HL Deb 25 June 1981 vol 421 cc1154-5

3.12 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 whether VAT is charged on subscriptions paid by members of trade unions, including the political levy.

Lord Cullen of Ashbourne

My Lords, VAT is not chargeable on subscriptions paid by members of trade unions, nor on the political levy. This in fact accords with the EEC Sixth Directive on VAT, Article 13A1(1).

Lord Boyd-Carpenter

My Lords, while thanking my noble friend for that reply, may I ask whether he can give additional cause for gratitude by indicating if the Government, following on their conscientious implementation of that part of Article 6 which relates to contributions by trade unions, intend to extend the exemption to the other bodies covered by the same directive, in particular non-profit-making clubs?

Lord Cullen of Ashbourne

My Lords, the present situation is that it is not considered that non-profit making clubs of all kinds can well be compared with trade unions. Trade unions and professional associations, where it is customary for people to pay subscriptions, are considered to be on all fours; but, for instance, the National Liberal Club or the Carlton Club, though they have political test for membership, would not be considered to be in any way suitable to a trade union.

Lord Boyd-Carpenter

My Lords, has my noble friend looked recently at the terms of the directive? If so, can he not confirm that non-profit-making clubs with political and social objectives are not only in the same clause of the directive but are actually in the same sentence, which insists on immunity for trade union contributions? May I ask my noble friend again: Why the discrimination?

Lord Cullen of Ashbourne

My noble friend has clearly done his homework on this, my Lords. The exemptions are for non-profit-making organisations with aims of a political, trade union, religious, patriotic, philisophical, philanthropic or civic nature. I would suggest to my noble friend that perhaps one of the clubs he is considering produces many goods and services for which VAT is chargeable and the political test of membership is ancillary.

Lord Blyton

My Lords, does the Minister think that the Question asked by the noble Lord, Lord Boyd-Carpenter, is weighted by malice against the trade unions? May I further ask him to say whether contributions to the CBI by private enterprise are charged VAT and the other penalties which the noble Lord suggests for trade unions?

Lord Cullen of Ashbourne

My Lords, I think the noble Lord was suggesting that there was something anti-trade union about the Question. I am quite unable to answer that question, as I did not ask it.