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Mr. Austin Mitchell : To ask the Chancellor of the Exchequer (1) whether he will publish in the Official Report a table showing for those with and those without investment income in 1988-89 the numbers in each income band up to a lower limit of £100,000 benefiting from mortgage interest relief ; and if he will provide an estimate for 1989-90 ;

(2) whether he will publish in the Official Report tables showing the estimated number of tax units under age 65 years in each income band up to a lower limit of £100,000 in receipt of mortgage interest relief in the current financial year and the percentage with investment income ; and if he will also distinguish between single persons, one-earner and two- earner married couples.

Mr. Lilley : The available information is in the tables. It is not possible to provide reliable estimates in all the detail requested not to provide separate figures for those under 65. Estimates are subject to revision.


Tax units<1> receiving mortgage interest relief by range of total                                                                 

income 1988-89 (thousands)                                                                                                        

Range of total income     |with no investment income|with investment income   |Total                                              

----------------------------------------------------------------------------------------------------------------------------------

Up to £5,000              |490                      |200                      |690                                                

£5,000-£10,000            |430                      |1,400                    |1,830                                              

£10,000-£15,000           |290                      |2,270                    |2,560                                              

£15,000-£20,000           |160                      |1,550                    |1,710                                              

£20,000-£25,000           |70                       |960                      |1,030                                              

£25,000-£30,000           |50                       |430                      |480                                                

£30,000+                  |50                       |750                      |500                                                

                          |---                      |---                      |--                                                 

  Total                   |1,540                    |7,560                    |9,100                                              

<1> Single people and married couples.                                                                                            


Tax units<1> receiving mortgage interest relief by range of total                                                                 

income 1988-89 (thousands)                                                                                                        

Range of total income     |with no investment income|with investment income   |Total                                              

----------------------------------------------------------------------------------------------------------------------------------

Up to £5,000              |440                      |200                      |640                                                

£5,000-£10,000            |420                      |1,280                    |1,700                                              

£10,000-£15,000           |270                      |1,990                    |2,260                                              

£15,000-£20,000           |160                      |1,720                    |1,880                                              

£20,000-£25,000           |120                      |1,080                    |1,200                                              

£25,000-£30,000           |60                       |550                      |610                                                

£30,000+                  |60                       |950                      |1,010                                              

                          |---                      |---                      |---                                                

  Total                   |1,530                    |7,770                    |9,300                                              

<1> Single people and married couples.                                                                                            

Life Policies

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer what is his forecast of the value in the current financial year of (a) investment- linked, (b) other surrendered life policies, excluding pension refunds, (c) the profit on these policies, and (d) the liability to tax on those profits.

Mr. Lilley : In 1986, on the basis of a sample of companies, surrenders--broadly life policies "cashed in", in whole or in part, other than on maturity or death--amounted to some £3 billion. The information necessary to update this figure is not yet available, and no discrete estimates can be made of the value of investment-linked or


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other policies wholly surrendered. Tax on life assurance, in respect of all policies, is paid at the level of the life office on income and gains, and policy holders, in a minority of cases, may have further liability to tax at the marginal rate : no estimate can accordingly be made of profits or tax liabilities for a particular class and generation of policies.

Junk Bonds

Mr. Allen : To ask the Chancellor of the Exchequer what economic and financial effects have arisen in the United Kingdom economy due to the growth in the use of junk bonds.

Mr. Ryder : I refer the hon. Member to the answer given to him on 20 July at column 263.

IMF (Quota Increase)

Mr. Wareing : To ask the Chancellor of the Exchequer what is the Government's response to the International Monetary Fund's proposals by Mr. Michael Camdessus for a quota increase.

Mr. Ryder : The size of any increase which may be made in IMF quotas is still under review.

Civil Service Dispersal

Mr. Cran : To ask the Chancellor of the Exchequer what has been the estimated saving to the Treasury of the relocation of Civil Service posts outside London and the south-east since 1979.

Mr. Ryder : This information could be obtained only at disproportionate cost, since no records are kept centrally of savings achieved through relocation of central Government Departments. However, the Scottish Office report published in June 1988 evaluating the dispersal of part of the Overseas Development Administration from London to East Kilbride in 1981 offers evidence of the significant financial and other advantages which can be obtained through relocation.

