However, he said other means can be found to increase funds available to the voluntary sector
Former prime minister Gordon Brown says there is nothing charities can do to change the government’s mind on the National Insurance (NI) hike which is about to rock the sector.
Voluntary groups have been campaigning for an exemption or at the very least mitigations to be made for charities – similar to arrangements being made for the public sector – ahead of the rise, which will start in April.
They say it will devastate organisations already under the cosh from the running costs and the cost of living crises and which have already been over-run by demand as they try to provide vital public services.
Brown, himself a former UK chancellor, was asked directly about the NI hike as he spoke at this year’s Scottish Council for Voluntary Organisations’ (SCVO) Gathering in Edinburgh.
Reflecting widespread grassroots worry about the coming hike, the question was posed by The Action Group, which supports adults and children with support needs and learning difficulties in the east of Scotland and Kingsway Community Connections, a Glasgow anchor group.
They asked for his insights on the NI hike – which are especially relevant given he himself once held the reigns at the Treasury.
He refused to say his modern day Labour counter-part Rachel Reeves should back off from charities – but instead proposed other means by which charities could offset the rise, none of which actually exist at the present time.
The former Labour PM said: “If life is going to be more difficult for charities then we should make dure more money is available to them in other ways.
“I can’t solve the problem of National Insurance, but I can think of more ways… for raising money that gives you the funds that you need and probably more funds than you’d lose through National Insurance.”
He also said that a lot of “foundations are hoarding money” which could be used.
Brown continued: “On National Insurance, it’s a huge burden on all of you, I don’t think it’s an ideal tax but I don’t think any of us will be able to change that decision. But there are other ways of raising even more money than will be lost to National Insurance.”
The former chancellor had already outlined the “other ways” charities could raise funds earlier in his speech.
These included reforms to Gift Aid, which was introduced under him, and for more pressure to be put on the wealthy and companies over increasing corporate giving.
He told the Gathering: “It’s not just from governments you [the voluntary sector] raise money – it’s from individuals, foundations and businesses and I think we need a big change in the way we approach the raising of money from these sources.”
He said that the average donation to charity from the top one per cent of earners is £560 and pressure must be brought to bear to increase this.
On Gift Aid, Brown added that “it’s not efficient at the moment, it’s got to be changed. If you are a top rate tax payer and you give to a charity, the charity will get 25% but you’ll get a reduction of 45% so there’s £700 million that’s going back to the top rate tax payer that could come to charities.”
He said that other changes could raise a billion “very quickly”, and called for loopholes to be closed and scams to be clamped down on.
On corporate giving, the former PM said: “Only 20 of the top 100 companies in the country give one per cent or more to charities each year. Some of the biggest UK names don’t even give 0.1 per cent.
“If the top companies gave one per cent more you’d have $5 billion more for charities, so there is a huge amount of money. The last government stopped companies having to report their charitable donations and that should come back – we should name and shame companies who don’t do so.”
On other demands from the sector, the former prime minister spoke at length about the need to combat child poverty but stepped back from calling for the scrapping of the two-child benefits cap by his Labour colleagues in power, but did agree with charities on the need for multi-year funding.
He said: “You can’t plan ahead if your funding comes to you half way through the year. You need multi-year support.”
The ideal time to press this demand, he said, will be the UK government’s three year spending review in June, which also allocates Barnett cash for Scotland.
During his speech, Brown spoke of how he has been involved in tackling poverty through setting up multibanks, which distribute a wide range of goods to those in need, including in his home area of Fife, and he said the task of ending poverty – and especially child poverty – falls on everyone.
He told the Gathering: “We are a society that is better than having to tolerate this. We are richer when we care for the poor and we are more secure when we care for the insecure. We are less vulnerable when we care for the vulnerable.
“It’s not anti-wealth to say that those who are wealthy must do more. We need to think differently about how we tackle social divisions.
“We need a new and improved, enhanced partnership and it’s not just charities and government – it’s charities, foundations, local government, community councils, the Scottish Government and the UK Government because no one agency and no one policy can provide the answer.
“Don’t tell me it’s impossible to solve the problem of child poverty in our country – it can be done, what is needed is the will to do it.”
