HC Deb 27 October 1994 vol 248 cc990-1
2. Dr. Godman

To ask the Chancellor of the Exchequer what was the amount the Inland Revenue failed to collect in taxes for the last year for which figures were available; and what proportion this represents of the amount raised in 1994 from VAT on fuel bills.

The Financial Secretary to the Treasury (Sir George Young)

Value added tax on fuel bills, excluding compensation payments, is expected to raise £1,120 million in 1994–95, which represents 75 per cent. of the £1,580 million written off by the Inland Revenue for 1992–93.

Dr. Godman

Could not the money raised by imposing VAT on domestic fuel have been collected by ending the tax relief on executive share options and by closing, once and for all, the tax loopholes that make the United Kingdom such a wonderful tax haven for many rich and greedy people?

Sir George Young

No, there is no way in which the measures outlined by the hon. Gentleman would meet the shortfall that he has identified. If the Labour party is seriously suggesting that the second stage should be revoked, it owes it to the House to say what other taxes Labour would increase or what public expenditure it would cut.

Dr. Spink

Will my right hon. Friend confirm that since privatisation in 1986, domestic gas prices have fallen in real terms, taking account of the extension of VAT, by 16.5 per cent.? Will he contrast that with the position in the late 1970s under the Labour Government, when the prices of all utilities rose tremendously under very high inflation and interest rates?

Sir George Young

My hon. Friend is absolutely right. There has been not only the favourable movement in fuel prices, to which he rightly drew attention, but a generous compensation package, costing £2.5 billion over three years, to help those on low incomes pay VAT on fuel.

Ms Armstrong

Will the Minister now take the opportunity to honour the Government's election pledge to rule out any further extension of VAT to items such as children's clothing or food? Will he please answer the question?

Sir George Young

I welcome the hon. Lady to her new position in the Treasury—[Interruption.] I meant the shadow Treasury team. I have nothing to add to the answer that has already been given.