§ Mr. RaynsfordTo ask the Chancellor of the Exchequer (1) what is his estimate of the impact on VAT revenues if new residential housing construction was subject to VAT at(a) 5 per cent., (b) 8 per cent. and (c) 17½ per cent. in (i) 1993–94, (ii) 1994–95 and (iii) 1995–96;
(2) what would have been the impact on VAT revenues, if the rate of VAT for (a) new residential house construction and (b) home improvement and repair work had been respectively (i) 17½ per cent., (ii) 8 per cent., (iii) 5 per cent. and (iv) zero per cent. in 1992–93; and what is his estimate of the impact of such changes on VAT revenues in 1993–94, 1994–95 and 1995–96;
(3) what is the expected total revenue from VAT in 1993–94 in respect of (a) all construction work and (b) home improvements and repair work; and what is his forecast for revenue in 1994–95 and 1995–96 from these sources;
(4) if he will publish a table showing the total revenue from VAT in respect of (a) all construction work and (b) home improvement and repair work in each year since 1985–86.
§ Sir John CopeNo estimates are available for the total revenue yield from all construction or for home improvement and repair work.
The estimates of the revenue yield from applying VAT to new residential house construction for 1992–93 and 1993–94 are as follows:
589W
1992–93 1993–94 (i) 17½ per cent. 1,800 1,700 (ii) 8 per cent. 800 800 (iii) 5 per cent. 500 500 (iv) 0 per cent. 0 0 No estimates have been made for beyond 1993–94. These estimates are approximate and subject to revision. Also, they make no allowance for the likely behavioural response to changing the rate of VAT applied to these items so the actual revenue effect could differ from the figures shown.
§ Mr. RaynsfordTo ask the Chancellor of the Exchequer what information he has as to the rates of VAT currently applicable to(a) new residential housing construction, (b) home improvement and repair work and (c) other construction work in each other country of the EC.
§ Sir John CopeThe information requested is shown in the table. The data given are the latest available.
VAT on new residential construction; repairs, maintenance and alterations; and other construction work in the EC Country New residential housing construction Repairs, maintenance and alterations Other new construction work Per cent. Per cent. Per cent. Belgium 119.5 26.0 19.5 212.0 12.0 Denmark 125.0 25.0 25.0 France 18.6 18.6 18.6 Germany Exempt 15.0 Exempt Greece 18.0 18.0 18.0 Ireland 12.5 12.5 12.5 Italy 2 4.0 19.0 19.0 19.0 Luxembourg 15.0 15.0 15.0 Netherlands 17.5 17.5 17.5 Portugal3 16.0 (12.0) 16.0 (12.0) 16.0 (12.0) 4 5.0 (4.0) 4 5.0 (4.0) 4 5.0 (4.0) Spain 5 3.0 15.0 15.0 5 6.0 15.0 United Kingdom 0.0 17.5 617.5 1 The standard rate applies to the sale of new buildings by a person who is a professional building contractor. 2 The lower rate applies to subsidised housing. 3 The rates in brackets apply to madeira and Azores archipelagoes. 4 The lower rate applies to contracted services relating to the construction of immovable property where the holders of the works contract are either (a) housing and building co-operatives providing that the services are contracted directly between them and the construction of the immovable property are perforned by companies engaged in building publicly financed dwellings within the scope of the development contracts; or (b) local government agencies, provided that the services in question are contracted directly with the contractor. 5 Three per cent. applies to dwelling defined admilnistratively as having official protection status under special arrangements, when the supplies are made by the promoters thereof. Six per cent. applies to sales of buildings or parts thereof suitable for use as dwellings, including their garages and outbuildings which are transferred jointly. This excludes business premises, even where the dwellings are transferred jointly with the business premises. 6 Authorised alterations to listed buildings are zero rated. Source: VAT in Europe (International Bureau of Fiscal Documentation).
590W
§ Sir Keith SpeedTo ask the Chancellor of the Exchequer what is his estimate of the latest annual yield of 17.5 per cent. VAT on newspapers, magazines and periodicals.
§ Sir John Cope[holding answer 22 July 1993]: It is estimated that the yield of VAT at 17.5 per cent. on newspapers, magazines and periodicals would be £1,100 million in 1993–94. This figure does not take account of any behavioural response to applying the standard rate of VAT to these items.
§ Mr. BettsTo ask the Chancellor of the Exchequer what would be the estimated yield in 1994–95 from levying VAT at 17.5 per cent. on(a) children's clothing, (b) passenger transport, giving separate figures for bus, coach, rail and air transport, (c) food and (d) newspapers and periodicals.
§ Sir John CopeLatest estimates available are for 1993–94 and are as follows:
£ million (a) Children's clothing 600 (b) domestic passenger transport 1,150 international passenger transport 1,000 (c) food 7,200 (d) books, newspapers and magazines 1,100 Separate estimates have not been made for bus, coach, rail and air transport. Consumers' expenditure data suggests that they comprise respectively, 42 per cent., 44 per cent., 8 per cent. and 6 per cent. of domestic passenger transport. Consumers' expenditure data also suggests that around 87 per cent. of the figure for international passenger transport is in respect of transport by air, and 13 per cent. in respect of transport by sea.
Separate estimates have not been made for newspapers and periodicals. Consumers' expenditure data suggest this may be around 70 per cent. of the total figure for books, newspapers and magazines.