Small Charitable Donations and Childcare Payments Bill — House of Lords, 2016-12-12
Topic: Social Welfare
Robert Stevenson (Labour, Centre-left): My Lords, I declare an interest as a trustee of two small charities, neither of which I think benefit from gift aid or the SDS. I thank the Minister for introducing the Bill and all the speakers. Like others who have spoken, we broadly support the Bill and want to move it through as quickly as we can within the circumstances of this money Bill arrangement The Bill is aimed at simplifying the small donation scheme so that it benefits the greatest number of charities and increases access for smaller and newer charities. However, I feel that the Bill as drafted will not meet that objective, and I do not think that the Government have been listening to the small charities which have been complaining about the current scheme, because they have certainly been talking to us, and they do not tell the same story We all agree that smaller charities are facing significant financial and capacity challenges, which makes schemes such as the SDS, which support development of new income sources, all the more important. As the noble Lord, Lord Shinkwin, said, these charities face the greatest challenges accessing the scheme due to its restrictive requirements. In support of that view, we have been told that uptake is much lower than forecast, with only a quarter of the 80,000 charities that the Government forecast would be using the scheme by now actually using it. Surely we all want to make that change for the benefit of smaller charities. However, as we have been reminded, this is a money Bill, so there is nothing further we can do about it in this House. We can rant and rage, but it will not have much effect on the words in the Bill. That is a pity, because there are clear ways in which the scheme could be reformed further to improve its accessibility. I suggest that the Minister and his officials take careful note of these points, and we hope that there will be opportunities to address them in later Finance Bills, either piecemeal or as a whole, because I think they will make a difference The main evidence that we have received seems to be about changing the matching requirement. All noble Lords who have spoken have mentioned that the matching requirement requires charities to make a certain volume of gift aid claims through the traditional system in order to access the SDS. In practice, this is £1 of gift aid for £10 via the donation scheme. A priori, it is more difficult for small charities to comply with this, as in their earlier years they often raise small amounts of gift aid or lack the capacity, as they are operating with volunteer staff, to process the gift aid donations. The suggestion by the noble Lord, Lord Hodgson, of a fixed annual amount has some merit, and I would support that, if it were brought forward When the Minister introduced the Bill, he said it was vital that schemes such as the SDS have appropriate and effective measures in place to prevent fraud and ensure that taxpayers’ money is well spent. Obviously that is true. However, in order to use the SDS, charities have to register not only with the Charity Commission, their own effective and efficient regulator, but with HMRC, under the normal gift aid scheme. Like the noble Baroness, Lady Barker, I am sceptical about whether there is really any evidence to demonstrate the extent to which the matching requirement is a necessary mechanism to prevent fraud and error, how effective it is and whether the matching ratio of one to 10 is necessary to stop fraud. I would be grateful for any evidence that could be provided, perhaps by letter The Government have stated that the small proportion of organisations affected by the matching rule means it does not need to be changed. Surely this is disingenuous. It is also ironic: because the claims from the groups concerned are small, organisations affected by the rule are more likely to be the smaller organisations that the Government wish to help with the scheme I have two further points. We do not believe that restricting the scheme to cash or contactless payments does enough to help charities or encourages them to use gift aid. The noble Lord, Lord Hodgson, made some points about that, and I agree with him. The Government could significantly expand the support available to small charities by expanding the types of donations used in the scheme and ensuring that charities which rely on texts, cheques or one-off online donations are not penalised. Will the Minister give consideration to that Finally, despite the community buildings requirement, local civic groups—the scouts and girl guides have been mentioned—are restricted in their ability to use the main SDS allowance as it is currently designed, as they are treated as being one organisation, so they can have only one joint claim for gift aid. This is despite these groups having to fundraise for their own activities locally, and often not being financially dependent on each other. We recommend that HMRC end this interpretation when it can be demonstrated that local groups not only raise their own funds but are not financially dependent on each other. Again, will the Minister agree to take this idea back Having said that, we support the Bill, including its formulations about childcare, and we wish it well.