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Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish in the Official Report a table comparing the changes in the numbers paying tax and the average gain or loss in each case with his revised proposals at current rates of income and tax along the lines of paragraphs 9 and 11 of annex 4 Cmnd. 9756.
Mr. Norman Lamont : When independent taxation is introduced in April 1990, the number of elderly married couples liable to income tax will fall by about 160,000. The reduction in the number of married couples of working age liable to tax will be small. Details of average gains from independent taxation, analysed by income, were included in the Inland Revenue press release of 15 March 1988. Further estimates were provided to the hon. Member for Dunfermline, East (Mr. Brown) on 19 May at columns 574-76.
Mr. Redmond : To ask the Chancellor of the Exchequer if he will be reconsidering the use of negative taxation as set out by the Government of the day in 1972 in their White Paper on this subject ; and if he will make a statement.
Mr. Allen : To ask the Chancellor of the Exchequer what was the take -up of the tax cuts announced in his Budget ; and if he will make a statement.
Mr. Norman Lamont : The cut in the basic rate of income tax and the double indexation of personal
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allowances benefited all 25 million income taxpayers. The abolition of all higher rates above 40 per cent. benefited the 1.6 million people who pay income tax at the higher rate. In addition, some 750, 000 people were taken out of the income tax net altogether by the increase in personal allowances.Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will consider introducing a scheme for gradually drawing back personal income tax alllowances on the lines of the present age allowance.
Mr. Austin Mitchell : To ask the Chancellor of the Exchequer what is his estimate of the number of unmarried couples eligible for two additional personal allowances, the number claiming two allowances, and the estimated saving to the Exchequer from reducing their entitlement to one additional allowance in 1989-90.
Mr. Norman Lamont : We estimate that about 20,000 unmarried couples may be affected by the change made in section 30 of the Finance Act 1988 restricting unmarried couples with children to only one additional personal allowance between them. There should be a small tax yield of around £5 million.
Mr. Austin Mitchell : To ask the Chancellor of the Exchequer, whether, in advocating the conversion of
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additional personal income tax allowance into one-parent and other benefits as suggested in paragraph 4.11 of Cmnd. 9756, he was also considering targeting the payment of one-parent and other benefits after the conversion of the additional personal allowance ; to what extent the considerations set out in paragraphs 4.11 to 4.16 have been affected by his revised proposals for the separate taxation of husband and wife ; and whether he has considered freezing, reducing or abolishing the additional personal allowance and/or one-parent allowance and/or child dependency addition to enable him to target the benefit to those families which he considers in most need of financial help.Mr. Norman Lamont : I refer the hon. Member to the reply which I gave to him on 5 December at column 54.
Mr. Ralph Howell : To ask the Chancellor of the Exchequer what information he has as to the starting rates of income tax in (a) the United Kingdom, (b) Germany, (c) the Netherlands, (d) Belgium, (e) Denmark, (f) France, (g) Japan and (h) the United States of America, for (i) 1969-70, (ii) 1979-80, (iii) 1984-85 and (iv) 1987-88 or the last available year, in £ sterling.
Mr. Norman Lamont : The information requested is given in the table.
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|Per cent.
------------------------------------------------------------------------------
United Kingdom |30 |25 |30 |25
Federal Republic of Germany |19 |22 |22 |22
Netherlands |4 |20 |16 |14
Belgium<1><2> |19.7 |20 |21.7 |24.2
Denmark<1> |18 |18 |14.4 |22
France |5 |5 |5 |5
Japan<1> |10 |10 |10.5 |10.5
United States of America<1> |14 |14 |11 |15
<1>Plus local income taxes at varying rates.
<2>For lower income levels a percentage figure is not quoted. The figures
given are effective start rates estimated from the official tax table.
Single Internal Market
Mr. Ian Taylor : To ask the Chancellor of the Exchequer what types of potential problems of differing direct, indirect and corporate taxation rates have been raised with him, or with the Bank of England, arising from progress towards completion of the single internal market.
