§ 58. Mr. Shersbyasked the Chancellor of the Exchequer to what extent he estimates the decline in net sales and rentals of colour television sets in Great Britain is due to the imposition of 25 per cent. VAT.
§ Mr. Robert SheldonI am monitoring the effects of the higher rate of VAT, but we shall have to accept that it is difficult to separate precisely the various causes of decline in the demand for colour television sets.
§ Mr. Adleyasked the Chancellor of the Exchequer upon what criteria he will review the success or failure, from the revenue raising view point, of the effect 264W of introducing VAT at 25 per cent. on the boating industry, and other industries selected for the increased rate by him in his main Budget last year.
§ Mr. Robert SheldonThe higher rate of VAT was one of the taxation measures introduced in the April 1975 Budget as part of my right hon. Friend's strategy to reduce the rate of inflation and improve the balance of payments as a basis for economic recovery. We are monitoring the effects of the 25 per cent. rate and the results of this monitoring will form part of the information my right hon. Friend will consider in drawing up his next Budget.
§ Mr. Hicksasked the Chancellor of the Exchequer if he will state the comparable value of the £5,000 exemption for VAT purchases when first introduced in April 1972 in current figures; and if he will modify the VAT exemption limit for small business to this latter figure.
§ Mr. Robert Sheldon:The exemption limit of £5,000 a year taxable turnover would need to be raised to £8,750. I will bear the hon. Member's suggestion in mind.