HC Deb 24 January 1985 vol 71 c1123
13. Mr. Freud

asked the Chancellor of the Exchequer if he will estimate what sum would be lost to his Department if the liability to value added tax of some adult education courses were ended for the financial year 1985–86; and if he will make a statement.

Mr. Hay hoe

I regret that this information is not available.

Mr. Freud

I cannot thank the hon. Gentleman for that reply. With the minimal income that he receives from VAT on adult education, with its selective imposition, is there not a strong incentive for him to reconsider the matter and abolish it, so that adult education may flourish, as was promised in his party's manifesto?

Mr. Hayhoe

The law on this matter has not changed, and the vast majority of adult education is outside the scope of VAT.

Mr. Greenway

Will my hon. Friend bear in mind the value of adult education as a medium for retraining people for jobs and as a means of giving self-dignity to unemployed and elderly people? Will he see whether the whole of adult education can be exempted from VAT?

Mr. Hayhoe

There are problems. Recreational and sports courses are subject to VAT when provided by the private sector. It would therefore be unfair not to impose VAT on local government when it is in direct competition with the private sector. Such courses have been subject to VAT since the beginning.

Mr. Loyden

Does the Minister agree that it is disgraceful that the Department has not monitored the effects of its decision on adult education, especially as local authorities have already assessed the effect of VAT on adult education courses?

Mr. Hayhoe

There has been no change in the law or in the practice of Customs and Excise in implementing it. What has changed is that some local education authorities have increased their prices and are competing directly with similar courses in the private sector. There should be a similar tax regime for both.