Digital Publishing, Academic Publishing, Bookselling, VAT

Don’t Tax Reading: the case against VAT on knowledge

The removal of VAT from electronic publications earlier this year was the triumphant culmination of a vigorous campaign that had been led by publishers, booksellers, writers, librarians, teachers and readers over many decades to protest against taxation on knowledge. Originally it was started to save print books from tax: after VAT was introduced to the UK in 1973, successive governments had cast envious eyes on the thriving book and newspaper industries and debated whether to slap this surcharge  on their products, perhaps at a lower rate than for other consumer goods, as other European countries had already done.  Protests began immediately; there were crises as the threat reappeared periodically, which the campaigners always won – VAT has never been imposed on printed publications in the UK – but sometimes the victory was a close-run thing.

To a significant extent, the advent of e-books hobbled the power of those watchful that the government of the day might target print books again. VAT was imposed on e-books immediately they became commercially available, because it was argued that they should be treated in the same way as the products of the music industry – records, cassettes and CDs. Publishers, especially, were worried that if they protested too loudly the government might retaliate by imposing VAT on print publications rather than removing it from electronic ones.

When Annika wrote about the freeing of electronic publications from VAT a few weeks ago, I remembered a book had been published detailing the early struggles.  I have a copy and had hoped to quote from it.  Unfortunately, I couldn’t find it then, but yesterday was finally reunited with it. Published in 1985, it’s even more venerable than I thought.  It was designed to be submitted to the Treasury when Margaret Thatcher was Prime Minister and Nigel Lawson the Chancellor of the Exchequer, and commissioned by an organisation called the National Book Committee.  (I’ve looked this up: it no longer exists, but in the foreword, contributed by its “Chairman” [sic], Baroness David, she explains that it represented “all the major organisations concerned with the production and reading of books”.) It was written by Marita Evans of W H Smith and Brenda White of CPI Associates (a research organisation similar to Gold Leaf), supported by several prominent academics, including Dr Frank Fishwick, of the University of Cranfield (with whom Gold Leaf subsequently worked on a JISC report on e-books).

Don’t Tax Reading: the case against VAT on knowledge is a fascinating compendium of history, economic argument, statements from prominent authors and accounts of the legal and political debates on the dissemination of knowledge that have taken place since the middle of the nineteenth century. Below are some selected quotations that seem particularly relevant.

“In 1941, in the darkest days of the Second World War, when the Government needed every penny it could get, the idea of a tax on books, on knowledge, was rejected.”

“Any attempt to separate out books of ‘non-educational value’ for taxation would lead to absurd judgements having to be made.  Fiction and poetry, for example, classical or popular, are just as important to understanding, literacy, and to our culture as serious works for formal education.”

“It seems that each generation has had to fight for the independence of the written word .. if this generation is to win its round, we must use words and tactics that are relevant today.  The arguments of the eighties.”

“The Government record for skimping on school books is abysmal: where among every twenty young adults leaving school – not even a classroom-full – there is at least one who is effectively illiterate; where a Government that is introducing huge training programmes to make sure that school-leavers are employable in our fast-thinking, fast-technology society, is now proposing to tax the basis by which those children’s minds are trained – the written word.”

“The National Association of Teachers in Further and Higher Education stated the following: ‘At a time when the Government is crying out for a better-educated work force, imposing a tax on books is not only illogical, it is stark-raving mad. Further and higher education students would need an extra £1.5 million in grants to enable them to buy their books if VAT is imposed. Will the Government provide this? We think not. Students will be penalised and their access to books reduced. And those students already least able to afford books will be the hardest hit.’”

Some of these statements seem quaint to us now. Grants? Today’s students should be so lucky! And  in 1985 students paid no tuition fees. The £1.5 million figure given as a proportion of overall student spend on books is illuminating: in 1985 the proportion of school leavers entering Higher Education was still only approximately 15%. Most were spending – and expected to spend – more in actual amounts – i.e., not adjusted for inflation – than students expect to spend today. The concept of the UK aspiring to a “fast-thinking, fast-technology society” in 1985 may seem risible to us; but no doubt future generations will be having a similar laugh at our expense in 2055.

However, much of the information captured in these extracts raises serious questions about how much progress we’ve made in the intervening 35 years. The Literacy Trust says that 1 in 7 adults in the UK today has the reading age of a child of nine or lower. There is still under-investment in our schools. In 2015, Iain Duncan Smith, the then Work and Pensions Secretary and prominent member of the Cameron administration, congratulated the government because the number of children living in poverty had “dropped to 2.3 million” – “the lowest since the mid-1980s”.  That figure was shocking; and even more shocking was that the government thought achieving the child poverty level of thirty years before was a cause for celebration. There has been further deterioration since: the Children’s Society estimates that four million children are living in poverty in 2020.

Social imbalance and educational under-achievement are of course the result of a complex mixture of factors; they can’t be attributed to a single cause. Neither can a “silver bullet” be conjured to remedy them. However, enabling affordable access to knowledge in all its formats has to be the greatest single action a government can take to alleviate these ills. Let us hope that the removal of VAT from every kind of publication is permanent; but if its shadow looms again, key stakeholders must surely unite again to protect knowledge.

[Written by Linda Bennett, Gold Leaf]