Examination of Witnesses (Questions 380
- 394)
TUESDAY 25 APRIL 2006
DCMS AND ODPM
Q380 Paul Farrelly: That is so.
Mr Lammy: There are definitely
people within the heritage sector who believe that the protection
and conservation of our heritage is absolutely key and they want
a department that has that as a priority and as a mandate, if
you like, in their relationship with the statutory adviser, English
Heritage. There might be great concern were you to move heritage
to another department, particularly a department with planning
responsibility, a department that has, by definition, to have
a relationship with developers and the construction industry,
that there might be a very obvious and clear conflict in the exercise
of those duties. So I think on my reading of the transcripts that
was also understood and that is why I said provocatively "if
not with DCMS, then where else to?" I suspect when you unpick
that it is actually to the Treasury. The other point which I think
is quite important is what is our assessment of where we have
got to. If we go back five or six years we were in a place in
this country when people were almost writing off the heritage.
They were writing books about "Theme Park Britain".
There was a cynical air about heritage. We had had a quinquennial
review of English Heritage that said there needed to be transformation
and reform, and they have undertaken that, and that there needed
to be efficiency savings and changes in the way that they run
their back-room operation. There still needs to be closer engagement
with the harder-to-reach communities on heritage, but up and down
the country, in this hearing today, we have heard examples of
huge heritage success stories in our great cities but also in
rural environments. I can think of the support in my own constituency
in Tottenham that English Heritage has given to the Tottenham
High Road and the townscape there. Those examples were not freely
on the table five or six years ago. So we must also acknowledge
the progress that has been made. I hope that my Department has
played a role in that and the key work that we have been able
to do with partners in other government agencies to take that
forward.
Q381 Paul Farrelly: David, you have
put your finger on another source of great unease about the suggestion
of a transfer. There you have it, Baroness Andrews, for your tour,
straight from the lips of a government minister that the overriding
perception of any heritage responsibilities landing in your department
is one of conflict. It surely should not be that perception, should
it?
Baroness Andrews: No, and it is
a completely wrong perception as well because we take our responsibilities
for the protection of the heritage very seriously, and they are
very robust. If you look at the range of controls we have—building
controls, conservation area controls and so on—they are
robust. I can tell you from experience that the planning application
process is extremely rigourous when it comes to observing and
placing all that in its proper context. When we now have a plan-led
system of reforms and you see the place that the heritage has
in our overarching PPS1, which is our formative statement of planning,
when you see it working through the protection of our town centres,
PPS6, our rural communities, PPS7, and PPS15 which will modernise,
and then through the local development frameworks—and it
has got to be clear there, it has to be clearly developed in our
supplementary documents—it is a very robust system, but
it does not mean that it is swamped by planning. What it means
is that planning is proactive tool to create the sort of spaces
we all want to live in. In the middle of that is the value that
we put on the character of places in which we live, which is the
heritage. What we have achieved through those reforms is a much
clearer and a much more generous definition of the role that heritage
plays in place and also, as we have said this morning, about the
economic and social benefits that are derived from that. It is
auditing that and celebrating it which will actually feed that
appetite which the Atkins Report itself said is so interesting,
so clear, and now goes beyond the professionals. I think that
is the most optimistic statement in that report.
Paul Farrelly: Chairman, that is music
to my ears and the invitation is on its way!
Q382 Chairman: Can I quickly ask
the Minister then, as a specific example of the clout of DCMS
in Whitehall, Sir Neil referred to the opportunity to resolve
the national disgrace in the next few months that is Stonehenge.
Are you confident that it can be resolved and will you persuade
the Department for Transport?
Mr Lammy: It is not about persuading
the Department for Transport. It is about working together.
Q383 Chairman: It is about finding
the money.
Mr Lammy: It is about working
together on what has proved to be a significant challenge. You
are right to mention the money in that, Chairman, because of course
the money went up considerably from what was anticipated so I
think it was right to stop, to look, to consult, to review (and
the review and consultation has only just ended) to see how we
can proceed henceforth from that place. I am clear, having been
down to Stonehenge, that we must solve the problem, and it is
hugely significant to the heritage community and to the heritage
of this country, but we have to solve it in a way that demonstrates
value for money for the British taxpayer, and that is where there
have been difficulties. There have been difficulties within the
heritage community itself about the solutions, and those solutions
have different fiscal outcomes, and then when we land on a solution
there looks to be some inflation in the cost, so we have to work
through that. There is a lot of effort going in and, if I might
say so, I think Sir Neil is doing a great job to keep this one
very publicly on the table, and let us look to see where we get
to by the autumn.
Q384 Chairman: It will be a good
test for your planning.
Mr Lammy: As it has been for my
six predecessors.
