Taxes on Spending

Ways and Means – in the House of Commons at 3:34 pm on 17th March 1987.

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I now turn to the taxation of spending.
I have already announced some important changes in value added tax to prevent avoidance and to help the small business man. I have no other proposals for major changes in VAT this year.
However, in the light of representations I have received, I have decided to extend slightly the VAT reliefs I introduced last year for certain aspects of charitable work. I propose to relieve charities from VAT on certain welfare vehicles used by hospices to transport the terminally ill; on installing or adapting lavatory or bathroon facilities in charity homes for the disabled; on drugs and chemicals used by a charity in medical research; and on specialised location and indentification equipment employed by mountain rescue and first aid services.
While on the subject of charitable giving, I should remind the House that this year's Finance Bill will increase the limit on donations to charity under the new payroll giving scheme, which starts next month, from £100 to £120 a year.
Next, the excise duties. I propose to maintain the revenue from the taxation of gambling but to make some readjustment within the total. I therefore propose to increase the gaming machine licence duty by about a. quarter, which will restore it in real terms to its 1982 level, when it was last increased; and to offset this by abolishing. from 29 March, the tax on on-course betting. I am sure that this measure will be welcomed by the racing and bloodstock industry, as well as consoling those hon. Members who have complained to me about the clash this year between Budget day and the Champion Hurdle.
In my Budget Statement last year I undertook to introduce a tax differential in favour of unleaded petrol, to offset its higher production cost. I can now announce that the differential will be 5p a gallon. This means that the pump price of unleaded petrol should be no higher than that of four-star leaded petrol. The change will take effect from 6 o'clock this evening.
In my 1985 Budget I announced the first stage in the process of increasing the rates of vehicle excise duty on farmers' heavy lorries to bring them into line with the use they make of the public roads. I introduced the second stage in last year's Budget and propose to complete the process this year. I also propose to increase the rates of duty on trade licences and to rationalise the taxation of recovery vehicles.
I have no further changes to propose this year in the rates of excise duty.