Lord Lucas highlights LVCR issues in Lords Debate

Lord Lucas opened the Lords Debate On Tuesday 1st March by asking the government for an estimate of the current level of VAT lost through LVCR.

Lord Sassoon, Commercial Secretary to the Treasury, replied by saying that the latest estimate was £130m for 2010, reduced from the previous estimate of £140m.

Lucas said he found the figure “mildly unbelievable since the turnover of the largest company involved in this scam is around £500m – and that is just one of them – on which we lose around £100 million a year”.

“Does my noble friend agree that what started out as a quite reasonable relief for Channel Islands flower growers has now been abused to the point where it has destroyed whole industries in the UK?” he said.

“You can no longer on the internet retail records, computer memory, contact lenses or gifts. It is ever expanding and costing us thousands of jobs and, as the Minister says, hundreds of millions of pounds. Has not the time come to put a stop to it?”

Sassoon replied by saying “The previous Government took steps with the Channel Islands authorities to encourage them to introduce a voluntary restraint and caps on the activities of individual firms in this area,”

“The issue relates not only to CDs and DVDs but to a whole range of goods. It is precisely because this is an important area and we want to make sure that the Exchequer is protected that Ministers are looking at what else we might do.”

“Ministers hope to be in a position to announce any possible changes to the operation of LVCR flowing from the review in the Budget on March 23,” he explained.

Sassoon, who admitted during the debate that he had not heard of LVCR until a few days earlier, went on to say that  LVCR was not a “scam” but instead came from the fact the Channel Islands are treated as being outside the European Union for these purposes. It was clear that he had not been properly briefed by officials as no mention was made of circular shipping of EU and UK product, the main driver for the distortion of competition caused by this abuse of LVCR in the UK.

“The previous Government took steps with the Channel Islands authorities to encourage them to introduce a voluntary restraint and caps on the activities of individual firms in this area,” Sassoon added.

“The issue relates not only to CDs and DVDs but to a whole range of goods. It is precisely because this is an important area and we want to make sure that the Exchequer is protected that Ministers are looking at what else we might do.”

The debate can be viewed in the window below.  Please note that Lord Lucas opens, and the exchange lasts approximately seven minutes.  Since the events for the entire day can be viewed below we recommend not using navigation buttons but simply watching the video from the beginning.

2 Comments

  1. It would seem from the comments made by a couple of the Lords they do not know it would be very easy to lower the value without any extra laws being passed

Comments are closed.