Clause 9 — extension of reduced standard rate and anti-avoidance provision

Part of Surface Water and Highway Drainage Charges (Exemption) Bill – in the House of Commons at 7:45 pm on 12 May 2009.

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Photo of Jeremy Browne Jeremy Browne Shadow Minister (Treasury) 7:45, 12 May 2009

That is an entirely fair point. Parking charges are a good example, which leads on from the point made by my hon. Friend Lembit Öpik. By and large, parking charges are rounded to a sensible hourly rate. A reduction of 2 per cent. would mean that instead of paying £1.50 an hour, a person would pay—somebody else should do the maths—£1.47 or whatever. People might prefer to pay £1.50 rather than £1.47 or have difficulty in paying the precise amount. Many local authorities would think it easier to stick at £1.50, so in such cases the benefit was not passed on to the consumer.

No doubt opposition parties of all colours in the authority would then criticise the administrating party for not passing on the VAT cut to consumers, even though it would have been administratively burdensome for the authority to do so. The money would be absorbed by the local authority, so I suppose that the Government would argue that the local authority would have more money to spend on other services. However, I am not sure that the money flowed through the system as neatly as the Government would have wished.