FEW parishes will be able to pay the so-called “mansion tax”, and dioceses will not be able to absorb the cost, the Bishop of Manchester, Dr David Walker, warned on Thursday, during a House of Lords debate on the Autumn Budget.
The Chancellor, Rachel Reeves, announced in her Budget speech last week the introduction of the High Value Council Tax Surcharge — dubbed the “mansion tax” (News, 28 November). It means that properties in England that are valued at more than £2 million will pay an annual surcharge of at least £2500 from 2028, in addition to existing council tax (News, 28 November).
During Thursday’s debate, Dr Walker said that, in London and the South-East, “location factors mean that, even in a relatively poor parish, the vicarage will have a capital value over the £2 million threshold.”
Dr Walker spoke about a 19th-century Act of Parliament, which “determined that vicars should live in their benefices”, so that they were easily accessible to parishioners and not “merely another middle-class commuter”.
“The modern vicarage is rarely as large and luxurious as some of former times; however, it needs not only to accommodate the priest and their household but to host meetings, provide a meeting place for parishioners, and provide study and office space,” he said.
He continued: “If we are to maintain the important principle of clergy living where they serve, including those from other denominations, I urge the minister to meet with church representatives so that we can discuss how the existing tax exemptions applying to the residences of ministers of religion can perhaps be extended.”
Dr Walker also spoke about the Listed Places of Worship Grant (LPWG) Scheme. Before the Budget, the Archbishop of York urged Ms Reeves to make scheme “permanent” and to “lift the cap on claims”, but she did not mention it in her Budget speech (News, 28 November).
Dr Walker said that works to repair and improve places of worship was “not cheap” and that “much-needed renovation and improvement work” was currently being stalled by the lack of a secure, long-term future for the listed places of worship repair scheme.
“Will the Minister commit to reviewing the future of this vital scheme, so that it can be extended in time, and commit to withdrawing the harmful limit of £25,000 a year, which was introduced only recently and makes many larger refurbishments unaffordable?”
In a maiden speech, the Bishop of Portsmouth, the Rt Revd Jonathan Frost, the lead bishop on education, spoke about the difficulties that schools were having in supporting children with special educational needs (SEND) and “the postcode lottery of SEND provision”.
He continued: “I note the intention to bring the cost of SEND provision into the central government spending envelope from 2028-29. This will be a relief to councils holding significant deficits, but I am deeply concerned that no indication has been given to date of how the estimated additional cost involved will be covered —according to OBR, £6 billion by 2028-29 — without causing a significant fall in mainstream funding for schools. I note, too, that from 2028, the Government will not expect local authorities to fund future special educational needs costs from their general funds once the statutory override ends at the end of 2027-28. . .
“I would welcome some assurance from the minister that accrued benefit deficits in local authority spending on SEND will not be paid off or reconciled by using the mainstream schools budget.”
Bishop Frost also commended the Government for removing the two-child benefit cap, which he described as “a leading driver of child poverty for nearly a decade, crushing aspiration, hope and opportunity”. He said: “I hope and pray that this is the beginning of a renewed commitment to investment in a generation of young people.”
Dr Walker also offered the Government his “deepest thanks” for ending the two-child cap. “I never felt it right or just to push a child into poverty simply for having too many sisters or brothers; it makes even less sense when we badly need a birth rate that will provide Britain with tomorrow’s workforce without having to rely on migration to fill the labour market gaps.”
The Labour peer Lord Rook also addressed the needs of the next generation. “A country that disinvests in its future citizens cannot expect the next generation to invest in their nation,” he said. “While these Budget measures are welcome, we can all do more and better, and we must, because it takes a society to raise a generation.”
The Conservative peer Lord True, in contrast, said that the Government was “failing” in its claim to be an institution for growth. “We respect the Government’s desire to secure growth: the trouble is that their policies are designed to stunt it. . . This Government are mercilessly battering businesses, particularly small businesses, with the big sticks of taxation and regulation, and it cannot succeed.”
Responding for the Government, the Treasury minister Lord Livermore, did not address the points raised by Dr Walker about vicarages and the LPWG Scheme. Lord Livermore did, however, respond to Bishop Frost’s concerns about SEND funding.
“The OBR has based its estimate on unreformed pressures,” he said. “It has not accounted for planned reforms to deliver a sustainable SEND system that works better for children and families. The detail of this will be set out in our reform plan early in the new year.
“The OBR has only used mainstream schools as an indicative example, whereas the Government have confirmed that residual SEND pressures will be absorbed within the overall Government DEL budget from 2028-29 onwards. The Government will not make final decisions until reform plans are confirmed and Budgets from 2028-29 onwards remain subject to the spending review in 2027.”
