The torrent of outrage that greeted the Chancellor’s decision to cap the tax relief on charitable donations appears to have frightened David Cameron into an embarrassing U-turn. Back-pedalling furiously, the Prime Minister has promised to listen “very sympathetically” to concerns.
Not everyone will feel sympathetic. There are some dodgy charities spending obscene amounts on overheads, administration and CEO salaries. You could argue (and many do) that some of them care more about their balance sheets than their beneficiaries. No doubt there are even a few that have been created purely as a smoke-screen for tax avoidance. Some wealthy people are less scrupulous than others and are not averse to cheating the taxman through what has become known as “pseudo-philanthropy”, donating, in some cases, to foreign charities that are subject to lax regulation.
The government should address the specific problems (i.e. the existence of spurious charities) and guard against throwing out the proverbial baby with the bath water. It’s important that philanthropy is valued and supported and not just dismissed as tax avoidance. Marcelle Speller, an internet entrepreneur and founder of the charity website Localgiving.com, made this point to BBC Radio 4’s Today programme. “I’m still very passionate about what I do with Local Giving,” she said. “I’ve put four years of my life and £2m into it so far, and I won’t stop doing it. But it’s rather galling to feel that the last four years and that money has now been seen as a tax dodge. It doesn’t give me a very good feeling.”
Those who are successful in business and acquire wealth in excess of their needs should be allowed at least some autonomy in the disposal of the balance. For George Osborne to confiscate more and more of it flies in the face of the government’s own aspirations for a “Big Society”.
So what were Cameron and Osborne thinking in the first place? This is just one in a series of episodes suggesting that the Tory contingent of the cabinet has completely abandoned party principles. Incredibly, one such episode involved a plan to keep a log of everyone’s emails. Is the Big Society mutating into Dave’s Society?
It could be that David Cameron feels bound to indulge a few LibDem whims as the price he must pay for forming a coalition government. Given the unpopularity of Conservatives when New Labour trounced them in 1997, he may also feel obliged to follow focus groups and the vagaries of public opinion. It would be nice if he could just have the courage of his convictions occasionally. It may be wise to listen to the charity sector on this occasion, but it isn’t always good to listen.