Writing exclusively for Endeavour Public Affairs, Loyd Grossman OBE FSA, Chairman of The Heritage Alliance, highlights the importance of the UK’s built heritage, both in terms of tourism and the wider construction industry. In his article he calls on the Chancellor to see the UK’s rich historic environment as an asset to our leisure, construction and tourism industries, and to our quality of life and sense of national pride. He calls on the Chancellor to support this sector in his upcoming budget; in particular he would like to see the introduction of a five per cent VAT rate for building repair and maintenance work.
Loyd Grossman has a background in journalism and television and is the creator of one of the UK’s most successful premium food brands. He is a former Commissioner of the Museums and Galleries Commission, a former Commissioner of English Heritage, a former Commissioner of the Royal Commission on the Historical Monuments of England, a founding member of the Museums, Libraries, and Archives Council, past Chairman of National Museums Liverpool, and of the Public Monuments and Sculpture Association. He founded the 24 Hour Museum (now Culture 24) and was its Chairman until 2005.
He is Patron of the Association for Heritage Interpretation and Patron of Heritage Open Days. He is President of the British Association of Friends of Museums and a Fellow of St Deiniol’s Library. He is an Emeritus Governor of the LSE and a Member of the Council of the British School in Rome. In 2007 he was appointed Chairman of the Churches Conservation Trust, and in 2008 he became Chairman of the University for the Creative Arts.
To follow Loyd Grossman on Twitter – @loydgrossman
The future of our national heritage is rarely headline stuff in the Chancellor’s Budget. On the contrary, there was a public slap in the face last year when a rare VAT exemption for alterations to listed buildings was abolished in a misguided stab at “tidying up” so-called tax anomalies.
VAT levied at 20 per cent on repairs, alterations, and improvements but zero per cent on new build discriminates against our existing historic building stock, whether that is the half a million outstanding buildings protected for public benefit or the broader tranche of traditional but unprotected buildings that make our towns village and cities so distinctive. If, as the Exchequer Secretary wrote to me last year, the Government wants “a sustainable private sector-led economic recovery”, then reviewing every barrier to investment including maintenance work is urgent.
In his speech on the economy last week, the Prime Minister noted that “Britain is in a global race. There’s a fierce battle for our economic future with great shifts in wealth taking place from West to East.” In that “fierce battle” our cultural heritage and historic environments give the UK a unique competitive advantage. We should be protecting and developing that advantage as a contemporary resource for a dynamic and entrepreneurial society. Our heritage is an essential part of the growth story. Images of our historic environment vividly convey to people all over the world that ours is a good country to visit, to live in, and in which to do business.
The economic impact of the historic environment is most frequently expressed in terms of tourism expenditure, valued at some £20.6 billion a year and sustaining nearly half a million jobs. The range and quality of our built heritage is a powerful motivator in people’s decisions to visit. The Government can influence this through policies ranging from visa regulations especially for those coming from BRIC countries and bringing with them new money from economies healthier than ours, to funding the tourism infrastructure or campaigns like Britain is GREAT, all vital to maximise the legacy of the world-wide coverage of the fabulous historic backdrops that accompanied the Queen’s Jubilee and the London Olympics.
The construction-related economic impact of our historic environment has been underplayed. As a whole, construction activity fell by 8.2 per cent over 2012 according to the Office for National Statistics. It is still 18 per cent below the 2008 level and more than 400,000 jobs have been lost. Despite the very public debate over new housing starts and major infrastructure projects – will they/wont they kick start a stubbornly flat economy – construction austerity is likely to last until 2018. New build is a tiny proportion of construction activity, significantly less than 10 per cent of the total market, and a fifth of our building stock dates from before 1919.
It would be effective, and fast, to unshackle the repair, maintenance and improvement element of the construction industry. Repair and maintenance work was worth £37 billion in 2010.
Re-using and adapting older buildings is government policy, as set out in the National Planning Policy Framework, underpinning its commitments to sustainable development and energy efficiency.
Repair and maintenance work generates local incomes and employment. Builders specialising in heritage work are typically small businesses, exactly those SMEs where growth begins. Income generated via trades relating to historic buildings repair tend to be spent locally and so acts as an agent of local economic regeneration.
Major new infrastructure projects are notoriously slow to get off the ground. There would be more rapid and immediate benefit in more “shovel ready” regeneration projects if only they were not so heavily discriminated against by a VAT rate of 20 per cent.
The Chancellor does have some room for manoeuvre within the European VAT regime. 15 per cent is the lowest possible standard rate but a general, temporary, reduction in VAT to 17.5 per cent, is one option that has already been floated. More attractive is the more limited but long term option under Annexe III to the 6th VAT Directive which allows Members States to apply a much lower rate, down to five per cent, on repair maintenance and improvement works to dwellings in private ownership. That would boost the renovation market and bring vacant and underused properties back into use.
Our rich historic environment is not a luxury nor a liability but an asset: an asset to our leisure, construction and tourism industries and to our quality of life and sense of national pride. With VAT working in its favour, our built heritage could make a far greater contribution to economic recovery and a prosperous future.
Published: Wednesday 13 March 2013
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