My Lords, I thank my noble friend Lord Taylor of Holbeach for securing this important debate. The charitable sector is of great benefit to society and of specific importance to those communities that are most in need. The Government’s support for an enhanced role for our communities provides a unique opportunity to promote a creative approach to social empowerment through the charitable sector. A strong civil society is viewed as an essential component of a successful democracy. Increased social action through the charitable sector is at the heart of strengthening our civil society. This will herald a new culture of increased volunteering and philanthropy.

In the past, central government has been accused by a number of organisations in the sector of having an overbearing nature that compromises local innovation and civic action. The Government have pledged to offer more support to voluntary and charitable organisations in making the transition towards increasing the services that they provide, without added interference. It is important to remove the layers of bureaucracy associated with the sector by decentralising power to charitable organisations, which are best placed to run their own affairs. This is likely to result in administrative savings, while boosting morale and empowering communities and charities to take charge of their own destinies.

I am of the view that we live in a compassionate society where most individuals readily give to the less fortunate. Some individuals choose not to donate to charity for fear that their contributions will have no impact. When I hear this argument, I refer them to the following story. A man is walking down a beach moments after a storm. He notices a person ahead of him picking up starfish that have been washed ashore and throwing them back into the sea. He asks the person how his efforts can make any difference, since the beach is long and thousands of starfish have been washed ashore and will probably die. The person looks at the starfish in his hand, throws it into the water and says, “It makes a difference to this one”. The moral of this story is that, even with the best of intentions, we cannot help everyone in the world, but we can make a difference to the lives of those we can help.

A key component in maintaining the level of public trust in charitable organisations, however, is ensuring that as much as possible of the revenue generated is delivered to front-line support. There is a perception that certain charities are not delivering to front-line support, as is desirable. It is therefore important that all charities carefully examine their expenses and undertake savings and reductions as far as possible. I personally know of charities that are perhaps smaller and where 100 per cent of the funds collected are used for charitable purposes.

Access to funding is one of the main challenges facing the charitable sector. The Government have announced their intention to create a big society bank to help to finance charities and voluntary organisations through intermediaries. I welcome this objective, which will contribute towards ensuring that the past financial obstacles to funding are given a long-term solution. We need to ensure that charities are able to overcome the current economic climate, which is likely to put pressure on their organisational models and delivery structures. In the face of a recession, the demands increase at precisely the time that revenue from donations is placed under great pressure.

The previous Government should be commended for introducing Gift Aid to make donating to charities more appealing to individuals. However, many charities still struggle to raise funds. I was pleased to hear from my noble friend the Minister the various steps that the Government will take to assist and enhance the charitable sector. These include the setting up of community organisations and the launch of the citizen service. However, perhaps more can be done to explain to the public how to utilise the Gift Aid scheme. If society is to benefit from the efforts of the charitable sector in the long term, individuals need to support those ventures that can reduce reliance on financial support from the state.

We have a moral duty to support charities through giving our time and resources wherever possible. The importance of helping those in need is a recurring theme in many religions. For example, in Islam it is compulsory to give to charity through the principle of zakat, which is one of the five pillars of Islam. My middle name is Iltaf. There was a famous Indian poet whose name was Altaf Husain Hali. He wrote in Urdu but I will translate what he said into English:

“God does not grant His mercy to those who do not feel the suffering and pain of others. Be kind to the living on earth and God will grant you from heaven His mercy and compassion”.

Those who do not practise or belong to any faith can look to a civic duty when approaching the issue of making donations to the charitable sector.

We all have our heroes. Mine was my late father, who was also my greatest teacher. He was a businessman and a philanthropist. He engaged in several charitable activities in east Africa and the Indian subcontinent. He taught me that there is a great deal of pleasure in giving, as both the donor and the recipient gain satisfaction. His philosophy in life was always to serve the community while retaining a sense of humility. I have formed, and entirely fund, a charity in his name, the Sheikh Abdullah Foundation, which gives support to charitable causes all over the world to continue his work.

The charitable sector has the potential to flourish and deliver services that are currently the responsibility of central and local government. There are, however, successful groups from this sector undertaking this work across the country. This can be of benefit to the wider society if we draw on the skills and expertise of people across the country in this sector as we respond to the social, political and economic challenges facing Britain. The role of the sector has never been of greater importance.

Finally, I know of several commercial organisations that contribute a certain portion of their profits to charitable causes. I urge other companies to think of doing so.