Value Added Tax

HC Deb 26 June 1980 vol 987 cc723-5

6. Mr. Hannam

asked the Chancellor of the Exchequer if he will seek to relieve from value added tax adaptations on cars for the disabled.

Mr. Lawson

I am well aware of my hon. Friend's long-standing interest in this subject, and indeed of his tireless work on behalf of the disabled in general. But I am afraid that, as my hon. and learned Friend the Minister of State has explained previously to my hon. Friend, such a relief could not be justified in the context of a broadly based tax.

Mr. Hannam

Does my hon. Friend accept that the provision of vehicles for the disabled has been discontinued by the Government and that it is therefore vital that the Motability leasing scheme is successful? Does he accept that one of the main obstacles is not the level of the mobility allowance but the VAT charged on adaptation?

Mr. Lawson

My hon. Friend is aware of our concern for the success of the Motability scheme. That is why Motability and similar organisations supplying cars to the disabled are able to deduct input tax on cars bought for leasing. Such input tax is not normally deductible.

Mr. Denzil Davies

Does the Minister agree that the main reason why people are suffering in this way is the increase in VAT from 8 per cent. to 15 per cent? Will the Government reduce the rate of VAT, not only to help the disabled but to reduce prices in general?

Mr. Lawson

No, Sir. A reduction in VAT would have to be paid for by an increase in income tax. The vast majority of the British people do not want that.

Mr. McQuarrie

Does my hon. Friend realise that the number of people involved in the adaptation of vehicles is minimal? Does he agree that the amount of money involved is such that there is the possibility of the Government doing something about it?

Mr. Lawson

My hon. Friend is right. The cost might be small but it is impossible to draw the line there. Similar relief would have to be made in a number of other cases where, in equity, the case is equally compelling.

Mr. Edwin Wainwright

Does the Minister realise that his answer will be met with displeasure by all decent people? Will he reconsider this, and look after these poor unfortunate people who are disabled and deserve as much benefit as we can give, although a few might take advantage of it?

Mr. Lawson

I appreciate the sincerity of the hon. Gentleman's question. Nevertheless, relief for the disabled is more sensibly given through the social security system than through complicated remissions which would damage the integrity of the VAT system and make it difficult to know where to draw the line.