Chancellor faces ire of Church over VAT on repairs

Senior Tories joined church leaders in calling on Mr Osborne to rethink his plans to end the VAT exemption for improvement, alteration and restoration works to grade one and grade two listed buildings.

The Church of England – which has 12,500 listed buildings – has reportedly estimated the move will cost it about £20m a year unless changes are agreed.

An e-petition on the Downing Street website calling for the levy to be dropped has already attracted more than more than 12,000 signatures.

Senior Conservative backbencher Sir Peter Bottomley denounced the measure as a “blunderbuss” and said ministers must now find an “accommodation” with the church.

“The Church of England has half the listed buildings in the country,” he said.

“The Government I think either needs to start saying we’ll recognise the special position of those looking after places of worship – which will be predominantly the Church of England – or roll back this provision, or do something which will make life fairer.

“The Government needs to listen to the churches and pay attention. I hope that the Government will do so, not on their knees, but looking the Church in the eye and saying ‘If we put forward a proposal that was more of a blunderbuss than we intended, how can we move forward together?’”

The Bishop of Wakefield, the Rt Rev Stephen Platten, said Wakefield Cathedral – which has just started a £3m restoration programme – now faces the prospect of having to raise another £200,000 in order to pay the VAT.

“The real worry about this is that because when you are running a thing like a cathedral, you are all trustees of the building,” he said.

“One wouldn’t have started off on a venture like this if you didn’t have the money available. Now, in theory, we could find ourselves in a tricky position - and made so by the Government itself - for having set out on a project for which we haven’t got all the money.

“What seems to me to be completely contrary is to give funds to cathedrals and churches and other listed buildings through the English Heritage listed buildings scheme and then to take it away by charging VAT.”