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Clause 11 — Donations to charity by individuals

Orders of the Day — Finance Bill – in the House of Commons at 3:35 pm on 13th June 2005.

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Photo of Mark Francois Mark Francois Shadow Paymaster General 3:35 pm, 13th June 2005

I beg to move amendment No. 36, page 11, line 40, at end insert—

'(h) interactive experiments with an educational purpose.'.

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

With this it will be convenient to discuss the following amendments:

No. 35, in clause 11, page 12, line 1, leave out 'one year' and insert 'three months'.

No. 1, page 12, line 8, after 'family', insert

'or of that person and an accompanying group of no more than twenty individuals.'.

Photo of Mark Francois Mark Francois Shadow Paymaster General

It is a pleasure to open the batting for the Opposition this afternoon on the first clause of the Finance Bill to be considered in Committee of the whole House.

Several changes have taken place at the Treasury since the general election, so with your leave, Mrs. Heal, I shall begin with a few quick courtesies. In his absence, I welcome the new the Chief Secretary to the Treasury, Mr. Browne, who is now the other Browne—Browne minimus—at the Treasury. I congratulate John Healey on his promotion from Economic Secretary to Financial Secretary and wish him luck, but not too much luck, in his new role. Finally, I congratulate Mr. Lewis on his joining the Treasury as the new Economic Secretary. He will be my direct opposite number, and I look forward to shadowing him in what I hope will be a constructive spirit.

Amendment No. 35 seeks to reduce the specified period in proposed new subsection 5H from one year to three months. Amendment No. 36 seeks to expand the range of charities that may claim gift aid on their admissions under subsection 5G to include those facilities which have

"interactive experiments with an educational purpose."

In addition, my hon. Friend Stephen Hammond is a new hon. Member, but he has had the gumption to propose his own amendment to the Finance Bill, which augurs well for the future. I look forward to hearing what he has to say, and I will seek to respond to his amendment in my winding-up speech.

On a procedural point, as clause 11 deals with changes to the tax treatment of gift aid in relation to a number of charities, in the interests of transparency, I declare an interest as a member of English Heritage, the Natural Trust and the Essex Wildlife Trust. With specific regard to amendment No. 36, I also declare an interest as a member of the friends of the Royal Air Force Air Defence Radar museum at Neatishead in Norfolk.

The concept of gift aid, which is at the heart of clause 11, was introduced by John Major when he was Chancellor back in 1990. Since then, it has helped to generate billions of pounds of tax-efficient donations to charity. Gift aid has been through a variety of changes since then, which, the Committee will be pleased to hear, I do not propose to apprise in detail now.

This afternoon's debate directly relates to a specific measure in the Finance Act 2000 that had the stated aim of encouraging new donations to charity. To cut a long story short, those changes to section 25 of the Finance Act 1990 permitted charities specifically involved in the conservation of heritage property or the conservation of wildlife to begin to reclaim gift aid on admission charges to their premises. In that context, it is important to note that that outcome was not the Government's stated intention, but a number of charities sought to take advantage of it with the subsequent agreement of the Inland Revenue, which is an important point. Indeed, paragraph 3.12 of the Government's own regulatory impact assessment to accompany the proposed changes to the gift aid regime states:

"Changes to the Gift Aid rules in Finance Act 2000 mean that heritage and conservation charities are acting within the terms of the law by seeking donations that give a right to free day admission. This has become established practice, and guidance produced by the Inland Revenue confirms it is within the terms of the existing Gift Aid legislation."

It is important to establish at the outset that what the Government propose to change has become established practice over the past few years, and that the Inland Revenue fully acknowledges that.

That brings me to the cost of these measures. In the debate on Second Reading, it was notable that when Ministers were pressed for the estimated cost of making the changes—that is, the amount of money that, in their view, the Revenue was losing, and that they wished to make up by amending the gift aid regime—they were noticeably reluctant to give that figure on the Floor of the House. However, if one looks into the detail of the regulatory impact assessment, as I have, it is clear that on several occasions the Government estimate that the amount of revenue in effect forgone by the Treasury is approximately £10 million. All public money is important—I would not deny that—but the Government are bringing in a change that will have a very significant effect on the charities and museums sector, particularly small and independent museums, and they must acknowledge that although there is not a vast amount of public money at stake here, it will necessarily have an important effect on the institutions in question.

Following the Government's decision in December 2001 to grant free admission to 50 or so Government-funded national museums and galleries, many charities that do not receive subsidies took advantage of the gift aid provisions to allow them to continue to compete with neighbouring attractions, entry to which had become free to the viewing public. Thus the situation post-2000, which pertains today, has helped to maintain something of a level playing field between subsidised and unsubsidised charities and museums, even though the Government admit in their RIA that that was not originally their intention. Again, this particularly affects smaller independent museums which are highly reliant on admission fees as a source of their income.

The reasoning behind the Government's proposals was, as they stated as far back as the pre-Budget report 2003, that gift aid had become, in the words of the Paymaster General, "a loophole", and that the facility was therefore to be withdrawn, even though the Inland Revenue had admitted to the museums and charities sector that it was perfectly within its rights in using it. Perhaps not surprisingly, that rapidly led to the Government getting into trouble with the charitable sector. Under a considerable amount of fire, not all of it very charitable, the Government began to back away and encouraged the consultation on the proposed changes. They came back with a modified scheme, which was presaged in pre-Budget report 2004 and is now contained in the Bill.

The proposals do not abolish the ability of charities to claim gift aid on admissions—we concede that—but rather reform it, with conditions and, in fairness, in order to allow additional institutions to qualify to claim gift aid, albeit on the revised basis. Those new conditions are addressed by amendment No. 35. New subsection (5H) sets either of two conditions by which institutions can continue to claim gift aid. In essence, they can do so either by charging an additional 10 per cent. on the admission fee for those people who wish their payment to be reclaimed as gift aid by the institution that they are visiting, or by granting a right of free admission for a year in return for an admission fee being reclaimed for gift aid. However, having contacted a considerable number of institutions over the past week, it is clear that implementing the changes presents several very practical difficulties.

First, there is a problem with the additional 10 per cent. provision. For example, several visitors who do not mind gift-aiding their current admissions fee may, to put it bluntly, be reluctant to do so if they realise that it will subsequently cost them extra to visit the attraction that they have come to see. One can imagine a family group being unwilling to pay, for example, an extra pound for each member simply to help the institution when they have come to visit the attraction itself.

In addition, there is the problem of staff at the ticket desk having to explain the difference to each group of visitors as they attempt to pass through. I presume that the staff would be encouraged by the charity's directors or trustees to try to persuade as many people as possible to sign up. That might sound easy in theory but it could be difficult in practice for the ticketing staff, especially on a hot summer's day, with long queues waiting to get in, perhaps many containing impatient children, who have already pestered their parents senseless.

There is also the additional cost for modified tills and accounting systems, compared with the relative simplicity of the current system, whereby visitors pay their money, fill in a gift aid declaration and go in. The Government's regulatory impact assessment assumes a 70 per cent. take-up of the facility but several institutions that my office contacted in the past week were especially sceptical about the matter.

For example, Mr. Alan Bentley, the director of the Brontë Parsonage museum, points out in a letter:

"I think it is very unlikely that we will be able to continue to use the scheme in the way that we do now as I do not think that many of our visitors will give the extra 10% and the need to allow 12 months entry undermines our membership benefits and so will need careful marketing to our members. Membership of the society is the lifeblood of the organization."

Mr. Keith Merrin, director of Bede's World in Jarrow, makes a similar point in a letter. He states:

"Our main concern about the changes to the scheme are that once again they will disadvantage independent museums such as ours who already exist in an environment that seems unfairly weighted against us. Bede's World does not receive any funding from DCMS nor is it part of the Renaissance in the Regions scheme which benefits many of the large local authority run museums in the region. As a result, the museum is reliant on charging admissions to visitors. The ability to reclaim Gift Aid seems to be one of the few areas of the funding system that favours a museum such as ours."

He goes on to provide some specific criticisms of the proposals. He states:

"We believe that the suggested changes to the scheme will significantly reduce our income from this source for two reasons:

1. The simplicity of the scheme and therefore its popularity with visitors as it stands lies in the fact that taxpayers are being given a very straightforward proposition (that is to pay the same amount as they would have done but make it as a donation). The suggestion that in future they will be asked to pay a further 10% would, I believe, have a detrimental effect on the take-up and therefore our income."

For good measure, he adds:

"The museum already operates a season ticket scheme through our Friends association at a charge roughly double the admission price. As such the suggestion of giving annual membership for the price of a single admission would have a serious impact on this scheme and overall reduce our annual income.

In summary, we do not feel the changes to the scheme as suggested would be of benefit to the museum and would favour a recognition that the scheme as it currently works is in fact of great benefit to museums like ours who in turn provide a huge service to the communities and economy of the country without the need for large amounts of public funding."

