§ 3.25 p.m.
§ The Earl of KINNOULLMy Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether they will review in the coming Budget the luncheon voucher concession of 15p in view of its current purchasing power; and what corresponding value it now has compared with 1959 when it was last raised.
§ The MINISTER of STATE, TREASURY (Lord Cockfield)My Lords, I have noted the suggestion of my noble friend, but the general preference of Her Majesty's Government is to concentrate on tax reductions across the board, which would help everybody, rather than to extend selective reliefs of this kind. The corresponding value of the concession compared with 1959 would be about 75p.
§ The Earl of KINNOULLMy Lords, I thank my noble friend for that reply. 899 Is he aware that, if he were today to exchange a luncheon voucher for a ham sandwich, he would find that that sandwich had no ham in it? Would my noble friend say what it would cost the Treasury if they were to double the present value?
§ Lord COCKFIELDMy Lords, the original intention of the concession was not to provide complete meals, or perhaps even complete ham sandwiches, but to give a relief which was equivalent to the subsidy given in the industrial canteen. Recent inquiries suggest that while the average subsidy is somewhat above the present figure for the luncheon voucher, it is not all that much in excess. The present concession costs about fl 2 million per annum, and to double it would therefore cost another £12 million.
Lord WALLACE of COSLANYMy Lords, would the noble Lord bear in mind that if the noble Earl, Lord Kinnoull, went into a cafe and bought a diminished sandwich, and if he took it outside and ate it in the nearest churchyard, it would be cheaper than if he ate it inside, because of the imposition of the penal rate of VAT at 15 per cent.? So the extent to which a luncheon voucher is diminished in value depends entirely on whether you eat out or eat in. It is a rather silly situation.
§ Lord COCKFIELDMy Lords, this is a well-known point. The VAT does apply to restaurant meals but it does not apply to food which is taken away, and this reflects the general policy, not only of the present Government but, of course, of their predecessors, of relieving expenditure on food as such from VAT.
§ Several Noble Lords: No! No!
Lord WALLACE of COSLANYMy Lords, I would ask the noble Lord whether he is aware that his Government doubled VAT and the previous Government did not.
§ Lord COCKFIELDNo, my Lords, the Government did not double VAT. The standard rate went up from 8 per cent. to 900 15 per cent., and the higher rate went up from 12 1/2 per cent. to 15 per cent. At the same time, very substantial reductions were made in income tax, which would no doubt enable noble Lords opposite to buy sandwiches with ham in them.