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Mr. Adrian Sanders (Torbay): It is a pleasure to follow the hon. Member for Worthing, West (Mr. Bottomley), who represents a fellow seaside town, and to hear a constructive speech from a Conservative Member. Like my constituency, Worthing is an end-of-the-line town--a place to which people go not to get somewhere but to visit because of what it has to offer. All coastal resorts tend to fall between two stools: the urban and the rural. Those are mentioned in the Queen's Speech, whereas coastal resorts are not.
The Queen's Speech made no mention of the damage that has been done to coastal resorts over the years. In the past year, the removal of "bed nights" from the local government grant formula has cost seaside resorts dear. No legislation has been promised for the deregulation of dry rooms. Many licensed hoteliers want to maximise the use of floor space in their properties, but are caught by ancient rules that require them to set aside a dry room. Nothing has been said about VAT on accommodation, which acts as a disincentive when the UK holiday industry competes with Europe.
Nothing is said about reforming the planning system, which is a significant problem in tourist areas where the market is in decline and there happens to be an over-supply of tourist accommodation. Under the existing planning system, people cannot obtain permission to change the use of their property. They become wedded to the tourism industry and have to ratchet down their tariffs to pay their bankers. They cannot change the use of their property in order to pay off that debt.
Another problem faced by any area that receives visitors is the additional cost of fire, police and health services, especially casualty services, which are not recompensed within the national health service. Local people suffer because the service available to them is diminished by the pressures caused by visitors. I was sad that the Queen's Speech said nothing about that.
The Queen's Speech felt like an end-of-term speech, such as one might expect the year before a general election. That may be because the reform of the House of Lords is expected to take up a great deal of time, so a number of legislative items could not be included.
I also regret that the Queen's Speech contained nothing about leasehold reform, which was in Labour's manifesto. Ministers have promised consultation papers, but we are still waiting for the legislation to be brought before the House.
There are no measures on housing revenue accounts. Local authorities that have a surplus must force their poor council tenants to meet the housing benefit bill for other poor council tenants. No attempt has been made to change that. The legislation to speed up conveyancing in the housing market, which was promised last year, has not been included in the Queen's Speech. That is pretty important, because a flexible labour market requires a flexible housing market. Speeding up conveyancing would be a small contribution towards that.
My constituents and others in the south-west will be disappointed by the Queen's Speech--as we have been disappointed by government over the past 20 years--because we wanted a farming Bill. We were pleased about the Secretary of State's announcement of new money to tackle the crisis, but that does not secure the long-term future of the industry. We would have liked measures to reduce the strength of the pound, so that farmers could compete with producers abroad and maintain CAP support at comparable levels.
Foreign imports should be subjected to the same high standards as British meat, especially beef and pigmeat products. We should encourage a "buy British" policy. We have a ridiculous situation in Devon. As a result of compulsory competitive tendering introduced by the previous Government, our local education authority has to purchase Irish beef when perfectly good Devon beef is available. The Government should have turned their attention to that matter in the Queen's Speech.
The Queen's Speech should have included a transport Bill that went a bit further than the additional money made available for rural areas in the Budget, and used more of the money levied from fuel taxes. As my hon. Friend the Member for Lewes (Mr. Baker) said, there should be a strategic transport authority, and there should be guaranteed funding transport packages, including safe routes to school, traffic calming, cycle and bus lanes, home zones and improved public transport. The Government talk a lot about discouraging people from using cars and encouraging them to use public transport, but the problem is that they are doing it the wrong way around. They should put the public transport infrastructure in place first, then they can get people out of their cars. They cannot do it the other way around, and they certainly cannot do it in rural areas where there is no bus service or public transport infrastructure.
The Queen's Speech should have included a crime and policing Bill that changed the funding formula in line with the significant extra demands made on policing rural
areas. Rural areas cannot make the economies of scale that can be made in towns and cities. People in my part of the country would have liked the demands made on the police by the increase in the population in Devon and Cornwall during the summer months to be recognised. If the police in Northampton or Oxfordshire are under strain, they can draw resources from the surrounding counties. However, Devon and Cornwall are on a peninsula, and go out to the sea, so they cannot draw resources from other areas. They must stretch their resources further.
There should have been a housing Bill that reassessed the number of extra homes needed in each region. That is becoming critical. The hon. Member for Worthing, West referred to Sussex, but other hon. Members would no doubt jump up and say that this problem affects their areas also. We should require developers to work with planning authorities to ensure that what is built matches local need. The part of the house build equation that is missed is not the number, but the type of housing required to meet local need.
We would have liked to see second home owners pay full council tax. It would have been easy to introduce a Bill to provide for that. A relatively short space of parliamentary time would have been required to allow local authorities that needed to end the concession on council tax to subsidise services in areas where there are too many second homes, which threaten schools, bus services and shops. At present, local authorities cannot subsidise communities in that way. If the council tax take were increased, the Chancellor would be able to ensure that the money was spent in the right way.
Water charges in the south-west are a vital issue. I cannot stress too much to hon. Members who do not live in the area how important water bills are there. They constitute a disproportionate part of the fixed incomes of, for instance, people on welfare benefits. Neither pensions nor welfare benefits take account of the cost of water charges, yet ours are the highest in the country. It would have been nice to see a bill introducing council tax banding to replace rateable value as a first step towards a fairer system, and perhaps a national fund for environmental improvements. It seems entirely wrong for the south-west, which contains 3 per cent. of the nation's population, to be lumbered with paying, through our water bills, to protect, enhance and clean up 30 per cent. of the nation's coastline.
