The Paymaster General (Mr. David HeathcoatAmory)
I beg to move,That the Value Added Tax (Buildings and Land) Order 1994 (S.I., 1994, No. 3013), dated 29th November 1994, a copy of which was laid before this House on 29th November, be approved.I understand that with this it will be convenient to discuss at the same time the following motion:That the Value Added Tax (Transport) Order 1994 (S.I., 1994, No. 3014), dated 29th November 1994, a copy of which was laid before this House on 29th November, be approved.We have two orders to consider, the first being the Value Added Tax (Buildings and Land) Order 1994. I will briefly set out the reasoning behind the order and the need for it.
The order closes a widely used VAT avoidance scheme, which is most often implemented by the use of commercial lease and leaseback arrangements, although it is not limited solely to those schemes.
Hon. Members will know that businesses supplying goods and services that are exempt from VAT, such as finance, gaming, health and educational services are not able to recover all the VAT that they pay on their own expenditure. Sometimes they cannot recover any of it. In contrast, businesses supplying goods and services that bear VAT can recover the VAT they pay on their expenditure. When an exempt business purchases a new building or has one constructed it will pay a large amount of VAT which would normally be wholly or mainly irrecoverable. In order to avoid that, some businesses have been leasing the building to an associated company, often formed specifically for the purpose, and then leasing it back again and occupying it.
Both companies then make use of a provision called the option to tax, which allows them to tax the. rents charged under the leases, which would ordinarily be exempt from VAT. That allows the exempt company to recover from the outset the VAT paid on the building. It cannot recover VAT on rents paid to the associated company under that lease, but as the lease is often extremely long, that has the effect of artificially spreading VAT paid on the building over many years. In one extreme case, a lease of 2,000 years was used. The Exchequer cannot wait that long to collect VAT on buildings constructed today.
The avoidance device is increasingly used in the financial sector but also by some universities, some fee-paying schools, hospitals and charities. In some grant-funded building projects the VAT will already have been catered for in the grant, so it cannot be right that such projects also enjoy an additional VAT relief through an avoidance scheme.
Those schemes are costing the Exchequer £200 million a year. We therefore decided that the option to tax should not be made available to those using such a scheme. VAT paid on buildings will properly accrue to the Exchequer from the outset. The necessary order effecting that was laid before the House on 29 November and took effect on 30 November.
The provision is not retrospective. Existing leases will not be affected. Under article 2 of the order, an option to tax will be ineffective on leases executed or land transferred on or after 30 November 1994 if at the time, 230 first, the grantor and the grantee are connected and, secondly, either the grantor or grantee is not entitled to recover all the VAT paid on its business expenditure. Thus the rental income will be exempt from VAT, and tax on the building cost will not be recoverable.
The measure, therefore, is not intended to affect businesses engaged in normal commercial property transactions, nor does it prevent the use of lease and leaseback arrangements. It merely ensures that the Exchequer receives revenue at the correct time in accordance with the original intention behind the VAT legislation. I commend the order to the House.
The second order before us is the Value Added Tax (Transport) Order 1994. That order was also made on 29 November 1994, but comes into effect on 1 April 1995. Public passenger transport in this country, unlike most other European countries, is zero-rated. It has been so since VAT was introduced in 1973, and was justified on social grounds.
The order aims to bring the scope of the relief more into line with what Parliament originally intended. It is highly selective, removing zero-rating only in circumstances where relief cannot be justified on social grounds, and is clearly distinguishable from the normal concept of public passenger transport.
§ Mr. David Marshall (Glasgow, Shettleston)
Can the Minister explain to the House why flights that are intended to cure people's phobia of flying will be subject to VAT, yet booze cruises out to sea and back will not? How can he justify a decision such as that? Where is the logic? Are not the aviation and coach industries being singled out for punitive treatment in that respect?
§ Mr. Heathcoat-Amory
I think that the hon. Gentleman would agree that a flight leaving one place and returning to the same place, and of the type described, to cure a fear of flying, is not public transport—certainly riot in the way that was understood by the House in 1973. Public transport must involve at least a transport of the public from one place to another. That is why we are restricting the zero-rating to what Parliament intended at the time.
§ Mr. Heathcoat-Amory
If the hon. Gentleman hopes to speak later on behalf of the Liberal Democrat party—
§ Mr. Tyler
It is precisely because I do not want to take the time of the House later that I want to make a specific argument about the tourist industry. I understand clearly what the Minister has just said about the logic, but I think that he is well aware that the tourist industry is alarmed about the proposal, because it will affect a number of steam railways, it will affect operators of boat trips and it appears to be being introduced without any consultation with the tourist industry.
I should be grateful if the Minister would tell us what consultation has taken place with the statutory tourist organisations or tourist operators before or since the order 231 was laid. The statutory organisations have expressed anxiety to me. The proposal appears to have come literally out of the blue, without any proper consultation.
§ Mr. Heathcoat-Amory
It certainly has not come out of the blue because it was announced on 29 November, and therefore there has been time to discuss the matter and to put at rest several unnecessary fears. The hon. Gentleman may be alluding to a number of supposed proposals to apply VAT at a positive rate to boat trips and other tourist attractions, when that is not the intention.
§ Mr. Heathcoat-Amory
Before I give way again, I shall proceed with my introductory remarks, because I want to emphasise that public transport in its usual and accepted sense, whether it is by bus or by coach, by train, ship or air, is not affected by the order, and will continue to be zero-rated.
I also want to lay at rest any idea or suspicion that the order has anything to do with any requirement from the European Community, because our zero rates are fully safeguarded by the sixth VAT directive, which can be amended only with the unanimous agreement of all member states, and we have no intention of removing zero-rating from public transport.
§ Sir David Mitchell (Hampshire, North-West)
I am grateful to my hon. Friend for giving way. I declare an interest as a member of the North Yorkshire Moors Railway and the Watercress line. Will my hon. Friend give me a clear assurance that there will be no VAT on train journeys on those preserved railways?
§ Mr. Heathcoat-Amory
Yes; I can give that assurance to my hon. Friend. These railways are zero-rated at the moment and will not be affected by the order, so I am happy to give that assurance. I think that that partly answers the argument made by the hon. Member for North Cornwall (Mr. Tyler), because many groundless anxieties have been caused, and I hope to set them at rest during the debate.
§ Mr. Richard Page (Hertfordshire, South-West)
When the matter was introduced in the Budget, it was clearly stated, under item 10, that the compliance cost assessment would be referred to relevant trade associations. As someone who is interested in and connected with the major trade association in this country, the Association of British Travel Agents Ltd, I know that the association was not contacted regarding the effect of the proposal. I feel strongly that it is premature to introduce it at this stage, without proper consultation throughout the industry.
§ Mr. Heathcoat-Amory
I give my hon. Friend the assurance that there will be no significant compliance cost because the legislation is a simplifying measure; therefore the anxieties expressed that it will be a bureaucratic imposition on the tourist trade are unfounded, as has been displayed by the compliance cost paper that is available.
§ Mr. Heathcoat-Amory
There will be opportunities for my hon. Friends to catch your eye, Mr. Deputy 232 Speaker, and I do not want to trespass too far into the debate itself. Before I give way again, I shall outline the three main areas of transport covered by the order.
The first main area concerns charges for admission to, or for the use of facilities at, places of amusement, entertainment, historical or cultural interest; those will become wholly liable to the standard rate. Currently, some such places that provide their customers with some forms of transport have been able to treat their supplies as wholly or partly zero-rated, while the rest of the admission charge is liable to VAT at the standard rate.
The second main area concerns charges for car parking facilities provided at airports together with a transport service between the car park and the airport terminal; those will become wholly standard-rated. Such charges may currently be apportioned between standard-rated car parking and zero-rated transport, with some operators being able to apply the zero rate to a high proportion of the total charge, even though the customer is primarily receiving a car parking facility.
The third main area covers pleasure flights, which include hot air balloon rides and other trips by air for pleasure or amusement or for the experience of flying; they will be standard-rated. In some cases that means no change, as rides with fewer than 12 seats are already standard-rated.
