Vat: Higher Rate

Part of Orders of the Day — FINANCE (No. 2) BILL – in the House of Commons at 12:00 am on 15 May 1975.

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Photo of Nicholas Winterton Nicholas Winterton , Macclesfield 12:00, 15 May 1975

I shall endeavour to be brief, but I should say straight away that I am delighted to have four Treasury Ministers to listen to my contribution.

I believe that multi-rate VAT is a crass stupidity and deplorable nonsense. However it is not my intention to attack the Government but rather to point out the error of their ways and obtain their sympathy and support for some of the points which I intend to make, so that at a later stage amendments can be brought in, not necessarily by the Opposition but by the Government, to improve the Bill and remove some of the more unpleasant anomalies.

Much has been said about the big yachts and boats and all the equipment that goes with them. I want to direct the attention of the Committee to the boats and canoes at the other end of the scale. Canoes and small sailing dinghies are used by youth-training organisations, youth clubs and voluntary bodies such as the scout movement to train young people and to give them an awareness of safety in sailing. I believe that boats at the smaller end of the boat building scale should have applied to them the 8 per cent. VAT, not the 25 per cent. rate. Otherwise many of these bodies, already sadly affected by inflation and the inability of local authorities to help them because of their serious rate burdens, will have to do without the accessories and equipment which are vital for youth training and youth recreation.

I should like to mention a very human matter. Some people in this country suffer from hypothermia and arthritis and live in thoroughly unsatisfactory housing conditions. These people need low-voltage electric blankets. Often those blankets for people suffering from hypothermia and living in unsatisfactory housing conditions are provided by local authorities. But the rate of VAT on the low-voltage electric blanket is to be increased from 8 per cent. to 25 per cent. I ask for the sympathy of the Treasury Bench in this matter. I hope that at least this item can be left at the present rate.

I move on to a ding-dong subject, that of bell-pushes and accessories, bells and chimes. Here again there is an anomaly. Many people in the building trade believe that such items constitute a fixed electrical installation, just like a ceiling rose, socket outlet and so on, and should have the 8 per cent. VAT rate levied on them. The Government have slipped up again, because bell-pushes and chimes, which must be considered vital in multistorey blocks of flats, maisonettes and other modern housing, will bear the higher rate.

I ask Treasury Ministers to consider these anomalies. I am not just trying to make constituency points or trivial points to the Government's disadvantage. I am trying to draw attention to the error of this legislation which will cause much suffering and hardship to many people.

At this point it is perhaps right to mention the smaller business man who, because of multi-rate VAT, will perhaps have to fork out extra money, at a time of serious liquidity problems, to change his accounting machines and stationery. The Government have loaded enough burdens on to business people. This could well be the last burden which will drive many of them out of business.

I conclude with a reference to the caravan industry, which a number of hon. Members have mentioned. Touring caravans are now an important part of our society. Many people on low wages and salaries use them for their family holidays. They cannot afford to stay in hotels and therefore take a touring caravan when they go away to the seaside.

The industry is a big exporting industry. In 1974 the home market took about 25,000 units and the export market just under 14,000, which is a fine export record. The industry needs a stable home market order to have a good export market. The Government would gain a great deal of popularity by removing the anomaly affecting this industry and by ensuring that the lower rate of VAT applies to caravans, particularly touring caravans.

I have tried to be brief. This has been a long debate. Before some of the interventions from the benches below the Gangway on the Government side of the House, it was a constructive and useful debate. I congratulate the Financial Secretary on having listened to the whole of it, and I thank him.

I have tried to be non-controversial and to be helpful to the Government, which is not my wont. I see an injustice here and I want it to be put right. That can be done only by the Government. I ask them to make sure that it is done before the Bill goes on to the statute book.