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Lord McKenzie of Luton: My Lords, the points of principle could be settled quickly but the drafting that would be needed to put those into the legislation would certainly involve complexity. We know from practice that whenever complex rules are established someone seeks to avoid them, therefore you have evermore complex rules. That is the history of so much tax legislation in recent times.
Lord Phillips of Sudbury: My Lords, I am most grateful to the noble Lord for giving way, but is he aware that one of the proposals is that there should be potentially a set form which would have to be used to take advantage of the relief? It would not involve the Revenue in a plethora of different types of trust and so on or, indeed, settlors. Would that not get round much of the concern that he is expressing?
Lord McKenzie of Luton: My Lords, there might be a set form and a set process, but the legislation that underpins the arrangements could be complex. The points that I have just run through, which are just some of the issues that came out of the opinion, demonstrate the potential complexity of the arrangements. Donors may need to seek professional advice and charity fundraisers would need to explain how these vehicles would work and so would need training. HMRC would have to deal with tax returns and compliance of these trustsalthough that could be helped in part by
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the point which the noble Lord, Lord Phillips, has just madeas well as make changes to the self-assessment system to allow donors to claim relief.
With these extra burdens, we would want to be sure that additional giving would be generated and that the benefits would outweigh the additional cost. A diversion of giving that might otherwise proceed via gift aid would have an adverse impact on charities. There is also evidence that the existing reliefs for charitable giving are abused and we would want to be very careful that any new reliefs would not be abused. The noble Lord, Lord Best, touched on that point. Certainly, proper oversight of a CRT would be key. The Finance Act 2004 contains anti-avoidance measures that had to be brought in to deal with abuse of the arrangements for gifts of shares to charities. That illustrates the environment that we could be in.
Officials in HMRC and HM Treasury continue to explore the proposals for CRTs in some detail to assess the available evidence. Government will always be interested in exploring ideas which may bring real benefit to charities. With CRTs the evidence is hard to establish, but we are keeping this matter under review as part of the budget process. I was asked specifically about the Government's view on that. I stress that we have made no decision on whether CRTs are appropriate and a good thing, but they are being kept under review. Many of those involved in the Lifetime Legacies Coalition, including the Institute for Philanthropy, which was referred to by the noble and learned Lord, Lord Lyell of Markyate, and the noble Lord, Lord Phillips, and the Institute of Fundraising, have put considerable work into making the case for a tax relief for a charitable remainder trust and I am sure that they will continue to have a very positive dialogue with the Treasury and HMRC.
The reference of the noble Lord, Lord Hodgson, to the Treasury's glacial approach was somewhat unfair. There has been a dialogue, which can continue. In the meantime, there are a number of government initiatives to encourage giving and the use of the existing tax reliefs. In November, the Home Office launched A Generous Society, which contains a range of measures to help government to play their part in meeting the challenge set by the Giving Campaign to double charitable donations in real terms over the next 10 years. This includes a programme to train and support charities in their use of tax-effective giving and extending charitable giving citizenship material to primary schools.
I will seek to deal with one or two other points that were raised. I understand the point made by the noble Baroness, Lady Noakes, that no commitment is made on behalf of the Conservative Party to have this as part of its programmeshe said that it is something that its tax commission may consider. However, the point about complexity is real. The noble Lord, Lord Phillips, made a point about accelerating giving. There is no reason why that acceleration could not
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take place by way of a legacy. The gift does not happen immediately but it does not happen under the trust arrangement in any event.
Lord Phillips of Sudbury: My Lords, the noble Lord cannot have his cake and eat it. The proposal allows a gift of a major asset now that has impact for tax and charitable purposes now but retains the income of the gift during the lifetime of the donor. That is a strong come-on for generosity now, because it does not cut one loose from the whole asset.
Lord McKenzie of Luton: My Lords, I understand that point, but the gift does not reach the charity until the end of the life interest. The same would apply under a legacy. The noble Baroness, Lady Cumberlege, referred to the great deal of work in which she is involvedI pay tribute to that. We recognise that charities need to do a great deal to raise funds. One way in which we can do that is to make sure that the existing reliefs are used to the full and certainly in relation to gift aid, where we have identified that just 30 per cent is taken. That figure could be doubled. Something like £600 million is potentially available to charities because of it. Tax relief is one of the many factors that support a culture of giving and civil society has an important role to play in encouraging those who can afford to give to do so. The noble Lord, Lord May, in particular, spoke about the need to change and move forward the culture in the UK to seek to match that of the US.
I hope that the noble and learned Lord, Lord Lyell, in particular, and all those who have spoken in the debate will not be too disappointed by the response. I hope that they will recognise a shared objective in supporting a strong voluntary and community sector in the most effective way possible. The Government are determined to do all that we can to foster and encourage a deeper, broader culture of giving into the future.
(1) The Secretary of State may provide accommodation and other essential living needs to persons who have been trafficked into the United Kingdom.
(2) For the purposes of this section, a "trafficked person" means
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(a) a person who is a passenger within the meaning of section 4 of the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004 (c. 19) (trafficking people for exploitation), and who has been or whom the Secretary of State believes may have been "exploited" within the meaning of subsection (4) of that section;
(b) a person who is the victim of an offence under sections 55 to 59 of the Sexual Offences Act 2003 (c. 42) or section 145 or 146 of the Nationality, Immigration and Asylum Act 2002 (c. 41);
(c) a person whom the Secretary of State decides, on the basis of the information available to him, should be treated as a person to whom paragraphs (a) or (b) above apply, pending any final determination of whether or not they have been trafficked within the meaning of those subsections."
The noble Lord said: My Lords, as can be seen from the heading of the amendment, it attempts to improve the situation as regards trafficking of persons. It is in fact a modified version of my Committee stage Amendment No. 74.
I emphasise that it is permissive and imposes no duties. The definition of a trafficked person has been improved by using the language of existing statutes. As your Lordships know, there is already some accommodation for women trafficked for purposes of prostitution through the Poppy project, while local authorities have responsibilities for trafficked children. There is however no specific provision for women trafficked for non-sexual exploitation, or any accommodation at all for men. The new clause fills that gap. It grants only a power to the Secretary of State. He or she would not have to return to Parliament if, following a consultation on the Home Office action plan headed "Tackling Human Trafficking", it is decided that accommodation is in fact needed. This could then be provided for the rehabilitation of victims and to facilitate the prosecution of criminals. I suggest that both purposes are necessary. I beg to move.
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