Previous Section Home Page

Column 117


                     Average reduction                       Average reduction                                          

                     in 1993-94 compared                     or increase (-) in                                         

                     with 1987-88                            1994-95 compared                                           

                     indexed regime                          with 1987-88                                               

                                         indexed regime                                                                 

Range of            |Income tax         |Income tax and     |Income tax         |Income tax and                         

individual's income                     |national insurance                     |national insurance                     

in 1993-94 or                                                                                                           

1994-95                                                                                                                 

£                   |£                  |£                  |£                  |£                                      

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

Under 5,000         |60                 |70                 |60                 |70                                     

5,000-10,000        |170                |240                |180                |220                                    

10,000-15,000       |260                |400                |230                |290                                    

15,000-20,000       |340                |480                |270                |290                                    

20,000-25,000       |420                |540                |330                |300                                    

25,000-30,000       |490                |600                |370                |310                                    

30,000-40,000       |300                |400                |30                 |-40                                    

40,000-50,000       |590                |680                |240                |170                                    

50,000-70,000       |1,970              |2,050              |1,540              |1,460                                  

70,000-80,000       |4,740              |4,810              |4,100              |4,020                                  

over 80,000         |19,500             |19,600             |19,100             |19,000                                 

Average             |420                |500                |370                |390                                    

For the purpose of the calculations the indexed regime of 1987-88 has been applied directly to the income bases of 1993-94 and 1994-95. In practice, retention of the 1987-88 regime, indexed as appropriate, for the intervening years would have led to changes in the income base.

Economic and Financial Councils

Ms Quin : To ask the Chancellor of the Exchequer if he will make a statement on the outcome of the EC Economic and Finance Council held on 25 October.

Mr. Kenneth Clarke : The European Community Economic and Finance Council--ECOFIN--met in Luxembourg on 25 October. I represented the United Kingdom.

Political agreement was reached on proposed secondary legislation designed to ensure that certain treaty provisions relating to stage II of European monetary union are consistently applied. I made clear that the proposed legislation was still under consideration by our scrutiny committees. Subject to that, final adoption of the proposed legislation is conditional on the entry into force of the Maastricht treaty and the opinion of the European Parliament. The Council looked favourably on the candidacy of Alexandre Lamfalussy, the outgoing managing director of the Bank of International Settlements in Basle, for the position as first president of the EMI.

The Commission circulated a report on progress made on the growth initiative since the Edinburgh declaration in December last year. All member states indicated their intention to complete the remaining procedures to establish the European investment fund by the end of the year. The Council also indicated broad support on widening the scope of the temporary EIB lending facility established by the Edinburgh European Council. I continued to stress the themes in the United Kingdom contribution to the Commission's White Book. A copy of the United Kingdom's contribution is available in the House Library. The Council had its first discussion of a proposal to amend the scope of the UCITS--undertakings for collective investments in transferable securities--directive which sets minimum standards for the regulation of certain collective investment schemes. The Council agreed that work should continue in the light of the forthcoming


Column 118

opinion of the European Parliament and a study by the Commission of the macro-economic impact of the proposal.

The Council discussed a proposal for an EC-wide withholding tax on interest from savings, directed at the distortions some other member states believe arise as a result of the differing systems in the Community for the taxation of interest. With support from some other member states, I made clear the Government's doubts about the need or likely effectiveness of a Community-wide approach. The presidency decided to remit the dossier back to the working group.

The Council adopted a directive on road haulage, tolls and user charges implementing the political agreement on these matters which was reached by the Transport Council in September. There was also final political agreement on the increase in travellers' allowances provisionally agreed during the United Kingdom presidency in November 1992. The tax free allowances will rise from 45 to 175 ecu for travellers from third countries and from 45 to 90 ecu for intra-Community travel. The agreement will be reviewed in 1995 and includes a derogation covering the eastern borders of Germany lasting until 1997. The Council also adopted an important regulation liberalising road haulage cabotage at the same time.

The Commission presented a report on the functioning of the indirect tax system in the single market in its first six months and applauded the efforts of national administrations in introducing the new systems.

The Council also noted the recent Commission proposal--8994-93--about changing the way in which annual surpluses and deficits are treated in the EC budget to produce a more regular cash flow. It was clear that the proposal was unacceptable to many member states. However, the Council agreed to look at alternative ways of attaining the same end, subject to respecting fully the annual ceiling on own resources.

There were no formal votes. The decisions on the road transport liberalisation legislation were taken by consensus.


