§ Mrs. Iris RobinsonTo ask the Chancellor of the Exchequer if he will reduce the level of VAT on repairs and maintenance to five per cent. [175933]
§ John HealeyEU Member States are permitted to introduce reduced rates of VAT only on a prescribed list of goods and services set out in Annex H of the EC Sixth VAT Directive. A review of this list is currently underway and we have been negotiating hard for the inclusion of repairs to listed places of worship.
The current list includes a category for the "supply, construction, renovation and alteration of housing provided as part of a social policy". The Government have used this provision to target relief at areas of specific need, such as certain residential conversions and the renovation of housing that has been empty for more than three years.
The European Commission has made proposals to clarify the housing provision by removing the distinction that housing should be provided as part of a social policy and by specifying the inclusion of the repair and maintenance of housing. If that proposal were agreed, we would examine the potential costs and benefits of applying a wider relief in the UK, focusing on those measures which offer the best targeted and most efficient support for our key social objectives.