§ Mr. Robert Banks (Harrogate)
I ask my hon. Friend to pursue the matter a little further and elaborate. Are we talking about roller-coaster rides in amusement fairs? Are we talking about ski lifts at Aviemore? Are we talking about overhead cable railways, such as those that run in an amusement park in Yorkshire?
§ Mr. Heathcoat-Amory
The roller-coaster rides that are seen at funfairs and at some theme parks and so on are already standard-rated, so will not be affected, but train rides within such amusements, or cable rides or monorails, will become standard-rated because such rides are not public transport. A number of known safari or theme parks will not only apply standard rating to existing attractions, but will extend it to the transport elements included in the admission price.
§ Mr. Gary Waller (Keighley)
May I press my hon. Friend a little more on preserved railways? He will know of the great importance that they have in many areas including my own, where we have the Keighley and Worth Valley railway. Will my hon. Friend assure the House that journeys on preserved railways, whether by steam or diesel, will not be subject to VAT, notwithstanding the fact that one of the stations on the Keighley and Worth Valley railway serves Haworth, the home of the Brontes, and is visited by many tourists every year?
§ Mr. Heathcoat-Amory
I appreciate the fact that my hon. Friend may not be giving full descriptions of all the facilities in his constituency, but his description of the railway leads me to assert with confidence that it will not be standard-rated.
§ Mr. Bill Walker (Tayside, North)
Will sporting activities such as club members flying gliders throughout Europe that are currently, because of the sporting aspect, zero-rated in the United Kingdom, continue to be so?
§ Mr. Heathcoat-Amory
As I understand it, gliding clubs—I know of my hon. Friend's interest in them—are exempted from VAT and will remain unaffected by the order. I am happy to give that assurance.
233 I emphasise that the order is confined to transport in a narrow range of circumstances, so zero-rating will continue to apply to the vast majority of cases. Steam train rides and boat trips, including ferries and canal boats, which are currently zero-rated, will continue to be relieved. The exception, mentioned earlier, involves trips at places such as theme and safari parks and other places of entertainment or interest. In those circumstances, admission charges, fares or other charges, which are currently either zero-rated or apportioned, will become wholly liable at the standard rate. Subject to the agreement of the House the order will come into effect on 1 April 1995 and is expected to generate additional revenue of about £45 million in a full year.
§ Ms Dawn Primarolo (Bristol, South)
In dealing with the two orders on VAT I shall first discuss the Value Added Tax (Buildings and Land) Order 1994 and make it clear that we will not press the order to a vote. However, I seek from the Minister some replies and clarification on a number of points. As the Minister has explained, the order involves the VAT exempt sector, which is different from the zero-rated sector. It deals specifically with the subject of lease and leaseback. A number of points have been raised on that issue and on the drafting of the order.
The Law Society has sought clarification from Customs and Excise on the specific nature of the loopholes that are being closed to prevent VAT avoidance. The transactions allowing such avoidance will not be permitted. But the Law Society has told us that Customs and Excise has acknowledged that the order goes too far and goes beyond the steps necessary to prevent VAT avoidance. It has apparently said that some form of extra-statutory concessions may be needed to tidy up the order. I should be grateful if the Minister could this evening tell the House whether that it is so.
The next two issues involve the definition of a third party and the possibility of the order applying retrospectively. It has been made clear that the effective date is 30 November 1994. If that is correct, the order is, arguably, retrospective and could have serious implications for many exempted bodies. Can the Minister give an assurance to the House that the legislation will not be retrospective and that the loophole being closed will take effect as indicated in the order?
My next point relates to the way in which the order blocks the loophole allowing tax avoidance, which it claims to seek to do. The order will be effective in blocking all lease and leaseback schemes. It applies only to the granting of leases between connected parties where either party is exempt. It appears that the exempt person developing the new building for his or her own use could circumvent the order by entering into a third-party agreement on lease or leaseback. The explanations to the provisions are not exactly clear. I should be grateful if we could have confirmation that such circumvention is not possible and that there can be no way in which, by using a third party, exemptions can still be obtained and avoidance achieved.
The Value Added Tax (Transport) Order 1994 contains an entirely different set of propositions. As some of the interventions this evening have already shown, the order is controversial. It has been extremely tortuous and difficult to identify and pin down the exact sectors to which it will be applied.
234 The order was hidden among the huge amount of papers that came with the Budget statement on 29 November 1994. During a debate on the Budget resolutions on 5 December 1994, my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) raised the issue of the order's impact on the tourist industry as there was already some concern about that. During that debate he explained, in column 38, the problems being experienced by the British Tourist Authority, the cuts in its funding and the implications for tourism of the order. In reply to that debate the Financial Secretary to the Treasury said that the order stoppedfavourable tax treatment for trips in hot air balloons, round trips in Concorde over the bay of Biscay, and so on."—[Official Report, 5 December 1994; Vol. 251, c. 108.]The order was presented to the House then as a means of preventing further abuses and dealing with a category that had sneaked in, so there was nothing more to concern the House.
However, the matter was raised again in the Ways and Means debate on 13 December 1994—the mini-Budget or Budget part II as it has become known. The Government still did not seem to know exactly what the order would do. When challenged, the Chancellor said:The Government have no intention and would never extend VAT to zero-rated goods"—which the order covers—without primary legislation.The order is not primary legislation. When my hon. Friend the Member for Dunfermline, East (Mr. Brown) challenged him during the debate that the order should be withdrawn and placed before the House as primary legislation, the Chancellor replied:The extension of the VAT transport order was done partly under these resolutions and partly under the Finance Bill as well.The Finance Bill was published on 4 January 1995 and these matters are not covered in that primary legislation. The House has been misled throughout the debates. We were told that VAT would be extended to zero-rated goods only through primary legislation, but there is no primary legislation before the House. The Chancellor went on to say:The VAT zero rating on transport is designed to protect passenger transport. It has now been extended to air balloon rides, funfair rides, to things inside theme parks. This legislation covers anomalies of that kind "—[Official Report, 13 December 1994; Vol. 251, c. 802–805.]I think that the Chancellor misled the House again because the order covers far more than that. The Chancellor promised that zero-rating would not be removed without primary legislation. That promise has been broken. It is not in the Finance Bill; it is in the orders which are before us today. The Chancellor and the Financial Secretary to the Treasury either did not know the exact extent of the order, or did not give the House all the available information when they were asked to clarify the situation. The effects of the orders are gradually becoming clearer.
Let us turn to the tourist industry.
§ Mr. Heathcoat-Amory
I am grateful to the hon. Lady for giving way. I wish to clear up one matter. My right hon. and learned Friend the Chancellor was quite clearly referring to major changes to VAT legislation. If the hon. Lady is complaining about marginal changes being made by way of orders, can she explain why the last Labour 235 Government did it three times? I have before me an order which removed certain food items from zero-rating because they fell into the category of biscuits. The last Labour Government did that by way of secondary legislation. Why is the hon. Lady complaining when Labour Governments have done the same thing?
§ Ms Primarolo
I am happy to debate what the last Labour Government did or did not do. If the Minister cares to put it before the House, we will engage in that debate. We are discussing undertakings that were given to the House a matter of weeks ago in parliamentary time about an issue that will have a considerable effect on the tourist industry. The Government are seeking to avoid the consequences of the decisions that they are making. Such is their desperation in moving constantly to indirect taxes to scrape in the money that they are not looking carefully at the implications of their actions for industries in this country.
§ Mr. Tyler
I am grateful to the hon. Lady for giving way. Does she accept that not only has the House been misled, but the tourist industry has not had a proper opportunity to take account of the Government's proposals and their implications, both in terms of the statutory bodies—the English tourist board and the regional bodies—and the operators? The Chancellor has misled not only the House but interested parties outside this place.
§ Ms Primarolo
I agree absolutely. I wish to turn to that point in my remaining remarks on the order.
The House has been misled. It is misleading to label the tax as one which affects only entertainment and recreation, as clearly business travel will also be affected to a large extent—particularly by the increased cost of transport in and around airports. Business tourism is currently experiencing very high levels of growth throughout Europe, and we need to be competitive in that sector.
That point is backed up in correspondence from Sir John Egan, chairman of the CBI's tourism working party and chairman of the BAA, to my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry). Sir John made clear the damage that he believes that the decision will do to the tourist industry.
