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Hague: Believing in Charities

I am delighted to be here at the Charities Aid Foundation's Annual Conference because the Foundation works so hard to strengthen Britain's charitable sector. And I salute your continuing efforts to bring companies, donors and charities closer together.

Travelling across Britain, I see at first hand how charities transform lives, sometimes in our most deprived communities. Across the sector - from those of you who helped the flood victims of Mozambique, to those who support people with epilepsy, who provide shelter for homeless people, who improve animal welfare, or work to protect our children from abuse - day after day, you make a real difference to people's lives, prospects and communities.

It is very good to have been welcomed by Martyn Lewis, a long-time champion of Britain's charities. Eighteen months ago Martyn was the independent chairman of a Listening to the Voluntary Sector meeting that the Conservative Party held with 200 representative groups. I hope that he will agree that today's speech demonstrates that the Conservative Party has listened and learnt from your sector's experience.

I am going to set out the principles that will guide the next Conservative Government's support for charitable and voluntary sector activity in Britain. I will say why charities are fundamental to the Conservative Party's vision of society. And I want to talk a little about how we might build a society which gives every person the opportunities enjoyed by the mainstream.

And, this is not the end of a policy formation process. For I am announcing today the formation of a new Conservative think tank on social policy which will underline my Party's commitment to listen more widely and deeply over the years ahead.

But let me begin by pointing to the essential role that charities, the voluntary sector and a huge number of other social institutions play in today's Britain. It is difficult to capture the full scale and range of your work. You advocate change. You educate. You knit communities together. You address social need. You befriend people. You mobilise volunteers. You are locally-rooted. You put neglected issues on the national agenda. You preserve the nation's heritage. You are frequently more knowledgeable than the so-called experts. You can embody and express people's deepest religious and personal beliefs.

Strong, united societies depend upon the shared interests and values that you nurture and protect. These values are kept alive and renewed in social institutions that are most real and immediate to people: the family, the church, the synagogue or temple, the school and a huge variety of voluntary associations. People don't get their deepest values from politicians or party manifestos. By serving others and by being part of compassionate communities we learn and renew the civic spirit.

This is what is meant by 'civil society'. As the commentator Dr David Green has remarked 'these are the elements of a free society which are deeper, larger and richer than either the market or Government'.

The charitable and voluntary sector offers people an alternative to the one-size-fits-all approach of the state. You can address a person in need in their full humanity: people down on their luck rarely just need material help. In the Jewish tradition the highest form of charity is one that helps an able-bodied person to attain the dignity of being able to provide for him or herself and loved ones.

And as I look back on the recent history of charitable work in Britain I see a record of innovation that so often betters the public sector. New approaches and methods developed by charities have greatly informed the development of public policy generally.

In fields such as hospice care, conservation, parenting skills, care for the homeless, women's issues, capacity-building in developing countries, child abuse and the spiritual dimension to recovery from addiction, the charitable and voluntary sector has been ahead of the curve.

Conservatives believe that charities are more than helpful additions to state social provision. Alongside the family and other local neighbourhood institutions, the charitable sector stands at the heart of our programme for civic renewal.

A future Conservative government will give new opportunities for charities to run schools, housing estates and contribute to the renewal of inner city communities. Through Regeneration Companies, we will be able to encourage new providers such as charities, religious bodies, and other educational providers, to set up Partner schools or take over failing schools. The taxpayer will continue to ensure a publicly funded service but you can help us to bring more diversity and choice to that service.

At the same time as expanding the large-scale parts of the sector we also want to encourage those local, intimate initiatives that may be run by, and serve, just a handful of people.

I want to stress that we will not transfer too many public responsibilities to the voluntary sector too quickly and that we will only devolve powers with wide consultation with you and the other groups affected.

There is much that needs to be done.

No decent society can be at peace with itself with so many of its children are excluded from prosperity and opportunity. No decent society can just sit back and watch as drug abuse spreads to the school playground. No decent society can be indifferent as more children grow up in homes where no father has ever been present. And no decent society can allow the same communities to suffer long-term unemployment, generation after generation.

