Backlash on charitable giving latest sign Budget was not thought through
Posted on 11 April 2012 | 8:04am
It was on April 1 (apologies for inability to cut and paste links on the iPad but nobody has taught me yet!) that I suggested we should ‘watch out for a backlash on charitable and philanthropic giving.’ At the time, the debate was focusing on pasties and the so-called granny tax, but it was a member of the government team who alerted me to what he believed could become an even bigger post-Budget problem for the Chancellor and the PM.
We are back to the recurring theme of crashing strategies when there is lack of clarity about what the big overarching strategy may be. The Big Society is one of the themes with which Mr Cameron in particular is most associated, and in so far as people know what it means, I think most have assumed one of its principles is the encouragement of charitable and philanthropic giving. Indeed, this has also been emphasised by ministers responsible for education, sport and the arts.
But George Osborne has one over-riding goal, and that is the rescue of his thus far failing plan to sort the deficit over a single Parliament (without a strategy for growth and jobs). So he was looking far and wide for plans that would save the Treasury the money needed to fund his tax cut for the richest people in Britain.
There was something very odd about his feigned shock yesterday at the extent of tax avoidance, given that his main argument for getting rid of the top rate of 50p was that so many of those liable to pay it shifted their earnings into the previous year (just as they will now shift them to next year, having virtually been invited by Osborne so to do.)
It says something about the extent to which he is trapped by the Thatcherite prism of politics that he assumed if he gave a tax cut to people at the top, they would welcome it, and the welcome would be shared by those who aspire to being top rate taxpayers.
But here he found himself crashing into the ‘all in this together’ strategy. It was the moment that one hit the buffers.
Still they dig on … The impression now being given is that people who give huge sums to good causes are a bunch of spivs concerned only with dodging tax. No doubt some do fall into that category. But many do not.
Charities are finding times hard enough at the moment what with government cuts, a squeeze on most people’s living standards, and something of a return to the values of the 80s. But if now to be added to that is a fall in the really big donations, the situation will get a lot worse, and Mr Osborne should not be surprised if he pays something of a political price for that. What seems remarkable is that he doesn’t seem to have seen it coming.