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The hon. Member for Middlesbrough, representing the Church Commissioners, was asked--

Church Repairs

28. Miss Anne McIntosh (Vale of York): What he expects the timetable will be for the reduction of VAT on church repairs; and if he will make a statement. [149414]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): The Government are continuing their discussions with the European Commission in relation to a reduced VAT rate for repairs to listed places of worship. A preliminary reply indicated that the matter would be considered by the Commission in its general review of reduced rates, which will take place in 2003. I am encouraged to note that, in the interim, the Government are considering special arrangements to help congregations to pay for repairs to listed places of worship.

Miss McIntosh: Is the hon. Gentleman aware that the Commission has ruled the application to be illegal under the treaty and as a result of a decision taken by Finance Ministers, which can be overruled only by a unanimous decision? Is the hon. Gentleman aware that it may be possible to submit an alternative application proposing that churches should be considered as historic buildings rather than dwellings, which is the current rule? Would that bring forward the timetable set out by the hon. Gentleman, so that a decision could be taken before 2003?

Mr. Bell: I am grateful to the hon. Lady, who was a Member of the European Parliament and therefore understands these matters. I am not aware that the Commission ruled any discussion with Her Majesty's Government illegal. It decided that there ought to be a proper review of VAT rates and reduced rates in relation to annexe K, of which the hon. Lady is well aware. The VAT group of the Church is discussing the matter with Customs and Excise. I refer the hon. Lady and the House

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to press speculation that the Chancellor of the Exchequer may be generous towards VAT on church repairs in his forthcoming Budget.

Mr. Andrew Reed (Loughborough): It is pity that the rate was raised from 8 per cent. to 17.5 per cent., which has put us in the present difficult position. Does my hon. Friend agree that for small congregations with very old churches that require a great deal of work--my own in Cossington, for example, requires expenditure of £400,000 and has a congregation of 30 or 40--the rate of 17.5 per cent. will have made an enormous difference to the amount of work that can be done to repair those historic buildings, which are vital not just to the congregation but to the small communities that use them during the rest of the week?

Mr. Bell: I am grateful to my hon. Friend for his question. We should remember that the Chancellor of the Exchequer is the first Chancellor in 25 years who has agreed to reduce the rate of VAT from 17.5 per cent. to 5 per cent. I agree entirely with my hon. Friend that the sudden rise in the rate to 17.5 per cent. in 1979 created a severe distortion in VAT on church repairs and has been an impediment to the repair of my hon. Friend's church.

Sir Patrick Cormack (South Staffordshire): Does the hon. Gentleman accept that the Chancellor excited expectations that he now has a moral duty to fulfil? Will he convey from both sides of the House the message that we expect an announcement on 7 March?

Mr. Bell: I am not entirely sure how my right hon. Friend the Chancellor would respond if I told him what he should include in his Budget, but we can hope and pray. The hon. Gentleman has been in the forefront of those who have asked for a reduction in VAT on church repairs in the past 20 years. I ask him and the House to read carefully the words used by my right hon. Friend in the announcement. He said clearly that the matter had to go to the European Commission and that discussions would follow. The Government have never suggested that the matter would be one of expediency. I will convey to my right hon. Friend the feeling throughout the House that a measure should be taken to balance the disequilibrium and that a substantial effort is needed to help churches by reducing VAT on church repairs.

29. Mr. Gordon Prentice (Pendle): How many Church of England churches there are in England; how many and what percentage of them require repairs to the roof, tower or steeple to keep them dry and structurally sound; and what steps the Church Commissioners are taking to help impoverished congregations finance the repair work. [149415]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): There are some 16,000 Anglican parish churches in England, 13,000 of which are listed. The Church holds no statistics on the number of buildings needing high-level repairs or work of a more general nature. The total repair cost to Church of England parishes in 1998 was about £123 million, with VAT accounting for at least £18 million.

Mr. Prentice: I am disappointed that there are no statistics on the number of churches that require major

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repairs, especially in the light of the information provided by my hon. Friend the Member for Loughborough (Mr. Reed) about the £400,000 cost of repairing his local church. I am unsure of the mechanism that the Church Commissioners use to distribute cash to the localities, but may I make a practical suggestion? Would it not be fair and equitable for them to use the index of deprivation, which extends down to ward level, in determining how much money goes to each diocese in the country?

Mr. Bell: I should point out to my hon. Friend that the Church Commissioners have no general power to assist with the repair and maintenance of churches. The costs are borne by individual parishes, upon whose energy and commitment the preservation of this important part of the nation's built heritage depends. My hon. Friend will be interested to know that the Churches Conservation Trust exists to preserve church buildings that are of exceptional quality, but which are no longer in parish use. The body is jointly funded; 70 per cent. of its funding is provided by the state and 30 per cent. by the Commissioners. We have £12.6 million in that budget for the next three years.

Sir Sydney Chapman (Chipping Barnet): Will the Second Church Estates Commissioner confirm that the Church Commissioners make a significant contribution to the 16,000 parishes through help with clergy stipends and pensions? As so many of the churches are part of our glorious English architectural heritage, does he further accept that it is incumbent on the state not only to limit--if not abolish--tax charged on repairs to church roofs, but to be generous with grants? On any score, but especially that of built heritage, these buildings are worthy of protection and financial help.

Mr. Bell: Some £10 million is given each year in state aid by English Heritage and a further £10 million is provided from the heritage lottery fund. That is a small amount compared with the huge repair bills faced by the Church, and, of course, it is offset by VAT on church repairs, which wipes that out. We must understand and

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accept that the churches throughout our land are part of our rich heritage and our nation's culture, and deserve greater state aid than they are getting.

30. Mr. Edward Leigh (Gainsborough): What recent representations he has received from churches on the level of VAT on church repairs. [149416]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): Parishes and dioceses of the Church of England have submitted substantial evidence underlining the burden borne by them in VAT costs on repairs to listed and non-listed church buildings. I know that the Church of England VAT group and others continue to work towards the hoped for reduction in VAT.

Mr. Leigh: Up and down the country, the hopes of congregations were raised by the announcement that VAT might be reduced, but a European Commission announcement is now setting matters back to 2003. Will the hon. Gentleman and the Chancellor please make the strongest possible representations to the European Commission that this is one area where it should get its sticky fingers out of the nooks and crannies of our crumbling heritage? We are talking about our culture and history and our churches and congregations--a matter not for the European Union, but for this House.

Mr. Bell: After such a sterling speech, I hesitate to remind the hon. Gentleman that a Conservative Government got us into the EU in the first place. However, setting aside that partisan point, I hope that the Chancellor hears the hon. Gentleman's comments. We seek grant in aid from the Chancellor to compensate our churches while the Commission, with help from our Customs and Excise, Members of Parliament and the Government, consider and unpick a delicate matter.

Mr. Bruce Grocott (Telford): Will my hon. Friend discount any representations that he receives on VAT on church repairs or anything else from Tories, especially former Tory Ministers? Not only were they responsible for rocketing VAT but they imposed a stealth tax on our churches.

Mr. Bell: I am grateful to my hon. Friend for his assistance. We try to be bipartisan on Church matters. However, as the Leader of the Opposition has announced a general election on 5 April, that may be too much to ask.

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