Most people lavish their generosity on friends, family and good causes. But some select a more unusual recipient: the Exchequer.
Making “patriotic gifts” to the nation has a long tradition, dating back to the time of the Napoleonic wars. Yet Britons’ willingness to donate to the Treasury has dwindled in recent years, even as the country’s debts reach a record high.
Four times as much money was raised through donations in the seven years before the financial crisis as in the eight years following it — a period in which the national debt has more than doubled, according to an FT analysis of figures from the Debt Management Office.
Most people who opt to give money to the nation in their will manage to remain anonymous. But one exception was Joan Edwards, a former nurse, who made a £520,000 bequest for “whichever government is in office”. This sparked a political controversy in 2013 after it emerged the donation had initially been split between the Conservatives and the Liberal Democrats, who were in coalition at the time.
Another benefactor was Hilary Blume, a charity entrepreneur, who in 2009 gave her grandchildren vouchers to “whittle down the national debt”. These were offered in her Good Gifts catalogue, which encourages people to send money to good causes in lieu of presents. She was castigated by critics who said the idea was nonsense.
In her own words, the suggestion “went down like a lead balloon”.
Even now, Dame Hilary says she wishes people concerned about welfare cuts would “pitch in a tenner” to support the government.
“Charity can do much,” she said. “Government can do more.”
There were 15 “donations and bequests” to reduce the national debt, totalling £180,393, in the year to March 2017, the most recent figures available.
By comparison, a total amount of £9.7bn was donated by Britons to charity last year, according to the latest Charities Aid Foundation annual report.
About 200 gifts have been made to the government since 2000, ranging from as little as 4p to as much as £600,000. During the 17-year period, the “donations and bequests account”, administered by the Commissioners for the Reduction of the National Debt, a government body, has received a total of £8.3m.
But such gifts have a negligible impact on the national debt. Donations made since 2000, which have all been used to buy and cancel government bonds, amounted to about 0.0005 per cent of the £1.79tn of national debt.
Based on current trends, the national debt — which is expected to peak this year at 86.5 per cent of GDP — is unlikely to fall to its pre-crisis levels of 40 per cent of national income until well past the 2060s, according to the Institute for Fiscal Studies think-tank.
Historically, wars have focused public attention on patriotic gifts. After the first world war, Stanley Baldwin, then financial secretary to the Treasury, appealed for voluntary donations to help reduce war debt. He also gave a fifth of his own wealth to the Exchequer, according to the Treasury.
In 1927, an anonymous donor set up the National Fund charity with about £500,000 — which has since grown 844-fold — to inspire the government to move quickly to pay off the UK’s debt. The donor specified that the fund should be held in trust until the country had collected enough money to pay off the whole debt.
Even now, taxpayers are invited to pay more.
In 2013, Iain Duncan Smith, then work and pensions secretary, encouraged wealthy pensioners to pay back their winter fuel allowance. Earlier this year, Westminster council wrote to the borough’s richest property owners, urging them to double the £1,376 a year they pay in council tax.
HM Revenue & Customs continues to invite “voluntary restitution” from taxpayers who owe tax but are unlikely to be pursued by the authorities.
Dawn Register, a partner at BDO, the accountancy firm, said she had dealt with several cases where individuals had felt a “strong moral obligation” to “make good” their flawed tax records.
Other countries also allow citizens to make voluntary contributions. The US Treasury has raised about $45m since 2000 through such means. In June, Norway’s government launched an initiative aimed at collecting voluntary contributions. But it brought in just $1,325 in its first month.
In Britain, experts blame a variety of reasons for why people have largely eschewed making contributions, including the ballooning public debt. Others may not be willing to contribute to pay down the national debt, following speculation that the government could simply cancel the debt acquired by the central banks as a consequence of quantitative easing.
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