Clause 145 - Payroll giving: extension of 10 per cent. supplement to 5th April 2004

Finance Bill – in a Public Bill Committee at 8:55 am on 17th June 2003.

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Question proposed, That the clause stand part of the Bill.

Photo of Stephen O'Brien Stephen O'Brien Conservative, Eddisbury

We welcome this extension to encourage charitable giving. It is particularly welcome at a time when charities need to optimise their encouragement of charitable giving, not least because many have suffered loss of income under the so-called pensions tax, when the ACT tax dividend credit was removed in this Chancellor's first Budget, and because of the pressures on charities caused by increased national insurance charges and the continuing bugbear of VAT. It would therefore be helpful if the Economic Secretary could confirm that he and his colleagues in the Treasury, including the Chancellor, are giving genuine consideration to putting the scheme on a permanent basis. Such a move should further increase the amount given to charities and provide certainty for charities, allowing them to plan for the longer term.

Photo of John Healey John Healey The Economic Secretary to the Treasury

I am glad of the welcome that the hon. Gentleman has given to the clause. It extends for a further year, until April 2004, the 10 per cent.

supplement that we introduced in the Finance Bill 2000 on donations made to charity through payroll giving schemes. The intention in introducing a limited-term scheme was to provide a supplement to boost an underused method of giving, and it is achieving that purpose. The scheme is time limited. We do not have plans to make it permanent, and this extension is for one year.

Donations made in that way increased sharply from £37 million in 1999–2000, before the supplement was introduced, to £55 million in 2000–01 and £72.5 million in 2001–02. Provisional figures for 2002–03 suggest that there will be a further increase in that year.

The supplement has encouraged higher levels of giving, and extending it for one more year will allow charities to make the most of their fundraising by encouraging more employers to offer schemes and more employees to make continuing commitments to the charities of their choice through the payroll. Many people in the voluntary sector campaigned for an extension of the supplement, including, not surprisingly, the payroll giving forum of the Institute of Fundraising. Many fundraisers have welcomed the announcement, seeing the extra year as an opportunity to build on and consolidate their achievements so far. I commend the clause to the Committee.

Photo of Stephen O'Brien Stephen O'Brien Conservative, Eddisbury

I am grateful to the Economic Secretary. I welcome the extra year and know that it will be generally welcomed. I know from experience that it encourages employees to give and employers to facilitate that, and it creates a positive attitude to payroll giving. Perhaps consideration could be given to extending it beyond the further year.

Question put and agreed to.

Clause 145 ordered to stand part of the Bill.

Clause 146 ordered to stand part of the Bill.