Mr. Norman Lamont : We have received a number of representations about the tax system in relation to the completion of the single market. These have ranged from representations about maintaining VAT zero rates and about the levels of excise duties proposed by the European Commission to questions of the interaction of the United Kingdom tax system and the free internal market in areas of the financial sector. I have been unable to trace any representations about direct and corporate tax rates as such.
Life Assurance
Mr. Alton : To ask the Chancellor of the Exchequer what representations he has received from the life assurance companies concerning the Inland Revenue review of life assurance ; and if he will make a statement.
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Mr. Norman Lamont I have received a number of substantial responses and I am studying them carefully. I will take account of all that has been said in coming to decisions on the future of the life assurance tax regime.Mr. Alton : To ask the Chancellor of the Exchequer when he intends to close his consultation on his document, "The Taxation of Life Assurance" ; and if he will make a statement.
Mr. Norman Lamont : I am currently considering responses to the Inland Revenue consultative document on the taxation of life assurance. There is much to digest before I can decide the best way forward and the extent of further consultation.
Mr. Alton : To ask the Chancellor of the Exchequer what was (a) the growth in tax yield from life offices and (b) the growth in life assurance business between 1982 and 1987, measured by total funds, taxable funds and taxable income.
Mr. Norman Lamont : The figures requested are not available from official sources and could be obtained only at disproportionate cost. The Association of British Insurers in its response to the Inland Revenue consultative document on the taxation of life assurance offered
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estimates of the growth rates described in the question based on a sample of life offices. I am sure that the association would let the hon. Member have details on request.Child Benefit
Mr. Austin Mitchell : To ask the Chancellor of the Exchequer what would be the effect on the tax threshold of a one-earner married couple with an income equal to that of the average earnings of an adult male manual worker ; and how many additional adults and children would fall into the poverty and employment traps if child benefit were terminated.
Mr. Norman Lamont : The level of child benefit has no effect on the thresholds at which married couples become liable to income tax ; these are determined solely by eligibility for personal tax allowances and reliefs. The
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effect of the abolition of child benefit on the numbers in the poverty and unemployment trap is a matter for my right hon. Friend the Secretary of State for Social Security.Pensions
Mr. Lester : To ask the Chancellor of the Exchequer if he will publish figures showing the different tax concessions for pension contributions, distinguishing between contributions to the state pension and to private pensions and between the maximum tax-deductible amounts or percentage that can be contributed by employees, employers and the self- employed, and also summarising the regulations regarding tax-free lump sums.
Mr. Norman Lamont : The information is set out in the table :
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1. Private Pensions
Table
Maximum
tax-relievable
contributions as
percentage of
earnings
|Employer |Employee |Maximum lump sum
|benefit
------------------------------------------------------------------------------------------------------------------------
|Lesser of 1.5 times
|final earnings or
Occupational Pension Schemes |No limit<1> |15<2> |£150,000<3>
|Lesser of 25 per
|cent. of value of
|individual's benefits
Personal Pension Schemes |17.5<4> |17.5<4> | or £150,000
|Three times the ann-
|ual annuity after
Retirement Annuity<5> Contracts |None |17.5<6> | commutation<7>
Notes:
<1> Employer contributions should not exceed the amount required to provide the benefits promised under the scheme
rules, taking into account any employee contributions.
<2> The self-employed cannot be members of an occupational pension scheme.
<3> Lump sums normally accrue at 3/80ths of final earnings for each year of service, up to a maximum of 40 years,
giving a maximum of 120/80ths. But maximum benefits may be given for 20 years' service to normal retirement age.
Finance (No. 2) Act 1987 introduced a proportionate link between maximum pensions and lump sums for people joining
pension schemes on or after 17 March 1987. The £150,000 ceiling does not apply to members who joined before that date.
<4> The limit of 17.5 per cent. applies up to the age of 50. The limit applies to aggregate contributions by employers
and employees. For higher ages the contribution limits are:
51-55 20 per cent.
56-60 22.5 per cent.
60-74 27.5 per cent.
The same limits apply to contributions by self-employed people.