These social concerns are nothing new. Similar problems have occupied governments and voluntary workers for decades.

Fifty years ago people looked to the state for all the answers. It seemed then that the only way to guarantee security for all was for the state to take over more and more of the services which had previously been dependent upon voluntary activity or the local rates.

The world in which you operate today is very different from the one that faced the CAF when it was first set up in 1924.

In many ways it has changed for the better. The welfare state has helped to eradicate the debilitating poverty seen in our industrial towns in the 1930s whilst millions have been lifted on a rising tide of global prosperity.

But along with these benefits we have lost something. For too many people think that by simply paying their taxes they have discharged their duty to society. It seems, to a worrying extent, we have nationalised compassion.

Governments do not have - and they must not assume - a monopoly of compassion. You cannot measure compassion by how much you are taxed. For real compassion is not about compulsion, about forcing people to care. A compassionate society springs not from the diktats of Whitehall, but from real day-to-day contact with, and concern for, your neighbour and local community.

Our task is quite clear. We must role back the frontiers of the state and allow independent groups and charities the scope to play a bigger role in tackling our social ills. It is time to denationalise compassion and create a genuine partnership between government and charities.

Within Britain there is hardly a social problem that is not being tackled by someone, somewhere. Many of the charities here today are in the forefront of that effort.

So if we are serious about tackling the terrible social problems of this country - the poverty, the missed opportunities, the hopelessness - we must turn first to renewing and strengthening civil society. And strengthening civil society means much more than tackling problems. Civil society creates a sense of identity, belonging and understanding, which would otherwise be absent.

Charities are often simply better providers of care than the state. Look at the case of Leonard Cheshire, a charity that provides care for the disabled. It delivers better quality care than many local authorities but does it at three-quarters the price - that means resources can stretch even further. But what makes your charities so successful?

First, voluntary organisations are flexible. You have a direct presence on the frontline; you don't find yourselves tied down by the bureaucracy that inhibits governments. Charities can act immediately on what they experience. Take, for example, the Harlow Accommodation Project, a small, community-based charity. Because it is local and responsive, it is able to house young people faster and more effectively than local authorities ever can.

Second, voluntary organisations are more human than the state. An anonymous winter fuel payment does not care for our vulnerable elderly people in the way that Meals on Wheels can through direct human contact. Those people who benefit from that service tell me it is about much more than providing warm meals, important as they are. It is also about alleviating loneliness, checking that there hasn't been an accident, and simply providing someone to talk with.

Third, voluntary organisations are independent - an important part of the British charitable tradition. This gives you the freedom to innovate and to find new solutions to our social problems. It is what makes the sector so diverse.

Conservatives are committed to respecting and defending the independence of charities in Britain. They are not simply arms of the state - there to deliver the political demands of central Government.

We do not want an identikit approach. It is only through a rich mixture of charities, voluntary groups, churches and families that we will solve the problems we face. 7,000 new charities are registered in Britain every year. Sometimes they don't succeed. But when they do the rewards can be immeasurable. This may be on the scale of an individual life, rather than a region on a Whitehall map, but small charities can have a truly transforming effect on the individual lives they touch.

Today I am announcing the launch of a new social policy group based at our party headquarters. Directed by David Lidington MP and generously supported by Sir Stanley Kalms, the Renewing One Nation team will strengthen our links with charities, voluntary groups, and faith communities. For these are the groups with frontline experience of enriching community life in every corner of our country.

Building one nation is not, for the Conservative Party, about left or right. It means governing for all the people. And that is what traditional Conservative values are about. We cannot tackle deprivation in our inner cities until we start to win the war against crime. We cannot properly build opportunity for the disadvantaged until we tackle under-achievement and low expectations in our schools. There is no choice to make between traditional Conservative values and governing for all - they are two sides of the same coin.

That is why we want to find new ways of involving all sections of the community in our fight against social exclusion. Renewing One Nation's work is set out in the 'Growing up in Britain' prospectus that I hope you have received. It presents a vision of one nation where we complement the economic and educational opportunities offered to our children with a wealth of support for civil society. How can we strengthen marriage and the extended family? How can we reconnect fathers with their children? How can we ensure youth services help young people to make sustainable choices? How can charities be free enough from bureaucratic control so that they can genuinely serve the communities they belong to? I want to encourage you to work with this Renewing One Nation team so that we can learn from your experience.

