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Queen’s Speech

My Lords, after these large constitutional issues, I turn to a series of small legal and administrative issues, which range across rather a wide spectrum of ministerial responsibilities. What links them is that they all affect the churches and, with one obvious exception, the wider charitable sector, with the important contribution that it makes to community health and cohesion. In that context, I declare a non-pecuniary interest as the new chairman of the Churches' Legislation Advisory Service. The first issue is surface water drainage. I warmly welcome the fact that the gracious Speech included reference to the Flood and Water Management Bill. As we noted earlier this afternoon, events in Cumbria over the past few days have underlined how much this measure is needed. I add the tributes of these Benches to all those public services that have worked so hard to respond to the flooding there, and express condolences to the family of PC Bill Barker and others affected by these events. The surface water drainage problem can be solved only by primary legislation, so we hope that it will be a major legislative priority and not allowed to fall by the wayside. However, while the Bill is important, community groups have argued for some time that the recent change, in some areas, in the basis of charging for surface water drainage has borne very harshly on churches, village halls, scout groups, amateur sports clubs and other charitable organisations. The Secretary of State agreed, and during the recent Labour Party conference said, that he would introduce legislation to allow the utility companies to run concessionary schemes for community organisations. This we welcome. Charities and churches are not asking for a free ride, but rather that they should be assessed proportionately to their ability to pay, thus enabling them to continue to go on making their own distinct contribution, not least in times of need. Noble Lords will recall that during the passage of the Planning Act 2008 the Government introduced a framework provision in your Lordships’ House to give exemption from the community infrastructure levy to charities and similar bodies constructing buildings for their own purposes. We have now had a chance to look at the detail in the draft CIL regulations and we are not at all happy about what we see. The voluntary sector as a whole has made numerous responses to the consultation and I do not propose to repeat them here at length. One particular issue, however, that seems to concern officials is whether an exemption would breach the European state aid rules. We simply do not understand why the Government are making such heavy weather of this. The state aid rules apply to undertakings and distortion of intra-EU trade. Very few charities are undertakings and, in any case, very few are involved in trade, still less in trade that puts them in Europe-wide competition. We think that this is a massively overcautious interpretation of the rules. Then I have three linked issues that are primarily for Treasury Ministers. The listed places of worship grant scheme is due to cease at the end of March 2011. At the ECOFIN meeting in March this year, the Government put forward the case for a reduced rate of VAT on repairs to listed places of worship and the construction of memorials, but it was rebuffed. We were subsequently given to understand that at some time in the future the Government would review the current arrangements and decide whether they should be extended. The scheme now has little over a year to run; and if it is to be extended after 2011, the Chancellor will have to start considering the matter in advance of the next Budget and, possibly, the next Finance Bill. I cannot overemphasise how important the scheme is for the churches. Since its inception it has returned some £96 million against the VAT levied on repairs. I have to declare an interest: about 90 per cent of that has gone to the Church of England, but that merely reflects the fact that we care for 85 per cent of all listed places of worship in England. We very much hope that the necessary resources can be found. The decision of English Heritage to close its cathedral grants scheme will increase the financial pressures on the Church of England and the Roman Catholic Church, and the continuation of the listed places of worship grant scheme would provide a welcome degree of relief. Next, I turn to the expectation that the UK Payments Council is going to recommend the phasing out of the cheque clearing system some time after 2018. We all know that cheques are expensive to process, and their use has declined dramatically. Churches and charities encourage people to give by standing order where possible and to sign Gift Aid declarations if they are taxpayers, but, at least unless something acceptable is put in its place, the abolition of the clearing system will potentially make life more complicated for people who cannot get to grips with IT or who live in remote rural areas, and, ultimately, for charities that depend on their donations. There are also those who refuse to use electronic banking or online payment systems because of security concerns, and their view needs to be respected. We have had helpful correspondence with the staff at the Payments Council, and they are certainly aware of the problem, but Ministers need to keep this matter under careful review. If the clearing system is going to be phased out, for some considerable time there will have to be an effective and, above all, simple way of making payments that does not require access to a computer. Finally, Gift Aid is crucial for the entire voluntary sector. The current transitional relief runs out at the end of March 2011. Everyone in the sector is anxious to persuade more donors to Gift-Aid their donations. There has been continuous dialogue between the Treasury, HMRC and the voluntary sector on Gift Aid simplification, but progress is painfully slow, not least because charities have not come to a common view on the reforms that they may wish to see. In the mean time, I gently suggest to Treasury Ministers that they should not be embarrassed about making small, helpful reforms in areas such as the requirements for declarations and reducing the complexity of the audit trail. The fact that there is an argument within the sector about the treatment of higher-rate tax should not obscure the need for incremental simplification to enable charities—these include many voluntary emergency services, which were referred to earlier—to continue to develop the public benefit that is rightly expected of them and, in the words of the noble Baroness, Lady Neville-Jones, to provide opportunities for people to exercise responsibilities alongside their rights.