§ Miss McIntoshTo ask the Chancellor of the Exchequer what assessment he has made of the impact of his policy on making a grant available for the repair of churches in lieu of reducing VAT; and what representations he has received on this subject. [11982]
§ Mr. BoatengThe Chancellor's long-term objective is to reduce the VAT rate levied on repairs to listed places of worship from 17.5 per cent. to 5 per cent. This is not permitted under current European Community legislation, but the European Commission has indicated that it will look at the UK's proposal to amend the VAT rules when these are reviewed in 2003. In the interim, the Chancellor has decided to introduce a grant scheme which will award the differential between the 17.5 per cent. and 5 per cent. rate to qualifying buildings. This scheme has been widely welcomed by owners of listed places of worship. It represents significant additional funds for this group—initial estimates are up to £30 million per year.