HC Deb 12 December 1974 vol 883 cc746-9
9. Mr. Brittan

asked the Chancellor of the Exchequer whether he will take steps to relieve those living in rural areas from the effects of the increase in VAT on petrol.

Mr. Robert Sheldon

It would not be practicable to provide the type of relief which the hon. Member has in mind.

Mr. Brittan

Does the Minister of State accept that for those living in country areas ownership of a car is not just a luxury but is often the only way of getting to work, seeing friends or engaging in the slightest social or communal activity? Will he not at least consider providing petrol vouchers for those living in the most isolated areas which would enable them to buy petrol at slightly less than the present prohibitive cost?

Mr. Sheldon

I understand fully the hon. Member's point, but there are serious practical difficulties in moving in the direction that he has in mind. There are problems of definition and discrimination of one kind or another which make it almost impossible for this to be considered as a solution.

Mr. Gould

Does the Minister of State accept that while the reasons for the increase in VAT on petrol are widely understood and accepted, there are some people who have been particularly hard hit by that increase, namely, disabled people who have to drive themselves to work and for whom the cost of petrol forms a high proportion of the small sums they are able to earn? Will he consider some form of relief for that group?

Mr. Sheldon

My hon. Friend has made an important and valid point. This is something which I shall draw to the attention of my right hon. Friend the Secretary of State for Energy.

Mr. Gwynfor Evans

Is the Minister of State aware that in Welsh rural constituencies as many as 40 per cent. of the working population have to travel considerable distances to work by car because of the almost total absence of public transport? Is he aware that these people have the lowest level of income in the United Kingdom? This oppressive cost of petrol is bound to aggravate the problem of rural depopulation.

Mr. Sheldon

I fully understand the hon. Gentleman's important point, but I must return to the very real difficulties of definition of rural areas, of the marginal situation between rural and suburban areas, and the question of subsidies for essential and non-essential users. Many people in rural areas do not use petrol always for essential purposes. This is something the House must understand.

Mr. Raphael Tuck

My hon. Friend has referred the question of the disabled driver to my right hon. Friend the Secretary of State for Energy, but is he aware that we have been to see the Secretary of State for Energy and that he has been able to offer us no relief? To stop this continual buck-passing, will the Minister of State offer some solution?

Mr. Sheldon

This is obviously a matter for both the Department of Energy and my right hon. Friend the Secretary of State for Social Services. The only thing that can usefully be said is that in this context there is possible scope for amelioration, and I shall take the matter up in consultations with both my right hon. Friends.

12. Mr. Dodsworth

asked the Chancellor of the Exchequer what is the outcome of his consideration of proposals for zero rating VAT on bloodstock; and if he will make a statement.

Mr. Robert Sheldon

These proposals are still under consideration.

Mr. Dodsworth

I thank the Minister for the continued consideration of the proposals, but is he aware that the matter is causing acute concern to those in the bloodstock industry? There is excessive competition in France and Ireland because of the advantageous VAT arrangements in those countries, and we shall sec the destruction of the bloodstock lines in this country if we do not make rapid changes in the legislation.

Mr. Sheldon

The Government understand the problems of the bloodstock industry. That is why the negotiations are taking place.

Mr. Hugh Fraser

I thank the Minister for his apparently sympathetic reply, but I reinforce what my hon. Friend the Member for Hertfordshire, South-West (Mr. Dodsworth) said. Will the Minister look at the correspondence I have sent to the Chancellor of the Duchy of Lancaster about the devastating effect the tax could have on the standard of British racing unless something is done?

Mr. Sheldon

The Government are waiting for the original bloodstock VAT committee to be reformed. Our waiting for its reformation, so that it can make representations covering the whole industry, is contributing largely to the delay.

19. Mr. Spriggs

asked the Chancellor of the Exchequer how many written representations have been made to him by retail and dispensing chemists, and the pharmaceutical industry in particular, about his plans for additional rates of VAT on the retail pharmacists; and whether he has considered their problems where calculation of VAT liability at more than two rates becomes impossible.

Mr. Joel Barnett

I have received over 430 written representations from or about retail pharmacists concerning the possible introduction of additional rates of VAT. Customs and Excise are studying, in consultation with the representative trade bodies, the problems that would arise, but I should stress that no decisions in this matter have yet been taken.

Mr. Spriggs

I thank my hon. Friend for that reply. Will he look at this question from a reasonable point of view and ensure that before final decisions are taken no action will be taken by his Department that will bring VAT into disrepute?

Mr. Barnett

I always like to be reasonable, particularly to my hon. Friend. I assure him, as I said in my original answer, that no decisions on this matter have yet been taken.

Mr. Fairgrieve

Does the hon. Gentleman appreciate that one of the main reasons for the change to VAT was that it would be a tax which could be at one rate, and that we are in serious danger of getting back to the stupidities of the previous purchase tax?

Mr. Barnett

I know that the Opposition when in Government announced that it was to be a broad-based, comprehensive and simple tax, but I am not sure whether anybody really believed them.

Mr. Robert Carr

The tax may not be wholly simple, but does not the hon. Gentleman admit that it would be two or three times more complicated if the Government were foolish enough to introduce a multi-rate system? Will he take note that the Opposition would oppose such a change with all the power at our command?

Mr. Barnett

I am not too surprised about what the right hon. Gentleman cares to oppose.