Column 119

Business Expansion Scheme

Mr. Matthew Banks : To ask the Chancellor of the Exchequer (1) what contribution the business expansion scheme has made to encouraging investment in the private rental sector ;

(2) what steps are being taken to encourage long-term ownership of rented property following the abolition of the business expansion scheme on 31 December.

Mr. Dorrell : The business expansion scheme was extended in 1988 for a limiting period for qualifying investment in private rented housing companies to stimulate investors' interest in a sector which has received little encouragement for many years. By the end of 1992-93, the BES had attracted some £2.1 billion for housing companies, and it is estimated that some 40,000 units of rented accommodation have been provided as a result. Any proposal for future tax policy are a matter for the Budget to be presented on 30 November.

Private Investment Projects

Ms Harman : To ask the Chancellor of the Exchequer if he will list those public investment projects within his Department's responsibility which have attracted private capital and have been commenced since the 1992 autumn statement.

Mr. Dorrell : The Treasury does not undertake or sponsor the sorts of large public investment projects with which private capital is generally associated. It has, however, used leasing for office equipment. The Treasury will explore the scope for further use of private finance where this can be justified on value for money grounds. Such opportunities will be evaluated on the basis of the published Treasury guidance on private finance.

Executive Share Option Scheme

Ms Harman : To ask the Chancellor of the Exchequer what assessment he has made of the economic effects of continuing tax relief on executive share options since the March 1993 Budget ; and if he will make a statement.

Mr. Dorrell : Tax relief for approved executive share option schemes is intended to help companies to attract, retain and motivate key executives. A report on employee share schemes by KPMG Management Consulting was published in 1991 ; and the relief is kept under regular review.

Ms Harman : To ask the Chancellor of the Exchequer if he will publish the most recent estimate he has made of the cost to the Exchequer of tax relief on executive share option schemes in 1992-93 and 1993-94.

Mr. Dorrell : Provisional estimates are as follows :


£ million                                                           

                                            |1992-93|1993-94        

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

Approved discretionary share option schemes |45     |55             

European Community

Sir Teddy Taylor : To ask the Chancellor of the Exchequer what esimate he has made of the United Kingdom's net contribution to the European Community over the next three financial years.


Column 120

Sir John Cope : A forecast of the United Kingdom's net contribution to EC institutions, for the years to 1995-96, was given in table 11.1 of the Chancellor's departmental report--Cm 2217--published in February 1993. A revised forecast, covering the years to 1996-97, will be published in the "Financial Statement and Budget Report" on 30 November.

Sir Teddy Taylor : To ask the Chancellor of the Exchequer what estimate he has made of the United Kingdom's net contribution to the EC in 1992-93 ; by what amount this is different from the estimates made prior to April 1992 ; and if he will make a statement.

Sir John Cope : The estimated outturn for the United Kingdom's net contribution to the European Community in 1992-93 is £1,810 million, £653 million lower than the forecast given in table 68 of the Chancellor's departmental report in February 1992--Cm 1918. The main reasons for a lower level of net payments than originally forecast were higher structural fund receipts than had been forecast and lower gross contributions, mainly as a consequence of a lower UK share of gross contributions resulting from adjustments to the VAT and fourth resources paid in December 1992 and lower agricultural and sugar levies and customs duties.

Mortgage Tax Relief

Mr. Dewar : To ask the Chancellor of the Exchequer if he will update his answer to the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) of 12 July, Official Report, columns 367-68, to include estimates for 1994-95 based upon changes already announced in the 1993 Budget and assuming indexation otherwise.

Mr. Dorrell : The estimates for 1994-95 are shown in the table. The figures are based on the conventional assumption of no further changes in interest rates.


Mortgage interest relief by range of total income<1>:                                          

Numbers 000's                                                                                  

Range of total     |Number of single  |Average mortgage  |Cost of mortgage                     

income<1> (lower   |people or married |interest relief   |interest relief                      

limit)             |couples benefiting                                                         

                   |from mortgage                                                              

                   |interest relief                                                            

£                  |Thousands         |£                 |£ million                            

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

    0              |840               |300               |250                                  

 5,000             |1,050             |270               |280                                  

10,000             |2,080             |320               |670                                  

15,000             |2,260             |360               |810                                  

20,000             |1,360             |380               |510                                  

25,000             |910               |400               |360                                  

30,000             |800               |400               |330                                  

40,000             |700               |420               |290                                  

                                                                                               

Total              |10,000            |350               |3,500                                

<1> Total income of husband for married couples.                                               

Child Care

Mr. Dewar : To ask the Chancellor of the Exchequer if he will estimate the effect on revenues in 1994-95 and in a full year of extending the income tax exemption for workplace nurseries as a benefit in kind to (a) child care cheques and vouchers and (b) other employer assistance into child care ; and what the effects would be if the relief were limited to the basic rate.


