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New Clause 3 - Complementary Gift Aid for small donations to small charities

Part of Small Charitable Donations Bill – in a Public Bill Committee at 5:00 pm on 30th October 2012.

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Photo of Mark Durkan Mark Durkan Shadow SDLP Spokesperson (International Development), Shadow SDLP Spokesperson (Work and Pensions), Shadow SDLP Spokesperson (Foreign and Commonwealth Affairs), Shadow SDLP Spokesperson (Home Affairs), Shadow SDLP Spokesperson (Justice), Shadow SDLP Spokesperson (Treasury) 5:00 pm, 30th October 2012

I thank the Minister for his complimentary observations. I have indicated that I do not regard the new clause as complete and perfectly formed, even for the purposes for which I am offering it, so I will of course withdraw it. I said earlier that I would not want hon. Members to vote against the spirit of something that many would probably like to see at some point.

The new clause would allow HMRC to stipulate the verification it needs, and essentially to draw up the scheme. It would answer our many questions about the practicality of the scheme and the associated regulations and guidance. If the Minister can resort to similar measures to deal with some of the vexed questions he has faced, I would like to do the same thing.

New clause 3 would allow HMRC to sift through the details it considered necessary. It could determine the definition of recently established charities and devise an eligibility test. I gave examples of recently established charities that often use people who are in local government as part of their set-up and assurance. HMRC would be able to decide how to satisfy itself of the bona fides of a charity; it would not simply have to take the charity’s word for it. HMRC could ensure that the verification arrangements were sufficiently testing to safeguard against possible abuse.

I am not saying that the scheme should be drawn up lightly or frivolously. HMRC must be satisfied that it will not be making payments to people who will not use them for the due purposes. New clause 3 does not offer an easy get-around, but it is an attempt to offer charities a genuine route to a benefit that many of them expected to get. The consultation exercise showed that many charities were disappointed because the Bill was not what they expected it to be. When the Government first announced the legislation, Members from all parts of the House welcomed it as a good idea and thought that  it would really help small charities, because it would not rely on the red tape of gift aid. It was going to offer something beyond that, but, lo and behold, that is now what we have.

The Chancellor announced a worthy measure and a good initiative, but it is as though there is some sort of strange predictive text programme in the Treasury that takes a good idea and turns it into the gobbledegook that we see in certain aspects of the Bill, which pre-empt all sorts of possible wheezes and abuses that people might get up to. As far as the primary scheme in the Bill is concerned, I understand why the Minister has been wedded to such measures. I believe, however, that there should be a secondary scheme in the same spirit, under which HMRC can satisfy itself of the bona fides of a charity and the people who run it.

I do not accept everything that the Minister has said in opposition to new clause 3, although I could have offered some practical criticisms of it and the wrinkles it might create. I hope this debate shows that many of us in Parliament want to keep alive the option of admitting more charities to the scheme, and that we are not content to leave it at that, just because some of the Churches are content with their treatment. More should be offered to other charities, and I hope that after the oft-promised review, at least, an idea such as this will be allowed to grow legs. With that, I beg to ask leave to withdraw the motion.