HL Deb 04 December 1984 vol 457 cc1211-3
Lord Jenkins of Putney

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

The Question was as follows:

To ask Her Majesty's Government whether they agree that all books, journals, newspapers and other communications media and all forms of art and entertainment should be zero-rated for VAT.

The Chancellor of the Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie)

My Lords, no. as is plain from the fact that some of the items mentioned in the noble Lord's Question are not and never have been zero-rated. As to the items which are zero-rated at present, the Government have made it clear that while they are committed to a shift in the burden of taxation from taxes on earnings to taxes on spending, they have no set views at present on how this might best be done.

Lord Jenkins of Putney

My Lords, will the noble Earl try to prevail upon his right honourable friend that if he must tax literature, if he insists upon penalising authors, he would be better to do so by a creative supertax rather than to charge VAT on books? Does he recognise that VAT is regressive and falls most heavily on the small circulation author, whereas a tax on literary income would fall most heavily on Barbara Cartland and Jeffrey Archer who are better able to bear it?

The Earl of Gowrie

My Lords, I think there is no point in prevailing upon my right honourable friend on some issue on which at present he is not insisting.

Baroness David

My Lords, would the Minister be kind enough to tell his right honourable friend about what has happened to takeaway food shops since VAT was put on takeaway food? Is he aware that there has been a sales turndown of 25 per cent. for the average take-away shop, that 7.000 full-time and 13,000 part-time jobs have gone and there have been many business failures? If VAT were to be put on books this could happen to small booksellers and that would be a dreadful loss to the nation.

The Earl of Gowrie

My Lords, I am very prepared to relay the noble Baroness's views to my right honourable friend.

Lord Davies of Leek

My Lords, does the noble and scintillating Earl agree with me when I say that Milton with his great Areopagitica wrote one of the world's most brilliant accounts and a Miltonian attack on morons who would put a tax on knowledge?

The Earl of Gowrie

My Lords, while suspecting that my right honourable friend is a cavalier rather than a roundhead like Milton, I may say that I am a great fan of the Areopagitica and I shall draw it to my friend's attention.

Lord Gladwyn

My Lords, would not the levy of VAT on books be almost equivalent to a self-destructive tendency on the part of the Government?

The Earl of Gowrie

My Lords, I have seen very few signs of self-destruction on the part of this Government.

Lord Harmar-Nicholls

My Lords, is my noble friend aware that with a question so wide-ranging as this the answer he gave was the only one? But is it not possible that special thought could be given to, say, the theatre where a subsidy is given back whereas the removal of VAT would have the same effect without all the expensive bureaucracy that comes in the middle?

The Earl of Gowrie

My Lords, many things can be said about VAT, but an "expensive bureaucracy" I think is not one of them as the people who pay it are usually the people who collect it. I am very well aware of the position as it affects theatres; but the fact is that Government subsidies to the arts take into account the revenue that the Government receive from the arts.

Lord McGregor of Durris

My Lords, would the Minister agree that it might be helpful if he were to indicate to the proprietors of newspapers, in particular of tabloids, in Fleet Street that the publication of gambling sheets is a poor basis for arguing that VAT would be a tax on knowledge?

The Earl of Gowrie

My Lords, I do not think that the proprietors of Fleet Street newspapers need any recommendations from me as to how to protect their interests.

Baroness Ewart-Biggs

My Lords, granted that this is a hypothetical situation, would not the Minister nevertheless give a view as to what the relationship would be between the free newspapers and the paid-for newspapers if VAT were imposed on the cover price of the latter?

The Earl of Gowrie

My Lords, the Government are aware of the argument that VAT on cover prices of paid-for papers would give an unfair advantage to free newspapers unless they too were taxed as free gifts by a charge on production costs. This question would need to be carefully studied if the issue of taxation on newspapers became real: but as I have said, as it is the issue is hypothetical.

Lord Diamond

My Lords, what is not hypothetical, however, is the noble Earl's statement in, I think, his first Answer that the Government believe in switching from taxes on earnings which are progressive to the VAT tax which is regressive. Why does the noble Earl support a policy which means putting the burden of taxation on to the narrow shoulders and taking it off the broad shoulders?

The Earl of Gowrie

My Lords, it is a big issue. If I had to answer in a sentence, I think the reason is that I suspect that this economy has rather broader shoulders than the noble Lord is allowing for; and in general I believe in a greater freedom of choice so far as the taxpayers are concerned.

Lord Jenkins of Putney

My Lords, may we take the noble Earl's answers as collectively indicating that the Government have no intention of putting VAT on books?

The Earl of Gowrie

My Lords, I think that this is one of those questions which, whatever answer I give, somebody, somewhere could take that as indicating what the Government are liable to do. The fact of the matter is that the Government have no plans at present to introduce this tax; but who knows what the situation will be next April?

Lord Beswick

My Lords, if the Government are looking for a source of revenue and they do not wish to tax either art or entertainment, would they consider advertising as being a suitable subject for VAT?

The Earl of Gowrie

My Lords, I do not think that any governments are so innocent as not to consider any potential sources of revenue.

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