That appears to me to be a reasonable presentation of the case.

In case the Economic Secretary has missed the point, Frances Snowden, who is the development assistant at the Abbot Hall art gallery in Kendal, puts it in another way in an e-mail. She states:

"The former option"— that is, the 10 per cent. option—

"requires that reception staff explain this complex system, and ask if the visitor is willing to provide a donation of 10% greater than the entrance fee. However well presented the case, all signs point to this being entirely unworkable, and the vast majority of visitors will not be willing to pay this premium on the entrance charge. The immediate loss to the Trust of Gift Aid money, based on this year's income, will be £53,000. For comparison, this equates to the trust's entire budgets for exhibitions at both Abbot Hall and Blackwell."

So that we can understand what is at risk, she goes on to say:

"The Education Department of the Trust provides inspiring workshops and free visits for children from all over Cumbria and from North Lancashire. This year, thousands of children have benefited from their work, and the Trust has taken on a new member of staff. Once again, this programme, at the heart of what the Trust aims to do, will be seriously threatened by a drop in expected income."

To contribute to the debate, the industry established the Attractions Gift Aid Liaison Group, the AGALG, and I understand that it has had a dialogue with the Minister over this issue for some time. At the risk of embarrassing him, the reports from the group are that the Minister has conducted the negotiations in a civil manner and has attempted to take on board some of the points that the group has been making. I am not seeking to make an overly partisan point.

I have, however, spoken to the chairman of the group, Mr. Ken Robinson, who was keen to stress that he is not anxious to be involved in partisan politics. He said that the group had reservations about the practical applicability of this option. He sent an e-mail, which reads:

"The assumption has been made in the Regulatory Impact Assessment that a 70 per cent. take-up by donors . . . would mean that there would be no net loss caused by these changes. It is the general opinion of potentially eligible Attractions that this level will not be achieved on the proposed future terms, and would only be possible at many Attractions if additional benefits can be persuasively offered."

Overall, among the institutions which my office has contacted over the past week, there was comparatively little enthusiasm for the additional 10 per cent. option, if I can give it that name.

I move on to the option of free admission for one year. It, too, presents a number of difficulties, to which I have referred in several of the extracts that I have shared with the House. The principal problem is that many charities that qualify use annual admission as an important part of their membership campaigns. Being able to achieve the same benefits simply by visiting the institution once would, in effect, tend to undermine that approach.

Helen Toolan, the museum curator of the Murton Park museums—a group of museums headquartered in York—had the following to say:

"By continuing with Gift Aid in its new guise visitors who participated in the scheme would then be allowed free entry to the museum for the coming year, this is an impossible situation, which would mean the loss of substantial income for the museum that it currently has from its admissions. If Gift Aid were to change, it would mean two things: firstly, smaller museums would not be able to afford to participate in the scheme because of the increased cost to the visitor in admissions and secondly a loss of much needed income that Gift Aid currently provides."

Diane Perkins, the director of Gainsborough's House museum in Sudbury, has the following to say:

"In direct response to (5H) . . . To give the right of admission for the whole year for £3.50 would dramatically affect our income—many people repeat visit during the year to see our changing exhibitions and attend events. It is most unlikely that visitors would choose to give an extra 10 per cent. just so that the charity can reclaim the tax. It would also be very difficult to explain and complicated to administer."

She adds:

"Having been already adversely affected by the change in VAT Cultural Exemption rules in June 2004 which will cost the charity about £10,000 over the next two years, we are dismayed at this second tax change within 10 months. Rather than Government's tax changes helping small charities to exist, they are actually causing considerable financial difficulties, which will result in reduced performance and services to the public through no fault of the organisation."

I think that the director is seeking to make an entirely reasonable point.

Amendment No. 35 seeks to reduce the amount of time for which the charity would have to allow free admission down to three months. This would be better because it would provide some sanction over the current situation, but it would not undermine the attraction of annual membership, which so many small and independent charities have assured us is extremely important to their revenue stream.

That point is also supported by the Association of Independent Museums, which, I believe, has also been involved in dialogue with the Minister. Bill Ferris, AIM's chairman, says:

"Many charity museums have effective and well developed annual memberships (friends) schemes. A reduction to 3 months in the eligibility period would prevent conflict with the existing schemes."

I would therefore ask the Minister, who has already spent considerable time on this matter, to consider seriously amendment No. 35. It allows some modification of the scheme to protect revenue, which we understand that the Revenue was seeking to do all along, but not to the point at which the annual visiting rights included in many memberships packages, on which independent museums rely, are undermined. It is also important to remember that such museums are competing daily with other larger museums, regional or national, which effectively receive considerable subsidies and to which potential visitors can go for free.

In the six months or so during which I have shadowed the Minister, he has normally played a pretty straight bat. Therefore, if he can assure me that the Government will consider the matter again, and come back with something new on Report, I assure him that I will not press the matter further today. If he is unable to offer any concession, however, or even the prospect of a concession on Report, we might have to test the will of the Committee in the Lobby. I have done my best to present that case, and I hope that he will give it a fair hearing on behalf of all the independent museums and charities that are clearly concerned about the matter.

Amendment No. 36 relates to the types of charities and institutions that might in future qualify for gift aid on admissions charges on the revised basis. I should explain to the Minister and the Committee that we have tabled this amendment to try to elicit the Government's thinking on a specific matter, including the reasons why they came up with their list, and I hope that he will appreciate that when he replies. The list of those bodies in subsection (5G) is expanded beyond the original two categories, which I mentioned in my opening remarks, to include: buildings, grounds or other land, plants, animals, works of art—but specifically not performances—artefacts, and property of a scientific nature. We welcome that in principle, but it would be helpful to have some idea of the anticipated cost of the measure, at least in broad terms. In the regulatory impact assessment, the Government gave their anticipated cost of the 10 per cent. provision for charities. We would now like to know what the Government think that widening the list will cost them. The RIA suggested that it would be broadly revenue-neutral, and we would like to know whether the Government hold to that view. As we had no figure on Second Reading, it would be helpful if the Government provided at least some figure in Committee this afternoon.

We would also like some clarification on the status of voluntary donations with regard to clause 11. Our understanding is that the provisions in the Bill will not apply to voluntary donations, and for the avoidance of doubt, we are not seeking to ensure that they do. To take one example, many cathedrals do not charge visitors a formal entrance fee but have a collection box with a notice encouraging visitors to chip in a certain amount. Clearly, that is a voluntary donation, and clarification that the new more complicated rules will not apply to them would be welcome. I am sure that Ministers do not wish to provoke divine wrath with their measures, so perhaps they could reassure all of us on that point.

In addition, some information on the operation of the proposed definitions would be useful, not least to those who operate museums that might qualify. A number of people who might have seen the provisions in the Bill, and the list of supposed new categories, will be wondering whether they might qualify. Perhaps the Minister could comment on how the Government intend to advise museums of their status, one way or the other, and to promulgate information so that potentially qualifying museums might have a chance to find out whether they will be able to take advantage. To give just one specific example—this is why I declared the fourth interest—would military museums, which are not historic buildings in their own right but which display military memorabilia, be covered under the heading of displaying artefacts?

In amendment No. 36, we seek to widen the proposed list further by including

"interactive experiments with an educational purpose".

Our definition of such facilities would be museums that have invested in interactive displays aimed specifically at the education of their visitors rather than being there simply for their amusement. A theme park, for instance, would not qualify on that basis, but a local history museum that had produced an interactive display representing local conditions through the ages would.

It would be helpful to know more of the Government's thinking on all that, and to know how museums that think they might qualify could go about obtaining a definitive decision. The proposals are not currently due to come into force until April 2006, so there is time, but it would help those in the sector who read the report of this debate to have a clearer understanding of where they can go for a workable definition. I look forward to what the Minister has to say. I also look forward to hearing from my hon. Friend the Member for Wimbledon, and indeed from other Members.

During our consultations over the past week or so, we have found some museums and charities that were unaware of the proposed changes, despite the obvious work of the representative groups. That in itself is slightly worrying: there is a risk that some smaller museums whose representatives may not read the Finance Bill with the alacrity of other people in the country will be caught short. As the revenue is important to them, that would be a shame. I hope that the Government will deal with the matter, if they are determined to press ahead.

I ask the Minister to give serious consideration to, in particular, amendment No. 35. It allows the Government to achieve what they want to achieve, in part, but it also hopefully removes the threat to the viability of some smaller independent museums that do not rely on Government or regional subsidy to remain in business, unlike museums that are effectively free at the point of use.

With that genuine plea to the Minister, I shall end my speech. I shall listen carefully to what others have to say.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon 4:00 pm, 13th June 2005

I declare an interest, as a member of the Wimbledon Society, which has a small museum.

