Economy: Budget Statement

Lord Bishop of Chichester Excerpts

Thursday 22nd March 2012 Lords Chamber

[The Lord Bishop of Chichester]

My Lords, the Chancellor has noble aims—a stable economy, a fairer, more efficient and simpler tax system and the encouragement of growth. From these Benches, I am pleased to endorse all three of those objectives. The debate is therefore not so much about the Government’s declared intentions as whether the Chancellor’s proposals are best calculated to achieve them.

A stable economy and sustainable growth are clearly in everybody’s interests. Rising prices and rising joblessness impact especially on the least well off, so the Chancellor is right to see maintaining confidence in our public finances, tackling inflation and creating the conditions for more job creation as priorities. Within this we therefore welcome the raising of the threshold of the basic rate of tax, given the benefit that will provide for lower-paid workers. Also welcome is the Chancellor’s belated rethink about the cut-off for child benefit payments. The higher figure removes the unfairness in the previous announcement, which would have created the perverse incentive for two parents on relatively low, modest salaries both to work outside the home rather than enabling one to be devoted to the care of very young children. It would also have hit a large number of middle-income families. We are very pleased to see that the Chancellor has had second thoughts about that. Other things to welcome include the anti-tax avoidance measures, the introduction of a new gift aid small donations scheme, more money for Armed Forces accommodation and some of the proposals designed to undergird the Prime Minister’s aspiration that those with the “broadest shoulders should bear the greatest load”.

In the present situation, it also seems sensible that the Budget should, overall, be fiscally neutral. “Overall”, however, is a slippery word. It inevitably implies losers as well as winners. We shall continue from these Benches to highlight concerns for the most vulnerable in our society. We therefore note with some concern the Chancellor’s suggestion that he will be looking for further reductions in the welfare budget in the next spending review period. Of course we accept that reform is necessary, but the question is: who pays the price?

When it comes to the proposal to freeze the tax allowances for the over-65s, I need to declare a double interest. First, I am about to become one of the “poor old dears” to whom the noble Lord, Lord Eatwell, referred, but secondly, and much more importantly, from my experience as the bishop of a diocese which contains a large number of pensioners who do not often have the benefit of occupational pension schemes and are struggling under the burden they are already bearing, I know of the fear which they experienced at hearing some of yesterday’s announcements.

My second concern is about the intention to change the law to relax the restrictions on Sunday trading. I am well aware that any attempt to question what the Government have proposed in this regard will sound either like party-pooping or special pleading. These will be the first Olympic Games in this country for 64 years and it is understandable that the Government want to maximise the commercial opportunities they will provide. Therefore, I do not wish to speak against the principle of a strictly time-limited and tightly drawn element of deregulation while the Games are in progress and in locations close to the main events. To remove all restrictions for an eight-week period, however, sounds suspiciously like a stalking horse for the wider deregulation for which some large retailers have been campaigning for a long time. Therefore, we will watch this space with a degree of scepticism. It is important that the regulations are drawn in such a way as to cover the Olympics and the Paralympics equally, but I remain to be persuaded that a Bill as widely drafted as the Government seem to intend is justified. I seek an assurance that there will be time for proper scrutiny of it in this House.

Thirdly, as part of the extension of VAT, the Chancellor is intending to remove zero rating from agreed alterations to listed buildings, so that, as is already the case with repairs and maintenance, the standard rate is payable. The Treasury document says that this is targeted mainly on listed dwellings but concedes that it will also affect listed places of worship and other buildings used for charitable purposes.

I need to remind your Lordships’ House that 45 per cent of all grade 1 listed buildings in England are places of worship. About 12,300 Church of England churches are listed out of 14,500 listed places of worship altogether, and 356 of those listed buildings are in my diocese. It is welcome that the Treasury has said that DCMS will extend the eligibility rules of the listed places of worship grant scheme so that alterations as well as repairs can qualify, and of course we are grateful for the extension announced in October 2010 of a further four years for a grant scheme.

However, the scheme is cash-limited, and I fail to see any reference to the amount of money available being increased. If so, does not the extension simply mean that the available money, which has already been reduced to £7 million this year, will have to be spread even more thinly? It rather blows any talk about the big society out of the water to make VAT non-refundable on agreed alterations by extending the VAT liability to improvements. Because the change will not affect places which charge for entry, it will increase the pressure on large churches and cathedrals to introduce admission charges. Of course, some already do that, but many, including my cathedral, as a matter of principle do not charge for admission and wish to remain in that position. The way in which the new rule will impact on them is particularly difficult.

Ordinary local people, members of local churches and communities, have been volunteers for years looking after our glorious heritage of listed buildings—and they pay for it as well. About £107 million is spent annually on Church of England churches, on the 2008 figures, and £70 million of that is raised by local people for their local parish churches. They did not choose to build those places; they inherited them. Now they are to have a 20 per cent tax on their efforts to improve them. They will be taxed for volunteering to support the nation’s built heritage in that way. They want to leave their building in an enhanced, improved state for the next generation, which has direct implications for introducing energy-saving and other improvements into medieval churches. Some joined-up thinking needs to be done here, or the impact of VAT on improvements will have a deleterious effect on some of the things that the Government think desirable.

All of that will be a bad blow for the churchwardens and parochial church council members of about 12,500 listed churches, many of whom strive tirelessly to raise money for basic improvements so that better facilities can be installed and churches are available for greater community use. I very much hope that the Government will be prepared to think again before the law is changed.