HC Deb 13 June 1974 vol 874 cc1801-2
2. Mr. Hal Miller

asked the Chancellor of the Exchequer whether he will remove from the scope of VAT those items of medical equipment such as linear scanners supplied to hospitals from money raised by public subscription.

The Financial Secretary to the Treasury (Dr. John Gilbert)

I have noted the hon. Gentleman's suggestion.

Mr. Miller

Will the hon. Gentleman please bear in mind that medical research and treatment is in some cases being delayed or prevented by an inability to procure this equipment, for which on occasion public funds have been raised? Will he please give speedy consideration to exempting such equipment from this tax and possibly also from import duty?

Dr. Gilbert

The case to which I think the hon. Gentleman is referring is the purchase of a piece of equipment of this sort to be presented to the Worcester Royal Infirmary in memory of the late John Baker. If the hon. Gentleman has not yet heard the news, I am glad to be able to tell him that this equipment will be relieved from both import duty and VAT.

3. Mr. George Gardiner

asked the Chancellor of the Exchequer what consultations are being undertaken by the Inland Revenue on the feasibility of differential rates of VAT; and what options are under investigation.

Dr. Gilbert

None, Sir. The Inland Revenue does not administer VAT. I would refer the hon. Member to the answer I gave yesterday to my hon. Friend the Member for Sheffield, Atter-cliffe (Mr. Duffy).

Mr. Gardiner

May I ask the Minister whether, in considering any changes in the rates of VAT, he would agree that in the interests of the family budget it would be better if he began by removing the 5p VAT imposed on petrol in the Budget?

Dr. Gilbert

My right hon. Friend had to make a decision about the amount of revenue he had to raise to lower the net borrowing requirement. Unfortunately one of the elements had necessarily to be petroleum products, in this case petrol. Through the operation of the VAT mechanism no element of that tax will fall on public transport fares.

Mr. Denzil Davies

When my hon. Friend is considering the scope of VAT, will he make it clear that the Government have no intention of implementing the proposals of the European Commission to impose VAT on the sale of new houses as is proposed in the harmonisation directive?

Dr. Gilbert

I will certainly take note of my hon. Friend's point. At the moment there are no requirements from the Commission for harmonisation as to either rate or rate structure.

Mr. Fairgrieve

Will the Minister accept that the whole point of VAT is that it should be imposed at two rates, zero and one other rate, thus distinguishing it from purchase tax, which had a series of rates? Will he assure us that it will operate only at those two rates?

Dr. Gilbert

Obviously I am not able to give the hon. Gentleman that assurance. That is why the consultations are taking place. I would point out that two countries already have four-rate structures and another has a five-rate structure.

Mr. Higgins

Will the hon. Gentleman accept that the Opposition do not regard as obvious what he said about changes in rate structure? Is it true that traders have been told that if there is a change in rate or in rate structure they will be helped with the provision of calculating equipment?

Dr. Gilbert

Not to my knowledge.

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