Kramer quizzes E Miliband

8.56.52pm BST (GMT +0100) Sun 11th May 2008

[May 07] Susan Kramer (Cabinet Office; Richmond Park, Liberal Democrat): As the Secretary of State will be aware, many charities will have a hole in their budget when the transitional period is over.

Surely this is the time to look again at the ability to recover VAT on charities. He will know that the EU commissioner has confirmed that member states-although not including Britain-are implementing systems compatible with EU legislation that would allow the whole charge to be reclaimed and recovered.

Edward Miliband (Minister of State, Cabinet Office; Doncaster North, Labour): I understand the hon. Lady's suggestion, because it is a long-running issue for the charitable sector. To be candid, the costs would be significant, running to hundreds of millions of pounds. EU legislation also poses barriers, although I will look into the point that she makes. My feeling, from talking to people in the charitable sector, is that the argument has moved on. People welcome the gift aid reliefs, and they want to build on the system that we improved and have protected through the transitional relief that I have mentioned.