§ 25. Mr. Dobson
asked the Minister of Transport what the increase in value added tax to 15 per cent. will cost (a) the transport industries generally, (b) British Railways, and (c) the National Bus Company in the current financial year.
§ Mr. Kenneth Clarke
Public passenger transport is zero rated for the purposes of value added tax, so the increases will have no effect either on fares or operators' costs. Freight charges carry VAT, so the increase will be reflected in operators' charges, but it will not affect their costs or their profitability.