A bill that seeks to remove the “outdated” caps on charity lottery fundraising will be debated by MPs this week, with estimates suggesting the plans could release an additional £175m for charity over the next five years.

The private members’ bill, which was introduced by Wendy Chamberlain, the Liberal Democrat MP for North East Fife, will be debated at its second reading in the House of Commons on Friday.

Under current legislation, each charity lottery is capped at selling £50m worth of tickets each year, but Chamberlain’s bill seeks to remove these limits.

The People’s Postcode Lottery has estimated that removing the annual cap could free up an additional £175m for charity over the next five years.

Chamberlain said that removing the “outdated” caps would help lotteries “maximise their charity fundraising” and therefore boost the amount available to charities themselves.

She said: “Charity lotteries play a vital role in supporting charities large and small across Britain, yet they are subject to limits on their sales, which ties them up in red tape, and restricts their effectiveness.

“These limits have no obvious purpose and removing them would cost the Treasury nothing, yet it will help boost charities at a time when they face a difficult fundraising environment.”

Chamberlain said within her constituency, causes ranging from farming experiences and skill-building for people with additional support needs to walking groups and local community projects have benefitted from charity lottery funding within the past year.

“It is bizarre that every other type of gambling product has no limit on sales, yet the product that does so much good for society through supporting our charities is capped,” she said.

Most private members’ bills fail to become law because they run out of time or fail to gain government support but Chamberlain said she hoped her bill would receive government backing on Friday.

Claire Govier, managing director of People’s Postcode Lottery, said: “The charity lottery sales limits are causing increasing difficulties for charity lottery fundraising at a time when charities need these vital funds to respond to the impact of the cost-of-living crisis.

“We welcome Wendy Chamberlain bringing forward this bill and urge MPs across parliament to support it.”

Lindsey MacDonald, chief executive of the children’s charity Magic Breakfast, also welcomed the bill, saying: “At Magic Breakfast we are responding to vastly increased need, yet because of the charity lottery sales limits our funding from charity lotteries cannot increase. 

“We join leaders across the charity sector who are calling on parliament to take action and resolve this issue as soon as possible.”

Laura Lee, chief executive of the cancer charity Maggie’s, added: “Charity lotteries have been transformational for so many charities and the important work they do. 

“That has certainly been the case for Maggie’s and it therefore makes no sense that charity lotteries are stymied by government red tape.”