§ Sir Richard BodyTo ask the Chancellor of the Exchequer if he will make a statement on the(a) procedure and (b) financial effect of VAT base capping in respect of the United Kingdom's contribution to the European Union general budget for 1998. [12283]
§ Mrs. LiddellVAT capping was first introduced for the EC budget in 1988, at a rate of 55 per cent. of 1 per cent. of each member state's gross national product.
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§ Dr. David Clark[pursuant to his reply, 30 July 1997, c. 314–15.]: Information on the ethnic origin of civil servants is collected using a voluntary, self-classification, confidential questionnaire. The number and proportion of Asian and Afro-Caribbean civil servants, by grade equivalents, who have submitted a questionnaire, as at 1 April 1996, is set out in the table.
Under the current own resources decision the VAT capping rate is being reduced progressively from 55 per cent. in 1994 to 50 per cent. in 1999. The 50 per cent. rate has applied to Greece, Spain, Ireland and Portugal since 1995. The VAT capping arrangements are broadly neutral for the UK because any change resulting from the application of the capping mechanism is offset a year in arrears by an equal but opposite change to our abatement.
§ Sir Richard BodyTo ask the Chancellor of the Exchequer (1) what legislation he plans to introduce for the implementation of value added tax at the point of origin for intra-European Union imports and exports; [12532]
(2) what proposals he has relating to trans-European Union harmonisation of VAT. [12485]
§ Dawn PrimaroloNone. The current EC VAT system, with tax accruing in the member state of consumption for intra-Community transactions, remains in force in the absence of unanimous agreement to change it. The European Commission has yet to produce legislative proposals for changes to the current system, and so discussions on the merits or otherwise of a move to an origin-based system have not even begun. The Government, while supportive of efforts to simplify and modernise the current EC VAT system, is opposed to further unnecessary harmonisation at the Community level.
§ Sir Nicholas LyellTo ask the Chancellor of the Exchequer what plans he has to review the system of value added taxation in relation to cereal bars, morning bars, and similar products; and if he will make a statement. [12543]
§ Dawn PrimaroloCereal bars and similar products, other than cakes, are liable to VAT at the standard rate. I have no plans to change their taxation.