HC Deb 26 February 1981 vol 999 cc956-7
2. Mr. Hannam

asked the Chancellor of the Exchequer if he will zero-rate ambulances and similar vehicles purchased by voluntary organisations for the transport of elderly and disabled people, in view of the large sums which now have to be raised by voluntary effort to pay the value added tax; and if he will make a statement.

The Minister of State, Treasury (Mr. Peter Rees)

I regret that I cannot anticipate the Budget Statement of my right hon. and learned Friend the Chancellor.

Mr. Hannam

Will my hon. and learned Friend agree that it does not seem to make sense to all those engaged in voluntary organisations and charities that they should be asked by the Government to take on extra responsibilities during the recession when, at the same time, they face severe extra VAT burdens as a result of the increase in VAT? Will my hon. and learned Friend, in the approach to the Budget, bear in mind that ambulances are specialist vehicles and should not be subject to VAT?

Mr. Rees

I take the general point that my hon. Friend makes. I shall look forward to talking to him and to the delegation that I know he is to bring to see me to discuss these subjects. He will appreciate that there is already a wide range of reliefs for medical requirements. I need only instance invalid chairs, wheelchairs, iron lungs, white sticks, artificial limbs and kidney machines. It is important to preserve a wide base for VAT.

Mr. Ashley

Is the Minister aware that, in my correspondence with the Treasury, I have always found it fairly sympathetic about ambulances but always pedantic and unsympathetic about other vehicles used as ambulances for disabled people. Will he look at the regulations again with a view to widening the criteria?

Mr. Rees

I am sorry that the right hon. Gentleman, whose deep interest in these matters is well known to the House, should have found the Treasury pedantic. He will appreciate that special reliefs and the frontiers of a tax like VAT pose definition problems of the kind that were so admirably exploited by the late Sir Gerald Nabarro. One therefore proceeds with caution in this area. I take note of what the right hon. Gentleman says. I shall look again at the problem.

Mr. Paul Dean

Will my hon. and learned Friend take account of the fact that charities feel that they are working with one hand tied behind their backs owing to VAT when they are assisting the elderly, the disabled and other vulnerable groups? Will he at least give serious consideration to putting them on an equal footing with local authorities when they are providing services similar to those provided by local authorities?

Mr. Rees

I take note of what my hon. Friend says. His deep knowledge of these matters is well known to the House. He will recognise, however, that local authorities provide a much wider range of services than those he instances. If we were led into the field of educational charities, neither he nor I would probably carry the House. I take note of what he says, but I cannot anticipate what my right hon. and learned Friend may decide.

Mr. Skinner

Is the Minister saying that one of the reasons why he is not able to give any indication of support for these voluntary organisations is that the Government are spending too much money keeping 2.5 million people out of work? Or is the reason that they have not any muscle?

Mr. Rees

I am sure that the hon. Gentleman who, behind his rough exterior, conceals a heart of, if not pure gold, at least pure coal, will recognise that in the last Finance Bill a bigger package of reliefs for charitable giving was devised by my right hon. and learned Friend than has ever previously been encountered by the House.

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