Inflation

Mr. Thurnham : To ask the Chancellor of the Exchequer what is his latest estimate for the rate of inflation ; and if he will make a statement.

Mr. Ryder : The all-items RPI inflation rate in the year to June 1989 was 8.3 per cent., the same as in May. Underlying inflation is much better depicted by the increase in the RPI excluding mortgage interest payments ; it rose 5.9 per cent. in the year to June 1989, down slightly from the 6 per cent. figure in May. Inflation may now have peaked and monetary policy will remain as tight as is necessary for as long as is necessary to ensure that it declines.

Interest Rates

Mr. Andrew F. Bennett : To ask the Chancellor of the Exchequer when he next expects to meet representatives of the Building Societies Association to discuss the level of United Kingdom interest rates.

Mr. Ryder : My right hon. Friend has no plans to meet representatives of the Building Societies Association.


Column 1132

International Monetary Fund

Mr. Barron : To ask the Chancellor of the Exchequer what was the outcome of the recent annual meeting of the International Monetary Fund and the World Bank ; and if he will make a statement.

Mr. Ryder : The annual meetings of the International Monetary Fund and World Bank will take place between 26 and 28 September 1989.

Mr. Allen : To ask the Chancellor of the Exchequer how many meetings he has had with the International Monetary Fund since 29 September 1988 ; whether the United Kingdom's interest rates, inflation rate, level of public investment or trade deficit were discussed ; and if he will make a statement.

Mr. Ryder : My right hon. Friend attended the spring meetings of the IMF in April. I refer the hon. Member to the reply that my right hon. Friend gave to my hon. Friend the Member for Bury, North (Mr. Burt) on 4 May 1989, Official Report, columns 347-48.

Domestic Credit

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer if he will include in the Official Report a table showing the components of domestic credit, together with the increase in each year since 1980 and the current year to date ; and if he will make a statement.

Mr. Ryder : Data on the components of domestic credit are published in Financial Statistics table 11.7.

Clearing Banks

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will include in the Official Report a table showing for the years 1959, 1969, 1979 and 1988 the assets and liabilities of the clearing banks set out in cash, call money and so on form together with the percentage in each category and the reserves held with the Bank of England in reserve ratios and special deposits.

Mr. Ryder : Figures for the assets and liabilities of United Kingdom banks, and banks' balances with the Bank of England are published in the Bank of England Quarterly Bulletin.

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will include in the Official Report a table showing for the big four clearing banks the profit before and after tax, excluding exceptional provisions in 1959, 1969, 1979 and 1988, together with his forecast for the current financial year.

Mr. Ryder : The information requested is as follows :


                 |Pre-tax profits |Post-tax profits                 

                 |£ million       |£ million                        

--------------------------------------------------------------------

1969             |212             |112                              

1979             |1,571           |1,081                            

1988             |4,443           |2,875                            

These figures aggregate relevant figures in the annual reports of Barclays, Lloyds, Midland and National Westminster. Comparable figures for 1959 and forecasts for the current financial year are not available.


Column 1133

VAT (Free Ports)

Mr. Alton : To ask the Chancellor of the Exchequer, pursuant to his reply of 19 July, Official Report, column 182, to the hon. Member for Mossley Hill, whether he will now review the operation of existing Customs roles in freeport areas ; and what consideration he has given to the representations of the Mersey Docks and Harbour Company, a copy of which has been sent to him.

Mr. Ryder : As the hon. Member will be aware, free ports were established in the United Kingdom in 1984 for an experimental period of seven years. The experiment is being reviewed this year by independent consultants. There will be a full examination of the rules administered by Customs and Excise which will take into account, among other matters, the representations of the Mersey Docks and Harbour Company.

EC Budgets

Sir Richard Body : To ask the Chancellor of the Exchequer whether he will set out in tabular form the total net payments or total net receipts of each of the other member states for the European Economic Community budgets since 1979.

Mr. Ryder : As my right hon. Friend the former Paymaster General indicated in his reply of 5 July 1989, Official Report, column 176, the information requested for other member states is not available.

Bank Lending

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer what has been the increase in bank lending since May 1979 ; where the additional funds have come from ; what effect he expects the increase in interest rates since the beginning of the year to have on banking profits ; and what is his forecast of the increase in revenue to the Exchequer therefrom.

