Editorial: Calman's logic may not suffice

There is no politcial appetite for a solution to the problem of cross-border regulation, says Stephen Cook

In last week's wide-ranging report on ironing out the difficulties that have come to light as a result of Scottish devolution, Sir Kenneth Calman devotes four densely argued pages to the law on charities.

He focuses on the fact that there are now three definitions of charity: two for regulatory purposes in Scotland and in England and Wales respectively, and one for tax purposes throughout the UK.

Many in the sector are already painfully aware of this, usually because it means that charities operating in both England and Scotland are in most cases subject to dual regulation by the Charity Commission and the Office of the Scottish Charity Regulator.

This can put some charities off operating in Scotland - Charity Bank, for example, recently decided not to start operating north of the border because it did not want the extra regulatory burden.

Calman notes this deterrent effect, acknowledges that the OSCR is planning a modified reporting regime for charities also regulated by the commission, but points out that only primary legislation can remove the burden entirely. He also warns that uncertainties of definition and regulation are liable to create loopholes for fraudsters.

He concludes there should be legislation by the UK Parliament, with the consent of the Scottish Parliament, to create a single definition of 'charity' and 'charitable purposes'. He also says a charity registered in one part of the UK should be able to operate in another without dual regulation.

That the logic is impeccable does not mean this is likely to happen. Already the SCVO has criticised Calman for focusing on the "minor complications" of dual regulation and failing to address what it sees as the bigger problem of the treatment of Scottish charities by HMRC.

The new regulatory regime in Northern Ireland is another complication, and it seems unlikely that politicians will step into this potential minefield in the foreseeable future.

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