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Question 1. Who said this: "Too many people think that all we care about is balancing the books. Wrong. We are going to encourage a stronger culture of giving in Britain — with more people giving more money and more time to good causes around us."

It was the Prime Minister, of course: David Cameron generously donating his time to the cause of explaining his Big Society idea, on May 23, 2011.

There is already a scheme to encourage giving. It is called Gift Aid. It categorises donations to good causes as net contributions after basic rate tax. If you donate £100 cash that counts as 80 per cent of the real amount, and the charity can claim the missing £25 from HM Revenue & Customs. If you pay income tax at the higher rates you can even reclaim something. On £100 that would be £25 for a 40 per cent payer and £37.50 for a 50 per cent payer. There are equivalent provisions for companies and corporation tax.

Naturally there is a limit. An individual can only use Gift Aid if they have paid tax at least equal to the amount claimed by their charities. That is only fair. But the HM Revenue & Customs website does have several pages devoted to "Tax-efficient giving to charity". So the taxman cannot claim that, to his surprise, people are using tax relief for charitable donations to reduce liabilities.

With that background, and with the Prime Minister's clarity and directness, we could expect that his government wanted people to give even more money to charity. 

Question 2. Which government, in its Budget on March 21, 2012, announced plans to limit the amount which individuals can donate to charity? That's right. Her Majesty's Government, speaking through Chancellor of the Exchequer George Osborne. The government's right hand does not seem to know what its head is thinking.

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