Column 121

Mr. Dorrell : Exempting all forms of existing employer assistance for child care would have a revenue cost at 1993-94 levels of provision and subsidies of approximately £5 million. There is insufficient information to sub-divide this estimate. If such a measure were introduced there would be substantial behavioural effects.

Invalidity Benefit

Mr. Dewar : To ask the Chancellor of the Exchequer if he will update the answer of 9 March, Official Report , columns 507-8, giving estimates for 1994-95 and for a full year.

Mr. Dorrell : Estimates for 1994-95 will depend on the levels of invalidity benefit and on tax rates and allowances for that year. The latest estimates for 1993-94 were given in reply to the hon. Member on 21 June 1993, at column 12 .

Corporation Tax

Mr. Cousins : To ask the Chancellor of the Exchequer, pursuant to his answer to the hon. Member for Darlington (Mr. Milburn) of 25 June, Official Report , column 328 , what was the corporation tax liability of the 25 largest profitable United Kingdom groups in 1992 both in cash and constant 1987 prices.

Mr. Dorrell : I regret that the information requested is not available. The tax assessments currently available are an insufficient basis on which to produce reliable estimates.

Banking Systems

Mr. Mandelson : To ask the Chancellor of the Exchequer what were the level of United Kingdom liabilities, for sterling and for foreign currencies, and the level of United Kingdom claims, for sterling and foreign currencies, with the banking systems of (a) the British Virgin islands, (b) the Cayman islands, (c) Guernsey, (d) the Isle of Man and (e) Jersey at 30 June.

Mr. Nelson : The information is not available in the form requested.

BT Share Offer

Mr. Burns : To ask the Chancellor of the Exchequer what were the administrative costs of the third BT share offer ; and if he will make a statement.

Mr. Dorrell : The costs of to the Government, during the financial years 1992-93 and 1993-94, of the third BT share offer are estimated to be as follows :


J

                                                      |£ million          

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

Advisers' fees and expenses                           |4.7                

Share Information Office                              |10.5               

Marketing                                             |16.1               

Receiving and Agent Bank operations                   |18.5               

International Tender Offer and Share Shop Commissions |44.5               

Overseas Offers                                       |0.9                

                                                      |----               

Total                                                 |95.2               

These costs represent about 1.8 per cent. of the total proceeds due from the sale of shares to the Government,


Column 122

which are estimated at £5,333 million. The costs exclude stamp duty and VAT on services provided to the Government, which are not net costs to the Exchequer.

Tax Ready Reckoner

Mr. Dewar : To ask the Chancellor of the Exchequer if he will update the information provided in the Treasury's "Tax Ready Reckoner and Tax Reliefs" on the basis of the September retail prices index.

Mr. Dorrell [holding answer 27 October 1993] : Updated information for tables 2 to 6 is as follows.

Figures for tables 7 to 9 have not been revised as these are not dependent on the September retail prices index.


Table 2-Income Tax                                                                  

                                                         |1993-94 |1994-95          

                                                         |£       |£                

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

Personal allowance                                       |3,445   |3,515            

Personal allowance aged (age 65-74)                      |4,200   |4,280            

Personal allowance (age 75 and over)                     |4,370   |4,450            

Married couple's allowance                               |1,720   |1,760            

Married couple's allowance (age 65-74)                   |2,465   |<1>2,715         

Married couple's allowance (age 75 and over)             |2,505   |<1>2,755         

Additional personal<2> and widow's bereavement allowance |1,720   |1,760            

Aged income limit<3>                                     |14,200  |14,500           

Lower rate band                                          |2,500   |<4>3,000         

Basic rate limit<5>                                      |23,700  |24,200           

<1> Includes the extra £200 proposed in the March Budget to ensure that basic rate  

taxpayers aged 65 and over lose no more from the restriction of the married         

couple's allowance to 20 per cent. than basic rate taxpayers under 65.              

