§ 12. Mr. Douglas-Mann
asked the Chancellor of the Exchequer whether he will now take steps to increase the rate of VAT.
§ Mr. Robert Sheldon
All tax rates are kept under review but my hon. Friend will not expect me to anticipate any decisions that might be reached.
§ Mr. Douglas-Mann
Will my hon. Friend confirm that if VAT were restored to its original level of 10 per cent. it would bring in about another £700 million a year, and that if it were increased to 20 per cent. it would bring in between £3,000 million and £4,000 million additional revenue? As food, housing, heating and children's clothes are all exempt, and the real essentials are therefore not affected, will my hon. Friend confirm that that would be a far preferable way to cut the public sector borrowing requirement than by the generation of unemployment or by reductions in the standards of public services?
§ Mr. Sheldon
I do not have all the figures to which my hon. Friend referred, but he is broadly right in those that he quoted. It is correct that the public sector borrowing requirement can be cut on both the revenue and the expenditure side. Exactly what my right hon. Friend may wish to do in the future is a matter for consideration in the light of subsequent events.
§ Mr. Budgen
Will the Minister confirm that the nationalised industries have been ordered to borrow abroad and to borrow expensively, rather than to borrow cheaply from central Government, and 649 that this has been done in order to fiddle the figures for the public sector borrowing requirement?
§ Mr. Sheldon
The hon. Gentleman is quite wrong. There has been no ordering and no compulsion by central Government upon nationalised industries in the way that the hon. Gentleman suggests, nor would it be right to exercise such compulsion