§ 7. Ms EagleTo ask the Chancellor of the Exchequer how much revenue has been raised by changes to the range of goods on which VAT is charged since 1992. [316]
§ Mr. OppenheimThe net revenue effect of various changes to VAT coverage since 1992 is estimated to be £870 million in the current year.
§ Ms EagleIs it not true that, before the last election, the Prime Minister announced that he had no intention of increasing, and no need to increase, the scope of VAT? Yet we have just heard that more than £800 million is to be collected this year from such extensions. Do the Government intend to make a similar pledge ahead of the next election, or are they going to extend VAT to children's clothes, food, books and newspapers?
§ Mr. OppenheimThe hon. Lady knows that the money raised from VAT on fuel, which was the largest component of that rise, funded the increase in NHS spending last year. Perhaps the shadow Chancellor will now tell the country where he will find the £450 million from his proposed cut in fuel duty. Which spending programmes will he slash? Will he cut spending on the NHS, will he raise other taxes, or will he do what every other Labour Government in history have done—massively increase borrowing?
§ Mr. John GreenwayCan my hon. Friend tell the House the original Treasury estimate for VAT on domestic fuel and how that compared with what has been raised? Surely electricity and gas prices have fallen sharply in the past three years, so that, even with VAT, people are paying less for electricity and gas at home.
§ Mr. OppenheimMy hon. Friend is right, and I should gently remind Opposition Members that for years they have had only one energy policy—to burn more and more expensive and relatively dirty coal. They fought tooth and nail our policy of allowing power stations to burn cheaper and cleaner gas, which has resulted in a fall in energy prices even when one takes into account the rise in VAT, and they are shameless enough to pretend that they care about the pollution of the environment and the cost to poorer people.
§ Mr. Mike O'BrienCan the Minister confirm that the Chancellor said:
If we could start again, we would have VAT on everything and I do not think the case for exempting newspapers is all that strong. The real reason we zero-rate newspapers is that politicians are frightened about putting VAT on newspapers."Is the Chancellor frightened, or will he have the courage of his convictions? Will we see the 23rd Tory tax rise? Enough is enough. Britain needs a new start and a new Labour Government.
§ Mr. OppenheimThat was the parliamentary equivalent of a cheap shot. I will confirm that, as long as the hon. Gentleman or the Shadow Chancellor, the right hon. Member for Dunfermline, East (Mr. Brown), will confirm that no Labour Government will under any circumstances increase VAT. I will also confirm it, if the hon. Gentleman will confirm that the Labour Front-Bench spokesman, the hon. Member for Edinburgh, Central (Mr. Darling) described last year's Scottish nationalist proposal to reduce VAT on fuel to 5 per cent. as
another cynical ploy from an increasingly opportunist and desperate party.—[Official Report, 23 January 1995; Vol. 253, c. 49.]That sums it up pretty adequately.
Mr. Robert G. HughesDoes my hon. Friend agree that the hon. Members for Bristol, South (Ms Primarolo) and for North Warwickshire (Mr. O'Brien) simply got their statistics in a twist when talking about VAT rises? We are talking not about rises, but about the elimination of fraud and, for the second time this afternoon, we have heard the Labour party being the friend of the tax avoider. Is it not right that the Labour party is simply trying to play politics and does not care about economics at all?
§ Mr. OppenheimMy hon. Friend is right. When it comes to fraud, of all Labour's phoney figures, those on borrowing, debt and tax are the most fraudulent. Our worst year for public borrowing was better than Labour's best year. If we had continued to borrow at the level that we inherited from the last Labour Government, national debt would have doubled—[HON. MEMBERS: "It has."] No, it has not. Hon. Members should get their facts right. National debt is significantly lower than it was in 1979, and if they have other figures, they should produce them. That is why people are saying, "There are lies, damned lies, and Labour sound bites."