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Mr. Mellor : No estimates are available.
Trade Statistics
Mr. Austin Mitchell : To ask the Chancellor of the Exchequer if he will publish a table showing the figures for the volume of gross domestic product and of United Kingdom exports of goods and services as shown in tables 25 and 29 of part 6 of the OECD National Accounts 1960-1989, less oil and gas.
Mr. Mellor : The estimates given in tables 25 and 29 of the OECD: publication cannot be readily adapted to remove oil and gas. Series can, however, be derived from data available here in the UK.
Gross domestic
product at
constant factor
cost excluding
the
contribution of
the oil and gas
extraction
industry given in
the usual
index number
format (1985=100):
Year
------------------
1960 |60.9
1961 |62.2
1962 |63.2
1963 |65.4
1964 |69.6
1965 |71.6
1966 |73.0
1967 |74.4
1968 |77.7
1969 |79.4
1970 |80.9
1971 |82.4
1972 |85.4
1973 |90.7
1974 |89.9
1975 |88.6
1976 |90.0
1977 |91.6
1978 |94.3
1979 |96.0
1980 |93.1
1981 |91.0
1982 |91.9
1983 |94.3
1984 |96.6
1985 |100.0
1986 |103.5
1987 |108.7
1988 |114.2
1989 |118.1
1990 |119.2
The volume of exports of oil and oil products at 1985 prices is available from 1983 on the Central Statistical Office's database as series BOWX and exports of goods and services at 1985 prices is available as series DJCV. From these series it is possible to calculate an index of goods and services less oil on UK definitions.
Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish a table showing for EC countries, the United States of America and Japan for 1970 to 1973, 1973 to 1979, 1979 to 1989 and 1985 to 1989, the percentage increase in (i) gross domestic product less oil and gas, (ii) manufacturing output, (iii) real incomes as well as the increase in the number of, (iv) employed and (v) unemployed persons, together with the balance of trade in manufactures as a percentage of gross domestic product together with a table showing the increase in gross domestic product and manufacturing output in per capita terms.
Mr. Mellor : Such information as is readily available on comparable bases can be obtained from the following international publications :
(i) gross domestic product less oil and gas
Table R1 in "National Accounts ESA Aggregates 1970-1989 Theme 2 Series C" published by Eurostat gives annual growth rates for gross domestic product at market prices. Data on a comparable basis are not available for gross domestic product excluding oil and gas ; (ii) manufacturing output
Page 16 of the US Department of Labour publication "International comparisons of manufacturing productivity and unit labour cost trends 1990".
(iii) real incomes
Information on compensation of employees which includes all payments in cash and in kind made by employers in remuneration for the work done by their employees is given in Table J in "National Accounts ESA Aggregates 1970-1989 Theme 2 Series C" published by Eurostat ;
(iv) employment
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Information on occupied population is given in Table O in "National Accounts ESA Aggregates 1970-1989 Theme 2 Series C" published by Eurostat ;(v) unemployed persons
Separate tables are given for each country in "Main Economic Indicators Historical Statistics 1969-1988" published by OECD. Later data are available in the monthly "Main Economic Indicators" also published by OECD ;
(vi) balance of trade in manufactures as a percentage of gross domestic product
The balance of trade in manufactures can be calculated from data in "Foreign Trade by Commodities : Series C" published by OECD and gross domestic product can be obtained from Table 1 for each country in "National Accounts ESA Aggregates 1970-1989 Theme 2 Series C" published by Eurostat ;
(vii) gross domestic product per capita
Information on gross domestic product at market prices per head of total population can be found in Table B2 in "National Accounts ESA Aggregates 1979-1989 Theme 2 Series C" published by Eurostat ; (viii) manufacturing output per head
Page 15 of the US Department of Labour publication "International comparisons of manufacturing productivity and unit labour cost trends 1990".
Copies of all these publications are available in the Library of the House.
Mr. Dobson : To ask the Chancellor of the Exchequer if he will list the changes made since October 1989 in the way trade figures have been collected, analysed or presented.
