2. Value Added Tax

Orders of the Day — Budget Resolutions and Economic Situation – in the House of Commons at 9:35 pm on 18th June 1979.

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Motion made, and Question.

That—

(1) As from 18th June 1979—

  1. (a) section 17 of the Finance (No. 2) Act 1975 and Schedule 7 to that Act (higher rate of value added tax) shall cease to have effect; and
  2. (b) in section 9(1) of the Finance Act 1972 (standard rate of value added tax) for the words "eight per cent." there shall be substituted the words "fifteen per cent."

(2) Sub-paragraph (1)(a) above does not affect Note (7) of Group 9 or item 1 of Group 17 of Schedule 4 to the said Act of 1972 (which contain exceptions from zero-rating expressed by reference to items in Schedule 7 to the said Act of 1975).

(3) Sub-paragraph (1)(b) above does not affect the rate of tax on any supply of telephone services provided by the Post Office or the District Council of Kingston upon Hull by means of their public switched telephone exchange systems, being services in respect of which the Post Office or the Council issue a tax invoice which includes a rental charge for a rental quarter beginning before 1st November 1979.

In this sub-paragraph "tax invoice" has the same meaning as in section 7 of the said Act of 1972.

(4) Where a supply in fact made wholly or partly before the said 18th June, or a supply which, apart from the other provisions of the said section 7, would be treated as so made by subsection (2) or (3) of that section, is treated

under those other provisions as made on or after that date, the person making the supply may account for and pay tax on the supply or, as the case may be, on the relevant part of it as if the rate of tax had not been increased by paragraph (1)(b) above.

(5) Where a person avails himself of sub-paragraph (4) above in relation to a supply in respect of which he is required by regulations to issue a tax invoice, any provision of the regulations requiring the amount of tax chargeable or the rate of tax to be stated in the invoice shall be construed as referring to the amount and rate that apply by virtue of that sub-paragraph.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Sir Geoffrey Howe.]

put forthwith pursuant to Standing Order No. 94 (Ways and Means Motions):—

The House divided: Ayes 304, Noes, 256.

