Value Added Tax: Listed Places of Worship

Lord Davies of Oldham Excerpts

Tuesday 24th April 2012 Lords Chamber

[Lord Sassoon]

The right reverend Prelate raises some important points. I can give him only partial comfort, or the answer that he wants, in respect of some of his question. First, as I have already explained, we intend to make sure that the compensation number fully reflects the additional costs of the Budget change. The element that troubles us most is that under the previous VAT arrangements the incentivisation worked in favour of alterations of listed buildings as opposed to repair and maintenance. We do not want to see anything that incentivises people against repairing and maintaining and therefore preserving the core heritage features of the property, so we think that it is right to put alterations, repairs and maintenance on an even basis. Therefore, although I cannot give the right reverend Prelate the comfort that we intend to revisit that issue, I stress again that we want to make sure that the churches are fully protected against the impact of the Budget change.

[Lord Davies of Oldham]

My Lords, is this a good time to reduce demand for the construction industry? In January this year, its output fell by 14 per cent. It is true that there was a slight improvement in February, but in the first quarter of this year output from the construction industry is certain to fall, with all the implications that that has for economic growth. Can the Minister look at this issue again?

[Lord Sassoon]

My noble friend was perhaps being excessively charitable to the noble Lord, Lord Davies of Oldham, in saying that he was always right on matters. I am afraid that on this one he has not got it right. As I explained, the Government are fully compensating churches for the changes in VAT so that there will be just as much money available to listed places of worship before and after the change for them to put into something that we want to protect—the ongoing repair and maintenance of our listed places of worship.