But what you want to know from me is how we are going to deliver.

Government cannot make charities, but it can certainly break them.

And let me make one thing clear - right now there is too much breaking going on.

It is wrong to keep on increasing taxes on our charities. Piling new taxes onto our charities simply does not make sense and it does not pay. Too often, governments are quick to count the immediate revenue from higher taxes and neglect the net cost. Heavy taxation of charities ultimately means we are left with a much bigger bill to pay.

As Leader of the Opposition, I have always said that we will support the government when it gets things right. And we have broadly welcomed the changes it has made to encourage charitable giving.

But we still have a long way to go. Those British people who are frequent donors to charity give much more than the average American donor. But there are far fewer who do give regularly in Britain. 90% of US households make regular charitable donations worth approximately 2% of the United States' GNP. Our aim must be to bring British giving up a comparative level.

I am gravely concerned that the benefits from the Government's reforms will be overshadowed by the effects of the additional tax on charities. The Government's abolition of Advanced Corporation Tax credits will cost charities in Britain just under half a billion pounds a year. This is the largest single tax increase ever imposed on your sector. From 2004, the tax burden on British charities will have doubled.

Because charities are so important to our social agenda for this country, I am deeply troubled at the prospect of what might follow. So what will we do?

Firstly, a Conservative Government will wish to continue to make charitable giving easier. That is why I am announcing today that we will extend Income Tax relief on gifts to charities to include unlisted shares. This shows that Conservatives are serious about learning from best practice abroad, and ready to make the changes you all need. For we are committed to looking at the tax system to help and support people who give to charities.

Secondly, we will deliver more clarity in tax arrangements for charities. You are faced with a long-term threat from the European Commission to remove VAT exemption on donated goods. This is just the sort of extension of tax on charities by stealth to which I am so opposed. We will stand firm against this threat to large and small charities and to charity shops in Britain.

But the increasing tax burden that this Government is imposing on charities raises other concerns. You are faced with large-scale redistribution of income within the sector. This happens on a wholly unplanned and arbitrary basis. It makes no sense for the Government to take more and more millions of pounds in taxation only to return that money to different parts of the sector so that, on average, £3 out of every £10 that charities spend comes from the state.

It is not the role of the government to take money donated to one charity and give it to another. The state's role is to support the families, neighbours and charities who work hard to achieve their own diverse objectives. So we must look to strengthen our communities, not to impose on them the changing objectives of remote politicians and bureaucrats. This is absolutely the fundamental issue in the government's relationship with civic society.

This might require radical rethinking of how smaller charities receive public funding, without affecting larger contracting relationships. So Renewing One Nation will look at how those local communities meant to benefit from public grants to the voluntary sector might be directly involved in funding decisions. It is nearly always the very poorest communities who have least say in the services they receive. We want to look at how that can be changed.

Thirdly, we will be a tax cutting government. And the more the state takes from the family's pay packet, the more it has to concern itself with paying the mortgage, with putting food on the table and the less room it has to even contemplate charitable giving.

The Government's relationship with charities is not, of course, just a financial one. Time matters as well as money for many of today's voluntary organisations. When I talk to people involved in running charities, they often tell me of shortages of skilled volunteers. They have a particular problem in finding volunteers with sufficient managerial, financial and business experience.

But there is a large pool of potential volunteers available. Whilst only 11% of the public participate in voluntary work, 37% say (according to the Government's own figures) that they are interested in volunteering. Together, we need to make it easier for them.

Already, the CAF does a great deal of work with employers, many of whom are important patrons of British charities, and some I know are here today. But we must also increase recognition of the importance of another resource they have - the expertise of their people.

We are listening to proposals with interest that give public recognition to companies that donate payroll hours as well as time. We need to work with companies to raise awareness of the needs of charities. And we need, in particular, to make sure arrangements are flexible to allow as many small and medium sized companies to take part in the process.