Mr. Ryder : I refer the hon. Member to the answer given to him on 29 July 1988 at columns 735-36.

Overseas Assets

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will bring up to date the information provided in the written reply dated 16 March 1983, Official Report, column 164, concerning the amount of tax collected on income earning and other assets held overseas ; and if he will include in the table an estimate for each year of the total value of such assets, whether or not they have been assessed to tax.

Mr. Lilley : I shall answer when resources permit.

Mortgages

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish in the Official Report a table showing for each year since 1979 the increase in


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mortgage funds for housing together with the increase in the value of the houses sold by reference to stamp duty or otherwise.

Mr. Lilley : I shall answer when resources permit.

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish in the Official Report a table showing for each year since 1979 the estimated number of mortgages for domestic premises, the value of mortgages outstanding, and the cost of servicing the debt as a percentage of gross domestic product to one place of decimals.

Mr. Ryder : I refer the hon. Member to statistics published by the Department of the Environment in "Housing and Construction Statistics" and by the Building Societies Association in "Housing Finance".

Investment Income

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish in the Official Report a table showing by range of income and tax status an estimate of the saving to the Exchequer in a full year by setting off investment income against mortgage interest qualifying for relief under the MIRAS scheme.

Mr. Lilley : I shall answer when resources permit.

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer (1) whether he will publish in the Official Report a table showing for those above and for those below pensionable age, the estimated number of tax units with an investment income in 1989-90 by range of total income up to a lower limit of £100,000, distinguishing between single persons, one- earner and two-earner married couples, together with the average investment income in each case ; and if he will provide separate figures for those with an investment income of more than £200 ;

(2) whether he will publish in the Official Report a table showing for women above and for those below pensionable age, the estimated number of tax units with an investment income in 1989-90 by range of total income up to a lower limit of £100,000, distinguishing between single persons, one-earner and two-earner married couples, together with the average investment income in each case ; and if he will provide separate figures for those with an investment income of more than £200 ;

Mr. Lilley : Available estimates are in the tables. All estimates are provisional and subject to a wide margin of error because they are based on a projection of the 1986-87 survey of personal incomes and the coverage of investment income in the survey is incomplete. In some cases, investment income on which basic rate liability is satisfied by deduction at source is not reported. No reliable estimates can be given for single people and married couples with total income of less than £5,000.


Column 1135


Table 1                                                                                                                                                                                                                                                                                                                             

Single people and married couples with investment income 1989-90                                                                                                                                                                                                                                                                    

Total income (lower         Single people                                                                    Married couples                                                                                                                                                                                                        

limit)                                                                                                                                                                                                                                                                                                                              

                                                                                                             without wife's earned                                                            with wife's earned                                                                                                                    

                                                                                                             income                                                                           income                                                                                                                                

                            Number                     Investment income                                     Number                     Investment income                                     Number                     Investment income                                                                                          

                                                      |Total                     |Average                                              |Total                     |Average                                              |Total                     |Average                                                                         

£ p.a.                     |'000s                     |£ million                 |£                         |'000s                     |£ million                 |£                         |'000s                     |£ million                 |£                                                                               

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                            Aged under 65                                                                                                                                                                                                                                                                                           

5,000                      |2,800                     |2,200                     |790                       |990                       |810                       |820                       |320                       |310                       |960                                                                             

10,000                     |2,200                     |2,100                     |960                       |2,200                     |2,500                     |1,150                     |2,300                     |2,400                     |1,060                                                                           

20,000                     |280                       |570                       |2,020                     |500                       |700                       |1,400                     |1,600                     |2,200                     |1,390                                                                           

30,000                     |80                        |460                       |5,930                     |210                       |640                       |3,000                     |650                       |1,600                     |2,390                                                                           

50,000                     |30                        |710                       |27,500                    |90                        |1,200                     |13,200                    |170                       |1,800                     |10,800                                                                          

                           |-------                   |-------                   |-------                   |-------                   |-------                   |-------                   |-------                   |-------                   |-------                                                                         

All                        |5,500                     |6,100                     |1,120                     |4,000                     |5,900                     |1,480                     |5,000                     |8,300                     |1,660                                                                           

                                                                                                                                                                                                                                                                                                                                    

