Fraser Nelson Fraser Nelson

Tax versus philanthropy 

I was on the panel of Any Questions last night in Saltaire, the most beautiful town I’ve seen outside of the Highlands. Jonathan Dimbleby always warms everyone up with a test question, which lets the panelists make their mistakes early. The first question was this: the town of Saltaire was founded by a philanthropist, Sir Titus Salt. What can be done to make today’s rich pay their fair share?

Lucky for me that it was not recorded, because I went on for ages. Sir Titus was living in an era before the welfare state, where welfare was provided voluntarily, by people in the community. Had he been alive today, the government would be confiscating 52 per cent of what he earned – thanks to George Osborne’s recently increased tax. Would he be inclined to give so much? Or would he conclude that it was the government’s job to pay for the poor, and that he had paid richly to do so?

More government means less community. The horizontal ties, which bind people to each other, have slowly been replaced with vertical ties, which seek to bind individuals to the state. Society is weakened by this, because the government does a very bad job. And high taxes undermine philanthropic intention, and community action. The sheet vanity of politicians blinds them to the destructive effect of their interventions. Sir Titus built beautiful stone houses for his mill workers (where there was, until five years ago, not even a pub). The government shovels the poor in high-rise welfare ghettoes riddled with crime and drug abuse. The result is this very British phenomenon: expensive poverty.

In my more optimistic moments, I would say that David Cameron understands all this. The “Big Society” agenda is explicitly aimed at replacing bad government-run programmes with effective community-based action. Cameron sounds as if he seeks to nurture and repair these horizontal ties, making our society – and, ergo, our nation – stronger as a result.

But then comes my other iron rule in politics: judge politicians by what they do, not what they say. Let’s look at another area where Britain is a world leader: global philanthropy. The average Brit gives more in overseas aid than anyone else in the world save for those famously generous Americans. It’s a proud tradition that goes back generations: we have always cared about the welfare of people whom we shall never know, in far-flung corners of the world. As we say in Scotland, we’re all Jock Tamson’s bairns. These are, if you like, globally horizontal ties. The Big, Global Society (BGS). And in Britain, I’m proud to say we specialize in them.

But the Big Global Society is now under threat: from David Cameron’s government. He is about to increase tax, in the process of doubling the international aid budget, a levy averaging £500 per household – taken by the taxman, on pain of imprisonment, and given to a charity of the Prime Minister’s choice. They may be good charities: last week we had GAVI, the immunization fund. Or they may be charities pursuing unwise causes: DfID’s number one destination country is India, which has its own space, nuclear and international aid programmes. Britain may disagree with how the Indian government allocates its budget, but we surrendered the right to influence this in 1947.

A poll last week by YouGov showed what I always suspected: that a quarter of Brits say they are less likely to give money to overseas charities as a result. The end result could very well be that Britain, as a country, gives less to overseas aid because the halo-seeking politicians sought to muscle in and do themselves what people have been doing as communities for ages. It is the very opposite of the Big Society message that David Cameron claims to believe in.

I doubt the Prime Minister has looked at British overseas donations and thought ‘that’s not enough’. In fact, I doubt that he has ever been given the figures on our world-class private donations, or worked out that Britain – as a country – already gives 0.7 per cent of GNI.

Government won’t tell him this, because government is institutionally blind to individual philanthropy. It vainly wants to do all the social stuff itself. Cameron himself has spoken about what “Britain” gives in overseas aid when he refers only to how much tax money his government gives. As a great politician once said, there is such a thing as society. It’s just not the same thing as the state.

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