HL Deb 30 March 1972 vol 329 cc1164-6

11.5 a.m.

LORD MONTAGU OF BEAULIEU

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government whether V.A.T. will be levied on admission charges for museums, galleries and historic houses.]

THE LORD PRIVY SEAL (EARL JELLICOE)

My Lords, the schedules of proposed reliefs in the White Paper on V.A.T., issued by Her Majesty's Government on March 21, contain no provision for relieving such charges from the tax. But where the supplier of the service has a turnover in taxable goods and services which does not exceed £5,000 per annum he can claim exemption from the tax.

BARONESS LEE OF ASHERIDGE

My Lords, may I ask the Minister to consider that point again? After all, our museums and galleries are already embarrassed by proposals for charges, and if in addition they are subjected to this tax it will simply add to the problems. May I ask the noble Earl if he does not think it would be a gracious act to look again at the question of museums, galleries and national houses to consider whether they cannot be exempted?

EARL JELLICOE

My Lords, I appreciate the noble Baroness's interest in this matter, but I would remind her and noble Lords that V.A.T. is designed as a comprehensive tax. Certain exemptions, by way of either exemption or zero rating, have already been provided for in the Chancellor's Budget Statement, and they are very important indeed. If one is to go along with further exemptions, however meritorious the special case, the whole point of having a comprehensive tax will be undermined. Perhaps I may also remind the noble Baroness that museums run by local authorities will be able to reclaim what is technically known as input tax, including any incurred on purchasing works of art, whether or not they make a charge for admission. This is a point made clear in an article in The Times, I think, yesterday.

BARONESS LEE OF ASHERIDGE

My Lords, may I say to the noble Earl that I am a little disappointed by that answer, and I hope he will agree with me that the test of a civilised Government is their priorities? Therefore, I hope that among the exemptions these particular establishments will rank high enough to he seriously considered.

LORD STRABOLGI

My Lords, following what my noble friend said, would not the Government agree that there is a case for zero rating the Arts wherever possible, in the same way as music and books have been zero rated?

EARL JELLICOE

My Lords, I would not dissent from the fact that there may well be a case, but again I must come back to the point that a case can be made for either exempting or zero rating in a great many meritorious instances. Before any extension of the principle of zero rating or exemption is made, the Government would have to consider this very carefully against a background of V.A.T. as a comprehensive tax. These matters will be coming up in the debates in Committee on the Finance Bill in another place, and I think it would be wrong for us to anticipate those debates on the detailed clauses.

LORD MONTAGU OF BEAULIEU

My Lords, will the noble Earl bear in mind that his answer will cause considerable concern to a number of people who are trying to maintain their historic houses? Will he also bear in mind that a tremendous amount of revenue comes to this country from overseas visitors?

EARL JELLICOE

Yes, my Lords. I was not altogether surprised to hear either the disappointment expressed by the noble Baroness, Lady Lee, or the concern expressed by my noble friend. I will bear those points in mind.

LORD STRABOLGI

My Lords, may I ask the Government how they propose to operate this tax when the ticket machines, as has been said on many occasions, will take only 10p coins?

EARL JELLICOE

My Lords, this will be a matter for the judgment of the museum authorities concerned, but I should point out to the noble Lord that both purchase tax and S.E.T. are being abolished. Museum authorities would otherwise have taken account of the incidence of both those taxes, so what they may be losing on the roundabouts they may be gaining on the swings, if that is an appropriate metaphor to use.

LORD BESWICK

My Lords, can the noble Earl tell us what purchase tax has been payable by museums?

EARL JELLICOE

My Lords, purchase tax has been paid on certain articles which they purchased.