09/05/2012 10:11 BST

Charity Tax: 'Give It Back' Campaign Welcomes PM's Hint Of A U-Turn

Campaigners fighting new taxes on charities have welcomed "the strongest signal" yet that the government will retreat on the controversial measure - but warned that the prospect of a gap is still causing damage.

Following Prime Minister David Cameron's comments in the Daily Mail that the matter would be "be dealt with", Ben Kernighan, who is the deputy chief executive of the national council for voluntary organisations (NCVO), which coordinates the 'Give it Back George' campaign, told The Huffington Post UK he was "very pleased".

"I think they realise the damage that a cap will do," he said. "They've already changed their position and said they are not attacking philanthropists and saying the reason for this is people giving to charity to avoid tax. They have changed their position on that already.

give it back george

But Kernighan added that despite Cameron's comments, there was no concrete plans to drop the cap on tax relief for charitable donations, a proposal revealed in Chancellor George Osborne's March Budget.

"We know that philanthropists are putting some of their giving on hold. I think if they act quickly to drop the cap that it will be a great message."

The hint of a u-turn comes after a study by Oxford Economics found the cap could cost £1.5bn per year.

In April Cameron gave a similar hint, saying he would take the time to "get it right."

Kernighan said that charities, arts organisations, philanthropists and universities were united against the cap and had told government it would damage the sector.

Speaking of a meeting with treasury minister David Gauke and civil society minister Nick Hurt on Tuesday, he said charities went in with "all guns blazing."

"They can have been left in no doubt that we weren't going to go away and that that was an issue they have to deal with.

"I think that they are listening. I think that the authority to abandon the cap doesn't rest with the junior ministers and that's why I'm very pleased with David Cameron's comments.

Sir Stuart Etherington, chief executive of NCVO, said in a statement: "This is the most encouraging sign yet that the diverse chorus of disapproval against the cap is being heeded by the highest levels of government.  We hope that the prime minister’s comments signal that this unloved policy is finally going to be put out of its misery."