§ 3 p.m.
§ Baroness David asked Her Majesty's Government:
§ Whether they are still of the opinion that the imposition of value added tax on books would adversely affect education and cultural pursuits in this country.
The Earl of CaithnessMy Lords, we have received a number of representations from all sectors of the publishing industry about the consequences of VAT being levied on publications, and those will be considered very carefully in the period leading up to the Budget. It would therefore be inappropriate for me to comment further at this stage.
§ Baroness DavidMy Lords, that is a not unexpected reply. Is the Minister aware that not only the publishing industry but also the whole educational world are extremely worried about the prospect of VAT on books? University libraries and university students will really feel the pinch if VAT is levied on books. Since further education colleges and sixth form colleges will come out from under the umbrella of the local education authorities, they too will not be able to claim the return on VAT which they have to pay on books. Therefore a much larger area will be affected.
The Earl of CaithnessMy Lords, the Government are fully aware of the VAT position of education establishments. We shall take that into account, too.
§ Baroness BirkMy Lords, reading is habit forming in particular when the habit is acquired at an early age. If any factor cuts down or prevents the habit continuing, it affects not only knowledge, education, employment and much else, but cuts out an enormous slice of sheer enjoyment in life. Will the Minister include that point in his representations? There is a lighter side to the Question, but it is just as important a factor in people's lives.
The Earl of CaithnessMy Lords, I shall draw what the noble Baroness said to the notice of my right honourable friend the Chancellor of the Exchequer.
§ Lord BeloffMy Lords, I must declare an interest as deputy chairman of the Hands Off Reading Campaign. However, although Budget secrecy is a part of our national mythology, is there also a part which refers to Cabinet solidarity? There have been unequivocal demands from both the Prime Minister and Secretary of State for Education for an expansion of education and a raising of standards. Does that not bind the Chancellor's hands?
§ Lord Jenkins of PutneyMy Lords, I believe that the unusual circumstance has arisen in which the 664 noble Lord, Lord Beloff, and I are in agreement. Does the Government recognise that there is a widespread body of opinion throughout the country which retains opposition to the taxing of literature which successive governments have maintained? Will the Minister bear that in mind? Will his noble friend the Chancellor also bear it in mind?
The Earl of CaithnessMy Lords, I hope that my noble friend Lord Beloff does not make a habit of the present circumstance.
§ Earl RussellMy Lords, will the Minster ask his right honourable friend the Chancellor to make a separate consideration of the market in learned academic books? Does he agree that those are a little like printed Parliamentary Bills? They are a market too small and too specialised to work by the normal rules. Does he agree that if such books were to disappear, it would be a considerable blow to education in this country?
§ The Lord Bishop of ChesterMy Lords, does the Minister accept that such a tax would have an enormous impact on the spiritual and moral knowledge of people in this country? It would have effects on distance learning, on spiritual and moral individual development and on RE resource centres.
The Earl of CaithnessMy Lords, I have listened carefully to the right reverend Prelate. Having heard what everyone has said in the House today, it does not surprise me that we are so much better than Europe, which has VAT on books, magazines and newspapers.
§ Lord RichardMy Lords, is the Minister aware that during the last election campaign the chairman of the Conservative Party stated,
VAT will not be imposed on books, newspapers or periodicals"?Does that remain the policy of Her Majesty's Government?
§ Viscount Montgomery of AlameinMy Lords, does my noble friend agree that both the price and availability of books would be much improved if he would consider the abolition of the Net Book Agreement.
The Earl of CaithnessMy Lords, that is an interesting idea but it is slightly wide of the Question on the Order Paper.
§ Lord StrabolgiMy Lords, is the Minister aware that VAT on books would have an adverse effect on the smaller book shops—in particular, those in outlying areas? It would lead to the much higher prices of books.
§ Lord Howie of TroonMy Lords, is the Minister aware that VAT levied on books and periodicals in 665 certain Continental countries is at a rate of about 2.5 per cent. or 5 per cent.? If VAT were levied in this country at 17.5 per cent., the printed media would be much more heavily taxed than any of its competitors in Europe. Is he further aware that competitors in Europe have subsidies on transport costs and postage? Similar subsidies would be required of Britain if we were to achieve the famous level playing fields about which we hear so much.
The Earl of CaithnessMy Lords, the range of VAT on books in Europe is from zero in Britain to 25 per cent. in Denmark. On magazines, it is from zero in Britain to 25 per cent. in Denmark. On newspapers, it is from zero in Britain to 10 per cent. in Ireland.
§ Baroness NicolMy Lords, does the Minister realise the special difficulties that may be caused to charities which supply magazines as part of their members' subscriptions? Does he agree that whatever may happen to other magazines, those issued by charities will remain zero-rated?
§ Lord Holme of CheltenhamMy Lords, I must declare an interest as a publisher. Does the noble Earl agree that British books make a notable contribution both to British exports and to British influence throughout the world? It would be desirable to avoid any measure which weakens the strength of British books in their home market.