HC Deb 22 June 2000 vol 352 cc436-9
2. Mr. Ian Pearson (Dudley, South)

What discussions his Department plans with voluntary sector bodies on the changes to the taxation of charitable giving set out in the Budget. [125825]

4. Mr. Tom Clarke (Coatbridge and Chryston)

What impact he estimates his plans to encourage greater use of payroll giving will have on the charity sector. [125827]

The Chancellor of the Exchequer (Mr. Gordon Brown)

The getting Britain giving package of measures, which I announced in the Budget, gives the most generous tax relief on donations by individuals and companies, including donations of shares to charities, and has involved extensive co-operation and consultation with the voluntary sector.

We will now also bring forward a proposal that the voluntary sector, business leaders, employees representatives and people from the marketing and advertising industry examine proposals for a national campaign to promote the giving not only of money, but of time. Our objective for the payroll giving campaign, which will be launched in September, is to more than double donations to charities through payroll giving. Our changes have been broadly welcomed by the charities.

Mr. Pearson

I thank my right hon. Friend for that reply and congratulate him on the steps that he is taking to encourage venture philanthropy and other forms of charitable giving. Andrew Carnegie's dictum that wealth brings responsibility was forgotten under the Tories, but philanthropy—giving something back—is an important part of what being a Labour Government is all about. Is not the big issue now the importance of letting people know about the opportunities that exist to give to worthy causes, and can we speed up and financially support the proposals for a national television, press and radio marketing campaign to promote a new age of giving?

Mr. Brown

I am grateful to my hon. Friend. As he rightly points out, the ceiling on payroll donations to charity under the previous Government was £1,200 and that has been lifted altogether. Individual donations below £400 did not attract tax relief, but now all individual donations do so. We will work with the industry and with charities to publicise the giving of time as well as money.

In addition, we are about to introduce a children's fund that will give grants to innovative projects that are being run by community and charitable organisations. We are making changes in our sure start programme so that charity and community organisations can become involved, and we are creating an alliance for children that will bring together all the charitable organisations involved in helping children. We have had extensive consultations with children's charities on those matters.

As I said, our proposals have been broadly welcomed by the charities involved. Mr. Brophy, of the Charities Aid Foundation, said about the Budget in March that it introduced some of the most radical changes to charitable giving ever. He added that at a stroke, Labour had created a new age of giving.

Mr. Clarke

Is my right hon. Friend aware that there is much enthusiasm among voluntary organisations in my constituency about his various initiatives on world debt? Many of them want to contribute to organisations such as Christian Aid, Oxfam and, in Scotland, the Scottish Catholic International Aid Fund. Does he therefore appreciate that his proposals are welcome to the Churches and charitable organisations, as they indicate both community and global involvement?

Mr. Brown

I am grateful to my right hon. Friend, and I applaud his work in furthering the cause of debt relief in the third world. Christian Aid issued a statement to the effect that it believed that the measures introduced in the Budget may help it to gain an additional £1 million in its charitable efforts for fund raising this year. Many people, not least my mother, have written to the Treasury asking us to do more on third-world aid. I believe that the proposals in the Budget help not only third-world charities, but all charities.

Mr. John Bercow (Buckingham)

Does the right hon. Gentleman understand the concern of the Industrial Careers Foundation, about which I have written to him twice since the Budget? It is worried that companies are assumed to make net donations, that they have to reclaim the tax themselves and that the charities are not able to do so on their behalf. This year, as a result of his changes and because of the structure of its donor profile, the ICF will lose no less than £5,000.

Mr. Brown

I am grateful to the hon. Gentleman for reminding me of the letter that he sent to me at the Treasury. Despite what he says, our proposals have been widely welcomed across the board. We have made it easier than ever for companies to give money to charities. We have introduced changes that the previous Conservative Government did not even contemplate.

