Dawn Primarolo, the Paymaster General, has agreed to re-examine the issue of VAT relief for charities, but emphasised that the Government prefers "targeted initiatives" to general relief.
She was replying to a Parliamentary question from Sammy Wilson, Democratic Unionist Party MP for East Antrim, who complained that the RNLI pays £3.2m in irrecoverable VAT - "£3 for every £1 raised by volunteers".
This was enough to run the lifeboat station in his constituency for 13 years, he said. He called on the Government to exempt the RNLI from VAT or provide a compensatory grant.
Primarolo said two reviews since 1997 had concluded that general VAT exemption for charities would cost an "astronomic" sum of up to £1bn.
"I undertake to consider the matter, but I hope that he understands the constraints," she said.
- See Editorial, page 22.