<5> Retirement annuity contracts were superseded by personal pensions on 1 July 1988, although contracts in existence
on that date may continue.
<6> Contribution rates are identical to those for personal pension schemes.
<7> In relation to contracts issued on or after 17 March 1987 an upper limit of £150,000 applies to the lump sum.
2. State pensions
(a) State retirement pension : The state retirement pension consists of a basic pension, and, in some cases, an additional pension (the state earnings-related pension scheme--SERPS) and a graduated pension. All are funded from national insurance contributions. There is no tax relief for employees' contributions. Employers' contributions may be deducted from profits as a business expense.
(b) Contracted-out personal pension schemes : When an employee uses a personal pension scheme to contract out of SERPS the tax treatment of his and his employer's national insurance contributions is the same as under SERPS. But the employee's share of the contributions--known as "minimum contributions"--paid to the personal pension scheme by the Department of Social Security (DSS) is grossed up at the basic rate of income tax.
(c) Contracted-out occupational pension schemes : Contributions by employers and employees paid towards a "Guaranteed minimum pension (GMP)" or "protected rights" qualify for tax reliefs in the manner described in the table above. The GMP or protected rights represent under DSS legislation a minimum level of pension which be paid to
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a scheme member by a contracted-out scheme. They are broadly equivalent to the amount of pension the member would have received under SERPS.(d) State pensions and those in substitution for them cannot be taken as lump sums.
Trade Deficit
Mr. Austin Mitchell : To ask the Chancellor of the Exchequer what is his estimate of the loss of revenue to the Exchequer as a result of the deficit of £14 billion in trade in manufactures.
Mr. Major : The effect of the deficit of trade in manufactures on Government revenues depends on what would otherwise have happened to a wide range of economic variables. Any estimates would be highly speculative and subject to wide margins of error. Even the direction of the effect is ambiguous. Revenues could be either higher or lower.
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Payroll Giving
Mr. Heddle : To ask the Chancellor of the Exchequer if he will indicate the level of public support for the payroll-giving scheme ; and how much money has been donated to charities for each year since the introduction of the scheme to the latest available date.
Mr. Fisher : To ask the Chancellor of the Exchequer (1) how many people participated in the payroll giving scheme in each of the past three years ;
(2) what total sums of money were distributed to charities through the payroll giving scheme in each of the past three years.
Mr. Norman Lamont : In 1987-88, the first year of the payroll giving scheme, about 60,000 employees participated and £1 million was donated. These estimates are provisional. Information for 1988-89 is not yet available, but donations and the number of participants in the scheme are expected to be considerably higher than in the first year.
Mr. Fisher : To ask the Chancellor of the Exchequer (1) whether he will publish a list of charities who have benefited from the payroll giving scheme ;
(2) what arts charities have benefited under the payroll giving scheme in each of the past three years ; and to what extent.
Mr. Norman Lamont : The extent to which all charities benefited from the payroll giving scheme in the year 1987-88, the first year of its operation, is estimated to be around £1 million. I am unable to supply details of individual charities which have benefited, because the information supplied to the Inland Revenue on individual charities is confidential.
EC (Revenue)
Mr. Redwood : To ask the Chancellor of the Exchequer if he will list all the sources of revenue for the EEC in 1988 along with the latest estimates of the amounts to be raised in pounds sterling.
Mr. Brooke : Information on the own resources figures in the Community budget is included in the "Statement on the 1988 Community Budget", Cm. 525, tables II and IIa. The Community also has miscellaneous items of revenue and, in 1988, benefited from a surplus carried forward from 1987. These additional items amount to some 811 mecu (£541 million). Table III of the statement provides a slightly more up-to-date estimate of what the United Kingdom is likely to pay this year.
Civil Service (Leavers)
Mr. Riddick : To ask the Chancellor of the Exchequer what steps he is taking to provide more scope for people who leave the Civil Service to return to it later in their careers.
Mr. Brooke : New arrangements come into force today by which former civil servants may be reappointed, at the discretion of the Civil Service Commissioners, at a grade higher than that occupied when they left the service, without the formality of an open competition. In the past it has only been open to former civil servants in such circumstances to return at the same or a lower grade than they previously occupied.
