Value-added Tax (Hansard, 25 January 1972)

§ 6. Mr. Lane
asked the Chancellor of the Exchequer what further representations he has now received about the practical implications of value-added tax; and whether he will make a statement.

§ The Chief Secretary to the Treasury (Mr. Maurice Macmillan)
A great many representations have been received, covering numerous aspects of the tax. The only statement I can make at present is that the process of consultation is continuing.

§ Mr. Lane
Although I am sure that value-added tax will prove a good innovation—[HON. MEMBERS: "Oh."]—will my right hon. Friend pay particular attention to the problems of retailers and do his utmost to allay their anxieties?

§ Mr. Macmillan
We have had a large number of consultations and over 500 different trade organisations have expressed views; there have also been discussions with the Customs and Excise. We have circulated trade organisations and have issued a number of discussion papers on particular practical aspects of V.A.T. The response to these is likely to be considerable.

§ Mr. Small
Would the hon. Gentleman look at V.A.T. as it operates in Italy and elsewhere on the basis of seeing that the small firm is exempted on a turnover of £3,000 a year?

§ Mr. Macmillan
I cannot undertake to look at V.A.T. operating in Italy because it does not operate there. The conditions in other countries are very different from conditions here. I cannot say anything about either the rate or the coverage of the tax.

§ Sir R. Cary
Could my hon. Friend say whether the view once expressed by the late Iain Macleod that V.A.T. would not apply to food still prevails in the Treasury?

§ Mr. Macmillan
It has been made clear that food will be relieved from V.A.T. This undertaking was given in our manifesto and we shall stand by it.

§ 14. Mr. Douglas
asked the Chancellor of the Exchequer if he will explain the administrative procedures he now intends to adopt to ensure that retailers' stocks are not subject to double taxation by the introduction of value-added tax.

§ 38. Mr. Cormack
asked the Chancellor of the Exchequer whether he will take steps to ensure that retailers' stocks already bearing purchase tax will not be subject to double taxation on the introduction of value-added tax.

§ Mr. Patrick Jenkin
As my hon. Friend the Minister of State told the hon. Member for Stirling and Falkirk Burghs (Mr. Ewing) yesterday, this question is still under consideration, but my right hon. Friend hopes to refer to it in his Budget Statement.

§ Mr. Douglas
Does the Minister accept that, unless a clear decision is made on the matter very soon, there will be a rundown in stocks which will have a consequent undermining of employment opportunities?

§ Mr. Jenkin
These are, indeed, among the points which have been made to my right hon. Friend. The hon. Gentleman will not have long to wait now.

§ Mr. Cormack
Will the Minister express the hope that, when the speedy review is complete, retailers' fears will be stilled and a sensible answer given to this worry?

§ Mr. Jenkin
I must ask my hon. Friend to await my right hon. Friend's Budget Statement.

§ Mr. Joel Barnett
In view of the Government's failure to give the House and the country a decision on the matter and the enormous number of representations which they have had, will the Government consider, for administrative reasons if for no other, delaying the introduction of value-added tax?

§ Mr. Jenkin
I do not think that there is any evidence relating to this matter which indicates that we should contemplate delaying the introduction of the value-added tax. We are quite confident that we shall be able to adhere to the timetable.