Personal Alarm Systems and VAT (Hansard, 4 July 1988)

§ The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara)
My Lords, distress alarm systems are zero-rated when supplied to a person who is chronically sick or disabled or to a charity for making them available to the chronically sick or disabled. The Government have no plans to extend this relief further to cover supplies to the able-bodied elderly or others. The case for doing so cannot be considered in isolation from many other equally deserving candidates for special VAT treatment.

§ Lady Saltoun of Abernethy
My Lords, while thanking the noble Lord for that reply, may I ask him whether, in view of the saving to the Exchequer of keeping elderly people in their own homes for as long as possible, the Government will reconsider extending exemption to elderly people living in their own homes who do not qualify under the Chronically Sick and Disabled Persons Act?

§ Lord Brabazon of Tara
My Lords, I take the point made by the noble Lady. VAT is intended to be a broadly-based tax and exemptions from it should be used very sparingly. Here we are talking only about 7 VAT added to the price of goods, which is only 15 per cent.

Lord Bruce of Donington
My Lords, in giving further consideration to the position of the elderly, who very often are just as immobile as the disabled, will the noble Lord bear in mind that there is nothing in the sixth VAT directive that prohibits the United Kingdom Government from granting exemption? Even though the European Court ruled otherwise, the Government can easily circumvent it, as has been illustrated by a recent court judgment.

§ Lord Brabazon of Tara
My Lords, I am not sure to what the noble Lord is referring when he says that we can easily circumvent the rulings of the European Court of Justice. As regards the application of this relief to non-domestic construction such as local authority communal homes or hospitals, we are consulting with charities about that ruling.

§ Lord Bruce-Gardyne
My Lords, as one who used on various occasions to explain in another place that VAT was a broadly-based tax, does my noble friend agree that the real problem with our VAT system is that it is not broadly-based enough and that it is riddled with far too many exemptions and zero ratings, which makes it more like Gruyere cheese than a comprehensible tax?

§ Lord Brabazon of Tara
My Lords, my noble friend seeks to extend the Question somewhat wider than the one on the Order Paper which is extremely specific. I believe that on this occasion I should be unwise to enter into debate with him.

§ Lord Murray of Epping Forest
My Lords, will the Minister seek to persuade the European Commission that the definition of VAT as a broadly-based tax should take full account of social considerations as well as narrow, economic considerations of a fiscal kind?

§ Lord Brabazon of Tara
My Lords, again we stray rather wide of the Question. We are still exempt from VAT on very many important items, such as food and domestic fuel. Ay my right honourable friend the Prime Minister said, we continue to pursue that policy.

§ Baroness Macleod of Borve
My Lords, does the Minister agree that elderly people living on a pension can, with confidence, go out at night if they have a personal alarm system in their hands? I have personal experience of this and I understand the system is now working throughout the country. The personal alarm is held in the hand and it emits a very loud shriek, thereby giving confidence to the person who owns it.

§ Lord Brabazon of Tara
My Lords, I am sure that my noble friend is quite right on that matter. However, the question is whether that personal alarm should be free of VAT for elderly people. I imagine that my noble friend realises that there would be a number of practical difficulties if VAT were to be 8 allowed on personal alarms for elderly people and not for everyone else.

§ Lord Annan
My Lords, as regards what the Minister said about the extension of VAT to so large a population as those deemed to be elderly, it is certainly true that some elderly people are as immobile as the disabled. Can such people be treated as disabled?

§ Lord Brabazon of Tara
My Lords, I am not certain what is the definition of "disabled" for this purpose. If a person is disabled then he qualifies for zero-rating on the system.