Will Cameron U-turn on charity tax relief?

The PM looks increasingly certain to revise Osborne's plan to cap tax relief on charitable donations

Three weeks on from the Budget, David Cameron could be forgiven for hoping that the political strife was over. But even 8,000 miles away in Asia [the PM flew from Indonesia to Malaysia earlier this morning], Cameron can't escape the aftershocks of George Osborne's statement. The outcry over the Chancellor's decision to impose a cap of £50,000 on tax relief for charitable donors is reaching a crescendo and Cameron has already hinted at a U-turn. Speaking in Jakarta yesterday, he said:

George Osborne said in the budget very carefully we would look at the effect on charitable donations because we want to encourage charitable giving... We'll look very sympathetically at these concerns

He has every reason to be sympathetic. A move intended to limit tax avoidance could end up strangling the PM's cherished "big society". A survey by the Charities Aid Foundation shows that nine out of 10 charities fear the plans will result in a drop in donations. The foundation's John Low speaks of "widespread alarm and despair" among charities. 88 per cent of the 120 charity executives surveyed believe that the cap will have a "negative impact on the value of donations" from major donors, while 56 per cent fear donations will fall by some 20 per cent.

In addition, there is pressure from Fleet Street and a significant number of Tory MPs to think again. Mark Pritchard, the secretary of the backbench 1922 Committee, commented: “This appears to be going in the opposite direction of encouraging philanthropy and major giving to charity.”

However, with the new rules not due to come into place until April 2013, there is time for a compromise. The Times (£) reports that one idea under consideration is to exempt high-value, “once in a lifetime” legacies from the new cap. Another option would be to limit the cap to donations to foreign charities, some of which do little or no charitable work.  Low's warning that a measure intended to hit the rich could end up hurting the most vulnerable is a cogent one.

Politically, the cap on charity tax relief is yet another example [cf. "the granny tax" and "the pasty tax"] of a measure the government has struggled to both explain and to defend. There are plausible arguments for all three taxes [ensuring the elderly contribute to deficit reduction, removing an anomaly that favours large traders over small ones, reducing tax avoidance by the wealthy] but Cameron and Osborne only seem to make them once it's already too late. The Daily Mail's caustic observation that the pair may now regret that they "swanned off to America" the week before the Budget will hurt because it is true.

David Cameron talks to sudents at The Al Azhar University on April 12, 2012 in Jakarta. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

YouTube screengrab
Show Hide image

“Trembling, shaking / Oh, my heart is aching”: the EU out campaign song will give you chills

But not in a good way.

You know the story. Some old guys with vague dreams of empire want Britain to leave the European Union. They’ve been kicking up such a big fuss over the past few years that the government is letting the public decide.

And what is it that sways a largely politically indifferent electorate? Strikes hope in their hearts for a mildly less bureaucratic yet dangerously human rights-free future? An anthem, of course!

Originally by Carly You’re so Vain Simon, this is the song the Leave.EU campaign (Nigel Farage’s chosen group) has chosen. It is performed by the singer Antonia Suñer, for whom freedom from the technofederalists couldn’t come any suñer.

Here are the lyrics, of which your mole has done a close reading. But essentially it’s just nature imagery with fascist undertones and some heartburn.

"Let the river run

"Let all the dreamers

"Wake the nation.

"Come, the new Jerusalem."

Don’t use a river metaphor in anything political, unless you actively want to evoke Enoch Powell. Also, Jerusalem? That’s a bit... strong, isn’t it? Heavy connotations of being a little bit too Englandy.

"Silver cities rise,

"The morning lights,

"The streets that meet them,

"And sirens call them on

"With a song."

Sirens and streets. Doesn’t sound like a wholly un-authoritarian view of the UK’s EU-free future to me.

"It’s asking for the taking,

"Trembling, shaking,

"Oh, my heart is aching."

A reference to the elderly nature of many of the UK’s eurosceptics, perhaps?

"We’re coming to the edge,

"Running on the water,

"Coming through the fog,

"Your sons and daughters."

I feel like this is something to do with the hosepipe ban.

"We the great and small,

"Stand on a star,

"And blaze a trail of desire,

"Through the dark’ning dawn."

Everyone will have to speak this kind of English in the new Jerusalem, m'lady, oft with shorten’d words which will leave you feeling cringéd.

"It’s asking for the taking.

"Come run with me now,

"The sky is the colour of blue,

"You’ve never even seen,

"In the eyes of your lover."

I think this means: no one has ever loved anyone with the same colour eyes as the EU flag.

I'm a mole, innit.