Public Affairs: Soap Box - Estelle McCartney, associate director, Champollion

Following closely on the heels of the 'granny tax' and 'pasty tax' fiascos, George Osborne's proposal to cap the tax relief on charitable donations has created another run of damaging headlines.

Not only does the Government appear increasingly incompetent in the substance of its policy, but it also seems ineffectual at dealing with the political and reputational fallout of those decisions.

Had the Chancellor taken the appropriate private soundings from the charitable sector, it is difficult to imagine the proposal would have ended up anywhere other than the scrap heap.

Having failed to do so, and finding himself under sustained attack from respected institutions, much-loved charities and his own party treasurer, what should be his response?

It is impossible to see how anything short of a climb-down will end this PR disaster. Opponents of the cap have mounted an effective and co-ordinated campaign that has fed the media with the stream of content they require to keep the story high in the running order.

The Chancellor now needs to accept the cap, whatever its intended effect, was a political mistake. He should orchestrate an immediate announcement explaining that while his motivation to clamp down on tax avoidance was the right one, he accepts this specific policy was wrong.

He then needs to begin the long task of rebuilding the relationships with and trust of the sector and the many individual organisations and institutions opposed to the cap. This cannot be done solely through a media offensive but requires him to undertake some direct engagement with the sector.

The Government should then move quickly to help its Chancellor and itself by making a significant and well-tested announcement to move the news agenda on. Only then will this damaging story move from the front pages.

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