Value Added Tax

HC Deb 23 March 1978 vol 946 c1731

10. Mr. Brotherton

asked the Chancellor of the Exchequer if he will reduce the rate of value added tax on power-driven lawn-mowers.

Mr. Denzil Davies

I cannot anticipate my right hon. Friend's Budget Statement.

Mr. Brotherton

Is the Minister aware of the great advantage which would acrue following the reduction of VAT on power-driven lawn-mowers, and, indeed, on everything else? Is he not aware that a return to a flat-rate VAT of 10 per cent. would be greeted with great satisfaction by small businesses and those other unpaid tax collectors, the shopkeepers? Will he confirm that a flat rate of 10 per cent, would raise an extra £600 million in revenue?

Mr. Davies

It may be that certain small businesses and shopkeepers would welcome a reduction to a flat rate of 10 per cent., although I believe that the difficulties have been exaggerated. The hon. Gentleman will be aware that other Common Market countries have three or four rates of VAT and seem to manage quite well. The disadvantage of doing what he suggests is that there would be an increase in prices, which would not be to the advantage of the British people.

Mr. Ridley

Is the hon. Gentleman's resistance to this proposal part of the Government's job creation programme?