§ Mr. Douglas-Mannasked the Chancellor of the Exchequer (1) by how much he estimates that the public sector borrowing requirement would be reduced if the rate of VAT were increased to 121 per cent., 15 per cent. and 20 per cent., respectively;
(2) what effect on employment he estimates would result from raising the rate 396W of VAT to 12½ per cent., 15 per cent. and 20 per cent. respectively; in which industries and trades he would expect such effects to be concentrated; and to what extent he considers that the effect on employment of reduced demand for goods resulting from higher rates of VAT could be offset by restrictions on imports.
§ Mr. Robert SheldonIncreasing the rate of VAT to 12½ per cent., 15 per cent. and 20 per cent. would raise in a full year £1,350 million, £2,100 million and £4,000 million respectively. The reduction in the public sector borrowing requirement over the same period however would be smaller since the increases in taxation would depress GDP, leading to an offsetting reduction in the yield of all taxes. It is not possible to give firm estimates of the employment effects of such large hypothetical changes. The effects would however be spread throughout the economy, although unevenly. Whilst selective import controls may assist employment in a particular industry threatened by unfair competition, the possibly favourable effects on employment of wider restrictions could be offset by retaliation and emulation.
§ Mr. Michael Marshallasked the Chancellor of the Exchequer what is his estimate of the cost to industry, small businesses and self-employed persons of administering VAT.
§ Mr. Robert SheldonThe costs to industry, small businesses, and self-employed persons of administering VAT vary from one business to another, and I know of no authoritative source of information on which an estimate of the total cost could be based.
The VAT system has, however, been designed, so far as possible, to fit in with normal commercial procedures and accounting practices in order to reduce these costs to a minimum.
§ Mr. Michael Marshallasked the Chancellor of the Exchequer how many bankruptcy proceedings have been instigated by Her Majesty's Customs and Excise in connection with VAT offences in each of the following periods: April 1973 to March 1974, April 1974 to March 1975, April 1975 to March 1976 and April 1976 to September 1976.
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§ Mr. Robert SheldonThe numbers of bankruptcy notices issued in England and Wales in connection with VAT arrears have been as follows:—
April 1973 to March 1974 Nil April 1974 to March 1975 341 April 1975 to March 1976 628 April 1976 to September 1976 284 Comparable figures for Scotland and for Northern Ireland are not available.
§ Mr. Michael Marshallasked the Chancellor of the Exchequer what is the number of bankruptcy proceedings which have been instigated by Her Majesty's Customs and Excise in connection with VAT as a percentage of the total number of bankruptcy proceedings in each of the following periods: April 1973 to March 1974, April 1974 to March 1975, April 1975 to March 1976 and April 1976 to September 1976.
§ Mr. Robert SheldonStatistics for the total number of bankruptcy proceedings in England and Wales are not available for financial years.
On a calendar year basis, bankruptcy notices issued in connection with VAT arrears have represented the following percentages of the total number of notices:—
Per cent. 1973 … … Nil 1974 … … 0.73 1975 … … 1.64 1976 (1st half) … … 1.60 Comparable percentages for Scotland and for Northern Ireland are not available.