Racehorse Owners: VAT Registration (Hansard, 2 March 1993)

The Minister of State, Department of Transport (The Earl of Caithness)
My Lords, the negotiations between representatives of the racing authorities and Customs and Excise are progressing very well and both sides are now optimistic that agreement can be reached.

§ Lord Peyton of Yeovil
My Lords, I had hoped to be able to thank my noble friend today. As it is, I am bound to ask him whether a decision has been made but the announcement is to be left to the Budget, in which case it would seem to be an act of homage and a piece of rather tawdry ceremonial. Alternatively, perhaps a decision has not yet been reached even after many months of discussions and questions, in which case it would seem that our decision processes are in urgent need of a radical overhaul.

The Earl of Caithness
My Lords, I am not sure whether to accept my noble friend's thanks in advance, or to wait for another Question to be put down to give him the opportunity to thank me. I know that in his position as a Minister my noble friend would have wished to make certain that any agreement fulfilled all the requirements of both sides. That is what we are doing at the moment. It would be wrong for me to comment further.

§ Lord Mellish
My Lords, is the Minister aware that this is not a party matter? I must say that his reply was optimistic. It was to the effect that the talks have gone very well. What we want to see is good results. Perhaps I may point out to the Minister—

Noble Lords
No!

§ Lord Mellish
My Lords, is the Minister aware that the Chancellor and the Treasury did the noble thing by making special concessions to the bookmaking industry, but that they do not seem to be running about doing it for the people who run racehorses?

The Earl of Caithness
My Lords, my right honourable friend the Chancellor of the Exchequer has done many noble things. I hope that we shall be able to make a further announcement soon.

§ Lord Acton
My Lords, is the Minister aware that thousands of people employed in racing support the 528 goal of the noble Lord, Lord Peyton of Yeovil? Does the Minister recall that in December the Select Committee of another place when talking about VAT and horse-racing said that many thousands of jobs in the UK depended upon urgent action being taken? Will the Government now take that action?

The Earl of Caithness
My Lords, the House will understand that I cannot go further than I did in my initial Answer. The noble Lord will know full well that there have been negotiations, and that they are close to some sort of agreement.

§ Lord Renton
My Lords, is my noble friend aware that in no fewer than eight other countries in the European Community the bloodstock industry has been registered for VAT for a long time? Is it not strange that this country, which founded the bloodstock industry 300 years ago, has still not had that, despite pressure from both Houses of Parliament for more than 300 days?

The Earl of Caithness
My Lords, I know that my noble friend would be the first to agree that we should abide by the rules of the Community. Racing also needs to change. That will permit Customs and Excise to interpret the law differently.

The Viscount of Falkland
My Lords, following what the noble Lord, Lord Acton, said, is the Minister aware that, if the decision is favourable, the impact on employment will be considerable? Racehorse owners, apart from keeping horses in training, invariably have mares and foals, leading to a need for fencing, loose boxes and that kind of thing. Any rebates will be used in the improvement of those facilities, all of which provide employment.

The Earl of Caithness
My Lords, a number of implications arise from the discussions that have taken place between the racing authorities and Customs and Excise. The noble Viscount alludes to some, but there are many others.

§ Lord Clark of Kempston
My Lords, my noble friend says that we are committed to European Community regulations. Why is VAT in the Irish Republic much lower than ours?

The Earl of Caithness
My Lords, it is within the fiscal sovereignty of every country to set VAT according to its requirements. In some respects our VAT is considerably lower. We have zero rates where others charge.

§ Lord Donoughue
My Lords, is the Minister aware that I agree with every word expressed with such characteristically 18th century elegance by his noble friend, the noble Lord, Lord Peyton of Yeovil; that I agree with every word so pungently stated by the noble Lord, Lord Acton, from the Cross Benches, and by the noble Viscount, Lord Falkland, from the Liberal Democrat Benches? Would not the most prudent and honourable thing now be to capitulate with grace on this matter?

The Earl of Caithness
My Lords, I know that the affair between the noble Lord and my noble friend 529 Lord Peyton in respect of this issue has gone on for some months. The noble Lord, Lord Donoughue, will realise that I have said as much as I can but I hope that I shall be able to say more in the near future.

§ Lord Campbell of Alloway
My Lords, is my noble friend aware, and will he take comfort from the fact, that he is putting up a magnificent performance on a very sticky wicket?

The Earl of Caithness
My Lords, I hope that we are successfully navigating all the hurdles and obstacles in our way.

§ Lord Peyton of Yeovil
My Lords, is my noble friend aware that, without too much effort, I have moved forward into the 20th century in order to express my surprise at the conceit which exists in this country that somehow we run our affairs better than other people? This issue appears to me to prove the contrary.

The Earl of Caithness
My Lords, certainly it is our ambition to run our affairs better than other people. We also want to run our affairs well, and that is why it is important to reach the correct agreement.