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  1. Wealth
May 8, 2012

Charities minister Nick Hurd sticks it to philanthropists

By Spear's

He dismissively and repeatedly referred to the relief cap as being about ‘the tax affairs of a very small group of the very rich’, as if their giving was insignificant

The smell of overripe bananas hung heavily in the air as minister for Civil Society Nick Hurd tried to deal with a rotten banana of the government’s making. Despite the journalists attending the press briefing in Mr Hurd’s office being told he wouldn’t talk about the Budget debacle of the capping of income tax relief, it was of course the main topic of conversation.

It wasn’t meant to be like this. Today is the Giving Summit, originally a charitable jamboree at the Natural History Museum with donors and third-sector grandees chewing the fat about how to get people to give more, but now a reporting session for committees on the improvement of philanthropy. Those are important, of course, but not quite the all-singing, all-giving extravaganza the government envisaged.

What happened was the Budget and follow-up comments by David Cameron, calling philanthropists ‘tax dodgers‘, and as pugnacious in its defence as Mr Hurd was, he nonetheless looked like a man who had been winded by the school bully and then had to pretend they were just talking as the teacher walked by – for fear of something worse.

He dismissively and repeatedly referred to the relief cap as being about ‘the tax affairs of a very small group of the very rich’, as if their giving was insignificant; this is despite saying that 8 per cent of donors gave 48 per cent of charity. The important principle, he kept saying, was that everyone should pay their fair share of tax (even when tax relief is used for charitable purposes, apparently). It was the sort of truism that would play well in his constituency, as he kept reminding us, but it doesn’t work for those who deal with philanthropists.

Not only did he not attempt to salve the wound, he actually deepened it: ‘I certainly regret that the discussion wandered away from the basic principle; [it’s the] debate about a very rich person paying 4 or 5 per cent tax opting out of making a contribution to the NHS or schools – that’s the debate.’ As recent Treasury figures showed, very few people actually paid such low tax. This was just another example of philanthropists being demonised by the government.

Mr Hurd said the government would be able to rebuild trust with the charitable sector, which had expressed their concerns ‘very strongly’, and that ‘we’ll work it through’, but he had no date or point of reconciliation to offer.

He pointed to the 10 per cent cut in inheritance tax announced in last year’s Budget as an incentive to give, but deflected my question about lifetime legacies, allowing donated assets to work for both charity and donor while they are alive. The charitable sector is in broad agreement that these would encourage giving sooner, rather than postponing it to death.

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The minister tried to direct the conversation to the broader base of charity the government is encouraging, tied in with today’s announcement that those taking money out from ATMs will be able to donate at the same time. The problem is that seems as likely to be popular as the option to donate your tax rebate to charity on a self-assessment form. Mr Hurd disagreed with my suggestion that now was not the best economic time to ask the man on the street for more money, saying that people gave to relevant charities when asked. How specific an ATM donation would be remains to be seen.

An increase in payroll giving was another takeaway: the government is working with the companies that run payrolls to see if it can be made easier to donate from your salary. There are good projects, like £500,000 matched funding for local charities and two Challenge Prizes for solutions to supporting older people and reducing local waste, but there is no reason the government can’t cultivate every facet of philanthropy, rather than kicking wealthy donors.

Philanthropists at least received a platitude: ‘We should celebrate philanthropists because they make fantastic things happen that wouldn’t otherwise happen.’ Celebrate them, yes – but apparently not encourage them.

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