To ask the Chancellor of the Exchequer what plans he has to introduce VAT on postal services. [118310]

The European Commission has recently published proposals to amend the provisions of the Sixth VAT Directive concerning the VAT arrangements applicable to postal services. Postal services provided by the universal service provider, Royal Mail, are currently exempt from VAT, and the Government believe that the vital social role played by the universal postal service should continue to be reflected in the tax system. The Government are therefore opposed to VAT on stamps, and will make this clear in negotiations on the proposals. Amendments to the Sixth VAT Directive must be agreed unanimously by member states.