§ Mr. Latham
To ask the Chancellor of the Exchequer, pursuant to his answer to questions from the hon. Member for Bedfordshire, North (Sir T. Skeet), of 27 April,Official Report, columns 355–56, if he will break down the figures given for the effect on (a) income tax and (b) value added tax of transferring services from local government to central Government between (i) education, (ii) police and (iii) fire.
§ Mr. Norman Lamont
[holding answer 23 May 1990]: Pursuant to my reply to my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet) of 27 April, the total costs of education, the police and the fire service (including civil defence) in 1990–91 would be around £18 billion, £5 billion and £1 billion respectively, if local authorities spent in line with total standard spending in England and Wales and total current expenditure in Scotland. If this expenditure were transferred to central Government, with no change to revenue support grant and specific grants for the police and fire service eliminated, this would imply additional expenditure of around £18 billion on education, £2.4 billion on police and £1 billion on fire and civil defence. These sums are equivalent to increases of around 12p, 1½p and ½p respectively in the basic rate of income tax or to increases of 9, 1 and ½ percentage points respectively in the VAT rate.