Clause 12

Part of the debate – in the House of Commons at 12:00 am on 10 May 1972.

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Photo of Mr Terence Higgins Mr Terence Higgins , Worthing 12:00, 10 May 1972

With respect to my hon. Friend, I think it would be out of order if I were to pursue this point. We are not here concerned with the regulator. We are concerned with the power to bring into tax items which are not taxed.

I found the distinction which the hon. Member for Heywood and Royton sought to draw between the purchase tax powers and the powers in the Schedule that we are debating by saying that purchase tax was simply imposed by order but under value added tax items already in tax are merely zero-rated to be a distinction which was purely metaphysical in this context, in as much as either way the tax could be imposed by order. The new power is no greater in the Clause that we are now debating.

That being so, it is true, as he said, that the previous purchase tax power, while it existed, was used by successive Chancellors to make changes of this kind—as 1 have said, to remove anomalies which reflect changes in technology or changes in marketing techniques or whatever. It was also the case that previous Chancellors, although they had this power, if they increased taxes—one major occasion was the increase in purchase tax coverage which the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) introduced in the 1969 Budget—the increases were made in an actual Budget. I think it is likely that Chancellors would continue to follow that practice, but, none the less, I believe the powers are necessary, particularly in the period when the tax is coming into operation for the first time and when we may find that there are various problems of the kind I have sought to outline to the Committee.