HC Deb 12 April 1972 vol 834 cc1258-60
33. Mr. Raphael Tuck

asked the Chancellor of the Exchequer how many additional civil servants he estimates will be required in order to administer the value-added tax as now proposed.

34. Mr. Arthur Lewis

asked the Chancellor of the Exchequer whether he will give the net savings in the number of civil servants who will be required on the ending of purchase and selective employment tax and the introduction of the value-added tax.

The Financial Secretary to the Treasury (Mr. Terence Higgins)

The number of extra civil servants who will be required on the ending of purchase and selective employment tax and the introduction of the value-added tax will, as I indicated in the Budget debate, be about 6,000. The exact number will be determined by the number of registered taxpayers.

Mr. Tuck

Is this another way of implementing the Prime Minister's promise that he would reduce the number of civil servants when he came to power? Is not the hon. Gentleman aware that the way to do this would be by operating a simple purchase tax instead of the value-added tax which will add so greatly to the existing number of civil servants? Will he consider this again?

Mr. Higgins

My hon. Friend the Parliamentary Secretary to the Civil Service Department answered the first part of that question just now. The change to V.A.T. is an important element in the Government's programme of tax reform, and we believe that the increase in the number of civil servants is justified by the elimination of the discriminations and inequities inherent in the tax system that V.A.T. will replace. Other elements in the Government's programme for the radical reform of taxation are expected to effect substantial economies.

Mr. Lewis

Is the figure of 6,000 the minimum or the maximum estimate, and can the hon. Gentleman say what is the actual or estimated cost per annum or per week of the 6,000 additional bureaucrats, to adopt the expression used by the hon. Member for Worcestershire, South (Sir G. Nabarro)?

Mr. Higgins

If the hon. Gentleman had listened to my original reply he would have appreciated that I said it would depend on the number of registered taxpayers. We are not at the moment in a position to give a precise estimate. The hon. Gentleman's other point is a separate question. I have no doubt that if he feels it necessary the hon. Gentleman will table a specific Question on the matter.

Dame Irene Ward

Will my hon. Friend bear in mind that as long as the additional civil servants enable this Government to improve the economic and social condition of the country I do not mind how many there are, because they are doing a better job than they were under the present ridiculous Opposition?

Mr. Higgins

I have no doubt that my hon. Friend the Parliamentary Secretary to the Civil Service Department will have noted what my hon. Friend the Member for Tynemouth (Dame Irene Ward) has said.

Mr. Lipton

Is the hon. Gentleman aware that, with the aid of a number of unemployed constituents of mine, I am willing to come to his rescue?

Mr. Higgins

There has been a certain amount of schizophrenia opposite, especially on the regional aspects of this question. We have taken account of that in our overall point of view. But we shall administer the tax in the most efficient way possible, and the overall way in which V.A.T. has been designed has been influenced by considerations of efficiency in collecting the tax.

Sir F. Bennett

Looking back into recent history, is not it a fact that the Leader of the Opposition himself frankly admitted to the House that V.A.T. would be an inseparable part of joining the Common Market? Therefore may we be told what convolutions have taken place, apart from those of the Leader of the Opposition, that make a further additional number of civil servants necessary other than those who would have been recruited anyway had the Leader of the Opposition stuck to his policy?

Mr. Higgins

I am glad to say that I am not responsible for the Leader of the Opposition.

Mr. Joel Barnett

Will the hon. Gentleman confirm that there is nothing which compels us to have a value added tax in 1973 as opposed to 1978? If it is the case that the number of civil servants will depend upon the extent of the registrations, will the hon. Gentleman consider increasing the exemption from £5,000 to £10,000, thereby reducing the number of additional civil servants that will be necessary?

Mr. Higgins

That is a matter which can be debated when we consider the Finance Bill. The Government have made it clear that we believe that V.A.T. is an important element in our overall reform of taxation and that the case for it is overwhelming.