Ministers urge giving to charity at the cash machine

A cash machine-giving scheme is already working in Colombia, ministers say

People could give to charity every time they use bank cards in shops or at cash machines, the government has said.

They could also be prompted to give money when they fill in tax returns, or apply for passports and driving licences, according to proposals.

Lottery winners would get thank-you letters from ministers if they donated large sums to good causes.

Labour welcomed the Green Paper but warned it would not stop the cuts facing charities.

The proposals are set out in a government paper calling for charitable giving to become a "social norm" and for public services to be encouraged to take on more volunteers.

The government's consultation, which runs until 9 March, calls on UK banks to look at copying a system used in Colombia which allows customers to make a donation each time they withdraw cash.

And it recommends a national "round-up-the-pound" scheme which would allow people to donate "change" when paying by debit or credit card.

The scheme is already operated by the Pennies Foundation charity with some retailers. A working group will be set up in the new year to look at how it could be expanded.

While the British are generous in charitable giving compared with people in most other countries, they rank 29th for volunteering - spending an average 17 hours a week watching TV but only one hour on voluntary work, the document notes.

The government said there was evidence of a "latent demand to give" and that individuals and businesses needed to be reminded of the "warm glow" resulting from helping others.

Cabinet Office minister Francis Maude said it was not an attempt to "compel" people but to encourage the "big society" agenda championed by Prime Minister David Cameron.

Donations from people to local projects in deprived areas will be matched through a £50m Community First Fund and £10m match-funding will be available to voluntary projects.

Under-used government buildings may also be opened up for charities to use.

Mr Maude told BBC Radio 5live: "If there were to be an understanding that people might give on average 1% of their income, that would generate another £4bn of giving.

"For some things there's an absolute social norm that if you go to a restaurant you expect to tip somewhere probably between 10% and 15% and that's kind of an understanding. There's no similar understanding with charitable giving."

But his Labour shadow Liam Byrne said many charities were laying off staff.

"I'm sure Mr Cameron wants civil society to be stronger. We all do. But the test of his sincerity is not a good slogan, it's whether he'll help the charities issuing thousands of redundancy notices in the new year because of cuts that are too big and too fast and a new £170 million VAT bill."

Chief executive of the Charities Aid Foundation John Low welcomed the Green Paper's attempts to "kick-start some new initiatives which will make it easy to give and to build up existing ones".

But he added: "There is more that could be done to make it easier to take advantage of tax incentives, including reforming the Gift Aid system, improving access to Give As You Earn and encouraging all types of tax-effective giving.

"Every year around £750m is lost in unclaimed Gift Aid alone and a third of UK adults don't know that they can give to charity tax-effectively."

He said lessons could be learned from the US where tax relief was easier to understand and more people made use of it.