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My right hon. Friend the Minister of State, Privy Council Office and my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs have approved an appropriate amendment to the Civil Service Commission General Regulations 1986 in respect of both the home Civil Service and Diplomatic Service.Tobacco Tax
Mr. Parry : To ask the Chancellor of the Exchequer what information he has as to the percentage of households paying more in tobacco tax than in income tax ; and if he will conduct an inquiry into this area.
Mr. Norman Lamont [holding answer 1 December 1988] : Sufficiently reliable and up-to-date information is not available to provide an estimate of the numbers requested. While the Government have no plans to conduct an inquiry into this specific issue, tobacco duties are reviewed annually. Their levels are set to strike a careful balance between revenue requirements and health considerations.
Growish Limited
Mr. Campbell-Savours : To ask the Chancellor of the Exchequer what progress has been made on investigations into offences under the Taxes Management Act 1970 and the Taxes Act 1988 in respect of Growish Limited.
Mr. Norman Lamont [holding answer 5 December 1988] : I cannot comment on the tax affairs of an individual taxpayer.
Pensioners
Mrs. Beckett : To ask the Chancellor of the Exchequer what income tax is received from those over pensionable age by decile or quartile with respect to total numbers of people over pensionable age ; and what is the median weekly income tax received from those over pensionable age.
Mr. Norman Lamont [holding answer 5 December 1988] : In 1988- 89, about 2.6 million single people aged 65 or over and married couples in which at least one partner is 65 or over will be liable to income tax. This represents about one third of all elderly tax units. The median level of income tax taken over all such tax units is therefore nil. The level of income at the upper quartile point is about £100 per week and income tax paid is about £7 per week. The corresponding figures for the highest decile point are £200 and £25. The total income tax liability of elderly tax units is given in the table.
Income tax liability of aged tax units 1988-89
Quartile |Tax units (thousand)|£ billion
------------------------------------------------------------------------------------
Top 10 per cent. |790 |3.1
Next 15 per cent. |1,185 |0.9
Next 8 per cent. |625 |0.2
Remainder |5,300 |-
|------- |-------
Total |7,900 |4.2
Estimates are based on a projection of the 1985-86 survey of personal incomes and are provisional.
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Privatisation (Advertising)
Mr. Wareing : To ask the Chancellor of the Exchequer what was the total cost of advertising the sale of shares in respect of each company privatised since 1979.
Mr. Norman Lamont [holding answer 5 December 1988] : I refer the hon. Member to the reply I gave to my hon. Friend the Member for Darlington (Mr. Fallon) on 3 March 1988 at column 629. This lists the cost to the Government of corporate and flotation advertising and advertising agency fees, exclusive of VAT, for each privatisation and residual share sale since the British Telecom sale of December 1984. Comparable figures for previous sales are not readily available.
Disposable Income
Mr. Nicholas Bennett : To ask the Chancellor of the Exchequer if he will give the average net disposable income after taking account of housing costs for each region of the United Kingdom in 1988.
Mr. Norman Lamont [holding answer 9 December 1988] : The latest available regional information on average per capita disposable income after taking into account housing costs is from the family expenditure surveys for 1985 and 1986. Data for 1985 and 1986 combined are :
|£ per person per
|week
---------------------------------------------------------
North |50.12
Yorkshire & Humberside |50.14
North West |52.08
East Midlands |53.92
West Midlands |50.17
East Anglia |56.29
Greater London |67.72
Rest of South East |62.08
South West |57.99
Wales |52.41
Scotland |54.60
Northern Ireland |44.88
United Kingdom |55.85
Housing costs consist of mortgage repayments, gross rent including owner occupiers' imputed rent, rates, water charges etc. less housing benefit, rebates and allowances.
Pension Funds
Mr. McCrindle : To ask the Chancellor of the Exchequer what proposals he has to permit or require pension funds to build up a margin of reserve against expected future liabilities ; and if he will make a statement.
