OUTCRY over the Government’s proposal to charge VAT on alterations to the nation’s historic churches is having an impact, but the public must continue to campaign for a complete exemption from the levy, the Second Church Estates Commissioner, Tony Baldry MP, has said.
The Government remains wedded to its plans to increase the funding allocated to the listed places of worship grant scheme rather than reverse its VAT plans.
After a meeting with George Osborne on Monday, Mr Baldry said that he was “confident” that the Chancellor was “very keen to try and find a solution that will be satisfactory to the Church”.
He said that the Church and the Treasury were “at one” on the need to separate out alterations to churches from those made to other properties — for example, “rich people living in Grade 1 listed buildings putting swimming pools into their garden”.
The Treasury and the Government are “very sensitive to public concern on this”, Mr Baldry said. He urged people to continue to sign the petition opposing the levy.
The meeting, which was also attended by the Bishop of London, the Rt Revd Richard Chartres, came after the Government sustained heavy criticism of its VAT proposals in the House of Commons, some of it emanating from its own benches.
During his first session of Prime Minister’s Questions since the Easter Recess on Wednesday — in which he admitted that it had been a “tough month” — David Cameron was accused by the Labour leader, Ed Miliband, of presiding over a “shambles” in tax policy.
Responding to a question about the tax on alterations from Gordon Marsden, Labour MP for Blackpool South, Mr Cameron said that the Government would be “putting money aside to make sure that churches that are undertaking repairs and alterations get the moneys that they need”.
Sir Alan Beith, the Liberal Democrat MP for Berwick-upon-Tweed, and chairman of the Historic Chapels Trust, said that the current system provides “a perverse incentive to alter rather than merely repair”. He argued that the Government should “put more money into the fund that churches can use to bypass VAT”.
This was countered by Mr Marsden — “I know of no examples in Blackpool where such a process has been the driver” — who was joined by Ben Bradshaw, the Labour MP for Exeter, and son of an Anglican cleric, in leading criticism of the tax from the Opposition. Mr Bradshaw gave short shrift to the Prime Minister’s promise of additional funding, arguing that the extension of the listed places of worship grant scheme by £5 million is “a wholly inadequate way to meet the extra cost that the VAT rise will create”. The Church of England estimates that the cost of the VAT rise will be £20 million a year. The Government has already cut the listed places of worship grant scheme from £23 million to £7 million a year, and it currently covers less than half the cost of all repairs.
Some Conservative MPs also spoke out against the Government’s plans. Nicholas Soames, the Conservative MP for Mid Sussex, described the tax as “a pretty poor advertisement for the Big Society”.
The Government eventually defeated an amendment that would remove the VAT on alterations, but by a majority of only 35. Eleven Conservative MPs rebelled.
The Exchequer Secretary to the Treasury, David Gauke, said that the Government’s policy “reflects the view that grants provide a more flexible mechanism than VAT for providing specific financial support for heritage”.
He said that the original announcement of £5 million was based on a church report, but “not set in stone”.
On Tuesday, a spokesman for the Treasury said that the report cited by Mr Gauke was produced by the Church of England in 2000 (The Impact of VAT on Church Properties), but that the figures had been uprated in line with inflation.
On Tuesday, the director of the C of E’s Cathedral and Church Buildings Division, Janet Gough, said that it was “absolutely not appropriate” to make calculations based on this report, which was produced before the recent campaign, spearheaded by the Bishop of London, to open church buildings for wider use.
On Wednesday, Wakefield Cathedral unveiled a second protest song at a national charities tax summit in London. “VAT ditty — the sequel with the George Osborne sextet” — features, Pamela Greener, the wife of the Dean of Wakefield, again take the Chancellor to task in a lyrical fashion.