The Cabinet Office spokesman in the House of Lords has outraged charities by claiming the proposed tax relief cap on charitable donations is needed to deter dodgy charities.
Speaking at Civil Society Media’s Question Time debate, Lord Wallace claimed that not all charities use their funds in a “public-spirited” manner, making the proposed cap necessary.
He told a room full of charity representatives: “Lets be honest – not every single charity is as public-spirited and determined to spend every single penny on public benefit as every other one.”
After an angry reaction from those in the room he added: “The man to my right [Lord Hodgson] is in the middle of a review of the Charities Act and that will give us better evidence of this.”
Labour’s civil society spokesman countered Lord Wallace’s argument by saying that the Government has yet to cite a single example of a “dodgy” charity that is benefiting from the tax relief cap.
He added that he believe that the tax relief cap was the “wrong strategic decision”, and that the Government hasn’t thought about its impact.
“It made a decision to cut the top rate of tax and then had to make the sums add up. Now charities are suffering as a result.
“The reasons for the measure have changed almost on a weekly basis; first it was avoidance, then it was an adverse European court ruling, then it was dodgy charities and I think at the moment now it’s just dodgy foreign charities.”
Wallace added: “We are actively consulting with the sector and have plenty of time before the proposed implementation in 2013.”