Division No. 10]AYES[10.00 p.m.
Adley, RobertChannon, PaulGlyn, Dr. Alan
Aitken, JonathanChapman, SydneyGoodhart Philip
Alexander, RichardChurchill, W. S.Goodhew, Victor
Alison, MichaelClark, Hon. Alan (Plymouth, Sutton)Goodlad, Alastair
Amery, Rt. Hon. JulianClark, William (Croydon South)Gorst, John
Ancram, MichaelClarke, Kenneth (Rushcliffe)Gow, Ian
Arnold, TomClegg, WalterGower, Sir Raymond
Aspinwall, JackCockeram, EricGray, Hamish
Atkins, Robert (Preston North)Colvin, MichaelGreenway Harry
Baker, Kenneth (St. Marylebone)Cope, JohnGriffiths, Eldon (Bury St Edmunds)
Baker, Nicholas (North Dorset)Cormack, PatrickGriffiths Peter (Portsmouth N.)
Beaumont-Dark, AnthonyCostain, A. P.Grist, Ian
Bell, RonaldCranborne, ViscountGrylls, Michael
Bendall, VivianCrouch, DavidGummer, John Selwyn
Benyon, Thomas (Abingdon)Dean, Paul (North Somerset)Hamilton, Hon. Archie (Eps'm & Ew'll)
Benyon, W. (Buckingham)Dickens, GeoffreyHamilton Michael (Salisbury)
Best, KeithDodsworth, GeoffreyHampson, Dr. Keith
Bevan, David GilroyDorrell, StephenHannam, John
Biffen, Rt. Hon. JohnDover, DenshoreHaselhurst, Alan
Biggs-Davison, Johndu Cann, Rt. Hon. EdwardHastings, Stephen
Blackburn, JohnDunn, Robert (Dartford)Havers, Rt. Hon. Sir Michael
Blaker, PeterDurant, TonyHawksley, Warren
Body, RichardDykes, HughHayhoe, Barney
Bonsor, Sir NicholasEden, Rt. Hon. Sir JohnHeddle, John
Boscawen, Hon. RobertEdwards, Rt. Hon. N. (Pembroke)Henderson, Barry
Bottomley, Peter (Woolwich West)Eggar, TimothyHeseltine, Rt. Hon. Michael
Bowden, AndrewElliott, Sir WilliamHicks, Robert
Boyson, Dr. RhodesEmery, PeterHiggins, Terence L.
Braine, Sir BernardEyre, ReginaldHill James
Bright, GrahamFairbairn, NicholasHogg, Hon. Douglas (Grantham)
Brinton, TimothyFairgrieve, RussellHolland, Philip (Carlton)
Brittan, LeonFaith, Mrs. SheilaHooson, Tom
Brocklebank-Fowler, ChristopherFarr, JohnHordern, Peter
Brooke, Hon. PeterFell, AnthonyHowe, Rt. Hon. Sir Geoffrey
Brotherton, MichaelFenner, Mrs. PeggyHowell, Rt. Hon. David (Guildford)
Brown, Michael (Brigg & Sc'thorpe)Finsberg, GeoffreyHunt, David (Wirral)
Browne, John (Winchester)Fisher, Sir NigelHunt, John (Ravensbourne)
Bruce-Gardyne, JohnFletcher, Alexander (Edinburgh N.)Hurd, Hon. Douglas
Bryan, Sir PaulFookes, Miss JanetIrving, Charles (Cheltenham)
Buck, AntonyForman, NigelJenkin, Rt. Hon. Patrick
Budgen, NickFowler, Rt. Hon. NormanJohnson Smith, Geoffrey
Bulmer, EsmondFox, MarcusJopling, Rt. Hon. Michael
Burden, F. A.Fraser, Rt. Hon. H. (Stafford & St)Joseph, Rt. Hon. Sir Keith
Butcher, JohnFraser, Peter (South Angus)Kaberry, Sir Donald
Butler, Hon. AdamFry, PeterKimball, Marcus
Cadbury, JocelynGalbraith, Hon. T. G. D.Kitson, Sir Timothy
Carlisle, John (Luton West)Gardiner, George (Reigate)Knight, Mrs. Jill
Carlisle, Kenneth (Lincoln)Gardner, Edward (South Fylde)Knox, David
Carlisle, Rt. Hon. Mark (Runcorn)Garel-Jones, TristanLamont, Norman
