§ 2. Mr. Yeoasked the Chancellor of the Exchequer what is the annual cost of collecting value added tax, as a percentage of revenue received, from registered traders with a taxable turnover of less than £50,000.
§ The Minister of State, Treasury (Mr. Barney Hayhoe)I regret that no reliable estimate is available.
§ Mr. YeoDoes my hon. Friend agree that smaller businesses have a particularly large potential for job creation and that for them the administrative and financial burden of VAT is particularly onerous? In view of that, a very cost-effective form of relief might be to exempt from VAT businesses with a turnover of less than £50,000.
§ Mr. HayhoeI agree with my hon. Friend about the importance of small businesses in job creation and about the importance of the Government reducing the bureaucratic loads that are placed upon them, but it would be misleading to say that the change that my hon. Friend proposes would be universally welcomed, and, anyway, it would be in breach of our European Community undertakings.
§ Mr. Campbell-SavoursIs it not true that newspaper organisations will be faced with substantial additional charges by the imposition of VAT? Has the Minister seen the Price Waterhouse and Co. report, which suggests that 7,000 jobs will be lost in the industry if VAT is imposed, and that 10 dailies and 100 weeklies will close? Will the hon. Gentleman do something to ensure that VAT is not imposed in the way that is suggested?
§ Mr. HayhoeI do not think that the papers, certainly the nationals, would welcome being described as small traders with a turnover of less than £50,000, which is what the question is about. More generally, the hon. Gentleman will know that it would be wholly improper to seek to anticipate in any way the Budget of my right hon. Friend the Chancellor.