Banking

Jason McCartney Excerpts

Wednesday 9th February 2011 Commons Chamber

[Mr Osborne]

I thank the hon. Gentleman for the support he has given to important parts of this package. I understand how important the banking industry is to Scotland, where many thousands of people are employed in it, and the impact that the failure of RBS and HBOS had in Scotland. On his specific point about bonuses, the new code of practice that came in last month forces all banks to pay a much greater proportion of their bonuses in shares and in deferred packages. Of course, none of this existed when Labour was regulating the City. As I have said, I would urge the banks to show restraint and reflect the fact that they are operating in a society with economic challenges brought about by the deepest recession and the biggest banking crisis of our lifetimes.

[Jason McCartney (Colne Valley) (Con)]

Let me tell the hon. Member for Bolsover (Mr Skinner) that my constituents and I can only dream of living in the £1.6 million house that his party leader lives in.

I welcome the Chancellor’s statement on lending to small businesses and curbing banking bonuses. However, with Lloyds TSB closing its last remaining branch in Meltham and Barclays closing its branch in Milnsbridge, when he next meets the banking bosses will he please stress the importance of community banking and the fact that not all constituents have access to internet banking?

[Mr Osborne]

When I next talk to the banking chiefs, I will certainly communicate to them, or my office will do so, the specific issues that my hon. Friend raises about the two banks in his constituency. One of the challenges we have at the moment is that RBS and Lloyds are trying to de-lever because of the enormous mess they got into under the previous Government. More generally, he makes a very good point about the importance of community banking. The four banks that have reached this settlement today are committed to extending that and thereby, to a degree, rolling back what happened in recent years. There are also those who want to enter the banking sector. Of course, they have to comply with the FSA requirements, but I know that some of them are offering a return to the kind of community banking that he talked about.

VAT (Charities)

Jason McCartney Excerpts

Tuesday 19th October 2010 Commons Chamber

[Ian Lucas]

Certainly. We want to encourage volunteers in our society. They contribute hugely to community spirit, but it must be demoralising for them to have the hard-earned funds that they have raised taken away from them.

The issue is one that the Government should try to confront and deal with. It has been dealt with in particular circumstances in the past; for example, it was recognised by the last Labour Government, in their listed places of worship grant scheme. This paid the equivalent of the VAT expended on repair projects for listed places of worship back to those organisations. I have received representations from the Church in Wales asking the Government to extend that scheme beyond its end date of March 2011. Will the Government commit to pay charities generally the extra VAT that they obtain from those charities as a consequence of their own decision to increase the level of VAT? If the Government do not do so, that will diminish the capacity of charities to carry out their work.

[Jason McCartney (Colne Valley) (Con)]

I congratulate the hon. Gentleman on securing this Adjournment debate. I wrote to the Minister recently about the Yorkshire air ambulance service, which receives no direct Government funding but needs £7,200 a day to keep both its air ambulances in the air. It currently has no exemption from paying VAT on the aviation fuel that it uses, but another charity, the Royal National Lifeboat Institution, is exempt from such charges on the fuel it buys for its lifeboats. Does the hon. Gentleman agree that this is yet another example of the inequality surrounding the payment of VAT by charities?

[Ian Lucas]

Indeed. I am sure that all Members of Parliament are aware of charities in our constituencies that work extremely hard to provide services that we all value. The hon. Gentleman has just ably demonstrated yet another contradiction that I cannot understand. The Government really need to address this issue as broadly as possible. If they do not do so, it will diminish the capacity of charities to carry out that valuable work in our communities.

I assume that this situation is directly contrary to the Prime Minister’s intentions. If the big society is to be anything more than a vacuous soundbite, its proponents should be extending the capacity of charities rather than reducing it. We need to discuss this complex issue. Irrecoverable VAT has existed for many years, but charities are now carrying out more work and local authorities are asking them to do more work on their behalf, and the time has come for the Government to assess their role and the tax that they pay, and particularly to examine the burdens that will be imposed by the increase in VAT. They must then take steps to address this anomaly.