Small Charitable Donations Bill – in a Public Bill Committee at 11:00 am on 23 October 2012.
Amendment is designed to probe why charities which haven’t made a successful Gift Aid exemption claim in at least three of the previous seven tax years shouldn’t be eligible for a payment under this Bill. It would also allow a debate on why charities recently started shouldn’t be eligible.
Amendment 20, in clause 2, page 2, line 22, leave out paragraph (a).
Gareth Thomas
Shadow Minister (Cabinet Office), Party Chair, Co-operative Party
11:15,
23 October 2012
The purpose of the amendments is to delete one of the further big unnecessary hurdles that Ministers want to create for charities accessing the small grants scheme. If it is unreasonable to require many small charities to jump through the hoop of registering for gift aid, it seems even more unreasonable and disproportionate to require three years’ worth of gift aid claims. I say gently to the Minister that the suspicion remains that the clause has been inserted into the Bill not as an anti-fraud measure but as a cap on how much is spent under the scheme. He should clarify for the benefit of the charity sector that that is the honest intent behind the clause.
I note that in the Minister’s winding-up remarks on the previous clause, he mentioned significant levels of gift aid fraud. Presumably, that is why he thinks he needs to continue to peddle to the charity and voluntary sector the idea that three years’ worth of claims must be produced, even though, given what he has said, there are few spot checks further down the line once registration for gift aid has been successfully completed.
The hon. Member for Stafford said in an intervention during my speech that we as Members of Parliament should all encourage people to claim gift aid. That is a perfectly reasonable point. Whenever charities approach us, if they have the time and capacity, we should clearly point them in the direction of gift aid if they are not registered. The hon. Member for Portsmouth North said that she thought that a considerable number of local infrastructure bodies and councils for voluntary action could support very small charities in claiming for gift aid, and the hon. Member for Congleton gave the example of people who work for guide groups and Brownie packs, suggesting that they have the capacity to claim gift aid.
Let me be clear: I do not think that the people who work for such charities do not have the capacity to claim gift aid. The question is whether it is a proportionate task for them, bearing in mind all the other tasks that they face in running charities. When they discover that, as a result of the subsections under discussion, even if they do claim gift aid, they will have to wait for three years to get access to funding, we may well meet with some scepticism as to why a small start-up charity may want to go through the hoops of registering for gift aid—however much we may want to persuade them otherwise.
Another question prompted by this set of subsections is why one needs a three-year waiting period to claim what is a relatively small grant or top-up payment, as the Minister calls it, when no similar probation period is required to access ordinary gift aid. The Minister needs to explain that disparity. Let us recall the figures. A pot of roughly £1 billion is currently allocated under gift aid. The Minister intends that £100 million—10% of the gift aid total—should be available under the new scheme, but charities will have to wait three years to get a chance of having access to it. There is no three-year wait for access to the £1 billion. Why is there such a difference? I return to wondering whether the proposal is not an anti-fraud measure and whether it is actually motivated by cost. We look forward to hearing the Minister’s answer.
There are other small grants schemes that do not require charities to be registered for three years with the administrators before they can get a grant of £1,250 or less. For the Minister’s sake, I return to the rather inconvenient example of Awards for All, where 10 times the amount on offer under the proposed scheme can be claimed. There is no three-year wait, and the level of fraud appears to be no higher than it would be under the new scheme. Most local authorities do not require a charity to have been registered with them and to wait for three years in order to get access to the small amounts of funding that they still have available for charities. Indeed, given the huge cuts that many local authorities face down the line, it is just as well that they do not.
Clause 2 was without question one of the most contentious measures during the evidence sessions. Many of the representatives from the charity sector were worried that charities will miss out on accessing the Treasury small grants scheme because of the three-year matching rule. The policy manager at the National Council for Voluntary Organisations specifically pointed out that the three-year track record requirement was likely to prevent many of the NCVO's smaller members from benefiting. She mentioned that she had received responses
“from organisations as diverse as the Telford and Wrekin Senior Citizens’ Forum, the Wiltshire Rural Music School, Cumbria Action for Sustainability and Southside Young Leaders’ Academy.”––[Official Report, Small Charitable Donations Public Bill Committee, 16 October 2012; c. 19, Q32.]
The Opposition can throw into the pot of organisations that will suffer a whole range of parent teacher associations, and I am very conscious of the example of the Friends of Newton Farm, the PTA that covers the most successful primary school in the country.
Andrew Turner
Conservative, Isle of Wight