HC Deb 10 March 1981 vol 1000 cc770-1

There is one group to whom we should pay special attention this year, despite the economic constraints that we face. I refer to the disabled, for this is the International Year of Disabled People. My right hon. Friend the Secretary of State will be announcing tomorrow an increase in the mobility allowance. I shall mention some other measures now.

The special income tax allowance for the blind has stood at its present level since 1975. I propose to double it to £360. I hope that this will be of some help to blind people in tackling the very real problems they have to face.

Many representations have been made to me for relief from value added tax on all purchases made by charities. I have regretfully concluded that such relief would be impossible to administer fairly or economically and would, in any case, cost too much. However, I do propose to extend existing value added tax reliefs for the disabled and the charities serving them. For example, the present zero rating for articles given to hospitals will, in future, cover ambulances and wheelchairs. The benefit of this zero rating will also be extended to institutions caring for the handicapped. Car adaptations for disabled drivers will also be relieved from VAT. The necessary Treasury order is being laid today.

I am also proposing changes that will widen the scope of the reliefs from capital taxation for trusts for the disabled. To encourage unemployed people to work for voluntary bodies, the amount that a person can earn without affecting unemployment benefit will be increased from 75p per day to £2 per day.

The total cost of these measures is relatively modest. But, if put alongside the tax reliefs that I announced last year in respect of covenanted gifts to charities, the overall amount is substantial. The House may like to be reminded that tax relief on covenants at the higher rates of tax becomes effective from 6 April this year at a revenue cost of £20 million. These reliefs should greatly improve the fund-raising ability of charities. I shall be arranging to publicise these reliefs, and the opportunities that they offer, much more widely.

There is one other matter to which I should refer. I announced last year that we planned to bring into tax the invalidity, sickness and other incapacity benefits. We had expected that this might be from April 1982. In part because of pressures on civil service staff numbers, we propose to postpone this. I confirm however, that when invalidity benefit comes into tax the 5 per cent. deduction made from the November 1980 uprating will be restored.