                            Aged 65 and over                                                                                                                                                                                                                                                                                        

5,000                      |540                       |1,200                     |2,290                     |430                       |670                       |1,560                     |160                       |220                       |1,400                                                                           

10,000                     |210                       |1,200                     |5,820                     |250                       |910                       |3,630                     |260                       |770                       |2,950                                                                           

20,000                     |50                        |640                       |14,100                    |50                        |490                       |9,810                     |120                       |890                       |7,160                                                                           

30,000                     |20                        |470                       |23,500                    |30                        |470                       |16,500                    |60                        |780                       |13,900                                                                          

50,000                     |20                        |830                       |52,600                    |20                        |690                       |35,500                    |20                        |550                       |30,800                                                                          

                           |-------                   |-------                   |-------                   |-------                   |-------                   |-------                   |-------                   |-------                   |-------                                                                         

All                        |20                        |840                       |4,400                     |5,280                     |800                       |3,200                     |4,160                     |620                       |3,200                     |5,210                                                


Table 2: Single people and married couples with investment income of more than £200, 1989-90                  

Total incomSingle people                 Married couples                                                      

limit)                                                                                                        

                                         without wife's earned         with wife's earned                     

                                         income                        income                                 

           Number    Investment income   Number    Investment income   Number    Investment income            

                    |Total    |Average            |Total    |Average            |Total    |Average            

£ p.a.    |'000s    |£ million|£        |'000s    |£ million|£        |'000s    |£ million|£                  

--------------------------------------------------------------------------------------------------------------

Aged under 65                                                                                                 

5,000     |2,600    |2,200    |860      |830      |800      |970      |270      |300      |1,130              

10,000    |2,000    |2,100    |1,040    |2,000    |2,500    |1,270    |2,100    |2,400    |1,170              

20,000    |260      |570      |2,170    |470      |700      |1,500    |1,400    |2,200    |1,510              

30,000    |70       |460      |6,410    |190      |640      |3,300    |570      |1,600    |2,700              

50,000    |20       |710      |29,900   |90       |1,200    |14,000   |160      |1,800    |11,800             

All       |5,000    |6,100    |1,220    |3,500    |5,800    |1,650    |4,500    |8,300    |1,840              

                                                                                                              

Aged 65 and over                                                                                              

5,000     |520      |1,200    |2,370    |400      |660      |1,680    |140      |220      |1,520              

10,000    |210      |1,200    |5,850    |240      |910      |3,730    |250      |770      |3,060              

20,000    |50       |640      |14,100   |50       |490      |9,850    |120      |890      |7,170              

30,000    |20       |470      |23,500   |30       |470      |16,600   |60       |780      |13,900             

50,000    |20       |830      |52,600   |20       |690      |35,500   |20       |550      |30,800             

All       |820      |4,400    |5,410    |740      |3,200    |4,380    |590      |3,200    |5,410              


Table 3: Single females with investment income and married couples where the wife has investment income       

1989-90                                                                                                       

Total incomSingle people                 Married couples                                                      

limit)                                                                                                        

                                         without wife's earned         with wife's earned                     

                                         income                        income                                 

           Number    Wife's earned       Number    Wife's investment   Number    Investment income            

                     investment income             income                                                     

                    |Total    |Average            |Total    |Average            |Total    |Average            

£ p.a.    |'000s    |£ million|£        |'000s    |£ million|£        |'000s    |£ million|£                  

--------------------------------------------------------------------------------------------------------------

Aged under 65                                                                                                 

5,000     |1,500    |1,300    |870      |700      |340      |480      |240      |120      |510                

10,000    |780      |900      |1,140    |1,600    |880      |550      |1,800    |1,000    |570                

20,000    |90       |230      |2,680    |340      |190      |570      |1,200    |790      |640                

30,000    |20       |220      |10,900   |140      |100      |700      |530      |380      |720                

50,000    |-        |180      |48,700   |60       |140      |2,260    |130      |310      |2,320              

All       |2,400    |2,800    |1,180    |2,800    |1,700    |580      |4,000    |2,600    |670                

                                                                                                              

Aged 65 and over                                                                                              

5,000     |400      |950      |2,360    |330      |250      |760      |110      |70       |680                

