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Lord Rooker: I should like to say that I have just heard five brilliant speeches in favour of a brilliant amendment.

A noble Lord: Go on, make it six.

Lord Rooker: It is supported by Conservatives, Liberal Democrats, Labour Members and Cross-Benchers. I am on a hiding to nothing. On the other

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hand, the chances are that it would be a Secretary of State accepting the amendment and not a humble Minister of State. I come with the bad news that I cannot accept the amendment, but nevertheless, I agree with every point made in those speeches. Frankly, any sensible Member of either House would agree with the general points made. I am not hiding behind the proprieties of this House in dealing with what is essentially a finance measure. I understand that there has been a great deal of support for it in another place but, in a way, another place is the place to sort this out. I fully concur with the points made by the noble Lord, Lord Moynihan, about the Olympic bid.

I am grateful to the noble Lord, Lord Phillips, for saying "Thank you" in his opening speech for what had been done previously, and I do not want to belittle any of the points made. I turned to officials half way through one noble Lord's speech and asked, "Would there be any trouble if I accepted this?". "Yes, there would be", they said. I am told that it is reshuffle week as well, so that would probably not be a good idea.

Obviously, it is a new clause. I fully accept that there is an idea drafted here and that there is a head of steam behind it; one looks for pegs to hang it on and Bills to fit it in. This is obviously a Bill into which it could neatly fit. I must point out that this particular Local Government Bill does not contain any provisions for mandatory rate relief for community amateur sports clubs.

I shall now turn to the notes—everything that I have said so far is not written down. In November 2001, the Charity Commission announced that it would now recognise as charitable purposes:

"The promotion of community participation in healthy recreation by the provision of facilities for the playing of particular sport",

and,

"The advancement of the physical recreation of young people not undergoing formal education".

They are two laudable points.

I must say to Members of the Committee who have just turned up to our proceedings—we have been in Committee for a few hours on this Bill so far; that is, 12 at the moment and coming up to 16—that every time I refer to the Local Government Finance Act 1988, I cannot resist reminding colleagues that it was the poll tax Act. Sections 43 and 45 of that Act provide mandatory rate relief to all charities at both the occupied and unoccupied rates. The Act does not make any distinction between different types of voluntary bodies, as they all do good community works. Any sports club that gains charitable status would immediately benefit from the existing rate relief for charities provided under the Local Government Act Finance 1988 at both those rates.

The Government introduced a tax package for community amateur sports clubs—for which the noble Lord, Lord Phillips, said thank you—in the Finance Act 2002. That provided a range of tax reliefs for sports clubs on their income and on donations which local people made to support them. Schedule 18 to the

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Finance Act 2002 provides the criteria required to gain charitable status. I do not have any figures on that. I should be grateful to have such figures, as I should like to know them.

As the noble Lord, Lord Phillips, said, few have taken the step that we are discussing. You can walk into—I shall not provide any business with publicity—branches of well-known stationers in the high street and buy prepared legal documents to enable you to take certain steps, such as making a will yourself rather than employ a solicitor. One would think that someone would knock up a little package to be sold in stationers for sports clubs. All they would have to do would be to fill in a form. Why not? What would be the problem? Is that a good or a bad point? Members of the Committee are laughing at me.

6.45 p.m.

Lord Phillips of Sudbury: It is very kind of the Minister to make that suggestion. My firm would provide just such a package. I shall give the Minister details later.

Lord Rooker: I refer to a package, which could be bought off the shelf, including forms that could be filled in. I understand the fear of bureaucracy that is engendered by the mere mention of the Charity Commission. The main purpose in life of the people that we are discussing is the relevant amateur sports club not filling in forms and getting involved in bureaucracy. But, given that the relevant legislation is in place to assist them, I do not see why they should not be assisted in the way I have described. I cannot lay claim to that suggestion. But it occurred to me that if so few of those bodies have taken the step that we are discussing, we should be able to encourage the rest to do so.

