Value Added Tax

HC Deb 21 February 1985 vol 73 cc1190-1

10. Mr. Hannam

asked the Chancellor of the Exchequer what representations he has recently received from disability organisations on the imposition of value added tax on building alterations.

The Minister of State, Treasury (Mr. Barney Hayhoe)

Over 100 from disabled individuals and their organisations.

Mr. Hannam

Is my hon. Friend aware that last year's extension of VAT to house adaptations has added a vast amount to the VAT bills faced by charities? Is he also aware that the system of relief for adaptations for the disabled is causing great confusion and anomalies? Will he remove them by extending relief to all household adaptations for the disabled?

Mr. Hayhoe

I have noted what my hon. Friend has said. He will recognise that last year special reliefs were given and at that time I said that the main objection to the proposal he has now made was revenue costs. The facts remain the same this year as last year.

Mr. Alfred Morris

Is the Minister aware that after the last budget the Jewish Blind Society had an extra VAT bill of £100,000, the Spastics Society one of £120,000 and the Royal National Institute for the Blind one of £100,000? The result was that their work in the service of severely disabled people was adversely affected. Is this not an intolerable way to treat the voluntary sector?

Mr. Hayhoe

I met the representatives of the Charities VAT Reform Group and points along the lines of those mentioned by the right hon. Gentleman were made at that meeting. One has to see this in the broader context of the very significant concessions within the tax system made available to charities and the very substantial grants that are made by the Government to charities.

Mr. Alan Howarth

Does my hon. Friend recognise that many charities undertake responsibilities which would otherwise be a direct and full charge upon the public purse? Will he therefore reconsider his policy with a view to putting in place a tax regime for charities that is coherent and systematically supportive of charities?

Mr. Hayhoe

The points made by my hon. Friend are those contained in the representations that the Chancellor has received from the Charities VAT Reform Group and, as has been indicated to that group, they will be given careful consideration.

Mr. Carter-Jones

Does the Minister agree that VAT on a vital alteration in a building for disabled people represents a tax on disability?

Mr. Hayhoe

No, I do not think that I would accept that proposition.

Mr. Yeo

Does my hon. Friend agree that the continued imposition of VAT on charities runs directly counter to the other helpful measures which the Government have tried to introduce in support of their wish for a partnership with the voluntary sector?

Mr. Hayhoe

I do not think that there is any question of trying to introduce—very substantial concessions and advantages have been introduced by this Government.

Mr. Ashley

Does the Minister recognise that the Treasury has been less than charitable to charitable organisations which are trying to carry out these adaptations for disable people? Why is he quibbling over a very tiny cost that could help many people in great hardship, especially when we know that the Chancellor is accumulating £1.5 million to give away in tax cuts?

Mr. Hayhoe

I do not think that "quibbling" is the right judgment to apply to the debates we had last year on that matter, and I was referring back to them. With regard to this year, it would, of course, be quite improper for me to seek to anticipate my right hon. Friend's Budget statement. I again assert that the Government have done a great deal to help charities, particularly those dealing with the disabled.

Mr. Meadowcroft

Will the Minister reflect on the answer that he gave to the hon. Member for Eccles (Mr. Carter-Jones), who is surely right? Many disabled people need building alterations to cope with their disability. This is surely a tax on disability.

Mr. Hayhoe

When one takes account of the relief that was given in the last Budget in connection with building operations for facilitating access to buildings by the handicapped, and of the special zero rating of the first-time installation of a bathroom, washroom or lavatory for a handicapped person in his own home, one sees that very considerable relief was afforded to the disabled in the last Budget.