Most of all, those of us speaking from a south-west perspective would like a Bill providing fair funding for the region. It would include provision for a sparsity factor in the standard spending assessment, to take into account the extra costs of providing services in rural areas, to take account of seasonal fluctuations of population that take their toll on regional services and to recognise the problems faced by peninsular communities with a lack of neighbouring services to fall back on. We would like such a fair funding Bill to be kept under regular review by an independent body.
During the 18 years of Conservative government, there was a great sense that we did not get a fair deal and, in the past 18 months, there has been precious little to convince constituents in Devon and Cornwall that they are getting a better deal from the present Government. It is a shame that, from a south-west perspective, the Queen's Speech does not seem to meet local needs.
Debate adjourned.--[Mr. Pope.]
Debate to be resumed tomorrow.
Welfare Services (VAT)
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Pope.]
Mr. John Whittingdale (Maldon and East Chelmsford):
It is a great privilege to initiate the first Adjournment debate of the new parliamentary Session. I am particularly pleased to raise an issue that greatly concerns many people in Essex and, indeed, throughout the country. I thank the Financial Secretary to the Treasury for being present to reply.
It has long been the case that welfare services supplied other than for profit, by a charity or public body, are exempt from value added tax. For a long time, home care services of all kinds were considered to be welfare services, but in 1995 Customs and Excise redefined the meaning of "welfare services" in the Value Added Tax Act 1994 to exclude practical help in the home. That was confirmed in a written answer given to my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) on 9 December 1997, in which the Financial Secretary said:
Despite the ruling having been made some time earlier, Age Concern was informed only in August that the policy branch had decided that
The justification for that rule comes from schedule 9 to the Value Added Tax Act 1994, which provides guidance on the way in which welfare services are to be understood. In group 7, item 9, "welfare services" means services that are directly connected with
The value added tax tribunal that considered the appeal on behalf of the Watford help-in-the-home service found:
At present, social services in Essex cannot fundall category one care requirements. Therefore, understandably, they prioritise "personal care" over more general domestic help. However, recognising the value of low-level care, they have jointly funded, with local health authorities, Age Concern's home help support service, which steps in where there is an identifiable gap in care. Age Concern does not make a profit from that service; in fact, when agreed funding in my constituency runs out in April, the service will run at a loss.
Age Concern seeks to work within its charitable guidelines. It assesses in its clients a need for home help services, a need that it is willing to subsidise. However, since the service started, it has already had to absorb the cost of the working time directive, which has made every care worker more expensive to employ and led to an increase in the charge that it has had to make. It simply does not have the resources to absorb the additional cost of VAT, which will amount to more than £1,000 per week.
As a result, Age Concern will have no alternative but to increase the charge that it makes by about £1 an hour. Many recipients of its service will simply be unable to afford that increase and are likely to give up the service as a result.
As the chief officer of Age Concern Essex, Mrs. Terry Cassels, wrote to me:
Motion made, and Question proposed, That this House do now adjourn.--[Jane Kennedy.]
9.53 pm
"The policy on the VAT treatment of domiciliary care services depends upon their nature. Where those services constitute medical care or welfare they are exempt from VAT. Domestic services such as laundry, cleaning, etc. do not qualify for VAT relief under any exemption."--[Official Report, 9 December 1997; Vol. 302, c. 508 .]
As you will know, Mr. Deputy Speaker, in Essex, those services are supplied to elderly people on low incomes by the charity Age Concern, which provides a subsidised service to some 750 clients.
"general housework and shopping services"
supplied by the charity should no longer be exempted from VAT. That corrected the advice that had been given earlier in the year, so VAT became chargeable only from that date: 24 August this year.
"the provision of care, treatment or instruction designed to promote the physical or mental welfare of elderly, sick, distressed or disabled persons".
The crucial word is "care". Customs and Excise takes the view that the provision of practical help in the home is not care. It would be hard to find a single care professional who agrees with that.
"It is only by considering the type of recipient that one can determine what services qualify as welfare."
It went on to uphold the appeal on the basis that
"the services provided are not an additional help but are either part of the necessary care which the people need in order to continue to live at home, or they are so directly connected with it that they fall within the terms of the statutory provision."
24 Nov 1998 : Column 116
A study by the Joseph Rowntree Foundation found that older people who had been interviewed saw the withdrawal of help with house work and with related activities as a failure by social services to understand what was important to them. In their view, getting such help stood between staying in their homes and going into residential care. Keeping the house up was akin to keeping themselves up. At the same time, diminishing energy and difficulties in managing heavy or physical tasks created concern that they could no longer cope in their homes. Seeing the dust pile up or no longer being able to reach the top shelf was a constant reminder of what they could no longer do and that could have a negative impact on both mental health and motivation to manage.
"we expect that the majority of clients will stop using our service and make private arrangements rather than pay an extra £1 an hour which will not benefit the worker or the organisation. Must older people on low fixed incomes be pushed into relying on their families and friends to do the essential work that has become too difficult for them? It does not take much imagination to realise that those members of family and friends will not be calling quite so frequently if on every visit they spend the whole time scrubbing floors or changing beds".
Customs and Excise has also argued that present arrangements
"give the widest possible relief for home care services within the constraints of current EC legislation."
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
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