§ 10. Mr. Redmondasked the Chancellor of the Exchequer whether, in view of the fact that value added tax is to be levied on catered meals, even if paid by luncheon vouchers, he will arrange in his forthcoming Budget for an increase in the amount by which a luncheon voucher may be issued free of tax.
§ Mr. Patrick JenkinI have noted my hon. Friend's suggestion.
§ Mr. RedmondI had expected my hon. Friend to say that he could not anticipate the Budget Statement. Will he tell the House when the level was last raised for the re-issue of luncheon vouchers? Despite VAT, is it not due for a review in any case?
§ Mr. JenkinAs my hon. Friend recognises, I cannot say anything much in advance of the Budget. The amount of 15p was fixed in 1959. It was never intended to cover the full cost of a meal outside. It was intended to be a contribution towards it approximately equivalent to the subsidy received by an employee who has the benefit of a stall or works canteen.
§ Mr. HefferIs it not clear that this will not hit ordinary working people? Is it not ridiculous that, for example, potato crisps and ice cream will be taxed but caviar is zero rated and will not be taxed? Is not this an absurdity about the tax on foodstuffs?
§ Mr. JenkinThe hon. Gentleman has asked his supplementary question on the wrong Question. This Question is about luncheon vouchers being free of tax.
§ Mr. Joel BarnettWill the hon. Gentleman clarify the position of luncheon vouchers under phase 2 of the counter-inflationary policy? Is it possible for companies to give luncheon vouchers or free canteen meals in addition to the £1 plus 4 per cent.?
§ Mr. JenkinLuncheon vouchers are a form of remuneration, and increases in the value of those issued to employees should be set against any other increase allowed under phase 2.