A Labour Party shadow minister has backed charging charities to help fund the Charity Commission.

Speaking at the Charity Finance Group’s annual conference yesterday, Baroness Hayter, the shadow minister for exiting the European Union, said she was in favour of a levy on charities to pay for the regulator.

In a response to a question about the sector’s relationship with the commission at the end of a session discussing Brexit and the consequences for the charity sector, she said her proposals would bring charities in line with other sectors, such as health, that pay for their regulators.

Hayter said: "I think the Charity Commission should be funded by charities – that would make a whole difference. Every other regulator is funded by its sector.

"If the government does bring up some future legislation on the Charity Commission, please let’s have a talk about it at that stage. I’m not saying that my solution is right, but I do think there is a big issue about the role of the regulator as champion, friend and regulator. We need to get that right."

The Charity Commission is expected to launch a consultation on charging charities after the general election, and its chair, William Shawcross, has repeatedly spoken in favour of such a reform.

Shawcross told a meeting in parliament of the All-Party Parliamentary Group on Charities and Volunteering last year that he hoped to raise about £5m a year from a levy, on top of the commission’s £20m annual budget, which has been frozen until 2020.

It is understood that the Treasury granted permission in March for a consultation on the issue to take place.

Also speaking at the session, Fabian Picardo, chief minister of Gibraltar, said there needed to be a strong relationship between the charity sector and the Charity Commission if the public was to have confidence in how charities were run.

"I think a regulator is there to give confidence to the sector, not to destroy confidence in the sector, but that’s a balance and a relationship between the sector and the regulator," he said. "Let’s make sure you get that right.

"Getting that right means the public has to have confidence in what you’re doing, it has to understand your goals and it has to share your goals. Let’s ask ourselves how it is that the charitable sector, such an important sector, has fallen out with its regulator and the public doesn’t understand it. You have got to tell your story and you have to tell it quickly."