HC Deb 25 April 1972 vol 835 cc1265-6
18. Sir G. Nabarro

asked the Chancellor of the Exchequer how much revenue he has estimated receiving in 1972–73 from purchase tax on foodstuffs and soft drinks; and how much selective employment tax revenue from the same foodstuffs and soft drinks in 1972–73, both including all distributive processes thereon.

Mr. Higgins

The 1972–73 revenue from purchase tax on those foodstuffs and soft drinks which a reliable to purchase tax is estimated to be of the order of £150 million. No corresponding estimate can be made for SET.

Sir G. Nabarro

Is it not a fact that the transposition from purchase tax and SET on the items referred to value-added tax will undoubtedly result in a greater revenue being derived from these items and therefore an increase in retail prices? Is that a desirable policy?

Mr. Higgins

I am somewhat puzzled by my hon. Friend's statement. As for those items which are charged at the 18 per cent. rate of purchase tax as against the 10 per cent. VAT rate, allowing as far as one can for SET, the situations is not that which he has described, so that the situation of which he complains would not arise.