§ 3. Mr. AlexanderTo ask the Chancellor of the Exchequer what representations he has received about differing VAT levels throughout Europe on the sale of racehorses; and if he will make a statement.
§ The Paymaster General (Sir John Cope)We have received many representations about the different rates of VAT within the European Community on the sale of racehorses. I understand the concerns of the bloodstock 433 industry about the potential position next year, and we are working with industry representatives to explore the options open to them.
§ Mr. AlexanderI thank my right hon. Friend for his reply. Will he bear it in mind that the Irish rate is 2.3 per cent. and that the French rate is 5.5 per cent? Will he bear it in mind also that large sums are involved in the sale of a racehorse and that it will be much easier for organisations such as Tattersall's and other dealers to take their entire operations to a country where the tax regime is much more favourable? Will my right hon. Friend look at this question urgently and make sure that our breeders and dealers are no worse off than if their business operations were in other parts of the European Community?
§ Sir John CopeWe are indeed looking carefully at this question, but anybody who is considering moving his business operation should think carefully before doing so because, apart from anything else, the French have not got permission for their reduced rate, although they claim to have it. There is opposition to it from both the Commission and ourselves.
§ Mr. EnrightWill the Minister consider giving the same sort of consideration to greyhounds and whippets?
§ Sir John CopeOf course.
§ Mr. PaiceI thank my right hon. Friend for his obvious commitment to finding a solution. We greatly appreciate the efforts of my right hon. Friend the Member for Norfolk, South-West (Mrs. Shephard) when she held his position. She tried very hard to find a way to deal with this matter. The industry employs about 8,000 people. This country is pre-eminent in the industry and has a positive balance of trade. If we do not find a way through, we shall lose it all. Moreover, the Treasury will lose the VAT.
§ Sir John CopeOne should not be too apocalyptic about it. Apart from VAT, the racing industry has a number of troubles. Nevertheless, I fully understand the points that my hon. Friend has made.