Since 1979, our trade surplus in tourism has turned into a £3.1 billion deficit. Meanwhile, our share of the growing world market has declined. If we had maintained the share of the market that we enjoyed in 1979—under a Labour Government—a further 150,000 jobs would have been created in tourism. Successive Tory Governments have become complacent about tourism. They have cut the budgets to the tourist boards in successive years, with this year being no exception, and they are now trying to apply an added tax burden to tourists in order to raise another £45 million. That is not a significant sum for the Treasury.
The Financial Secretary to the Treasury has dismissed our claims as scaremongering, saying that the decision will not affect other areas. This evening the Minister tried to skate over its implications for heritage and for museums. Since more than 60 per cent. of overseas tourists claim that they visit Britain for cultural reasons, it is ridiculous for the Government to apply a tax to the very items which attract tourists to this country.
236 The tourist industry has long been seen as a soft target, and Sir John and Richard Tobias, the chief executive of the British Incoming Tour Operators Association, make that point in their letters. It is interesting to read what the tourist industry representatives are saying. Richard Tobias said:Clearly this is yet another example of one of Britain's most successful export industries being taxed to the point where we are becoming uncompetitive against our European neighbours".Adele Biss from the British Tourist Authority said:We are also stressing that the effect on our international competitiveness appears not to have been taken into account by this decision".Sir John also said:each new tax burden therefore is not a burden in isolation,"—I am sure that every taxpayer in this country knows that—but rather becomes an additional part of a cumulative burden that gnaws at the industry's competitiveness".That is what British tourism is saying about this order's impact on the industry.
It was asked whether consultation had taken place on the issue, and the Minister replied that that had taken place. That is very interesting, because in a written answer on 12 December the Secretary of State for National Heritage said: "The application of VAT is a matter for my right hon. and learned Friend, the Chancellor of the Exchequer, who announced on 29 November that services relating to entertainment or recreational activities and car parking at airports, which include passenger transport, will become wholly standard-rated. The measure, which will affect a limited range of businesses, will not involve significant compliance costs … "—I will return to that point later—and it is not expected to affect international competitiveness."—[Official Report, 12 December 1994; Vol. 251, c.498.]Clearly, at that time he had not spoken to the tourist industry. Of course, consultation was not considered necessary. We must compare his comments to those emanating from the tourist industry. Customs and Excise says that no compliance costs are necessary and that none is expected.
Those in the tourist industry have produced their brochures for the year and committed themselves to costs they cannot now avoid. They must either recall all their brochures, which would involve costs, or sustain the loss that the tax difference will make and endeavour to recoup it next year. No consultation was carried out with the National Heritage Department or with the industry before the order was introduced. The Government continue to claim their commitment to tourism, yet here they are undermining that very process.
I am sure that hon. Members will give many examples this evening, but I want to mention a couple of tourist attractions that will be damaged. I have received correspondence from the director of the slate caverns in Blaenau festiniog. Those who work there are angry and upset. They won an appeal in a VAT tribunal to keep zero-rating on their facilities in the slate caverns, but that tribunal is now overridden by the imposition of the order.
Mr. Jones, the director of the slate caverns, writes:The Chancellor's actions could have come from the darkest depths of Stalinist Russia".It is decorative wording from very angry people. He states that the cavernshave attracted 5 million tourists in the past 21 years, winning all Britain's top tourism awards and many international accolades.237 He continues by explaining how he heard about the order:We know of it only because a gleeful VAT officer telephoned before Christmas, saying Budget legislation was on its way to cancel a 1984 court rulingand that the two rides provided in the caverns no longer constituted public transport.
Those working at the caverns expected to find the proposals in the Finance Bill because they had been told that the measures would be contained in primary legislation, but, after two days of looking at the Finance Bill, they discovered that that was not so and that the proposals were in a statutory instrument. They were then told by Customs and Excise that the document could not be faxed to them—time was running out and it had been pointed out that we would be debating it today—because that would be breaking Crown copyright. They had to order it from Norwich. They placed their order and they are still waiting for copies of the order that we are discussing tonight. Mr. Jones continued:the vindictive intention is clear enough, i.e. to overturn the 1984 court ruling which we won on appeal. It is an act of revenge against a small company which makes a major contribution to the rural economy of North Wales".The tax will add 87p to the entrance price of £4.95. They have already printed the price list so they are already committed for 1995 and they will have to sustain that loss. There was no consultation and they will have to face plenty of costs—all for £45 million to the Exchequer.
The historic national tramway museum is in a similar position. Somebody once said as a joke that this Government would tax air if they could find a way of doing it. They are certainly trying to tax at every opportunity our heritage and the time that people give freely to such institutions to maintain that part of our heritage. That time is now to be taxed. It is absolutely obscene.
§ Mr. David Winnick (Walsall, North)
Has my hon. Friend received correspondence about the Birmingham tramway museum? Is she aware that it will be a devastating blow to people in the west midlands, not just in Birmingham but in the surrounding areas, including my constituency, if the museum is to he penalised along the lines that she has described? It is a serious matter. I have received correspondence about it and have recently written to the Minister.
§ Ms Primarolo
I am grateful to my hon. Friend. A number of representations have been made. I was trying to spare the House the agony of going through every single one, because we would exceed the one and a half hours allowed for the debate. I have picked out two examples, but the clear intention of the order is to rake in money not on the basis of Concorde flights over the Bay of Biscay or hot air balloon rides, although it is questionable whether VAT needs to be placed on that.
I am interested to find out why VAT will not apply to glider flights, given that for the gliders to get up in the first place they have to be towed by an aircraft, to which VAT will he applied.
§ Mr. Bill Walker
Perhaps I can help the hon. Lady. The answer is that gliding clubs are non-profit-making organisations, which throughout Europe are exempt from VAT.
§ Ms Primarolo
With respect, that makes no difference under the order but I am sure that the Minister will clarify 238 that point. I hope that he will ensure that he uses precise wording and has a clear understanding of the points that his hon. Friends are raising with him before he gives a categorical assurance on the Floor of the House this evening because we take with several pillars of salt the word of any Government Minister about VAT.
Last summer the Chancellor wrote to one of his constituents about VAT on fuel. He made clear the Government's views on extending VAT on to zero-rated goods. It is advisable for all of us as Members of Parliament to answer only the questions that we are asked, as opposed to venturing speculation. The Chancellor wrote:I have always thought that we attempt to exempt too many goods and services from VAT in this country. VAT is still imposed on a little over half of all sales, which is much more restrictive than the sale taxes in other countries.".It is clear that the Chancellor wants to extend VAT and that it will continue to he an issue between now and the next general election, whenever that may be—I hope, sooner rather than later.
The Government continue to give undertakings on the Floor of the House and then break them. They attempt to mislead the House on the purposes of tax orders that are before us. They are driven desperately by the desire to increase indirect taxes, mainly through VAT, to advance a spurious and dishonest argument that they are the Government of reducing taxes. This is a tax too far. They are undermining the industries that they claim to support and I urge all hon. Members to vote against the order this evening.
§ Mr. Deputy Speaker (Mr. Michael Morris)
Order. Although no 10-minute restriction is now in operation, I appeal for short speeches.
§ Mr. Patrick McLoughlin (West Derbyshire)
The hon. Member for Bristol, South (Ms Primarolo) sometimes overstates her case, even when she is making a point with which Conservative Members may agree. After all, anyone experiencing difficulty in obtaining a copy of the order could have contacted his or her Member of Parliament, who could easily have supplied it.
Many hon. Members on both sides of the House are concerned about the national tramway museum in Crich, which is in my constituency. I want to concentrate on the issue of consultation on the museum. My hon. Friend the Member for Broxtowe (Mr. Lester) agrees with many of my views. I feel that my hon. Friend the Minister was less generous with the House than he should have been when he spoke of consultation on the order. It was made on 29 November, and laid before the House on the same clay; where was the time for consultation?
