§ Mr. Carter-Jonesasked the Secretary of State for Trade and Industry if he will introduce legislation to prevent misleading advertisements regarding the impact of VAT on sale prices, details of which have been supplied by the hon. Member for Eccles; and if he will make a statement.
§ Sir G. HoweThe introduction of VAT cannot, in any circumstances, justify price increases of more than 10 per cent. or the publication of advertisements which make any such claim. Under the Counter-Inflation Bill, the Government are taking special powers to ensure that, when VAT replaces purchase tax and selective employment tax on 1st April 1973, the full benefit of any net reduction in tax is passed on to the public, and any price increases are no larger than is justified by the tax change.