Orders of the Day — Value Added Tax

Part of the debate – in the House of Commons at 12:00 am on 5 December 1972.

Alert me about debates like this

Photo of Mr Teddy Taylor Mr Teddy Taylor , Glasgow Cathcart 12:00, 5 December 1972

In any situation it is impossible to isolate one factor and say that it caused particular prices to rise. Football clubs have their problems, for example. If some clubs close down next year it will be impossible to say that VAT was the cause or even that it had anything to do with it. We do not know. It is impossible to isolate any one factor.

If my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) reads the Catering Times for this week, he will see a four-page supplement in which the splendid ice cream firm of Wall's gives general guidance to retailers on what they should do about prices. We have been told by hon. Members on the Opposition side of the dangers from spivs or twisters, but they would not put Unilever in that category. It is a fine and reputable firm which makes good ice cream. This is its advice to the people who sell its ice cream: Add 10% to all your menu prices—that means ice cream prices stay on a level with all other sweets on your menu. But then, because of the special ice cream rating, the profit margins on ice cream go up by around 10%, which can't be bad. So again ice cream is more profitable to you. When challenged, an official of Unilever said: We are merely giving caterers advice on how they can best operate VAT. Sweets are purchase-taxed at 25 per cent. whereas ice cream is purchase-taxed at 18 per cent. Obviously, therefore, if we have a general adjustment in all prices there will be greater profit in ice cream.