Finance (No. 4) Bill

Lord Soames of Fletching Excerpts

Wednesday 18th April 2012 Commons Chamber

[Mr Ben Bradshaw (Exeter) (Lab)]

I rise to support new clause 7 in my name and those of several other right hon. and hon. Members.

The upkeep of our beautiful and historic buildings is vital to the preservation of Britain’s unique cultural heritage, and it is often done, particularly in the case of churches, thanks to tireless fundraising by volunteers. Raising VAT from 0% to 20% on alterations to our churches and other historic buildings, at the same time as the Government are making fundraising harder with their cap on philanthropy, represents a double whammy to our heritage sector and a dreadful blow to our historic churches—and cathedrals, in particular.

Our great churches and cathedrals are not just historic piles of bricks and mortar or even just places of worship for the few. They are among our most important tourist attractions, bringing thousands of overseas visitors to Britain every year, and well-run major churches and cathedrals, such as the stunning cathedral in Exeter, open their doors constantly to the local community and provide a vital public service. They are our greatest physical symbol of the big society.

I can think of countless occasions in Exeter—for example, a service of thanks for the work of the Royal Marines in Afghanistan, or a funeral for a local teenager tragically murdered—when the cathedral has been packed to the rafters with local people in celebration or in grief. It is a unique service not provided by any other institution.

[Nicholas Soames (Mid Sussex) (Con)]

I wholly support the point that the right hon. Gentleman is making, and does he agree with me that the issue is about not just cathedrals, but small village churches with, in many cases, small congregations, who go to great efforts to raise large sums of money to make their facilities more usable for the rest of the community? Does he agree also that the proposed change is a pretty poor advertisement for the big society?

[Mr Bradshaw]

I absolutely agree.

The Government, in their consultation document, claim that the impact of the change on churches will be small, but that is not the case. Some 45% of grade I listed buildings in England are maintained by the Church of England, including 42 cathedrals. Their upkeep is incredibly expensive, and there are no central funds available for building maintenance.

A very large proportion of the alterations made to churches are about making them easier for the community to use, including, for example, installing disabled toilets, kitchens and so on, but the charge will also hit traditional skills and crafts, such as bell hanging and organ building. About £100 million is spent on those works annually, and imposing 20% VAT on them will add £20 million a year to those bills. In reality, much of the work will simply stop, and that will hit local churches, local communities and the building trade—and it will not raise a single extra penny for the Treasury.

The Prime Minister said earlier today at Prime Minister’s questions that the Government would be giving churches the money that they need to make up the loss, but that is also not the case. The compensation being offered in the Budget by extending the listed places of worship grant scheme, which currently refunds the VAT liable on repairs, is a wholly inadequate way to meet the extra cost that the VAT rise will create.

The Government have already cut the listed places of worship grant scheme by a massive two thirds, from £23 million to £7 million a year, and it already covers less than half the cost of current repairs.

--- Later in debate ---

[Mr Marsden]

It would be absolutely appropriate, not least because there seems to have been scant consultation with any of the Churches or other religious groups or places of worship on this issue. Perhaps the Government would like to start taking notice of the e-petition on this issue, which already has more than 16,000 signatures. Anne Sloman, chair of the Church Buildings Council, wrote to the Chancellor last week stating:

“a very large proportion of the alterations to these buildings…are concerned with making these buildings viable for use by the wider community by installing meeting rooms, lavatories and kitchens. This is the Big Society in action. The imposition of 20 percent VAT…means…most of it will simply stop.”

In conclusion, this is a nonsensical policy. At the end of holy week, the Prime Minister piously talked about the Church in action, but at the same time he let this howler through in a Budget that he claimed to have read line by line. I appeal to the Treasury Front-Bench team, if it is worth appealing to them on this matter, to take notice of what is being said across the Committee. They ought to do a little more line-by-line consideration of this proposal’s perverse effects if they want to dissuade people from the general judgment often passed—possibly very cynically—that some officials and others in the Treasury do indeed know the price of everything and the value of nothing.

[Nicholas Soames]

I believe that there is a great deal in the Budget to applaud and support, but on this issue I wholly agree with the hon. Member for Blackpool South (Mr Marsden), who has just sat down, and the right hon. Member for Exeter (Mr Bradshaw), who put it very well. I also know that my hon. Friend the Member for Banbury (Tony Baldry) has written a powerful letter about this matter.

--- Later in debate ---

[Richard Graham (Gloucester) (Con)]

Does my right hon. Friend agree that the churches and the cathedrals across the land play a vital role in regeneration, growing the economy and tourism, and contribute to our community in a number of different ways, which makes it essential that the Treasury looks on VAT for alterations with great compassion?

[Nicholas Soames]

They do all those things, but they are also places that represent the spirit of England down the centuries. To trifle with them in this way is really not a sensible thing to do, either for the nation at the moment or for the future.

I beg the Treasury Minister to consider whether it would not be worth while laying this measure aside and considering how better it might be to come up with a different scheme. As the right hon. Member for Exeter said, the listed places of worship grant scheme could not possibly compensate for the kind of money involved in imposing a 20% VAT rate on alterations. I urge my hon. Friend the Minister to view this issue with great care, to pay attention and to understand the feelings in this House and elsewhere in the country among people who give of themselves to keep such places going. They mind very much indeed, and their views should be heard and considered.

[Ian Lucas (Wrexham) (Lab)]

I wish to speak in support of new clause 2, which stands in my name. It deals with a long-standing campaign that I have undertaken alongside a charity in my constituency, Chariotts, which offers dial-a-ride-type services to disabled people and has been established for a number of years. It has become more and more successful, transporting people in wheelchairs and those with severe disabilities across the constituency.

The problem in recent years is that as the charity has grown, so has the likelihood of its becoming registrable for VAT in the near future. A VAT anomaly exists that is relevant to Chariotts, as well as other organisations across the country, which is that there is an exemption from VAT for public transport vehicles with 10 seats or more, but not for those with fewer than 10 seats. That means that a disabled passenger undertaking a journey in a small vehicle will have to pay VAT on the journey. When the charity becomes registrable, there will be a 20% increase for disabled passengers, which is extremely serious for individuals on fixed incomes.

I have raised this issue on many occasions in the Chamber, as well as with the Exchequer Secretary elsewhere. He told me in a written answer:

“No estimates have been made of the cost of extending this zero rate as long-standing formal agreements with our European partners prevent us from unilaterally extending the scope of our existing zero rates or introducing new zero rates.”—[Official Report, 28 November 2011; Vol. 536, c. 718W.]

That was quite a categorical no to extending the exemption, to go alongside the statement that European policy was preventing it from occurring. Imagine my astonishment, therefore, when I learned on Monday that the Budget introduces an exemption—a further VAT concession—for small cable-based transportation systems. Ski lifts and the like will benefit from a tax cut from 20% to 5%. There is to be a reduced rate of VAT for skiers on the piste. We have already heard about pasties and caravans. Now, for reasons that are unclear, the Government are giving a tax cut to people having a luxury holiday.