Tax-free donations could have saved one of London's best local theatres
AS THE pounds 750m Millennium Dome gives more details of its attractions this spring, the Greenwich Theatre, a short distance away, will close its doors for want of an additional pounds 100,000 a year. This illustrates the crazy state of the crisis in the arts.

The Independent on Sunday and Independent campaign is urging the Chancellor to simplify the tax system for those giving to the arts and make all donations tax deductible in his Budget on 17 March. This would massively increase the amount of money individuals give to the arts, and help end the financial crisis faced by cultural institutions.

The highly-regarded Greenwich Theatre is a victim of the crisis in the arts, and would benefit from the simple measures we are advocating. It has considerable support both locally and among the national arts community. Yet when its production of Romeo and Juliet finishes in March it will close its doors, and will not reopen as a repertory company presenting its own work - if it reopens at all.

Last month the London Arts Board axed its pounds 196,000 grant. The theatre's artistic director, Matthew Francis, said last week: "We just need an additional pounds 100,000 a year. As it was we received the smallest subsidy for a building-based theatre, yet 51,000 people came to our plays over the last year, and as recently as 1994-95 we had a surplus."

Giving simple tax relief to donors would be an enormous help, Mr Francis said. "I have raised several thousand pounds from individual donors for productions in the past. There is a great spirit of support for the theatre. But there's no question that if people knew they could give pounds 100 or pounds 50 and there was an immediate tax break on it, more money would come from that. We need to make it easier and less bureaucratic."

As for the contrast with the money being spent on the Dome, and the fact it will bring tourists to the area who will now not be able to see the repertory company in action, Mr Francis said: "It's too hurtful to think about."

Leading lights in the arts continue to come on board the campaign. Last week, the musicals impresario Sir Cameron Mackintosh lent his support as did the actor Sir Ian Holm, who is one of the favourites for a Laurence Olivier award tomorrow for his performance as King Lear.

They join a list that includes Sir Peter Hall, Alan Ayckbourn, Fiona Shaw and Harriet Walter. Support has flooded from readers, showing the desire that exists in the country both to give to the arts and to end the anomalies that effectively penalise people for doing so.

We are urging Mr Brown to use his Budget to introduce a change in taxation law to enable people to make tax-free donations to arts companies and venues. A simple system could be brought in to replace the muddled and cumbersome system of tax relief through covenants and the Gift Aid Scheme.

The system is riddled with anomalies. Some arts organisations are charities, others are not. Tax relief can only be claimed where the organisation is a charity. In addition, tax relief can be claimed only on donations above pounds 250, a deterrent to many who would like to help the arts.

The campaign also scored two significant victories over the past week. Culture Secretary Chris Smith, who cannot speak publicly about tax matters in the run-up to the Budget, was said by senior sources in his own department to be behind the campaign and to be having talks with the Chancellor about making contributions tax deductible.

And the Association for Business Sponsorship of the Arts expressed its support. It includes leading businesses such as BT and BP and has on its council such arts luminaries as Lord Puttnam and Dame Diana Rigg. Its director-general, Colin Tweedy, said: "Arts supporters should be left with a warm feeling, not an accounting nightmare."

Many readers and celebrities who have been phoning in with their support were keen to stress, correctly, that the system of tax relief and climate of giving we are advocating should be additional to, and not a substitute for, a proper system of public subsidy.

This was best summed up by David Barrie, director of the National Art Collections Fund, who said: "Tax incentives for individuals will certainly encourage them to support the arts on a much more generous scale than hitherto, and will do a great deal to foster a climate of giving in this country. But if the government takes action to encourage private giving, it should not use this as an excuse to withdraw from its core funding commitments.

"Private donors need to feel that their contributions are helping the arts to thrive. They do not want to see their money disappearing into ailing institutions, to fund staff redundancies or fix the roof. Private giving and public subsidy work best in long-term partnership, with both parties entering into the 'deal' with enthusiasm."