§ Mr. Ian Stewartasked the Chancellor of the Exchequer whether he will estimate the additional revenue that would arise from unifying the two present VAT rates into a single rate of (a) 10 per cent., (b) 12½ per cent., (c) 15 per cent. and (d) 20 per cent., and the impact of such changes on the retail price index and the pensioners' price index.
§ Mr. Robert SheldonEstimates of the increases in revenue in a full year and in the retail price index are:
Rate of VAT (per cent.) Revenue (£ million) Retail Price Index (per cent.) General Pensioners (a) … 10 600 0.8 ½ (b) … 12½ 1,600 2¼ 1½ (c) … 15 2,500 3½ 2½ (d) … 20 4,300 6 4¼ The higher rates of VAT specified would result in substantial changes in the pattern of expenditure and estimates of the effects are correspondingly uncertain.
§ Mr. Rostasked the Chancellor of the Exchequer (1) what consideration he is giving to zero-rate VAT for materials and labour employed for thermal insulation and other expenditure which achieves energy conservation;
(2) what consultations he has had to remove the existing disincentive to energy conservation arising from VAT on materials and labour employed for thermal insulation and other expenditure which reduces fuel consumption.
§ Mr. Robert Sheldon,pursuant to his reply [Official Report, 24th February 1978; Vol. 944, c. 841], gave the following information:
Many types of professional insulation work have always been eligible for VAT zero-rating under the general provisions 82W relating to building construction and alteration work. The VAT position of "do-it-yourself" purchasers of insulating materials has been carefully considered, but the financial benefits of adequate thermal insulation are well known and a special relief for materials could not be justified in a broad-based tax.