Charities (Donations)

Richard Fuller Excerpts

Tuesday 8th January 2013 Westminster Hall

[The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)]

I thank the hon. Member for Glasgow North West (John Robertson) for a thoughtful, wide-ranging speech, and I welcome the additional comments provided by the hon. Member for Paisley and Renfrewshire North (Jim Sheridan). I venture to guess that my hon. Friend the Member for Warwick and Leamington (Chris White) was going to mention his valuable work on introducing the Public Services (Social Value) Act 2012, which I congratulate him on as well.

I turn to the comments made and the issues raised by the hon. Member for Glasgow North West in the debate today. I agree that charities play an important role in our society, and I take this opportunity to extend my thanks to the charitable organisations in this country that work so hard, and to those who work in them. They will be glad to see us taking these issues seriously in the House, and I know that there is much more that we must do.

I start with a general point that the hon. Gentleman will be well aware of. Matters pertaining to donations to charities in Scotland are, of course, devolved matters. He is nodding, and he will know as well as I do that it is for the Scottish Government to comment on those matters. Perhaps they have a clear idea of what they wish to do in the long term in Scotland about such things, but he and I can take that into a different debate any time that he wishes.

I turn to the broad issue of current donations and the health of the sector, which was raised in the hon. Gentleman’s speech and in reports a short while ago. Much has been said about the health of the sector generally, and I add that the picture is very mixed. Clear trends are not easy to discern at this stage. The evidence of recent reports from the Charities Aid Foundation suggests that charitable donations are down, while other evidence, such as the Taking Part survey commissioned by the Department for Culture, Media and Sport, finds that there is a slight increase in the proportion of people giving to charity. Similarly, the overall effect on the health of the charitable sector is unclear.

There are, however, grounds for optimism. Some reports suggest that the total income of registered charities has grown from £52 billion in 2009 to almost £59 billion now and that there are 2,000 more registered charities now than in 2009. Those figures are to be welcomed and cast an interesting light on the debate that we are having here today. What appears clear is that no one can say for certain whether donations are decreasing and certainly not at what rate. There is some debate in the sector about whether a decrease is what charities are experiencing on the ground.

We will need to wait and see if there is a clear trend in donations, but regardless of what trends emerge, it is also true that life goes on. We need to acknowledge that it is a challenging environment for charities and, clearly, for the people they serve. We should all make every effort to help the sector to raise money efficiently and effectively to meet the challenges, and that is exactly what we are doing. If the hon. Gentleman will allow me, I will go on to deal with a couple of ways in which the Government are seeking to play their part.

The hon. Gentleman referred to face-to-face fundraising, often referred to as chugging. That is certainly seen regularly in Norwich. Indeed, only recently I was corresponding with a constituent on exactly that matter. It is an important and successful method of fundraising, which can bring millions of pounds into the charitable sector every year, but I welcome the announcement in November by the Public Fundraising Regulatory Association and the Local Government Association of an agreed template for voluntary site management agreements as a way for local authorities to control chugging in their areas. I think that more than 50 site agreements are in place, with more being negotiated.

Much more is being done by this Government to support the sector, including by supporting a culture of giving both money and time—an important area of debate—by opening up new sources of income and finance through social investment or delivering public services where organisations decide that that is right for them and by providing wider support for the sector, thereby making it easier to set up and run a charity or social enterprise. All those actions support the health of the sector, either through increasing access to income of various kinds or through reducing costs and burdens, so that that income goes further.

The debate has focused on charitable donations, and perhaps the biggest help that the Government give to the sector is gift aid, which the hon. Gentleman went through in some detail. He will know that it is a matter for the Treasury. Although I used to be that Minister, I would not dream of going on to such territory here today, but he did mention his pride in chairing the debates in Committee on the gift aid small donations scheme, and I was the Minister responsible for much of the work on that and was deeply proud to be so, because it is a very good avenue of further help—up to £100 million a year, we hope—for the sector. I shall say more on that in a second.

I want first to deal with the administration of gift aid and ways in which traditional gift aid can be made better for the sector. My right hon. Friend the Chancellor of the Exchequer announced in the autumn statement that an examination would be carried out to identify ways to improve the administration of gift aid to reflect new ways of giving money to charity and, in particular, digital giving, to which the hon. Gentleman referred.

[Richard Fuller (Bedford) (Con)]

rose—

[John Robertson]

I accept what the Minister is saying. I have no doubt that she is right and I think that gift aid is a good idea. The problem is that the small and medium-sized charities seem to be suffering the most, and they do not seem to have the access to gift aid that the larger charities have.

[Miss Smith]

I shall be very happy to answer that, but first I shall take the other intervention.

[Richard Fuller]

On a similar note to what has been said by the hon. Member for Glasgow North West (John Robertson), rather than looking to reform gift aid, would my hon. Friend the Minister consider scrapping gift aid entirely and putting in place a system whereby people can make direct deductions from their taxation? If we want to create a culture of giving, nothing is better than letting people write a cheque to a charity. That is one way in which smaller charities would benefit, rather than having to go through the more cumbersome process of gift aid.

[Miss Smith]

My hon. Friend makes a fascinating point, and I am always very interested to hear his ideas, some of which I have time to debate at length with him in this Chamber. I shall ensure that that idea goes where it can be well considered.

In answer to the point made by the hon. Member for Glasgow North West, the instigator of the debate, I think that the most important way to help smaller charities is to reduce the costs and burdens associated with what the state can provide to charities. That includes what we did in Budget 2011, which made it clear that we intend to make it easier for charities to claim gift aid by introducing a new IT system that will allow charities to claim gift aid online and through, as I mentioned, the gift aid small donations scheme, which will allow charities of all shapes and sizes—we hope that it will be of particular benefit to small local charities—to claim top-up payments equivalent to gift aid on small cash donations of up to £5,000 a year, without the need to have gift aid declarations from donors. That scheme should commence in April of this year, and as I mentioned, it is expected that it will increase the amounts received by charities by about £100 million a year. It is my sincere hope that it will be put to very good use by smaller charities as well as others.