10,000    |140      |970      |6,770    |200      |210      |1,060    |210      |260      |1,200              

20,000    |30       |460      |18,100   |30       |110      |3,530    |110      |210      |1,920              

30,000    |10       |370      |26,300   |20       |130      |5,860    |50       |160      |3,430              

50,000    |10       |430      |50,600   |10       |180      |12,800   |20       |150      |9,400              

All       |590      |3,200    |5,360    |590      |870      |1,480    |490      |850      |1,730              


Table 4                                                                                                       

Single females with investment income of more than £200                                                       

and married couples where the wife has investment income of more than £200: 1989-90                           

Total incomSingle people                 Married couples                                                      

limit)                                                                                                        

                                         without wife's earned         with wife's earned                     

                                         income                        income                                 

           Number    Investment income   Number    InvestmentWife's IncNumber    InvestmentWife's Income      

                    |Total    |Average            |Total    |Average            |Total    |Average            

£ p.a.    |'000s    |£ million|£        |'000s    |£ million|£        |'000s    |£ million|£                  

--------------------------------------------------------------------------------------------------------------

           Aged under 65                                                                                      

5,000     |1,400    |1,300    |950      |540      |320      |590      |180      |110      |650                

10,000    |720      |890      |1,240    |1,200    |840      |690      |1,500    |1,000    |670                

20,000    |80       |230      |2,970    |290      |190      |650      |1,000    |770      |750                

30,000    |20       |220      |11,500   |90       |90       |1,000    |380      |360      |970                

50,000    |-        |180      |50,500   |40       |140      |3,250    |100      |310      |3,060              

          |-------  |-------  |-------  |-------  |-------  |-------  |-------  |-------  |-------            

All       |2,200    |2,800    |1,290    |2,200    |1,600    |730      |3,200    |2,600    |800                

                                                                                                              

           Aged 65 and over                                                                                   

5,000     |390      |940      |2,450    |210      |230      |1,140    |80       |70       |880                

10,000    |140      |970      |6,810    |170      |210      |1,210    |180      |250      |1,430              

20,000    |30       |460      |18,100   |30       |110      |3,900    |100      |210      |2,130              

30,000    |10       |370      |26,300   |20       |130      |6,090    |50       |160      |3,610              

50,000    |10       |430      |50,600   |10       |180      |13,200   |20       |150      |9,880              

          |-------  |-------  |-------  |-------  |-------  |-------  |-------  |-------  |-------            

All       |580      |3,200    |5,510    |440      |860      |1,960    |410      |850      |2,040              

Financial Statistics

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish in the Official Report a table showing for manufacturing, other industrial and commercial companies, and the financial sector the same information as given in table 14.3 of the "Annual Abstract of Statistics 1989" for 1979 and 1987 ; and if he will add a forecast for 1988.

Mr. Norman Lamont : Separate figures for manufacturing companies are not available. A subdivision of the corporate sector between financial and industrial and commercial (including manufacturing) for the years 1979 and 1987 is given in the tables. Definitive figures for 1988 are in the course of preparation and will be available in September 1989.


Table 1: Corporate sector appropriation account<1>: financial             

                                            |1979     |1987               

                                            |£ million|£ million          

--------------------------------------------------------------------------

Income                                                                    

Income arising in the United Kingdom                                      

  Gross trading profits of companies and                                  

  trading surplus of public corporations                                  

      After deducting stock appreciation<2> |-1,856   |-3,586             

      Stock appreciation                    |-        |-                  

                                            |----     |----               

      Total<2><3>                           |-1,856   |-3,586             

                                                                          

Rent and non-trading income<4>              |15,856   |40,086             

                                            |----     |----               

Total                                       |14,000   |36,500             

                                                                          

Income from abroad<5>                       |1,375    |6,534              

                                            |----     |----               

Total income                                |15,375   |43,034             

                                                                          