I believe that a number of anomalies will remain, given my hon. Friend's logic in the correspondence that we have had on this technical and complicated matter. Those anomalies have been sneaking into parliamentary answers, including written answers given by my hon. Friend the Minister to my hon. Friend the Member for Worcester (Mr. Luff) on 13 December. I do not understand why the Treasury's list of items that will remain zero-rated includes ferries, canal boat rides and other boat trips on public waterways, fishing trips and trips around harbours. If a boat went outside a harbour, would VAT be levied?
239 Mystery coach tours are also included. If people start a coach trip without knowing where they are going, that trip will be zero-rated; but a trip to the tramway museum in my constituency, providing a view of the Derbyshire hills, will be liable for VAT. I feel that such measures should be in the Finance Bill: the beauty of that would be the opportunity given to organisations to express concern. As it is, the measures are in an unamendable order.
I hope that, in his closing remarks—if he has time to make them—my hon. Friend the Minister will say that the Finance Bill may give us a chance to discuss any complications that arise from the order. I do not have time to deal with all the problems, because this is a short debate and other hon. Members wish to speak.
§ Dame Peggy Fenner
I thank my hon. Friend for giving me a few moments in which to emphasise the value of the national tramway museum. Only it and the railway museum are allowed to call themselves "national".
Although my constituency does not contain such a museum, my constituents give up their time voluntarily to work there, raising money to build a beautiful new exhibition hall. They are very worried. Mr. Webster, for instance, came to my advice centre and said that he had known of the proposals for only a couple of weeks, and believes that his projects are in peril. His father was a tram driver, and his whole family go up to work on trams and raise money. Like my hon. Friend the Member for West Derbyshire (Mr. McLoughlin), I hope that my hon. Friend the Minister will ensure that no anomalies affect such a wonderful volunteer organisation.
§ Mr. McLoughlin
I am grateful to my hon. Friend, who has illustrated the amount of concern that exists. I know that my hon. Friend the Minister will take it on board.
§ Mr. Tyler
The hon. Gentleman is making a powerful case, but I think that the Minister should be asked to withdraw the order and table a Government amendment to the Finance Bill in Committee, providing an opportunity for the discussion and consultation that hon. Members on both sides of the House want.
§ Mr. McLoughlin
I do not think that that is likely to happen. I should be more than happy to receive an assurance from my hon. Friend the Minister that, if he considers the matter in more detail over the next few months and feels that a change in the Finance Bill is necessary, he will take such action.
The national tramway museum is a small, non-profit-making organisation. It has already printed its literature for next year. I do not want those who run it to have to put up a sign at the entrance saying, "These used to be the entrance prices until the Budget." We do not want an extra 17.5 per cent. added to the museum's charges—that would be rather unfortunate. If it happens to this museum, it will also happen to a number of others. That would not be of much benefit to the Government.
240 I had the privilege of serving as a Minister for some time. It is most unusual to have to take through the House a piece of legislation that directly impinges on one's own constituency—but that was what happened to me when I took the Transport and Works Bill through the House. The main aim of the Bill was to stop a considerable amount of private legislation being taken on the Floor of the House. I know that many hon. Members were grateful for that.
The Bill, however, also imposed on the national tramway museum the same legal requirements as those governing conventional tramways and railways. The orders meant that such museums were obliged to observe all the onerous legal requirements, including safety requirements, that were applicable to conventional tramways and railways. Now these places are to be treated more harshly under the taxation system than other tramways. That is unfair and inconsistent, and I hope that the Minister will tonight be able to offer us some reassurance on the Government's intentions.
§ 9.5 pm
§ Mr. Peter Snape (West Bromwich, East)
I shall confine my remarks to the second order. I endorse entirely what the hon. Member for West Derbyshire (Mr. McLoughlin) has just said; the fact that the national tramway museum is in his constituency serves only to add force to his comments.
Like the hon. Member for Medway (Dame P. Fenner), I, too, have had a letter from a constituent who has spent a lifetime in public transport in the west midlands. He retired recently and he spends a lot of his free time voluntarily helping out at the national tramway museum. Ken Sutton—he will not mind my naming him—writes to tell me that the effect of the order will be to add £35,000 a year to the running costs of the museum. Is that really what Ministers intended when they laid the order? If the order is approved tonight, heritage groups such as those who run the museum, largely voluntarily, will be treated far worse in taxation terms than profit-making tramway organisations in other parts of the country. That is manifestly unfair.
Earlier, the Minister twice said that he had been accused of introducing a bureaucratic imposition but that that description was untrue. Judging by the interventions in his speech, however, and by the speeches made since, that is what the House thinks of this order. The hon. Member for North Cornwall (Mr. Tyler) asked the Minister—I suspect not with any great hope of success—to take the order away and to reintroduce it, if that is what the Government want, in prime time and on the Floor of the House so that we may adequately debate it and, just as importantly, so that proper consultations with those responsible for operating these places can be held.
Whether the Minister accepts it or not, this VAT order does entail bureaucratic impositions. Thanks to my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall), I have been able to look at the press release published by the Department, where I find phrases such as "fun" or "historic" rides, "transport within theme parks", other places of "entertainment or historic interest", and so on. By no stretch of the imagination can the cost of moving someone from an airport car park to the terminal fall into any of those categories. I am left wondering why that addition was made. What impact will it have on legitimate business costs incurred at airports? To say the least, it is anomalous—I hope that the Minister 241 will accept that description—that airport car parking transfer charges are now to be subjected to VAT at 17.5 per cent.
Earlier, the hon. Member for Hampshire, North-West (Sir D. Mitchell)—a former Transport Minister—intervened to ask about a couple of railway lines in his constituency. It is obvious that he was satisfied with the Minister's response, because he is no longer in his place.
I, too, want to ask some questions about the imposition of VAT on preserved railway lines. I appreciate that the Minister replied fairly straightforwardly to his hon. Friend. The Watercress line and the Keighley and Worth Valley light railway have been mentioned, and it seems that charges will not he imposed on either line. Does that apply throughout the preserved steam railway sector? Does it apply to all journeys? I very much doubt whether it does. I think that the hon. Member for Hampshire, North-West accepted the Minister's assurance rather too quickly.
In the west midlands we have the Severn Valley railway. In the run-up to Christmas, the railway operates what it calls Santa specials. They start and finish at the same place. For much of the year, the Severn Valley railway operates dinner specials. Again, they start and finish at the same place. Passengers board the train at Kidderminster and they are taken to Bridgenorth. The locomotive runs around the train, as it were, and the train returns to Kidderminster. Would such a journey be subject to the imposition of VAT at 17.5 per cent? Would it come within the terms of the order? The Santa specials would fall within the terms of the order.
§ Sir Keith Speed (Ashford)
The Kent and East Sussex railway in my constituency runs similar Santa specials. In my youth, I was once a Santa Claus giving out presents to children. The trains go up and down the line, starting and finishing at the same place. The Wealden Pullman is an excellent example of what preserved railways are doing. Again, the train travels up and down the line and has no destination. A very agreeable meal is served on the train at a very agreeable price. The line does not make a profit, but it is an enormous tourist attraction. If the order is implemented, the railway will have to issue many different types of tickets for its many different activities. Surely that is nonsensical.
§ Mr. Snape
The hon. Gentleman illustrates the fact that the Treasury interferes in the preserved railway sector at its peril. I hope that the Minister will take up these fundamental questions. Will VAT be levied on such journeys?
I have another example of journeys that may be covered by the order unless he tells us, as I hope he will, that they will not. In the Birmingham area there is the Tyseley steam museum. The Flying Scotsman was there until comparatively recently. Are the journeys that are undertaken by locomotives in the museum to be subjected to VAT at 17.5 per cent. under the terms of the order? If they are, perhaps the Minister will explain why there has been no consultation with the organisations that I have mentioned.
The order will not do. The Treasury should not treat the House in this way. We heard from my hon. Friend the Member for Bristol, South (Ms Primarolo), who spoke from the Opposition Front Bench, about specific pledges that were given on the extension of VAT to the journeys that have been mentioned. The Government should, for 242 once, honour their pledges. They should take away the order and give us a proper opportunity to debate these matters in prime time. Equally importantly, they should give those responsible for levying charges and for advertising railway entertainments throughout the United Kingdom the opportunity to be consulted. Consultation has been conspicuous by its absence so far.