Where sports clubs do not meet the Charity Commission's criteria, or where they have decided not to seek this status, I have to repeat what I am sure was said in another place; namely, that local authorities have the power under Section 42(2)(c) of the Local Government Finance Act 1988 to grant rate relief of up to 100 per cent to any non-profit-making body at their discretion. I cannot rest my case on what I am about to say, but I say to Members of the Committee who are new to our proceedings that the Bill is about freedom and flexibility for local authorities. The whole idea is to remove burdens from them. That is the whole thrust of the legislation. I should like to think that—although I would not describe the measure we are discussing as centralising—we are giving freedoms and flexibilities to local authorities that they have dreamt of only in recent years.

There is already legislation that enables local authorities to grant rate relief of up to 100 per cent for certain worthy bodies. I suspect that a little more local pressure in the right quarter ought to be applied to those local authorities that do not grant such relief. The Committee will be aware that community amateur sports clubs may also benefit from the proposals in the Bill for the rate relief scheme for small businesses, which would provide mandatory rate relief of up to

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50 per cent for qualifying properties. Sports clubs will also remain eligible for up to 100 per cent rate relief as a top-up to the new mandatory relief at the discretion of a local authority. Local authorities are required to make some contribution to the rate pool for discretionary relief but they do not have to make a full contribution.

The following information may be a little out of date. I do not refer to any clubs from my former constituency. I understand that rates are based on open market rental values. The rates bill is therefore less than 50 per cent of the annual rental value because the rates poundage is less than 50p in the pound. Therefore, the rates may not be the primary expenditure of many sports clubs. They may not pay the open market rental if they have entered into a particular arrangement. They may not pay the full amount. Therefore, as I say, the rates may not constitute the main expenditure but they will constitute a large part of the expenditure of some clubs.

I have some good news now. The Cabinet Office's Strategy Unit report, Private Action, Public Benefit, proposes that the list of charitable purposes be expanded to include the advancement of charitable sport. That proposal would be of particular benefit to amateur sports clubs, as many more, including the larger ones, would become eligible for mandatory rate relief as a result. The report also makes recommendations that should reduce the onerous process involved in the registration of charities as well as proposals on trading, membership charges and selection rules.

Although the Government are still considering the proposals in the report, if adopted they would build on the existing measures in place to assist sports clubs to gain charitable status. In other words, the matter is not frozen. We have not reached the point of saying, "This far and no further". Work is going on at present. I do not know what the outcome of the Government's final consideration of the Cabinet Office report will be, but these measures taken together should ensure that community amateur sports clubs benefit from reduced-rates bills without the need to introduce special provision in legislation beyond what is available for charities. As I say, the charitable route exists. If it could be made easier for community amateur sports clubs to attain charitable status, so much the better.

Amendment No. 138ZA attempts to ensure that the money saved through rate relief will be channelled back into sporting activity. As I believe the noble Lord, Lord Addington, said, since community amateur sports clubs will not pay the charge that we are discussing—they are probably not paying it at the moment due to discretionary rate relief—it is difficult to know how to prove that the money that is saved is being channelled back into sporting activity. Provided that a club could show that it had spent the amount saved on sporting activity, it would fulfil the terms of the amendment. However, there is no way of proving

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that the money that is spent on sporting activity is the money that is saved through rate relief. That is the difficulty.

I told my noble friend earlier that I hoped to give him some reassurance; however, I may sound negative initially, as I am resisting the amendment. Members of the Committee are, of course, free to return to the matter on Report. However, as I said earlier today, the Bill needs to receive Royal Assent between late July and early September in order to bring in the new local government financial structure for the next financial year. I have warned the Committee that if any ping-pong were contemplated with regard to the Bill, the Government would take away the ball. However, I would not dream of making threats. I believe that the amendment that we are discussing is brilliant. I could not possibly be accused of making threats.

I hope that, with the assurances that the Government do not have a closed mind on the issue, the noble Lord will withdraw the amendment. I have no doubt that I shall make a similar speech at later stages of the Bill.

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