HL Deb 13 July 1981 vol 422 cc994-5

2.42 p.m.

Lord Boyd-Carpenter

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 to list the classes of organisations subscriptions or contributions to which would be exempted from the payment of VAT in compliance with the Sixth Directive of the European Economic Community; and which classes of organisations at present enjoy such immunity in the United Kingdom.

The Minister of State, Treasury (Lord Cockfield)

My Lords, the provision in the Sixth Directive for exempting membership subscriptions from VAT is limited to non-profit-making organisations with aims of a political, trade union, religious, patriotic, philosophical, philanthropic or civic nature. The exemption is subject to the proviso that it is to be applied only where it is not likely to cause distortion of competition. This proviso would exclude from the relief clubs which provide facilities such as accommodation or catering.

Our own law is to be found in Section 45(3) and Group 9 in Schedule 5 to the Finance Act 1972 (as amended). It is of course these provisions and not the Sixth Directive as such which govern the position in the United Kingdom. In principle, we regard them as in line with the Sixth Directive.

Lord Boyd-Carpenter

My Lords, while thanking my noble friend for this reference to the Finance Bill, which is, of course, my bedside reading, may I ask him to confirm whether, of all the wide variety of organisations covered by the Sixth Directive, only professional associations and trade unions receive the concession which the directive suggests?

Lord Cockfield

My Lords, my noble friend has raised two points. The provision, in fact, is to be found in the Finance Act 1972, and not in the Finance Bill at present before another place. Secondly, the exemption is set out at length in the schedule to which I have referred, and it applies to a wide range of bodies which satisfy the stated condition.

Lord Jenkins of Putney

My Lords, is this not an example of the undesirable legislation which traditionally stems from the EEC? Would it not be a very good idea if we were to secede from this organisation and thus save ourselves all the consequences of belonging to it?

Lord Cockfield

My Lords, may I assure the noble Lord that it is no such thing. As regards the United Kingdom, the provision is to be found in the Finance Act 1972, while the Sixth Directive was not passed until 1978.

Lord Derwent

My Lords, I should like to ask my noble friend this question, rather unusually, purely for information: Is the British Legion exempt? If so, under what heading and, if not, why not?

Lord Cockfield

My Lords, I should be happy to write to my noble friend about that particular question.

Lord Gladwyn

My Lords, to what extent are these directives of the EEC binding on Her Majesty's Government?

Lord Cockfield

My Lords, the noble Lord raises a most intricate point relating to EEC legislation. Broadly, the position is that in case of a directive, as opposed to a regulation, member states are expected to ensure that their own legislation is in line with the directive. That is why I stated specifically in reply to my noble friend that the provisions of the 1972 Finance Act were in principle in line with the directive.

Lord Spens

My Lords, can the noble Lord tell us what is the situation about educational arrangements, in view of an article which appeared in one of yesterday's papers saying that the Commissioners of Customs and Excise are now clamping down on arrangements for school travel, and things like that, because those matters are no longer being subsidised by the local authorities?

Lord Cockfield

My Lords, this is an intricate matter which relates to the question of whether the arrangements in question are primarily for educational purposes or whether they are primarily for holiday purposes. Perhaps I might write to the noble Lord about this.