§ Baroness Miller of Hendonasked Her Majesty's Government:
What response they intend to make to the European Union proposal for VAT on postal services.
§ Lord McIntosh of HaringeyMy Lords, the Commission has not yet made a proposal for VAT on postal services.
§ Baroness Miller of HendonMy Lords, I understand from the discussion paper that the Commission is considering doing so. It has been a year since the noble Lord, Lord Simon, responded to a Question from the noble Lord, Lord Stoddart. Have the Government come to a conclusion as to what they will do if a firm proposal is put forward, as seems likely?
§ Lord McIntosh of HaringeyMy Lords, we do not know what the proposal will be. If the noble Baroness is concerned that vie will accept a tax on stamps, I can say that that is a decision which requires the unanimous agreement of all member states. The Government have made clear that they will not give their agreement to such a tax.
§ Lord EzraMy Lords, first, is this issue linked with the proposals for the progressive opening up of the EU postal market, the next step for which is due in 2003? Secondly, can the Minister indicate the Government's attitude to that development?
§ Lord McIntosh of HaringeyMy Lords, it is linked to the proposals for the opening up of the market for postal services. One of the major issues in that regard is that of monopoly which, under the Postal Services Bill now before another place, is being replaced by the licensed area proposals, whereby a licence has to be obtained by the Post Office and any other competitive body from the new Postal Services Commission. The proposals being made by the European Community are that the licensed area should be no greater than that required for the universal service obligation. As the noble Lord will know, we are committed to the universal service obligation.