Mr. Norman Lamont [holding answer 9 December 1988] : It is a matter for the trustees of individual pension funds to decide what reserves should be held against expected future liabilities.
Pensions Holidays
Mr. McCrindle : To ask the Chancellor of the Exchequer (1) what proposals he has to review the practice of taking pensions holidays ; and if he will make a statement ;
(2) what proposals he has to extend to 20 years the period over which pension surpluses should be eliminated ; and if he will make a statement ;
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(3) what proposals he has to abolish or restrict contribution holidays for employer sponsored occupa-tional pension schemes ; and if he will make a statement.Mr. Norman Lamont [holding answer 9 December 1988] : I have no such proposals.
Contracts (Tendering)
Mr. Blair : To ask the Chancellor of the Exchequer whether the Government have made any study of the impact on British industry of the EEC draft directive requiring all companies in the private and public sectors to put out to tender contracts for supplies above £500,000 and capital schemes above £3,000,000 ; when he expects this draft directive to come into effect ; and if he will make a statement.
Mr. Major [holding answer 9 December 1988] : Recent proposals by the European Commission to extend rules on purchasing to bodies outside central and local government cover undertakings in the water, energy, transport and telecommunications sectors which operate on the basis of special or exclusive rights or an authorisation granted by a competent authority of a member state. The rules are intended to make purchasing more open, but let undertakings negotiate with selected suppliers or contractors instead of putting contracts out to tender. Individual contracts would be affected when their estimated value, net of VAT, exceed £142,000 for supplies (and software service contracts in the case of the proposal on telecommunications) and £3.3 million for building and civil engineering works ; supplies requirements which were expected to exceed £500,000 in a product area over 12 months would be the subject of periodic indicative notices. The proposals are part of the single market programme due to be completed in 1992. The Government are consulting closely with relevant purchasers and suppliers in the United Kingdom on possible changes to the proposals which would reduce any burdens the rules may impose. The rules should enable United Kingdom suppliers and contractors to compete more effectively in markets which in some cases have been difficult to enter.
MIRAS
Mrs. Ray Michie : To ask the Chancellor of the Exchequer what is the total cost to the Treasury in terms of MIRAS of a 1 per cent. increase in mortgage lending rates.
Mr. Norman Lamont [holding answer 8 December 1988] : A one percentage point increase in gross mortgage interest rates would increase the cost of mortgage interest tax relief by about £450 million in a full year at 1988-89 levels. If other interest rates were also to change, there would be other effects on Government revenues.
Fixed Capital Formation
Mr. Nigel Griffiths : To ask the Chancellor of the Exchequer if he will publish general government gross domestic fixed capital formation, total gross domestic fixed capital formation, net general government fixed capital formation and net domestic fixed capital formation for each quarter of 1978, 1979, 1987 and 1988 at constant prices, specifying in each case which deflator has been used.
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Mr. Major [holding answer 8 December 1988] : The latest constant price estimates together with the implied deflators are given in the tables. The net figures are available only on an annual basis.
~
Net domestic fixed capital formation at constant 1985 prices in £ million, together with the implied deflators<1>
Year |Total |Deflator for total |General Government |Deflator for General
|(1985=100) |Government
|(1985=100)
------------------------------------------------------------------------------------------------------------------------------
1978 |20,587 |56.4 |4,606 |56.9
1979 |21,250 |64.7 |4,208 |67.1
1987 |20,546 |107.6 |4,057 |104.3
<1> A large number of deflators are used in the calculations of capital formation at constant prices. The CSO's "United
Kingdom National Accounts, Sources and Methods, 1985", Chapter 12, gives further details.
~
Net domestic fixed capital formation at constant 1985 prices in £ million, together with the implied deflators<1>
Year |Total |Deflator for total |General Government |Deflator for General
|(1985=100) |Government
|(1985=100)
------------------------------------------------------------------------------------------------------------------------------
1978 |20,587 |56.4 |4,606 |56.9
1979 |21,250 |64.7 |4,208 |67.1
1987 |20,546 |107.6 |4,057 |104.3
<1> A large number of deflators are used in the calculations of capital formation at constant prices. The CSO's "United
Kingdom National Accounts, Sources and Methods, 1985", Chapter 12, gives further details.
