How long can the PM continue to be charitable to Osborne?
Tories look set to retreat on philanthropy attack as yet another Budget measure turns sour
DAVID CAMERON and George Osborne are heading for a retreat over the tax on charitable giving which has raised a storm of protest from some of Britain's leading philanthropists.
The storm has caught the Prime Minister by surprise on his tour of the Far East, where he lands today in Jakarta.
Cameron's officials were trying to hold the line while he is away by claiming that some multi-millionaires are hiding their wealth from the taxman by investing in "bogus charities".
This inept piece of spin-doctoring was intended to gain popularity for another disastrous mistake by Osborne in his Budget. It could soon be reversed.
Lord Fink, the Conservative party's principal treasurer, has signalled to Cameron that he needs to get the Tories out of this mess. Fink said it was clear some charities would not be able to operate without support from rich donors and urged the Government to intervene.
The Chancellor's attack on the tax breaks for charitable giving was part of his attempt to undo the damage done in his Budget by giving a tax cut to the rich while taxing pensioners more. The charities have pointed out that the decent givers will carry on giving, but if the philanthropists lose their tax benefits, the charities will simply receive less than they did in the past. At a stroke, Osborne has cut the already slightly threadbare rug from under them.
Adam Afriyie - the Queen's MP, as the Tory member for Windsor - sounded the alarm bells this morning. "I am becoming increasingly alarmed at the level of anti-business rhetoric emanating not just from the media, but from too many other MPs," he said on the Tory grassroots website, ConservativeHome.
By attacking charitable donors in the same breath as tax-dodging millionaires, Osborne has managed to outrage scores of philanthropists - the sort of people who are supposed to be the bedrock of the Conservative party. None more so than the woman who has emerged as the donors' shop steward, Dame Stephanie Shirley, who has given £60 million to charity after making her personal fortune running her own software company.
Dame Stephanie, who likes to be called 'Steve' and runs a group called Ambassadors for Philanthropy, accused the Government of "a cack-handed assault on philanthropic giving". She said the charity sector stood to lose "hundreds of millions of pounds a year".
In an open letter to Cameron, she said: "These plans are already discouraging major giving, with donors informing charities privately of their intention to put on hold plans to give five-, six- or even seven-figure sums.
"They will, if enacted, significantly hamper the work of many charities, large and small, as almost half of all giving comes from just seven per cent of donors."
Dame Shirley came to Britain as an unaccompanied refugee from Germany and started F. I. Group in 1962. She had an autistic son who died young. Since retiring, she has devoted most of her giving to charities for autism.
So far 1,800 charities and benefactors have signed up to a petition organised by the Charities Aid Foundation – which handles over £1 billion a year in donations – opposing Osborne's changes.
It takes a peculiar genius to outrage so many charities and benefactors at the same time. Osborne is only keeping his job because he is a mate of the Prime Minister. If Cameron wants to distance himself from these cock-ups, he should sack his Chancellor.