Editorial: Will the Charities Bill ever become an Act?

Stephen Cook, editor

Are we ever going to get new legislation on charities? The Bill that proposes this modernising, rationalising piece of legislation has been consulted on, examined and picked over ad infinitum by a joint parliamentary scrutiny committee and the House of Lords, including two high-powered Lords committees.

It has been introduced in the Commons, but there is no sign yet of the second reading that would give MPs their first real shot at it. The Bill seems firmly stuck in the doldrums, and anxiety levels are said to be rising in the Charity Commission, which remains in a state of suspended animation over its proposed new structure and powers.

The sticking point, as ever, is the public benefit test that the Bill says all organisations would have to pass if they were to hold charitable status and benefit from the tax breaks that go with it.

No problem for most charities, but what about the public schools, other independent schools and hospitals that are charities yet charge high fees?

The informed legal view is that existing case law says, in effect, that such institutions provide public benefit by their very existence because they are in principle open to everyone. Is this acceptable in today's world?

Because the answer to this is generally deemed to be 'no', an amendment was proposed in the Lords that would require the Charity Commission to take account of fees when deciding if an institution provided public benefit.

This would guard against any mavericks - probably few in number - who might hold out against the recent trend among independent schools of extending some of their facilities to the wider community.

The Government has stubbornly resisted this amendment, and it is believed this is because it is worried it would permit right-wing commentators to accuse it of attacking public schools. It might also be concerned that a hard core of backbenchers won't accept charitable status for public schools on any terms.

Whatever the reason, it is now clear that Labour MPs are planning to revive the Lords amendment, and the number prepared to back it is potentially sufficient to put the Government in a position similar to the one it faced over the Education Bill - relying on Conservative votes to pass its laws.

But there's an easy solution - the Government should overcome its fears, which may well be imaginary, accept the amendment and get on with the job.

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