VAT on Fuel (Hansard, 15 July 1993)

§ 10. Sir John Hannam
To ask the Chancellor of the Exchequer with which organisations he has held discussions on the impact on charities of VAT on fuel and power.

§ Sir John Cope
My right hon. and learned Friend the Chancellor and I have received representations from a number of charities and I have particularly had discussions with the Charities Tax Reform Group.

§ Sir John Hannam
I thank my right hon. Friend for the courtesy that he has shown the representatives from the charities at those meetings. Will he take into account the fact that in recent years charities have faced an ever-increasing burden of non-recoverable VAT, and the £25 million in VAT on fuel and power in addition to that is presenting them with major problems? Will he therefore give sympathetic consideration to the proposal for a tax refund system for charities; and will he give the Charities Tax Reform Group an opportunity to meet him between now and the Budget?

§ Sir John Cope
The allowances against VAT given to charities have increased since 1979 from about £23 million a year to about £150 million a year—a fact which my hon. Friend should bear in mind. Of course, I will consider any proposals put to us, and I will be pleased to see the Charities Tax Reform Group again before the Budget, if it should so wish.

§ Mr. Matthew Taylor
Is the Minister aware that the imposition of VAT on charities and on the people of this country would not have been necessary if the Government had collected the £1.7 billion that the Inland Revenue wrote off in uncollected taxes last year? That was about 20 times the amount uncollected in the last recession. Does he believe that this recession is 20 times as bad, or is it time 1104 for the Government to start looking at collecting taxes from those who owe them instead of imposing new burdens on charities and others who cannot afford them?

§ Sir John Cope
Both on VAT and on the Inland Revenue side, we go to great efforts to collect all the taxes due, and we shall continue to do so. Of course, it is to be expected that that is more difficult in a recession, when the figures, of course, go up.

§ Mr. Colin Shepherd
Will my right hon. Friend call in the charities again and discuss with them the thinking of the Labour and Liberal parties as set out in their policy documents, so that he can make it clear to them that a carbon tax or a tax on energy would be what those parties would advocate were they in government now?

§ Sir John Cope
I will certainly make that point clear.

§ Mr. Betts
At the general election, the Government gave an absolute commitment that there would be no increase either in the level or the range of VAT. They have broken that commitment by imposing VAT on domestic fuel, to the detriment of the elderly and the poor. Is any consideration being given to the imposition of VAT on public transport, which was also ruled out at the general election and which would be a move that would also disadvantage the poor, the elderly and the young, and create traffic congestion in our cities?

§ Sir John Cope
The hon. Gentleman exaggerates what was said before the election. He has obviously not paid attention to the many debates that we have had on the subject recently