David Cameron finds himself in the midst of a blue-on-blue barney over
the charity tax, which has prompted rumours that ministers may dilute the current proposals by adopting an American-style legacy deal. Tory party treasurer Lord Fink has said that the proposed changes
would ‘put people off giving’, and some boisterous Conservative MPs are openly challenging the leadership. Zac Goldsmith has penned a diatribe in the Mail on Sunday in which he says:
‘I am ashamed that a Conservative Chancellor has not only announced measures that will undoubtedly depress giving in this country; he has spun a narrative in which philanthropists are now the
enemy.’
Meanwhile, David Davis told the Andrew Marr Show that the tax was an ‘unforced error’ that was an ‘assault on the Big Society’. Yet again, the government looks thoroughly
disorganised as the Budget continues to unravel.
The government, in the form of William Hague on Sky, is holding the line for the moment. He argued that the proposals are designed to curtail tax avoidance by a small number of people who donate to organisations which are based abroad, and which ‘you or I do not consider to be a charity’. That suggests that this issue could be defused by the Charities Commission, but Iain Martin explains that is not as simple as that: European Law prohibits making a distinction between British and European charities.
There is a further consideration: if the government, or one of its agencies, decides which causes are legitimate, it might impede aid efforts that are not politically preferable. This already happens with the (expanding) international development budget. People who have worked on or funded projects in developing countries like Zambia, Angola and Namibia, routinely complain that state support is limited because those countries are not primary British foreign policy concerns, which is a polite way of saying that there is no jihadist threat, yet. And, if these proposals go through, the damage to already hard-pressed British universities does not bare thinking about.
Labour, cognisant of the complexity of this issue and the feeling that it has engendered, has played a careful hand this morning. Shadow Treasury Secretary Rachel Reeves appeared on Sky earlier and she said that philanthropy is vital. She added that tax relief which benefit charities is not the same thing as tax avoidance; rather, ‘it is doing something good’. For months now, Labour has been worried by David Cameron’s Big Society rhetoric, convinced that voluntarism and community is its territory. This latest ‘unforced error’ has presented Miliband with the perfect opportunity to reclaim that ground.
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