<2> Primarily for single parents.                                                   

<3> If the total income, less allowable deductions, of a taxpayer aged 65 or over   

exceeds this limit, the age-related allowances are reduced by £1 for each £2 of     

income over the limit until the basic levels of the personal and married couple's   

allowances are reached.                                                             

<4> This is the level proposed in the March Budget. If the band for 1993-94 were    

indexed, the 1994-95 band would be £2,600.                                          

<5> Higher rate income tax is payable on income-less those allowances and reliefs   

that are allowed at the higher rate-in excess of the basic rate limit.              


Table 6-Direct effects of illustrative changes in direct taxes<1>                                            

                                                                                      £ million              

                                                                                      cost/yield             

                                                                                     |1994-95|1995-96        

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

Income tax<2>                                                                                                

Rates                                                                                                        

Change lower rate by 1p<3>                                                           |390    |220            

Change basic rate by 1p                                                              |1,600  |1,900          

Change higher rate by 1p                                                             |270    |440            

                                                                                                             

Allowances                                                                                                   

Change personal allowance by £100                                                    |470    |600            

Change age-related personal allowances by £100<4>                                    |45     |60             

Change married couple's allowanceby £100<5>                                          |140    |190            

Change age-related married couple's allowance by £100<4>                             |12     |16             

Change aged income limit by £500                                                     |5      |9              

Change all personal allowances by 1 per cent.<6>                                     |170    |230            

Change all personal allowances by 10 per cent.<6>                                    |1,700  |2,250          

Change married couple's and related allowances by 1 per cent.<6>                     |25     |35             

Change married couple's and related allowances by 10 per cent.<6>                    |280    |360            

                                                                                                             

Lower rate band                                                                                              

Increase lower rate band by 10 per cent.<6>                                          |240    |310            

                                                                                                             

Basic rate limit                                                                                             

Change basic rate limit by 1 per cent.<6>                                            |55     |80             

Change basic rate limit by 10 per cent.<6>:                                                                  

  increase (cost)                                                                    |500    |720            

  decrease (yield)                                                                   |630    |890            

                                                                                                             

Allowances, lower rate band and basic rate limit                                                             

Change all main allowances, lower rate band and basic rate limit by 1 per cent.<6>   |290    |380            

Change all main allowances, lower rate band and basic rate limit by 10 per cent.<6>:                         

  increase (cost)                                                                    |2,800  |3,650          

  decrease (yield)                                                                   |3,050  |4,000          

                                                                                                             

Corporation tax<7>                                                                                           

Change full rate by 1 percentage point                                               |390    |630            

Change small companies' rate by 1 percentage point<8>                                |70     |110            

                                                                                                             

Capital Gains tax<9>                                                                                         

Change annual exempt amount by £500 for individuals and £250 for trustees            |0      |6              

                                                                                                             

Inheritance tax<9>                                                                                           

Change rate by 1 percentage point                                                    |14     |31             

Increase threshold by £5,000                                                         |14     |29             

<1> The estimated revenue effects of the changes on receipts are rounded. The extent of rounding reflects    

the desire to avoid undue compounding of its effects when numbers are pro-rated, rather than the accuracy of 

the estimates.                                                                                               

<2> The figures for income tax changes include consequential effects on the yield of capital gains tax.      

Changes are assumed to take effect from April 1994.                                                          

<3> Including the effects of the change on receipts of advance corporation tax and on consequent liability   

to mainstream corporation tax.                                                                               

<4> Allowances for those aged 65-74 and aged 75 and over.                                                    

<5> Figures include revenue effects of changing the additional personal allowance and the widow's            

bereavement allowances by £100.                                                                              

<6> Percentage changes are calculated with reference to 1993-94 levels.                                      

<7> Assessment to corporation tax normally relates to the preceding year.                                    

These estimates are the changes to revenue that would occur if the changed rates were applied to profits     

from 1 April 1993.                                                                                           

<8> These figures ignore effects arising from the imputation system.                                         

<9> These changes are assumed to take effect from April 1994.                                                


Table 6-Direct effects of illustrative changes in direct taxes<1>                                            

                                                                                      £ million              

                                                                                      cost/yield             

                                                                                     |1994-95|1995-96        

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

Income tax<2>                                                                                                

Rates                                                                                                        

Change lower rate by 1p<3>                                                           |390    |220            

Change basic rate by 1p                                                              |1,600  |1,900          

Change higher rate by 1p                                                             |270    |440            

                                                                                                             

Allowances                                                                                                   

Change personal allowance by £100                                                    |470    |600            

Change age-related personal allowances by £100<4>                                    |45     |60             

Change married couple's allowanceby £100<5>                                          |140    |190            

Change age-related married couple's allowance by £100<4>                             |12     |16             

