Clause 3 — Rate of value added tax

Part of Bill Presented — Shared Parenting Orders Bill – in the House of Commons at 6:15 pm on 13 July 2010.

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Photo of Stephen Williams Stephen Williams Liberal Democrat, Bristol West 6:15, 13 July 2010

I have not read that study and I thank the hon. Gentleman for bringing it to my attention, but I repeat my earlier point: lots of considerations go into the mix in respect of the economic decisions that businesses make, and VAT is not always the sole determinant. When I was a tax adviser we always said to clients that the tax decision does not wag the business dog. Taxation is one of the factors that all businesses will take into account when making decisions-such as who to employ, what to sell and how to pitch their prices-but there are many others.

My hon. Friend Andrew George said that his amendments were probing amendments intended to generate discussion, and they have certainly achieved that. His amendment 54 was designed to address what the impact of a smaller rise in VAT-to 18%-would be, and he gave us his answer to that. We on the Government Benches should not be afraid of having internal discussions. Although I did not participate in all the Budget debates and Finance Bill debates in the previous Parliament, many of us will fondly remember Rob Marris, who, sadly, lost his Wolverhampton seat at the election. He tabled many friendly probing amendments from the Labour Back Benches, which might sometimes have made his Front-Bench colleagues uncomfortable, but they also made a valuable contribution to debates.

Both my hon. Friend in his amendment 55 and the hon. Member for Nottingham East in his amendment 22 propose sunset clauses so that the rise in VAT-which, at least, it seems they are both contemplating as necessary-would be for a specified period. Every year we have a pre-Budget report, a Budget and a Finance Bill, so I am fairly confident that every year we will return to this topic and there will be an opportunity, as there has been under all Governments, to change the mix of taxes, and each year we will get to vote on the current mix.