Mr. Mellor [holding answer 7 November 1991] : Following are the main changes :
(a) Adjustments to statistics of oil exports. Since October 1989 better methods have been used to measure direct exports of crude oil from offshore fields, including adjustments for any such trade reported late to Customs and Excise.
(b) Improved seasonal adjustments. Since January 1990 seasonal factors for the current month and the preceding month have been estimated afresh each month using all the latest available information. This replaced the previous method of calculating factors at the beginning of each year for all of the following twelve months.
(c) Progressive development of detailed methodology. Various small refinements have been made to the statistics, such as more elaborate adjustments for differences in the length of a month and improved deflators for some high-value commodities.
Farms
Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish a table showing the increase in incomes of farmers in terms of constant prices in 1979 and in the latest available year compared with the average of 1967 to 1971 together with the increase in the direct and indirect cost of agricultural support to the consumer/taxpayer. Mr. Mellor : The table shows United Kingdom aggregate farm income, and public expenditure in support of agriculture in the United Kingdom. Agricultural market support through the CAP means that EC consumers pay more for their food than they would do in a free market. The estimated cost to United Kingdom consumer, based on work by the OECD, is given in the table. All figures are in constant 1985 prices.
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Year |Farm |Public |Estimated
|income |expenditure |consumer cost
|(£ million) |(£ million) |(£ million)
----------------------------------------------------------------------
<1>1967-71 |2,555 |1,481 |nil
1979 |1,956 |1,130 |3,000
1989 |1,242 |1,033 |4,600
<2>1990 |972 |1,469 |5,400
Notes:
<1> Average.
<2> Forecast.
Figures for public expenditure relate to the financial year beginning
in the year shown.
Consumer cost is based on OECD estimates of the cost to EC
consumers scaled down to relect the United Kingdom share of
consumption.
Aggregate farm income is defined in chapter 6 of Agriculture in the
United Kingdom 1990, HMSO, 1991.
Public expenditure in support of agriculture is defined in chapter 9
of Agriculture in the United Kingdom 1990. It includes the cost of
market support reimbursed by the EC; and excludes indirect support
for agriculture such as free or subsidised advisory services and
research and development.
Manufacturing Industry
Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will publish a table showing for the United Kingdom, Germany, France, Italy, the United States of America and Japan for each year since 1970 the percentage, to one place of decimals, of gross domestic product invested in manufacturing industry, together with the amount invested in terms of dollars per person employed in manufacturing at current prices and exchange rates.
Mr. Mellor : The latest readily available information in respect of gross fixed capital formation by the manufacturing industry, of gross domestic product at current prices in national currencies and of the numbers employed in the manufacturing industries can be obtained from tables 3,1 and 15 respectively for most of these countries in "National Accounts Detailed Tables Volume II 1976-1988" published by the OECD. Exchange rates to convert the national currencies into dollars are given in table 3 in the Appendix to "National Accounts Main Aggregates Volume I 1960 -1988" also published by OECD. Copies of these publications are available in the Library of the House.
Mr. Austin Mitchell : To ask the Chancellor of the Exchequer if he will publish a table for each quarter since 1967 of indices of (a) the wholesale price of materials and fuels purchased by manufacturing industry other than food, drink and tobacco, (b) the wholesale price of home sales of manufacturing industry other than food, drink and tobacco and (c) the unit value of imports of basic materials, as defined in the overseas trade statistics, with 1975 as 100.
Mr. Mellor : I have placed tables showing the first two series in the Library of the House. Unit value indices for recent years are not available on a 1975 base but the indices for imports of basic materials on a 1985 base can be found in table C15 of the "Monthly Review of External Trade Statistics" and its annual supplement, available from the Library of the House, or on the Central Statistical Office database which may be accessed through the Library. No information is available for years prior to 1970.
