The Government have been in constant dialogue with the third sector about the impact of the downturn. We will shortly publish an assessment of the effects on the third sector and the action that the Government will soon take to support the sector through the downturn. I can confirm that the package announced by my noble Friend Lord Mandelson will be open to third sector businesses.
The voluntary sector already employs 1.5 million people, and it has the potential to create many more part-time, full-time and voluntary jobs. Will the Minister say why the voluntary sector was not represented at the jobs summit on Monday, and why the Government are ignoring its important potential to create new employment in the downturn?
The House should be clear that the third sector enters this downturn with unprecedented strength because the Government have doubled public income to the sector, taking it from about £5 billion to about £11 billion today. Tax relief alone is now worth £3 billion. In all my conversations on the National Economic Council and elsewhere, I have ensured that third sector interests are represented. That is why the package announced by Lord Mandelson today is open to third sector businesses. In this debate, it is important that we talk about investing in the third sector, rather than cutting. I, for one, was unhappy to see proposals from the right hon. Member for Witney (Mr. Cameron), who says that he wants to cut 1 per cent. from the Cabinet Office budget—
Order. We will hear from the right hon. Member for Witney later. I call Jeff Ennis.
Does the Minister agree that the establishment in Yorkshire last year of the Charity Bank in the North, funded by Yorkshire Forward, is one of the many practical examples of what the Government are doing to sustain charities in this difficult economic downturn?
My hon. Friend is absolutely right: the pre-Budget report confirmed spending totalling nearly £500 million—on top of the £11 billion or so that now goes into the sector—over the next couple of years to help third sector organisations, which are on the front line in helping many communities through the downturn. My hon. Friend will want to know that if we cut £100 million from that budget, we would be cancelling grants for more than 2,000 small local charities, and about 400,000 volunteering opportunities. That is why we will not propose that course of action.
Given the economic downturn and its impact, what steps can the Government take to make people even more aware of the generous tax breaks that are available on donations to charities, which in turn may enable charities to employ people to do even better the work that they do so well?
The hon. Gentleman is right to say that tax breaks are now a vital part of the income of third sector organisations. We are very proud of the fact that gift aid has increased from £385 million a year to almost £900 million a year. The pre-Budget report that my right hon. Friend the Chancellor published last year set out a range of new measures that we will investigate to ensure that tax reform in future years helps the third sector in the way that it could. We will continue at every opportunity to promote to individuals the benefits of gift aid because it is now such an important part of third sector income.
The George Thomas hospice in my constituency—a charity named after one of your predecessors, Mr. Speaker— reports to me that in the downturn individual donations have dropped and corporate giving has been slightly reined in, but that charity shops have increased their income. Does my right hon. Friend believe that that pattern is being repeated across the country?
My hon. Friend raises an important point. The third sector is experiencing different effects and we will take into account the different views when the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Cardiff, West (Kevin Brennan), publishes our third sector action plan. We are grateful for about 80 detailed and helpful representations from the sector, and we will reflect on that advice before we publish our action plan in the coming weeks.
Will the Minister stop wittering on about the third sector? May we talk about the voluntary sector? Does he recognise that gift aid will go down for many reasons, not least the fact that the 28p is to be reduced to 25p?
Quite significant arrangements were in place to help make sure that transitional benefits were in place to protect gift aid contributions to the third sector, the voluntary sector and the charitable sector over the period in which different tax rates come into effect. On nomenclature, I will constantly seek to profit from the hon. Gentleman’s advice.
Many charities, including Rainbows hospice in my constituency, have reported similar patterns of reduced corporate and personal giving while the income from charity shops has increased. At this crucial time, it is important that Departments in particular play their full role, with respect not just to hospices—I hope my right hon. Friend will make the case that they should be properly funded by the NHS—but to community and amateur sports clubs, on which some Government policies are having an impact, particularly water charges in some parts of the country. Will my right hon. Friend ensure that bureaucracy and added burdens on community groups in constituencies such as mine and those elsewhere across the country are reduced as quickly as possible?
My hon. Friend underlines the fact that now is the time for sustained investment in the third sector. Different parts of the third sector, the voluntary sector and the charitable sector are experiencing different pressures every day. Many are experiencing an increase in requests for services, and others are confronting challenges in new patterns of voluntary giving. It is surely right to continue to invest in the third sector, the voluntary sector and the charitable sector so that they help us come through the downturn faster and stronger. That is why we will not seek to cut 1 per cent. from the Cabinet Office budget over the next couple of years, as that would weaken the sector, not strengthen it.
Further to the excellent question from my hon. Friend the Member for Upminster (Angela Watkinson), which reminded the House of the potential of the voluntary sector to create desperately needed jobs, may I press the Minister to be more explicit about when the long-awaited action plan will be published? Will he confirm that it will contain new investment, new resources and new money for the sector, rather than the repackaging of existing initiatives?
Let me be clear about what the action plan will not contain. It will not contain any proposals to cut 1 per cent. from the third sector budget in the Cabinet Office. Let me remind the House that that would mean cancelling grants to more than 2,000 small local charities across the country and cancelling about 400,000 volunteering opportunities. When the third sector action plan is published, it will contain proposals to strengthen charities, voluntary organisations and third sector organisations because they are on the front line in helping many people and many communities get through the downturn in good shape.