§ Mr. Marlowasked the Secretary of State for Social Services if there has been any change in the policy of Her Majesty's Government for 1979–80 to maintain the real level of health service expenditure gross or net of value added tax repayments.
§ Dr. VaughanWhen value added tax was introduced, the Government of the day decided that health authorities, like other exchequer funded bodies, would pay VAT on the goods and services they purchased. Health authorities were given extra resources to match the higher costs they had to meet. When the rate of VAT was raised in the June 1979 budget, health authority cash limits were not increased. Health authority cash limits for 1980–81 will, however, fully reflect this increase.