The Renewing One Nation team will work to understand how volunteering amongst the young can best be encouraged. Four factors seem crucial here: the involvement of parents, role models or peers in volunteering; membership of a church, youth group or other voluntary association; experience of volunteering at school; or favourable media coverage of volunteering.

Our policies will extend an initiative already announced by our International Development spokesman, Gary Streeter, to increase the numbers of students spending time working for communities' abroad.

That is why, as part of our commitment to international development, we will launch Aid Direct, in partnership with Non-Governmental Organisations. By bringing together British embassies, charities and central Government, it will acts as a 'one-stop-shop' for potential donors - so that they can give effectively. As the CAF's excellent 'All About Giving Website' shows, simply offering a centre for up-to-the-minute information is in itself a way of enabling our charities to succeed.

The government also provides a regulatory framework for charity. The last twenty years have seen an enormous growth in the size and complexity of the charitable sector. But there has been no fundamental reform of the structures of regulation to match. People involved in administering charities are increasingly telling me that charities have simply outgrown current arrangements.

Let me set out three steps that we will take to make the tasks of some of our charities easier.

One - we will simplify and lighten regulation of charities so they can keep on growing. We are committed to carrying out an audit of the cost of regulation on the voluntary sector and we shall propose reductions in cost. Smaller organisations are, again, important, and we will look for areas where we could exempt them altogether from whole categories of regulation, in the same way that we intend to exempt small businesses.

Two - we will end the growing danger of religious discrimination against religious organisations by grant-giving and regulatory bodies. A project's religious character is often the reason for the success of that project. When we make faith-based communities dilute their religious ethos to apply for grants, we endanger these energetic projects.

The Soul Survivor 'Message 2000' project is another good example of religious conviction moving people to action. Last August, 11,000 young people spent ten days at Message 2000; a Christian event that has changed lives in and around Manchester. Each afternoon they went out in teams of 25 to serve the community. Some staffed play schemes for children, others delivered leaflets, many helped practically, digging, weeding and painting; lending a hand to local residents in their homes, gardens and communities.

A superintendent of the Greater Manchester police force said that, for the first time in his experience, there had been no reported crime in that area of Manchester where the Message 2000 members have been working, so great was the impact of their visit. He asked if the volunteers would stay in the area.

Three - we will simplify the funding system so that charities spend less time chasing penny packets from different Departments and Agencies, less time preparing bids and more time delivering real services and care. There needs to be more predictability and durability in grant making.

Here, I am deeply concerned by the effects of the Government's misuse of Lottery funds. Nowhere has this abuse been greater than in the extra funding given to the Dome.

So on taxes, public involvement and regulation, we promise a fresh approach. We will combine traditional Conservative values and new ideas, as a first step towards bringing British levels of charitable giving up to match the best in the world. We will encourage volunteering. We will attack regulation.

Our policies for charities will be part of a broader agenda to strengthening civil society. So the next Conservative government will legislate for local control of schools, we will strengthen the family, we will cut taxes, we will protect the autonomy of faith communities and we will encourage volunteering.

Looking ahead, the British people will still care about their living standards, their healthcare, their children's schooling. But new concerns are moving up their agenda. Their need for proper care for ageing relatives. Their community's ability to take action to fight crime and the drugs menace. Their ability to conserve the environment they love and wish to live in. A right to choice in schooling.

These concerns are inherently more local, more personal, than many of the big issues that governments have to deal with today. And they will only be addressed when government and business work in genuine partnership with civil society - when independent, voluntary institutions are given the careful mix of freedom and support they need.

The rich vitality of the social architecture that lies between the individual, big business and the state gives life so much of its meaning and possibility. I believe that the charitable sector lies at the heart of tomorrow's politics of civil society.

I want a future for Britain's charities where you can use your independence, your community roots, your record of innovation and your sense of social concern to deliver for all the nation. For a Conservative Government will govern for all the people. And to do that we need a thriving voluntary sector. So we promise to listen hard to your concerns and then to take action to meet the challenges ahead.

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