§ Sir Peter Fry (Wellingborough)
It is not often that the hon. Member for West Bromwich, East (Mr. Snape) and I agree—we have often debated with each other on transport matters—but I endorse his closing words: it is still the job of Members of Parliament to examine legislation that is presented to us, to see whether it deserves to be passed. I contend that it is clear tonight that many hon. Members, on both sides of the House, feel that we should not just happily pass the order in its present form, without further consideration.
It seems odd to me that an order that is supposed to implement the will of Parliament and clear up anomalies instead creates an enormous number of extra anomalies. We have not even had a definition of public transport. Before we can possibly pass the order, we should at least know what is meant by "public transport".
I declare an interest as adviser to the coach industry action group, although it has not approached me on this point. I have received a letter from the confederation of passenger transport. It is very concerned and tells me that coach operators provide exclusive tours, which, for VAT purposes, fall under the tour operators' margin scheme. It wants to know—it wrote to Customs and Excise on 14 December—whether its exemption will continue. I think that it is fully entitled to an answer from my hon. Friend the Minister tonight, or before the legislation comes into effect.
This is one of the most discriminatory pieces of legislation that I have ever seen. Why, for example, are we picking out the aviation industry for a further clobbering? The industry—entirely within the private sector—has had a series of measures imposed on it by the Government and there is clear discrimination against it, as outlined in article 3 of the order. I would have understood had the Government said that, henceforth, any form of transport—I shall use the words in the order—that was notprimarily for the purpose of transporting passengers from one place to anotherwould cease to be exempt from VAT, but I would not necessarily have agreed with it, because, as hon Members have said, there are many forms of transport that should not have VAT applied to them.
Why do the Government use that phraseology only in respect of article 3, which would allow a range of other transport activities to remain exempt from VAT? Why, for example, should a trip by sea be exempt when a trip on an aeroplane will not? Certain activities will become much more expensive. Because of the lack of consultation and the way in which the order has been introduced, it is no wonder that many responsible bodies are very concerned.
One of those bodies is British Airways. It feels strongly that it has been picked out as part of the aviation industry for extra taxation. One of the points that it has put to me—I sincerely hope that my hon. Friend the Minister 243 will respond to it when he winds up the debate—is that the order contravenes, or could, the sixth VAT directive, 77/388 EEC, which decrees that the imposition of VAT must not discriminate. I defy anybody to read the order and not conclude that there is strong discrimination, particularly against the aviation industry.
I have been in the House for more than 25 years, and a number of squalid measures have been introduced, from the Treasury and from Governments—both Labour and Conservative. There are not many occasions on which there has been a spontaneous reaction on both sides of the House to any particular measure. My hon. Friend and the Government should come clean. If they really want to remove the exemption in article 3, they should at least have the courage of consistency and apply it right across the board to transport. They have not done that, I suspect for the reason that we have heard tonight—that many hon. Members will get up and rightly point out the damage that will be done by the imposition of VAT on the national tramway museum and local railway lines.
If the Government expect the House to pass the measure, they should accept the suggestion that it should be withdrawn and be part of the Finance Bill and the debates that we shall have in future weeks. If my hon. Friend expects the House happily to let what I regard as a somewhat mean little measure go through tonight, he will do so without my support.
§ Mr. David Marshall (Glasgow, Shettleston)
The transport order is one of the daftest measures introduced by the Government in my time in the House, and that is saying something. It was made even worse when the Minister said that it is not the result of a European directive, so he is even deprived of being able to blame it on someone else. It is just another case of the Government building up a treasure chest to bribe the electorate in a pre-election Budget. That is the only possible explanation for their introducing this punitive measure.
I declare an interest as a sponsored member of the Transport and General Workers Union.
I fully agree with the hon. Member for Wellingborough (Sir P. Fry) that we have not yet had a definition of public transport, especially in its usual sense, particularly coach travel. I take it that coach travel as part of a holiday package is not public transport in its usual sense and therefore would be subject to VAT. That is worrying, particularly for Scotland whose largest industry is tourism and as such is important to it. Many thousands of tourists come by coach from England and Europe and many tourists who fly into Scotland travel by coach rather than drive themselves around. Those tourists spend between one day and three weeks in Scotland. Such holidays do not come cheap. Most cost many hundreds of pounds and some cost thousands of pounds in total. The imposition of 17.5 per cent. VAT on such holidays will substantially reduce the number of tourists coming to Scotland, as well as England, Wales and Northern Ireland. Businesses, particularly small businesses in remote and rural areas will suffer a great loss of revenue.
§ Mr. Bill Walker
The hon. Gentleman is wise to mention the importance of coach travel and the tourist industry in Scotland. Like me, he will be aware that the 244 tourist industry, particularly coach tours and especially those from England, has been down considerably in the past 12 months, which is worrying.
§ Mr. Marshall
For once, I could not agree more with the hon. Gentleman. This order could be the final nail in the coffin for many businesses.
It is a two-way trade because coach tours go from Scotland south of the border. Some hotels survive only because they are on the coaching trail and some tourist attractions are viable only because of coach tours. Mystery tours and coach excursions have been referred to and they are popular, particularly with families and the elderly, especially those on low incomes and people who live in cities, such as Edinburgh and Glasgow, and other industrial centres of Great Britain. They want to get out of the city into the country and coaches provide a relatively cheap way of doing so.
Many tours will now disappear as a result of the imposition of VAT and all that it will achieve will be to deprive people of some pleasure and to deprive many people of their livelihood. It will be harder for small businesses, coach operators and drivers to remain in employment.
Many small towns and villages depend almost entirely on coach tours for their livelihood. Car traffic and passing trade is all very well but it is the coach tours that make businesses such as hotels, restaurants, souvenir shops and takeaway food centres profitable.
Some examples in the Scottish scene spring readily to mind. The hon. Member for Tayside, North (Mr. Walker) will be familiar with them. Places such as Callander, Aberfoyle and Loch Katrine in the Trossachs are inundated with coach tours in summer and winter, especially at weekends. Woollen mills that sell the products of many rural areas also depend on coach tours and visitors to make a living: one thinks of Alva Glen and Culzean castle.
Coach tours to Blackpool illuminations are popular. There are hundreds of such tours, all of which will become uneconomic or will be put at risk as a result of the imposition of VAT. The National Trust for Scotland, too, has many hundreds of properties throughout Scotland—social attractions, historical attractions and garden attractions—and VAT will adversely affect all of them.
The whisky trail and visitor centres that attract many thousands of people from all over the world will be at risk too, because many of the visitors come by coach. It is worth noting that the whisky visitor centres employ more people than does the production of the whisky. That shows how important such attractions are to people and how important coach travel is. The measure is ill thought out and will turn out to be counter-productive. It discriminates especially against remote areas and against Scotland.
It is worrying, too, that VAT at 17.5 per cent. may be only the beginning. Can the Minister assure us that at some future date, if VAT is 22 per cent. or 25 per cent., the tax will not be increased? Of course he cannot. Things will be even worse when that day comes, as it surely will under the present Government.
Finally, can the Minister tell the House whether VAT will be levied on organised air trips to Lapland to see Santa Claus? Even Ebenezer Scrooge did not go that far. The order is not fair, just or logical, and the House should reject it.
§ Mr. Colin Shepherd (Hereford)
I perceive that the House is much exercised about excursions, but I shall speak about the Value Added Tax (Buildings and Land) Order 1994, and press as quickly as I can the point made by the hon. Member for Bristol, South (Ms Primarolo) when she asked for extra-statutory concessions.
Some organisations have been literally caught on the hop by the introduction of the measure. I understand that the Paymaster General has introduced it so speedily to stop what may be called end-play situations, but it is right that attention should be paid to the predicament of legitimate organisations caught on the hop.
For example, I am a council member of the Royal College of Veterinary Surgeons, appointed by the Privy Council, and accordingly I am involved with the college's acquisition of new premises in exchange for its old premises. It has acquired, through a property sub-company, a property to be purchased, but has not yet signed a lease with that company, so it is literally caught between stepping stones.
The arrangement that the Royal College of Veterinary Surgeons was entering into was absolutely legitimate when it embarked upon that course. It was using the law as it existed, and was setting out not to avoid VAT but to spread it. That formed part of its calculations in making the transaction.