OVERSEAS DEVELOPMENT
UNICEF
71. Mr. Tom Clarke : To ask the Secretary of State for Foreign and Commonwealth Affairs when he next proposes to meet
representatives of UNICEF to discuss common priorities ; and if he will make a statement.
Mr. Chris Patten : I hope to see Mr. Grant, the executive director of UNICEF, in March.
Aid (Women)
72. Mr. Matthew Taylor : To ask the Secretary of State for Foreign and Commonwealth Affairs if he has any plans to increase the number of staff in his Department responsible for monitoring the effect of aid projects on women.
Mr. Chris Patten : Executive departments in the Overseas Development Administration are responsible for monitoring all aspects of projects, including their impact on women. The staffing of these departments is adequate to fulfil their full range of
responsibilities. Professional advice available to the Department on social development issues has been significantly strengthened in the past year.
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European Community
73. Ms. Quin : To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met his European Economic Community counterparts ; and what was the content of the discussion.
Mr. Chris Patten : I met them at the Development Council on 23 November. We agreed on the fundamental importance of food security and adopted a resolution which provides valuable guidelines on this. We discussed whether the Community's Asia/Latin America programme should be focused on the poorest countries and the progress made to date on renegotiating the Lome convention. We also reviewed the Community's special programme of assistance for debt-distressed countries in sub-Saharan Africa, under which over £200 million has been allotted over the last year.
Kampuchea
75. Sir Russell Johnston : To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his Department's co-operation with British voluntary agencies in the provision of aid for Kampuchea.
Mr. Chris Patten : I announced on 25 October an additional allocation of £500,000 to support projects, including humanitarian projects in Cambodia, proposed by British voluntary agencies for assistance under the joint funding scheme.
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Aid (Environmental Impact)
76. Mr. Hind : To ask the Secretary of State for Foreign and Commonwealth Affairs whether British overseas aid projects are scrutinised for environmental impact.
Mr. Chris Patten : Aid managers in the Overseas Development Administration are required to ensure the environmental soundness of projects from the earliest stage to completion and evaluation. A new ODA manual to help project managers decide how much environmental assessment is required in each case is currently being field tested ; over 50 international agencies and non-governmental organisations have been asked for their comments.
Ethiopia
77. Mr. Baldry : To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his recent visit to Ethiopia.
Mr. Chris Patten : I visited Ethiopia from 6 to 9 November. The main purpose of my visit was to see the refugee camps in the Ogaden and on the Sudanese border. I also had talks with Ethiopian Ministers and officials and with representatives of the international and voluntary agencies. My main impression was of the appalling degree of human suffering which is being caused by the conflicts in Sudan and Somalia. We shall continue to do all we can to urge a peaceful resolution of these conflicts and, meanwhile, to ease the plight of the refugees.
India
78. Mr. Butler : To ask the Secretary of State for Foreign and Commonwealth Affairs what is the total of overseas aid given to India between 1981 and the latest available year.
Mr. Chris Patten : Gross British bilateral aid to India was £825 million for the calendar years 1981-87 inclusive.
81. Sir Fergus Montgomery : To ask the Secretary of State for Foreign and Commonwealth Affairs to what extent British is assisting the development of primary education in India.
Mr. Chris Patten : We have carried out an innovative pilot project in four districts of the state of Andhra Pradesh providing a total of £1.3 million to construct 200 classrooms to new, improved designs and to train teachers and teacher educators in child-centred learning tech- niques. A recent appraisal mission has been looking at ways of extending the project to all 23 districts of Andhra Pradesh. We look forward to working with the state Government on this major undertaking.
Sub-Saharan Africa
79. Mr. Andrew Smith : To ask the Secretary of State for Foreign and Commonwealth Affairs what was (a) Britain's and (b) other members of the OECD development assistance committee's net official development assistance disbursement to sub-Saharan Africa between 1980 and 1987.
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