§ Mr. Ronald Brown
asked the Secretary of State for Trade and Industry what 9W discussions his Department has held with furniture manufacturers and retailers and the Furniture, Timber and Allied Trade Union on the effect of VAT on furniture prices and the reason for ageeing to the retailers increasing their mark-up by 6.67 per cent., thereby increasing the retail price beyond its pre-VAT price.
§ Sir G. Howe
No such discussions were held. I understand that the custom of the trade was to calculate the percentage mark-up on furniture on the wholesale price inclusive of purchase tax. Following the tax changes on 1st April, the requirement was that prices should be adjusted in such a way that retailers' cash margins were not increased. Thus a variation in percentage mark-up need not imply any increase in cash margins, but if the hon. Gentleman has any specific case about which he has doubts perhaps he would write to me about it.