Repairs to historic buildings should be VAT-free, peers have urged, amid warnings the Covid-19 pandemic is squeezing budgets.

Conservative Lord Cormack said the Church of England is responsible for 12,000 grade one and two listed churches but they are largely dependent on fundraising by “dwindling and ageing” congregations.

He pressed Chancellor Rishi Sunak to remove VAT on restoration to help aid their “survival”.

Speaking during a virtual Lords debate, Lord Cormack said: “One diocesan bishop said recently that he expected many in his diocese to close.

“I speak literally in the shadow of Lincoln Cathedral, one of the greatest of all our cathedrals.

“It costs more than £50,000 a week to maintain and that doesn’t account for any restoration or repair, nor for the cost of the staff of dedicated and very skilful craftsmen and women.”

Lord Cormack saluted Mr Sunak for his efforts to “save the economy” before warning: “If architects and craftsmen go to the wall, not only will valuable jobs and skills be lost, but our historic buildings will be at greater risk than ever before.

“With a stroke of a pen Mr Sunak could make a great contribution to their survival by removing VAT on restoration.

“It’s inexplicable that restoration carries 20% on VAT and new build carries none at all.

“I hope he will take that message.”

The Bishop of Portsmouth, the Rt Rev Christopher Foster (pictured), echoed the call.

He said: “We are rich in assets but the pandemic means income is plummeting and budgets were already tight.

“I therefore urge the Government at least to remove VAT on repairs to historic buildings.”

Liberal Democrat Baroness Randerson urged ministers not to “fall into the trap of abandoning free entry or cutting support for museums”.

She said they were good for mental health, education and tourism, adding: “We will need them more than ever.”

Tory Baroness Rawlings said historic buildings and gardens were being “penalised” by new laws “stuffed with anomalies”.

Lady Rawlings said gardens should be allowed to open for people’s sanity after being “cooped up for months”.

On the financial suggestions to help historic buildings, including the removal of VAT, culture minister Baroness Barran said: “All of these things are being actively explored.”