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Parliamentary Debates House of Commons Official Report General Committees PARLIAMENTARY DEBATES HOUSE OF COMMONS OFFICIAL REPORT GENERAL COMMITTEES Public Bill Committee FINANCE BILL (Except clauses 1, 4, 8, 189 and 209, schedules 1, 23 and 33 and certain new clauses and new schedules) Fifteenth Sitting Thursday 21 June 2012 (Morning) CONTENTS CLAUSE 195 agreed to. SCHEDULE 26 agreed to. CLAUSES 196 to 201 agreed to. SCHEDULE 27 agreed to. Adjourned till this day at One o’clock. PUBLISHED BY AUTHORITY OF THE HOUSE OF COMMONS LONDON – THE STATIONERY OFFICE LIMITED £5·00 PBC (Bill 001) 2012 - 2013 Members who wish to have copies of the Official Report of Proceedings in General Committees sent to them are requested to give notice to that effect at the Vote Office. No proofs can be supplied. Corrigenda slips may be published with Bound Volume editions. Corrigenda that Members suggest should be clearly marked in a copy of the report—not telephoned—and must be received in the Editor’s Room, House of Commons, not later than Monday 25 June 2012 STRICT ADHERENCE TO THIS ARRANGEMENT WILL GREATLY FACILITATE THE PROMPT PUBLICATION OF THE BOUND VOLUMES OF PROCEEDINGS IN GENERAL COMMITTEES © Parliamentary Copyright House of Commons 2012 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through The National Archives website at www.nationalarchives.gov.uk/information-management/our-services/parliamentary-licence-information.htm Enquiries to The National Archives, Kew, Richmond, Surrey TW9 4DU; e-mail: [email protected] 543 Public Bill Committee21 JUNE 2012 Finance Bill 544 The Committee consisted of the following Members: Chairs: MR DAVID AMESS,MR PETER BONE,MR JIM HOOD,†JIM SHERIDAN † Baldwin, Harriett (West Worcestershire) (Con) † McKinnell, Catherine (Newcastle upon Tyne North) † Barclay, Stephen (North East Cambridgeshire) (Con) (Lab) † Blenkinsop, Tom (Middlesbrough South and East † Malhotra, Seema (Feltham and Heston) (Lab/Co- Cleveland) (Lab) op) † Burley, Mr Aidan (Cannock Chase) (Con) Mann, John (Bassetlaw) (Lab) † Elphicke, Charlie (Dover) (Con) † Mearns, Ian (Gateshead) (Lab) † Garnier, Mark (Wyre Forest) (Con) † Mills, Nigel (Amber Valley) (Con) † Gauke, Mr David (Exchequer Secretary to the † Morrice, Graeme (Livingston) (Lab) Treasury) † Morris, Grahame M. (Easington) (Lab) † Gilmore, Sheila (Edinburgh East) (Lab) † Pugh, John (Southport) (LD) † Rees-Mogg, Jacob (North East Somerset) (Con) Gyimah, Mr Sam (East Surrey) (Con) † Reeves, Rachel (Leeds West) (Lab) † Hamilton, Fabian (Leeds North East) (Lab) † Smith, Miss Chloe (Economic Secretary to the (Chelsea and Fulham) † Hands, Greg (Con) Treasury) † Harrington, Richard (Watford) (Con) † Swales, Ian (Redcar) (LD) † Hilling, Julie (Bolton West) (Lab) † Syms, Mr Robert (Poole) (Con) † Hoban, Mr Mark (Financial Secretary to the † Williams, Stephen (Bristol West) (LD) Treasury) † Williamson, Gavin (South Staffordshire) (Con) † Jamieson, Cathy (Kilmarnock and Loudoun) (Lab/ Wilson, Sammy (East Antrim) (DUP) Co-op) † Kirby, Simon (Brighton, Kemptown) (Con) Simon Patrick, James Rhys, Committee Clerks Lavery, Ian (Wansbeck) (Lab) † McKenzie, Mr Iain (Inverclyde) (Lab) † attended the Committee 545 Public Bill CommitteeHOUSE OF COMMONS Finance Bill 546 Since then, we have seen U-turn after U-turn. It seems Public Bill Committee that the bigger anomalies are in the Government’s policy- making process, rather than in the policies themselves. Thursday 21 June 2012 Of the two VAT elements in the clause, the Government have already backtracked on one, having recognised (Morning) that they got it wrong on churches that are altering their historic buildings, and we welcome that change. We tabled the amendment to highlight the concerns expressed [JIM SHERIDAN in the Chair] by industry representatives, church groups and MPs about those two specific items, and to call attention in Finance Bill Committee to the ongoing confusion and uncertainty that surrounds the Government’s post-Budget policy- making process. (Except clauses 1, 4, 8, 189 and 209, schedules 1, 23 and 33 and certain new clauses and new schedules) Will the Minister confirm whether the Government still intend to go ahead with the planned changes to VAT on self-storage? After all the uncertainty in economic Clause 195 policy in past weeks on matters ranging from hot pasties to static caravans, it is not unreasonable to suppose that ANTI-FORESTALLING CHARGE TO VALUE ADDED TAX some change might be in the offing, as interest in the Budget cools down. The truth is that the Government’s 9am policy making over the past few weeks has been a mess. Rachel Reeves (Leeds West) (Lab): I beg to move They have had to consult on proposals after announcing amendment 200, in clause 195, page 112, line 25, at end them, because they had not bothered to do so before. add— Time and again, they have had to make about-turns because of the disastrous Budget process that gave ‘(2) No new Order shall be made under section 30(4) or 31(2) of the Value Added Tax Act 1994 unless the Chancellor of the millionaires a tax cut, while asking millions to pay Exchequer has reviewed the full impact of those changes on jobs, more. living standards and businesses, and placed the review in the Toprovide some background, the repair and maintenance Library of the House of Commons.’