HL Deb 10 March 1994 vol 552 cc1525-6

Baroness David asked Her Majesty's Government:

Whether they intend to levy VAT on adult educational classes.

The Parliamentary Under-Secretary of State, Department of Employment (Lord Henley)

My Lords, some changes to the VAT exemption for education and training are being considered to aid clarity and consistency. However, I can give an assurance that these changes will not result in VAT being applied to currently VAT-free adult education classes provided by further education colleges and local authority adult education centres.

Baroness David

My Lords, I thank the Minister very much indeed for that satisfactory reply. I do not think that I need: 0 ask any supplementaries.

Lord Stoddarl of Swindon

My Lords, if my noble friend has none, I have. The organisations named were specific, but presumably what the Minister is saying is that outside Further education establishments like, for example, the university of the air, the Open University, it is possible that VAT will be applied. Perhaps we may also have an assurance that it will not be applied for those organisations.

Lord Henley

My Lords, there will be VAT on certain arrangements; that is, educational courses like driving lessons. I think that I can give a fairly categoric assurance that there will be no VAT levied on what amounts to mainstream education, on fee-paying education by colleges, schools and universities, as legally defined, which are VAT exempt. Other fee-paying education is VAT exempt if provided otherwise than for profit. It is the expression "otherwise than for profit" that we want to remove because it causes a certain degree of confusion; but it will be the status of the institution that will largely govern whether or not VAT will be levied. However, I do not envisage that the fees charged by the university of the air will be subject to VAT.

Lord Eatwell

My Lords, will the Minister accept that it has been most encouraging that in giving that answer he has no: used the phrase,"We have no plans"? Whenever the Government use that phrase we know that they have plans to implement VAT increases immediately. However, the answer has been most encouraging.

Lord Henley

My Lords, perhaps I may offer my condolences to tie noble Lord on his collarbone. I am sure that he will soon recover. I can give him an assurance that when we say,"We have no plans", we mean exactly that. It means that we have no plans.

Baroness David

My Lords, I have thought of a supplementary question. Can the Minister assure me that there will be no weakening of the consultative paper's proposal to exempt educational charities in the voluntary sector from VAT?

Lord Henley

My Lords, the consultation paper is a consultation paper and the consultation period ended on 28th February. Obviously it is too early to come to any final conclusions but I can certainly give the assurance that the noble Baroness asked for as regards educational charities.

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