I wish to speak to the amendment that seeks to extend the definition of who can accompany a donor under gift aid in subsection (5I)(a). Last week on Second Reading I mentioned a number of small museums in my constituency, and also the Wandle industrial museum, which held an exhibition on Saturday. The chairman of its board of trustees is the Reverend Andrew Wakefield. It was somewhat surprising, therefore, to find that the board was sponsoring an exhibition on Nelson, especially as it featured the ménage à trois in which he lived in Merton. [Interruption.] For the benefit of Chris Bryant, may I say that Nelson lived with Emma, Lady Hamilton, who was married to someone else at the time? It was odd to find a reverend member of the Church sponsoring such an exhibition.

The industrial museum is exactly the sort of small museum covered by the Bill. I asked Mr. Wakefield whether he had had a chance to read the report of last week's Second Reading or had heard anything about the clauses that were being suggested. It seemed that, like those mentioned by my hon. Friend Mr. Francois, he had heard nothing, and nor had he had a chance to consider how the provisions might affect the museum.

On Second Reading I commented on the current position. Subsection (5I) explains that "right of admission" means a right of admission

"of the person who makes the gift or of that person and one or more members of his family".

That covers a number of circumstances: a parent taking a child; a parent taking another family member; and a parent taking a family member, plus certain other family members.

However, a parent's taking a group of children to a small exhibition or museum is currently disallowable under the gift aid clause. Given the many different circumstances that can arise, it is sensible to widen the terms of that clause, which is what the amendment seeks to do. The ability to make a donation should surely extend to everyone in the donor's party, and the amendment would remove the anomaly so that the whole party would be covered by the gift aid provision. Inserting "accompanying" would also ensure a link between the principal person and the group itself, instead of a spurious association. I accept that figure of 20 to which the amendment refers is an arbitrary one; none the less, that figure would cover most of the circumstances to which I referred earlier, such as a children's party or a local group or society trying to enter a museum. I hope that the Minister will consider accepting the amendment, which would simply clarify matters and allow a number of perfectly innocent people who wish to be admitted to be covered by the gift aid provisions.

I want to say a little about the amendments moved by my hon. Friend the Member for Rayleigh, which I hope the whole House will welcome and commend. When I spoke to various people after last week's Second Reading, it became clear that the one-year rule will create real problems for those who have established friends' groups for small industrial museums. Such groups often have a right of admission of a year. Unless the provision is amended, it would be rather odd if someone actually wanted to become a friend of a museum, instead of just paying their donation on the way in. Changing the period from one year to three months seems an acceptable idea that would provide valid support for museums.

On Second Reading, I referred to interactive displays. I have a child who regards viewing museum displays as a rather restrictive pastime and who is keen to take advantage of the various interactive hands-on displays. There is no real purpose to confining the current provision to viewing alone. Amendment No. 36 also refers to the "educational purpose", and I hope that anyone who enters a museum would regard doing so as educational. I hope that the Minister will accept the amendment.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

Will the hon. Gentleman clarify what an interactive display or exhibition is? I have my own views—I have seen such displays in museums—but I wonder what his are.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

I can give two practical examples. The museum that I visited on Saturday contains a working scale model of a mill. Children can look at it, move it around and remove and replace its various parts. Another display included various panels that people can touch, with lights indicating different results. Instead of simply viewing the display, they can press buttons and involve themselves in interactive way. As I understand it, the amendment will allow such circumstances to be covered.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

That deals with "interactive", but will the hon. Gentleman say a little more about the second word in the amendment, which is "experiments"? The mill to which he referred may count as an experiment, but his second example, involving flashing lights, did not sound like an experiment.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

The amendment in question is not mine, so perhaps the hon. Gentleman should have sought clarification on that point earlier. I was merely discussing interactive displays.

I hope that the Minister will accept the amendment.

Photo of Susan Kramer Susan Kramer Shadow Minister, Treasury, Shadow Spokesperson (Business, Innovation and Skills), Liberal Democrat Spokesperson (Business, Innovation and Skills)

I shall speak primarily to amendment No. 35, but I shall also say a few words about amendments Nos. 36 and 1. I declare my various interests, which I discovered, once I started writing them down, are more extensive than I had realised. They include English Heritage, the National Trust, the Tate museum and, in my own constituency, Barnes wetlands and Kew gardens, some of which might be beneficiaries of the revised gift aid programme.

I thank the Minister for recognising that many charitable attractions use the provisions on gift aid and admissions not as a loophole, but, with the encouragement of the official guidance of the Inland Revenue, as a justified way to enhance their viability. For many small museums, including the Richmond and Kingston museums, gift aid has played a significant role, especially when local government is frequently cutting funding. With intensified competition from national museums—now free of charge—the difficulties of the smaller museums have worsened, and gift aid provision has proved a lifeline. That is why the proposed changes are of such concern.

I accept the fundamental notion that for gift aid to apply, it is right to ask for a little something extra to be provided, rather than simply having admissions converted into a donation. I accept that in principle, but I am concerned about the provisions that are intended to give effect to it. I have received from Ken Robinson, and from people on the ground, representations saying that the difficulty of explaining the need to put an extra 10 per cent. into the pot so that payment qualifies as a donation is a challenge for many small museums, particularly where the admissions person is a volunteer—someone passionate about the collection, but not necessarily able to sit down and take someone through the complex details of adopting route A or B and explaining the differences between them. That is particularly significant when there is a fairly long queue. From a practical point of view, it provides a challenge particularly for small museums, but also perhaps for the larger ones.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

Is it not already the case that small museums have to explain gift aid provisions? The people paying the entrance fee are taxpayers and have to fill in forms in any case; surely a different form could be given to them to fill in while they were in the long queues that Mr. Francois mentioned. The punters would soon come to understand the situation.

Photo of Susan Kramer Susan Kramer Shadow Minister, Treasury, Shadow Spokesperson (Business, Innovation and Skills), Liberal Democrat Spokesperson (Business, Innovation and Skills)

The hon. Gentleman will know that many taxpayers frequently make donations and often understand the need to fill in forms. In other words, it is a practice with which they are familiar and accept as part of their general routine. It is not associated only with admissions but with all sorts of other things that people happen to do relating to charities. Suddenly finding that a separate set of rules applies as people go through the admissions door at the local museum is a significant additional step. This is simply a matter of practicalities. When five or six people are standing in a row to gain admission to a small museum and another crowd arrives behind them, that can be overwhelming.

If the Minister believes that the clause is efficient and will work effectively, will he agree to monitor it? If we started to see that the provisions were having an impact on small museums that were unable to realise the funding and benefits that both they and the Minister anticipate, could some intervention be made to deal with that problem? I am willing to accept the provision as a starting point, but I ask for it to be watched because the practicalities may prove more difficult than is currently envisaged.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

I am reflecting carefully on what the hon. Lady is saying, but it strikes me that if there is a queue, people can get their heads around what is required while they are in it; and if there is not a queue, it can be explained to them at the ticket desk.

Photo of Susan Kramer Susan Kramer Shadow Minister, Treasury, Shadow Spokesperson (Business, Innovation and Skills), Liberal Democrat Spokesperson (Business, Innovation and Skills)

I suggest that such provisions should be tested out with the experience of time. Hon. Members, who often enjoy discussions, sometimes overestimate the skills of the typical volunteer who helps out over the weekend at the local museum. This could prove to be an intimidating challenge in which people find themselves extensively questioned. If I am wrong, I will be happy for the provision to apply as it is, but I would like to know that the Government are prepared to watch to establish whether I am wrong.

Photo of Mark Francois Mark Francois Shadow Paymaster General

I hear what Rob Marris says, but does Susan Kramer agree that I have provided several examples from museums and charities that have direct experience, day in and day out, of how practicable some measures are? They are firmly of the view that the suggestion is not practicable. I do not know how many days some Labour Members have spent working as charity volunteers in museums, but I do think that the museums know what they are talking about.

Photo of Susan Kramer Susan Kramer Shadow Minister, Treasury, Shadow Spokesperson (Business, Innovation and Skills), Liberal Democrat Spokesperson (Business, Innovation and Skills) 4:15 pm, 13th June 2005

I thank the hon. Gentleman for saying that, because I believe that those on the ground are usually better than those of us who preach at telling what the realities are.

I support amendment No. 35. I have talked to people from several institutions, and as Mr. Francois has said, the one-year membership is at the core of their funding and of their whole strategy of communicating with and marketing themselves to the community that they seek to serve. That is an important community and an important role.

As I understand it—if I am wrong, I shall be grateful if the Minister corrects me—if the price of a one-year membership exceeds the price of a single admission, charities will lose out substantially if they adopt the programme, unless they can provide some sort of extraordinary differentiation between a one-year membership under the donation and a one-year membership under their current structure. In fact, I cannot see how anybody, even a Member of Parliament—certainly I am struggling with the idea—could try to explain the difference to people applying for membership or coming into the museum or other attraction.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

The hon. Lady may find that extraordinary, but I find her proposition extraordinary. For example, I am a member of the friends of the Grand theatre in Wolverhampton—although that is not a charity in exactly the same sense—and like lots of other people I get additional benefits, besides admission, from my membership. We are talking about charities, so the financial transactions should be viewed not in purely capitalist terms, but in terms of supporting an organisation, its ethos and what it is trying to do. This is not simply a question of admission; for example, people get newsletters from the National Trust and other such organisations.

