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Lord Wright of Richmond: My Lords, this has been an important and wide-ranging debate. I am extremely grateful to the many noble Lords who have taken part. I thank and congratulate, in particular, the noble Lord, Lord Robertson of Port Ellen, on his excellent maiden speech. I also thank the Minister for the characteristically comprehensive, courteous and skilful way in which she has summed up the debate.

I take fully the reservations of the noble Lord, Lord Wallace of Saltaire, on my proposal that foreign affairs might be somehow separated from defence or
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international development in the Queen's Speech debates. Perhaps that is not a sensible way to proceed. But I am very grateful for the opportunity to hold this debate on what the Minister referred to as our global agenda.

I suggest tentatively that the House authorities, business managers and the Government might view positively the idea that we should have such wide-ranging debates more often than, say, six months, which is about the strike rate at the moment. Although I retired from the Diplomatic Service 13 years ago, I think that I am still allowed to be grateful to the Minister for her remarks on it. Our role in international affairs is too important not to be given a wider airing from time to time.

I hope also that the House authorities and the Government will look sympathetically on the proposal of the noble Earl, Lord Sandwich, that this House should be given more opportunity in its committee system to review and scrutinise international affairs more widely than the present restriction to scrutinising European affairs—I do not suppose that one could call European affairs limited.

I apologise to my noble friend Lord Joffe for the extent to which my debate may have transgressed the time allotted to his important Cross-Bench debate on charitable donations, which noble Lords are about to enjoy. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.

Charitable Giving

Lord Joffe rose to call attention to the 25 per cent fall since 1992 in charitable giving as a percentage of gross domestic product; and to move for Papers.

The noble Lord said: My Lords, there is a widespread illusion that the British give generously to charity. Sadly, however, the statistics tell a very different story.

It must be said that, for a number of complex reasons, the statistics for voluntary giving are far from satisfactory. However, they are reliable enough to reflect trends, as outlined in a telling speech last year by Stephen Ainger, the chief executive of the Charities Aid Foundation. Those trends sparked off today's debate, in respect of which I declare an interest as the chair of the Giving Campaign.

The trend period upon which I will focus runs from 1992 to 2002, the most recent year for which statistics are available. During that period, personal incomes have risen in real terms on average by more than 25 per cent; personal wealth has more than doubled; the Chancellor of the Exchequer, Gordon Brown, has introduced a range of very attractive tax benefits with the objective of stimulating giving; the charitable sector has become much more professional in fundraising; and the very wealthy have prospered as never before. With all those positives, one would have expected the level of individual giving as a percentage
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of GDP to have increased dramatically. Instead it has fallen from 1.2 per cent in 1992 to 0.9 per cent in 2002, a fall of 25 per cent.

In seeking to explore the reasons why the level of giving has not risen in line with the growth of incomes, it emerges that the poor who give to charity give on average three times as much as a proportion of their income as the better off, the top 20 per cent of whom give on average only 0.7 per cent. So, we find that the poor, who cannot really afford it, are considerably more generous than the well-off, who can. This is even more astonishing when regard is paid to the statistics that show that the wealthiest 1 per cent of the population own close to one quarter of the total marketable wealth, while the poorest half of the population own between them only 5 per cent. It follows from those statistics that if the level of giving is to increase significantly, that increase must largely come from the well-off substantially increasing the level of their giving. Unless the very wealthy set an example, it is unlikely that this increase will happen.

The definitive guide to the richest 1,000 people in Britain today is the Sunday Times 2004 Rich List. The qualification level to make the list is wealth of £40 million or more. In this year's list, it is recorded that Britain's super-rich have never had it so good, with their wealth in excess of £200 billion having almost doubled in the past four years. The Rich List also contains the Sunday Times Giving Index, which ranks the 30 most generous philanthropists in the Rich List based on the amount that they give expressed as a percentage of their wealth. The top seven in that index were generous, each having given more than 5 per cent of their wealth in recent donations, headed by the splendid example of Tom Hunter, the Scottish industrialist, who committed £100 million, which was one fifth of his wealth, to charity.

However, of the 10 richest billionaires in Britain, with wealth ranging downwards from £7.5 billion to £2.2 billion, only two, the noble Lord, Lord Sainsbury, and Hans Rausing, figure in the Giving Index. The other eight, including such well known billionaires as Sir Richard Branson, Philip Green and Bernie Ecclestone, either have not qualified or have failed to provide information as to their giving. If it emerges that in fact they were very generous, that would be good news. It is important to recognise that those who have provided information as to their giving in the Rich List have done so not in order to flaunt their wealth, but rather in the hope that they are setting an example for others to follow. It would be encouraging if next year the others in the Rich List followed this example.

It is instructive to compare what the wealthy in the USA give in relation to their counterparts over here. In December last year, Business Week published a list of the 50 most generous philanthropists in the USA. Bill Gates headed the list, having given away 23 billion US dollars over five years, which is about half his present wealth, while Gordon Moore, cofounder of Intel, at number two donated 7 billion US dollars, which is more than his current wealth. In the top 50 in the USA, 30 had given away more than 10 per cent of their
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current wealth. With such generosity among the very wealthy in the USA, it is easy to understand why over the period 1992 to 2002, charitable giving has increased by 15 per cent as a percentage of GDP, in contrast to our own 25 per cent fall, although I should add that it is not in all respects a valid, like-by-like comparison.

