Value-Added Tax

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 7th July 1970.

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Photo of Mr Arthur Lewis Mr Arthur Lewis , West Ham North 12:00 am, 7th July 1970

asked the Chancellor of the Exchequer whether he will make a statement on the Government's policy regarding a value-added tax; and when he will implement this policy.

Photo of Mr Jim Sillars Mr Jim Sillars , South Ayrshire

asked the Chancellor of the Exchequer if he will make a statement on his policy regarding a value-added tax.

Photo of Mr Arthur Lewis Mr Arthur Lewis , West Ham North

Is the Chancellor aware that it has been reported in reputable journals that if we go into the Common Market, whatever the terms, we shall have to have the value-added tax? As the leaders of both parties are committed to going into the Common Market, would it not appear that we shall have the value-added tax if we go in?

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

It is certainly true that the value-added tax is part of the taxation arrangements of the Common Market, but in the study I have been giving to it I have looked at it irrespective of the question of the Common Market. After all, nine different countries have introduced it. It is a tax of some complexity but of very great attractions indeed.

Photo of Mr Jim Sillars Mr Jim Sillars , South Ayrshire

Is the Chancellor aware that in the Conservative Party's manifesto it is said that the party will possibly replace purchase tax with a value-added tax? Will he now tell us whether he will or will not introduce a value-added tax within the next 12 months?

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

We made that point entirely clear. Perhaps I could go over it for the hon. Member. The pledge to abolish S.E.T. is firm. We have said that we are also carrying out a review of taxation, and, although there are a number of possibilities, the one to which we have given most attention is the value-added tax. If we introduce a value-added tax, purchase tax will go, too.

Photo of Mr Edward Milne Mr Edward Milne , Blyth

asked the Chancellor of the Exchequer if he will make a statement on the proposals for a value-added tax in Great Britain arising from negotiations on entry into the European Economic Community.

Photo of Mr Edward Milne Mr Edward Milne , Blyth

Is the hon. Gentleman aware that the secrecy about the value-added tax is bound to cause concern, not only in Britain but in Europe generally? It is time that the Government came clean on this matter. Or have they dismissed the idea of a value-added tax until they are coerced into it during the course of the negotiations on the Common Market?

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

At the risk of boring the House again, I must impress upon hon. Members opposite that we do not intend to announce all our decisions within a fortnight of the General Election. We have had too much instant government.

Photo of Mr Dick Taverne Mr Dick Taverne , Lincoln

Will the hon. Gentleman convey his views on instant government to his right hon. Friend the Secretary of State for Education and Science?

Photo of Mr Edward Milne Mr Edward Milne , Blyth

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I give notice that I will raise the matter on the Adjournment at the earliest possible moment.

Photo of Mr Raphael Tuck Mr Raphael Tuck , Watford

asked the Chancellor of the Exchequer what estimate he has made of the number and cost of civil servants necessary to administer a value-added tax.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

This would depend entirely on the form and coverage of the tax.

Photo of Mr Raphael Tuck Mr Raphael Tuck , Watford

As it is evident that a much larger number of civil servants would be required, and as the Conservative Party have always been caterwauling about reducing the number of civil servants, will the Chancellor look into this very carefully before considering a value-added tax?

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

It is one of the factors to which we are giving the closest study.