Q385 Chairman: Indeed. Let us hope
we can do better than that. Can I ask you about the priority which
you attach to heritage within the DCMS. I heard you yesterday
at Question Time talking about the increase in resources that
have been given, for instance, to the arts and your colleague
Dick Caborn will tell us how much the increase to sports has been.
These are considerably greater than the increase that has gone
to the architecture and historic environment division of your
Department. Would it be true to say therefore that heritage is
seen as less of a priority within the DCMS?
Mr Lammy: We have been clear on
our priorities vis-a"-vis sport and the inheritance that
we had there when we came into office. I think it should also
be acknowledged that within the arts budget there are areas that
have a direct impact on the historic environment. I am thinking
there of things like Creative Partnerships where we have some
Creative Partnerships in our schools where heritage is playing
a feature there. The important thing to remember vis-a"-vis
heritage is the overall envelope. A key plank of what we said
when we came to power and the resulting action was that we wanted
free entry to our national museums. That costs the Department
just over £140 million every year and that is because, of
course, our museums play a key part in our national appetite for
heritage and access to heritage. Indeed, that budget has gone
up from £384 million to £415 million into the next fiscal
year. You have got to link that alongside the £130 million
that we give to English Heritage a year. £130 million for
an NDPB within the department is a lot of money. It sits alongside
the work of other government departments, and that includes ODPM.
We have heard about the work of RDAs and about the work of English
Partnerships. We know that DEFRA has put £90 million specifically
into the rural historic environment. Then on top of that sum you
must add the £3.3 billion that the Heritage Lottery Fund
has made to the heritage sector over the last decade. So against
that backdrop, fiscal decisions have to be made, but there is
no doubt about it, there is more money in heritage now when you
look at the combination of all that effort than ever before.
Q386 Chairman: But it is also going
down?
Mr Lammy: In relation to English
Heritage, it is important to reflect on where we were in previous
spending rounds. We had stated priorities. We had a quinquennial
review that suggested that reform was needed. That reform has
been embarked on. There have been efficiency savings of just over
£28 million, some of which English Heritage has been able
to put back into the operation. English Heritage has received
funds for specific projects. We have heard about HELM where ODPM
have funded that to £100,000. They have been able to reform
their IT network. They have been able to grow their membership
to 600,000 people across the country. They have been able to renew
some of their properties. They have been able to concentrate on
their education facilities. They have been able to move, as Simon
fairly outlined, to a more transparent arrangement that is not
just about experts but is about engagement. During that journey
and during the reform that the quinquennial review found that
they needed to make, it would not have been right to put lots
of extra funds into the organisation. It is important to bear
in mind also that on huge national priorities like our cathedrals
the Cathedrals Fabric Survey has shown huge progress because of
what English Heritage has been able to do. So that is the backdrop,
that is where we have arrived at. We now move to a peer review,
as I have said to the Committee, and we will see where we get
to. No minister anywhere in Whitehall can give financial undertakings
as you move into another spending round, but that is the overall
envelope within which I think we are operating.
Q387 Paul Farrelly: I was just remarking
on the figures here because from the figures it seems that the
whole budget for sport in the country is only £24 million
more than the budget of English Heritage, so there is a different
way of looking at this as well. I wanted really just to look at
the issue of VAT which unites the heritage sector. Not everybody
who is looking for VAT relief is suggesting that it needs to be
a blanket relief; it could be clearly limited to avoid unjustified
middle and upper class subsidies and the like. It could be limited
to organisations such as charities or building preservation trusts.
I was just looking, David, at one of your Parliamentary questions
where you deftly sidestepped—and I do not know whether you
have played rugby before but you deftly sidestepped—
Mr Lammy: I did actually.
Q388 Paul Farrelly: —the issue
by saying: "Together with ODPM, we will keep the impact of
VAT on repair, refurbishment and maintenance of buildings under
review, but to date the case for change is unproven." That
seems to imply that the departments have gathered some evidence
on this or reviewed or modelled the effects. Would that be the
case?
Mr Lammy: Actually I think it
is to the contrary. We have been able to make progress where on
residential properties people could indicate that they are making
alterations and there is VAT relief under those circumstances.
There is also VAT relief that attracts to charitable causes. Where
there is a case that is being made by parts of the sector is in
the area of repairs and the case has not been made out to Treasury
that, in a sense, that would be cost effective, because in terms
of private ownership it would generally benefit those in high
income and middle income brackets, and as they look across the
piece they have to make those determinations. I might also say
that this is an area where we would have to be in discussions
with our colleagues in Europe and gains specific to the heritage
sector might mean losses in other areas like new construction
and other things. So in the end this is a determination that Treasury
colleagues must make. That is not to say that they have not looked
favourably upon parts of the historic environment like the listed
places of worship scheme. That gets that money back, as it were,
to our faith populations so that where there are alterations they
can get that zero or 5% rating. It is to say, however, that the
case has not been made for blanket zero rating across the piece.
