As hon. Members have said, the clause will increase the limits on the value of benefits that can be received by individuals and corporations who make qualifying donations to charity. The adjustments will increase the cap on the benefits that donors can receive in a year in response to gift aid donations from £250 to £500. In addition, the percentage limit for benefits received in return for donations over £1,000 will be increased from 2.5 per cent. to 5 per cent. Those benefit limits allow charities to build sustained relationships with donors by offering them a gesture of recognition.

The limits have been unchanged since the introduction of gift aid in 1990 and we believe that the changes in the Bill will help to encourage increased philanthropy, as appropriate levels of benefits can increase scope for institutions to build up lasting relationships with donors. As the hon. Member for Falmouth and Camborne highlighted, for the purpose of gift aid donations by individuals, community amateur sports clubs are treated as charities and so will also benefit from the increase in benefit limits.

As the hon. Member for Rayleigh said, reaction to this change has been positive. He asked me three questions. First, he asked why we were only increasing the threshold limit for larger donations. As he said, these changes have been welcomed by the Chartered Institute of Taxation and the London Society of Chartered Accountants. The benefit limits have not been increased since 1990. It was sensible to review them. For larger donations, we understand that the current limits constrain charities when making gestures of recognition to reflect the scale of donation. That therefore restricts their ability to deal with and develop relationships with large donors.

We feel that the existing limits for smaller donations are already generous. For example, if a donor makes a gift of up to £100, a charity may thank them with items or services worth up to £25, which in that case would be 25 per cent., rather than 2.5 per cent. The changes were specifically intended to increase scope for charities to recognise larger donations and develop relations with their wealthy donors. It was in that area, rather than on smaller donations, that we perceived there to be a problem. That is why we have acted in this way, but if the sector makes further representations, we can consider those in due course. The representations that were made concerned larger donations.

On the second point, the representation from the Royal Aeronautical Society and the former Member of this House, Mr. Keith Mans, I am happy to commit the Treasury to consider the matter. I cannot give the hon. Member for Rayleigh an answer today. It is not an issue on which he has tabled an amendment. On this occasion, I had no advance notice of the detailed point, so I am not in a position to respond to it outside the scope of the clause. I will, however, examine the matter. We will be happy to meet Mr. Mans—on the ground rather than in the sky—and I will happily commit the Treasury to writing to the hon. Gentleman about the matter, and to meeting Mr. Mans.

On the point that the hon. Member for Falmouth and Camborne raised in passing about awareness, we have explicitly flagged the extra benefit limits to the Community Amateur Sports Clubs forum as well as the Central Council for Physical Recreation. We will endeavour to ensure the widest awareness.

That brings me on to the third point about the impact of Budget changes. When we make changes to the tax system, they have an impact more widely. Those impacts are considered in making Budget decisions. At the same time, however, we always work with the sector to try to ensure that we increase awareness and opportunity. Although the amount of gift aid repayable to charities is affected by the change to the basic rate of tax, we believe that there is significant scope for the charitable sector to increase the proportion of donations that enjoy gift aid tax relief.

The Charities Aid Foundation has stated that an additional £700 million of gift aid tax relief could potentially be claimed. The consultation that we announced in the Budget is aimed at trying to find particular ways to raise awareness and to change the regulations so that we can increase the amount of charitable giving that benefits from the tax relief. We hope that in the coming years, the strong upward trend in donations will continue, and the upward trend in donations receiving tax relief will continue. I remind  the Committee that in 1996-97, the amount of basic rate gift aid to charities was £134 million. By 1998-99 that had risen to £306 million. By 2005-06, the amount had risen to £750 million. There has been a substantial rise in the amount of tax relief for gift aid, but this is one of those occasions on which the Treasury would like the cost to the Exchequer to go up, not down.