§ Mr. BerminghamTo ask the Chancellor of the Exchequer what progress has been made with respect to the European Commission's 1992 value added tax approximation proposals; and if he will make a statement.
§ Mr. Ryder[holding answer 26 January 1990]: In May 1989, the Commission put forward revised VAT 2W proposals, the main changes being the suggestion of an (unspecified) minimum standard rate of VAT and an acknowledgement that some existing zero-rating could be continued. Subsequent discussions in successive Economic and Finance Ministers Councils agreed that the Council should decide on the tax approximation issue by the end of 1991. For further details of discussion at December ECOFIN, I would refer the hon. Member to my reply to my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) on 20 December at column 244.
The United Kingdom view remains that centrally fixed approximation of VAT rates is neither necessary nor appropriate to achieve the single market. While the Government have welcomed the Commission's acceptance of the need to continue zero-rating, they have continued to make clear that they could not accept any proposals which would restrict their ability to apply zero rates.
Useful progress has, however, been made on technical arrangements for removing fiscal frontiers. The decisions taken largely reflected the United Kingdom approach and should ensure reduced compliance costs for businesses, while maintaining adequate controls against fraud.
§ Mr. BerminghamTo ask the Chancellor of the Exchequer what representations he has received in relation to amelioration in the value added tax treatment of charities; and if he will make a statement.
§ Mr. Ryder[holding answer 26 January 1990]: My right hon. Friend has received various representations from charitable bodies and individuals. The concerns expressed are being carefully considered, but any changes in taxation would be a matter for my right hon. Friend's Budget statement.