Bloodstock Breeding (Hansard, 19 December 1991)

§ 8. Mr. Bellingham
To ask the Minister of Agriculture, Fisheries and Food when he next expects to meet representatives of the bloodstock breeding industry to discuss the state of this sector.

§ Mr. Curry
I have no plans to meet the horse bloodstock industry, but my noble Friend Lady Trumpington is to attend the annual luncheon of the Thoroughbred Breeders Association on 9 January 1992.

§ Mr. Bellingham
Is the Minister aware that a number of stud farms in my constituency, including two owned by Her Majesty the Queen, and also stud farms in general make a tremendous contribution to the rural economy? 443 That is valuable at a time when farming is in difficulties. Is he also aware that bloodstock is subject to a far higher rate of VAT than in this country in France or in Ireland? That is an extremely serious problem which is leading to a number of stud owners moving their horses abroad. Will he tell the House what he is doing about that and what discussions he is having with the Treasury?

§ Mr. Curry
My hon. Friend will know that my hon. Friend the Minister of State, Treasury, has taken the lead in the discussions. The Irish rate of VAT is safe because it was in place before the cut-off date in the Community. The French rate of VAT may be challenged and may have to rise. We cannot lower the rate of VAT under Community rules, but we can try to find a way to assist the industry. My hon. Friend the Minister of State, Treasury, is conducting discussions with the industry on the basis of a proposal for a flat rate agricultural tax which would replace the 17.5 per cent. VAT. The discussions are close to a conclusion and I understand that my hon. Friend will shortly be writing to the industry to clear up some of the remaining points, which will isolate the relatively few issues to be settled.

§ Sir Patrick Duffy
Is the Minister aware that feeling within the industry and the related sales industry is that if the VAT gap between this country and Ireland and between this country and France is not narrowed significantly we could lose a considerable part of our breeding industry and our entire sales industry, which are the most prestigious in the world? Although the recent approaches to the Treasury and the manner of their reception have been much appreciated, there is a feeling that little may yet be done to prevent the most serious disruption of breeding and horse sales in this country.

§ Mr. Curry
I appreciate the hon. Gentleman's concern. He knows that we cannot reduce the VAT rate as a solution, but he also knows that we can take measures that would have a similar effect in helping the industry. A meeting a week ago today between officials and the industry got to grips with some of the remaining problems. As a result of that, my hon. Friend the Minister of State, Treasury, will write to the industry shortly. That should clear the way for what may be the final round of discussions which, I hope, can reach an agreement to achieve a measure that is equivalent to a reduction in VAT, within the Community rules which permit it.