Small Charitable Donations Bill

Chris White Excerpts

Tuesday 4th September 2012 Commons Chamber

[Chris White (Warwick and Leamington) (Con)]

I am pleased to follow the hon. Member for Banff and Buchan (Dr Whiteford), because of what she said and the many excellent points she made.

Let me begin by congratulating the Government on introducing the Bill and the measures in it that will help our small charities. Like many hon. Members, I spend a lot of time visiting some of the fantastic local community organisations in my constituency. Most are small, with only a handful of people working and volunteering in them, but they make a big difference, and I am always impressed by their passion and dedication. However, these are difficult economic times, and it is the smallest charities—organisations that rely on perhaps a few thousand pounds in donations and grants each year—that are coming under the greatest pressure, yet they make up the backbone of our civil society. They generate hundreds of thousands of volunteering hours every year, and are often set up to champion local issues and causes that might not be considered by the Government or the big charities. I am thinking particularly of local community facilities and local environmental charities.

Despite the fact that more than half of all voluntary organisations are micro in size—that is, with less than £10,000 income—they receive only 0.6% of the total income of the voluntary sector. There are 474 major organisations—those with an income of more than £10 million—that take in nearly half of all voluntary sector income: about £17 billion in 2009-10. In contrast, 87,683 micro voluntary organisations shared just under £240 million. So, when the Chancellor announced last year that he was going to make gift aid easier for small charities to claim, thousands of organisations across the country were delighted with the news.

It is often difficult for charities to get gift aid declarations for small cash donations, and a top-up payment scheme will provide a real incentive to smaller charities to get out there and seek new ways of raising funds. The British public are incredibly generous. I know that at first hand, as I am proud to say that Leamington was named the most generous town in the UK by Oxfam last year. In 2009-10, charities made nearly £8 billion in individual donations, including gift aid and membership subscriptions. That is equivalent to about 0.5% of our gross domestic product.

The intentions behind the Bill are to be applauded, but there remain a number of concerns about the details, and I hope that the Government will pay close attention to the submissions that have been made by the Charity Finance Group and the National Council for Voluntary Organisations. I know that the details will be dealt with in Committee and on Report, but I would like to touch on just a few of the Bill’s provisions.

First, concern has been expressed about eligibility. Charities will have to have claimed gift aid for three years before they can take advantage of the scheme. That is a long time for many smaller organisations to wait, and if we are going to encourage smaller charities to get on board, we need to reduce that time or at least create a probationary period so that the Bill can make an impact in the shorter term.

Secondly, there is concern about the matching principle. I understand that the Treasury wishes to target the scheme, and to link the amount of gift aid that can be claimed to the amount that charities have already claimed in a year, but that provision will disadvantage many of the smaller charities that we are trying to help. A 2:1 matching principle will benefit only those charities that are already good at claiming gift aid. It will not encourage those that do not have the necessary resources to do so. I hope that the Government will consider scrapping that provision, so that we can encourage as many small voluntary organisations as possible to take part in the scheme.

Thirdly, there are concerns about the community building rules. I appreciate that the Government are keen to ensure that charities do not abuse the scheme by splitting into smaller organisations, and to ensure that independent local groups that are part of small charities are not excluded from the scheme. However, the rules might have unintended consequences. For example, they could disadvantage charities such as support groups that work with vulnerable people.

I am confident that those details can be ironed out, and that if all parties work together in a constructive, non-partisan manner, we will get the legislation on to the statute book in a form that prevents abuse and ensures that benefits are targeted at those organisations that need them most. Time is of the essence, however, and we should not make the voluntary sector wait too long for the scheme to come into effect. I hope that all parties will therefore ensure that the Bill gets a speedy passage through this House and the other place while also ensuring that its provisions receive proper scrutiny.

The Bill could make all the difference for small charities up and down the country, so I have no hesitation in giving its Second Reading my full support. I look forward to discussing it in more detail when it comes back to the House, and showing that, despite the challenges our country faces, we still appreciate and support the invaluable work that these organisations do.