And they're willing to use that understanding to get what they want. Scott Colvin, author of How To Use Politicians To Get What You Want, explains...
The unseemly row over charitable giving shows little sign of abating. For those not in the know, in the Budget, the Chancellor changed the rules which previously allowed wealthy individuals to give all of their income to charity, rather than to the taxman.
In the interests of fairness, the Government decided to set a tax relief cap of £50,000 or 25% of income. This caused a huge row with both philanthropists and the charities themselves, made worse by a cack-handed attempt by Downing Street to suggest some donors were cheating the system.
Any hope from the Chancellor that this row would soon die down has proven to be hopelessly naive. It continues to rumble on, and the Deputy Prime Minister, Nick Clegg, and the Culture Secretary, Jeremy Hunt, both got a taste of some of the sentiment at a reception for arts giving last Tuesday, at which I was present.
Subsequently, the Government briefed that there was likely to be a partial u-turn, with the cap lifted to around 50%. Whether this solves the problem is difficult to assess, but it might take the row off of the front pages, at the very least.
This whole episode reveals how difficult being in Government really is. The four ministers who presumably knew about the change - Cameron, Clegg, Osborne, Alexander - had little experience of the charitable sector, so will have barely any understanding of the storm they were about to create.
The people who could have warned them of the severe consequences - Jeremy Hunt and charities minister Nick Hurd - were not consulted. Hunt has worked hard to get the arts community onside, no mean feat considering the inevitable cuts to the arts proposed by the Coalition. He has promoted a tremendous inheritance tax change of which I have helped to raise awareness (www.legacy10.com) namely a cut in IHT from 40% down to 36% for those who decide to leave at least 10% of their wealth to charity in their will.
Much of that good work has been damaged by another part of Government working in isolation without due consideration for the consequences. The Treasury will have to reflect on whether an attempt to save £40m has been worth the subsequent weeks of political grief.
What has impressed me is the way the charities have used techniques I wrote about in my book How to Use Politicians to Get What You Want. They have put pressure on Government by making the issue very politically painful, turning the issue away from the principle of rich people cutting their tax liabilities, to the real consequences for charities trying to make ends meet. People in communities up and down the country will have been offended and upset by the policy change and may think twice about voting Conservative at the next election. The campaigners have understood what motivates politicians, namely the impact any policy has at the ballot box.