Change aged income limit by £500                                                     |5      |9              

Change all personal allowances by 1 per cent.<6>                                     |170    |230            

Change all personal allowances by 10 per cent.<6>                                    |1,700  |2,250          

Change married couple's and related allowances by 1 per cent.<6>                     |25     |35             

Change married couple's and related allowances by 10 per cent.<6>                    |280    |360            

                                                                                                             

Lower rate band                                                                                              

Increase lower rate band by 10 per cent.<6>                                          |240    |310            

                                                                                                             

Basic rate limit                                                                                             

Change basic rate limit by 1 per cent.<6>                                            |55     |80             

Change basic rate limit by 10 per cent.<6>:                                                                  

  increase (cost)                                                                    |500    |720            

  decrease (yield)                                                                   |630    |890            

                                                                                                             

Allowances, lower rate band and basic rate limit                                                             

Change all main allowances, lower rate band and basic rate limit by 1 per cent.<6>   |290    |380            

Change all main allowances, lower rate band and basic rate limit by 10 per cent.<6>:                         

  increase (cost)                                                                    |2,800  |3,650          

  decrease (yield)                                                                   |3,050  |4,000          

                                                                                                             

Corporation tax<7>                                                                                           

Change full rate by 1 percentage point                                               |390    |630            

Change small companies' rate by 1 percentage point<8>                                |70     |110            

                                                                                                             

Capital Gains tax<9>                                                                                         

Change annual exempt amount by £500 for individuals and £250 for trustees            |0      |6              

                                                                                                             

Inheritance tax<9>                                                                                           

Change rate by 1 percentage point                                                    |14     |31             

Increase threshold by £5,000                                                         |14     |29             

<1> The estimated revenue effects of the changes on receipts are rounded. The extent of rounding reflects    

the desire to avoid undue compounding of its effects when numbers are pro-rated, rather than the accuracy of 

the estimates.                                                                                               

<2> The figures for income tax changes include consequential effects on the yield of capital gains tax.      

Changes are assumed to take effect from April 1994.                                                          

<3> Including the effects of the change on receipts of advance corporation tax and on consequent liability   

to mainstream corporation tax.                                                                               

<4> Allowances for those aged 65-74 and aged 75 and over.                                                    

<5> Figures include revenue effects of changing the additional personal allowance and the widow's            

bereavement allowances by £100.                                                                              

<6> Percentage changes are calculated with reference to 1993-94 levels.                                      

<7> Assessment to corporation tax normally relates to the preceding year.                                    

These estimates are the changes to revenue that would occur if the changed rates were applied to profits     

from 1 April 1993.                                                                                           

<8> These figures ignore effects arising from the imputation system.                                         

<9> These changes are assumed to take effect from April 1994.                                                


Table 6-Direct effects of illustrative changes in direct taxes<1>                                            

                                                                                      £ million              

                                                                                      cost/yield             

                                                                                     |1994-95|1995-96        

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

Income tax<2>                                                                                                

Rates                                                                                                        

Change lower rate by 1p<3>                                                           |390    |220            

Change basic rate by 1p                                                              |1,600  |1,900          

Change higher rate by 1p                                                             |270    |440            

                                                                                                             

Allowances                                                                                                   

Change personal allowance by £100                                                    |470    |600            

Change age-related personal allowances by £100<4>                                    |45     |60             

Change married couple's allowanceby £100<5>                                          |140    |190            

Change age-related married couple's allowance by £100<4>                             |12     |16             

Change aged income limit by £500                                                     |5      |9              

Change all personal allowances by 1 per cent.<6>                                     |170    |230            

Change all personal allowances by 10 per cent.<6>                                    |1,700  |2,250          

Change married couple's and related allowances by 1 per cent.<6>                     |25     |35             

Change married couple's and related allowances by 10 per cent.<6>                    |280    |360            

                                                                                                             

Lower rate band                                                                                              

Increase lower rate band by 10 per cent.<6>                                          |240    |310            

                                                                                                             

Basic rate limit                                                                                             

Change basic rate limit by 1 per cent.<6>                                            |55     |80             

Change basic rate limit by 10 per cent.<6>:                                                                  

  increase (cost)                                                                    |500    |720            

  decrease (yield)                                                                   |630    |890            

                                                                                                             

Allowances, lower rate band and basic rate limit                                                             

Change all main allowances, lower rate band and basic rate limit by 1 per cent.<6>   |290    |380            