It seems to me that the order is targeted at lease and leaseback arrangements rather than at ordinary property leasing arrangements—certainly, the Customs and Excise briefing document suggests that it is. Yet it does not seem to have been possible to draft the order tightly enough to draw in only lease and leaseback, so property arrangements have been drawn into the net as well. That has penalised many companies that have entered into legitimate arrangements and then been caught out.
The royal college is now caught in the worst of all worlds. It has acquired the property, without the leasing arrangements, as a straight purchase. Had it done so outright as a straight purchase it could have recovered one third of the VAT, but now no VAT can be recovered. As a consequence of the order, the college will have to pay much more VAT to Customs and Excise than it would otherwise have done. I cannot believe that it is the intention to penalise persons caught on the hop in that way.
For those who are so caught, I suggest that the fair way forward is for them to be placed on a footing that leaves Customs and Excise receiving what it would have done had that part of the VAT remained recoverable. The RCVS would have been able to recover a third of its VAT. Under the order, Customs and Excise will receive 50 per cent. more than it would have done for a straight purchase. If the Treasury should have its due, it should not be the beneficiary of a 50 per cent. windfall.
As I understand it, the Minister has the power to make extra-statutory concessions. The number of companies or organisations caught in that way cannot be large, so I would like from my hon. Friend an assurance that he will entertain requests for an extra-statutory concession so that the injustice can be corrected and the genuine nature of transactions such as the one that RCVS has entered into can be reflected. Members of the RCVS are honourable people doing honourable things. The arrangement is not a 246 chipping arrangement or a short cut; it was done in all good faith. That ought to be reflected in the actions of the Treasury tonight.
§ Mr. Barry Field (Isle of Wight)
I do not want to raise the question of theme parks and so on, but I understand from correspondence with my hon. Friend the Minister that the Isle of Wight steam railway will not be covered by the order because it charges for its tickets, not for admission. However, it is to the Isle of Wight that I wish to speak because we rely on our ferries to come and go from the island.
I am worried about the information given out by Customs and Excise about the order. Paragraph 3(b) says:in any motor vehicle between a car park"—or its vicinity—and an airport passenger terminal".That seems to me to be a hop, skip and a jump to transport from a car park to a ferry terminal, and that could include Ryde pier. That worries me enormously.
Paragraph 9 of the information says that the changes are unlikely to affect the present treatment of boat trips or ro-trains. It does not say that they will not. It does not say that they do not. It says that they are unlikely to affect it. That sort of language terrifies me when it comes from the Treasury. Paragraph 12 refers to pleasure flights including hot air balloon rides. I was puzzled as to why the Government thought that they could raise so much money from hot air balloons. I realised when I listened to the speeches of the Liberal Democrats that there was a whole new means of travel here and tremendous income was to be gained from hot air balloons.
As I understand it, the French and British Governments reached agreement on the VAT treatment of the channel link. If that train happened to go into Disneyland, it would become VATable under the order. That is extraordinary. Paragraph 12 refers to experience of flying. What about experience of boating? As I speak, the British Marine Industries Federation is putting on the international boat show. It has experience of boating. One can hear the tills clicking away over at the Treasury as they say, "Aha, another means of income." That is very worrying.
The nub of the matter is that we all know in the House that the moment we depart from a zero rate on VAT on anything within the EC structure, we are stuck with it. We can never go back to less than 5 per cent. My hon. Friend is either being a little disingenuous, has been misled by his officials or is playing with fire—or he is doing all three. By moving the Value Added Tax (Transport) Order 1994 he is inviting the EC to say that the United Kingdom has departed from VAT at a zero rate on public transport. It will rule that we must impose VAT at the minimum rate of 5 per cent. on all public transport. That is what really worries me. I believe that the price of freedom from taxation on the Isle of Wight ferries is eternal vigilance over the Treasury.
§ Mr. Heathcoat-Amory
I will endeavour to answer the many questions raised during the debate. I think that I can give significant reassurance, especially to my hon. Friend the Member for Isle of Wight (Mr. Field). I promise him that there is no intention of applying value added tax at the standard rate to the ferry services on which his 247 constituency relies. The essential feature of the Value Added Tax (Transport) Order 1994 is to return the situation to what Parliament intended when it granted zero-rating to public transport. We have drifted away from that and some forms of transport—trips in hot air balloons to name but one—have come under the umbrella of public transport and have claimed and been given zero-rated status when that was clearly not intended.
I find it a little strange that the Opposition should complain about features of the two orders which are designed to end loopholes and anomalies, when their entire shadow Budget was founded on the pretence that they could fund their expenditure ambitions through windfall taxes and ending loopholes.
§ Mr. Heathcoat-Amory
No. I am responding to points that have already been made, if the hon. Lady will forgive me.
When the Government introduce measures to end loopholes and anomalies, the Opposition complain about that in detail.
§ Mr. Heathcoat-Amory
I will come to the hon. Lady's point in a minute, if I may just finish my argument. The Opposition complain about confusion in the orders, which I can well understand on their part, because they are in a good deal of confusion over their VAT ambitions. I find it strange that some of them at least wish to put VAT on education, yet they resist measures that return the zero-rating privilege for the public transport sector to what Parliament originally intended.
§ Ms Primarolo
The Minister will surely have noticed during tonight's debate that there is considerable disquiet on both sides of the House about the proposals in the Value Added Tax (Transport) Order 1994. Given the Chancellor's promise to the House that zero-rated VAT would be removed only by primary legislation, will he tell us why he cannot withdraw the transport order tonight and bring it back as an amendment to the Finance Bill, when it can be considered thoroughly, proper consultation can be undertaken and every hon. Member can satisfy himself of the exact intention?
§ Mr. Heathcoat-Amory
I already pointed out in an intervention on the hon. Lady that all Governments, including a Labour Government, have used secondary legislation to make adjustments and alterations at the margin to the coverage and extent of value added tax. In 1976 and 1977, the Labour Government introduced exactly analogous measures—including one which I mentioned as an example—to remove from zero-rating certain items of food and confectionery. We are merely using the same methods of secondary legislation as were employed by the hon. Lady's party when it was last in office.
§ Mr. Heathcoat-Amory
I am sorry, but I owe it to my hon. Friends and to other hon. Members who raised matters in the debate to try to respond.
§ Mr. John Wilkinson (Ruislip-Northwood)
Will my hon. Friend give way, as I was not able to raise this matter during the debate? I am grateful for his courtesy. Can he tell me whether the Ruislip lido railway, which runs within a recreational area, will be subject to standard rate VAT? One can either take a round trip and end up where one began, in which case I presume that one would be subjected to that rate, or one can go to the other end of the line and get off, in which case one would not. The latter journey would be zero-rated because it would be assumed to be transport, even though it is a distance of only three quarters of a mile down the line. Can my hon. Friend tell me, beyond peradventure, what the position will be?
§ Mr. Heathcoat-Amory
My hon. Friend has not given me sufficient details to make a snap judgment about whether a facility in his constituency falls within the order. If he writes me a letter giving further details, I shall respond in due course.
In her opening remarks, the hon. Member for Bristol, South (Ms Primarolo) suggested that the buildings order would be retrospective. I have already assured her that it will not be. The order took effect from 30 November 1994, so leases entered into before that date are not affected. She also asked whether the provisions could be circumvented by use of a third party. On the information that she gave in her opening remarks, I would say that that would not constitute tax avoidance and would not be caught by the order. If she wants further details, she should write to me.
I understand the close interest which my hon. Friend the Member for West Derbyshire (Mr. McLoughlin) has taken in the national tramway museum. Admission charges to museums without transport are already liable to the standard rate. It was never intended to provide a tax advantage to places that happen to include, or take the form of, a ride. We are merely returning the museum to equal treatment with all other museums and places of interest. Nor will it mean different treatment for places of interest and places of entertainment, which would give rise to difficult borderline cases if we tried to distinguish between them.
Let us imagine, for example, a theme or safari park that sets up a mock Jurassic park attraction. Some would say that it is a matter of entertainment, while others would say that it is a matter of interest or education. In dealing with legislation, it must therefore be right to provide rules that go across the board and deal with all places of entertainment, museums and theme or safari parks.