Photo of Susan Kramer Susan Kramer Shadow Minister, Treasury, Shadow Spokesperson (Business, Innovation and Skills), Liberal Democrat Spokesperson (Business, Innovation and Skills)

We shall have to agree to disagree, because I think that there will be a significant impact on the income of organisations such as the National Trust and English Heritage—an impact that will be a loss to the nation.

Photo of Susan Kramer Susan Kramer Shadow Minister, Treasury, Shadow Spokesperson (Business, Innovation and Skills), Liberal Democrat Spokesperson (Business, Innovation and Skills)

I think that we have gone round this subject long enough.

It is entirely appropriate to ask an attraction to offer something more than simple admission to justify gift aid, but it seems unacceptable to set the hurdle much higher than that. The opportunity to differentiate between an annual membership with add-ons and one without is pushing the limits of the system too far, and I suspect it is not what was intended. I ask the Government seriously to consider reducing the period from 12 months to three; indeed, there is an argument for reducing it to one month. Somebody could pay the price of a single admission and then be able to go back again and again over the period of the membership. For museums that change their displays—places that people enjoy going back to—it would be extraordinarily unfair if people could pay the admission charge and go in once while those who paid the same amount categorised as an annual membership could go back 10 or 12 times. For places that people visit only once in a while, that is probably reasonable, but for places that know that people will take advantage and come back over and over again, it strikes me as insane to say that a single visit must cost the same.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I wonder whether the hon. Lady's argument is accurate. The national museum of Welsh life just outside Cardiff is a fine institution, and it is free now, because the policy of the Welsh Assembly and of this Government has been to try to make all national galleries and museums free. Many people argued that museums would suffer from not getting admission charges, but I go to that museum several times a year—certainly every time friends come to visit—and it probably makes far more money out of me now, because I go four or five times a year. I wonder whether the precise arithmetic is as the hon. Lady would have us believe. Sometimes, because people have free admission across a year, they go to the museum or gallery more often, including the bookshop or coffee shop, and spend more money. If the gallery or museum is not short-sighted, it may end up earning more money rather than less from that.

Photo of Susan Kramer Susan Kramer Shadow Minister, Treasury, Shadow Spokesperson (Business, Innovation and Skills), Liberal Democrat Spokesperson (Business, Innovation and Skills)

That is a risk that most small museums could not take. Museums funded by the Government can perhaps take the risk that visitors would spend money in other ways, because their core funding is essentially secure. However, I am talking about admissions that are essentially core funding for many small charitable institutions. If that is put at risk because annual memberships are no longer possible—because they would cost the same as a single admission—we will threaten the viability of those museums. Many are already under pressure.

The industry has argued its case effectively, with more than one hon. Member, and the Government should consider its point. If the Government are willing to do so, there will be no need to divide the Committee, but if they are not willing to take a second look, we should divide to try to protect that core funding.

Photo of John Bercow John Bercow Conservative, Buckingham

Given the hon. Lady's desire that the period of the right of admission should be reduced to three months, which is consistent with the argument of my hon. Friend Mr. Francois, or even to one month, does she think that that three-month or one-month period should be at any time during a 12-month period, or is she concerned that it should not be at a period of maximum interest, such as August or another time of extended school holiday?

Photo of Susan Kramer Susan Kramer Shadow Minister, Treasury, Shadow Spokesperson (Business, Innovation and Skills), Liberal Democrat Spokesperson (Business, Innovation and Skills)

I take the hon. Gentleman's point. The one-month period would provide more protection from someone who tried to target their visits on the most interesting season or a time when they were likely to come back on multiple occasions for the price of a single admission. One month would provide better protection than three months.

Photo of Mark Francois Mark Francois Shadow Paymaster General

I thank the hon. Lady for her courtesy in giving way again. There is no separate Liberal Democrat amendment on this clause, so can she confirm—for the avoidance of doubt—that if we decide to press amendment No. 35 to a division, if the Government make no concessions, we will enjoy the support of the Liberal Democrats?

Photo of Helen Goodman Helen Goodman Labour, Bishop Auckland

Is the hon. Lady saying that she supports amendment No. 1 about

"an accompanying group of no more than twenty individuals"?

If so, can she explain why that will not mean that top-rate taxpayers collect together basic-rate or non-taxpayers to exploit another loophole?

Photo of Susan Kramer Susan Kramer Shadow Minister, Treasury, Shadow Spokesperson (Business, Innovation and Skills), Liberal Democrat Spokesperson (Business, Innovation and Skills)

Most of the top-rate taxpayers I have met would be unlikely to spend the energy to find sufficient friends and neighbours to visit on that single occasion. I agree with Stephen Hammond that the issue is more likely to be a couple of parents bringing a group of youngsters along for a birthday party or special treat in the holidays. We should do everything we can to get youngsters into our museums and attractions so that they are much more aware of the whole community around them, especially the arts and sciences and our various botanical gardens.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

Surely the point is that the provisions are about financial dependants, and that cannot be extended to any 20 people one may choose to gather and call members of one's family, unless one is able to prove that they are financial dependants. That would drive a coach and horses through the finance legislation.

Photo of Susan Kramer Susan Kramer Shadow Minister, Treasury, Shadow Spokesperson (Business, Innovation and Skills), Liberal Democrat Spokesperson (Business, Innovation and Skills)

My interest is in trying to draw up a provision that will encourage people to bring in youngsters, which frequently means a group of youngsters, wherever possible. If there were something in the provision that did that, I should be entirely satisfied that the clause contained all that I wanted to achieve.

Finally, on amendment No. 36, although I do not pretend to understand the difference between an interactive project and an interactive experiment, we can probably all understand the sense of those words. An interactive approach is being adopted at more and more charitable attractions to engage youngsters. For example, at the Barnes wetlands project in my constituency, and indeed my neighbourhood, an attraction is being set up where youngsters can become engaged through climbing, guessing, touching and drawing to work through issues relating to wetlands, such as climate change and its impact on ecology. Such strategies are being used to draw young people to various attractions. That is important, so there can be nothing disadvantageous in adding the amendment; it can be only advantageous.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

The hon. Lady is making an important point about the variety of places where we might want to encourage such activity. However, I do not understand why the amendment is necessary; none of the examples advanced so far, including the one that she has just given, cannot be met by some other part of subsection (5G), which refers to "grounds, or other land" used

"by a charity in pursuance of its charitable purposes".

The amendment may be a nice thing, but it is completely redundant—a bit like the Lib Dems I suppose.

Photo of Susan Kramer Susan Kramer Shadow Minister, Treasury, Shadow Spokesperson (Business, Innovation and Skills), Liberal Democrat Spokesperson (Business, Innovation and Skills)

The hon. Gentleman gives me the opportunity to say that the direction shown by the amendment is one for which there is an increasing interest and following. I can see no harm in adding those words. There is nothing in their scope of which the hon. Gentleman would not approve and that he could not support. It at least adds clarity, which is helpful on these occasions.

I am not quite sure how one draws these things to a close but I have reached the end of my speech.

Photo of Doug Henderson Doug Henderson Labour, Newcastle upon Tyne North

I have only one short point to make, but first I declare an interest as a member of the National Trust and a proud member of Beamish, which is a marvellous museum in County Durham.

As has already been said, small museums, as well as private and specialist museums, which often have charitable status, have to compete with the state's museums, which are free—although I completely support that. However, that situation affects museums such as Beamish, which is quite a large organisation.

As the Financial Secretary knows, the practice has developed over the past three or four years of paying gift aid with membership subscriptions. Mr. Francois referred to that in his introduction. People standing in the queue eating their ice creams at Beamish, or at the ticket desk, get leaflets about gift aid so they know about it already. When the Government are considering the small print, I urge them to make it clear that we are not worsening the current position but that the measure merely establishes in law rights that are currently applied. I hope that we can mount a campaign on that.

I understand why the Opposition are raising those points, because various museum groups have also raised them, but the important thing is that the Government respond to what is happening and maintain the situation. We must get that message across. I ask the Financial Secretary to be generous in considering some of the suggestions. The suggestion made by Stephen Hammond was a good try, but it would create so many anomalies in our tax legislation that it cannot be a runner.

I do not know whether the period should be 12 months, three months or one month, but I rather suspect that, whatever the provision, it will be theoretical. Museums are ingenious and they can usually find ways of getting round the regulations that we establish. One of the ways of doing that—it is quite legal—is to give an annual member privileges that someone who is a member for a day or three months does not have. For example, an annual member may be able to get the kids in a bit cheaper. There are ways in which the institutions can respond to the points that have been made.

