subsidised by the British taxpayer through the charitable status”. Adding that “charitable status is now an outdated and inappropriate financial privilege that is impossible to justify without substantial action from independent schools, which is what the new clauses seek to achieve”.

Jo Churchill, Conservative MP for Bury St Edmunds, said that she was saddened by “the lack of understanding of independent schools and the benefits that they bring to the table, including how they already contribute to the public good. The proposals would apply red tape to something that is already working.”

Wilson said that he agrees that more should be done to promote stronger partnerships between independent and state schools, but that it should be recognised that many strong partnerships already exist. He also made the point that “independent schools do not necessarily offer a better, more advantageous education for our young people than state schools”.

Turley said she will not press the clause to a vote, but “may well reconsider it on third reading”.

The next stage of the bill is the report stage.