§ Miss Lestor
To ask the Chancellor of the Exchequer when the size specifications governing VAT zero-rating of children's clothes, including shoes, were first fixed; and when they were last reviewed.
§ Sir John Cope
Since the inception of VAT, zero-rating for young children's clothing and footwear has been decided by reference to a schedule, published by Customs and Excise, of minimum measurements reflecting the average body sizes of children up to their 14th birthday. The continuing relevance of the size specifications in the schedule is monitored against the results from surveys by the British Standards Institution: the most recent of which is BS 7231/1990. The schedule of garment and shoe sizes was laid reviewed by Customs and Excise in 1985. A further review is currently in progress.
§ Mr. Wigley
To ask the Chancellor of the Exchequer what estimate he has as to what percentage of gross domestic product in the United Kingdom is accounted for by the underground economy.
§ Mr. Nelson
By its very nature, the underground economy cannot be measured directly or estimated with any precision. An evasion adjustment is made in the United Kingdom national accounts to allow for that part of income which is concealed but where the corresponding expenditure is not. This results in an addition to factor incomes of around 1¼ per cent. in recent years.
The evasion adjustment applied in the calculation of GDP does not attempt to encompass the whole of the underground economy. Estimates of the size of the underground economy made by a number of researchers show wide variation.