§ Mr. MarlowTo ask the Chancellor of the Exchequer what is the money raised by 5 per cent. value added tax, if it were expended as a fixed personal rebate on community charge to each charge payer pro rata rebated to rebated charge payers; by how much this would reduce the community charge paid; and what impact such a transfer would have on(a) the balance of payments and (b) the retail price index.
§ Mr. Mellor[holding answer 21 January 1991]: The money raised would be £8.5 billion. Assuming no change in local government expenditure, community charges would be reduced by around £225 where the full charge is made and by around £45 for those paying only 20 per cent. of the charge.
It is not the practice to provide estimates of the wider economic effects of hypothetical tax changes.