Allocation of income                                                      

Dividend and interest payments<4><6>        |9,660    |27,415             

Current transfers to charities from                                       

  companies                                 |9        |33                 

Profits due abroad, net of United Kingdom tax 281      48                 

United Kingdom taxes on income              |758      |1,673              

Royalties and licence fees on oil and gas                                 

  production                                |-        |-                  

Balance: undistributed income after                                       

  taxation<7>                               |4,667    |13,865             

                                            |----     |----               

Total                                       |15,375   |43,034             


Table 2: Corporate sector appropriation account<1>:        

industrial and                                             

commercial                                                 

£ million                                                  

                                      |1979  |1987         

-----------------------------------------------------------

Income                                                     

Income arising in the United Kingdom                       

  Gross trading profits of companies                       

  and trading surplus of public                            

  corporations                                             

    After deducting stock                                  

  appreciation                        |28,818|71,421       

    Stock appreciation                |8,061 |4,384        

                                      |---   |---          

Total<3>                              |36,879|75,805       

                                                           

Rent and non-trading income<4>        |3,567 |8,996        

                                      |---   |---          

Total                                 |40,446|84,801       

                                                           

Income from abroad<5>                 |5,722 |11,506       

                                      |---   |---          

Total income                          |46,168|96,307       

                                                           

Allocation of income                                       

Dividends and interest payments<4><6> |11,842|25,479       

Current transfers to charities from                        

  companies                           |42    |152          

Profits due abroad, net of United                          

  Kingdom tax                         |3,711 |5,461        

United Kingdom taxes on income        |4,305 |13,500       

Royalties and licence fees on oil and                      

  gas production                      |531   |1,151        

Balance: undistributed income after                        

  taxation<7>                         |25,737|50,564       

                                      |---   |---          

Total                                 |46,168|96,307       

<1> Includes flows between the companies' sector and       

public corporations but excludes flows within the          

companies' sector.                                         

<2> This represents the contribution of financial          

enterprises in the corporate sector to the gross domestic  

product. It is the difference between bank charges,        

commissions, etc., on the one hand and management expenses 

of the other.                                              

<3> Before providing for depreciation and stock            

appreciation.                                              

<4> Financial sector figures include payments to and       

receipts from industrial and commercial sector. Industrial 

and commercial sector figures include payments to and      

receipts from financial sector.                            

<5> After deducting depreciation allowances but before     

providing for stock appreciation.                          

<6> Excludes dividends and debenture interest payments by  

United Kingdom subsidiaries to their overseas parents.     

<7> Before providing for depreciation, stock appreciation  

and additions to tax and dividend reserves.                

Mortgage Interest Relief

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish in the Official Report a table showing his estimate of the number of cases in which higher rate relief will be given on mortgage interest payments in the current financial year together with (a) the gross amount of interest qualifying for relief, (b) the amount of higher rate relief and (c) the number of recipients of working age and their distribution by personal tax category and by range of total income together with the average amount of relief given at the standard and higher rate of tax ; and if he will add his forecast of the additional cost to the Revenue on the basis of this year's figures and rate of tax of mortgage relief as a result of the separate taxation of married couples.

Mr. Lilley : I shall answer when resources permit.

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will provide a further breakdown of the numbers below £15, 000 given in his answer of 29 July 1988, Official Report, columns 729-30, concerning the distribution of mortgage interest relief and the percentage with investment income in the form of his answer of 27 March 1987, Official Report, column 310 ; and if he will provide a forecast for 1989-90.

Mr. Lilley : It is not clear to which answer the hon. Member is referring.

Pensions

Mr. Austin Mitchell To ask the Chancellor of the Exchequer whether he will publish in the Official Report (i) his estimate of the employers notional contribution to notionally funded and unfunded schemes, (ii) figures for the Civil Service showing the percentage contribution made by the Government and its employees and (iii) his best estimate of the proportionate split between sources of pension income in the cases quoted in sub-paragraphs (a) and (b) of paragraph 22 of the Inland Revenue paper, using as a basis the information given in his answer of 11 November 1988, Official Report, column 235 .

Mr. Lilley : I shall answer when resources permit.

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether the payment of a lump sum pension is subject to the maximum pension rules ; whether the estimated cost of the lump sum referred to in the table given in his answer of 11 November 1988, Official Report, columns 357-58, include (i) those who commute their pensions for a lump sum and (ii) provision for the beneficiary to replace the lump sum by an increase in pension ; and at what cost to the Exchequer.

Mr. Lilley : Part of the benefits from a tax-approved pension scheme may be paid as a tax-free lump sum. The


Column 1140

normal maximum lump sum benefit is 1.5 times final salary from an occupational scheme or 25 per cent. of the accumulated fund under a personal pension scheme. The estimated cost of the tax exemption for lump sum payments is derived from a survey of amounts paid out in lump sums on retirement in a given year.

