As I understand it, subsection (1) allows the Treasury to amend the £5,000 figure, which is the benchmark for the amount of small donations that need to be collected to achieve the maximum top-up payment available under this scheme of some £1,250.

Subsection (2), if I have read it correctly, appears to allow the £20 limit on cash donations to count towards that £5,000 figure—to be amended at some future point if the Treasury is so minded. My interpretation of the clause is that it is the Treasury’s “get out of jail” card. If all the other hoops that it has inserted into this scheme—the linking to gift aid; the requirement for three years of gift aid claims; the connected charities rule; the community buildings clauses; and the pages and pages of guidance that will have to be issued, never mind the complex issues that we have been discussing around mergers—fail to keep down the number of charities applying for the full £1,250 to the total sum the Treasury has thus far said in public it is willing to spend on the scheme, then the Treasury under clause 13 could bring down the £5,000 figure and could conceivably bring down the £10 cash donation figure.

If small charities jump through all those hoops, they could end up with less than the £1,250 they initially thought they would be able to achieve, or they could only register £10 of small cash donations, again making it even harder to claim the full amount. Admittedly, we on the Labour Benches and many in the charity sector that deal with the concerns of small charities do not believe that we are likely to see that scenario, but the Minister is defending a scheme that is so complex that far fewer charities than was claimed by the Chancellor of the Exchequer in his Budget statement will benefit from this small payments scheme. Nevertheless, it appears  that the Treasury is taking a reserve power, almost, to limit still further the amount of money paid out to small charities.

Perhaps a more likely scenario, which we on the Opposition side can envisage, is that the Chancellor of the Exchequer might look for even more aggressive public spending cuts. It is worth remembering that we have already seen, by the National Council for Voluntary Organisations estimate, a likely £3.3 billion of support taken out of the charity sector by 2015 as a result of Government cuts.

So out of touch is the Chancellor of the Exchequer that no one on this side would be surprised if he changed his mind about the scheme. Perhaps he thought that the charity tax row—which appears to have influenced his mind in the preparation of the scheme, wanting to appease charities that were distinctly unhappy about the charity taxes proposed in the Budget—had been sufficiently forgotten that he could get away with reducing the amount of money available to small charities under this scheme.

We need to hear from the Minister in which scenarios he might want to use the two powers that he wants to keep under clause 13. One scenario that we posed on Second Reading was that the Treasury might want to increase the £5,000 figure in line with inflation; some charities clearly aspire for the Minister to show a generosity to them—he certainly did not when discussing the three years in seven rule, for example—and increase the £5,000 figure in line with inflation. Otherwise we risk seeing the 2.5% inflation that the Treasury expects to see year on year devalue the potential amount that charities can get under this scheme.

Let us take the example of the 2nd Bromsgrove Scout Association, one of the 40% of Scout troops in the Minister’s area not registered for gift aid. The 2nd Bromsgrove comes along to the charity event that the Minister is hosting in January, and which he is going to get HMRC officials to come to, and is persuaded to apply for gift aid. It waits for three years—possibly four years, depending on when it gets a gift aid claim in—and is excited by the thought of getting the full £1,250. However, if the Minister has not used the power under subsection (2) and uprated that £5,000 figure, the £1,250 that the 2nd Bromsgrove Scouts might have claimed will have substantially devalued because of the impact of inflation.

I do not know whether the Minister is worried about the 2nd Bromsgrove Scouts, but let us take another example. Stafford hospital, if there is such a hospital, may have a radio station. We do not know whether Stafford hospital is registered for gift aid, but let us assume that it is.

I shall put the hon. Gentleman out of his misery. Stafford hospital does have a radio station—a very good one.

I am delighted that Stafford hospital has a radio station. Although I am not sure whether the hon. Member for Stafford has had a chance to appear on it, I imagine his mellifluous tones would be very soothing for patients.

I also do not know whether Stafford hospital radio is registered for gift aid, but let us assume for now not only that it is, but that it has been for a significant time and has submitted gift aid claims for three of the last seven years. We shall assume, too, that a dedicated person is ready to read through at least—as I think the Minister said—another 60 or 80 pages of guidance, which is roughly the same amount that one has to wade through to register for gift aid and is what we expect will be produced to explain the scheme.

Let us assume that Stafford hospital has one such saint in its team, willing to go through that process. They put in a claim under the small grants scheme, expecting to be able to receive £1,250. Therefore, in 2015, they anticipate being able to get £1,250 worth of goods. However, in practice, because of inflation, unless the figure of £5,000 has been uprated, the value of what they can claim under the scheme will not be worth as much as it potentially would be in 2013.

