HC Deb 06 July 1990 vol 175 cc729-30W
Mr. Thornton

To ask the Chancellor of the Exchequer if he will estimate the amount of tax forgone due to the zero rating of value added tax on(a) food, (b) children's clothing, (c) new housing and (d) books and newspapers.

Mr. Ryder

The extra revenue yield, in a full year, from applying the standard rate of VAT to the items listed is estimated approximately at:

£ million
a. Food 5,100
b. Children's clothing 600
c. New Housing 1,600
d. Books and newspapers 700
Total 8,000

Such estimates depend, among other things, on the reaction of consumers to increased prices and so are subject to a considerable margin of error.

Mr. Steen

To ask the Chancellor of the Exchequer if he will take steps to harmonise the arrangements for payment of value added tax on duty-free fuel by British fishing vessels to bring them into line with existing arrangements for Belgian, Dutch and French fishing.

Mr. Ryder

[holding answer 2 July 1990]: The Government are aware of the difficulties for British fishing vessels and other maritime interests, caused by the European Court of Justice's ruling on some of the United Kingdom's VAT zero rates. They are considering whether and how any changes to the present arrangements should be made.

Mr. Thornton

To ask the Chancellor of the Exchequer if he will estimate the likely increase in the retail prices index if value added tax at standard rate was applied to(a) food, (b) children's clothing, (c) new housing and (d) books and newspapers.

Mr. Ryder

Following is the information:

Percentage increase in the Retail Prices Index Per cent.
a. Food 2.0
b. Children's clothing 0.2
c. New housing 1n.a.
d. Books and newspapers 0.2
1 The effects on the RPI of applying VAT to new housing cannot be quantified precisely. The immediate impact would be very small. Over many years however it would become significant.