HC Deb 14 June 1984 vol 61 cc1056-7
5. Mr. Freud

asked the Chancellor of the Exchequer what representations he has had from the take-away food industry about the effect of the imposition of value added tax on hot food since it came into force; and if he will make a statement.

The Minister of State, Treasury (Mr. Barney Hayhoe)

A number of letters and petitions have been received and the matter has been fully debated in the Finance Bill Committee.

Mr. Freud

In view of the concern felt by the many fish and chip shop owners and Chinese take-away concerns, and the lunacy of avoidance schemes whereby people are now charging for salt and vinegar and giving away chips, will the Minister look at raising the base level on which VAT will come into being?

Mr. Hayhoe

The level at which VAT comes into being is established at a little over £18,700. My right hon. Friend the Chancellor of the Exchequer has raised that level so that it broadly conforms to the rise in prices. I join the hon. Gentleman in condemning the lunacy of some of the absurd avoidance techniques which have been suggested and which largely, I imagine, are wholly ineffective.

Mr. Rooker

Given that the 1979 Conservative manifesto pledge not to put VAT on food was not repeated in the 1983 Conservative manifesto, will the Minister give a commitment that there will be no further imposition of VAT on food in the lifetime of this Parliament?

Mr. Hayhoe

I see that the Leader of the Opposition is joined by some of his flock in trying to get this absurd canard running during the European election campaign. Their actions have been shot to pieces by a characteristically devastating blast from my right hon. Friend the Prime Minister. My right hon. Friend has made it absolutely clear on many occasions, including Prime Minister's Question Time this week, that the Government have no intention of putting VAT on food.

Mr. Willie W. Hamilton

Does the hon. Gentleman think it wise to quote the Prime Minister in that context, because she seems to be a great stranger to the truth?

Mr. Hayhoe

I utterly repudiate that suggestion. I have noted the attempts by the Opposition, because they are so devoid of a positive policy in the European election, to run these scare tactics. The reality is that, if the Opposition's policies were put into effect, there would be massive increases in indirect and direct taxation.

Mr. Pike

Does the Minister recognise the administrative difficulties that VAT on take-away food has caused to many small take-away shops and fish and chip shops, because of the problem of discerning which foods attract the tax? Will the hon. Gentleman now have second thoughts and, even at this late stage, reverse the decision?

Mr. Hayhoe

I understand that some small shops have run into difficulties, largely because they have not made themselves fully acquainted with the helpful advice that they can obtain from their local Customs and Excise office. Those businesses will find that there are available a number of alternative schemes for dealing with this matter that do not place a heavy administrative load upon them.