§ Mr. Heddleasked the Chancellor of the Exchequer what is his policy towards European Economic Community proposals for changes in the incidence and structure of value added tax, with particular reference to the present zero-rating arrangements for non-residential new construction work
§ Mr. HayhoeA formal European Community proposal for changes in the structure of VAT would have to take the form of a draft directive which would require the unanimous approval of the Council of Ministers before it could be adopted. No such proposal has been made. The European Commission has indicated that in its view, which we do not accept, the United Kingdom's zero rate in favour of non-residential new construction work is not permissible under the sixth directive on the harmonisation of VAT, but has taken no formal step in the matter.
§ Mr. Heddleasked the Chancellor of the Exchequer if he has made any assessment of the impact on private investment in new buildings and upon employment in the construction industry of any change in the existing zero-rating for value added tax purposes of non-residential new construction work, in the light of European Economic Community proposals for changes in value added tax.
§ Mr. HayhoeAs indicated in answer to the my hon. Friend's preceding question, there are no formal Commission proposals.