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VAT (Listed Buildings)
11. Mr. Lindsay Hoyle (Chorley): If he will make a statement on the charging of VAT on the renovation of listed buildings. [130138]
The Paymaster General (Dawn Primarolo): The repair and renovation of listed buildings has been charged at the standard rate since the beginning of the tax.
Mr. Hoyle: I understand what my hon. Friend says. However, she may not be aware of the plight of the Rev. David Morgan and the parish church of Adlington in Chorley. He has genuine problems with church repairs. The church is a grade 2 listed building; what began as a simple exercise has incurred a cost of £145,000, and the VAT is more than £25,000. What help and consideration can be given to reducing VAT on listed buildings in future?
Dawn Primarolo: I understand that in the grants from English Heritage to grade 1 and grade 2 listed buildings,
payments are made for urgent repairs, which my hon. Friend described. The conditions of VAT were established when the tax was introduced. We are not permitted to introduce reduced or zero rates. The Government therefore seek, through English Heritage and the Department for Culture, Media and Sport, to support our heritage through direct help.
Mr. Peter Brooke (Cities of London and Westminster): As the campaign has existed for about 15 years--I acknowledge that, some time in the past, I had to give the same answer as the Paymaster General--will the hon. Lady find a way to communicate the EU position to those who write to us? It would then become clear that the campaign has some serious deficiencies.
Dawn Primarolo: As the right hon. Gentleman knows, having given the same answers and having been a Minister when the legislation was operating, the Government cannot change it except in periods of review of the tax. We are not currently in such a period.
I have repeatedly made it clear to Members in detail when and why the imposition was made, when the tax began and what happened in 1984. Since that date, we have been unable to introduce zero or reduced rates. Therefore, the Government approach investment in historic and cultural buildings through methods other than VAT. As the Minister responsible for the tax at that time, the right hon. Gentleman will know that that is the only way forward, regardless of how strong feelings and campaigns are.
Mrs. Gwyneth Dunwoody (Crewe and Nantwich): But my hon. Friend will realise that although Treasury Ministers' habit of giving the same answers as their predecessors is not unknown, it is not a proper response to a proper worry. As a member of a very imaginative Treasury team, will she look seriously at some other way of tackling the problem? Frankly, English Heritage is not the answer. Such buildings consistently require not only that work be done by expensive craftsmen, but large sums of money. Destroying important buildings in the United Kingdom on the basis of being unable to change our tax system is not a sufficiently good answer.
Dawn Primarolo: The Government are always looking for innovative ways to use the tax system to encourage the type of behaviour that we would like to see in the UK. My hon. Friend will know that Lord Rogers's urban taskforce report on regeneration of our communities made a series of important proposals that will be discussed as part of the consultation on the urban White Paper. Tax issues regarding brownfield and greenfield sites and other matters have been raised. We are looking at them seriously and will respond.
Business Taxation
12. Mr. John Butterfill (Bournemouth, West): What recent representations he has received on his policy on business taxation. [130139]
The Financial Secretary to the Treasury (Mr. Stephen Timms): We have received numerous representations from business, including the statement from the Institute of Directors that the Budget shows that the Government believe in the enterprise culture.
Mr. Butterfill: Does the Chancellor recollect his statement of 19 December 1998 that he intended to reduce business taxation? How does the Minister reconcile that with the CBI estimate that business taxation has increased by £5 billion a year for each of the past three years?
Mr. Timms: No, that is not right. We have set out our ambition to increase productivity faster than our main competitor states in order to close the productivity gap that opened up over a long period. We have set out a clear strategy for doing that, and the tax system has an important role to play in boosting productivity and improving competitiveness. Corporation tax rates are at their lowest ever and are the lowest in the industrialised world. On average, small companies have enjoyed a corporation tax cut of about 25 per cent.
Mr. Barry Sheerman (Huddersfield): Is my hon. Friend aware that those of us who spend time with businesses in this country, including those in my constituency in west Yorkshire, find that business people say that this is the best time to be in business in terms of business taxation and the general business environment? They have one caveat: they are still worried about the value of the pound against the euro.
Mr. Timms: My hon. Friend is right. There are 1 million extra jobs in the economy since the election and 100,000 more small firms. We are creating a new culture of enterprise for all and our tax policies are a key element in that success.
Mr. Owen Paterson (North Shropshire): The president of the CBI has clearly stated that the Government have imposed £5 billion of taxes on business. Will the Minister please name three businesses that have been made more competitive by that policy?
Mr. Timms: Small businesses have enjoyed an average corporation tax cut of 25 per cent. Let me tell the hon. Gentleman about another tax change that we have made: the new 10p starting rate for corporation tax has helped 270,000 small businesses--not three, but 270,000.
Children's Tax Credit
13. Ms Sally Keeble (Northampton, North): What progress is being made with the introduction of the children's tax credit. [130140]
The Paymaster General (Dawn Primarolo): The Inland Revenue has issued claim forms to PAYE taxpayers in families that, according to its records, may be eligible for the credit. We estimate that almost 2 million forms have already been sent back to the Inland Revenue. There has been a radio and press advertising campaign to encourage people to claim and return their forms in good time.
Ms Keeble: I am grateful for that reply. May I congratulate the Department on its effective advertising and take-up work, which has been well received in my constituency? Will my hon. Friend confirm that this tax credit will be available to people with small businesses who are not on PAYE? Does she agree that many families want to know whether this and the other child support measures that the Government have introduced will be supported by the Conservative party, or whether they will all disappear into its £16 billion black hole?
Dawn Primarolo: The self-employed will claim the credit on their tax returns in the normal way. As for support for the children's tax credit, we must add it to the list of items that the Opposition oppose, because they have rejected and voted against it at every opportunity. That means that nearly £8.50 a week would be denied to families who need it most.
Mr. John Bercow (Buckingham): Is the Paymaster General proud that hundreds of thousands of married couples have been deprived and short-changed of support for a full 12 months before the belated introduction of the children's tax credit?
Dawn Primarolo: What I am proud of is that this Government recognise that pressure on families is greatest when they have children. What I am proud of is that we are addressing the fact that 3 million children are living in poverty, which was inherited from the previous Government's policies. What I am proud of is that at the end of this Parliament, 1.2 million children will have been lifted out of poverty, and the children's tax credit, which the Opposition oppose, will have played its part in that.
Mr. Malcolm Chisholm (Edinburgh, North and Leith): Is it not the case that no additional costs are associated with marriage, but that many are associated with having children? Is it not therefore correct to target help on children via the children's tax credit, the working families tax credit, the record rise in child benefit and the other many initiatives that will reduce, and finally eliminate, child poverty?
Dawn Primarolo: My hon. Friend is absolutely correct. Indeed, when the shadow Chancellor was at the Treasury, he said that the married couples allowance had the least on-going justification because it was given to couples when they married--and only when they married--in recognition of the fact that the man was acquiring a wife and therefore had less taxable capacity. We recognise that pressure is placed on families when they have children--when one parent may give up work or when the family faces child care costs. That is the point at which to help families and to ensure that children are lifted out of poverty.
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