I am not absolutely stuck on the 12-month rule, but I think that it is fairly reasonable. Although the points made by the Opposition sound reasonable, they would not apply to most museums. If one joins the Beamish, it is a 12-month deal. Most people visit once a year, but I recognise that some go more frequently. However, the revenue for gift aid comes from those who go once a year.

I hope that the Minister will be generous in his response and make it clear to museums that there will be no worsening of conditions.

Photo of Philip Dunne Philip Dunne Conservative, Ludlow 4:30 pm, 13th June 2005

I support amendments Nos. 36 and 1. In common with many other Members, I declare an interest as a member of the National Trust—I am a life member—and I am expecting to become a trustee of the Ludlow Town Walls trust. I am also a member of the Hereford Cathedral Perpetual Trust.

I support the remarks of my hon. Friend Mr. Francois on amendment No. 36, but ask the Minister for clarification in relation to one of my interests. That may not be good form, but I shall ask the question anyway because the position is not clear. Under the proposed new paragraphs (e) and (f) to section (5G) of the Finance Act 1990, I wonder whether the world-renowned Mappa Mundi and its associated chained library that reside in Hereford in a purpose-built building constructed by the perpetual trust a few years ago qualify as either "works of art" or "artefacts". If not, I am sure that the trust would establish an interactive educational exhibition to ensure that they qualify if our amendment is accepted. I should point out that the constituency of Ludlow is in the diocese of Hereford, so I am not interfering in neighbouring Members' affairs.

Amendment No. 1, which was tabled by my hon. Friend Stephen Hammond, is eminently sensible. The leaders of many of the groups that visit museums pay the admission fees on behalf of the group as a whole. It would be quite wrong if groups could not benefit museums by being able to take advantage of the gift aid provision.I should perhaps also declare that I am a member of Ludlow Civic Society and the Leintwardine history group, both of which organise group visits to areas of historic interest.

Photo of Helen Goodman Helen Goodman Labour, Bishop Auckland

We have heard much about queues in the debate, but how would this amendment stop people—some would be top-rate taxpayers; others would not—going along a queue and saying that they were all part of a group?

Photo of Philip Dunne Philip Dunne Conservative, Ludlow

To answer on behalf of my hon. Friend the Member for Wimbledon, I think that the word "accompany" is useful in assisting the hon. Lady with her point. A group leader pays on behalf of all its members precisely to avoid the need for up to 20 other people to form part of the queue. That is very sensible.

I also wish to refer to the Broseley Conservative Association, because I am particularly familiar with its activities. It runs biannual coach outings to places of historic interest outside the Ludlow constituency and around the country. It is led by the remarkable Mrs. Yvonne Miles, who is a particular favourite of mine as she helped me in my recent campaign. She collects on the coach the subscriptions for her members before they enter a place of interest, and it is precisely to enable people such as Mrs. Miles to maximise the take for the museum or other site that they are visiting that the amendment should be supported.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

It is important for us to consider the amendments in the context of the dramatic expansion of the number of museums and galleries in this country over the past few years and, for that matter, of attendance at museums and galleries. The fact that the sector has increased significantly has partly been a direct result of additional funding from national Government, from the lottery, especially, and from local government, although that element is often forgotten. Most smaller galleries and museums such as those cited by hon. Members today subsist by virtue of the support that they receive from local government. It is a source of pride in my constituency that the Rhondda heritage park museum has received significant support over the years from the local authority. In the near future, I hope that there will be the opportunity to refurbish the museum completely so that it can meet the needs of the 21st century.

Photo of Adam Afriyie Adam Afriyie Conservative, Windsor

It is clear from listening to the debate and the contribution that I made last time round that this is quite a complicated area. There are thousands, or perhaps even hundreds of thousands, of charities throughout the UK, many of which are in the Windsor constituency. May I ask the hon. Gentleman—or the Minister, in effect—how much, if any, quantitative research has been undertaken to establish which charities in the mix will be affected the change? We hear lots of words such as "many" and "some of these", and hon. Members have cited specific examples from their constituencies, but is the measure based on quantitative research, and will that be considered during our deliberations?

Photo of Chris Bryant Chris Bryant Labour, Rhondda

The hon. Gentleman is really putting a question to the Minister, not me. As he was speaking, a picture of the Queen paying admission to go into Windsor castle was going through my mind. However, she is not a top-rate taxpayer, so perhaps gift aid donations would not be relevant—I do not know whether she signs the form.

The hon. Gentleman, like all hon. Members, will know that the number of galleries has expanded, so there is now considerable competition for attendance in the gallery sector. One is often better off if there are two or three galleries in an area because they are able to promote the area and many people will choose to visit several galleries in a day, rather than just one at a time.

I urge people who work in the gallery industry to be open to possible changes to the system because that is likely to be in their interests. As I said to Susan Kramer, I do not accept the argument that if galleries give free admission for a year, it automatically means that they will mathematically lose the full cost of any visits that might have occurred during that year. It is free for me to go to the National Gallery and the National Portrait Gallery. I can now also go to the Victoria and Albert for free—it used to charge admission, but thanks to this Government it no longer does. The fact that it is free means that I visit it more regularly and thus use the bookshop more, drink more cups of tea and eat more chunks of cake there. Many galleries have found that such auxiliary services are not only a good way of making money, but often an important part of the educational and charitable purposes that they want to pursue.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I have not given way quite yet. I will give way to the hon. Gentleman now.

Photo of John Bercow John Bercow Conservative, Buckingham

I am grateful to the hon. Gentleman for determining the precise point at which the giving way takes place. It is always a joy—a titillating delight, no less—to listen to him. However, although obviously he is central to his own world, he is not necessarily central to the world. Further to the inquiry made by my hon. Friend Adam Afriyie, can the hon. Gentleman extrapolate beyond his example and say what evidence he has that what he is advancing, which is perfectly valid in theory, is true in practice? What is the additional spend in cafeterias, bookshops and so on in the examples that he is describing?

Photo of Chris Bryant Chris Bryant Labour, Rhondda

The Victoria and Albert Museum used to describe itself as a great caff with a museum attached. I do not have the precise figures to hand, but the hon. Gentleman is usually a more encyclopaedic resource than I on such matters—I see that with flattery, he does smile.

I was, of course, trying to scrutinise the amendment, and it was in the interests of scrutiny that I made the point about the pure mathematical equation. Free admission to a gallery for a year does not mean that the gallery automatically loses four £3.50s. I would have thought that if a gallery had a database of people who had become members for a year, it would want to use it to entice them back into the museum as often as possible during that year so that they bought books and used other services.

Photo of Nigel Dodds Nigel Dodds Opposition Whip (Commons), Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Treasury)

I am following the hon. Gentleman's argument with interest. He refers to museums like the Victoria and Albert and other great national museums, but they have the advantage of size, which means that people have to return a number of times to see them in their totality. They also have the advantage of changing exhibitions because they bring in new attractions on a regular basis. Those considerations do not apply to small private museums and galleries.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I am not sure that the hon. Gentleman is right in his final assertion that smaller museums and galleries do not change their exhibitions. A small gallery often changes what it exhibits because it does not have the space to exhibit all the material it has. Exhibits at the National Portrait Gallery and the National Gallery barely change because nearly everything they own is up on the walls, whereas that is not true for other galleries, such as the Tate. The important point is that we are talking not about national museums, but about museums such as the Rhondda heritage park, which does not receive national Government funding. In fact, it is in competition with Big Pit, another mining museum in south Wales, which receives money directly from the National Assembly and has free entrance. There is a specific need to help such museums and galleries.

Photo of Philip Dunne Philip Dunne Conservative, Ludlow

I have another interest to declare in that I am a director of a bookshop, and I hope that I can help the hon. Gentleman in dealing with his point on national museums. The company that I am involved in operates the concession in the Science museum. When admission fees were abolished, the bookshop's revenue increased, I am delighted to say. In the interests of commercial sensitivity, I shall not reveal by how much it increased for fear of prejudicing our negotiations on renewal. I can assure him, however, that it went up not by a multiple of sales, but by a percentage of sales considerably less than 50 per cent. There is an improvement in the other commercial add-on opportunities for museums, but it is not of the order of magnitude that he suggests.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I am grateful to the hon. Gentleman for correcting that. I was merely trying to argue against the idea advanced by the hon. Member for Richmond Park, who said that there was a mathematical equation to show the loss of income across the year. Clearly, it is different from that. One thing that we have seen over the past 10 to 15 years is that many museums and galleries have tried to maximise their opportunities.

I was a bit depressed when everyone else declared an interest and I had no museum or gallery of which I was a member and for which I could declare an interest, but I realise that I can now declare one. The only museum that still sells my biography of my hon. Friend Glenda Jackson is the Theatre museum—

The First Deputy Chairman:

Order. The debate is stretching wide of the amendments.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I take the admonition, Mrs. Heal.

