Finance (No. 4) Bill

Ben Bradshaw 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.

[Jonathan Ashworth (Leicester South) (Lab)]

I am grateful to my right hon. Friend for giving way, and I suppose I should declare an interest as a patron of the St Peter’s project in my constituency, where we are trying to raise funds to make much-needed alterations and renovations to St Peter’s church in Highfields. There are already considerable pressures on the listed places of worship grant scheme, which is a very good scheme, but one problem with it is that when a church applies to it there is no certainty about the amount of grant that it will receive. Now that this change is being made, those pressures are only going to increase.

[Mr Bradshaw]

My hon. Friend is exactly right. As I said, the grant already covers only less than half of the cost of repairs, and the £5 million that is being offered to extend it to alterations covers only a quarter of the likely annual cost of those alterations.

A number of churches and cathedrals have already put on hold schemes that were planned or under way. My own cathedral in Exeter faces having to raise several hundred thousand pounds more for its exciting cloister project. The wife of the dean of Wakefield cathedral, which faces an extra £200,000 of costs for alterations, has famously composed a protest song about the VAT hike. The lovely little church in the small Herefordshire village of Llangarron, at which I attended Easter Eucharist, will have to find an extra £60,000 for a project that has been in the pipeline for seven years.

As 26 deans of cathedrals wrote in an unprecedented letter to The Sunday Times on Sunday, this change will seriously jeopardise the sustainability of many of our great buildings, not only for present-day use but for that of future generations. I urge the Government to think again on this very important matter, and I hope, Ms Primarolo, that you will help to facilitate the expression of the will of the House on it shortly.

[Mr David Davis (Haltemprice and Howden) (Con)]

I want to associate myself with the comments made by my right hon. Friend the Member for East Yorkshire (Mr Knight), by my hon. Friend the Member for Beverley and Holderness (Mr Stuart), and by my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson); I embarrass him again by calling him that. The proposal for VAT on static caravans will have a seriously deleterious effect on all of east Yorkshire, including Hull, dramatically cutting employment in the area at a time when we are trying to encourage growth and to balance the books. This proposal will do neither; in fact, it will reverse both.

This is a Finance Bill; the aim is to raise money. The latest estimates of the employment impact of this measure are that it will result in 4,000 to 7,500 job losses, of which 1,500 to 2,000 will be in the vicinity of our constituencies. The effect of that in financial terms is pretty straightforward to calculate. The Government estimate that they will raise £30 million to £40 million in VAT from this change. They will lose between £32 million and £65 million in lost national insurance, lost inland revenue, and extra welfare costs. It will therefore do the opposite of what the Budget is attempting to do. When I put that point to the Treasury, people said to me: “We don’t calculate things in that way.” That might sound silly, but there is a substantive point behind it—as I am sure that the shadow Chancellor, who is smiling, will know. Usually when one introduces a tax change that leads to job losses, people will, in due course, find another job. In east Yorkshire, two of the three Hull seats have dramatically high unemployment levels already, and the ratio of jobs available to unemployed people seeking them is one of the highest in the country. As a result, the resulting unemployment will not be short term but is likely to last for more than five years. We should calculate the effects of the proposal in this way because, for the foreseeable future, it will cost more than it will raise.