HC Deb 08 November 1979 vol 973 cc603-4
11. Mr. Gummer

asked the Chancellor of the Exchequer whether he will seek to exempt building works on listed buildings from value added tax?

Mr. Lawson

My right hon. Friend has no plans to do so.

Mr. Gummer

Is that not a pity, since all changes to listed buildings must be in the form of repairs because no new construction is allowed and VAT bears heavily upon them? Many of those repairs are paid for out of public subscriptions, and more money has to be raised to cover VAT. Is my hon. Friend aware that much of the money is provided by Government grants? Would it not be better to exempt listed buildings from VAT and allow people to raise more money to protect our historic homes?

Mr. Lawson

We are not out of sympathy with the need to help our national heritage, but this is not the right way to do it. If relief were to be given it would give rise to demands for comparable relief on other types of repair work. The tax at stake for zero rating all building repair and maintenance work is as much as £300 million in a full year.

Mr. Denzil Davies

Were not the problems involved made much worse by the increase of VAT to 15 per cent. in the last Budget? Does the Financial Secretary agree that that was a disastrous decision? Will be re-examine the VAT rate, reduce it, and so bring down the rate of inflation?

Mr. Lawson

The right hon. Gentleman has a curiously simpliste view for one who purports to understand monetary policy and the causes of inflation. Does he really believe that the rate of VAT determines the rate of inflation? If so, how does he explain why, when his right hon. Friend reduced the rate of VAT from 10 to 8 per cent., in the following 12 months we suffered the highest rate of inflation—about 35 per cent.—that the country had ever had the misfortune to experience?

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