Editorial: Lifting the trade barrier would be of public benefit

Stephen Cook

The headline reaction to the report of the Parliamentary scrutiny committee on the draft Charities Bill was, as usual, dominated by the vexed question of public benefit and public schools. But tucked away in this lengthy document are a number of important recommendations that would make a lot more practical difference to the everyday life of charities than any amount of legalistic debate about the nature and definition of public benefit.

Perhaps the best example is the question of trading by charities, the only major subject area where the Government chose to reject the recommendation of the Strategy Unit report, which laid the foundations of the draft Bill. Raising the spectre of the bar in the village hall using tax advantages to turn itself into a competitive chain of high street pubs, and swayed no doubt by the arguments of the small business lobby, the Government's chose to stick with the current law, which requires charities to set up a separate company if they want to do a significant amount of trading.

The scrutiny committee listened to the arguments of the sector about the extra costs and bureaucracy caused by this requirement and came down against the Government. It decided instead to recommend raising the ceiling for the amount of trading a charity can do without having to set up a separate company, and called for a consultation about how high that ceiling should be set.

What a sensible proposal. It would reduce the bureaucratic load, relax a restriction that has proved to be too confining, but retain a limit that would prevent things getting out of proportion. Let's hope the Government adopts it - and, of course, puts the Bill in the Queen's Speech.

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