§ Mr. BettsTo ask the Chancellor of the Exchequer what would be the effect on Treasury revenue in 1995–96 and in a full year of extending value added tax at(a) 8 per cent. (b) 17.5 per cent. to all those zero-rated, giving figures separately for each item.
§ Mr. Heathcoat-Amory[holding answer 2 November 1994]: The Treasury publication "Tax Ready Reckoner and Tax Reliefs" shows the expected cost of zero rating items currently zero-rated in 1994–95. It is possible to derive an estimated revenue gain from taxing these items at both 8 per cent. and 17.5 per cent. These figures make no allowance for behavioural changes.
£ million 8 percent. 17.5 percent Food 3,270 7,150 Construction of new dwellings 890 1,950 Domestic Passenger Transport 525 1,150 International Passenger Transport 525 1,150 Books, newspapers and magazines 525 1,150 Children's clothing 275 600 Water and sewerage services 320 700 Drugs and medicines on prescription 230 500 Supplies to charities 90 200 Ships and aircraft above a certain size 205 450 Vehicles and other supplies to disabled people 70 150