I have a letter from the British Legion, arising from changes that we have made to the treatment of value added tax on poppies—another matter with which the previous Government did not deal. My correspondent says that he had the opportunity to make a statement about that VAT relief to his annual conference, and he tells me that it was "extremely well received".

Mr. Michael Portillo (Kensington and Chelsea)

As the Chancellor claims to be helping charities, may I help him with his arithmetic? His changes to advance corporation tax have cost charities £500 million a year. His further claim, which is not necessarily substantiated, is that £400 million has been given back to the charities. Will he tell the House plainly: does that leave the charities better off, or worse off?

Mr. Brown

We have given £1.2 billion in additional relief to charities as a result of the ACT changes that we introduced. In addition, despite what was said about those changes, there has been a 20 per cent. increase in the amount of dividends that charities have received from company fund raising. As for verification of the figures on the generosity of the tax package in the Budget, £350 million is the figure that has been used by the Charities Aid Foundation and by individual charities.

However much he wants to, the right hon. Gentleman cannot deny that the previous Conservative Government talked a lot about helping charities, but never did what we have done. Our measures have been welcomed right across the board. The National Council for Voluntary Organisations said that our changes in the Budget were "very welcome". It is only one of a number of organisations that support our measures. Charities are better off as a result of what we are doing.

Mr. Portillo

That is simply not the case. The Chancellor put the tax package figure at £350 million, but he has taken away £500 million. However, if he will not take that from me, will he take it from the chief executive of Barnardos? He said that the Chancellor is giving with one hand what he has already taken away with another. Do not the charities know that the Government are taking away more than they have given? Is it not the case that no one believes a word that the Chancellor says?

If the right hon. Gentleman will not listen to Barnardos, will he listen to Ian Campbell, who is the director of another charity? He said: The Chancellor sets up backdoor burdens on us. Spin doctors may think that sweeteners can con electors but they distrust politicians who say one thing and do another. Does not that explain why Labour Back Benchers are now openly briefing against the Chancellor? Do not people in the country now contrast what the Chancellor says with what he does? Do they not say to themselves, in the words of the Deputy Prime Minister: Isn't this spinning, and spinning is lying?

Mr. Brown

If the shadow Chancellor wants to be consistent, let him repeat the words that he used about the Conservative party. He said that the Tories were linked to harshness and thought to be uncaring about unemployment, poverty, poor housing, disability and single parenthood. He said they were thought to favour greed and the unqualified pursuit of the free market, with a devil-take-the-hindmost attitude. That is hardly an attitude that would commend itself to the charities that operate throughout the country.

Barnardos is involved with us in setting up the children's fund, and it welcomes what we are doing in this area. Let us remember that it was the previous Government who put VAT on fuel. We have extended VAT exemptions to more charity fund-raising events, broadened the VAT zero rate for sale and hire of donated goods, broadened the VAT zero rate for charity advertising, given greater VAT relief on the sale by charities of donated goods, extended VAT relief for the provision of rooms for disabled people in day centres and increased to £100,000 the limit below which charities and other businesses do not have to account for VAT on goods in hand. We have taken action to deal with abuses of VAT, with which the previous Government failed to deal.

The right hon. Gentleman cannot deny that, for the first time, individual donations to charities can be made with tax exemption for all such donations from the Government. Equally, companies can make individual donations and receive tax relief. That is something that the Tory party never did and, from what the shadow Chancellor says about it, would never do.

Mr. Dennis Skinner (Bolsover)

Is not one of the reasons why the Tories are not keen on large benefactors giving money to charity is that Brian Souter finances the Tory party campaign from Scotland, Paul Sykes finances the Tory party campaign from Yorkshire and Michael Ashcroft finances the Tory party campaign from Belize and the House of Lords? Why does my right hon. Friend not tell those three people that it is a waste of money? What is the point of giving money to this tinpot Tory party? It is like chucking money down the drain.

Mr. Brown

I agree with my hon. Friend. The Conservative party is not a charity and never will be.