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9. Adam Price (Carmarthen, East and Dinefwr) (PC): Whether he has discussed his proposals for local pay in the public sector with the Finance Ministers in the National Assembly for Wales and the Scottish Executive. 
The Economic Secretary to the Treasury (Mr. Ivan Lewis):
Treasury Ministers periodically meet Finance Ministers from the devolved Administrations to discuss a range of issues of common interest, including public sector pay. The objective of the Government's public sector pay policy is to ensure high-quality delivery of public services while ensuring value for money for the taxpayer. In some cases, that may require a local pay
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variation to reflect differences in labour market conditions across the country. In devolved areas, it is for devolved Administrations to determine pay settlements. In some cases, they have decided to be part of the UK-wide systems.
Adam Price: In a report funded by the hon. Member for Caerphilly (Mr. David), the Bevan Foundation, a Labour-leaning think-tank, concluded that the introduction of local pay in the public sector would widen further the pay gap between Wales and the rest of the UK. Did the Minister's colleagues in the National Assembly make that point to him forcefully, or does the Labour party say one thing in public and another in private?
Mr. Lewis: Wales has done better than almost anywhere as a consequence of this Government's policy. In recent years, public sector workers in Wales, particularly those in the front line, have received significant, year-on-year salary increases. That is the real gap compared with the pay that they were receiving up until 1997. There are arguments for localised pay in some circumstances, but there is no room for any grievances about the rates of pay for public service workers on the front line in Wales.
Mr. Wayne David (Caerphilly) (Lab): Does the Minister agree that the strength of the Welsh economy is eloquent testimony to the effective partnership between the Welsh Assembly Government and central Government?
Mr. Lewis: I entirely agree with my hon. Friend and congratulate him on his new book, which was published recently. The combination of economic growth and public service improvements in Wales that has occurred as a consequence of the partnership between the devolved Administration and the Westminster Government means that the people of Wales are experiencing, on a daily basis, a difference in their quality of life and standard of living.
The Chancellor of the Exchequer (Mr. Gordon Brown): Following millennium volunteering for young people, which was introduced in 1999, and the young volunteering challenge after 2000, the Government set up the Russell commission in 2004. It has recommendedand the Government have accepted£100 million of new investment in gap years and other volunteering for young people. That is already sponsored by 26 companies and the programmes are run with the involvement of young people. The national youth community service board is independent of Government in its appointments and its allocation of money.
Does my right hon. Friend agree that many young people do not get a good press? Will he join me in congratulating Action Durham Millennium Volunteers in my constituency? It comprises a group of
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16 to 24-year-olds who are involved in a range of voluntary projects. Many of them have won the award for excellence for completing 200 hours of volunteering.
Mr. Brown: I congratulate the volunteers in my hon. Friend's constituency. In every constituency in the country, more young people are taking part in voluntary activities, and there is a greater demand that they do that. All the evidence from the most recent volunteering initiatives shows that, when young people are given the opportunity, they respond, not only in traditional projects for volunteering but in environmental projects, for which we announced new measures in the Budget. The importance of the volunteering initiative is that we hope to have 1 million more people volunteering as a result of the Russell commission proposals and the work of the national youth community service that has now been set up. I repeat that its board is independent of Government in its appointments and its allocation of money.
The Paymaster General (Dawn Primarolo): Her Majesty's Revenue and Customs has no formal responsibilities for dealing with or identifying illegal migrant workers. When HMRC officers come across information that suggests that an employer has committed a criminal offence by employing an illegal worker, it can be and is passed to the immigration and nationality directorate.
Dr. Pugh: The Paymaster General will acknowledge that the failure of agencies and gangmasters to account properly for their tax affairs is often the clearest indication of the systematic use of illegal labour and, of course, it gives them a competitive advantage. Does she acknowledge that there have been cases in which the Inland Revenue's pursuit of unpaid tax has conflicted with police investigations and attempts to prosecute under proceeds of crime legislation? Will she admit that that is ripe for further investigation?
Dawn Primarolo: No. I assume that the hon. Gentleman is aware of the joint workplace enforcement pilot, which involves all the agencies, including HMRC, and the gangmasters licensing scheme, which the Gangmasters Licensing Authority operates. He will also know that HMRC co-operates fully with and has information gateways to the Serious Organised Crime Agency and he will therefore understand that I am confident that relevant information is passed to the relevant authorities.
The Economic Secretary to the Treasury (Mr. Ivan Lewis): In 2000, the Government greatly expanded tax relief for giving to charities. Since then, tax repaid to charities on donations using gift aid has increased from £222 million in 200001 to £625 million in 200405. Payroll giving has increased in value from £55 million in 200001 to £83 million in 200405.
Ian Lucas: I recognise the excellent progress that has been made since 1997 in the development of charitable giving. However, the development of charitable foundations and tax deduction at source in the United States means that there is a far higher level of charitable giving there than in the UK, even now. Has any long-term assessment been made of a change in the charitable giving system?
Mr. Lewis: In the Budget, the Chancellor announced the creation in the Treasury of the office of charity and third sector finance, which will focus on financial support to the sector. In addition, as part of the comprehensive spending review process, we will undertake the largest ever consultation with the third sector in this country. It will include every region of the country and consult not only the large and medium-sized charities but some of the grass-roots, community-based charities. We have an impressive record of incentivising giving in payroll giving and gift aid, but we want to do much more.
Mr. Nigel Dodds (Belfast, North) (DUP): While acknowledging what has been achieved, may I ask the Minister what impact VAT has had on charitable giving? Will the Treasury take on board the representations made by the charitable sector for the removal of VAT for charities?
Mr. Lewis: We have conducted two fundamental reviews of VAT and charities and have concluded that there would be no equitable solution. However, thanks to the changes to gift aid and the encouragement, particularly of small and medium-sized enterprises, to give through payroll giving, the amount of charitable giving is increasing significantly year on year. We need only reflect on the recent tsunami and other events to see that the charitable nature of the British people has never been stronger.
Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): My hon. Friend shares my belief that this Government have done a great deal to encourage charitable giving. Does he agree that more attention should be paid to giving to universitieswhich are charitiesand to the higher education sector generally? I know that there was a taskforce, and that the Chancellor has made some real changes, but people still say that there are not enough advantages to giving to universities as charitable organisations. We still lag far behind the level of giving in the United States in this regard.
As my hon. Friend is aware, we have recently announced further investment support to universities. As part of the comprehensive review process, and of the stream that is looking into the needs of charitable organisations, we will of course examine the needs of the higher education sector. I have to say to
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him, however, that more resources than ever before are going into that sector year on year to meet the challenges of globalisation.
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