§ 21. Miss Lestor
asked the Secretary of State for Trade and Industry how many cases of alleged abuse of VAT charges have been received in connection with dry cleaners and laundries.
§ Sir G. Howe
My Department has received 95 complaints of incorrect price adjustments by dry cleaners, laundries and launderettes since the tax changes on 1st April. Detailed information about the pattern of complaints dealt with locally is not available.
§ Miss Lestor
Is the right hon. and learned Gentleman aware that my trading standards services department in Slough made a complaint against a firm of dry cleaners and launderers on 10th April, that no reply was received until the end of May, that the firm was instructed to amend its prices on 24th May, which it did, until 28th May, when it increased them on the ground that raw material prices had gone up? Is he aware that 25 there are great difficulties in communication between the VAT division and the Price Commission, and that this is resulting in general chaos in the whole operation, which is largely regarded as a farce by my consituents?
§ Sir G. Howe
I am not aware of the validity of the general observations that the hon. Lady has made. As she knows from the letter that I have written to her about this case, there was some difficulty in establishing contact between the inspector and the proprietor of the company in question, but the complaint was investigated by the weights and measures inspector. He communicated his ruling on the matter to the company, the company reduced its prices, but the Price Commission has now been asked to investigate whether the increases that the company has since made comply with the provisions of the Price and Pay Code. The important fact is that many price reductions have been made since the commencement of stage 1, including a large number since the coming into effect of VAT. It is wrong to suggest that this machinery is ineffective.
§ Mr. Alan Williams
But what action is the Department now taking to search out these VAT abuses? Will the Minister bear in mind that although the specialrôleof the Weights and Measures Inspectorate came to an end over six weeks ago there are still price increases by cleaners and laundries, and particularly by restaurants, beyond those that are legitimate under VAT? What processes of detailed VAT scrutiny now exist at High Street level?
§ Sir G. Howe
Of course, the initial peak of complaints of price increases due to VAT was noticed when VAT started. The number of complaints now attributable to VAT has shrunk to much smaller proportions. Since the commencement of stage 1, price reductions effected by the Prices Unit, the Weights and Measures Inspectorate and the Price Commission have amounted to more than 10,000. Those effected by the Price Commission through its eight regional information centres have amounted to 150,000, which have been done voluntarily. That shows the extent to which the Price Commission is effectively taking over the rôle initially discharged by the Weights and Measures Inspectorate.