Charity Cases

Glen Newey

Once, in a time beyond political memory, charity was touted as part of the government’s big thing. Conservatism in its ethical moments takes warmth from the idea of the well-off writing cheques drawn against their sense of richesse oblige, and the not well-off selling jumble and raffling gin to aid the needy in lieu of the state; indeed, this is how the Conservative Party itself has long been run. Its Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill, introduced just before the recess and hurried back to Parliament for its second reading yesterday, sets up a statutory register for lobbyists.

It’s also meant to hit unions, whose political donations ceiling effectively drops from £989,000 to the across-the-board limit of £390,000. But the bill’s vaunted ‘transparency’ is the willed blindness of those gazing on the emperor’s new clothes. Rather than bringing in a catch-all list of lobbyists, the register nets smaller companies, but not those rich enough to maintain an in-house lobbying outfit. It also adds staff costs onto the sums – though this rule doesn’t apply to political parties’ spend. The bill’s cash limits on campaigning before an election will also make it harder for charities to inform and wrangle in the public sphere. But as the Citizens United case in the US showed, the openness of a platform for debate depends not just on the law, but on who can afford to hire it. Still, that’s an ideal-world question. The bill as drafted may well get ripped apart next week in committee, in this case a committee of the whole house. But it may still make it hard or impossible for charities and trade unions to work.

Amid the skirmishing over the bill, the Charity Commission, the government charities watchdog, has demurely held its peace. Its boss is William Shawcross, another scion of the Etonocracy. Last month he fouled his shreddies by griping about the salaries paid to charity executives, only to have it pointed out that a good many Eton beaks snag over 100K a year – public schools, easy though it may be to forget, are registered charities. Shawcross's keenness on executive pay is the more striking given his otherwise forbearing stance on charity regulation. In gripping exchanges last March with the Commons Public Accounts Committee, he defended his quango’s inaction over the scandal of the CC-registered Cup Trust, where businessmen used a British Virgin Islands trust to dodge tax and claim gift aid relief. Cup’s latest accounts say that its claim for £46 million in gift aid is ‘more than likely to succeed’. By March 2011 the ‘charity’ had handed out £55,000 from the £176.5 million it had raised from ‘donors’.

Shawcross’s defence to the PAC had two mutually blunting prongs: that the CC clamped down on the scam with all due rigour as soon as it found out; and the scam wasn’t really a scam anyway, since though Cup only paid out a few pence to token beneficiaries for every hundred quid it raised, there’s no statutory floor on charities’ donations-to-benefactions rate. Shawcross admitted to the PAC that of the UK’s 160,000 charities, the commission manages to vet about twenty a year; he hadn’t got round to reading a National Audit Office report from 2001, which identified scam charities as a growing problem. In one of several jaw-dropping moments, he told the PAC that the very paltriness of Cup’s benefactions let it slip under the CC’s radar – this even though Cup was at one stage raising far more in ‘donations’ than the million-member RSPB.

Meanwhile, the CC has its plate full with another charity scam. This involves the Spiritualist Association of Great Britain, which sold off its HQ in Belgravia in 2010 for a knockdown £6 million – to, by odd coincidence, a company in the British Virgin Islands. Soon afterwards it was sold on to another company in the islands for £21 million. The CC’s now making a show of taking off the kid gloves, to protestations of innocence from the Spiritualists.

So there it is, a tale of two regulatory regimes, one a watchdog savaging awkward customers, the other a toothless mutt dozing languidly by the hearth.