HL Deb 11 March 1980 vol 406 cc722-3

2.38 p.m.


My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what is the reasoning behind the imposition of value added tax on confectionery when the vast majority of other foodstuffs, including components in the manufacture of confectionery purchased individually, are zero-rated.

The MINISTER of STATE, TREASURY (Lord Cockfield)

My Lords, the reason is to raise revenue. The total revenue from confectionery, ice cream, soft drinks and other products of this kind which are subject to value added tax is estimated to be about £400 million per annum and for confectionery alone about £200 million. I think my noble friend will recognise that the Government could not forgo revenue of this order without making good the loss in other ways.


My Lords, while thanking my noble friend for that Answer which was the type of Answer which I expected from the Treasury, I should like to ask him two supplementary questions. First, is he aware that the ingredients for confectionery—cocoa, chocolate, sugar and so on—can all be obtained zero-rated and that if people decide to make their own confectionery they can also obtain those ingredients zero-rated? Is my noble friend further aware that the confectionery industry contributes a great deal of educational value towards the hygiene of teeth and so on, and that although there are a number of particularly obnoxious cream cakes available in various places, certain types of chocolate and barley sugar are much more nutritious than others? Therefore, while recognising that VAT is a necessary tax—and I quite appreciate the importance of the figures that he has mentioned—is my noble friend aware that nevertheless it is an anomalous situation?


My Lords, as regards the first point made by my noble friend, it is also true that barley, which is used in the production of beer, is zero-rated, but the final product is not. That is a common feature with a tax like VAT. As regards my noble friend's second point, the reason for confectionery being charged to VAT is based on revenue requirements and not on any arguments about the nutritional or other value of the products concerned.


My Lords, I should like to ask the Minister whether, if the Government are minded to give consideration to the request made by his noble friend, they would bear in mind that this country is one of the highest consumers of sugar in the world. A tremendous amount of sugar is consumed in this country and I think that there is abundant medical evidence to show that it is responsible for many conditions of ill health and obesity. At present we are suffering from a very serious problem of dental caries, mainly in children, as well as in adults.


My Lords, I am well aware that arguments of that type are advanced, but I personally would not wish to become involved in them. So far as the Government are concerned, the overriding factor in this particular case is the amount of revenue involved.