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.

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The final shortlist for Labour’s next general secretary is a victory to Corbyn

Drawing up a list of options that consist of your preferred candidate and a smack on the head is a very old Labour trick.

One thing that hasn't changed in the Labour party is that the hand that controls the shortlist controls the world. Labour's power brokers used that power very effectively yesterday in drawing up the shortlist for the party's next general secretary: in the red corner we have Jennie Formby, senior Unite official and the preferred candidate of the leader's office. And in the, uh, other red corner we have Christine Blower, former general secretary of the National Union of Teachers.

Drawing up a list of options that consist of your preferred candidate and a smack on the head is a very old Labour trick (as well as being a very old New Labour trick) and this one is a masterclass of the genre. While no Corbynsceptic will be able to fairly argue that Blower isn't qualified for the role, her long history in movements outwith Labour means that she will be an unpalatable choice for most Corbynsceptics on the party's ruling national executive.

Victory to Jeremy Corbyn, then? Well, it is a sign that the leader of the opposition's office is getting better at managing these internal battles. But it's also a sign that, for the moment, Corbynite hegemony doesn't look any more inclined to be consultative than what came before. (See also: the party's Brexit policy.)

There is a large dash of the old in Corbyn's new politics. And as far as Labour goes, whether you think that's a good thing or a bad thing speaks to the most interesting schism in that party: between those who see the promise of Corbynism largely in what it could do the country, and those who see it as a catalyst for real party change that looks likely to unused.

Stephen Bush is special correspondent at the New Statesman and the PSA's Journalist of the Year. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.