National Debt

Mr. David Evans : To ask the Chancellor of the Exchequer what has been the total amount of national debt repaid by the Government over the last five years.

Mr. Ryder : Over the last five years as a whole, there has been a small net public sector borrowing requirement (PSBR) of about £1 billion. However, in the last two years, there has been a public sector debt repayment (PSBR) totalling £18.3 billion and a further substantial net repayment is forecast for the current year.

Gross Domestic Product

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer what has been the rate of growth in gross domestic product, in manufacturing output, and in employment and unemployment in the United Kingdom and other European monetary system countries since 1979 ; and to what he ascribes the difference.

Mr. Ryder : I shall answer when resources permit.

House Purchase

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer what information he has for (i) West Germany, (ii) France, (iii) Italy, (iv) Holland and (v) Belgium on the amount in terms of local currency of lending to purchase dwellings, the current rate of interest and the cost of servicing such loans as a percentage of (a) real disposable incomes and (b) consumers' expenditure.

Mr. Ryder : I shall answer when resources permit.

Privatisation

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer what is his assessment of the effect of privatisation on the United Kingdom figures for (i) company profits and (ii) private and public sector investment since 1979.

Mr. Lilley : I shall answer when resources permit.

Charitable Donations

Mr. Chris Smith : To ask the Chancellor of the Exchequer what was the value of one-off company donations to (a) charities and (b) professional arts organisations with charitable status in every year from 1986-87 to 1988-89, inclusive.

Mr. Lilley : Estimates of single donations to charities by companies are given in the table :


          |£ million          

------------------------------

1986-87   |4                  

1987-88   |9                  

1988-89   |19                 

Separate figures for donations to professional arts organisations with charitable status are not available.


Column 1141

Capital Allowances

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer what is his forecast for capital allowances other than first year allowances for plant and machinery and vehicles for 1987 ; whether he will gross up for each year since 1976 the implied value of corporate investment in company cars together with the loss to the revenue ; and if he will publish in the Official Report a table showing the annual increase in gross and net investment in plant, machinery and vehicles less the estimated figure for company cars.

Mr. Lilley : Capital allowances for plant, machinery and vehicles are estimated at £15 billion in 1987, excluding public corporations. The available data on capital allowances for companies' cars are very limited and not sufficiently detailed to serve as the basis for estimates of annual expenditure.

Returnable Bottles

Mr. Frank Cook : To ask the Chancellor of the Exchequer if he has any plans to offer tax incentives to manufacturers and retailers who sell drinks in returnable bottles.

Mr. Lilley : My right hon. Friend has no present plans to introduce such tax incentives.

Farming Partnerships

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer if he will provide statistics on the taxation of farming partnerships on the same basis as that given in his answer of 14 November 1988, Official Report , columns 515-16 ; and what is his estimate of the saving to the Revenue from aggregating the incomes of spouses in such partnerships for income tax purposes.

Mr. Lilley : The information could be obtained only at disproportionate expense.

Life Assurance

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer what is his estimate of the gain to the Revenue in the current financial year if the anomalies described in the discussion paper in the taxation of life assurance, including pension and annuity business, were to be corrected in favour of a neutral regime.

Mr. Lilley : The discussion paper "The Taxation of Life Assurance" set out the difficulties involved in making direct comparisons between life assurance and other media, and went far beyond a simple listing of anomalies. No perfectly neutral regime was identified in the document, and no estimate of tax yield from such a regime can be made. The discussion paper outlined three broad options for reform, but I have nothing to add about extra yield to the answer given to the hon. Member on 24 July at column 544.

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer what is his estimate of the loss to the Revenue in 1988-89 and the forecast loss in the current financial year of single premium life assurance policies ; and how much of the cost of writing such policies is offset against current profits.


Column 1142

Mr. Lilley [holding answer 27 July 1989] : The value of single premium policies effected in 1988-89 is not known, and no forecast of figures for the current year can be made. Nor are figures available for the value of single premium policies in force in 1988-89 ; and it is therefore not possible to give any meaningful estimate of the difference in tax yield which could have resulted had moneys invested in such policies been placed elsewhere. The costs of writing single premium policies are currently deductible immediately and in full under the income less expenses system, but from 1 January 1990 they will be deductible on the deferred basis prescribed in section 86 of the current Finance Act.

