The Minister for the Cabinet Office (Edward Miliband): In Budget 2008, the Government committed to a transitional gift aid rate of 22 per cent. for three years, worth £300 million to the sector, which was widely welcomed. Alongside that, we are making significant changes to the auditing, record-keeping and claims process to reduce the administrative burden on charities. We will continue to work with the charitable sector to see how the take-up of gift aid can be improved.
Ian Lucas: Gift aid has been such a successful scheme that there was real concern about detrimental effects when announcements were made about changes to the tax regime. Will my right hon. Friend ensure that there is close contact with the charitable sector, including the many small organisations, to ensure that it fully understands the changes so that the scheme can be as effective as it has been in the past?
Edward Miliband: My hon. Friend is right. The Government have a good record on gift aid. Gift aid receipts were £385 million in 1996-97 and were £830 million in the latest year for which figures are available. The transitional relief that we have been able to provide has been widely welcomed by the charitable sector. My hon. Friend is right that there is still a lot of unclaimed money in gift aid, and both the Government and the charitable sector must work to ensure that it is taken up.
Mr. David Evennett (Bexleyheath and Crayford) (Con): Is not the Minister concerned that the amount that charities receive in gift aid will fall as a result of the cut in income tax, and what will he do to ensure that they have more funding opportunities?
With respect, the hon. Gentleman must have missed my reference to the announcement
in the Budget. The Chancellor of the Exchequer announced three years of transitional relief to tide over charities that face a cut in gift aid as a result of the cut in the basic rate of income tax to 20p.
Edward Miliband: The charitable sector thinks that the tax rate and the gift aid rate need to be tied together in the long termand it is rightbecause it removes the Governments discretion to vary the amount the sector gets. We need to use the next three years to see whether we should reform the gift aid system furtherI welcome any suggestions that he hasand to increase the take-up of gift aid.
Ms Sally Keeble (Northampton, North) (Lab): Will my right hon. Friend look sympathetically at the representations that have been made to extend gift aid to subscriptions to junior sports clubs? That would be an excellent way to encourage young people to participate in sport and to reward parents and others who run the clubs, who make an enormous contribution to our communities.
Edward Miliband: I was not aware of the specific campaign, but I clearly should be. I will endeavour to look at my hon. Friends proposal. Sports clubs play a huge role throughout the country and are an incredibly important part of the charitable sector. I shall make representations to my right hon. Friend the Chancellor of the Exchequer.
Susan Kramer (Richmond Park) (LD): As the Secretary of State will be aware, many charities will have a hole in their budget when the transitional period is over. Surely this is the time to look again at the ability to recover VAT on charities. He will know that the EU commissioner has confirmed that member statesalthough not including Britainare implementing systems compatible with EU legislation that would allow the whole charge to be reclaimed and recovered.
Edward Miliband: I understand the hon. Ladys suggestion, because it is a long-running issue for the charitable sector. To be candid, the costs would be significant, running to hundreds of millions of pounds. EU legislation also poses barriers, although I will look into the point that she makes. My feeling, from talking to people in the charitable sector, is that the argument has moved on. People welcome the gift aid reliefs, and they want to build on the system that we improved and have protected through the transitional relief that I have mentioned.
Tom Levitt (High Peak) (Lab): It is good news that charities now have three years to prepare for what will be a hit when the gift aid rates come into line with income tax rates. This is a good time for charities and employers to encourage the use of payroll giving. Will my right hon. Friend do what he can to increase the amount of payroll giving on which gift aid can be claimed?
My hon. Friend is right. Payroll giving can play a big role in increasing the income that is available to charities. We should be honest about the
fact that we can do much more to promote payroll giving. Outside work is being done on how payroll giving can be reformed to make it more attractive for people to take up, because there is nothing like having people committed to giving to a charity through their payroll. It means that the charity has some certainty about the income that it will receive. I would welcome any suggestions that my hon. Friend or others have about how to improve the system of payroll giving and increase take-up.
Anne Main (St. Albans) (Con): Relate is a fantastic charity that offers a valuable service in many of our constituencies. I met Sue Andrew, the Hertfordshire director of Relate, who said that the charity had previously been entitled to gift aid but was not now. Relate stresses that it suggests a voluntary donation of approximately £40 in Hertfordshire, but it does not withdraw services if a donation is not forthcoming. Indeed, some families give more. Will the Minister investigate why gift aid has not been available for Relate?
