More than a dozen umbrella bodies and major charities have written to Lord Mandelson calling on him to reverse a decision to start charging charities for playing recorded music before it becomes law this month.
The Department for Business, Innovation and Skills announced in November that charities that play recorded music on their premises will no longer be exempt from paying royalties to the licensing body Phonographic Performance Limited, which passes the fees on to performers and record companies.
The letter, sent yesterday, says the charge, of at least £80 per building per year, would cost the sector £20m annually and "severely impact" the ability of charities to support their beneficiaries.
"The real risk is that with 54 per cent of charities running on annual budgets of less than £10,000, many will simply be unable to pay the proposed extra charge and may lose out on fundraising income and have to withdraw some services as a result," the letter says. It calls on Mandelson to put an end to "this inappropriate use of our limited funds".
It has been signed by senior staff from several major charities, including the chief executives of Oxfam and Mind, as well as by the chief executives of the national charity umbrella bodies in England, Scotland, Wales and Northern Ireland, local umbrella body Navca and the Association of Charity Shops.
Stuart Etherington, chief executive of the NCVO, said he was expecting the abolition of the exemption to be ratified by Parliament "any day now".
"This letter shows the Government how broad opposition to this decision is, and just how badly it will impact on our ability to help the most disadvantaged people in our society," he said.
A spokesman for the Department for Business, Innovation and Skills said a meeting took place yesterday between Mandelson and PPL, but he was unable to comment on what had been discussed. He said the timetable for the legislation remained unchanged.
If the changes are agreed, they will come into force in April. An early day motion against the move, posted on 1 December by Tom Levitt, chair of the All-Party Parliamentary Group on the Community and Voluntary Sector, has now attracted 100 signatures.