§ Mr. Duffyasked the Chancellor of the Exchequer what is his policy towards the introduction of additional rates of VAT following his consultations with industry; and whether he will make a statement.
§ Dr. GilbertIn the last two months Customs and Excise have, on my right hon. Friend's authority, opened consultations with representative trade bodies about the procedural changes that would have to be made in the VAT system if additional rates were introduced. They have suggested that it should be assumed, for the purposes of those consultations, that either one or two additional rates might be introduced, making a maximum of four with the standard rate and the zero rate. No proposals have been made by Customs and Excise as to the particular goods or services which might be affected, and a newspaper report that particular rates had been proposed was incorrect. My right hon. Friend will naturally study the responses of the trade bodies before taking any firm decisions, but he has already, in his Budget speech, expressed the view that the single posi-562W tive rate of VAT has substantial disadvantages from the point of view of flexibility.