HC Deb 04 June 1981 vol 5 cc1053-4
1. Mr. McQuarrie

asked the Chancellor of the Exchequer, further to his reply to the hon. Member for Ealing, North (Mr. Greenway) on 6 April, if he will make a statement on the steps so far taken by collectors of taxes to help businesses faced by difficulties because repayments of value added tax are being delayed by reason of the Civil Service dispute.

The Chief Secretary to the Treasury (Mr. Leon Brittan)

Collectors of taxes appreciate the cash flow difficulties which face businesses as a result of the interruption of VAT repayments. They are taking those into account in considering how far to press for payment of both PAYE and other tax liabilities which are overdue. In addition, the Board of Customs and Excise will on request confirm to a bank that a business is normally in receipt of repayments of VAT.

Mr. McQuarrie

I am deeply grateful to my right hon. and learned Friend for that reply, which will be of considerable encouragement to the many businesses, particularly small private businesses, which are suffering severely under the restrictions caused by the unnecessary Civil Service strike. Will my right hon. and learned Friend undertake to monitor the situation to ensure that, if it is possible to alleviate the hardship to small businesses, that will be done?

Mr. Brittan

We are keeping an eye on the sitiuation and doing everything we can to help. I underline my hon. Friend's comment about the completely unnecessary nature of the action.

Mr. Dubs

Will the Minister confirm that VAT repayments are being made to some businesses, particularly those which complain enough?

Mr. Brittan

I do not know what information the hon. Gentleman has to suggest that that is so. If he would like to give me such information, I shall consider it.

Mr. Farr

Does not my right hon. and learned Friend agree that it is wrong that the Inland Revenue should send threatening letters to one-man businesses for the payment of some trivial sum of tax when four-figure sums are due in the repayment of VAT?

Mr. Brittan

As I have said to the House, the Inland Revenue will take into account overdue VAT repayments in considering the collection of other taxes. If there is any case in which it appears that that has not been done, I shall undertake to look into it.

Mr. Robert Sheldon

How much revenue has been lost as a result of the action by the civil servants? What instructions have been given by the Inland Revenue to those people who owe the Inland Revenue pay-as-you-earn, but in their turn are also owed VAT repayments? My information is that some pressure is being continued, at least on some people who owe PAYE. What effect is that action having on the money supply and generally on interest rates?

Mr. Brittan

With regard to the first point, the latest available estimate of the revenue which is delayed as a result of the dispute—it is a temporary delay—is about£3¼ billion to £3½ billion. I stress that the loss of revenue is temporary and will be recovered. I said in my original answer what the attitude is towards PAYE.