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Value Added Tax

The VAT changes will need to be accommodated. Some companies will change their marketing collateral, while others will invoke training procedures so that adjustments can be made at the till. Others—almost all—will have to spend additional money on accountancy to accommodate the way in which the books will be audited. There may not be a real, recognisable cost in terms of, for instance, the production of new brochures, but there will be a cost none the less. The next issue that I wish to raise was alluded to by the hon. Member for Twickenham (Dr. Cable). When VAT was reduced, the Government compensated for that outrageously with a second increase in duty on Scotch in a single year, and by increasing the duty on fuel. The prayer calls only for the VAT change to be annulled, with no annulment of the increases in duty that were introduced to offset the VAT reduction. That would land the drinks sector, the hospitality sector and those who depend on fuel with an additional charge. Although I support fiscal stimulus, and although I have criticisms of the way in which the Government have introduced the VAT reduction, it amounts to 1 per cent. of GDP and £12.5 billion of real money for the real economy. I must therefore tell the Liberal Democrats, with regret, that the Scottish National party will not be able to support their attempts today.