My hon. Friend the Member for Hereford (Mr. Shepherd) mentioned the Royal College of Veterinary Surgeons. He has written to me about that difficult case. I assure him that organisations or businesses caught innocently by the order may be granted an extra-statutory concession. However, I understand that that organisation tried to enter into an arrangement that clearly falls foul of the anti-avoidance provision. Indeed, it was the intention that before the cut-off date it should take advantage of a lease and leaseback arrangement, so I cannot assure my hon. Friend that we shall necessarily deal with it as sympathetically as those caught innocently. I shall look at the issue again, however, because of my hon. Friend's interest.
249 A number of other hon. Members, particularly the hon. Members for West Bromwich, East (Mr. Snape) and for Glasgow, Shettleston (Mr. Marshall) spoke as though all coach and bus transport would suddenly become standard-rated. I assure them that that is not the intention. Indeed, many of the types of transport mentioned in the debate are already standard-rated. For instance, hot air balloons that go up with fewer than 12 passengers are already standard-rated. Therefore no change is in prospect.
§ Mr. Heathcoat-Amory
No, I am sorry, but I want to try to answer my hon. Friend the Member for Wellingborough (Sir P. Fry), who asked whether air transport was, in principle, dealt with differently from surface transport. My hon. Friend would agree that a journey that goes from A to B has elements of public transport about it, because passengers could be transported not for pleasure but for the genuine motive of being transported from one place to another. In cases of pleasure flights round the Bay of Biscay in Concorde or whatever, that clearly cannot—
§ It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Order [16 December].
§ Question agreed to.
That the Value Added Tax (Buildings and Land) Order 1994 (S.I.,1994, No.3013), dated 29th November 1994, a copy of which was laid before this House on 29th November, be approved.
Motion made, and Question put,
That the Value Added Tax (Transport) Order 1994 (S.I.,1994, No.3014), dated 29th November 1994, a copy of which was laid before this House on 29th November, be approved.— [Mr. Bates. ]
§ The House divided: Ayes 236, Noes 198.252
|Division No. 36]||[9.45 pm|
|Aitken, Rt Hon Jonathan||Burt, Alistair|
|Alison, Rt Hon Michael (Selby)||Butcher, John|
|Allason, Rupert (Torbay)||Butter, Peter|
|Amess, David||Carlisle, John (Luton North)|
|Ancram, Michael||Carlisle, Sir Kenneth (Lincoln)|
|Arbuthnot, James||Carrington, Matthew|
|Arnold, Jacques (Gravesham)||Cash, William|
|Arnold, Sir Thomas (Hazel Grv)||Channon, Rt Hon Paul|
|Ashby, David||Chapman, Sydney|
|Aspinwall, Jack||Churchill, Mr|
|Atkins, Robert||Clappison, James|
|Atkinson, Peter (Hexham)||Clark, Dr Michael (Rochford)|
|Baker, Nicholas (Dorset North)||Clifton-Brown, Geoffrey|
|Baldry, Tony||Coe, Sebastian|
|Banks, Matthew (Southport)||Colvin, Michael|
|Bates, Michael||Congdon, David|
|Batiste, Spencer||Conway, Derek|
|Bellingham, Henry||Coombs, Simon (Swindon)|
|Beresford, Sir Paul||Cope, Rt Hon Sir John|
|Biffen, Rt Hon John||Cormack, Sir Patrick|
|Bonsor, Sir Nicholas||Couchman, James|
|Booth, Hartley||Cran, James|
|Bowden, Sir Andrew||Currie, Mrs Edwina (S D'by'ire)|
|Bowis, John||Curry, David (Skipton & Ripon)|
|Brandreth, Gyles||Davies, Quentin (Stamford)|
|Brazier, Julian||Deva, Nirj Joseph|
|Bright, Sir Graham||Devlin, Tim|
|Brooke, Rt Hon Peter||Dover, Den|
|Brown, M (Brigg & Cl'thorpes)||Duncan, Alan|
|Browning, Mrs. Angela||Duncan Smith, Iain|
|Dum, Bob||Maitland, Lady Olga|
|Durant, Sir Anthony||Malone, Gerald|
|Dykes, Hugh||Mans, Keith|
|Elletson, Harold||Martand, Paul|
|Evans, Jonathan (Brecon)||Marshall, John (Hendon S)|
|Evans, Nigel (Ribble Valley)||Martin, David (Portsmouth S)|
|Evans, Roger (Monmouth)||Mates, Michael|
|Evennett, David||Mayhew, Rt Hon Sir Patrick|
|Faber, David||Mellor, Rt Hon David|
|Fabricant, Michael||Merchant, Piers|
|Fermer, Dame Peggy||Mills, Iain|
|Field, Barry (Isle of Wight)||Mitchell, Andrew (Gedling)|
|Fishburn, Dudley||Mitchell, Sir David (Hants NW)|
|Forman, Nigel||Moate, Sir Roger|
|Forsyth, Michael (Stirling)||Monro, Sir Hector|
|Forth, Eric||Montgomery, Sir Fergus|
|Freeman, Rt Hon Roger||Moss, Malcolm|
|French, Douglas||Needham, Rt Hon Richard|
|Gallie, Phil||Nelson, Anthony|
|Gardiner, Sir George||Neubert, Sir Michael|
|Garnier, Edward||Newton, Rt Hon Tony|
|Gillan, Cheryl||Nicholls, Patrick|
|Goodson-Wickes, Dr Charles||Nicholson, David (Taunton)|
|Greenway, Harry (Ealing N)||Nicholson, Emma (Devon West)|
|Greenway, John (Ryedale)||Norris, Steve|
|Griffiths, Peter (Portsmouth, N)||Onslow, Rt Hon Sir Cranley|
|Grylls, Sir Michael||Ottaway, Richard|
|Gummer, Rt Hon John Selwyn||Patnick, Sir Irvine|
|Hague, William||Pattie, Rt Hon Sir Geoffrey|
|Hamilton, Rt Hon Sir Archibald||Pawsey, James|
|Hamilton, Neil (Tatton)||Pickles, Eric|
|Hargreaves, Andrew||Porter, David (Waveney)|
|Harris, David||Powell, William (Corby)|
|Haselhurst, Alan||Rathbone, Tim|
|Hawkins, Nick||Redwood, Rt Hon John|
|Hawksley, Warren||Renton, Rt Hon Tim|
|Heald, Oliver||Richards, Rod|
|Heathcoat-Amory, David||Riddick, Graham|
|Hendry, Charles||Rifkind, Rt Hon Malcolm|
|Hill, James (Southampton Test)||Robathan, Andrew|
|Hogg, Rt Hon Douglas (G'tham)||Robertson, Raymond (Ab'd'n S)|
|Hordern, Rt Hon Sir Peter||Robinson, Mark (Somerton)|
|Howard, Rt Hon Michael||Roe, Mrs Marion (Broxbourne)|
|Howell, Rt Hon David (G'dford)||Rumbold, Fit Hon Dame Angela|
|Howell, Sir Ralph (N Norfolk)||Ryder, Rt Hon Richard|
|Hughes, Robert G (Harrow W)||Sackville, Tom|
|Hunt, Sir John (Ravensbourne)||Sainsbury, Rt Hon Sir Tim|
|Hunter, Andrew||Scott, Rt Hon Sir Nicholas|
