Value Added Tax

Mr. Michael Brown
asked the Chancellor of the Exchequer what is his estimate of the effect of the recent value-added tax increase on the current rate of inflation.

Mr. Peter Rees
It is estimated that of the 17·2 per cent. increase in the retail price index over the 12 months to mid-October, about 3½ per cent. was the result of the Budget increases in the 8½ and 12½ per cent. rates of VAT to 15 per cent.