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Charitable Giving

Volume 173: debated on Thursday 7 June 1990

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To ask the Chancellor of the Exchequer what is the estimated cost to the Exchequer of his proposals to assist charitable giving.

Will my hon. Friend confirm that charitable giving has doubled in the past 10 years and say how much the cost of tax relief has increased over that period?

My hon. Friend is right that the amount of charitable giving in Britain has more than doubled in real terms during the past decade. Tax relief has risen in real terms by 120 per cent. and has been a major stimulus in that welcome increase.

Is it true that the Adam Smith Institute, a right-wing think tank and the keeper of the sacred flame of Thatcherism, benefits under the legislation governing charities? Is it fair that it can call itself a charity? Is not that an abuse of charity law and should not the law be changed?

I can neither confirm nor deny the hon. Gentleman's point. Of course, he could look it up in the public records. However, I have been lobbied in the past on behalf of the Fabian Society for alleviation of inheritance tax. Apparently it receives a large proportion of its moneys from inheritances from deceased members.

What does my hon. Friend think would be the effect on charitable giving if the 171 promises for increased spending in "Meet the Challenge, Make the Change" were implemented, estimated by Phillips and Drew at £19·5 billion?

My hon. Friend makes a good point. Undoubtedly, the increase in charitable giving was due not only to the physical incentives that we gave but to the fact that people have more money in their pockets because taxes are lower. They are able and willing to give more. If that were not the case charitable giving would decrease, as it would under the heavy and increased burden of tax which the Labour party would impose.

Although I welcome the increase in charitable giving, does the Minister agree that many charities are disappointed that more citizens and taxpayers have not used the give-as-you-earn scheme?

I confirm that there is considerable scope for improvement in the use of the scheme that we have introduced. However, last year the number of donors through the payroll giving scheme increased by 50 per cent. and the amounts given increased by 100 per cent. I pay tribute to the level of giving of all kinds in the hon. Gentleman's Province. Although the Province has the lowest income, it has the highest level of giving per head and is an example to the rest of the United Kingdom.

Why is not inheritance tax paid in respect of donations to political parties? What justification can there be for that?

Because the decision was taken, alongside other changes in inheritance tax, by the Committee that considered the Finance Bill last year, without a great deal of dissent.