§ Mr. NellistTo ask the Chancellor of the Exchequer what proposals to extend the range of goods and services covered by value added tax are currently being considered; how many recent representations he has received on this topic; and if he will make a statement.
§ Mr. LilleyThe Government are considering how to implement the European Court of Justice's ruling that certain of our VAT zero rates do not comply with existing Community law. The European Commission has proposed approximation of VAT rates, which would involve VAT being charged on all items currently zero-rated; but we have made it clear that we do not consider tax approximation to be a necessary precondition for completing the internal market and that we cannot accept any proposals which would restrict our present ability to use VAT zero rating. We have received a number of representation on these, and other, aspects of VAT zero rating.