Column 503
Producer Price Index
Materials and fuel purchased by
manufacturing industry other than
the food, drink and tobacco
manufacturing industries
1975=100
|Q1 |Q2 |Q3 |Q4
------------------------------------
1967 |30.9 |30.4 |31.0 |33.1
1968 |35.4 |34.7 |34.7 |34.7
1969 |34.4 |36.0 |36.6 |37.3
1970 |37.9 |38.0 |37.7 |37.7
1971 |38.8 |39.6 |39.6 |39.0
1972 |39.3 |39.7 |41.0 |43.0
1973 |46.3 |49.4 |55.5 |62.4
1974 |83.1 |85.8 |87.2 |91.0
1975 |92.6 |96.3 |101.7|109.4
1976 |113.3|126.2|129.9|137.6
1977 |140.7|143.5|143.6|139.1
1978 |134.2|137.8|138.5|145.4
1979 |153.8|158.3|163.4|174.9
1980 |185.1|180.0|178.4|180.7
1981 |186.9|192.0|200.7|209.0
1982 |212.3|295.7|207.5|217.0
1983 |228.4|222.8|226.9|231.1
1984 |240.5|240.9|246.7|260.4
1985 |275.8|257.2|249.6|247.0
1986 |243.0|225.3|217.0|233.3
1987 |238.9|235.6|244.9|246.8
1988 |250.5|253.3|255.7|260.6
1989 |268.1|269.1|265.0|272.2
1990 |271.7|262.1|263.4|268.3
1991 |261.3|260.3|259.0
Note: This table reflects the
changes over three base years (i.e.,
1975/80/85) and the effects of
reclassification from 1968 SIC to
1980
SIC from 1983.
Producer Price Index
Products of manufacturing
industries other than food, drink
and
tobacco manufacturing
industries-home sales
1975=100
|Q1 |Q2 |Q3 |Q4
------------------------------------
1967 |45.0 |45.0 |45.3 |45.6
1968 |46.5 |46.9 |47.1 |47.3
1969 |47.8 |48.1 |48.6 |49.2
1970 |50.4 |51.8 |52.8 |54.2
1971 |56.1 |57.5 |58.4 |58.8
1972 |59.5 |60.5 |61.6 |63.0
1973 |63.5 |64.7 |66.6 |69.1
1974 |75.0 |80.8 |84.5 |88.6
1975 |94.5 |98.6 |101.8|105.1
1976 |110.1|114.3|119.1|124.3
1977 |130.9|137.0|140.6|143.3
1978 |146.6|149.7|152.9|155.8
1979 |160.5|166.1|172.4|178.5
1980 |187.3|193.7|198.8|201.9
1981 |204.8|208.8|211.5|215.0
1982 |220.5|223.8|226.0|228.1
1983 |231.6|235.7|238.3|241.0
1984 |244.9|248.8|251.4|254.7
1985 |260.6|264.9|267.6|269.7
1986 |273.7|276.2|278.3|280.5
1987 |285.0|288.5|291.2|294.0
1988 |298.7|302.4|305.6|308.8
1989 |314.7|318.7|322.2|325.9
1990 |332.6|338.2|341.9|346.5
1991 |353.7|356.9|358.7
Note: This table reflects the
changes over three base years (i.e.,
1975/80/85) and the effects of
reclassification from 1968 SIC to
1980
SIC from 1983.
Economic Policies
Mr. Austin Mitchell : To ask the Chancellor of the Exchequer what is the long-term objective of the Government's economic policies.
Column 504
Mr. Maples : The Government's central objective is to create the basis for improved living standards and public services by promoting sustainable, non-inflationary economic growth.
Mr. Austin Mitchell : To ask the Chancellor of the Exchequer whether he will bring up to date the information given in his written answer of 20 February 1990, Official Report, column 696, concerning the amount of mortgage interest payable each year as a percentage of (a) disposable income and (b) consumers' expenditure ; and if he will (c) add figures (i) for the percentage of gross domestic product and (ii) the years 1970-78.
