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Hospital Equipment: Donations And Tax Relief

Volume 416: debated on Monday 19 January 1981

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2.50 p.m.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they will consider zero-rating for VAT purposes the ambulances and wheelchairs which are given to hospitals by voluntary organisations.

My Lords, wheelchairs and a wide range of other items can, under certain conditions, be supplied free of tax to chronically sick or disabled persons for their domestic use and to charities for onward supply to such persons. In the case of articles donated to hospitals, relief is confined to medical or scientific equipment solely for use in medical research, diagnosis or treatment and does not extend to transport or general hospital equipment. Changes in tax relief are a matter for my right honourable friend the Chancellor of the Exchequer's Budget.

My Lords, I thank the noble Lord for that reply. I hope he will realise that the voluntary organisations are now supplying…many things which they used not to supply, because of the various cuts in supplies that have occurred. Perhaps the noble Lord would be kind enough to pass this point on to his right honourable friend the Chancellor, so that he might accept it in the coming Budget.

My Lords, I do, indeed, entirely appreciate the point that my noble friend makes. I will certainly draw the attention of my right honourable friend the Chancellor of the Exchequer to what she says.

My Lords, are the Government not being a little inconsistent in this matter? We all know that the Government are anxious to foster more interest in the National Health Service by the public and by voluntary organisations. If, on the other hand, people find in so helping that part of the money that they have given is going in VAT, will this not be a disincentive to encouraging voluntary organisations to make this kind of gesture—a gesture which Members on all sides of the Houe would want to encourage?

My Lords, while, of course, I appreciate the point which the noble Lord makes, I do not think that a charge of inconsistency really lies. There are problems with the extension of selective reliefs. This is why, last year, my right honourable friend the Chancellor of the Exchequer gave very substantially improved conditions for charitable giving. The period for deeds of covenant was reduced from seven years to four years, and for donations up to £3,000 a year relief is now available against the higher rates of tax. The object of this was to enable people to give increased donations to the charities in which they were particularly interested, and I hope very much that the charities will take advantage of these improved conditions.

My Lords, while appreciating what the noble Lord has said about the benefits already conferred upon the charitable organisations, as one who wholeheartedly supports the request of the noble Baroness, Lady Vickers, for aid in this field, may I ask whether he would also ask his right honourable friend the Chancellor of the Exchequer to give very sympathetic consideration to the request made by the seven leading voluntary organisations for relief from VAT, so that people who give to a charity give to the charity, and not to the Government?

My Lords, I note what the noble Lord says. At this time of the year representations are received from a wide range of bodies and organisations. All of these are given the most careful consideration by my right honourable friend the Chancellor of the Exchequer, and I can assure the noble Lord that what he says will be considered very carefully.

My Lords, is the noble Lord aware that the question of relief in relation to VAT, as asked by the noble Baroness, Lady Vickers, received what in my judgment and, I think, in the judgment of those who were present, the unanimous support of every speaker who addressed the House in the recent debate on disablement?—a debate which, in my judgment, demonstrated complete justification for the existence of the House of Lords. Why does the noble Lord come along and say that this is a matter for the Chancellor of the Exchequer? This is a matter for the decision of the House of Lords and the House of Commons, and not for the Chancellor of the Exchequer alone. When the noble Lord speaks on behalf of the Government, he speaks not on behalf of the Chancellor of the Exchequer but on behalf of the Government.

My Lords, I note what the noble Lord says. Nevertheless, the tradition is that the Budget is presented by the Chancellor of the Exchequer and not by anybody else.

My Lords, would the noble Lord agree that any relief from paying VAT on these articles which are supplied by voluntary organisations will only relieve the hospital of any extra unnecessary expenditure on the same articles?

My Lords, I appreciate the point which the noble Lord makes. I can go no further than to say that the comments that he makes will certainly be considered.