Change all main allowances, lower rate band and basic rate limit by 10 per cent.<6>:                         

  increase (cost)                                                                    |2,800  |3,650          

  decrease (yield)                                                                   |3,050  |4,000          

                                                                                                             

Corporation tax<7>                                                                                           

Change full rate by 1 percentage point                                               |390    |630            

Change small companies' rate by 1 percentage point<8>                                |70     |110            

                                                                                                             

Capital Gains tax<9>                                                                                         

Change annual exempt amount by £500 for individuals and £250 for trustees            |0      |6              

                                                                                                             

Inheritance tax<9>                                                                                           

Change rate by 1 percentage point                                                    |14     |31             

Increase threshold by £5,000                                                         |14     |29             

<1> The estimated revenue effects of the changes on receipts are rounded. The extent of rounding reflects    

the desire to avoid undue compounding of its effects when numbers are pro-rated, rather than the accuracy of 

the estimates.                                                                                               

<2> The figures for income tax changes include consequential effects on the yield of capital gains tax.      

Changes are assumed to take effect from April 1994.                                                          

<3> Including the effects of the change on receipts of advance corporation tax and on consequent liability   

to mainstream corporation tax.                                                                               

<4> Allowances for those aged 65-74 and aged 75 and over.                                                    

<5> Figures include revenue effects of changing the additional personal allowance and the widow's            

bereavement allowances by £100.                                                                              

<6> Percentage changes are calculated with reference to 1993-94 levels.                                      

<7> Assessment to corporation tax normally relates to the preceding year.                                    

These estimates are the changes to revenue that would occur if the changed rates were applied to profits     

from 1 April 1993.                                                                                           

<8> These figures ignore effects arising from the imputation system.                                         

<9> These changes are assumed to take effect from April 1994.                                                


Table 6-Direct effects of illustrative changes in direct taxes<1>                                            

                                                                                      £ million              

                                                                                      cost/yield             

                                                                                     |1994-95|1995-96        

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

Income tax<2>                                                                                                

Rates                                                                                                        

Change lower rate by 1p<3>                                                           |390    |220            

Change basic rate by 1p                                                              |1,600  |1,900          

Change higher rate by 1p                                                             |270    |440            

                                                                                                             

Allowances                                                                                                   

Change personal allowance by £100                                                    |470    |600            

Change age-related personal allowances by £100<4>                                    |45     |60             

Change married couple's allowanceby £100<5>                                          |140    |190            

Change age-related married couple's allowance by £100<4>                             |12     |16             

Change aged income limit by £500                                                     |5      |9              

Change all personal allowances by 1 per cent.<6>                                     |170    |230            

Change all personal allowances by 10 per cent.<6>                                    |1,700  |2,250          

Change married couple's and related allowances by 1 per cent.<6>                     |25     |35             

Change married couple's and related allowances by 10 per cent.<6>                    |280    |360            

                                                                                                             

Lower rate band                                                                                              

Increase lower rate band by 10 per cent.<6>                                          |240    |310            

                                                                                                             

Basic rate limit                                                                                             

Change basic rate limit by 1 per cent.<6>                                            |55     |80             

Change basic rate limit by 10 per cent.<6>:                                                                  

  increase (cost)                                                                    |500    |720            

  decrease (yield)                                                                   |630    |890            

                                                                                                             

Allowances, lower rate band and basic rate limit                                                             

Change all main allowances, lower rate band and basic rate limit by 1 per cent.<6>   |290    |380            

Change all main allowances, lower rate band and basic rate limit by 10 per cent.<6>:                         

  increase (cost)                                                                    |2,800  |3,650          

  decrease (yield)                                                                   |3,050  |4,000          

                                                                                                             

Corporation tax<7>                                                                                           

Change full rate by 1 percentage point                                               |390    |630            

Change small companies' rate by 1 percentage point<8>                                |70     |110            

                                                                                                             

Capital Gains tax<9>                                                                                         

Change annual exempt amount by £500 for individuals and £250 for trustees            |0      |6              

                                                                                                             

Inheritance tax<9>                                                                                           

Change rate by 1 percentage point                                                    |14     |31             

Increase threshold by £5,000                                                         |14     |29             

<1> The estimated revenue effects of the changes on receipts are rounded. The extent of rounding reflects    

the desire to avoid undue compounding of its effects when numbers are pro-rated, rather than the accuracy of 

the estimates.                                                                                               

<2> The figures for income tax changes include consequential effects on the yield of capital gains tax.      

