Economic and Monetary Union

HC Deb 28 October 1997 vol 299 c782W

Miss McIntosh

To ask the Chancellor of the Exchequer (1) if he will make it his policy to protect Britain's zero rates of VAT during negotiations on stage III of economic and monetary union; [12841]

(2) what action he will take to ensure that Britain's zero rates of VAT are protected under European Commission plans to harmonise VAT rates. [12842]

Dawn Primarolo

Although the European Commission aspires to the further harmonisation of VAT rates as part of its suggested programme for a "common system" of VAT, there are no current legislative proposals on rates. The UK's zero rates are fully safeguarded under existing EC VAT law, and any change requires the unanimous agreement of member states. We are committed to retaining the right to keep our existing zero rates and there is no question of being forced to give them up.