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Lord Mackay of Ardbrecknish: My Lords, it remains the Government's policy to retain the present VAT reliefs relating to motor vehicles for disabled people. Those include relief for vehicles specially designed for use by disabled people, and vehicles supplied either to charities providing care or medical or surgical treatment, or to certain other eligible bodies which pay for the goods wholly from voluntary contributions or charitable funds.
Lord Mackay of Ardbrecknish: My Lords, the question of defining what is eligible for relief is quite difficult. There are, so to speak, two hurdles over which a vehicle must jump, if I may use that expression, in order to obtain zero rating. First, it has to be a motor vehicle as defined. Off-road vehicles are not regarded as motor vehicles. Secondly, it must be able to carry people who are seated in wheelchairs. It is for those reasons--principally for the first reason--that the off-road vehicle, which I know the noble Viscount uses with such success, is not considered eligible for zero rating.
Lord Ashley of Stoke: My Lords, judging from that answer, is there not a case for reconsidering the criteria for help for exemption from VAT? One criterion should be that if it helps disabled people and cannot be exploited by others there should be exemption. The point raised by the noble Viscount is surely within that category.
Lord Mackay of Ardbrecknish: My Lords, I very much appreciate the use to which some people can put an off-road vehicle, especially if they are interested in carrying out pursuits in the countryside. However, with
Lord Boyd-Carpenter: My Lords, is not the defect of the tax called VAT that it falls on all kinds of areas where it is desirable that there should be expenditure and falls heavily on them? Is that not an inherent defect of VAT?
Lord Mackay of Ardbrecknish: My Lords, I do not think that Question Time is quite the time, especially on this rather narrow issue, to discuss the merits of direct or indirect taxation. I know that many of us on this side feel strongly that there are considerable merits in indirect taxation; taxation, that is, on people's expenditure. If one is to make exceptions to VAT--by zero rating or exemption--it has to be done on very tight grounds. Otherwise we would go back to the old sport which, as some of your Lordships will remember, we had on purchase tax.
Lord Monkswell: My Lords, can the Minister say what action would be required to ensure that zero rate of VAT on the particular vehicle referred to can be levied? Does it require primary legislation, secondary legislation, or could it be done by Inland Revenue regulation?
Lord Mackay of Ardbrecknish: My Lords, I regret to tell the noble Lord that the question of extending zero rating is a good deal more complicated even than the choice of school to which you send your child. One cannot extend zero rating in this country or any other European country because that would be a breach of the sixth VAT directive.
Lord Tebbit: My Lords, is my noble friend aware that, although he is a very popular Minister, the reply that he gave is a very unpopular one? Does he agree that the vehicle in question was developed specifically for disabled people and was developed in order that disabled people could enjoy the open countryside in the same way as those of us who are on two legs are privileged to do? Was it not developed for that purpose with the aid of a grant from British Telecom, that being a condition of its development? Will he accept that it must surely be possible to change those regulations, so that a vehicle designed for disabled people--which it clearly is--should qualify for zero rating whatever the bureaucrats in the Treasury or Brussels say?
Lord Mackay of Ardbrecknish: My Lords, it is easy enough for my noble friend now to talk about regulations in that way. I do not suppose that he thought about them like that when he had to carry such responsibilities, though carried jointly so far as concerns the Treasury. The point I want to make is that in the advertising for the vehicle, though its value for people who are disabled is mentioned, the pictures of the
Lord Peston: My Lords, I do not want to intervene on the question of the noble Lord's popularity. However, I find his answers puzzling. It seems to me that the points that have been made nearly cover the definition. Is the Minister not willing at least to go back to his right honourable friend the Chancellor of the Exchequer and say that this vehicle is clearly for disabled people, as the noble Lord, Lord Tebbit, said? Will he accept that it is not a matter of the modification being free of VAT but that the vehicle ought to be free from VAT? It seems to me that the House would like him to say that we ought to look at this matter, given the arguments that have been put forward.
Lord Mackay of Ardbrecknish: My Lords, I looked very carefully at this matter when I studied the Question and indeed the Answer. I come back to the point I made. It is certainly not a road vehicle--nobody argues about that. But a second point is that, while it may be a very good vehicle for a disabled person, it is certainly not exclusively designed for a disabled person and any reading of the advertising material would certainly draw me to that conclusion. My last point, which I make again, is that in order to fall within the definitions, which have to be drawn in order to keep the area moderately tight so far as concerns taxation, the unit should carry someone in a wheelchair, which is one of the fundamental definitions that allow for zero rating.
Viscount Ingleby: My Lords, may I suggest to the Minister that he listen to the makers, to whom I have spoken? They tell me quite plainly that it is possible to adapt this machine to carry a disabled person in a wheelchair.
Lord Mackay of Ardbrecknish: My Lords, if a vehicle were to be adapted to take a wheelchair in situ, certainly the adaptations upon it would be zero rated for VAT purposes. It does not get us away from the first Question, which is that it still would not be a road vehicle and so the whole vehicle would not be zero rated.
Baroness Darcy (de Knayth): My Lords, perhaps I may narrow down the question put by the noble Lord, Lord Boyd-Carpenter. Is there not a case for at least zero rating all equipment supplied to organisations which supply welfare services under the Value Added Tax Act 1994--I believe that it is Part II of Schedule 9?
Lord Mackay of Ardbrecknish: My Lords, the noble Baroness takes me a good deal wider than the original Question. There are a considerable number of VAT helps and advantages for disabled people. Indeed, the total cost of the various zero rating advantages that are available for disabled people comes to something
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): No, my Lords. Anyone suffering chronic ill health which they ascribe to exposure to organophosphate sheep dips should consult their general practitioner. The general practitioner can refer them to a consultant with experience in the diagnosis and treatment of illness caused by exposure to chemicals.
The Countess of Mar: My Lords, the noble Baroness is well aware of my battle to have these people looked at. In view of the fact that the use of organophosphates for sheep dip was, to all intents and purposes, compulsory between 1975 and 1992 and that most of the people affected were affected during that period, does she feel that it is only fair that they should be seen by a group of consultants who can deal with all of them? Does she believe that it would help in the clinical side of the research? I know that there is an epidemiological study which is due to report in 1999. Does she agree that we also need some clinical evidence so that the methods of diagnosis can be assessed more easily?
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