Changes are assumed to take effect from April 1994.                                                          

<3> Including the effects of the change on receipts of advance corporation tax and on consequent liability   

to mainstream corporation tax.                                                                               

<4> Allowances for those aged 65-74 and aged 75 and over.                                                    

<5> Figures include revenue effects of changing the additional personal allowance and the widow's            

bereavement allowances by £100.                                                                              

<6> Percentage changes are calculated with reference to 1993-94 levels.                                      

<7> Assessment to corporation tax normally relates to the preceding year.                                    

These estimates are the changes to revenue that would occur if the changed rates were applied to profits     

from 1 April 1993.                                                                                           

<8> These figures ignore effects arising from the imputation system.                                         

<9> These changes are assumed to take effect from April 1994.                                                

DEFENCE

Next Steps

Mr. Cormack : To ask the Secretary of State for Defence how his Department is responding to the next steps initiative ; and if he will make a statement.

Mr. Aitken : My Department's response to next steps is part of the major programme of defence management reform in train. Next steps, in line with the principles of the citizens charter, places particular emphasis on efficiency, standards of service to customers and value for money. The Ministry of Defence's support organisations provide services to internal and external customers, but their primary role is to support the operational units in their delivery of military capability. Higher standards of service and performance will enhance the overall effectiveness of our defence capability.

Areas now under review include the Fleet Maintenance and Repair Organisation, the naval marine services organisation, RN training, Army logistic information systems, Army Engineer Services, RAF signals, and test and evaluation.

We are increasing the scale of this. Our aim is to extend the next steps programme to all significant defence support areas. This means that we shall also consider for defence agency status the whole of the naval support organisation including the naval bases and the storage and distribution function ; the recruiting, pay and some personnel systems for each of the services ; those schools not already in agencies ; Army individual training ; significant further elements of Army logistics in the base areas and RAF logistics ; the medical organisations of each service ; human factors research ; tri-service communications systems ; the Defence lands organisation ; and elements of the procurement executive.

There is no presumption that an organisation included in this list will become an agency. This is a process which involves, inter alia, consideration of operational implications and of prior options, including privatisation and contracting out. Final decisions will be taken case-by- case if it is clear that the best solution is to retain the activity within the Ministry of Defence. Our aim is to have prepared the selected organisations for launch as defence agencies over the period to mid-1996. We expect to have completed a substantial part of the programme by mid- 1995.

Radioactive Waste

Mr. Llew Smith : To ask the Secretary of State for Defence what means exist for the on-site treatment at AWE Aldermaston of solid radioactive wastes arising from operations at the site.

Mr. Aitken : Apart from limited compaction facilities, there are no facilities at AWE for the treatment of solid radioactive waste. All solid radioactive wastes are either disposed via authorised routes, such as Drigg, or stored safely and securely pending the availability of the Nirex repository.


Column 125

Mr. Llew Smith : To ask the Secretary of State for Defence what progress has been made in resolving the outstanding problems of radioactive waste management, with particular reference to the disposal of radioactive resins arising from submarine reactors, and the measurement and categorisation of plutonium contaminated material, identified at paragraph 6.9 of the 12th annual report of the Radioactive Waste Management Advisory Committee in 1991.

Mr. Aitken : I refer the hon. Gentleman to the reply I gave to the hon. Member for Denton and Reddish (Mr. Bennett) on 13 May 1993, at column 571.

Flag Exercises

Mr. Llwyd : To ask the Secretary of State for Defence if he will list the squadrons whose crew have participated in flag exercises in north America since 1985, giving in each case (a) the date and name of the flag exercise and (b) the location of the squadron's work-up training prior to the exercise.

Mr. Hanley : Details of RAF participation in red-green flag exercises are not held centrally and information covering all of the period in question could be provided only at disproprotionate cost and effort. From 1988 however, the information requested is as follows :


Date                                 |Name                                |Squadrons                                                                

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

October/November 1988                |89-1                                |Numbers 15, 16, 17, 56, 92                                               

April 1989                           |89-3                                |Numbers 14, 27, 617                                                      

April 1990                           |90-3                                |Numbers 16, 16, 31                                                       

April 1991                           |91-3                                |Numbers 1, 3, 4                                                          

January/February 1992                |93-1                                |Numbers 2, 5, 9, 11, 29, 47, 55, 617                                     

Details on Maple flag exercises are also not held centrally. The exercise takes place in May to June of each year, and RAF participation usually comprises either Jaguars and Harriers, which usually attend in alternate years.

Most substantive work-up training for flag exercises takes place either in the United Kingdom or at Goose Bay in Canada.

