VAT (Listed Properties)

Debate between Alison Thewliss and Hywel Williams

Wednesday 4th March 2020 Westminster Hall

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure to see you in the Chair, Sir Christopher.

I thank the hon. Member for South Thanet (Craig Mackinlay) for securing this debate, which is on an issue that is overdue for some action. I certainly hope that the Government will take it on board.

The SNP has argued for a reduction in VAT for energy improvement measures in homes. We asked for reductions in VAT for more modern buildings, those affected by the cladding scandal. I agree with the hon. Gentleman that there is a strong argument to do that for listed buildings as well. Research by the Federation of Master Builders demonstrates that cutting VAT for energy-efficiency improvements, for example, would significantly boost the UK economy and generate thousands of jobs, bring empty properties back into use, improve the energy efficiency of our housing stock, reduce the incidence of fuel poverty, and protect consumers and legitimate businesses by significantly reducing the competitive advantage of rogue traders.

The hon. Gentleman went into some of the history of the measures we are debating and how they came about. In 2012, when the then Chancellor proposed levying VAT on listed properties, the Scottish Government Culture Secretary, Fiona Hyslop—I note she is still in her post, despite the UK Government being on their fourth Chancellor since then—said in a written answer to a parliamentary question in Holyrood:

“The UK Government’s proposal is clearly a deeply regrettable step in the opposite direction from the approach that the Scottish Ministers advocate.

Maintaining the VAT relief on alterations to listed buildings, and reducing the VAT rate applicable to repairs and maintenance, would be important positive steps which would stimulate economic activity in a sector worth around £2.3 billion gross value added”—

to Scotland’s economy alone—

“a significant proportion of which is attributable to construction activity.”

At the time, she wrote to the Chancellor,

“urging him to withdraw from this policy”,

but, as we know, that is not always taken on. However, there is always an opportunity for the Government to reflect on the error of their ways—perhaps they would be wise to do so.

There are many arguments around the subject, and rationales about Tudor swimming pools and the like have been given, but this is not about people in big mansions getting their houses repaired. The reality is that half of listed properties in this country are occupied by people at the very low end of the socioeconomic distribution. This is not necessarily about attacks on the wealthy or just about protecting glorious listed buildings; this is about the homes that people live in.

There are 1,840 derelict sites and buildings in Glasgow city; 126 of those are in the listed buildings at risk register. It is no surprise that many are concentrated in areas of higher deprivation. People in those areas are three times more likely to live near vacant derelict land, but they are the same people who benefit most from having those buildings repaired and brought up to standard.

[Hywel Williams]

There is a particular issue where there is a high concentration of listed buildings in poor condition and low incomes. The market in general has a chilling effect on the provision of specialist labour, as the hon. Member for South Thanet (Craig Mackinlay) mentioned. There is a more general effect of the amplification of housing deprivation when one compares the many hundreds of thousands of new builds, particularly in urban and suburban areas in the south-east, which are free of VAT, with buildings such as those in my constituency, where 20% VAT is paid.

[Alison Thewliss]

The hon. Gentleman is correct; it is a perverse incentive that a building could be perfectly fixable, but it is more cost effective to demolish it and build something new. We want to incentivise people to keep those buildings. In Glasgow, huge swathes of the city have been demolished and replaced with newer and less adequate buildings, which in turn have been demolished, rather than investing in the original buildings. In the areas where we still have a dense tenemental stock, there would be a real benefit to incentivising people to repair those buildings and keep them, because they are fundamentally good and we should have them for the future.

Within the city of Glasgow there are 25 different conservation areas. In my constituency there is Central, Park, East and West Pollokshields, Dumbreck, Strathbungo, Bridgeton, Hazelwood, Walmer Crescent and St Vincent Crescent. They all have different characters: the working-class neighbourhoods of Bridgeton have a beautiful cross, which would see the benefit of further repairs. It is very different in character from West Pollokshields, where there are bigger houses.

All those areas need repair and maintenance, because times have changed since the Victorians built them. They need continual maintenance and repair to avoid dramatic tenement collapses, which do happen on occasion in the city. That is because, despite the best efforts of organisations such as the Glasgow City Heritage Trust, which pays out building repair grants, development grants and grants that go towards those traditional skills, they are just papering over the cracks of a larger problem of the maintenance of tenement stock. My hon. Friend the Member for Glasgow East (David Linden) has also made the argument in the House that we need to look at these issues and find ways of tackling the burden on cities. Reducing that 20% VAT rate as low as we can would have a huge impact on our ability to deal with that.

The social cost of derelict and damaged buildings is huge. They are deeply uninspiring for people who live next to the sites and look out on them. They are a drag on aspiration and motivation, and they often serve a visual reminder to many people of a distant, out-of-touch Government who neglected the industrialised communities over generations and left them to rot. The Scottish Government have made some progress in reversing the situation through the Community Empowerment (Scotland) Act 2015, which gives community groups the option to repurpose derelict buildings for the good of the people who live in those communities. The funding to do so comes from the Scottish Land Fund. Those are community-led, focused actions, instead of the top-down approach that has often failed communities and left them behind.

From a policy perspective, investment in high-deprivation areas makes economic sense. People in those areas are much more likely to spend their money locally, and repurposing buildings to create jobs or businesses has a high multiplier effect. Will the Minister look at the issue from that point of view, as a good endeavour to incentivise people in those areas?

There are plans afoot in my constituency to refurbish the old St James Primary School in Calton, to provide a brand-new primary school—a much-needed facility that will, if it goes through, specialise in Gaelic education, to become the next Gaelic school in the city of Glasgow. The building was built in 1895 but, sadly, stood derelict for 10 years after it was closed by the Glasgow Labour administration. At the time, I was a councillor fighting to save it, because it was very much the heart of the community. Without it, the community has no hub—all people see when they walk past is a derelict building with trees growing out of its roof. The council at the time said that it was too difficult to run and too expensive to repair: too expensive to get the energy efficiency measures that were needed; too expensive to fit a boiler to replace the old coal boiler that the janny had to haul coal into. Making the VAT rate for those kind of improvements more incentivised would be a good thing to do.

In addition, there is a lot to do with identity and the importance of those buildings in communities. I urge Minister to take action. As hon. Members have said, the excuse of the EU is finished with, sadly—I agree with the hon. Member for Bath (Wera Hobhouse) on that. As the hon. Member for Arfon (Hywel Williams) said, some of this has been of our own making, but it is now up to the Government to put that right.