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Truss and Sunak: How could the next PM’s policies affect civil society?

02 Sep 2022 In-depth

Rishi Sunak and Liz Truss, official government photos

For the last six weeks, Rishi Sunak and Liz Truss have been campaigning to become the leader of the Conservative party and the next prime minister. 

Political discourse has primarily focused on the cost-of-living crisis, taxes, and rebuilding the economy – but civil society has had little mention. 

However, the policies each candidate has pledged will inadvertently affect charities – from promising to help businesses with energy bills, to tax cuts which could decrease the value of Gift Aid. 

Auditing charities to ‘weed out’ extremism

Earlier this month, Sunak’s team said there had been “too many examples” of publicly-funded charities that support extremist ideologies, and that these should be audited to “weed” them out.  

“Rishi will conduct an audit of publicly-funded third-party organisations – starting with those linked to the government’s anti-radicalisation work – to make sure no extremist organisation receives taxpayer money,” their statement read.

Sunak is a patron of the National Osteoporosis Support Group, Leyburn Brass Band and Wensleydale Wheels community transport project.

Meanwhile, Truss does not hold any formal roles in a charity. 

Tax cuts

An issue Sunak and Truss have discussed at greater length over the summer is taxation.

Sunak has said he will cut the basic rate of tax within seven years, but has not committed to making any immediate changes. 

Christy Wilson, a tax associate at Katten Muchin Roseman UK LLP, warned that Sunak’s plan to decrease the basic rate of income tax would have a knock-on effect on the amount charities receive through Gift Aid.

She said: “Gift Aid is based on the basic rate of income tax which is now at 20%. Through Gift Aid, charities receive an additional contribution – currently for every £1 donated, charities receive in total £1.25. However, if the basic rate of income tax goes down (as Rishi Sunak promised in his last budget, to take effect from April 2024) then this means so too does the additional contribution that the charities receive. 

“However, Rishi Sunak included in his last budget that this change was to be mitigated through the introduction of a three year transitional period for all charities which was going to apply between 6 April 2024 and 5 April 2027. This means that charities would receive a transitional relief of 1% on all donations eligible for Gift Aid during this period, keeping the effective rate of basic rate income tax at 20%. I presume this would all still go ahead if Rishi Sunak were prime minister.”

Meanwhile, Truss has pledged £30bn in tax cuts and claimed she will decrease inflation. She has promised to reverse the hike in national insurance.  

Wilson said that while this policy may prove popular with the public because it allows people to keep more of their monthly pay, it could be detrimental to key services, as the health and social care levy was instated to fund the NHS and social care. 

“There is very good reason why this levy was introduced and it is arguably needed in order to deal with the continuing impacts of Covid-19,” Wilson said.

Energy crisis

Sunak has also vowed to scrap VAT on energy bills for a year to create a saving of around £160 per household. 

Charities have been reporting a 300% increase in energy bills, with some selling assets to stay afloat – and sector leaders have written to the government to ask for help during this cost-of-living crisis. 

Amidst the energy crisis, both candidates have pledged to support business costs. But some in the sector including chief executive of Alcohol Change, Richard Piper, criticised the leadership hopefuls for disregarding charities in these promises. 

 

Fixing social care

Social care charities have written to the government asking them to prioritise their cause. 

Kari Gerstheimer, chief executive of Access Social Care, said: “Throughout this contest, there has been a distinct lack of discourse about the future of the social care system. Once again, the care sector is playing second fiddle to the NHS and appears to be somewhat of a political afterthought. In 2019, Boris Johnson pledged to ‘fix social care once and for all’ – but social care is not fixed, and it’s high time we have a prime minister that will make good on this promise.”

The chief executives of NSPCC, Barnardo’s, the Children’s Society, National Children's Bureau and Action for Children have also written to Truss and Sunak asking them to commit to implementing recommendations from the recent government-commissioned review of children's social care.

“We now have a once-in-a-generation opportunity to radically reform the children’s social care system in England, so that fewer children enter the system, and those who do are provided with the best possible care. Our charities stand ready to work with you to put vulnerable children at the heart of your government,” the letter reads.

Meanwhile, both Truss and Sunak plan to proceed with the government controversial Rwanda policy, which many in the sector have spoken out against. In April, over 160 civil society organisations called on the government to abandon the “cruel” and “immoral” plan to send asylum seekers to Rwanda. 

Sunak and Truss are both keen to pursue the government’s work on levelling up, but have yet to disclose how they plan to do so. 

A new charities minister?

Nigel Huddleston is currently the minister for tourism, sport, heritage and civil society. 

He has publicly backed Sunak’s campaign from the start of the leadership competition. With Truss leading in the polls, it begs the question of if she is made leader, will we be seeing a new minister for charities?

We should find out in the days after the new leader is revealed next week. Although judging by previous cabinet announcements, charities ministers tend to be some of the last appointed by prime ministers.

For more news, interviews, opinion and analysis about charities and the voluntary sector, sign up to receive the Civil Society News daily bulletin here.

 

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