Mr. Mellor : The latest estimates are as follows :
Mortgage interest payable as a percentage of
|Personal dispos-|Consumers' |Gross domes-
|able income |expenditure |tic product
|(a) |(b) |(c)
-------------------------------------------------------------------------------------
1970 |2.6 |2.8 |2.1
1971 |2.7 |2.9 |2.1
1972 |2.7 |2.9 |2.1
1973 |3.2 |3.6 |2.5
1974 |3.7 |4.1 |2.9
1975 |3.4 |3.8 |2.6
1976 |3.4 |3.8 |2.6
1977 |3.5 |3.8 |2.6
1978 |3.0 |3.3 |2.3
1979 |3.5 |4.0 |2.8
1980 |4.4 |5.1 |3.5
1981 |4.5 |5.1 |3.6
1982 |4.8 |5.4 |3.8
1983 |4.5 |5.0 |3.6
1984 |5.3 |5.9 |4.2
1985 |6.6 |7.3 |5.2
1986 |6.4 |7.0 |5.2
1987 |6.8 |7.3 |5.4
1988 |7.2 |7.6 |5.7
1989 |9.4 |10.2 |7.6
<1>1990 |10.6 |11.7 |8.6
<1> Figures affected by introduction of the community charge in
England and Wales.
In the first half of 1991 mortgage interest accounted for 10.0 per cent. of disposable income and for 11.5 per cent. of consumers' expenditure. It is not possible to give the corresponding percentage of GDP because the interest figures are not available in seasonally adjusted form whereas money GDP exists as a seasonally adjusted series only.
Sports Council
Mr. Allen : To ask the Chancellor of the Exchequer what discussions Her Majesty's Treasury has had with the Sports Council about funding the relocation of the Sports Council and associated jobs to Nottingham ; and if he will make a statement.
Mrs. Gillian Shephard : The Chancellor of the Exchequer has not discussed this question with the Sports Council.
EC Budget
Mr. Butler : To ask the Chancellor of the Exchequer if he will make a statement on the reasons why United Kingdom contributions to the EC budget are expected to increase from £0.9 billion in 1991-92 to £2.2 billion in 1992-93.
Mr. Maude : The autumn statement provided a forecast of the UK's net payments to EC institutions of £0.9 billion
Column 505
in 1991-92 and £2.5 billion in 1992-93. The uneven profile results from the timing of adjustments to UK contributions, mainly because contributions are paid on the basis of agreed estimates and adjusted in the light of outturn, and from subsequent correction to the UK's abatement. The net contribution in 1991-92 is unusually low as the result of a refund in 1991 of contributions overpaid in 1990 and higher than usual abatement in 1991, reflecting adjustments paid in 1990 to make good underpayments in the previous year.VAT
Mr. Madden : To ask the Chancellor of the Exchequer what is the average penalty imposed in Yorkshire on those who submit value added tax returns late by (a) one week, (b) two weeks, (c) three weeks and (d) four weeks.
Mrs. Gillian Shephard : Customs do not maintain statistics for individual counties or regions. The penalties imposed for late submission or payment of VAT returns do not vary with the length of the period between due date and receipt by Customs. Nationwide, the average penalty imposed on defaulting traders (including those who may have received more than one penalty) over the current and preceding financial year is :
|Average
|penalty
|£
----------------------------------------------------
Financial year ending 31 March 1989 |266.24
Financial year ending 31 March 1990 |375.42
Financial year ending 31 March 1991 |429.39
1 April 1991 to 30 September 1991 |441.41
Mr. Madden : To ask the Chancellor of the Exchequer how many appeals against penalties imposed for incorrect and late payment of value added tax have been upheld in the current year, to date, by value added tax tribunals in Yorkshire.
Mrs. Gillian Shephard : Customs do not maintain statistics for individual counties or regions. Nationwide in the current calendar year to 31 October a total of 50 appeals were upheld or partly upheld against penalties for incorrect declaration of value added tax. For the same period, the total number of appeals upheld or partly upheld against penalties for late payment of value added tax is 94.
Mr. Madden : To ask the Chancellor of the Exchequer how many representations he has received calling for the time required to elapse form date of supply for bad debt to obtain value added tax relief to be reduced from 24 months to 12 months ; and if he will make a statement.
Mrs. Gillian Shephard : Between March 1990 and March 1991 about 150 representations were received seeking a reduction in the two-year waiting period for bad debt relief,which was part of the comprehensive scheme for bad debt relief enacted in the Finance Act 1990. In response, my right hon. Friend announced in his Budget statement that the waiting period would be halved to one year.
