§ Mr. Marlow
asked the Secretary of State for the Environment what is the cost of the water industry; what increase in value added tax would be necessary if this cost were transferred wholly to value added tax; whether Her Majesty's Government will make this transfer; and if he will make a statement.
§ Mr. Fox
The estimated revenue requirement for the water industry in England and Wales is of the order of £1,700 million for 1980–81. It would not be sensible to meet the costs of the industry out of general taxation as proposed. Our aim is to improve as far as possible the relation of charges to usage of services and this would not be helped by such a move. A charge of this sort would also weaken considerably the incentive to better and more economical management of the water industry.