§ Mr. William Clarkasked the Chancellor of the Exchequer whether he has reached a decision on all the representations which he has received in favour of special treatment for taxi fares under VAT.
§ Mr. Patrick JenkinThe Chancellor of the Exchequer has carefully considered all the representations which have been put to Treasury Ministers but he has decided that taxi fares should remain within the scope of VAT at the standard rate. Because, in many areas, maximum taxi fares are statutorily controlled and there is no provision for any variation to take account of VAT, arrangements will have to be made for fares to be varied without delay in those places where this would be appropriate. My right hon. Friend the Home Secretary has power to authorise an increase in London taxi fares, and Parliament will shortly be asked to approve a provision in the Counter-Inflation Bill which would allow account to be taken of the incidence of VAT on the taxi trade in the provinces by very early increases in fares.