Finance Bill

The coalition Government are very keen to support charities. At the moment, charity tax reliefs are worth something like £3 billion a year. We are looking to encourage charitable giving. However, the essential problem—I am sorry to have to keep coming back to this central point—is that we have a crisis in the public finances. We know that the measure is unwelcome, and it is regrettable that charities, among other groups, will have to pay more in tax and will not be able to recover all of it. There is not a great deal of flexibility in the VAT system. I have to come back to the point that was rightly made by my hon. Friend the Member for Bristol West (Stephen Williams). Employers' national insurance contributions are also going to hit charities hard. Many small charities in my constituency have raised that particular concern, but the fundamental issue is the state of the public finances and the need to address it. The hon. Member for Wrexham (Ian Lucas) argued that we could increase corporation tax, but I am afraid that that would be short-sighted because it would prevent a strong private sector recovery.