Taxation: VAT on Retrofitting Buildings

Debate between Lord Redesdale and Lord Newby

Thursday 25th July 2013 Lords Chamber

[Lord Newby]

As the noble Lord said, the VAT regime is an EU regime. Any attempt to change it will require unanimity as it is a tax measure. Opening up the regime would, in my view, open up a Pandora’s box, and I do not recommend that as a policy approach.

[Lord Redesdale]

My Lords, Britain has one of the oldest building stocks in Europe. Does the Minister not agree that the value of retrofitting old buildings is incredibly important? I point to the enormous success of the retrofitting of the Palace of Westminster and congratulate the efforts by the staff to make great savings. However, there are particular problems with the Palace of Westminster. It is a grade 1 listed building, and there is quite a cost burden on retrofitting listed buildings. Can the Government consider a different, deferential rate for all listed buildings because of the cost implication of retrofitting listed buildings?

[Lord Newby]

My Lords, I think that we are all aware of the complications of trying to make a building such as this energy efficient, and I pay tribute to the work being done in that respect. Sadly, under EU legislation, the scope for a reduced rate of VAT on non-residential royal palaces is, I am afraid, non-existent. However, I commend, and refer the noble Lord to, the work that the National Trust is doing on green energy projects—for example, installing a biomass boiler system at Chirk Castle, which just shows what can be done. I remind the noble Lord that the Green Deal will apply to homes that are listed buildings.