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish in the Official Report a table showing which of the three key features of the wider tax regime applicable to investments listed in paragraph 3.3 of the 1988 consultative document on the taxation of life assurance apply to each of the options listed in paragraph 18 of the 1983 discussion document on the taxtion of pension funds ; and what would be the consequential saving to the Revenue in the current financial year of (i) each option and (ii) taxing pension schemes on the same basis as unit trusts.

Mr. Lilley [holding answer 27 July 1989] : This information could be provided only at disproportionate cost.

Taxable Benefits

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer (1) what is his estimate of the real and the taxable value of benefits subject to (i) special and (ii) general rules, together with the estimated revenue therefrom ;

(2) whether he will bring up to date his reply dated 6 April 1987, Official Report, column 78, concerning taxable benefits together with an estimate of (i) the amount by which the scale charges for company cars fall short of the true value of the benefit and (ii) the yield from taxing the full value.

Mr. Lilley : The available information, based on projections from data relating to 1985-86, on the taxable value of benefits and the tax yield arising is as follows :


k

Benefit provided by the            |Taxable value          |Tax yield                                      

employer-1989-90                                                                                           

                                   |£ million              |£ million                                      

-----------------------------------------------------------------------------------------------------------

Cars and free fuel for private use |2,840                  |880                                            

Private medical insurance          |290                    |90                                             

Other expense payments and                                                                                 

  benefits                         |470                    |150                                            

                                   |-------                |-------                                        

Total                              |3,600                  |1,120                                          

The Government's view is that the typical value to employees of being able to use their company cars privately exceeds the present scale charges. But the value to particular employees depends on a wide range of factors. It is not possible, therefore, to provide an estimate of the aggregate extent to which the private use of company cars is undertaxed, or of the additional revenue which would arise if the full value was used in computing income.


Column 1143

Rent Income

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will include in the Official Report his forecast of the increase in rent income in 1989-90 as a result of the relaxation of rent controls, the amount which will be subject to tax and the expected yield and the extra amount which the Exchequer will have to pay out to tenants by way of rent relief.

Mr. Lilley : My right hon. Friend has made no such forecast.

Child Benefit

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish in the Official Report a table showing the amount by which child benefit could be increased on a revenue neutral basis if it was made taxable, the gross and net cost to the Exchequer of raising the benefit to £20 for the first child and £15 for subsequent children, the estimated saving to public authorities as a result of the consequential reduction in other benefits, the tax saving from the abolition of the additional allowance for income tax purposes and the estimated distribution of individual child benefits by range of income and tax status of their parents/guardians.

Mr. Lilley : The estimates requested could be provided only at disproportionate cost.

Age Allowances

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish in the Official Report a table showing (i) the gain to the Exchequer in the current financial year at present rates of tax of abolishing the age allowances and (ii) the cost of retaining them without the income limit.

Mr. Lilley : The yield in a full year at 1989-90 levels of income of abolishing the age allowances for taxpayers aged 65 and over is estimated to be about £420 million. If the age allowances were retained and the income limit abolished, the cost to the Exchequer would be £220 million.

The estimates are based on a projection of the 1986-87 survey of personal incomes and are provisional.

Wife's Earning Exemption

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish in the Official Report a table showing how many names were excluded from the 190,000 households referred to in the footnote to his answer of 29 July 1988, Official Report, columns 729-30, concerning households kept out of higher rate tax by wife's earnings exemption, and the distribution of the 190,000 plus any excluded wives on the same basis as in the table ; and if he will provide an estimate of the saving to the revenue if (i) mortgage interest and (ii) other allowances were not deducted from total income in assessing liability to higher rate tax.

Mr. Lilley : The estimates requested could be provided only at disproportionate cost.


Column 1144

Corporation Tax

Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish in the Official Report his forecast of the yield in revenue from corporation tax and advance corporation tax in the current financial year and in 1990-91 net of double taxation relief ; and if he will include figures showing the amount of tax collected as a percentage of gross trading profit and as a percentage of the amount paid out in dividends.


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