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House of Lords Hansard
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Charities: National Fund
16 July 2018
Volume 792

Question

Asked by

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To ask Her Majesty’s Government whether they will review the recent decision of the Attorney General to give over £400 million from a registered charity, the National Fund, to the Treasury.

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My Lords, the charitable purpose of the National Fund is the reduction of the national debt. Therefore, using the fund to reduce the national debt must be the correct approach. It is not right to use money donated for a specified charitable purpose to support one or other different cause, however worthy those other causes may be.

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My Lords, actually, this charity was set up to write off, not to reduce, the national debt—so can we just keep to the facts? The national debt is £1.84 trillion, which is 4,000 times the size of this charity. In fact, the national debt grows by the size of the charity every day. Instead of helping people with charitable purposes, the Attorney-General has simply given it to his friend, the Chancellor, with no consultation or debate in Parliament and no parliamentary approval. Just because it cannot write off the debt is no reason to use it in the way suggested. Given that we now have a new Attorney-General, would the Minister agree to ask him to reconsider that decision and make sure that charitable money is used for charitable purposes?

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My Lords, the noble Baroness is not quite right. It is, indeed, the charitable purpose of this charity to pay off the national debt. The issue to which she refers is around the administrative provisions within clauses 2 and 3A of the 1928 deed, which specify that it can be paid off when that condition is reached—but the purpose remains the same. However, it is the case that, after much consideration, it is now the opinion of the trustees of the charity, the Charity Commission and, indeed, the investment managers, that to resolve the situation, we should seek the permission of the High Court to use this fund to pay down the national debt.

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Could the Minister say something about a separate charitable fund held by the Treasury, which I am told arises from fines imposed on banks during the banking crisis? If that fund exists, what size is it and who can access it?

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I thank the noble Baroness for her question. Unfortunately, it is a little beyond my brief today as it does not particularly relate to charities. However, I shall endeavour to find out that information and write to her.

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My Lords, the trustees actually asked the Charity Commission for permission to give the money to charity, and they referred the matter to the Attorney-General to get permission for that purpose. Why were the wishes of the trustees actually ignored?

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My Lords, the wishes of the trustees were not ignored. The noble Lord is quite right in saying that, initially, it was the view of the trustees that the money should be used for other charitable purposes. They approached the Attorney-General, who then looked into the very complex charity laws surrounding this case, and it was then agreed that this was the only reasonable way forward. To that extent, in February 2017, William Shawcross, who was then the chairman of the Charity Commission, said that he accepted the legal correctness of the approach that the Government wished to adopt.

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My Lords, surely there is an easy resolution to this—a payment is made to the Chancellor to keep in the narrow terms of the trust, but the wishes of the trustees for such money to go to charity are then met by an offsetting donation by the Government, which is the kind of mechanism used for dormant bank accounts.

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My Lords, I do not believe that that would be within the spirit of the law at all.

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My Lords, will the Government consider allocating some of these charitable funds to small charities faced with additional costs, historically associated with sleep-ins, should the successful appeal by Mencap be overturned in the future? If not, will the Government at least hypothecate some of the funds to charities in the social care sector which were running at significant deficits prior to the publication of the Green Paper on social care?

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My Lords, the Attorney-General has received many suggestions on how this money could be used and I am sure that noble Lords could think of many more. However, it is simply not right for money that has been donated for one purpose—whether the donors are living or not—to be given to another cause. Therefore, it will not be in this case.

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My Lords, I understand that, under circumstances in which—for whatever reason—trustees cannot fulfil their duties, the Charity Commission has the power to transfer the assets of one charity to another. If these trustees cannot fulfil their duties, because paying off the entire national debt is difficult, would it not have made more sense for the Charity Commission to have suggested that the assets be passed to another charity for good purposes? Why was that not considered?

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My Lords, I think I have made myself very clear on what the Charity Commission currently feels. Noble Lords looked at the Charities Act in 2011, and the Government have been through charities law fairly recently. It is a fact that the charity is required by law to adhere to the purpose of the fund, which is to pay off the national debt. It is an administrative sub-clause which requires the entire national debt to be paid off.

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My Lords, I declare an interest as chair of Age Scotland. Charities are finding it very difficult at the moment because of cutbacks in grants from government and local government and difficulty in fundraising. Can I suggest that we ask the views of the chair of the Charity Commission on this? We will then find out whether her interest is really in favour of charities or of the Government.

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My Lords, I have already quoted the views of the then chair of the Charity Commission in February 2017. There is nothing to suggest that anything has changed. The Government will be proceeding as I have already explained.