Photo of Gordon Banks Gordon Banks Labour, Ochil and South Perthshire

To pick up on the point made by Mr. Dunne about the increased sales in the bookshop, if other services that support that main exhibit increase by the same significant amount, the overall effect is positive.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

Absolutely. I agree wholeheartedly.

My second point is that the other significant expansion over the past few years is in gift aid. The Government should be congratulated on the way in which they seized hold of what was originally a Conservative idea and made it their own. They have expanded the scheme and made it possible not only for people with significant incomes who make significant charitable donations every year to give that bit extra through the tax system, but for many millions of people throughout the country to do the same. It will be beneficial for many museums and galleries that, after their initial hesitation, the Government have now accepted that and are effectively legitimising it.

Turning to amendment No. 36, as I told the hon. Member for Richmond Park, many museums and galleries have excellent interactive exhibits, which harness young people's desire to learn through play, experimentation and problem solving. However, that does not make the amendment a necessary measure, nor is there a mischief in the Bill that it would correct. Every single example instanced by hon. Members is covered by proposed new section (5G), which is satisfied if any charity

"in pursuance of its charitable purposes" holds buildings, grounds or other land, plants, animals, work of art, artefacts and property of a scientific nature. The Mappa Mundi was mentioned earlier, but the way in which people have tried to exploit it means that it is not usually to be found in the annals of good financial practice, given that the deanery and the cathedral got into trouble financially. The Mappa Mundi is clearly kept in a building. The cathedral is trying to pursue its charitable purposes, and the Mappa Mundi is a work of art or an artefact—in fact, it is probably both—so it would be covered by the clause. There is therefore no need for greater clarity. Indeed, sometimes when we insert too much clarity into a Bill, provisions are narrowed, creating problems for some organisations. I accept that there are many interactive galleries and museums, but they are already covered by the Bill.

Photo of Philip Dunne Philip Dunne Conservative, Ludlow 4:45 pm, 13th June 2005

The Mappa Mundi has featured prominently in our debate. It is a map, and maps are not necessarily categorised as works as art. The chained library primarily contains books, which are not necessarily works of art. It is therefore not clear that the terms "artefacts" and "works of art" are sufficient, which is why I asked the Minister for clarity.

The First Deputy Chairman:

Order. I urge all hon. Members to concentrate on the amendments. We are straying wide of this group of amendments.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I am grateful for your admonition, Mrs. Heal.

The Mappa Mundi has been made by man, and is therefore an artefact.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I was going to move on to the next amendment, but I shall give way to John Bercow.

Photo of John Bercow John Bercow Conservative, Buckingham

We all want the hon. Gentleman to move on, but we also want clarity, if not too much of it.

The hon. Gentleman objected to amendment No. 36 on the grounds that it did not remedy a mischief. His exegesis of the unamended clause is of interest, but it is not conclusive. Does he not accept that it would be helpful if the Minister made it clear that the existing unamended clause is intended to embrace the terms of amendment No. 36? Failing that, we are justified in pursuing a belt-and-braces approach.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

If the hon. Gentleman had not intervened, we would hear the ministerial reply rather sooner. I am grateful to him, however, for taking us round that hermeneutical circle.

As I said earlier, amendment No. 1, which was tabled by Stephen Hammond, is problematic. It might be nice for the local Conservative association to gather its fees and present them to a gallery or a museum. They could, however, present that money as a gift aid cheque. In fact, if the association members raised some extra money on the bus, they could be even more generous by filling in a form and providing substantial amounts to the gallery or museum in question. I am not sure whether that is a very good argument in favour of the amendment, but the fundamental point is that it would be difficult to extend the benefits to all the other 20 people throughout the whole year. We should reject the amendment and stick with the Government's proposal, as there should be a degree of financial dependency among the group of people as they are constituted.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

Does the hon. Gentleman object to the principle of amendment No. 1 or the number to which it refers? If he objects to the principle, why does he disagree with the industry's leading practitioners, including the Law Society and its tax law committee?

Photo of Chris Bryant Chris Bryant Labour, Rhondda

It is the principle that I object to, not the number. As the hon. Gentleman said earlier when he confessed the weakness of his own argument, the number is entirely arbitrary; it could be six, 20, 50 or 100, and he has chosen 20. My argument is that there should be a degree of financial dependency, as would be found in a family. That is why we should reject his amendment and stick with what the Government propose.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

I agree with my hon. Friend Chris Bryant that there is a question of principle on amendment No. 1. There is also an issue of practicality. The amendment refers to

"an accompanying group of no more than twenty individuals".

The paying person produces a total of 21, but my understanding of proposed new section (5I) to the Finance Act 1990 is that all 21 people, of whatever age—they will often include children—would have the right of admission for a year.

That seems to contradict hon. Members who have argued that one year is too long. On one hand, it is said that one year is too long and people should not have free membership for a year, but we can apparently still pile in 20 people with what is effectively free membership, as it is being characterised, or certainly the right to free admission. Will Stephen Hammond explain that contradiction and tell us whether he supports amendment No. 35?

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

As I said earlier, I support amendment No. 35. There is no contradiction at all.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

It is helpful to know that the hon. Gentleman continues to support amendment No. 35, despite my exegesis, as John Bercow would call it, on the contradiction.

I have already referred in interventions to amendment No. 36, whose wording is problematic. I shall be interested to hear the Minister's comments, but I think that the word "experiments" is problematic. Museums and similar places have many exhibits that are interactive, but that are not in the nature of experiments. As my hon. Friend the Member for Rhondda sagely pointed out, if the wording is too narrow, institutions could fall foul of it that would not do so if the provisions were left slightly broader. If amendment No. 36 were agreed to, an institution offering interactive exhibits that are not in the nature of experiments would be excluded, even though it might not otherwise have been excluded. I urge caution in that regard.

Photo of John Bercow John Bercow Conservative, Buckingham

The hon. Gentleman is a magnificent anorak—he is even more pedantic than I am in such matters. He has made a thought-provoking point, and I put it to him that, although the interactivity of itself might not be experimental, a child's decision and choice to participate in it probably is.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

The hon. Gentleman has made my point for me—it is difficult to interpret tax legislation in terms of who is the user of an exhibit. If he were playing with the machine with flashing lights, it might not be an experiment, but if his son Oliver were playing with such an instrument, it might be an experiment, given the young lad's age.

I shall be interested to hear what the Economic Secretary has to say about amendment No. 35. Some hon. Members have been pessimistic in assessing the effect of the one-year admission rule, which amendment No. 35 would change. The excellent Wolverhampton art gallery, of which I am not a member because it is free, has a tea shop, the kind of facility to which my hon. Friend the Member for Rhondda referred. Lots of people who go to the tea shop just to drink tea end up catching an exhibition. The example is anecdotal, but since the tea shop has been expanded in the past few years, footfall must have increased since the abolition of entry charges to museums.

Many museums in England, Wales and, I suspect, Scotland—this is possibly true in Northern Ireland—are expanding their provision of tea shops because they are experiencing greater footfall with free admissions. Footfall increased following the introduction of the 12-month right of admission in the great public museums and art galleries that have become free under this Government, and footfall might similarly increase in small museums, such as the Gainsborough museum in Sudbury to which Mr. Francois referred.

The 12-month right of admission might allow small museums that already get some repeat business to increase that business and benefit from spin-offs on commercial sales and increased interest in the museum and its offerings. Charities should try to increase footfall to enable more people to enjoy and learn, which is their purpose. If a museum were creative, the 12-month restriction could assist it by allowing it to say to people, "You are now an honorary class 2 member. Come here more often, drink more cups of tea and bring other people with you."

Amendment No. 35 attempts to address a problem that may not exist, whereas the current wording in the Bill could provide small museums and art galleries with an opportunity to increase visitor numbers.

Photo of Ivan Lewis Ivan Lewis The Economic Secretary to the Treasury

When I was appointed Minister with responsibility for adult skills in the Department for Education and Skills, many people said that my challenge was to make that post sexy. Having listened to this afternoon's debate, I am not sure whether this challenge exceeds that one.

I thank Mr. Francois for his kind words about my new post. I enjoyed jousting with him on the Higher Education Act 2004 and I am sure that he will shadow me in a reasonably dignified way. [Laughter.] I nearly said that I look forward to the months and years ahead, but I will settle for the months ahead.

This is my maiden Finance Bill speech, which, as I understand it, Mrs. Heal, means no interventions, a polite hearing from hon. Members and a discussion of the wonders of my constituency. Hon. Members' contributions covered an astonishing range of interests. I declare an interest as president of the Manchester City football club in the community scheme, by which admission to the trophy room has been entirely free for the past 29 years.

I congratulate Stephen Hammond, because, as one will find if one studies Hansard closely, all the Tory amendments tabled for this debate come from his contribution on Second Reading. On that basis, he could well be yet another Conservative party leadership candidate. Indeed, when he referred to Nelson's ménage à trois, I wondered whether that was a potential solution to the difficulties facing the Tories as they choose their leader.

