Peers demand amendments during the Bill's second reading in the Lords.
The charitable status of independent schools and the powers, independence and competence of the Charity Commission took centre stage as the battle lines for the Parliamentary passage of the Charities Bill were drawn in the House of Lords last week.
In a second reading debate lasting five and a half hours, the Opposition welcomed the Bill, while speakers from all parties praised it and hoped that it would become law before the General Election, which is expected in May or June.
But peers also made it clear they wanted to amend the Bill in areas ranging from the definition of public benefit to the powers of the proposed Charity Tribunal and the regulation of fundraising.
Home Office minister Baroness Scotland introduced the Bill by saying it aimed to release the potential of charities, encourage their diversity and independence, and sustain public confidence through effective regulation.
Lord Hodgson of Astley Abbotts said the Conservatives welcomed the Bill but thought it had ducked big issues such as consolidating legislation.
He warned it should not be rushed as the election approached.
The strongest intervention came from Lord Phillips of Sudbury (LibDem), a charity lawyer with 30 years' experience, who said public benefit was the only potentially partisan issue - "which I note that others, rather gingerly, have walked around."
He referred to the statement by Charity Commission lawyers to the scrutiny committee on the draft bill last summer that the Bill in its present form would not provide enough powers to change the charitable status of private schools and hospitals as established by case law.
"The minister, Fiona Mactaggart ... asserted before the joint committee that that was wrong and that the Government would scarcely be bringing forward the public benefit change for it to be ineffectual in practice.
"In my considered view, which is shared by other senior charity lawyers, the Charity Commission was right and still is. The fact that all that is disputed by other charity lawyers exposes a central flaw in the Bill which, I believe, should not be allowed to persist to the final legislation."
Lord Sainsbury of Preston Candover (Con), another member of the committee that scrutinised the draft bill, said the Charity Commission was insufficiently independent of ministers and unnecessarily bureaucratic, autocratic and insensitive. "I believe the commission is under-resourced and is not able to attract sufficiently qualified staff, particularly on the legal side," he said.
The Bishop of Southwell was concerned at the Bill's removal of the presumption of public benefit for religion. Lastly, Baroness Morgan of Drefelin voiced concerns on self-regulation of fundraising, but said her experience of 'chugging' was positive.
- Charities Bill gets general welcome from all parties in the House of Lords
- Tories want to "probe" the Charity Commission's role and its relationship with the Government
- Lord Phillips says disputed questions about public benefit are the "central flaw" in the Bill and must be addressed
- Bishops are concerned about the removal of the presumption of public benefit for religious groups.