HC Deb 27 February 1975 vol 887 cc679-80
4. Mr. Freud

asked the Chancellor of the Exchequer what consideration he has given to the question of VAT assessment on the restoration of historic buildings.

Mr. Robert Sheldon

I have taken note of representations for relief from VAT for restoration of historic buildings.

Mr. Freud

Is the Chancellor aware that the VAT on the repair work on Ely Cathedral is £35,000, which has severely affected the material position of one of the most beautiful cathedrals in the country? Does he realise that there will have to be a further financial appeal, and if it is not the right hon. Gentleman's intention to tax the public's generosity will he consider making an exception in this case?

Mr. Sheldon

The problem arises from the difficulty of discrimination which is inherent in the value added tax system. I recall full well when this tax was introduced as an comprehensive, broad-based and free-from-anomalies tax. The trouble is that the Government are having to live with the anomalies. Of course, the hon. Member will be aware that any grants which are made take account of the VAT.

Mr. Lane

While there may be some possibility of reclaiming some VAT in cases like this, may not the time be coming when some public contribution in support of private generosity may be inevitable for historic cathedrals and churches such as Ely Cathedral if they are to be properly preserved? Will the Government keep an open mind on this subject in the future?

Mr. Sheldon

Obviously the Government are very concerned about the preservation of historic buildings. We are prepared to consider doing anything which can be done within the context of what I have said.

Mr. Cormack

The Minister will be aware that the Government have announced that they are to make £1 million available for historic churches, for which we are grateful. In view of that, will he not look again at the speeches which he and certain of his colleagues made on the subject two years ago and remove this absurd anomaly, bearing in mind that everything that was said by the hon. Member for Isle of Ely (Mr. Freud) applies to many of the country's most important historic buildings?

Mr. Sheldon

The grants take account of the VAT that is included within the grants. The hon. Member is right about the problems of the tax. There are anomalies, and the Government have to live with the results of the inflation that was created by the previous Conservative Government.