It would be useful to hear whether the Minister intends to uprate the sum of £5,000 in line with inflation. I make no suggestion about whether he should; he will be weighing that up along with other questions, as part of examining the sorry state of public finances, which the Chancellor of the Exchequer has allowed to develop in his term in office. It would also be helpful to hear whether the Minister can assure the Committee that the figure of £5,000 will not be reduced at all between now and the next general election.

This is not exactly on the point that the shadow Minister is making, but on a personal basis, I was a member of the 1st Lickey Scout Group, a Bromsgrove Scout group, and also of the 271st Birmingham Scout Group. As I understand it, there is no 2nd Bromsgrove Scout Group, although there is a 1st and a 3rd. Is he trying to get phantom scout groups money out of the system?

That is an interesting intervention, but I will not rise to the hon. Gentleman’s shocking attempt to draw me off the subject of my speech; I am sure that I would risk being out of order. However, let us continue to use the imaginary example of the 2nd Bromsgrove Scout Group, because helping to see how different parts of the Bill might affect real charities can only help to illuminate the practical impact of the legislation. Perhaps that will make it easier for the Minister and his advisers in HMRC to reduce the amount of guidance that is published.

It would also be helpful for the Minister to set out the context in which the figure of £20 might change. Mr Turner, as you are a dedicated reader of the Committee’s proceedings in Hansard, I know that even if you were not here when I gave this example, it will nevertheless be familiar to you. Imagine the situation, as we have before, of all the chief executives of legal loan shark companies such as Wonga coming together, wanting to make a donation.

Such is the amount of money that legal loan sharks make—and no doubt, the salaries that their chief executives receive—that £20 would be an extremely small sum. It is conceivable that the Minister might be persuaded to increase the figure for donations, although he has not done so yet. He has indicated that he believes that £20 is  a reasonable sum. Nevertheless, he has the power, under clause 13(2), to vary it. It would be helpful to hear from the Minister in what context he might want to take advantage of that reserve power.

Perhaps one last example worth reflecting on is that of parent-teacher associations—charities set up to help state schools mainly, but others too. Some 84% of PTAs are not registered for gift aid, but let us imagine that the Amber Valley primary school parent-teachers association has the good fortune to be registered for gift aid, to have put claims in for gift aid in three of the past seven years, and to have someone sufficiently talented and patient to wade through all the guidance that the Minister will have to produce for the Bill.

That talented and patient person is looking forward to receiving the full £1,250. However, subsection (1) risks a situation where the Minister has reduced the £5,000 sum, potentially reducing the amount the Amber Valley primary school PTA might claim under the small grants scheme; alternatively, it might not receive full value for the £1,250 because Ministers have chosen not to uprate the £5,000 figure beyond 2013.

It would be useful to hear from the Minister how he sees those different examples playing out: Stafford hospital radio; the 2nd Bromsgrove—although following the intervention from the hon. Member for Birmingham, Yardley the Minister may want to focus on the circumstances of the 1st and 3rd Bromsgrove; I will not complain—and the Amber Valley primary school PTA. In those circumstances, what would he do about the £20 figure? In what circumstances might he vary that figure? Explaining that to us now might help to reduce the guidance by at least five pages. What are the circumstances in which he might amend the £5,000 figure, using the reserve power in subsection (1)?

I thank the hon. Gentleman for his comments. I particularly thank my hon. Friend the Member for Birmingham, Yardley for his superb intervention.

Clause 13 gives the Treasury the power to amend certain amounts set out in the Bill. The amounts that can be varied are the £5,000 limit on which charities can claim the top-up in a year, and the £20 limit on a small cash donation. The clause gives Government the power to vary the £5,000 annual limit for donations collected while running charitable activities in a community building, as well as the £5,000 limit for donations collected elsewhere. The power is included in the Bill to provide future flexibility for the design of the scheme without needing primary legislation. However, we have no current plans to use the power. Any change would need to be agreed by the House under the affirmative procedure.

The Government have announced that there will be a limit of £5,000 on small donations collected each year. Like all limits, it will be kept under review, but payments under the scheme must be restricted to keep a reasonable check on the overall costs of the scheme.

