Editorial: The regulator's challenge on terrorism

Last week's review by the Home Office and the Treasury of safeguards to protect the charitable sector from terrorist abuse has some extremely worrying implications for the Charity Commission and for community relations in this country.

The thrust of the report is that the commission's current regulatory model "is designed to combat more mundane abuses such as fraud or theft" and that its approach to identifying and acting on the potential diversion of charitable funds to terrorist organisations "may not be sufficiently proactive".

The report notes that there is already "an intelligence function" within the commission, but says there is a need for better relationships with "the spectrum of government departments and agencies involved in counter-terrorism work" and that the commission should get "more systematic access to the use of classified intelligence material on the terrorist threat". Its argument includes an assertion, which can't be verified independently, that 14 charities have been linked to the July 2005 London bombings and two subsequent foiled attacks. And its conclusion, couched in the usual managerial jargon about business strategy, benchmark indicators and delivery, is that the commission should overhaul its approach to the threat of terrorism.

There is nothing inherently wrong with some of the proposals, which include updating guidance to charities about safeguards such as more methodical checks on the bona fides of their beneficiaries. It is also reasonable for there to be better working relationships between the commission and the security services if evidence of possible terrorist links does come to light.

But the challenge is going to be implementing such changes while preserving the commission's status and reputation as an independent and impartial regulator. Muslim communities already feel they're being singled out by the commission's new faith unit.

The danger is that we will end up with a state of affairs in which Muslim charities feel that a visit from the commission is tantamount to a visit by MI5. That would only increase the sense of grievance and discrimination that plays a part in leading young people from some backgrounds to feel that extremism can be legitimate.

The commission is being forced to confront the familiar dilemma of how a liberal society can protect itself against terrorism without itself seeming illiberal, repressive and discriminatory. If it ends up looking to its critics like an agent of the security services, the damage will take a long time to repair.

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