. of a protected building is standard-rated for VAT purposes, but the approved alteration of a protected building was The Chair: With this it will be convenient to discuss previously zero-rated. The effect of the clause and the following: schedule 26 is that VAT will essentially be payable on all Clause stand part. building work carried out on listed buildings that are That schedule 26 be the Twenty-sixth schedule to the used as dwellings or for charitable purposes. In the Bill. Budget, that was presented as one of a series of corrections to anomalies, which originally included the changes relating to warm pasties. Was the Minister involved in Rachel Reeves: It is a pleasure to serve under your the Budget’s scoring process, during which such options chairmanship this morning, Mr Sheridan. I am sure were considered? What consultation was carried out there are some haunted faces around the Cabinet table with major owners of listed buildings—and smaller when anyone mentions VAT, so perhaps it is better that owners—who may be affected? the Chancellor is not here for clause 195. Although it makes changes that are more technical than those in Many churches in hon. Members’ constituencies will other clauses, this clause still indicates the wider shambolic have made adaptations to their premises to make them policy making that has defined the Bill. more family-friendly and better to accommodate their congregations. When the related measures were termed Through schedule 26, the clause will, from October, anomalies in the Budget, did the Treasury know that impose VAT on supplies in relation to self-storage and Church of England churches and cathedrals spent approved alterations to protected buildings. The clause £120 million on repairs in 2010-11, of which £23 million and schedule will introduce an anti-forestalling charge in VAT was reclaimed from the listed places of worship on such supplies if, for VAT purposes, they are treated grant scheme? After the Budget and before the £30 million as taking place before 1 October 2012, even though compensatory fund was announced, 29,000 people signed services are delivered or materials are incorporated into an e-petition against the plans, which would have hit a building on or after that date. This is one of the places of worship hard. That shows the concern about elements of the Budget that have filled so many column the plans more generally. inches and taken up so much time in Committee. I am sure that the Chancellor did not expect that when he I welcome the decision to compensate churches through said in the Budget: the fund, but we are concerned about what the process “We will also address some of the loopholes and anomalies in implies about the Government’s approach to policy our VAT system. For example, at present soft drinks and sports making, because it is not only churches that are concerned. drinks are charged VAT, but sports nutrition drinks are not. Hot Although only churches will benefit from the U-turns takeaway food on the high streets has been charged VAT for more to date, not all protected buildings are places of worship, than 20 years, but some new hot takeaway products in supermarkets as the Minister knows. A huge number of listed buildings are not. Some companies are using the VAT rules that exempt the are not places of worship, and they are run by a range rental of land to avoid the tax that their competitors are paying. of groups, businesses and individuals. The Society for We are publishing our plans today to remove loopholes and anomalies, but we will keep the broad exemptions on food, the Protection of Ancient Buildings said: children’s clothes, printed books and newspapers.”—[Official Report, “VAT affects the ability of owners to care for their buildings, 21 March 2012; Vol. 542, c. 801.] the viability of projects involving historic buildings at risk, and 547 Public Bill Committee21 JUNE 2012 Finance Bill 548 the survival of firms that work in this specialist field. We wish to which do not give up space directly to their customers. see works of care and repair to listed buildings supported, with How many firms will be affected, and what will be the no perverse incentive to alter or build anew. Owners of listed administrative burden on them?
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