Sadly, we are not blessed with the presence of the hon. Member for Banbury today, but we know that he is an enthusiast for the Church of England. Has the Minister considered the potential disappointment of many Churches—the Church of England, the Catholic Church and the nonconformist community—that there  are no plans to increase the value of the £5,000 in line with inflation to reflect the hard work that they put into claiming gift aid and wading through all the guidance, which he will issue as part of the scheme?

As the hon. Gentleman knows, in putting together the legislation we had discussions with charities both on a trusted basis and in the evidence session. The Church of England is happy with the initiative that the Government have taken to introduce the legislation. I think that it is pleased with the £5,000 limit; that is its approach, rather than expressing disappointment at the figure being £5,000, which many charities would consider a good step forward.

To follow up the point that my hon. Friend made, the Minister has on occasion implied that the figure of £5,000 would have to be changed if the cost of the scheme increased. Does he agree that there is still lingering concern that that implies that there is an overall cap on the number of charities or the amount of money available?

There is no concern about the number of charities that might use the scheme. When the scheme is developed, the Government clearly need to take account of its overall cost to public finances. Within the terms of the scheme, as we have discussed, there will be eligibility criteria and there is no restriction on the number of charities that can take advantage of it.

We encourage all charities that meet the criteria to use the scheme. We are comfortable that the limits we have set—the £5,000 limit and the £20 small donations limit—will meet the spending envelope that the Government, with the help of the Office for Budget Responsibility, expect the scheme to cost. Although the two limits—£5,000 and £20—obviously have an impact on our overall estimate of the total cost of the scheme, we do not think of them as a limit on the number of charities.

During our debates, Government Members have thought that the Opposition were being pessimistic about the ability of small charities and so forth to make use of the scheme. We may indeed be unduly pessimistic and perhaps large numbers of organisations will apply. Am I to understand that there is an inherent financial limit, so that if we are wrong and lots of people come forward, that limit might be reached and there would be an intention to vary it downwards?

I do not think that the hon. Lady is right to think that. The only financial limits imposed are the two that we are talking about now—the £5,000 limit on the overall amount of donations and the £20 limit on what can be classified as a small donation. To put her and the hon. Gentleman’s minds at rest, the Government have no intention of changing the limits, and that includes in a downward direction. We have no plans at all to cut the £5,000 or the £20 numbers. If she will allow me to finish, I may answer any other questions she has.

It is sensible, and normal in legislation of this type, for the Government to have flexibility in the numbers, so that if they or a future Government wish to change the limits, there is no need for primary legislation, although such a change would be debated in the House and require an affirmative resolution. It is sensible to include such flexibility in the Bill.

The hon. Member for Harrow West talked about the link to inflation. The Government have no plans to link the figures to inflation. As I said, we will monitor the scheme over time, and if the limits need to be changed, they can be. It is also useful for many charities, and particularly smaller ones, to have a nice round number—£5,000 and £20—that can be explained to volunteers and helpers, rather than numbers that by being linked to inflation would change by small amounts every year. That could add to the management pressures on smaller charities.

The hon. Member for Harrow West also asked about the figure of £20.

The Opposition certainly accept that charities will be nervous of any more complexity in the scheme, but if they go through all the different hoops and apply for a payment they will nevertheless want to feel confident that what they get will retain its value by being increased in line with inflation. Such are the difficult circumstances for small charities, partly because of the spending decisions taken by the Government. I suggest that the Minister should not be so complacent about small charities’ desire to maximise their income.

It would be grossly unfair to accuse the Government of a complacent approach. Both sides of the House have agreed on the general principles of the Bill and why it is good for the charitable sector.

We have discussed the £20 before, but it is worth repeating that it is about small cash donations to charities. When the Government proposed the Bill, they had £10 in mind, but that has been increased to £20. That  was done after consultation with charities. It was important to get their feedback. It is fair to say that most charities with which the Government discussed the issue, or which gave feedback, felt comfortable that £20 was the right sum when trying to capture small cash donations.

Clause 13(2) provides the Treasury with the power to amend paragraph 1(1) to the schedule. Will the Minister confirm that that power of amendment is to be used strictly in relation to the sum of £20 and not in relation to the form of donation? Given what the Minister has said previously about keeping matters under review, and about a three-year review, could clause 13 have been more widely drafted, so that the power to amend paragraph 1(1) would be the power not just to alter the sum, but to remove the restriction to cash payments? The form of donation, as well as the sum, might then be changed.

I confirm that the power can be used only to change the £20 limit, not the form of the donation. I will not discuss the question of the form of donation; we have discussed it before.

Question put and agreed to.

Clause 13 accordingly ordered to stand part of the Bill.