HC Deb 21 January 2002 vol 378 cc612-4
34. Miss Anne McIntosh (Vale of York)

To ask the hon. Member for Middlesbrough, representing the Church Commissioners, what recent representations he has received on the reduction of VAT on church repairs through a grants equivalent. [26156]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners)

I have not received any particular representations following the successful launch of the listed places of worship grant scheme.

Miss McIntosh

Is the hon. Gentleman aware that English Heritage is planning to reduce its grant by the amount that the recipient of those grants receives from the Treasury? Is he not alarmed, as I am, by that development? Will he make representations to the Treasury to ensure that that unwelcome development does not continue and become an accepted practice? Will he continue to make representations stating that we should seek to reduce VAT for church repairs under the directive?

Mr. Bell

I am grateful to the hon. Lady for her support, and may I say how pleased I was to see her on the Front Bench a few moments ago? As she knows, the scheme provides a grant that equates to part of the VAT paid, rather than being a reduction in the VAT rate. She mentions the on-going discussions in the European Union, and the European directive on a formal reduction in the rate. Those discussions are continuing. I will ensure that the Treasury is made aware that English Heritage is withdrawing or reducing some of its grant.

Mr. Andy Reed (Loughborough)

I welcome the scheme. Any way that we can reduce Church costs in that way is welcome. Will my hon. Friend estimate what sort of expenditure is likely to occur in the foreseeable future? Is there any evidence that repair work has been held back, awaiting that decision, so that there may well be a quick rush in the first year or two? If so, is the scheme likely to be cash-limited, in which case a number of applications may well be turned down because there is a closed list?

Mr. Bell

I am grateful to my hon. Friend. There is no real indication that schemes to repair churches have been held back or withdrawn, given the Fact that, of course, the VAT directive is some way off and is being modified, but the total cost of repair work in the Church of England amounts to £120 million and the VAT on the listed building work is about £10 million, so bringing the Government scheme into action as quickly as possible will avoid the problem to which my hon. Friend refers and help us to get a move on with church repairs.

Mr. Geoffrey Clifton-Brown (Cotswold)

Given the figures that the hon. Gentleman mentions—the VAT on repairs cost the Church £10 million—will he or the Church Commissioners strongly press the Treasury to obtain a derogation from the sixth directive on VAT on the basis that a reduced or zero rate of VAT should be applied to the repair of community buildings?

Mr. Bell

Many of those representations have already been made in the European Union, but, as the hon. Member for Vale of York (Miss McIntosh), will know, they did not receive an echo back. That is why the directive is being considered with a view to its being overhauled and brought into line more with the hon. Gentleman's request.