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Value Added Tax

Volume 979: debated on Thursday 21 February 1980

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asked the Chancellor of the Exchequer how much has been received from the value added tax charged on confectionery since the rate was raised to 15 per cent.

Because traders registered for VAT are not required to make returns of the particular goods and services on which tax has been charged, I regret that this information is not available. However, the amount of VAT charged by traders at the 15 per cent. rate on sales of confectionery up to the end of December 1979 is estimated to have been about £100 million.

In the wake of redundancies and lay-offs at firms like Barker and Dobson, I wonder if the Minister will tell the House whether he agrees that the amount of money collected in VAT is outweighed by the money that has to be paid out in short-term working schemes such as the temporary compensation scheme and unemployment benefits for many workers in sweet-making factories who are suffering as a result of the high level of VAT?

I am not certain whether I can make the precise calculation that the hon. Gentleman asks of me. I hope the House will recognise that VAT is not the most sensitive instrument for treating that sort of problem.

Since the increase in VAT to 15 per cent. in the Budget was so disastrous, and has caused at least 4 per cent. of the inflationary problems that we are suffering, will the Minister make clear that there will be no further increases in indirect taxation in this Budget with the further inflationary effects of that?

The right hon. Gentleman is too experienced in these matters seriously to expect me to anticipate my right hon. and learned Friend's Budget.