Edward Miliband: The hon. Lady raises an important issue. I have a local interest in Relate, as one of its offices is based in Doncaster. Even if that was not the case, I would endeavour to look into that point. I shall write to her.
Mr. Francis Maude (Horsham) (Con): We miss the Secretary, Cabinet Office, the hon. Member for West Bromwich, East (Mr. Watson) from his usual place, but he has courteously explained why he is away. I am sure that the whole House will want to send him and his wife all its good wishes for the forthcoming event.
We welcome the transitional relief to which the Secretary of State refers, which has been given to compensate charities for the shortfall in gift aid income as a result of the Prime Ministers income tax changes, after my hon. Friend the Member for Tunbridge Wells (Greg Clark) raised the issue in the Budget debate last year. What assessment has the Cabinet Office made through its social exclusion taskforce of other groups in society that are losing out as a result of the income tax changes?
Edward Miliband: I pay tribute to the right hon. Gentlemans ingenuity in bringing that point into a question about gift aid. I think that it is good that we are cutting the basic rate of tax to 20p. As we can see, that has an effect on the charitable sector, and it is right that we should try to help the charitable sector out. As I said earlier, I think that the transitional relief has been widely welcomed.
Mr. Maude: Is it not clear that the belated introduction of the transitional relief on gift aid shows that the income tax changes were simply not thought through? After the kick in the ballot box that the Government received last week, do not Ministers realise that it is now time to set out in detail what relief there will be for the millions of low-paid victims of the 10p tax hike? Is it not unfair to Ministers such as the hapless Communities Secretary to send them out night after night on Newsnight, unable to answer the most basic questions on that point? When will she be put out of her misery?
Edward Miliband: This Question is on gift aid, but I will happily answer the right hon. Gentlemans question on the other issue, with your permission, Mr. Speaker. My right hon. Friend the Chancellor of the Exchequer is looking at the issues in relation to the 10p rate and he will make a statement at the appropriate time. If the right hon. Gentleman wants to have an argument between now and the next election, either about the charitable sector or about people in poverty in this country, and about which party is best to deal with those points, I say, Bring it on. Not only do this Government have a good record on gift aid and the charitable sector, but we have a record on poverty of which we can be proud.
The Minister for the Cabinet Office (Edward Miliband): Charities play an essential role in campaigning for change. I welcome the Charity Commissions recently published guidance, which gives greater clarity to the freedoms that charities have to campaign in order to meet their charitable purposes.
Fiona Mactaggart: Does the Minister have an estimate of the degree to which local authorities punish charities that campaign for change within their area and on behalf of residents? What can he do to stop local authorities cutting grants to campaigning charities?
Edward Miliband: My hon. Friend is a former charities Minister, and she knows the issue well. She knows some of the difficulties of addressing it. Her fundamental point is absolutely right. Charities should not feel constrained from biting the hand that feeds them. Whether they are funded by an organisation, a local authority or a national Government, they should feel absolutely free to campaign against the policies of that authority or Government. I want the Commissioner for the Compact, Sir Bert Massie, to consider how we can do more locally to ensure that local organisations can campaign with freedom on local issues.
Mr. Roger Williams (Brecon and Radnorshire) (LD): In the area that I represent, public transport is inadequate for many people who do not have cars. Voluntary community transport schemes provide people with the opportunity to be taken to hospital, yet the amount of money that the schemes can pay volunteers who provide their own vehicle has been pegged. The schemes are not allowed to pay any more without tax being deducted. As there has been an increase in the price of petrol and in other costs, will the Minister consider that and decide whether the amount paid can now be increased?
I am taking away rather a lot of work today for myself and for the Secretary, Cabinet Office, my hon. Friend the Member for Corby (Phil Hope). The treatment of expenses for volunteers is a significant issue. It arose about a year ago in relation to
lunch expenses for people on benefits, and we managed to get a good result with that. As I have said in answer to some other questions today, we will endeavour to look at the issue that the hon. Gentleman raises.
Mrs. Sharon Hodgson (Gateshead, East and Washington, West) (Lab): One social change that I have been working with the third sector to try to achieve is a shift towards healthier lifestyles and diets. Will the Minister join me in congratulating organisations such as the Child Poverty Action Group and Unison? They have joined me in campaigning for free, universal and locally sourced school lunches to ensure that every child in every school has a hot, healthy meal.
