To ask the Chancellor of the Exchequer if he will exempt school uniforms from value-added tax irrespective of size.

No. Under the EC VAT sixth directive, member states may neither widen the scope of existing zero rates nor introduce new ones.

I remind the Minister that I received precisely that reply long before the regulations relating to the EC were introduced. Is she aware that the myth that children's clothes are exempt from VAT is easily exploded by the fact that children grow much faster than the rate allowed for by the Treasury? With the increases in VAT, thousands of parents suffering unemployment, combined with family poverty, are having to pay VAT on children's shoes for school, which can cost £25 or £26, and full VAT on school uniforms. Will the Minister find a way to enable uniforms designed for children to wear at school, and the wearing of which is compulsory, to be exempted from the tax?

I have explained that under the sixth directive, member states may neither widen the scope of existing zero rates nor introduce new ones. The hon. Lady will also be aware that the sizes and measurements in the schedule take account of the average sizes of children up to their fourteenth birthday, which is a suitable cut-off point. Even if we were allowed to do it, the problem would be to make certain that the benefit of zero rating was confined to children. As those who followed the Jaffa cake saga will know, definitions are a great problem in the VAT system.

In addition to the important point raised by the hon. Member for Eccles (Miss Lestor), may I ask my hon. Friend to comment on VAT on horses?

Not unless they wear school uniform.

When children wear school uniform to ride horses, can my hon. Friend say anything about VAT on horses?

I am not sure whether I am allowed to reply to that question. You seem to be nodding, Mr. Speaker.

Yes, depending on the answer.

All right. There have been considerable problems for the bloodstock market caused by distortions within the European Community which have disadvantaged the bloodstock industry in this country. We have agreed to enter into discussions with the industry to see whether we can work out an acceptable agricultural flat rate scheme. That will depend on discussions with the industry, but progress is being made.