HL Deb 04 June 1991 vol 529 cc541-2

2.58 p.m.

Lord Dean of Beswick asked Her Majesty's Government:

What consideration has been given to granting a corporation tax concession on funds raised by the British Olympic Association in the four years to mid-1992, and what conclusions they have reached.

The Parliamentary Under-Secretary of State, Scottish Office (Lord Strathclyde)

My Lords, a number of representations have been made over the years about the tax treatment of the British Olympic Association, and also other sporting bodies. Those representations have been considered, along with all others made, in the context of the annual Budget and Finance Bill. My right honourable friend the Chancellor of the Exchequer decided that it would not be possible to single out the BOA for special tax privileges.

Lord Dean of Beswick

My Lords, the Minister will not be surprised if I express my disappointment in his Answer. Some weeks ago in the debate in your Lordships' House on sport and leisure figures given to me by the BOA were quoted. Its target was £4 million, and if the present financial arrangements are continued it will lose £1.8 million of that to the Treasury. If that is the case, does the Minister consider that such treatment will be a disincentive to people to donate to that fund? As £1.8 million is a small proportion of the annual Budget would it not be right and proper for the Government to write off that sum? He should bear in mind that most of the major countries competing in the Olympic Games adopt that practice or tax Olympic funds very little. Will the Minister raise the matter again with the Chancellor in order to try to help the organisation?

Lord Strathclyde

My Lords, I am aware that last year the BOA said that it paid about £¾million in corporation tax over a four-year cycle. More recently, it has referred to a total of £1½million. However, the Government remain to be persuaded of the case for a special tax exemption for the BOA or any other sporting body.

Lord Bruce of Donington

My Lords, does the noble Lord or his right honourable friend the Chancellor of the Exchequer feel constrained by the provisions of the Finance Bill which he mentioned? If so, is he aware that all the Government have to do is to instruct the Board of the Inland Revenue to add to a long list of extra statutory concessions? This would facilitate what I am sure is the noble Lord's wish and possibly the subconscious wish of the Government to which he belongs.

Lord Strathclyde

My Lords, I am delighted to receive the noble Lord's advice. I am well aware of the special procedures that can be worked out. However, the plain answer is that the Government remain to be persuaded of the case for a special tax exemption for this body.

Lord Dean of Beswick

My Lords, would the Minister care to deal with the point that I made? People are asked to donate to the Olympic fund knowing that 40 per cent. of donations will go straight to the Treasury, Mr. Lamont. Will the noble Lord respond to the point that I raised—that that is a terrible disincentive to people to give to the fund? Will he bear that in mind and speak to the Chancellor of the Exchequer to see whether he will review the situation in the light of what other competing countries do?

Lord Strathclyde

My Lords, plenty of organisations pay tax and still have to raise sizeable amounts of money. There is no reason why the BOA should not be able to do so. As to the example that the noble Lord gave of what people in other countries do, I am not sure that it is relevant in this case.

Lord Dean of Beswick

My Lords, the Minister may not think it relevant, but all we ask for is equal treatment with our competitors.