Chalker, Mrs. LyndaGilmour, Rt. Hon. Sir IanLang, Ian
Langford-Holt, Sir JohnNeedham, RichardSpence, John
Latham, MichaelNelson, AnthonySpicer, Michael (S. Worcestershire)
Lawrence, IvanNeubert, MichaelSproat, Ian
Lawson, NigelNewton, TonySquire, Robin
Lee, JohnNott, Rt. Hon. JohnStanbrook, Ivor
Lennox-Boyd, Hon. MarkOnslow, CranleyStanley, John
Lester, Jim (Beeston)Oppenheim, Rt. Hon. Mrs. SallySteen, Anthony
Lewis, Kenneth (Rutland)Page, Rt. Hon. R. Graham (Crosby)Stevens, Martin
Lloyd, Ian (Havant & Waterloo)Parkinson, CecilStewart, Ian (Hitchin)
Lloyd, Peter (Fareham)Parris, MatthewStewart, John (East Renfrewshire)
Loveridge, JohnPatten, Christopher (Bath)Stokes, John
Lyell, NicholasPatten, John (Oxford)Stradling Thomas, J.
McAdden, Sir StephenPattie, GeoffreyTapsell, Peter
McCrindle, RobertPawsey, JamesTaylor, Robert (Croydon N. W.)
Macfarlane, NeilPercival, Sir IanTebbit, Norman
MacGregor, JohnPeyton, Rt. Hon. JohnTemple-Morris, Peter
Mackay, John (Argyll)Pink, R. BonnerThatcher, Rt. Hon. Mrs. Margaret
Macmillan, Rt. Hon. M. (Farnham)Pollock, AlexanderThomas, Rt. Hon. Peter (Hendon S.)
McNair-Wilson, Michael (Newbury)Porter, GeorgeThompson, Donald
McNair-Wilson, Patrick (New Forest)Prentice, Rt. Hon. RegThorne, Neil (Ilford South)
McQuarrie, AlbertPrice, David (Eastleigh)Thornton, George
Madel, DavidPrior, Rt. Hon. JamesTownend, John (Bridlington)
Major, JohnProctor, K. HarveyTownsend, Cyril D. (Bexleyheath)
Marland, PaulPym, Rt. Hon. FrancisTrippier, David
Marlow, AnthonyRaison, TimothyTrotter, Neville
Marshall, Michael (Arundel)Rathbone, Timvan Straubenzee, W. R.
Marten, Neil (Banbury)Rees, Peter (Dover and Deal)Vaughan, Dr. Gerard
Mates, MichaelRees-Davies, W. R.Waddington, David
Mather, CarolRenton, TimWakeham, John
Maude, Rt. Hon. AngusRhodes James, RobertWaldegrave, Hon. William
Mawby, RayRidley, Hon. NicholasWall, Patrick
Mawhinney, Dr. BrianRidsdale, JulianWaller, Gary
Maxwell-Hyslop, RobinRifkind, MalcolmWalters, Dennis
Mayhew, PatrickRippon, Rt. Hon. GeoffreyWard, John
Mellor, DavidRoberts, Michael (Cardiff N. W.)Watson, John
Meyer, Sir AnthonyRoberts, Wyn (Conway)Wells, John (Maidstone)
Miller, Hal (Bromsgrove & Redditch)Rossi, HughWells, P. Bowen (Hert'rd & Stev'nage)
Mills, Iain (Meriden)Rost, PeterWheeler, John
Mills, Peter (West Devon)Royle, Sir AnthonyWhitelaw, Rt. Hon. William
Miscampbell, NormanSainsbury, Hon. TimothyWhitney, Raymond
Mitchell, David (Basingstoke)St. John Stevas, Rt. Hon. NormanWickenden, Keith
Moate, RogerScott, NicholasWiggin, Jerry
Monro, HectorShaw, Giles (Pudsey)Wilkinson, John
Montgomery, FergusShelton, William (Streatham)Williams, Delwyn (Montgomery)
Moore, JohnShepherd, Colin (Hereford)Winterton, Nicholas
Morgan, GeraintShepherd, Richard (Aldridge-Br'hills)Wolfson, Mark
Morris, Michael (Northampton, Sth)Shersby, MichaelYoung, Sir George (Acton)
