§ Mr. MaddenTo ask the Chancellor of the Exchequer if he will take steps to seek to exempt all hearing aids from value added tax.
§ Mr. Lilley[holding answer 16 May 1988]: Hearing aids supplied by a person on the register of dispensers of hearing aids or the register of persons employing such dispensers are at present exempt from value added tax. However, my right hon. Friend the Chief Secretary recently tabled a new clause to the Finance Bill which, if approved by the House, will apply VAT at the standard rate to these supplies from 1 September 1988. This is to comply with a judgment of the European Court, published on 23 February, which ruled that the United Kingdom, in exempting from VAT certain goods supplied with medical care (including hearing aids), was in breach of its obligations under the EC sixth directive on VAT adopted in 1977. Hearing aids supplied free by the National Health Service will remain outside the scope of the tax.