Keir Starmer has said the government is considering how it can support charities facing financial challenges, including potential changes to business rates.
However, the prime minister once again ruled out an outright exemption for charities from a recently introduced rise in employer national insurance contributions (NICs), estimated to cost the sector £1.4bn a year.
Starmer was speaking at a Liaison Committee hearing on Monday, in which the culture select committee chair Caroline Dinenage asked what his government would do to support charities facing increased overheads and demand for their services as well as declining donations.
In response, Starmer said: “It is important. I think over half of charities have been exempted from the national insurance rises. We are looking at what we can do on business rates etc for charities and to put in the support that they need.”
Currently, charities are granted a mandatory 80% relief from business rates on properties mainly used for charitable purposes.
Starmer did not say what further support the government was considering. Civil Society has asked the Treasury for clarification.
No ‘blanket carve-out’ for charities
Dinenage suggested it was time for “blanket carve-out” for charities from the NICs rise, introduced in April this year, to which Starmer responded: “No, I don’t think it is.”
Starmer said the Civil Society Covenant, published last week, was “very well received and was an example, to my mind, of the sort of partnership working that we are going to have to have in this country if we are to bring about the change that we need to bring”.
When Dinenage accused Starmer of “attempting to break our charities”, he repeated Labour’s claim that the NICs rise was introduced due to a “missing” £22bn from the UK’s public finances.
“We addressed that in the budget and at the same time we used the money from that NICs increase to invest hugely in our NHS,” he added.
“We promised two million extra appointments in the first year of a Labour government. We have done 4.5 million. That takes the pressure off many, many charities.”
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