Susan Kramer made an important contribution. She said—this comment will be very familiar to all hon. Members in relation to the Liberal Democrats—that those on the ground always know best. That depends on which ground it is. John Bercow observed from a sedentary position that the Liberals back the Tories, but that would depend on which part of the country we were talking about, as well as which Tories.

My hon. Friend Chris Bryant kindly took it upon himself to answer questions on my behalf—at one stage, I thought that he was looking to swap positions with me. I am sure that I can have a word with the Chancellor of the Exchequer to see what we can do, but not just yet; perhaps I could be given a few months in the job.

My hon. Friend Mr. Henderson asked how the Government will consider the proposal's impact on charities. To demonstrate how much confidence my advisers have in my ability to handle this debate, I have the answer here. It reads: "The Government has no wish to overburden charities. We are happy to monitor the effect of these changes over time." I hope that that reassures my hon. Friend. He is right to say that, whenever we introduce any new regulations or legislation in this House we must, as a matter of course, review its impact and ensure that it does not make the situation worse.

Mr. Dunne, who has so many interests that I wonder how he can cope with the burdens of doing this job—he said that he is now the director of a bookshop, as well, and is obviously a very busy man—made a reasonable point about the Mappa Mundi. I was delighted that my hon. Friend the Member for Rhondda—my shadow Minister, so to speak—was able to explain what that is, because I did not have a clue. On a serious note, the hon. Member for Ludlow raised an important issue. I will write to him about it, because I do not want to give him and his constituents a trite answer that may prove to be not entirely accurate.

The hon. Member for Rayleigh made one or two comments that I did not completely agree with. He said that, during his conversations with various stakeholder groups involved in this debate, they described my hon. Friend the Financial Secretary as a reasonable man. I am not sure to whom he has been speaking. He said that they were anxious not to be caught up in party political fighting and read out an e-mail from the person concerned.

On the whole, people have attempted to make a sensible contribution to the debate, bearing it in mind that these issues have an impact in the real world on charitable organisations that are doing an excellent job, as well as on those who wish to patronise them and to contribute significantly to charity. There is complete unity among Members on both sides of the Committee that the voluntary sector is an incredibly important part of the kind of society that we want to encourage. People making contributions to charity is in the finest traditions of this country, and gift aid—I give credit to the former Prime Minister who introduced it when he was Chancellor of the Exchequer—has been a particularly innovative and imaginative way of supporting and encouraging charitable giving. I was slightly bemused when the hon. Member for Rayleigh referred to difficulties with the playing field for publicly funded galleries and museums. There was no problem with a level playing field under the Tory Government because there was no question of free admission to museums and galleries. The Government should be incredibly proud of introducing free admission.

Photo of Adam Afriyie Adam Afriyie Conservative, Windsor 5:00 pm, 13th June 2005

Will the Economic Secretary tell us about the research and the facts and figures that he used to analyse the clause's effect on the various museums throughout the country? Instead of the assertions and individual points that have been made today, I should like know what quantitative analysis has been conducted.

Photo of Ivan Lewis Ivan Lewis The Economic Secretary to the Treasury

My hon. Friend the Financial Secretary was described as reasonable for the way in which he dealt with the consultations. A significant period of re-evaluating and analysing the provision that we wanted to introduce has taken place to ensure that it did not have unintended consequences. I want to cite some expert and relevant stakeholders. According to my briefing, Sam Mullins is chairman of the Association of Independent Museums, although the hon. Member for Rayleigh had a different person fulfilling that role. Perhaps we need to check. However, Sam Mullins is a world expert on such matters. He said:

"The need to attract an additional donation of 10% will be a challenge. But one advantage is that it gives us the opportunity to communicate our educational and charitable objectives to visitors. We look forward to working with Government to promote public awareness and buy-in to the concept of Gift Aid."

Equally important, Mark Taylor, who, according to my briefing, remains the director of the Museums Association, stated:

"To its credit, the Treasury has listened, and is not only modifying its original plan, but also giving museums an extra year to prepare".

That is a direct answer to the hon. Member for Rayleigh. A significant amount of evidence suggests that we have listened, consulted and taken seriously the concerns that people expressed.

It is important to put clause 11 in context. The exemption of rights of admission as a benefit was first granted in the Finance Act 1989 in relation to charitable deeds of covenant and was applied to gift aid as part of the 2000 reforms. As many hon. Members have said, the exemption applied only to specific heritage and conservation charities.

Some unintended consequences of the changes to gift aid donations have come to light. The clause tries to maintain the original objectives of generating new and additional giving and increase the range of charities that might benefit from the exemption while closing down the unintended consequences. The hon. Member for Rayleigh was fair enough to acknowledge that the consequences of the provision would be to increase the overall number of charities that benefit from the exemptions.

Photo of Philip Dunne Philip Dunne Conservative, Ludlow

Will the Economic Secretary quantify how many charities are likely to be affected positively or negatively by the proposals?

Photo of Ivan Lewis Ivan Lewis The Economic Secretary to the Treasury

I cannot do that now, but I shall write to the hon. Gentleman. We will have a comprehensive list of the charities that are known to us but we will not know of every single charity in the country. However, we know from consultation that the scope of the Bill covers a far larger number of charitable organisations than would be supported through sustaining the status quo. Although the hon. Member for Rayleigh tabled amendments on specific aspects, the thrust of the Opposition contribution has been to question the principle of the changes. Without clause 11, the additional charitable organisations would not be in a position to benefit.

Photo of Mark Francois Mark Francois Shadow Paymaster General

Before the Economic Secretary writes his letter in response to the reasonable question of my hon. Friend Mr. Dunne, will he confirm that the Treasury's regulatory impact assessment admits that it does not know how many charities will be affected?

Photo of Ivan Lewis Ivan Lewis The Economic Secretary to the Treasury

I just said that. I said that it is impossible to know the exact number of charities that are affected. However, my hon. Friend the reasonable man, who was described as reasonable because of his handling of the consultation, sat down with the stakeholder organisations and assessed the impact. We did not do it simply as a paper exercise or conduct the regulatory impact assessment in an abstract way. We have spoken over a period to the relevant organisations and we have been assured. The scope of legislation will be extended to support a significant additional number of voluntary organisations. I do not have the precise figure to hand but I will endeavour to give the hon. Member for Ludlow as much information as I can.

Photo of Greg Knight Greg Knight Shadow Minister (Transport)

Many of us are interested in this important point. Rather than merely writing to my hon. Friend Mr. Dunne, will the Minister place a copy of his letter in the Library so that we can all see his answer?

Photo of Ivan Lewis Ivan Lewis The Economic Secretary to the Treasury

I welcome the right hon. Gentleman to the Chamber. Perhaps he has been in the Library reading letters that I have been writing to his colleagues. If it will help, of course I am happy to place in the Library any answer that I give to the hon. Gentleman.

I want to put the matter into context. The clause provides details of property where the right of admission will be disregarded as a benefit where a donor is given a right of admission to view that property. It is an important point that the list is not intended to be exhaustive. It is a guide to the types of property held by a charity where a right of admission to view that property will benefit from the exemption. The rights of admission must meet the other requirements of clause 11 to qualify. When I write to the hon. Member for Ludlow, it is important that we consider the other element in the issue.

It is important also that the clause makes a clear distinction between simple payments to view the property of a charity and donations to a charity demonstrating a commitment and gift beyond the simple admission price. As has been said, to be eligible the donation must be at least 10 per cent. higher than the cost of the equivalent right of admission, or secure unlimited rights of admission for 12 months during all times when the site is open to the public.

The hon. Member for Richmond Park raised the question of the practical implementation of these changes. My hon. Friend Rob Marris pointed out that a dialogue has to take place on the implications of the proposals. It is also true that a qualitative dialogue between the charity and the individual visiting that charitable organisation is surely in the interests of that voluntary organisation.

A specific objective of gift aid is to build a sustainable and credible long-term relationship that is meaningful with the donor base. Potentially, for entrepreneurial voluntary organisations, it is a real opportunity to help them go further in terms of their original intentions in the context of the gift aid scheme. We are aware that there are practical implementations to consider. We do not seek to deny that. In the long run, once people have become used to change—we know that change is never easy—the position of charitable organisations that use the clause positively and practically could be enhanced.

It is important that I respond directly to the amendments, which were presented in a reasonable and fair way, but we are not convinced by them. I shall deal first with amendment No. 36. The list of types of property in clause 11 is not exhaustive. Where charities meet the other conditions of the clause, they will be able to use gift aid. I can confirm that the list, in terms of guidelines, will specifically include interactive experiments with an educational purpose. We can allay the fears that have been expressed about that.

Military memorabilia would also be included in the list. As I have said, the list as published is not exhaustive. The two specific examples that have been raised during the debate will be included in it.

