§ Mr. SnapeTo ask the Secretary of State for Transport what is his estimate of the annual effect on British Rail revenue and traffic volume of the imposition on rail fares of VAT at the rate of 4 per cent. and at the rate of 9 per cent.
§ Mr. FreemanWe estimate that the loss of gross revenue to British Rail would be in the approximate ranges of £50 to £90 million per annum for an imposition of 4 per cent. and £100 million to £200 million for 9 per cent. Reductions in passenger traffic of up to about 3 per cent. and 7 per cent. respectively would be likely. It is not possible to be precise, since the impact depends upon passenger response and the extent to which in the case of the grant-aided railway, higher VAT might be matched by increased grant.