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Finance | Ian Allsop | 4 May 2012

Government incompetence over the tax relief cap gets Ian Allsop very hot under the collar.

I don’t usually get irate. Not even David Cameron gets me properly angry. He irritates, bemuses and frustrates but I find it hard to get really steamed up by him. But he and his chums have certainly ruffled a few charity sector feathers with their recent incomparable governing.

Indeed, by the time this is published the entire government may well have been brought down by carefully considered arguments and controlled fury from civil society leaders.

I met Cameron once. At a charity. I say met him; I passed him and his family at the Natural History Museum. My youngest, who was then almost two, was charging down the corridor and nearly knocked over the then leader of the opposition (without any prompting from me). At least that was how I mentally stored the encounter away for future recounting.

But even then I instinctively knew that this was a tale that would grow in the telling and be interpreted according to how history dictated it best. Did Alex nearly knock him over or was it the other way round?

In my memory I see Dave striding purposefully towards us, a steely glint of malice in his eye, the look of a man who wasn’t going to alter his line but expected everyone else to move according to his wishes. The only benefit I could see of him ever becoming PM at that point was it would at least add a level of quality to the anecdote in the future.

It wasn’t the first time my family had encountered Dave. My uncle runs a burger van on Cornwall’s north coast and Cameron once bought a cup of tea there while on holiday.

It is highly possible that he made a mental note to “have a word with George about the VAT on those if we get into power” when spotting the tepid pasties being eaten by fellow customers.

But the budget brought much more than that to get reheated under the collar about. This government is now officially operating at a level of incompetence way outside its comfort zone of simply bumbling along.

The tax relief cap on donations by higher-rate tax payers prompted calls for George to ‘give it back’, amid fears of the effect this would have on giving levels. Things really got interesting when the government tried to justify the cap on the grounds that philanthropists are giving money to dodgy charities to avoid tax.

It was a classic piece of lazy government slurring. They have become experts at demonising whole groups of people as scroungers, for example benefit claimants and the disabled, based on the misdeeds of the few.

Instead of tackling head on a problem that exists in a minority of cases, it is much easier to apply a blanket solution that targets everyone. Clearly if there are philanthropists giving money to sham charities this should be addressed through the appropriate channels. If only there was a regulator which had the powers to do this.

It shouldn’t be dealt with by imposing rules that tar the reputation of genuine philanthropists without supporting evidence.

The sector exploded with wrath. Sir Stephen Bubb threw his toys so far out of his pram that they went into orbit and he famously offered to give his knighthood back in protest on Newsnight, but I may have imagined that.

Spare a thought for Nick

It is worth remembering at this point the comments Nick Hurd made at the CFG dinner last November about the government wanting to take giving to new levels. Alas, I am not sure he meant it quite in this way.

Poor old Mr Hurd. It can’t be easy supporting the sector when your bosses are living in their own little bubble and introducing ill-thought out measures, seemingly without any discussion or consultation.

At least the whole kerfuffle has sparked honest and sensible debate about whether spending priorities should be determined by the whims of the rich few, rather than through taxation, but it was hardly the intended outcome.

If the government really believes there is a problem with dodgy charities it should have been raised sensibly through reasoned dialogue. Instead it has been blurted out in an attempt to shore up the rationale for a pronouncement that could adversely affect donations to charity at a time when government policy in other areas mean they are more vital than ever.

It has become too easy to say that this government is out of touch, but in the case of charities it seems once again that is the case. Despite the fact that the man leading it was educated at one. Or is that because of? 

 

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Ian Allsop

Ian Allsop is a freelance journalist and editor specialising in not-for-profit management and financial issues.

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