§ 3.13 p.m.
Lord Bruce of DoningtonMy Lords, I beg leave to ask the Question standing in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether, before recommending to Parliament the acceptance of any European Commission proposals for VAT harmonisation, they will institute an inquiry into the variations as between EC member states of labour, energy, rental, interest and other principal industrial costs, together with levels of industrial investment; and whether they will publish the results of the inquiry.
§ Lord Young of GraffhamMy Lords, the Government have no intention of accepting any proposals for VAT harmonisation which would extend VAT to food, gas, electricity or young children's clothing and footware.
We therefore have no plans to institute an inquiry on the lines suggested by the noble Lord.
Lord Bruce of DoningtonMy Lords, is the noble Lord aware that, notwithstanding what he has said, efforts will continue to be made by the commissioner concerned (the noble Lord, Lord Cockfield) to pursue this matter to the extreme? If it becomes necessary, will the noble Lord fortify himself by examining a recent publication of the Institute of Fiscal Studies which proves conclusively that the harmonisation of VAT is not a significant ingredient in the distortion of competition; that its effect on fiscal frontiers is absolutely minimal; and that the whole case is bogus?
§ Lord Young of GraffhamMy Lords, this is a rare, almost unique, occasion on which I find myself in total agreement with the noble Lord, Lord Bruce of Donington.