Finance Bill

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Dr. Pugh: Will the hon. Gentleman clarify whether he is suggesting that a sports council list will be accepted wholesale by the Treasury, which will authorise it, or is the Treasury in a position to pick from a menu of sports put forward by the sports council?

John Healey: Our intention, and my commitment to the Committee, is that we will use the list of recognised activities produced by the sports council in England, which will be the basis on which we frame statutory instruments that define which sports are eligible.

Roger Casale (Wimbledon): I join colleagues in welcoming my hon. Friend to the Front Bench. I wish him well in his new appointment.

I welcome the new measure. Will the Economic Secretary make it clear whether amateur football clubs are likely to be eligible? He will be aware that recently we have seen the disappearance of our community professional sports club to Milton Keynes—our local

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Wimbledon football club is to go there. We are going to start a community amateur sports club—a new football club—called Wimbledon association football club. I shall certainly put my hand in my pocket to support that new venture. I hope that my donation and those of other members of the community will qualify for the new relief, which will help us on our way to replay the wonderful story of Wimbledon football club, which is starting again from scratch.

John Healey: This is new indeed: Wimbledon loses one football club to Milton Keynes, but gains another. My hon. Friend has always given strong support to constituency activities. I can confirm that football is on the list of recognised activities. Community amateur football clubs will qualify as eligible under the Bill.

I should like to give an indication to the hon. Member for Southport of how we will approach monitoring the impact of the new provisions, and determining in the long term whether they have had the impact that we seek. I draw on his earlier observation to say that the Treasury alone does not have the expertise to make such a judgment; nor would it seek to make one alone. As the Chancellor undertook in the Budget, we will continue to assist with the development of community amateur sport, and will demonstrate and underline our continuing commitment to such clubs. We will do so in close liaison with the Department for Culture, Media and Sport and in dialogue with many other sporting interests. I am meeting my right hon. Friend the Minister for Sport on 3 July to discuss those issues.

I shall turn now to amendments Nos. 69 and 70. As the hon. Member for Arundel and South Downs said, the amendments seek to put beyond doubt a couple of points in legislation. Amendment No. 69 would ensure that incorporated clubs came under the legislation. Nothing in the Bill prescribes the form that a community or amateur sports club must take; nor should it. I therefore give an assurance to the hon. Gentleman and to other Committee members that an incorporated club would be able to register, provided it met the criteria for registering under the schedule.

Amendment No. 70 seeks to ensure that a club would not fail to meet the criterion of being open to the whole community because it had rules that allowed members to be expelled for inappropriate or disruptive behaviour. We do not intend to prescribe in schedule 18 detailed rules for every registered community or amateur sports club. We want to leave general rules relating to the conduct of club activities to good sense and to the wishes of club members; that is part of the clubs' autonomy. The Inland Revenue will take a common-sense view of those rules, and will be concerned only if a rule offends the spirit underpinning the criteria. Clearly, a club must be able to exclude members if the presence of those members is disruptive to the orderly running of the club. I am happy to put on the record an assurance that such a rule will not preclude a club from being registered as a community amateur sports club for the purposes of the provision.

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On the basis of those two assurances, I hope that the hon. Member for Arundel and South Downs will withdraw the amendment.

Mr. Flight: I thank the Economic Secretary for dealing with those two points. His response was entirely satisfactory. Under amendment No. 70, the broad rule would be open membership, but clearly that raises the issue of what the position would be with regard to expelling people who clearly acted improperly. Although the hon. Gentleman's response to incorporation was not crisp, it was satisfactory.

Which amateur clubs will qualify for charitable status, if they wish to apply for it? Our understanding is that the Charity Commission will need to decide on the principle of whether an activity is capable of improving physical health and fitness. It has already made it clear that certain sports, such as angling, ballooning, billiards, crossbow, pistol shooting, flying, gliding, motor sports and parachuting will not meet that principle, and there may be others. Not all amateur sports clubs will have the choice between applying for charitable status and the package under the clause. If there were a choice, there would be more logic in saying that a certain package was less generous and that the other was the full charity package.

