§ Lord Goodhartasked Her Majesty's Government:
In view of the statement in paragraph 6.3 of the response of the Home Office to the Fifth Report of the Committee on Standards in Public Life that the tax relief scheme on donations to political parties as proposed by the committee would be expensive for the Inland Revenue to administer, what would be the estimated annual cost to the Inland Revenue of administering such a scheme. [HL4143]
§ Lord Bassam of BrightonThe reasons given in the White Paper for not allowing tax relief on donations to political parties are that it would amount to general state aid by another route; that it would be expensive for the Inland Revenue and political parties to administer relative to the likely level of take-up; and that the Government have to balance the loss of revenue against other spending priorities.
The administrative costs have not been estimated precisely either in the Neill Committee's report or subsequently. It is, however, clear that they would significantly offset the benefit, particularly in relation to smaller donations. The Neill Committee recognised in paragraph 8.21 of its report that below a certain level it would be uneconomic for a party to claim tax relief on a donation.