Morrison, Hon. Charles (Devizes)Silvester, FredYounger, Rt. Hon. George
Morrison, Hon. Peter (City of Chester)Sims, Roger
Mudd, DavidSkeet, T. H. H.TELLERS FOR THE AYES:
Murphy, ChristopherSmith, Dudley (War, and Leam'ton)Mr. Spencer Le Marchant and
Myles, DavidSpeed, KeithMr. Anthony Berry.
Neale, GerrardSpeller, Tony
NOES
Abse, LeoCanavan, DennisDouglas-Mann, Bruce
Adams, AllenCant, R. B.Dubs, Alfred
Allaun, FrankCarmichael, NeilDuffy, A. E. P.
Alton, DavidCarter-Jones, LewisDunn, James A. (Liverpool, Kirkdale)
Anderson, DonaldCartwright, JohnDunnett, Jack
Archer, Rt. Hon. PeterClark, Dr. David (South Shields)Eadie, Alex
Armstrong, ErnestCocks, Rt. Hon. Michael (Bristol S.)Eastham, Ken
Ashley, JackCohen, StanleyEllis, Raymond (NE Derbyshire)
Ashton, JoeColeman, DonaldEnglish, Michael
Atkinson, Norman (H'gey, Tott'ham)Concannon, Rt. Hon. J. D.Ennals, Rt. Hon. David
Barnett, Guy (Greenwich)Conlan, BernardEvans, Ioan (Aberdare)
Barnett, Rt. Hon. Joel (Heywood)Cowans, HarryEwing, Harry
Beith, A. J.Crowther, J. S.Field, Frank
Bennett, Andrew (Stockport N.)Cryer, BobFlannery, Martin
Bidwell, SydneyCunliffe, LawrenceFletcher, Ted (Darlington)
Booth, Rt. Hon. AlbertCunningham, Dr. John (Whitehaven)Foot, Rt. Hon. Michael
Boothroyd, Miss BettyDavidson, ArthurFord, Ben
Bottomley, Rt. Hon. Arthur (M'brough)Davies, Rt. Hon. Denzil (Llanelli)Forrester, John
Bradford, Rev. R.Davies, E. Hudson (Caerphilly)Foster, Derek
Bradley, TomDavies, Ifor (Gower)Foulkes, George
Bray, Dr. JeremyDavis, Clinton (Hackney Central)Fraser, John (Lambeth, Norwood)
Brown, Hugh D. (Provan)Davis, Terry (Br'm'ham, Stechford)Freeson, Rt. Hon. Reginald
Brown, Robert C. (Newcastle W)Deakins, EricFreud, Clement
Brown, Ron (Edinburgh, Leith)Dempsey, JamesGarrett, John (Norwich S.)
Buchan, NormanDewar, DonaldGarrett, W. E. (Wallsend)
Callaghan, Rt. Hon. J. (Cardiff SE)Dixon, DonaldGeorge, Bruce
Callaghan, Jim (Middleton & P)Dobson, FrankGilbert, Rt. Hon. Dr. John
Campbell, IanDormand, J. D.Golding, John
Campbell-Savours, DaleDouglas, DickGourlay, Harry
Graham, TedMcWilliam, JohnSheldon, Rt. Hon. Robert (A'ton-u-L)
Grant, George (Morpeth)Magee, BryanShore, Rt. Hon. Peter (Step and Pop)
Grant, John (Islington C)Marks, KennethShort, Mrs. Renée
Grimond, Rt. Hon. J.Marshall, David (Gl'sgow, Shettles'n)Silkin, Rt. Hon. John (Deptford)
Hamilton, W. W. (Central Fife)Marshall, Dr. Edmund (Goole)Silkin, Rt. Hon. S. C. (Dulwich)
Harrison, Rt. Hon. WalterMarshall, Jim (Leicester South)Silverman, Julius
Hart, Rt. Hon. JudithMartin, Michael (Gl'gow, Springo'm)Skinner, Dennis
Hattersley, Rt. Hon. RoyMason, Rt. Hon. RoySmith, Cyril (Rochdale)
Haynes, DavidMaxton, JohnSmith, Rt. Hon. J. (North Lanarkshire)
Healey, Rt. Hon. DenisMaynard, Miss JoanSnape, Peter
Heffer, Eric S.Meacher, MichaelSoley, Clive
Hogg, Norman (E Dunbartonshire)Mellish, Rt. Hon. RobertSpearing, Nigel