The reason for the disparity in giving compared to the USA is a difference in culture. In the USA, it is generally accepted by the well-off that they have a responsibility to give at least part of their wealth to the society that made it possible for them to accumulate such wealth. As a result, in the USA giving is celebrated. Those who give earn and deserve respect from their society for their generosity. In the UK, unfortunately giving is not a defining characteristic of the well-off. It is argued that in the UK many of the well-off prefer to avoid publicity and give anonymously, and that as a result their giving is not taken into account in the statistics. This is true in some cases, but it is often the excuse of those of the well-off who do not give generously, or at all, but prefer not to admit it.

The question arises as to whether we should be seeking to influence the well-off to increase their giving to charity. After all, giving is a personal matter, and there is no way that we can compel individuals to give more than they wish to. Whether we decide to try to influence them depends on the kind of society that we would like to have in this country. Is it to be one where the wealthy and the well-off focus solely upon their own gratification, and accumulate yachts, homes, personal jets, fleets of motorcars and other playthings, and show little regard for those less fortunate than themselves? Or do we want a caring society, in keeping with British tolerance and sense of fairness, where everyone contributes as generously as they can to make it a better society for all? It is the latter for which we should be aiming, and the initial objective for which we should aim is to double the level of giving to charities over the next 10 years. As to the range of initiatives that should be taken to achieve this, a new book to be published next month, Why the Rich Give written by Theresa Lloyd of Philanthropy UK, a project of the Association of Charitable Foundations, is essential reading.

I do not believe that the majority of the well-off are mean and uncaring. They do give, but unfortunately their giving is reactive rather than planned. If they see pictures on TV of starving children, or if they are asked to give, they often respond—sometimes generously. However, they seldom plan their giving by relating the amount that they give to their income and wealth. If they did this periodically I do not doubt that they would spontaneously wish to increase the level of their giving. I recall Michael Brophy, a previous chief executive of the Charities Aid Foundation, making a point at meetings of asking the people there to put up their hands if they gave more than 1 per cent of their incomes to charity. It was astonishing how few put up their hands, but how many subsequently said that having thought about it, they had immediately increased the amount that they intended to give.
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The natural starting point in changing our approach to giving by the well-off is to establish benchmarks. Many people just have no idea of how much it would be reasonable for them to give. I suggest an initial benchmark for our society as a whole of an average of 1.5 per cent of income or wealth. Within that general benchmark, the starting figure for the well-off—whom I define as having incomes in excess of £100,000 a year—would be 2 per cent, going upwards depending on the wealth and income of the individual concerned and going down to virtually nothing for those who struggle to survive on annual incomes of £10,000 or less.

Surprisingly, there is considerable opposition to benchmarks, mostly, I suspect, by those who do not give generously, or at all. The rationale for this opposition is difficult to follow. While no one has a right to determine how much somebody else should give, it is not unreasonable, in a society where we are all dependent on one another, to suggest guidelines as to what may be reasonable. It is not as if benchmarks on giving are something new. Most faiths lay down specific guidelines. Christian faiths often follow 10 per cent, with 5 per cent to go to the Church and 5 per cent to other good causes. For Islam, the starting point is 2.5 per cent, with charity beyond this encouraged. For Hindus, it is according to ability and position and up to 50 per cent, while for Sikhs 10 per cent is specified in the Code of Conduct, and the amount for Jews is also 10 per cent. I am not suggesting that we should leap to these levels at this stage.

However, having established benchmarks we should, as in the USA, celebrate the giving of those whose giving matches these benchmarks, or even more those who exceed them. Naturally, the key players—whose job it is to influence both the well-off and the not so well-off to give to charity—are the charities themselves. They must face up to the challenge of proving to donors that they are making a real and positive difference to society; that they are efficient and effective; and that they appreciate and value the support of those who contribute to their work. Having accepted this responsibility, charities must tailor the level of their "ask" to the income and wealth of the donor, and not be frightened to ask for generous donations from those who can afford them. Increasingly, charities should take potentially generous donors out to show them their work so that such donors gain an understanding of what it is like to live in poverty, or to be without shelter or food, or dying of AIDS. When the wealthy have seen such suffering and realised that they can make a difference, I believe they will want to give generously.

The corporate sector and the Civil Service also have an important role to play in individual giving through encouraging payroll giving. This is an extremely tax- effective way for employees to give. In the USA, 32 per cent of employees are enrolled for payroll giving. The corresponding figure in the UK is only a tiny 2 per cent.

The Government have done a great deal to encourage individual giving through the generous tax incentives introduced by the Chancellor of the Exchequer and by their wide-ranging support of the
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voluntary sector. While there is a limit to what government can do, a change in the legislation relating to new trust structures based on the American experience—enabling donors to get immediate tax relief on gifts, but to draw income as well for a prescribed period—would attract very substantial endowments.

The media too have increasingly made a positive contribution in profiling generous donors—and, in the case of the Sunday Times, in creating a giving index—and will, it is to be hoped, focus more on the positive aspects of the charitable sector in future. If the charitable sector, the business sector, government and the media work in partnership to spread the message of the importance of planned giving—with an emphasis on relating the level of giving to wealth and income—I believe that over a period of 10 years it should be possible to meet the target of doubling the level of voluntary giving in real terms. Although individual giving in the period 1992–2002 has fallen so dramatically as a proportion of GDP, the potential is there greatly to increase this level. Already in the past three years, despite the crash of the stock market, the level of giving has begun to rise.

We would be well on our way to achieving this target, if the 1,000 members of the rich list with wealth in excess of £200 billion were, on average, to increase their giving from 0.7 per cent to 1.7 per cent—which they can so easily afford. This alone would raise the current level of giving by £2 billion to £9.3 billion, and would set an example to the other 230,000 millionaires in the UK and to the mass affluent.

As a society we must do better. One hopes that the better-off, rather than the poor, will lead the way. I beg to move for Papers.

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