Moreover, amateur sports clubs have advanced the sensible argument that, with all the toing and froing, qualifying as a charity is a cumbersome, expensive and complex matter. If it were decided to give charities tax benefits, it should be administratively easier for them to qualify and apply for such benefits. We believe that the measure is unwise. People will misunderstand the situation. There will be a lot of hassle, for example, if certain gifts did not qualify, but would qualify if they were charitable. The cost savings are not worth the candle in terms of the national economy. Hassle will be created by a slightly different and ungenerous rule. The logic of the Economic Secretary's speech was not correct. For starters, many sports clubs will not qualify as charities.

Mr. Edward Davey (Kingston and Surbiton): The hon. Gentleman referred to the limited cost of some of his ideas. Has he noted that, in the Red Book for 2003-04, the total cost of the proposal will be a mere £5 million? The extra costs of his ideas will be small.

Mr. Flight: I thank the hon. Gentleman for that response. If hundreds of millions of pounds were involved, there would be a simple budget controlling argument. However, the amounts involved are not worth the candle. We remain strongly of the view that it is unproductive to have separate rules.

However, with regard to amendments Nos. 69 and 70, we appreciate the Minister's comments, and he has answered our questions satisfactorily for the record. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Mark Hoban (Fareham): I beg to move amendment No. 41, in page 240, line 28, leave out from beginning to 'and'.

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The Chairman: With this we may discuss the following amendments: No. 42, in page 241, line 1, leave out from beginning to 'and' in line 2.

No. 43, in page 241, line 24, leave out from beginning to 'and'.

No. 44, in page 242, line 7, leave out 'income and'.

No. 45, in page 242, line 11, leave out from 'is' to 'the' in line 14.

No. 46, in page 242, line 17, leave out 'income and'.

No. 47, in page 242, line 19, leave out 'income and'.

No. 48, in page 242, line 22, leave out 'income and'.

No. 49, in page 242, line 41, leave out 'income and'.

No. 50, in page 242, line 42, leave out 'income and'.

No. 51, in page 243, line 3, leave out 'income and'.

Mr. Hoban: The hon. Member for Southport was right to describe the relief as modest earlier. That point was amplified by both my hon. Friend the Member for Arundel and South Downs and the hon. Member for Kingston and Surbiton (Mr. Davey). As is pointed out in the Red Book, the relief will cost £5 million next year and £10 million in the fiscal year following that.

I tabled the amendment because the relief is already restricted in so far as the income limits to which tax relief will be granted are set out in the Bill. For example, trading income is limited to £15,000, and property income to £10,000. There is a further restriction based on the proportion of expenditure and income that is applied for qualifying purposes.

Many sports clubs will find the task of trying to identify what income expenditure is to be applied for qualifying purposes onerous. I spoke to a couple of local sports clubs before the recess to identify what levels of expenditure they thought would be applied for qualifying. First, they said that that would depend on how the rules were interpreted, and that they would need more guidance than is given in the schedule. Secondly, by their interpretation, the proportions of qualifying expenditure would be very high. One club suggested that it would be 90 per cent., and another 78 per cent, of its expenditure.

We are imposing a burden on sports clubs that is perhaps not necessary. Most sports clubs earn very little surplus on which they can be taxed anyway. The vast majority of their expenditure is incurred for the purposes of qualifying. To force clubs to jump through further hoops to claim that relief places a disproportionate burden on them, one which runs against the spirit of what the Government are trying to achieve, which is to encourage clubs to grow and develop, and to stress their community aspects. Those who will have the task of leading and developing those clubs—the committee, the treasurers and the administrators—will spend a disproportionate amount of time trying to comply with the schedule.

I ask the Government to think about ways of lifting that burden. That is the spirit in which my amendment was drafted. I should like them to think seriously about whether the restrictions are necessary, or whether the provision places unnecessary regulations on sports clubs, which need all the encouragement that they can get to meet their objectives.

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