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The Economic Secretary to the Treasury (Mrs. Helen Liddell): I shall begin with the three Government amendments. I am grateful for the acknowledgement by the hon. Member for Sevenoaks (Mr. Fallon) of the line that the Government took in Committee. We chose to introduce three new amendments this evening in order to make incontrovertibly clear what I said in Committee about extending the scope of the benefit that marks the millennium. In Committee, I explicitly read the Government's view on to the record. However, in order to give those who are so generous as to support charity in this way the added reassurance that medical provision would be included, we thought that it would be wise to introduce the three new amendments. I am grateful for the support of Opposition Members.

In relation to amendments Nos. 53 and 54, we had a lengthy discussion in Committee about the date of the millennium. I must admit that we had some fun in

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Committee discussing the millennium date definition advanced by the hon. Member for Kingston and Surbiton (Mr. Davey). He seemed to think that the millennium was a movable feast and that perhaps, like the synod of Whitby, we could convene and discuss a date that would be the millennium. As a consequence, both the Government and the official Opposition reached rare agreement about the date of the millennium.

10.30 pm

I said that I would reconsider the case made by the hon. Member for Sevenoaks (Mr. Fallon) for extending the provision for three months beyond the date of the millennium. However, I do not think that the case has been made for that extension. The measure is designed to focus giving for a specific purpose on one specific date: it allows people to mark the millennium by assisting those who are in poverty in less advantaged parts of the world. The scheme must have a cut-off date, and that date coincides logically with the millennium.

I remind the hon. Gentleman, as I did earlier in Committee, about the continuing investigation into the future of charities taxation. Anything we do in relation to this millennium giving does not prejudge in any way what could happen under the review of charities taxation. There is no reason to believe that there will be a less advantageous system for giving after the millennium because of the ending of this millennium project about which the Chancellor feels so strongly. For those reasons, I hope that the hon. Gentleman will not press the amendments. That would be unfortunate, given our commonality of purpose in relation to this scheme, which would allow the generous people of this country to mark the millennium in a way that gives the greatest benefit to the poorest in our world.

I turn to proposed new clause 16. The Opposition have introduced an exceptionally narrow point on Report which, as the hon. Gentleman pointed out, is concerned with investments by charities through mixed unauthorised unit trusts. The new clause is not very robust technically, but I will not concentrate on its technical aspects. I turn to the substantive argument to answer the hon. Gentleman's points.

The wider point is that charities have a range of options when investing their money. We made quite sure that the advisers to charities had a year to digest the implications of our proposals last year for tax credits on dividends. What is more, we have given them almost as long again to prepare for next April when the proposals come fully into force. Therefore, charities have the opportunity to put their funds into investments in such a way as to maximise tax benefits while maximising their returns.

The hon. Gentleman referred to the Thalidomide Trust and, surprisingly, introduced some rather unfortunate inaccuracies in relation to that trust. I have in front of me the first letter received by Ministers in relation to that matter dated 22 June 1998, eight days ago--a letter to my right hon. Friend the Chancellor of the Exchequer. That correspondence relates to the contact that there has been between the Thalidomide Trust and the Revenue.

The point at issue about the advice that the Revenue gave to the Thalidomide Trust relates to events in December 1996, when the Thalidomide Trust contacted the Revenue to ensure that its investments were in no way part of a tax avoidance scheme. The Revenue's response

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was the kind of confirmation that it required. But there is no way in which the Revenue could give any guarantees about future tax treatment, particularly as this happened under the previous Government. There was a general election, and the present Government decided to correct the anomaly that had existed in relation to tax credits.

I have specifically asked Revenue officials whether they have evidence of any other charities that have encountered the same difficulty, and we know of none. The Revenue cannot be responsible for the nature of the decisions that charities make about how to invest their funds. We have deliberately gone to considerable lengths to allow charities the opportunity to arrange their portfolios in such a way that they maximise the benefits to themselves.

Mr. Peter Bottomley (Worthing, West): The hon. Lady rightly confirms what my hon. Friend the Member for Sevenoaks (Mr. Fallon) said about 1996, when the Revenue confirmed that the tax would not be levied on the charity's investment, and she rightly confirms that this month, Ministers received a letter. Will she give the House her view on what my hon. Friend said about the chairman of the Revenue, Mr. Montagu, informing the charity that six months ago, Ministers knew the effects of what they were doing on the charity's investment?

Mrs. Liddell: The hon. Gentleman may not have been present during debates on the previous Finance Bill when these matters were extensively debated. The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), with his technical expertise, has long waxed eloquent on these matters. We recognised at that time that there would be an impact on charities, which is why preferential treatments for charities were built into that legislation to give them an opportunity to rearrange their portfolios in such a way that they could maximise the benefits to themselves.

That was a rational and clear-cut way in which to behave, given that an anomaly in the taxation system had to be corrected. It was the Conservative Government who began the process of the correction of tax credits. Therefore, one regrets that the decisions that the Thalidomide Trust took in relation to its investments have meant that it was liable for more tax than it thought. At the end of the day, however, the advice given to the Thalidomide Trust by the Revenue related to a specific inquiry, before the election of this Government, about whether the trust was becoming involved in a tax avoidance measure.

The Conservative case is not well made in relation to this matter. The Government, in giving charities the opportunity to seek independent advice on how they should place their investments, gave charities as much opportunity as possible to take the right kind of advice so that they could configure their portfolios in the most appropriate way. Therefore, I cannot accept the new clause, because it would mean making a one-off provision merely to take into account a single sort of investment. Charities will be able to find a range of secure and productive homes for their money. I urge the hon. Gentleman to withdraw new clause 16 so that we can continue with the consensus that we have enjoyed in respect of this important part of the Bill.

Mr. Fallon: With the leave of the House, Mr. Deputy Speaker. In respect of amendments Nos. 53 and 54, may

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I tell the Economic Secretary that she is, as we know, a hard lady? We have tried to put our point three times, and each time she has resisted, so I shall happily withdraw it.

In respect of new clause 16 and the problems that the Thalidomide Trust faces, her response was not at all satisfactory. First, she suggested that there were inaccuracies in what I said. I made it clear that the advice from the Revenue was given in December 1996. There is no dispute about that: I have the words, and I quoted them, so I hope that she will withdraw any suggestion that I was implying that the advice was given in a different December.

Mrs. Liddell: I am glad that the hon. Gentleman has clarified the situation, and I am happy to accept his point. If I have misunderstood him, I am happy to withdraw my remarks, but I hope that he will withdraw his remarks about the Government not being concerned about the matter, and about Ministers failing to respond, given that we received the letter only on 22 June.

Mr. Fallon: I shall deal with that point in a moment, but let me make it clear that I said at the start of my remarks that the date was December 1996, and it was. I am glad that the Economic Secretary has withdrawn the suggestion that that was inaccurate.

Ministers may have been informed about the issue only on 22 June; so were we, but we have been doing something about it. We raised the issue at Question Time last week, and have had a new clause drafted and debated within seven days of receiving the Thalidomide Trust's letter. The hon. Lady, with all her officials in the Treasury, could have tabled a new clause, so it is nonsense to suggest that she has not had time to consider the matter.

Mrs. Liddell: I am sorry, but I am afraid that the hon. Gentleman is still obscuring the main point. I am not saying that the Government have not had time to consider the point. My general point is that we received correspondence from the Thalidomide Trust on 22 June; my substantive point relates to the fact that the new clause would introduce a narrow change for a specific sort of investment. That is the substance of my remarks and, for that reason, I ask hon. Members to oppose the new clause, if the hon. Gentleman will not withdraw it.

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