§ Mr. HeddleTo ask the Secretary of State for Scotland what assessments he has made as to the likely effect on(a) his Department's capital building programme and (b) the rent the Department will pay under occupational leases of implementation of the European Court of Justice's judgment on value added tax on non-domestic buildings.
§ Mr. RifkindImplementation of the European Court of Justice's judgment on VAT will have no effect on my Department's capital building programme, since compensating adjustments have been made to the relevant expenditure provisions. At this stage, before landlords have decided whether to exercise their option to tax rents, it is not possible to offer meaningful estimates of the effects of the judgment on rental costs.
§ Sir Hector MonroTo ask the Secretary of State for Scotland whether, following the European Court's judgment that value added tax should be applied to new non-domestic buildings with effect from 1 April 1989, he has reviewed the levels of grant available under the local capital grants scheme.
§ Mr. Michael ForsythI have reviewed the levels of grant available and have decided to increase the maximum grant from £80,000 to £100,000 with effect from 1 April 1989. In addition our 1989–90 allocation for this scheme has been fixed at £1.045 million representing an increase of 17 per cent. over the 1988–89 amount. This increase takes into account both the imposition of value added tax on new buildings and increased costs.