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Lord Walpole: My Lords, does the Minister have figures as to how much VAT the Government have removed from those congregations at the same time?

Lord Mackay of Ardbrecknish: No, my Lords. Obviously that figure is not available. The VAT is paid by the building firms which do the work, both small and large. Their VAT returns include all the work that they do. Nobody prayed this point in aid, but those historic buildings which charge admission fees and run businesses—although cathedrals may not be in that category—may sometimes be in a position to reclaim at least some of the VAT. Therefore there is a possibility of reclaiming VAT in respect of some part of the built heritage. However, I concede that that does not cover

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those buildings where there is no admission charge and which are not businesses; and of course it does not cover parish churches.

There is one other future source of funds, although I am not entirely sure whether I should mention it in this context. That is the National Lottery and the National Heritage Memorial Fund. I believe it was William Booth of the Salvation Army who asked why the Devil should have all the best tunes. Perhaps the same should apply to the National Heritage Memorial Fund.

The fund is charged with the distribution of the heritage tranche of the lottery proceeds. Like other distributing bodies, it has drawn up guidelines for applicants for lottery funding. Churches of historic interest are among the bodies eligible to apply for funding from the National Heritage Memorial Fund for repair, conservation or restoration of buildings and for improvement to existing buildings to improve public access. Therefore, whether or not one approves of the lottery, a considerable amount of money will come forward in the next few years which will be available for the built heritage, including churches, in addition to the money already available from the taxpayer through the Treasury.

Lord Chorley: My Lords, I am sorry to intervene, but we have 15 minutes left. Does the Minister not agree that it has been made quite clear that lottery money will not be available for repairs?

Lord Mackay of Ardbrecknish: My Lords, I am told that money from the National Heritage Memorial Fund will be available for repairs, conservation or restoration of buildings. When I get back to my office I shall certainly ask whether that is right or whether the noble Lord is right. If the advice that I have received is wrong I shall certainly write to him. However, if the money is not available for repairs I am not entirely sure how one would define repairs as against conservation or restoration. It must be confusing when it comes to mediaeval churches or old buildings. Thinking on my feet, I do not think that that will be a great problem.

We recognise the financial burden borne by churches. The right reverend Prelates rightly drew our attention to that burden. It is a problem which many congregations face. Sometimes congregations are unlucky enough to have a modern church built 50 or 60 years ago which is not likely to stand the same test of time as mediaeval churches. The parishioners of those churches have a tremendous responsibility, as do the owners of houses of historic interest.

We fully appreciate the work of the churches and their important role in society. While I appreciate that there was a call for churches to be protected from taxation, I am sure that your Lordships will not be surprised to hear me say that no matter how valuable we consider the work that they and others do, it is not possible to protect certain groups from taxation which applies to everyone else. The number of people who would come forward, especially in relation to buildings, to plead that their cause deserved special VAT treatment would be considerable.

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Despite the suggestion of the noble Lord, Lord Eatwell, that we are VAT junkies, the fact is that VAT is an important part of the tax base. When I do not speak from this Dispatch Box on behalf of the Treasury I speak for the Department of Social Security, which requires a vast amount of taxpayers' money to assist many people whom your Lordships would rightly consider we ought to help. I do not think that we should run away with the idea that VAT can be discounted as being of importance to the Treasury as part of the tax take which we need in order to meet the competing demands on the taxpayers' money. Rather than going down the road which I am invited to follow this evening, our preferred way of helping churches is to encourage charitable giving by direct grants and by the grants through historic church buildings, consistent with what the country and the taxpayer can afford.

I know that all churches are keen to push charitable giving on people. I am amazed at the number of people who are reluctant to do that. They somehow believe that it will cost them something, whereas it will cost the taxpayer and the Treasury a little in addition to what most people will give Sunday by Sunday. Deeds of covenant, gift aids and payroll giving are all methods by which people can increase the amount of money that they give to whatever the good cause—in this case the church and church buildings.

In conclusion, the European Commission's report is perfectly clear: this is not the time to make changes in the reduced rate schedule. In its opinion, the present arrangements are working satisfactorily. Its next report will be in two years' time and will address any possible changes in the rate coverage against the Commission's conclusion on the definitive VAT system. We shall, of course, consider the position at that time.

Without ignoring the excellent cases that have been put forward by all noble Lords, I hope that I have made clear the Government's position on value added tax. I simply say that I do not believe that this is the right way to proceed with maintaining, as we should, this important part of our heritage.

Lord Eatwell: My Lords, before he sits down, I asked the Minister a number of questions, none of which he has attempted to answer. However, given the shortage of time and the considerable interest in this Question expressed on all sides of the House, despite the Minister's evident embarrassment, will he give a commitment to provide time for the subject to be debated at an appropriate and less hurried length?

Lord Mackay of Ardbrecknish: My Lords, that is not a matter for me but for the usual channels. I shall certainly draw their attention to the fact that the noble Lord would like to have a longer debate. But I do not believe that the case would be better made by having five-minute or 10-minute speeches than it has been by having two-minute speeches.

Lord Lucas: My Lords, I beg to move that the House do now adjourn during pleasure until half past-eight.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.22 to 8.30 p.m.]

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Environment Bill [H.L.]

House again in Committee

Clause 45 [Borrowing powers]:

Baroness Hamwee moved Amendment No. 223ZA:

Page 38, line 28, leave out ("not exceeding £160 million,").

The noble Baroness said: I wish to speak to Amendments Nos. 223ZA and 223AA with which are grouped Amendments Nos. 223A and 223B. This is an entirely simple and straightforward point. In moving to delete the limits on borrowing, I seek to ask the Minister how those limits have been arrived at. £160 million is a little more than £150 million which was a good round figure, but it seems a slightly odd amount to pick out of the air. My point is as simple as that. I beg to move.

Lord Carmichael of Kelvingrove: Perhaps I may help by speaking to Amendments Nos. 223A and 223B which were grouped with the noble Baroness's amendments. I am also concerned about whether the new body will be able to function. The Minister may not be able to give us the figures now, although there is no reason why he should not have them somewhere. How do the total figures for borrowing relate to the amounts that can already be borrowed by the existing bodies? Is any new money involved or is it an accumulation from all the other bodies at present involved in environmental work? Does it all add up to the same thing?

Perhaps I should continue speaking until, as a famous Member used to say, the Seventh Cavalry arrives. If there is no new money for the new body, we will not get far because so much is involved. Perhaps we may have the figures from the Minister.

The Earl of Lindsay: Amendments Nos. 223ZA and 223AA, moved by the noble Baroness, Lady Hamwee, would remove the upper limits on the amounts that Ministers may specify, by means of a negative resolution order, as the total that the agencies may borrow.

I believe that if it were ever necessary for the agency to borrow sums in excess of £160 million for a major project, it is likely that additional enabling legislation would be required, for example, as was necessary when consideration was being given to the building of the Thames Barrier. I do not think that the limit, which is the same as currently applies to the NRA under the Water Resources Act 1991—and that may explain to the noble Baroness why the sum was chosen—will give rise to any difficulties in practice. Nor do I believe that the limit of £5 million for SEPA is likely to cause any difficulties, in particular because it will not be undertaking any major capital works similar to those at present carried out by the NRA. I hope that the noble Lord and the noble Baroness will feel able to withdraw their amendments.

The noble Lord, Lord Carmichael, moved Amendments Nos. 223A and 223B—

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