This week, Members of Parliament debated changes to VAT, as the Government’s Finance Bill reached the report stage in the Commons. The Government’s budget is now almost unrecognisable since it was announced in March, after they have crumbled under public pressure for numerous u-turns, from petrol to pasties.
One of the many controversial elements remaining in the Bill is the planned withdrawal of VAT relief from approved alterations to listed buildings.
Listed buildings are physical landmarks of British history, but they are also an important part of the future of the local, regional and national economy. At present, there are over 29,000 listed buildings in Britain, each varying in size, shape and historical era. The term ‘listed building’ is, as Lloyd Grossman described, “a recognition of their immense public value.”
What is more, owners of listed buildings have not only taken on the burden of history, but the considerable economic burden of running and maintaining part of our nation’s heritage. Organisations such as the National Trust and the Historic Houses Association also have a huge weight of responsibility due to the number of properties they manage for the public.
It is an economic burden that is set to worsen once the changes pushed through by the Chancellor come into force on the 1st October. It will mean that our historic buildings will be charged for the most basic of alterations such as the fitting of toilets, disabled access or cafeterias. In short, the essential upkeep and maintenance that is needed to make certain that the public and tourists continue to enjoy our heritage sites will simply become unaffordable. This will inevitably have a severe impact on the future of our heritage.
The tax changes themselves are seemingly driven out of a desire to make life easier for the Treasury – both in terms of meeting an impractical target for deficit reduction and the bureaucracy that comes with VAT relief for vital public goods such as Listed Buildings. Propping up George Osborne’s already battered opinion poll ratings should be no reason to jeopardise the UK’s Heritage.
Indeed, there is an imbalance in his proposals. The Coalition Government claims to have prioritised economic growth and community cohesion. Yet these two aims are undermined by VAT changes that will be deeply unhelpful to local economies and to community identities.
This was highlighted by the Heritage Alliance recently, as they described the proposal as “fundamentally flawed”. The Alliance’s damning verdict came after a beleaguered consultation process that produced a weak analysis. A Freedom of Information request submitted by the Heritage Alliance to the Treasury revealed that the tax change was based on a sample of just 105 cases. This is despite the fact that there are almost 30,000 alteration applications each year.
Therefore, there was clearly not sufficient evidence produced by the Treasury to impose such a change to the way alterations to listed buildings are taxed.
The Government has already acknowledged that through their decision to provide additional compensation to listed places of worship that the VAT changes pose a very real risk to the future of heritage sites.
This week, the Government should have gone further, and ensured that the equally valid risks to community centres, town halls, village halls, theatres and all other listed buildings, were properly reviewed. As a result of this failure, the decision of the Government to push this irreversible proposal through will mean that buildings throughout Britain, with major historical and social importance, are now at greater risk.