Photo of Mark Francois Mark Francois Shadow Paymaster General 5:15 pm, 13th June 2005

Effectively, the Minister has said that he has accepted amendment No. 36 in that the guidelines that the Treasury will produce will incorporate that, too. I thank him for that. Can he give the Committee some idea of when those guidelines will be available—at least the month in which they will appear—as those museums and charities that might be affected will want to get their hands on them as soon as possible?

Photo of Ivan Lewis Ivan Lewis The Economic Secretary to the Treasury

They will appear as soon as possible, when we can sit down with those affected and make sure that we get the list right. The point is that the list was never intended to be exhaustive.

Amendment No. 35, which would reduce the 12-month period to three months by allowing gift aid to apply when the right of admission is granted for only three months, would diminish the distinction between paying an admission charge and making a gift that generates an ongoing relationship between the donor and the charity—the point that I was making earlier. That undermines an important principle of gift aid, which is about additional giving or additionality. Furthermore, a short period might encourage charities to manipulate the scheme when they think that it is unlikely that visitors will come back within such a three-month period: they could offer a three-month season ticket for a donation equivalent to a single admission and ensure that gift aid applies, rather than asking for a donation that is 10 per cent. more than that admission. We believe that the principles of gift aid are very important, and that the 12-month period is about right for sustaining those principles. It is also important to mention that there is no requirement to offer annual membership for the same price as a single admission. That decision is for the charity, taking account of the relevant circumstances.

Amendment No. 1 relates to the definition of "family". With regard to the contribution from the hon. Member for Wimbledon, one must ask whether a ménage à trois would qualify as part of a definition of the term. The key point about the legislation and guidance is that it is for the charity to determine what constitutes an accompanying family. Therefore, it will be for the charity to determine whether the definition relates to a relatively small number of people or a far more significant number of people. The scenario given on Second Reading by the hon. Member for Wimbledon, I think, raised the issue of what happens when one takes one's children and their friends to visit a museum. Clearly, those friends are not part of one's immediate family. Under the legislation and guidance, which we wish to keep as flexible as possible, it is absolutely clear that it is for the charity to define the term "family". In my view, there is a danger of an unintended consequence if we refer to 20 individuals, as charities might assume that that is the norm or median. As far as I am concerned, it makes sense to leave the provision as it is, whereby the individual charity defines flexibly, in this context, the term "family".

Photo of Judy Mallaber Judy Mallaber Labour, Amber Valley

The National Tramway museum in my constituency, on whose behalf I have lobbied on this issue, is pleased with the way in which this matter has been dealt with. While I am happy with what my hon. Friend has just said, can he assure the Committee that we will not suddenly find regulations being put down that narrow the definition and that the provision will not suddenly be interpreted in a more restrictive way by those administering it?

Photo of Ivan Lewis Ivan Lewis The Economic Secretary to the Treasury

I understand entirely my hon. Friend's concern, and any regulation or guidance must be consistent with what I have put on record in this debate during the past few minutes. I hope that that reassures her about how the provision will be applied.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

Is the Minister saying that the charity can define "family" to include anyone within a group, but not necessarily a member of the charity? That is, in fact, the thrust of the amendment.

Photo of Ivan Lewis Ivan Lewis The Economic Secretary to the Treasury

I did not entirely follow the question. May I ask the hon. Gentleman to intervene again?

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

Is the Minister suggesting that a charity can choose to define "family" as a group accompanying the original member? If so, it seems to me that he is accepting the amendment.

Photo of Ivan Lewis Ivan Lewis The Economic Secretary to the Treasury

No, I am not accepting the amendment. What I said was that the definition of the term "family" in the legislation and the current guidance, which will not be changed, is basically a matter for the individual charity. We believe that maintaining the status quo is in the best interests of what we are trying to achieve, and that accepting the amendment would lead to a more confusing and ambiguous situation for charitable organisations. Having made those points, I call on the hon. Member for Rayleigh to withdraw amendment No. 36.

Photo of Mark Francois Mark Francois Shadow Paymaster General

I think that I can genuinely say that this has been an informative debate and I thank all who have contributed. I noticed that we kept the Officials' Box rather busy, and I think we can all take that as a backhanded compliment.

The Minister admitted in his introductory remarks that he had been a lifelong Manchester City supporter, so his courage is not in doubt, but he also said that he was making his maiden speech in a Finance Bill Committee. Actually, so was I, but I did not ask for quite the same mercy in the form of a lack of interventions. I think the Minister will forgive me if I put that on the record as well.

This issue was dealt with for 18 months by John Healey, who is now Financial Secretary to the Treasury. I was slightly disappointed that he did not respond to the debate. I take it that the baton was effectively handed to the Economic Secretary in a shuffle of responsibilities. Having heard the debate, I am sure that the Economic Secretary is delighted to have been given this bonne bouche by his more senior colleague.

I listened carefully to Susan Kramer. I am grateful for her declaration of support for our amendment No. 35, which I am minded to press. Let me deal first, however, with amendment No. 1. My hon. Friend Stephen Hammond tabled an interesting amendment seeking to widen the qualifying definition in clause 11(5I), and made an interesting case for it. As this year is the 200th anniversary of the battle of Trafalgar, I was intrigued to hear of Lord Nelson's domestic arrangements, which my hon. Friend described at one point as a ménage à trois. Who is to say that debate on the Finance Bill must always be dry? Having heard what the Minister said, I suspect that my hon. Friend will not be minded to press his amendment at this stage. Nevertheless, he has succeeded in raising the issue in Committee and I congratulate him on that.

I also congratulate my hon. Friend Mr. Dunne, who gave a number of practical examples of how the clause could directly affect his constituency. He also managed to get more interest on the record than I did in my opening remarks, and I congratulate him on that as well. My hon. Friend asked a specific question about how the Mappa Mundi would be affected. I was pleased to hear that the Minister had offered to write to him directly. I hope that my hon. Friend will receive clarification that will be of value to his constituents.

With amendment No. 36, we were partly trying to tease out the Government's thinking, but we also had a serious point to make. Let me say to the hon. Members for Wolverhampton, South-West (Rob Marris) and for Rhondda (Chris Bryant), both of whom spoke, that we drafted the amendment deliberately. We did not say that it would apply only to educative interactive facilities for children, because children do not have a monopoly on being educated. Adults can often be educated too, as the House of Commons proves regularly.

Of course, as a rule of thumb, people under the age of 18 tend not to be taxpayers, so the issue is whether the institution itself can qualify. I am pleased that in his speech the Minister effectively accepted amendment No. 36 by confirming that the guidelines that the Government will issue to clarify this matter will include that category of charity. I thank him for that, but I reiterate the plea on behalf of the whole sector that we have those guidelines as soon as possible. Quite properly, and for all the reasons that we have elucidated this afternoon, many museums and charities throughout the country will want to investigate whether they can qualify. The sooner, therefore, that the Treasury and Her Majesty's Revenue and Customs produce those guidelines in hard copy, so that everybody can read them and take a view, the better.

I also paid particular attention to what the Minister said about amendment No. 35. I appreciate that his very reasonable predecessor has discussed this issue—which, as I said, dates back to December 2003—with the industry for some time. Originally, the Government were going to abolish qualifying institutions' ability to claim gift aid on admission charges. There was such a row that they retreated and came up with a modified position, on which they have also consulted. However, as we have attempted seriously to argue this afternoon, a number of institutions are still genuinely very concerned about how the clause will operate, particularly the provisions concerning the 10 per cent. additional charge and the one-year right of admission. We have tried to reduce that period to three months, so that the Government can protect revenue without charitable sectors—museums—being inappropriately affected to the point where their revenue schemes are under serious threat.

We have made the case and I am sorry to hear that the Minister was not minded to accept it. I suspect that, as a result, this issue will rumble on. The Government have offered to review the situation in 2007, as the regulatory impact assessment points out, so we may yet need to consider how the provision works in practice. I make a final plea to the Minister that between now and consideration on Report in July, he goes back to those who are affected by this provision and considers the issue one last time. However, given that he has offered no concessions this afternoon, we have no option but to test the opinion of the Committee. I therefore wish to press amendment No. 35 to a vote.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

May I ask the hon. Gentleman what Her Majesty's Opposition intend to do about amendment No. 36? Do they wish to withdraw it?

Photo of Mark Francois Mark Francois Shadow Paymaster General

Forgive me, Sir Nicholas—I thank you for that guidance. Because the Government have effectively accepted amendment No. 36 in the revised guidelines, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 35, in page 12, line 1, leave out 'one year' and insert 'three months'— [Mr. Francois.]

The Committee divided: Ayes 203, Noes 290.

Division number 9 Orders of the Day — Finance Bill — Clause 11 — Donations to charity by individuals

Aye: 203 MPs

No: 290 MPs

Ayes: A-Z by last name


Nos: A-Z by last name


Question accordingly negatived.

Clause 11 ordered to stand part of the Bill.