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Lord Mackay of Ardbrecknish: My Lords, I am pleased that I surprised the noble Lord with my Answer. I think that his problem arises from the subscriptions paid to clubs where there is indeed a difference. Local authority courses pay VAT; indeed, I understand they are content with that situation. Non-profit-making golf courses pay no VAT; profit-making commercial courses pay VAT. I confirm that the position regarding VAT on sport, as the noble Lord rightly said, is the subject of a public consultation exercise which finished at the end of the year as part of a deregulatory review of VAT law on exemptions for sport. We are currently considering the responses to that consultation.
Lord Taylor of Gryfe: My Lords, I declare an interest as a member of three golf clubs and a resident of St. Andrews. Golf is the only industry in that town. While there are anomalies, as described by the noble Lord, Lord Taylor of Blackburn, that represents no impediment to those who want to play golf. Last year, in Scotland alone, 9.8 million rounds of golf were played, 22 per cent. of them by visitors. The Links Trust of St. Andrews, which has responsibility for the most famous golf courses in the world, took over £2 million in green fees and charged no VAT whatever on visiting players, whose contributions represented 85 per cent. of green fees paid.
Lord Mackay of Ardbrecknish: My Lords, first, on behalf of the Treasury, I wish to thank the noble Lord, Lord Taylor of Gryfe, for his contribution to the VAT income from the three golf courses of which he is a member. I also congratulate him on the amount of golf he plays and the famous course on which he is privileged to do so. The position on a course like St. Andrews is, I presume, that it counts as a non-profit-making course and therefore its subscriptions are not liable to VAT. I am not entirely sure why the green fees charged to visitors are not liable to VAT. Perhaps the noble Lord ought not to have raised the point in case some friendly VAT-man reads these proceedings. However, I am pleased to hear that nearly 10 million rounds of golf were played in Scotland last year. I put in a plug for it as a country with excellent golf courses.
Lord Beloff: My Lords, does the Minister agree that the noble Lord, Lord Taylor of Gryfe, is highly unfair to the town of St. Andrews? Its major industry is the University of St. Andrews of which I have the pleasure of being an honorary professor. To revert to the supplementary question, does the Minister further agree that for young people more active team games should be encouraged rather than a game which is more suited to people of the noble Lord's age?
Lord Mackay of Ardbrecknish: My Lords, I suspected that someone connected with the University of St. Andrews would take exception to the description by the noble Lord, Lord Taylor of Gryfe, of golf being the only industry in St. Andrews. I am not sure that "industry" is quite the right word. There are two famous undertakings in the town. One is golf, the other is the university.
As regards encouraging young people to take up golf, I do not normally answer questions about sport as I am not the most sporting person in your Lordships' House. However, it is good for young people to take up any kind of sport because it gives them a meaningful activity, something to do in their spare time. The great advantage of golf is that if you take it up young, you can carry it on into old age. I suspect that if I took up golf now I would not be good at it.
Lord Monkswell: My Lords, I do not play golf and have no interest in it, but I have an interest in good local government and the provision of facilities for the local community. Could the VAT regulations be reinterpreted so that everyone living in a local authority area was considered to be a member of the municipal golf club? If the golf course were run as part of the leisure services department rather than as a trading enterprise by the local authority, it would not be a profitable organisation and therefore would not be liable for VAT.
Lord Mackay of Ardbrecknish: My Lords, I do not think that many local authorities would be attracted by that proposition, if they are telling the truth. They keep saying that they are pressed for money. Clearly, to give everyone free golf would be a considerable additional expense and I doubt whether they would wish to
undertake it. As regards VAT, the reason local authorities are content with the present arrangements is that if they were not registered for VAT they would not be able to recover it on the purchases they make relating to their sporting interests.
The Duke of Roxburghe: My Lords, I need to declare an interest. I own a golf course, so perhaps my interest is rather more intense. In light of the recent consultation paper on VAT and sport, can the Minister say whether the Government will consider any changes to level the playing field between the members' courses, the members' clubs and the proprietary clubs? Perhaps I may widen the question: will the Government consider extending the exemption to other sporting activities besides golf?
Lord Mackay of Ardbrecknish: My Lords, I wondered how soon we would arrive at level playing fields and the like. My noble friend is right to point out that commercial golf clubs are liable for VAT on their subscriptions as well as, like the others, on their green fees. That is part of the review. It seems highly unlikely that visitors' green fees charged by any one of the three categories will be excused VAT; they are more likely to remain liable to it. There is a difference between non-profit-making organisations. At the risk of bringing other noble Lords to their feet, one of the issues involved is the EC sixth VAT directive which requires exemption of certain services supplied by non-profit-making organisations to persons taking part in sport. That is another part of this complex problem.
Lord Eatwell: My Lords, is the Minister aware that his Answer to my noble friend Lord Taylor of Blackburn surprised me too? That is because the Minister appeared to be making a statement contrary to government policy as set out by the Chancellor of the Exchequer. Is he aware that in the Budget speech of 1993 the Chancellor said that he had never disguised a personal view that the coverage of value added tax in this country was too narrow? Offered the opportunity to extend value added tax, the noble Lord turns it down. Does he agree with the Chancellor of the Exchequer that coverage is too narrow? To what goods and services would he like to extend VAT?
Lord Mackay of Ardbrecknish: My Lords, it is clear that the noble Lord, Lord Eatwell, is not a golfer. That shot is not just into the rough; it is out of bounds as regards the Question. If he wants a discussion about the wider issues I suggest he puts down a Question.
Rail Privatisation: Benefits
2.56 p.m.
Lord Berkeley asked Her Majesty's Government:
- Whether rail privatisation has resulted in better services for passengers and greater network capacity in west London.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, yes. In west London the franchising of passenger rail services is bringing about sustained improvements in services and will continue to do so. The flotation of Railtrack has provided an impetus to develop strategies for greater network capacity.
Lord Berkeley: My Lords, I should declare an interest as a resident living next-door to the west London line, but the comments I am about to make apply more widely throughout the country. First, will the Minister accept my sincere congratulations on allocating £1.3 million for the construction of three stations on that line? But does he share my concern that Railtrack has said that it cannot operate trains at the stations because there is no longer any capacity?
Viscount Goschen: My Lords, first, I can accept the noble Lord's congratulations with hardly any trouble. Secondly, he referred to Railtrack and capacity issues. I understand that Railtrack is considering how to improve the capacity of the west London line, and it would be very much in its interests so to do.
Lord Dean of Beswick: My Lords, in his Answer to my noble friend, the Minister brought in the subject of the privatisation of the buses. Is he aware that a report was published today on the privatisation of the bus companies which stated that, with the splitting up of bus services, the whole situation is in a mess and the change should never have been carried through in this way? No one has responsibility for co-ordination any longer.
Viscount Goschen: My Lords, the Question concerned rail privatisation in west London. However, as we have a little time, yes, the Government will study the report carefully.
Lord Cochrane of Cults: My Lords, does my noble friend agree that the suggested location of the stations as preferred by developers, at this stage grouped closely together at the southern end of the route, seldom more than 200 yards apart, would cause a considerable operational obstruction and require much greater headway than is currently provided?
Viscount Goschen: My Lords, it is for the parties concerned--among them the franchisee and Railtrack--to decide such issues as where the stations should most appropriately be put--where they would be of most use and generate the most traffic.
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