|Hurd, Rt Hon Douglas||Shaw, David (Dover)|
|Jack, Michael||Shaw, Sir Giles (Pudsey)|
|Jackson. Robert (Wantage)||Shephard, Rt Hon Gillian|
|Jenkin, Bernard||Shepherd, Colin (Hereford)|
|Jessel, Toby||Shersby, Michael|
|Jones, Robert B (W Hertfdshr)||Sims, Roger|
|Kellett-Bowman, Dame Elaine||Skeet, Sir Trevor|
|Key, Robert||Smith, Sir Dudley (Warwick)|
|King, Rt Hon Tom||Smith, Tim (Beaconsfield)|
|Kirkhope, Timothy||Speed, Sir Keith|
|Knapman, Roger||Spencer, Sir Derek|
|Knight, Mrs Angela (Erewash)||Spicer, Sir James (W Dorset)|
|Knight, Greg (Derby N)||Spicer, Michael (S Worcs)|
|Knox, Sir David||Spink, Dr Robert|
|Kynoch, George (Kincardine)||Spring, Richard|
|Lait, Mrs Jacqui||Sproat, Iain|
|Lang, Rt Hon Ian||Squire, Robin (Hornchurch)|
|Lawrence, Sir Ivan||Stanley, Rt Hon Sir John|
|Legg, Barry||Steen, Anthony|
|Leigh, Edward||Stephen, Michael|
|Lidington, David||Stern, Michael|
|Lightbown, David||Streeter, Gary|
|Lord, Michael||Sweeney, Walter|
|Luff, Peter||Sykes, John|
|Lyell, Rt Hon Sir Nicholas||Taylor, Ian (Esher)|
|MacKay, Andrew||Taylor, John M (Solihull)|
|Maclean, David||Temple-Morris, Peter|
|Madel, Sir David||Thomason, Roy|
|Thompson, Patrick (Norwich N)||Wheeler, Rt Hon Sir John|
|Thornton, Sir Malcolm||Whitney, Ray|
|Thurnham, Peter||Whittingdale, John|
|Tredimick, David||Widdecombe, Ann|
|Twinn, Dr Ian||Wiggin, Sir Jerry|
|Viggers, Peter||Willetts, David|
|Waldegrave, Rt Hon William||Wilshire, David|
|Winterton, Mrs Ann (Congleton)|
|Wakten, George||Winterton, Nicholas (Macc'f'ld)|
|Walker, Bill (N Tayside)||Wolfson, Mark|
|Waller, Gary||Wood, Timothy|
|Ward, John||Young, Rt Hon Sir George|
|Wardle, Charles (Bexhill)|
|Waterson, Nigel||Tellers for the Ayes:|
|Watts, John||Dr. Liam Fox and Mr. Simon Burns.|
|Ainger, Nick||Foster, Rt Hon Derek|
|Ainsworth, Robert (Cov'try NE)||Foster, Don (Bath)|
|Anderson, Ms Janet (Ros'dale)||Foulkes, George|
|Armstrong, Hilary||Fyfe, Maria|
|Ashdown, Rt Hon Paddy||Galbraith, Sam|
|Austin-Walker, John||Gapes, Mike|
|Banks, Tony (Newham NW)||George, Bruce|
|Barnes, Harry||Gerrard, Neil|
|Barron, Kevin||Godman, Dr Norman A|
|Battle, John||Godsiff, Roger|
|Bayley, Hugh||Golding, Mrs Llin|
|Berth, Rt Hon A J||Gordon, Mildred|
|Benn, Rt Hon Tony||Graham, Thomas|
|Bennett, Andrew F||Grant Bemie (Tottenham)|
|Bermingham, Gerald||Griffiths, Nigel (Edinburgh S)|
|Berry, Roger||Griffiths, Win (Bridgend)|
|Betts, Clive||Grocott, Bruce|
|Blunkett, David||Gunnell, John|
|Boateng, Paul||Hall, Mike|
|Bradley, Keith||Hanson, David|
|Burden, Richard||Hardy, Peter|
|Caborn, Richard||Harvey, Nick|
|Callaghan, Jim||Hattersley, Rt Hon Roy|
|Campbell, Mrs Anne (C'bridge)||Henderson, Doug|
|Campbell, Menzies (Fife NE)||Heppell, John|
|Campbell, Ronnie (Blyth V)||Hill, Keith (Streatham)|
|Campbell-Savours, D N||Hinchliffe, David|
|Chidgey, David||Hodge, Margaret|
|Chisholm, Malcolm||Hoey, Kate|
|Clapham, Michael||Home Robertson, John|
|Clark, Dr David (South Shields)||Hoon, Geoffrey|
|Clarke, Eric (Midlothian)||Howarth, George (Knowsley N)|
|Clarke, Tom (Monklands W)||Hughes, Kevin (Doncaster N)|
|Clwyd, Mrs Ann||Hughes, Robert (Aberdeen N)|
|Coffey, Ann||Illsley, Eric|
|Connarty, Michael||Ingram, Adam|
|Cook, Frank (Stockton N)||Jackson, Glenda (H'stead)|
|Corbyn, Jeremy||Jackson, Helen (Shef'ld, H)|
|Corston, Jean||Jamieson, David|
|Cunningham, Jim (Covy SE)||Janner, Greville|
|Cunningham, Rt Hon Dr John||Jones, Barry (Alyn and D'side)|
|Dalyell, Tam||Jones, Lynne (B'ham S O)|
|Darling, Alistair||Jones, Martyn (Clwyd, SW)|
|Davidson, Ian||Jones, Nigel (Cheltenham)|
|Davis, Terry (B'ham, H'dge H'I)||Jowell, Tessa|
|Denham, John||Keen, Alan|
|Dewar, Donald||Kennedy, Jane (Lpool Brdgn)|
|Dixon, Don||Khabra, Piara S|
|Dobson, Frank||Kilfedder, Sir James|
|Donohoe, Brian H||Kilfoyle, Peter|
|Dowd, Jim||Kirkwood, Archy|
|Dunwoody, Mrs Gwyneth||Lewis, Terry|
|Eagle, Ms Angela||Liddell, Mrs Helen|
|Eastham, Ken||Livingstone, Ken|
|Etherington, Bill||Llwyd, Elfyn|
|Ewing, Mrs Margaret||Loyden, Eddie|
|Field, Frank (Birkenhead)||Lynne, Ms Liz|
|Flynn, Paul||McAvoy, Thomas|
|McCartney, Ian||Robertson, George (Hamilton)|
|McFall.John||Roche, Mrs Barbara|
|Mackinlay, Andrew||Rooker, Jeff|
|McLeish, Henry||Rooney, Terry|
|McMaster, Gordon||Ross, Ernie (Dundee W)|
|McWilliam, John||Ruddock, Joan|
|Madden, Max||Salmond, Alex|
|Maddock, Diana||Simpson, Alan|
|Mahon, Alice||Skinner, Dennis|
|Mandelson, Peter||Smith, Andrew (Oxford E)|
|Marek, Dr John||Smith, Chris (Isl'ton S & F'sbury)|
|Marshal, David (Shettleston)||Smith, Llew (Blaenau Gwent)|
|Marshal, Jim (Leicester, S)||Soley, Clive|
|Martlew, Eric||Spearing, Nigel|
|Maxtor, John||Spellar, John|
|Meale, Alan||Squire, Rachel (Dunfermline W)|
|Michael, Alun||Steinberg, Gerry|
|Michie, Bill (Sheffield Heeley)||Stevenson, George|
|Michie, Mrs Ray (Argyll & Bute)||Stott, Roger|
|Milbum, Alan||Strang, Dr. Gavin|
|Miller, Andrew||Sutcliffe, Gerry|
|Morley, Elliot||Taylor, Matthew (Truro)|
|Morris, Estelle (B'ham Yardley)||Thompson, Jack (Wansbeck)|
|Mudie, George||Timms, Stephen|
|Mullin, Chris||Tipping, Paddy|
|Oakes, Rt Hon Gordon||Tyler, Paul|
|O'Brien, Bil (Normanton)||Vaz, Keith|
|O'Hara, Edward||Walker, Rt Hon Sir Harold|
|Olner, Bil||Wardell, Gareth (Gower)|
|Parry, Robert||Wareing, Robert N|
|Patchett, Terry||Watson, Mike|
|Pearson, Ian||Wicks, Malcolm|
|Pendry, Tom||Wilkinson, John|
|Pickthail, Colin||Williams, Alan W (Carmarthen)|
|Pike, Peter L||Wilson, Brian|
|Pope, Greg||Winnick, David|
|Powell, Ray (Ogmore)||Worthington, Tony|
|Prentice, Bridget (Lew'm E)||Wray, Jimmy|
|Prentice, Gordon (Pende)||Young, David (Bolton SE)|
|Prescott, Rt Hon John|
|Primarolo, Dawn||Tellers for the Noes:|
|Reid, Dr John||Mr. Joe Benton and Mr. Stephen Byers.|
§ question accordingly agreed to.