HC Deb 05 November 1993 vol 231 cc556-8W
Mr. Peter Bottomley

To ask the Chancellor of the Exchequer what information he has as to(a) the price elasticity and (b) the range of profitability of newspapers and magazines.

Sir John Cope

The Institute for Fiscal Studies has estimated the price elasticity for leisure goods, which include books, newspapers and magazines, to be -0.657. The Newspaper Society has different elasticities for different types of regional papers ranging from -0.3 to -0.5. The Newspaper Society suggests that regional daily papers have an average profitability of 11 per cent., and regional weeklies, 7 per cent.

Mr. Cash

To ask the Chancellor of the Exchequer if he will publish a table showing for each EC member state(a) the current rate of VAT imposed on periodicals, (b) whether postage subsidies or a special rate for periodicals is available, (c) whether a newsprint subsidy is available, (d) whether transport costs are subsidised and (e) whether overseas distribution costs are subsidised.

Sir John Cope

The current rate of VAT applied to periodicals in all EC countries as well as whether partial subsidies or special rates are available for periodicals are shown in the table. For the remaining items,(c), (d) and (e), it is not possible to obtain the information on the ground of disproportionate cost.

Country (a) VAT rate on periodicals per cent. (b)Whether postal subsidies or special rates available
Belgium 10 6 Not known
Denmark 25 Yes
France 52.1 Yes
Germany 7 Yes
Greece 24 (3) Not known
Ireland 12.5 Not known
Italy 4 Yes
Luxembourg 3 Not known
Netherlands 6 Yes
Portugal 45, 330, (44, 321) Not known
Spain 3 Yes
United Kingdom 0 Yes
1 Magazines which appear at least 50 times a year and whose aim is to educate or entertain the general public are subject to the zero rate.
2The rates in brackets apply in certain distant Greek Islands.
3 Obscene and pornographic material is subject to an increased rate of 30 per cent. (21 per cent. in the autonomous regions of Madeira and the Azores Archipelagoes.)
4 Providing they are considered in the legislation covering these items to be of a cultural, educational, recreational or sporting nature.(A lower rate of 4 cent. applies in the autonomous regions of Madeira and the Azores Archipelagoes.)
5 The following rates apply to Corsica: 0.9 per cent. and 2.1 per cent.

Source: (a) VAT in Europe (International Bureau of Fiscal Documentation) 1993.

(b) Periodical Publishers Association (UK) 1989.

Mr. Peter Bottomley

To ask the Chancellor of the Exchequer if he will estimate the net change of turnover of newsagents if VAT were introduced on newspapers and magazines.

Sir John Cope

Various trade interests, including the Multiple Newsagents Association, have provided estimates of the effect on turnover should VAT be extended to this area.

Mr. Peter Bottomley

To ask the Chancellor of the Exchequer what representations he has received in favour of VAT on(a) national newspapers, (b) regional and local priced newspapers, (c) free newspapers and (d) magazines.

Sir John Cope

A small number of representations have been received in favour of ending the zero rate of VAT on books, newspapers and magazines.

Mr. Peter Bottomley

To ask the Chancellor of the Exchequer what estimates he has as to the proportion of weekly newspapers that would be expected to convert to free distribution if VAT were imposed.

Sir John Cope

Ministers have received various reports from the industry which predict some movement of weekly paid-for newspapers to the free sector if VAT were extended to this area.

Mr. Peter Bottomley

To ask the Chancellor of the Exchequer what are the rates of VAT on newspapers and magazines in each other OECD country.

Sir John Cope

Following is the information requested.

VAT on newspapers and magazines in each other OECD country
Country Newspapers Magazines
Australia No VAT No VAT
Austria 10 per cent. 10 per cent.
Belgium 0 per cent.1 0 per cent. 1
6 per cent. 6 per cent.
Canada Exempt Exempt
Denmark 0 per cent. 25 per cent.
Finland Exempt2 Exempt2
22 per cent. 22 per cent.
France 2.1 per cent. 3 2.1 per cent. 3
Germany 7 per cent. 7 per cent.
Greece 4 per cent. 4 per cent.
(3 per cent)4 (3 per cent)4
Iceland 14 per cent. 14 per cent.
Ireland 12.5 per cent. 12.5 per cent.
Italy 4 per cent. 4 per cent.
Japan 3 per cent. 3 per cent.
Luxembourg 3 per cent. 3 per cent.
Netherlands 6 per cent. 6 per cent.
New Zealand 12.5 per cent. 12.5 per cent.
Norway 0 per cent.5 0 per cent.5
22 per cent. 22 per cent.
Portugal 5 per cent. 5 per cent.
(4 per cent.)6 (4 per cent.)6
Spain 3 per cent. 3 per cent.
Sweden 0 per cent.7 Exempt7
25 per cent. 0 per cent.
25 per cent.
Switzerland No VAT No VAT
Turkey 8 per cent. 8 per cent.
United States No VAT No VAT
1 0 per cent. applies to newspapers and magazines that appear at least 50 times a year and whose aim is to educate or entertain the public.
2 Exemption applies to subscriptions to newspapers and magazines. This is a preliminary decision by the Finnish Government's Fiscal Committee.
3 The following rates apply in Corsica: 0.9 per cent and 2.1 per cent.
4 The rates in brackets applies in certain distant Greek Islands.
5 0 per cent. applies to:
(a) newspapers that appear at least once a week.
(b) magazines that are sold to subscribers or to members of an organisation.
(c) Magazines of a certain character (e.g. political, literary).
It applies only at the last taxable stage prior to acquisition by the consumer.
6 The rate in brackets applied in Madeira and the Azores Archipelagos.
7 0 per cent. applies to newspapers and magazines published at least once a week.

Exemption applies to:

  1. (a) staff magazines.
  2. (b) magazines sent to members of an organisation.
  3. (c) certain other magazines (religious, political, etc. in aim).
  4. (d) magazines that represent disabled or incapacitated workers.
  5. (e) quarterly foreign magazines under certain conditions.

Mr. Peter Bottomley

To ask the Chancellor of the Exchequer if he will estimate the total revenue from VAT charged on advertising in the various categories of newspapers and magazines.

Sir John Cope

When the zero rating of advertisements in newspapers and magazines was withdrawn in May 1985 the change was costed at £50 million. No subsequent estimate has been made.