asked Her Majesty's Government:Further to the Answer by the Lord McIntosh of Haringey on 2 February (H. L. Deb., col. 1420) that "we are in control of our own fiscal policies", whether the United Kingdom is entirely free to decide the coverage of VAT and to set the applicable rates. [HL949]
The European Community's Sixth VAT Directive provides a framework for the coverage of VAT and the rates which may be applied by member states. Within that framework, the UK is able to decide a number of important issues, including the level of our standard rate above the 15 per cent. EC minimum which the last Government agreed to in 1992.