HL Deb 14 March 1985 vol 461 cc232-3

3.24 p.m.

Lord Monson

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 will take advantage of the continuing weakness of sterling against most major world currencies to raise additional revenue for socially useful purposes by withdrawing the VAT rebates enjoyed by overseas visitors, and by increasing the rate of stamp duty on conveyances of residential property to those who are not United Kingdom citizens.

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

My Lords, while not accepting that the pound is weak against most major world currencies, I can say that the operation of a VAT retail export scheme is one of the United Kingdom's obligations of membership of the European Community. Withdrawing the VAT rebates enjoyed by overseas visitors in order to raise additional revenue, for whatever reason, is therefore not legally available to Her Majesty's Government.

Stamp duty is a tax on documents, not on people or transactions. Although by custom duty on a conveyancing document is normally paid by the purchaser, this is not a legal requirement. The United Kingdom has entered into various international agreements which rule out discriminating taxation of this kind.

Lord Monson

My Lords, I thank the noble Earl for his informative reply. Nevertheless, would he not agree that it is bad economics for a nation to sell its goods and services, or indeed its assets, too cheaply to people from overseas, as seems to be happening to some extent at the moment? Is he aware that overseas investors are pouring over £100 million a year into British residential property, often to the detriment of indigenous house seekers? Would he not agree that if stamp duty on these transactions were trebled from 1 per cent. to a still modest 3 per cent., enough extra revenue would be raised to save the pound note; or to save one or two more historic houses and their contents for the nation; or to restore British diplomatic representation in such small but politically sensitive countries as Laos and the Dominican Republic; or to reverse the damaging cuts made in recent years to the BBC's External Services—to give just a few examples?

The Earl of Gowrie

My Lords, the noble Lord beguiles me with various tempting opportunities for the heritage, the Revenue, the World Service and all kinds of other things which are very dear to my heart. But unlike the noble Lord, I am rather keen on foreigners and they are certainly doing the economy in this country a lot of good at this moment.

Lord Bruce of Donington

My Lords, without wishing to invite the noble Earl to anticipate his right honourable friend's Budget Statement, may we have his assurance that when it comes to interpreting "socially useful purposes", as mentioned in this particular Question, the ambit of the Government will go rather wider than that proposed by the noble Lord, Lord Monson?

The Earl of Gowrie

My Lords, I shall look at what the noble Lord has said. I rather suspect that the second part of his supplementary question was not logically consistent with the first part; but I shall do my best.