Edward Miliband: May I begin by paying tribute to what started off as my hon. Friends one-woman campaign for universal free school meals? It is an ingenious campaign, and many people in this House will understand its benefits. I was recently in Hull, where the Labour council introduced free school meals in primary schools for a time, but that was unfortunately abolished by the Liberal Democrats[Hon. Members: Shame!] Well, what would one expect? However, I can tell my hon. Friend that I know that others in Government are looking at this matter, and I hope that they are doing so sympathetically.
Mr. Peter Bone (Wellingborough) (Con): Wellingborough Mind does a wonderful job of campaigning for social change in my constituency. It is funded by the NHS and the county council but, unfortunately, that funding runs out on 30 June. What would the Minister say to those organisations about providing a properly funded budget for the future?
Edward Miliband: The hon. Gentleman indicates that he is doing so, Stable funding is incredibly important for the third sector. Again, I pay tribute to the work of Mind, which does an excellent job throughout the country. From here in Whitehall, it is very difficult to ensure that every local organisation is funded, but I wish him luck with his representations.
The Parliamentary Secretary, Cabinet Office (Phil Hope): Englands biggest ever youth action scheme, v involved, started in April. The scheme funds 158 projects to recruit volunteers up and down the country, and 107 teams to support young volunteers and to help organisations to involve young volunteers. Over the coming three years, v involved will create 500,000 more volunteering opportunities. That will help it to progress towards its overall objective of 1 million new volunteers by 2011.
Mr. Hendrick: I thank my hon. Friend for that reply. Will he join me in congratulating the Ingol and Tanterton Action Group, and in commending it for its work? The group is made up of many young people from Preston who are working in the community to develop many fantastic activities such as summer festivals, internet cafés, coaching in sports activities and DJ workshops. They are also working with older people to generate the intergenerational capacity that we need so much in our communities.
Phil Hope: My hon. Friend is absolutely right, and I certainly want to congratulate him on his work as a champion of young people and young volunteering in his constituency. The Ingol and Tanterton Action Group does terrific work, and I want to emphasise that its intergenerational nature fosters better relationships between younger and older people in the community. That can do a great deal to break down barriers, dispel myths and build community cohesion between people of different ages.
Mr. Nick Hurd (Ruislip-Northwood) (Con): When the charity v was launched by the Prime Minister two years ago, it was set a target of raising £50 million from the private sector. How much cash has been raised so far?
Phil Hope: The charity v was charged with delivering in a variety of ways the resources that we provide, as I described earlier, and with creating match-funding opportunities as well. Some £75 million of the £117 million that v will be delivering has come via the v involved programme. The match-funding target is some £45 million. To date, v has secured more than £32 million in pledges for youth volunteering from the private sectorwell on course!
Mr. Alan Meale (Mansfield) (Lab): Is the Minister aware that we have a very active volunteer centre in Mansfield? Part of it is the new Artemis project that deals with young ex-offenders. I hope that he will give that project a fair wind today, and give us some news about its future.
Phil Hope: I have some good news for my hon. Friend: the Artemis project in Mansfield is receiving money from v to do some very interesting work on peer mentoring between older young people and young people who find themselves in trouble with the criminal justice system. I think that there is particular value in the one-to-one relationship that that can provide for young people, either when they are in custody or when they leave custody and go back into the community and need support. May I remind everybody that the first week of June is national volunteers week? I hope that every Member of the House will take the opportunity to go to their volunteer centremy hon. Friend mentioned the one in Mansfieldand offer their services for a couple of hours during volunteers week.
Sir Patrick Cormack (South Staffordshire) (Con): Will the Minister volunteer to learn the English language? What does all this ghastly jargon meanv involved? It has not even got a capital letter. Will he please get rid of this awful jargon?
Phil Hope: I am struck by the thought that some intergenerational volunteering might not be amiss for the hon. Gentleman. V is short for volunteering. He will be glad to know that young people are getting cash to support their projects through v cashpoint, are getting involved in local projects through v involved, and are having a great time contributing to building their communities through v teams. Perhaps he might like to go down to his v volunteer centre and offer to educate himself about the contribution that young people are making through those very innovative schemes.
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