Holland, Stuart (L'beth, Vauxhall)Mikardo, IanSpriggs, Leslie
Home Robertson, JohnMillan, Rt. Hon. BruceStallard, A. W.
Homewood, WilliamMitchell, Austin (Grimsby)Steel, Rt. Hon. David
Hooley, FrankMolyneaux, JamesStewart, Rt. Hon. Donald (W Isles)
Horam, JohnMorris, Rt. Hon. Alfred (Wythenshawe)Stoddart, David
Howell, Rt. Hon. Denis (B'ham, Sm H)Morris, Rt. Hon. Charles (Openshaw)Stott, Roger
Howells, GeraintMorris, Rt. Hon. John (Aberavon)Strang, Gavin
Huckfield, LesMorton, GeorgeStraw, Jack
Hughes, Robert (Aberdeen North)Moyle, Rt. Hon. RolandSummerskill, Hon. Dr. Shirley
Hughes, Roy (Newport)Mulley, Rt. Hon. FrederickTaylor, Mrs. Ann (Bolton West)
Janner, Hon. GrevilleNewens, StanleyThomas, Jeffrey (Abertillery)
Jay, Rt. Hon. DouglasOakes, GordonThomas, Mike (Newcastle East)
John, BrynmorOgden, EricThomas, Dr. Roger (Carmarthen)
Johnson, James (Hull West)O'Halloran, MichaelThorne, Stan (Preston South)
Johnson, Walter (Derby South)O'Neill, MartinTilley, John
Jones, Alec (Rhondda)Orme, Rt. Hon. StanleyTinn, James
Jones, Barry (East Flint)Owen, Rt. Hon. Dr. DavidTorney, Tom
Jones, Dan (Burnley)Paisley, Rev IanVarley, Rt. Hon. Eric G.
Kaufman, Rt. Hon. GeraldPalmer, ArthurWainwright, Edwin (Dearne Valley)
Kerr, RussellPark, GeorgeWainwright, Richard (Colne Valley)
Kilfedder, James A.Parker, JohnWalker, Harold (Doncaster)
Kilroy-Silk, RobertParry, RobertWatkins, David
Kinnock, NeilPendry, TomWeetch, Ken
Lambie, DavidPenhaligon, DavidWellbeloved, James
Lamborn, HarryPowell, Rt. Hon. J. Enoch (S Down)Welsh Michael
Lamond, JamesPowell, Raymond (Ogmore)White, Frank R. (Bury & Radcliffe)
Leadbitter, TedRace, RegWhite, James (Glasgow, Pollok)
Leighton, RonaldRadice, GilesWhitlock, William
Lestor, Miss Joan (Eton & Slough)Rees, Rt. Hon. Merlyn (Leeds South)Wigley, Dafydd
Lewis, Ron (Carlisle)Richardson, Miss JoWilley, Rt. Hon. Frederick
Lofthouse, GeoffreyRoberts, Albert (Normanton)Williams, Rt. Hon. Alan (Swansea W)
Lyon, Alexander (York)Roberts, Allan (Bootle)Williams, Sir Thomas (Warrington)
Lyons, Edward (Bradford West)Roberts, Ernest (Hackney North)Wilson, Gordon (Dundee East)
Mabon, Rt. Hon. Dr. J. DicksonRoberts, Gwilym (Cannock)Wilson, Rt. Hon. Sir Harold (Huyton)
McCartney, HughRobertson, GeorgeWilson, William (Coventry SE)
McCusker, H.Robinson, Geoffrey (Coventry N. W.)Winnick, David
McDonald, Dr. OonaghRobinson, Peter (Belfast East)Woodall, Alec
McElhone, FrankRodgers, Rt. Hon. WilliamWoolmer, Kenneth
McKay, Allen (Penistone)Rooker, J. W.Wrigglesworth, Ian
McKelvey, WilliamRoss, Ernest (Dundee West)Wright, Miss Sheila
MacKenzie, Rt. Hon. GregorRoss, Wm. (Londonderry)Young, David (Bolton East)
Maclennan, RobertRowlands, Ted
McMahon, AndrewRyman, JohnTELLERS FOR THE NOES.
McMillan, Tom (Glasgow, Central)Sandelson, NevilleMr. James Hamilton and
McNally, ThomasSever, JohnMr. John Evans
McQuade, JohnSheerman, Barry

Question accordingly agreed to.