§ Ms RuddockTo ask the President of the Board of Trade if he will make it his policy that the articles for the blind facility will remain a Freepost service following any reorganisation of the Post Office.
§ Mr. McLoughlinThe Government are well aware of the importance of the free postage facility currently offered by the Royal Mail for articles for the blind. The Green Paper on the Post Office, which is due to be published shortly, will, therefore, make clear that, under any option, the Royal Mail will be required to continue to offer this valued service.
§ Mr. Chris SmithTo ask the President of the Board of Trade what approval is required from institutions of the European Union, and in what form, for the zero-rating of VAT on postage for letters and parcels in the event of privatisation or part-privatisation of the Post Office.
§ Mr. McLoughlinArrangements in respect of VAT and postal services need to conform with EC VAT legislation and, in particular, the sixth EC VAT directive, which provides VAT exemption for the universal letter and parcel services. In the light of discussions with the European Commission, as well as earlier jurisprudence of the European Court of Justice, the Government are satisfied that privatisation would not mean the imposition of VAT on these services. The Government have made it clear that, under any option that they finally adopt, stamps will continue to be free of VAT.