§ Mr. Aspinwallasked the Chancellor of the Exchequer if he will take the necessary steps to alleviate the effect of the high value of the £ sterling on exports, particularly in the confectionery industry; and if he will make a statement.
§ Mr. LawsonThe sterling exchange rate is primarily determined by market forces, not by Government. Intervention in the foreign exchange markets might reduce the rate though this is far from certain. But this could only be at the cost of undermining the tight monetary policy which is fundamental to bringing inflation under control, and which is the only way to improve the export competitiveness of all sectors of British industry.
§ Mr. Aspinwallasked the Chancellor of the Exchequer if, in view of the contraction in the confectionery market where a 20 per cent. drop in sales in the first quarter of the year has been reported, he will seek to abolish value added tax on confectionery; and if he will make a statement.
§ Mr. Peter ReesNo. In the context of a broadly based tax on consumer expenditure, a selective relief from VAT for confectionery would not be justified.