HC Deb 04 March 1993 vol 220 cc446-7
11. Mr. Kirkwood

To ask the Chancellor of the Exchequer what recent representations he has received on the imposition of VAT.

Mr. Nelson

Many representations have been received, and these will be considered in the run-up to the Budget.

Mr. Kirkwood

Has the Minister received any representations from the bloodstock industry about VAT? Is he aware of the absurdity of the situation in which it is profitable to take horses to Ireland, leave them on the tarmac for 30 minutes to complete the transaction at the lower rates of VAT there and then fly them back to this country? Is he further aware that the French Government have managed to get a derogation from the VAT regime to protect their bloodstock industry? When will the Government do the same for the United Kingdom industry?

Mr. Nelson

I have taken careful note of what the hon. Gentleman says. He will be aware that negotiations are taking place between Customs and Excise and the Jockey Club. I hope that they will come to a satisfactory conclusion.

Mr. Alan Howarth

Does my hon. Friend accept that the Government have acted imaginatively over the years to ease the burden of tax on charities? Will he bear in mind, however, that the beneficial effects of those changes will be significantly undone if charities have to pay VAT on items that are currently zero rated? Will he listen sympathetically and respond positively to the calls to relieve charities of their existing burden of VAT?

Mr. Nelson

The Government always listen sympathetically on such matters.

12. Mr. Hall

To ask the Chancellor of the Exchequer what was the total yield from VAT in 1978–79; and what is the expected total yield for 1992–93 in cash and in 1992–93 prices.

Mr. Dorrell

The yield from VAT in 1978–79 was £4.8 billion, which is worth £13.2 billion at today's prices. The expected yield for the current year is £37.7 billion.

Mr. Hall

The House will be aware that since 1979 the Tory Government have put up VAT from 8 to 17.5 per cent. and have increased the number of goods covered by VAT 14 times. That has added to the increased tax burden. Will the Minister confirm that if VAT is put on books, periodicals and newspapers, it will be in breach of Tory party election pledges, but in line with Tory actions in government?

Mr. Derrell

I do not intend to say anything about what might happen in my right hon. Friend's Budget, but it is passing strange that the Government should be under attack for pursuing precisely the policy that they always said they would pursue—that within a constant tax burden they would shift the burden from income to expenditure. That is what we said we would do, and that is what we have done.

Mr. Ian Taylor

Will my hon. Friend, although enjoying purdah at the moment, note that although special representations are being made about VAT, he and his right hon. Friend the Chancellor should maintain maximum flexibility? Many of us believe that broader-based VAT is the right way forward, with special categories, especially for the poor, which could be targeted in other ways. We want the maximum flexibility and we must bear in mind that tightening the tax regime at present is the right policy, given our much looser monetary conditions.

Mr. Dorrell

I will not put up a vigorous defence against my hon. Friend's suggestion that Front-Bench Members should retain room for flexibility.