HC Deb 25 May 1972 vol 837 cc482-3W
Mr. Deakins

asked the Chancellor of the Exchequer if he will take steps to introduce safeguards for the consumer against excessive price rises following the introduction of value added tax.

Mr. Higgins

In calculating prices, allowance will need to be made for the abolition of purchase tax and SET. It is also important for the effect of the credit mechanism of the new tax to be fully understood; we shall be explaining this to traders and others in our VAT publicity material at the appropriate time.

Mr. Deakins

asked the Chancellor of the Exchequer what is his latest estimate of the effect of a 10 per cent. value added tax on the cost of living index and on the cost of living for retirement pensioners.

Mr. Higgins

As my right hon. Friend said in his Budget statement, the total overall effect of the whole process of the reform of indirect taxation starting from the time of his announcement in the last Budget and moving to a VAT of 10 per cent. will be to reduce taxes on expenditure and so help keep down the cost of living. This is still the position.