U.K. Parties Taking $810,000 Sparks Call for Bequest Clarity

Prime Minister David Cameron and his deputy Nick Clegg sparked controversy last month after their parties initially pocketed 520,000 pounds ($810,000) left to the British government in a retired nurse’s will. Now lawmakers want the process for donating money to the state to be made easier.

Joan Edwards made headlines after the Electoral Commission named her as the second-biggest political donor in the second quarter. While her will stipulated the money should go to the government to spend “as they may think fit,” her solicitors, after consultation with Treasury solicitors and Attorney General Dominic Grieve’s office, decided it should be given Cameron’s Conservative Party and Clegg’s Liberal Democrats.

The coalition partners were pressured into handing the legacy to the Treasury after initially sharing it out between them as party funds. While the Treasury said it’s reviewing the way donations are made, there are no plans for a U.S.-style system to allow benefactors to make donations by bank transfer or card online.

“With the levels of Internet banking it’s really behind the times not to have a simple measure to make bequests to the government,” said Paul Flynn, an opposition Labour Party lawmaker. “They should make it easier to encourage people to do that. If they could also choose which department to donate to, people would be a lot keener.”

The Liberal Democrats were the first to pass on the money to the Treasury, saying they had accepted the funds “in good faith.” The Conservative Party said in a statement that the money will be used to pay off the national debt “to put the matter beyond doubt.”

Debt Costs

Net debt stands at 1.2 trillion pounds and government spending exceeded revenue by more than 116 billion pounds in the year ended March, a budget deficit of 7.4 percent of gross domestic product.

The Treasury spent 39.3 billion pounds on interest payments during the period, meaning Edwards’s gift would cover seven minutes of debt costs.

“Currently members of the public wishing to make gifts to the nation can do so by contacting the Treasury or Debt Management Office and payments can be received by cheque or direct bank transfers,” the Treasury said in an e-mailed statement. “The government currently assesses these arrangements to be appropriate but continues to keep them under review.”

1970s Crisis

Donations to the Treasury to bolster the economy have long been a part of British political life. In the 1970s, a time of economic crisis, Labour Chancellor of the Exchequer Denis Healey received letters with small gifts of cash from concerned members of the public.

In the past decade, about 3 million pounds has been donated to help pay off government borrowing, according to data released by the Debt Management Office’s Commissioners for the Reduction of the National Debt.

In 2007, the year the financial crisis started and lender Northern Rock Plc required a government rescue, the amount surged to 864,384 pounds, before dropping to only 8,143 pounds the following year.

In the U.S., donations can be made by card or transfer online, a system the U.K. has no plans to implement at the moment.

“I’d be in favor of the state doing more to eliminate the deficit rather than relying on people making voluntary donations,” said Conor Burns, a Conservative lawmaker. “We should be making it more convenient to leave money to charities who will spend the money better than the state ever would.”

To contact the reporters on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net; Thomas Penny in London at tpenny@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net; To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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