Mr. Madden : To ask the Chancellor of the Exchequer if he will empower value added tax tribunals to take mitigating circumstances into account when determining penalties on incorrect and late value added tax returns.
Column 506
Mrs. Gillian Shephard : Consideration of this matter is currently forming part of the thorough review of value added tax penalties announced by my right hon. Friend the Chancellor of the Exchequer in his Budget statement. As my right hon. Friend said, the aim is to bring forward proposals for any changes required to the penalty regime in the 1992 Finance Bill.
Mr. Madden : To ask the Chancellor of the Exchequer what is the value added tax threshold in the United Kingdom and in each of the other EC countries.
Mrs. Gillian Shephard : The VAT registration threshold in the United Kingdom is £35,000 annual turnover.
Belgium, Spain and Italy have no minimum VAT registration threshold.
For other member states of the EC the thresholds are as follows : Threshold based on annual turnover
Denmark
DKr 10,000 (£888.49)
France
FF 70,000 (£7061.79)
Germany
DM 20,000 (£6872.85)
Greece
DR 1,000,000 (£3113.32) (Supply of goods)
DR 250,000 (778.33) (Supply of services)
Ireland
IR £32,000 (£29384.75) (Supply of goods)
IR £15,000 (£13774.10) (Supply of services)
Luxembourg
LFrs 200,000 (£3330.55)
Portugal
Esc 800,000 (£3205.12) (Industry)
Esc 500,000 (£2003.20) (Professions)
Threshold based on annual VAT payable after input tax deduction Netherlands
DFl 2174 (£3717.19)
Sources : VAT Monitor
Tax News Service
Rates of exchange : as at 31 October 1991.
EC (National Incomes)
Mr. David Shaw : To ask the Chancellor of the Exchequer if he will list the national income, 3 per cent. of that figure and the budget deficit of each member state in the EC indicating the differences in accounting treatment where relevant.
Mr. Maples : Following is the information, for the latest year available :
|GDP |3 per cent.|<2>GGFD
|of GDP
-------------------------------------------------------------------------
UK (£ billion) |550.6 |16.5 |3.6
Belgium (BF billion) |6,027.9 |180.8 |402.1
Denmark (Kr billion) |776.0 |23.3 |3.7
France (FF billion) |6,113.1 |183.4 |86.3
Germany (DM billion) |2,235.6 |67.1 |-5.5
Greece (Dr billion) |8,798.4 |294.0 |n.a.
Ireland (IrP billion) |20.0 |0.6 |1.8
Italy (Lit trillion) |1,188.0 |35.6 |121.1
Luxembourg (BF billion) |223.3 |6.7 |-6.9
Netherlands (Fl billion) |474.4 |14.2 |24.5
Portugal (Esc billion) |4,420.4 |132.6 |281.5
Spain (Pta trillion) |40.2 |1.2 |1.3
Source: OECD National Accounts volume II, 1977-89, except for UK
figures from Financial Statistics.
<1> Latest year is 1989 except for UK (1990); Spain (1988); Ireland
(1987); Luxembourg and Portugal (1986).
<2> General government financial deficit, positive number indicates
government borrowing.
The Dutch presidency text defines the budget deficit as "the net balance to be financed on a cash basis". However, data for this concept are available. Data for general Government financial deficits are not available for most countries, and are therefore generally used to make international comparisons of budget deficits. Most countries, however, focus on other aggregates in their national budgets. The main differences between the net balance to be financed on a cash basis and the GGFD are that the former is measured on a cash basis, the latter on an accruals basis; and the GGFD excludes privatisation proceeds.
Figures for the United Kingdom are based on the national accounts. Figures for other countries are standardised to conform to the United Nations system of national accounts. No figures are available for the general Government financial deficit of Greece. More recent data and forecasts of Government deficits of member states are published by the European Commission in "European Economy", Supplement A, May 1991.
