George Osborne was actually right to cap tax relief on charitable giving for the very wealthy. If they are ‘such great guys’ who got rich with the help of clever accountants and ‘tax minimisation strategies’, should they not both give something back and pay their taxes?
The unbudget is a new phenomenon in UK politics as far as I can see. This is a new initiative in which the Government undoes all the stupid things it did in its budget. Usually it’s just a few tweaks or perhaps a u-turn on one element. But the Osborne budget now seems so riddled with mistakes and miscalculations that even his own colleagues now seem to want a degree of reversal which amounts to more than tweaks.
But (and it is with a little credulity at myself that I write this) I would encourage George Osborne to stand firm on one aspect, and that’s a cap on tax relief for charitable giving. I know that this is at odds with the SCVO position, the briefing of the university fundraisers and they comments of people linked to the National Galleries. I understand their pragmatic point – tax breaks are an incentive for people to give to charity. And since most charitable fundraisers will tell you that it’s not all the many little donations that count so much as the few giant donations, what they want is the kind of tax break that incentivises the very rich to give.
I recognise that in the Victorianisation of Britain imagined by Thatcher and delivered by Blair, charity is important again. It is Victorianisation because it had a complex combination of deregulating harmful pursuits ‘for the masses’ such as endless encouragement to drink more alcohol and to gamble, a philosophy that somehow there is more merit in a rich individual providing a service for the public than the state doing it and a dismantling of universal provision in favour of a mishmash of private sources doing the providing (charities being private after all). The main difference is that incitement to ‘Admire the Rich’ is political rather than cultural (neoliberal rather than know-your-place) and the privatisation agenda is not so much about leaving the ‘undeserving poor’ to it as helping the rich to make more money (Serco soon to make yet more money by evicting asylum seekers from their homes in Glasgow).
But I miss the point where the egos of some of our big ‘philanthropists’ need to be subsidised with no limit with the direct result of making them personally benefit out of their ‘good acts’. There are all sorts of reasons I feel this way. One is because I object to the role of these ‘philanthropists’ in politics, with the odious assumption that because they are rich they have a ‘right’ to dictate aspects of welfare policy. I object to the fact that making this a structural part of welfare provision here or abroad means that they end up in a position to hold a gun to our heads because we have created a giant gap round about them from which their absence would require public action. I object because they are already getting plenty much out of their donations – they get to unilaterally rebrand themselves as good people irrespective of whether they are good people or not (which is why I keep putting inverted commas round ‘philanthropist’). And I just plain object that it is us – you and me – who have to pay them to play with their pet projects. Sure, giving money to cancer research might pay us back, but since there is little check or control on their action we need to pay them too if they want to give their money to an overseas aid charity that works against contraception.
The thing about Andrew Carnegie is that he started out on his philanthropy with a clear and unambiguous statement that he knew he got rich from the suffering of many people and it was his duty, not his right, to make reparations through good acts. Tom Hunter was involved in a whole string of loans from HBoS which were not repaid and which played a part in the downfall of the bank. And yet his PR suggests that he is a philanthropist not as reparation but as a continuation of his personal brilliance. Globally, Bill Gates has been involved in all sorts of monopolistic manipulations of the market in their years of Microsoft hegemony which were bad for all of us. His philanthropy, however, comes with a smug grin and not an apology. And you’re not going to mistake their role – the Hunter Foundation and the Gates Foundation are much better known brands than most of the good causes they have supported.
And, when it comes right down to it, these people are very, very rich and the idea that we have to pay them to do the right thing is objectionable. That they suggest they may walk away from doing the right thing if we don’t keep paying them is reprehensible – what definition of philanthropy involves only doing it if you get cash back?
A cap of £50k of tax relief (that’s not £50k of donation, only of the tax relief on a much bigger donation) or of 25 per cent of salary hardly seems an ungenerous perk. These rich people should not be able to dodge tax which is used to fund democratically agreed priorities of the many so they can go and run a sort-of covert welfare state of their own choosing. That they might stop giving to charity as a result is plain wrong and their self-satisfied bluff should be called. And in the end, while I would be the first to support the value of investing in art for the nation, that some rich individual might gain endless tax relief (which would have been used for unemployment benefit) to buy Italian Masters for galleries that those unemployed will never visit is plain wrong.
These rich people did not benefit us in the process of making themselves rich (despite the rhetoric) and they probably dodged lots of tax when they were getting rich. They should not be allowed to decide what benefit we are to get from that money and get another tax dodge at the same time. Hunter et al, do the right thing; give to charity and pay your tax.