asked Her Majesty’s Government:

Whether they will review the VAT paid by disabled people in view of the Low Incomes Tax Reform Group’s report VAT and Disabled People—The Case for Removing the Barriers.

My Lords, the Government will consider the evidence presented in the report carefully and will assess whether any of the recommended VAT changes would be consistent with European VAT agreements and whether they would be well targeted and cost-effective when compared with the range of support already provided for people with disabilities.

My Lords, I thank my noble friend for that response, but does he agree that the law relating to disabled people and VAT contains some ridiculous anomalies? One among many examples is that if a disabled person decides to widen his doorway to make it accessible, he qualifies for zero-rated VAT, but if that same man decides to have a new doorway made to aid accessibility, he has to pay VAT at 17.5 per cent. I do not see the sense in that. This kind of absurd anomaly damages disabled people because it is so unfair to them. What we require now is urgent government action. Can my noble friend say whether we will get some government action with not too many ifs and buts? This has been going on for far too long and I would like a clear, straight answer on the urgent action needed to resolve this problem.

My Lords, the whole House will recognise the authority with which my noble friend speaks on these issues. As I may have mentioned in my original Answer, a meeting is due to take place in the next 10 days between the Low Incomes Tax Reform Group and officials from the Treasury and Revenue and Customs in order to discuss these issues, including some anomalies. Whether the anomalies are quite as dramatic as my noble friend has indicated, I might dispute. There is a difference between widening a doorway to assist the disabled by enabling wheelchair access and designing a doorway that might just be to improve the quality and value of the house and might not be strictly necessary for the disabled person. That is why the one attracts VAT and the other is exempt. However, of course I respect what my noble friend is saying. The meeting is due to take place shortly and certainly those attending will be able to present these issues to officials.

My Lords, does not the Minister agree that there is some degree of confusion in the tax system? As the noble Lord has pointed out, although you get some tax relief for certain repairs in your home, if you are carrying out workplace initiatives to enhance the Government’s policy of getting disabled people into work, you do not get VAT relief. Does not the Minister agree that that is an absurdity?

My Lords, with all these issues there is a borderline and, depending on which side of the border a particular decision is taken, it can create disquiet. The noble Lord is right that we are concerned to help the disabled to enjoy full-time work when they are able, but he will recognise that we have to protect our system from exploitation in which VAT is avoided when works are for the benefit not of the disabled but of others in the household. Those circumstances do not justify VAT relief.

My Lords, in his original Answer, the Minister said that the Government’s actions in this area could be proscribed by the VAT directives. Will he explain just how they might be proscribed? More important, what happens in other EU countries so far as these anomalies are concerned?

First of all, my Lords, the noble Lord will recognise that we have lived with the directives since 1973, ever since VAT was introduced. The range of reliefs and zero rates have been targeted at disabled people against a background where it is clear that we are bound by European positions on VAT; for instance, we are prohibited from changing VAT rates from those that we have inherited from previous Administrations. VAT is a significant conditional factor occasioned by Europe, but the benefits of membership of the EEC and the single market in other respects counterbalance this particular limitation on the Treasury’s ability to act.

My Lords, VAT legislation refers throughout to “handicapped”, while the Taxes Management Act 1970 refers to “idiot”, “lunatic” and “insane person”. Both need bringing up to date in line with the definition in the Disability Discrimination Act. Will the Minister undertake to look at this and perhaps do something about it as soon as possible?

My Lords, the Government are fully aware of the embarrassing fact that certain parts of our taxation legislation refer to disabled people in terms from the 1970s and 1980s that are now utterly redundant and unacceptable. The noble Baroness will recognise, however, that as the principles contained in those Acts are not changing significantly at this stage, whether we ought to introduce primary legislation merely to update a particular term is an issue that concerns the Government in terms of the availability of time.

My Lords, while it would be remiss of me not to mention the great changes that have occurred because of the disability rights movement, does the Minister agree that there is still a huge way to go, as those who most need help are often still not aware of some of the benefits of this or other pieces of legislation that benefit disabled people?

My Lords, I agree with my noble friend that the question of public awareness with regard to take-up of these opportunities is important. The Government are particularly concerned that frail and elderly people who should benefit from support often, because they do not actually have a disability, do not think that they should benefit, and nor do their relatives. That is important information that should be better communicated.