§ 7. Mr. Michael Marshallasked the Chancellor of the Exchequer what study his Department has made of the effect of value added tax on the boat-building industry in the last 12 months.
§ Mr. Denzil DaviesWe have continued to monitor the effect of the higher rate of VAT on the boat-budding industry, and Her Majesty's Customs and Excise has maintained close contacts with the trade associations concerned.
§ Mr. MarshallDoes the Minister accept that that non-answer does not take us 1581 very much further? Will he recognise that the real decline in some of the areas connected with the domestic market of the boat-building industry stems from the differential in VAT, especially at the top rate of 25 per cent. Since some small boat builders are suffering from the differential in VAT, will he say what the Government intend to do about the situation?
§ Mr. DaviesI do not accept that argument. The reason why the boat-building industry, in common with other industries. has suffered in the last few years is mainly that, because living standards have not risen, people have less money to spend. According to a survey recently carried out by the boat-building industry, there are signs of an improvement and there is optimism for the future.