§ Mrs. Fyfe
To ask the Chancellor of the Exchequer if he will make it his policy to exempt residential establishments which care for children with multiple handicaps who require a very warm atmosphere and which are labour intensive(a) from VAT on fuel and (b) from bearing the cost of statutory sick pay.
§ Sir John Cope
VAT is designed as a broad-based tax on general consumer expenditure. In line with this principle the changes in the taxation of fuel and power will apply across the board to all consumers. Special treatment or particular sectors would produce inconsistencies. The revenue and environmental objectives of the changes would be put at risk. It is far better to provide extra financial help to those who need it via the benefit system, and this is what the Government have done.
Subject to parliamentary approval, the Statutory Sick Pay Bill 1993 will end the reimbursement of 80 per cent. of employers' SSP costs from April 1994. At the same time, employers' national insurance contributions will be reduced to ensure that employers as a whole are more than compensated for their additional SSP costs. Small employers will receive further help in the form of full reimbursement of any SSP paid after four weeks' sick absence.