§ Mr. HainTo ask the President of the Board of Trade what discussions he has had with the European Commission about amending article 13(a)(1)(a) of the EC sixth VAT directive, whereby public postal services are exempt from VAT.
§ Mr. McLoughlinThe Commission has indicated in its Green Paper on postal services its intention to review the VAT treatment of postal services, and this has arisen in discussions with them. The Commission has not, however, brought forward any proposed amendment.
§ Mr. HainTo ask the President of the Board of Trade what discussions he has had with the European Commission about the interpretation of article 13(a)(1)(a) of the EC sixth VAT directive as it relates to the privatisation of Parcelforce.
§ Mr. McLoughlinMy officials, together with those of Her Majesty's Customs and Excise, have had a number of contacts with the Commission of the European Communities about that provision of the sixth directive. The Government are satisfied that, under the directive as it stands, privatisation would not mean the imposition of VAT on the universal letter and parcel services provided by Royal Mail and Parcelforce. The Government have made it clear that under any option they finally adopt, stamps will continue to be free of VAT.