Clause 5.—(REFUNDS TO CHARITIES.) (Hansard, 21 July 1966)

§ Mr. Gordon Campbell (Moray and Nairn)
I beg to move Amendment No. 146, in page 6, line 34, to leave out 1004 Minister of Labour "and insert" appropriate Minister ".

The Deputy Chairman
It would be for the convenience of the Committee if we took with this Amendment No. 147, in page 6, line 36, at end insert: (2) For the purposes of this section, the appropriate Minister in relation to any charity shall be, for English charities the Minister of Labour, for Scottish charities, the Secretary of State for Scotland and for Welsh charities the Secretary of State for Wales. (3) For the purposes of this section, the nationality of a charity shall be determined by the law applicable to it, and whether its governing body usually meets in Wales.

§ Mr. Campbell
I was one of the six sponsors, headed by my hon. and learned Friend the Member for Antrim, South (Sir Knox Cunningham), who put a Motion on the Order Paper soon after the Selective Employment Tax was announced. That Motion sought to exempt charities from the tax. There followed a period when the Government made it clear that they were intending that charities should pay the tax. We heard arguments from the Front Bench opposite to the effect that charities had to pay indirect taxation and Purchase Tax and they would have to pay this tax.
1005 Eventually, the Government gave way and we welcomed this.
The way in which charities were to be exempted was that they would receive repayment under this Bill. To that extent we welcome Clause 5, although we are sorry that they have to make a forced loan to the Government for about five months. The part of the Clause which we seek to change with Amendment No. 147 is that relating to the Minister of Labour being the Minister to make repayments in Scotland and Wales. Instead we seek to make the Secretaries of State perform that duty.
You will know, Mr. Irving, that we deplore the fact that the Guillotine has made impossible to speak on the major adverse effects of this Bill on large areas of Scotland and its very heavy impact because of so little in the way of repayments coming back in refunds and premiums to those areas. This will lead to depopulation and emigration. We believe that the premium for charities should be carried out by the Secretaries of State. I understand that in England charities are registered officially. In Scotland there is a different system, based on recognition by the Secretary of State for Scotland. Presumably subsection (4) of this Clause is there for that reason, because it stipulates that the Minister of Labour may not make a repayment without the Secretary of State for Scotland certifying that a charity is a charity.
In that case, why should not the Secretary of State carry out this whole operation? It would much tidier and would ensure that charities recognised by the Secretary of State for Scotland, which is the equivalent of registration, were fairly treated and were entitled under the Bill to the repayment of the tax. Likewise, when the governing body of a charity meets in Wales and it is clearly a Welsh charity, the Secretary of State for Wales should be responsible for the repayment.
Under the Guillotine, this is the only Scottish point in the Bill likely to be considered. In view of the heavy impact that the taxes will have in large areas of Scotland, we consider that this is deplorable. However, we hope that the Government will meet the limited point which we make in these Amendments.

§ Mr. Ian MacArthur (Perth and East Perthshire)
I very much hope that the Government will accept the Amendment which has been so ably moved by my hon. Friend the Member for Moray and Nairn (Mr. G. Campbell). I join him in condemning the Government for gagging Scotland in the consideration of this Bill. This is the only opportunity which we have to discuss one limited aspect of the Bill's application to Scotland.
I hope that the Government will agree to introduce the Secretary of State as the Minister responsible in this Clause. I must confess that I do not always have the greatest regard for the right hon. Gentleman, but I believe that even he is more familiar with the problems of Scotland and with the needs of charities in Scotland than the Minister of Labour, who is specified in the Bill as the responsible Minister. Moreover, the Secretary of State has a very much greater knowledge of life in Scotland generally and the need for charitable action in relieving poverty than his colleagues in the Government. It is he, more than anyone else, who will be able to identify charities.
The Secretary of State knows the harsh effect which this tax will have on many industries in Scotland, on agriculture and on areas such as the Highlands and Islands. We were precluded earlier from debating the problems of the Highlands and Islands by the harsh and vicious timetable introduced by the Government. By the Amendment the Government have an opportunity to meet many of their own declared objectives relating to Scotland and the Highlands in particular. Earlier, we had an Amendment which was selected, but not called because of the timetable, whereby the Selectiye Employment Tax would have been repaid to areas within which the functions of the Highlands and Islands Development Board might be exercised.
I have no doubt that had we debated that Amendment the Government would have accepted it because it was entirely in line with their declared aim of providing a job for everyone in the Highlands and everyone wanting to return to the Highlands. The establishment of the Board has not been sufficient to achieve this very desirable aim, and emigration continues. The effect of the tax will be 1007 to accelerate this drain of manpower because alternative employment in manufacturing industry for those at present in the service industries in the Highlands simply does not exist. The position will be made worse by the shake-out on which the Prime Minister has embarked.
Recent Questions tabled by my hon. Friend the Member for Moray and Nairn tried to discover what the effect of the tax would be on the Highlands. The reply showed that 18 per cent. of the gross yield of the tax would be returned to the Highlands in repayments compared with 68 per cent. in England. This illustrates how the tax will impinge most severely on the Highlands. I will at once relate my argument to the Amendment, as I see a sign of impatience in your eye, Mr. Irving.
So far, the Government have failed lamentably to achieve what they promised for the Highlands. I want to help by supporting the Amendment, which opens the way for the Government to do for the Highlands what they pretended before the General Election that they wanted to do. If we are suggesting that the Secretary of State should be responsible for charities in the Clause, we must be clear—