Mr. Robert AinsworthTo ask the Chancellor of the Exchequer what would be the effect on Treasury revenue in 1996–97 and in a full year of extending value added tax at(a) 8 per cent. and (b) 17.5 per cent. to all those zero-rated, giving figures separately for each item. [91]
§ Mr. Heathcoat-AmoryTable 10 of the Treasury publication "Tax Ready Reckoner and Tax Reliefs" shows the estimated cost of not applying standard rate VAT to those items currently zero-rated. Those figures make no allowance for changes in consumer behaviour. It is possible to derive estimates for revenue from 8 per cent. VAT from those figures. The latest figures available are for 1995–96.
111W
£ million 8.0 per cent. 17.5 per cent. Food 3,450 7,550 Construction of new dwellings 820 1,800 Domestic passenger transport 620 1,350 International passenger transport 530 1,150 Books, newspapers and magazines 550 1,200 Childrens clothes and shoes 340 750 Water and sewerage services 410 900
£ million 8.0 per cent. 17.5 per cent. Drugs and medicines on prescription 300 650 Supplies to charities 90 200 Ships and aircraft above a certain size 210 450 Vehicles and other supplies to disabled people 70 150