Employees' Benefits (Taxation)
Mr. Burns : To ask the Chancellor of the Exchequer whether he has any proposals to modify the restrictive rules in section 80 of the Finance Act 1988 concerning the tax charge on special benefits for employees; and if he will make a statement.
Mr. Maude Where employees or directors acquire shares as a result of their employment, and because of their ownership of those shares they subsequently receive a "special benefit", that "special benefit" is currently taxable in some circumstances. For example, such "special benefit" might flow from an entitlement to subscribe to a "rights" issue, or from a right to shareholder priority in a public offer. The Government do not think it is right to charge tax on a benefit that is available to all or substantially all shareholders, where a majority of the shares in relation to which the benefit is actually received are held otherwise than by people who acquired them as employees. We therefore propose that exemption from the charge should apply to any benefit received in these circumstances on or after today. Legislation to this effect, which will include some minor consequential changes, will be introduced in the Finance Bill 1992.
Employees' Expenses and Benefits
Mr. Terry Davis : To ask the Chancellor of the Exchequer how much overtime has been agreed in the Inland Revenue to clear the outstanding P11D forms ; and when he expects this work to be up to date.
Mr. Maude : The bulk of P11D forms are received in the first part of the tax year and dealt with in a targeted programme finishing in December. That programme is proceeding to target. No overtime has been centrally allocated to this specific task. However, the Inland Revenue's regional controllers can use part of their budgets for overtime, and some work on P11D forms may have been done during locally arranged overtime.
Mr. Terry Davis : To ask the Chancellor of the Exchequer how many P11D forms on hand on 13 June 1991 had been outstanding for more than three months.
Column 508
Mr. Maude : None was reported as having been outstanding for more than three months.
Deep Gain Securities
Mr Hind : To ask the Chancellor of the Exchequer if he plans to change the tax treatment of deep gain securities.
Mr. Maude : The deep gain legislation provides a tax regime for bonds which are issued at a discount to par but which cannot be taxed according to the deep discount rules. The deep gain rules charge all of an investor's return to income tax. However, it has recently been brought to our attention that many ordinary bonds, carrying a full coupon, and issued at a small discount to par, but not containing the characteristics of true deep gain securities are, in strictness, so classified if they contain standard event of default or event risk clauses.
We have therefore decided to restore the position to what everyone previously believed it to be : bonds already in issue which are deep gain securities solely by virtue of the inclusion of standard event of default or event risk clauses will be treated as not being deep gain securities. We intend to introduce legislation in the next Finance Bill to take these bonds out of the deep gains legislation. In the meantime, and with my agreement, the Inland Revenue will not treat securities issued on or before 12 November 1991 as deep gain securities where they fall to be so treated only by reason of a redemption which may be made before maturity, and that redemption is --outside the scope of paragraph 1(3A), Schedule 11, Finance Act 1989, or of paragraph 2(13) of that Schedule, as the case may be ; and
--occasioned by the happening of an event (other than the exercise of a put option) prescribed in the terms of issue of the security as an event on the happening of which the security will or may be redeemed.
This concession may not be applied if the terms of the security as respects the events occasioning such redemptions before maturity are materially amended after 12 November 1991.
For tranche issues, securities issued after 12 November 1991 will be treated as not being deep gain securities if they fall to be so treated only by reason of a redemption which may be made before maturity if they are issued under the same prospectus as a security described above or on terms such as to make them fungible, either immediately or after the first payment of interest in respect of the security, with a security described above.
The Government also intend to set in place a new tax regime for bonds issued after today. The precise terms of the legislation covering these bonds will depend on the outcome of consultations which the Inland Revenue will be undertaking with interested parties. But the Government's intention is that securities issued after today will not fall to be treated as deep gain securities only by reason of a redemption which may be made before maturity in pursuance of a term of issue of the security and
--the term provides that the security will or may be redeemed on the happening, before maturity, of an event which is not at the time of issue certain or likely to occur ;
--if the security provides for early redemption on the happening of more than one such event, it is not at the time of issue certain or likely that any one or more of them will occur ;
--the term is such as to protect the holders of the security against the consequences of the event prescribed ; and
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