Lord Hodgson promised yesterday that he would "continue banging on" about the compulsory registration threshold for charities being raised from the current £5,000 to £25,000, until the government relents and agrees to change it.

In the government's response to the twin Charities Act reviews by Lord Hodgson and the Public Administration Select Committee last week, ministers opted not to accept Hodgson's advice that the threshold be raised.

Doing so would remove too many charities from Charity Commission oversight, it argued, allowing them to operate ‘below the radar’.

But in an address to the Westminster Social Policy Forum yesterday, Lord Hodgson said he simply could not understand why his suggestion had not resonated with the sector, the Commission, and the public.

He repeated again his proposal: that charities should only be compelled to register with the Charity Commission once their income passes £25,000, but can do online if they wish to achieve registered charity status.

Those with income below that threshold should have 'small' on all their communications materials so the public knows they are not subject to the same level of scrutiny as larger charities.

This would give the Charity Commission a much more realistic constituency to regulate, Hodgson argued.

"The Charity Commission simply cannot regulate 160,000 charities," he said. “This would give them an opportunity to come clean, because at the moment the public believes that the Commission looks at and regulates every single charity, from the biggest to the smallest.  But it can’t be done.

"Sadly this idea has not found favour, but I am still going to bang away about it and I shall be going for ministers again, because I really think this is an issue the sector and the Charity Commission should pick up."