Q389 Paul Farrelly: That is quite
interesting because you have said that you have not made the case,
so there is no document within your Department that has been submitted
to the Treasury to make the case?
Mr Lammy: Hang on, let us just
be clear on that. I am in constant dialogue with colleagues in
other departments, and that would include the Treasury, and we
have been in constant dialogue on this issue. They have made a
determination. In the context of your question you point to those
that might benefit and in their overall analysis of our VAT regime
they have not found the case made out to move forward to the extent
that parts of our sector would like, but they have been able to
make progress in other areas that have benefitted our sector.
Q390 Paul Farrelly: Can we be precise
then: a case has been made but you have not persuaded the Treasury.
Is that more accurate?
Mr Lammy: The Government is at
one! There is constant discussion within Government and the case
that I put is quite simply that such a change is difficult to
make just in the context of the historic environment without repercussions
for other sectors and that, rightly, is the preoccupation of colleagues
in the Treasury, and I suspect why this has not found favour.
What has found favour, and did indeed once again in the last Budget,
is being able to recoup some of that money and get it back particularly
to parts of the historic environment like our faith communities
and like our churches. So in that dialogue I can well understand
why colleagues in the Treasury have reached the decision they
have on the basis of the information that they have available
to them and on their preoccupation with the overall envelope within
which we make decisions about VAT. These are technical discussions
that we would be required to have with our colleagues in Europe,
and that is not obviously the primary concern of those in the
heritage sector.
Paul Farrelly: I am very glad to hear
that the Government speaks with one voice, although my two colleagues
here might have something to say.
Q391 Chairman: Minister, you will
be aware that there was the opportunity from Europe to reduce
the VAT rate and that 80 heritage organisations wrote to the Chancellor
asking him to take advantage of that opportunity. You presumably
would be supporting those 80 heritage organisations in making
that case?
Mr Lammy: They are entitled to
make the case. If that is what you mean by my support, they are
entitled to make that case and that case is entitled to be heard.
Q392 Chairman: In the hope you might
be championing it.
Mr Lammy: That does not mean that
the conclusion of that case will be one that they would necessarily
want because of course progress in that area might have big ramifications
for where we have got to on new construction and the VAT arrangements.
Inevitably that is a preoccupation of the Treasury and indeed
I should be aware of that with my responsibilities for architecture.
It is not a preoccupation of some of the heritage community that
are calling for blanket VAT relief. That is the assessment that
has to be made.
Q393 Paul Farrelly: I wanted to be
precise. In my question I did not ask for blanket relief, but
there are clearly reliefs that could be targeted at specifically
defined organisations, perhaps as a way of promoting those organisations,
for example, building preservation trusts. I am quite sure that
the Treasury would be absolutely confident with its worshipful
places scheme that there are not that many tax-dodging vicars
around the country, but with organisations such as BPTs or other
organisations, they will want make to sure that there is a limit
to the potential for abuse. In that context, has your Department
made any case for a more limited form of relief that is not blanket
but limited to certain forms of organisation?
Mr Lammy: As I have said, we have
been able to make progress on the listed places of worship. We
have been able to make progress on alterations of residential
homes. We have been able to make progress vis-a"-vis charitable
organisations. That is some progress in terms of our VAT arrangements.
We have not been able to get to a place where there is zero-based
rating and relief for repairs, and that remains of some concern
in the sector, but that has implications for other parts of the
VAT regime. It would be unusual to restrict that kind of VAT relief
to one sector, notwithstanding where we would get to with our
European colleagues. So that is the picture. It would not be right
to say that there has not been progress in some areas, but it
is right to say that in this area there would need to be more
evidence, in fact, as to why the sector themselves would not be
able to make the repairs that are necessary because this also
sits against a backdrop in which I have said more people than
ever before are visiting our historic environment. This sits against
a backdrop in which we have and English Heritage has been able
to make a substantial contribution, for example, to the fabric
of our cathedrals, and the surveys there bear that out. They are
moving on now to look more closely at parish churches. It sits
also against the huge impact that the HLF has made. £3.3
billion, by any estimation, is not a small amount of money. So
I am sure all of those things are preoccupying the number-crunchers
in the Treasury, as they should.
Paul Farrelly: Chairman, I am conscious
of time, and so I will take it from that answer that you have
tried but not been entirely successful, sir.
Q394 Chairman: Ministers, there are
many other questions that we would like to ask you but I am conscious
of the time so I think we should probably draw a line at that
point. Can I thank you both very much for giving up your time
this morning.
Mr Lammy: Thank you.
Baroness Andrews: Thank you very
much indeed.
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