Low Flying

Mr. Llwyd : To ask the Secretary of State for Defence how many aircraft, and of what types, took part in the tactical leadership course at RAF Lossiemouth in May 1992 ; how many low-level sorties were undertaken ; and how many of these were authorised down to a height of 100 ft.

Mr. Hanley : The tactical leadership training course held at RAF Lossiemouth in May 1992 involved eight Tornado GR1, two Tornado GR1a, six Tornado F3, four Harrier GR5, two Harrier GR7, four Buccaneer and four Hawk aircraft. Ninety-two low-level sorties were flown overland ; none of them was authorised down to a height of 100 ft.

Mr. Llwyd : To ask the Secretary of State for Defence what regulations are contained in Joint Services Publication 318 concerning low- level flight over areas of concentrated population and public assemblies.

Mr. Hanley : Joint Services Publication 318 requires that aircraft flying over areas of concentrated population do


Column 126

so at sufficient height to permit a safe emergency landing outside the congested area--not less than 2,000 ft above ground level for fixed-wing aircraft and 1,000 ft for helicopters. If weather or other factors mean that sufficient height cannot be maintained, such areas are to be avoided unless doing so would endanger the aircraft. Flying over any place where a large number of people are assembled is prohibited below 1,000 ft except when specially authorised, or when it is necessary to do so while carrying out the arrival or departure procedure at an airfield or heliport. These regulations do not apply to aircraft participating in air displays or flypasts, to which separate procedures apply.

Mr. Llwyd : To ask the Secretary of State for Defence what consideration has been given to extending the system by which aircrew entering a low-flying area broadcast their presence on a common military radio frequency, in such a way as to permit civil pilots to receivarea to broadcast their presence on a common military frequency.

Mr. Llwyd : To ask the Secretary of State for Defence if he will list the number of days in 1992 on which the observed weather was below the minima required for military low flying at (a) RAF Tain, (b) RAF Spadeadam, (c) RAF Wainfleet and (d) Pembrey.

Mr. Hanley : The information is not available in the format requested. The total number of hours lost in 1992 due to adverse weather at each range is, however, as follows :


Range                |Number of hours lost                     

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

RAF Tain             |152                                      

RAF Spadeadam<1>     |Nil                                      

RAF Wainfleet        |180                                      

RAF Pembrey          |340                                      

<1> RAF Spadeadam is an all-weather facility.                  

Mr. Llwyd : To ask the Secretary of State for Defence how many aircraft, and of what types, took part in the tactical leadership course (a) at RAF St. Mawgan in March and (b) at RAF Chivenor in November-December 1992 ; how many low-level sorties were undertaken ; and how many of these were authorised down to a height of 100ft.

Mr. Hanley : The tactical leadership training course held at RAF St. Mawgan in March 1993 involved six Tornado GR1, seven Tornado F3, four Buccaneer, four Sea Harrier, two Nimrod and one Sea King aircraft. Fourteen low-level sorties were flown overland. The helicopter tactics instructor course held at RAF Chivenor in November to December 1992 involved three Chinook, three Puma, two Wessex, three Harrier GR7, three Tornado GR1 and three Tornado F3 aircraft. Fifty-nine low-level sorties were flown overland, each involving two helicopters and one or two fast jets. No fixed -wing aircraft sorties were authorised down to a height of 100 ft during either course.

Mr. Llwyd : To ask the Secretary of State for Defence if he will list the dates and numbers of aircraft involved in training detachments of Harrier aircraft to West Freugh


Column 127

since 1990 ; how many low-level sorties have been undertaken during these deployments ; and which location is now the principal location for night low-level training for the RAF Harrier force.

Mr. Hanley : Training detachments of Harrier aircraft were held at West Freugh between 18 to 27 November 1991, 28 September to 2 October 1992, and 4 to 8 October 1993. Eight aircraft were deployed on each occasion. A total of 80 low-level sorties were flown during the three detachments. RAF Harrier night low-flying training is conducted throughout the UK night low- flying system.

Mr. Llwyd : To ask the Secretary of State for Defence how many Harrier GR7 pilots have received night low-level training at US Marine Corps Air Station, Yuma, Arizona ; when the training programme commenced ; how many sorties are required for each pilot to qualify to fly the aircraft at low level at night ; what is the minimum altitude flown during the training ; how many aircraft are currently committed to the task ; and what is the additional cost of carrying out this training at Yuma rather than (a) in the United Kingdom and (b) at Goose Bay, Canada.

Mr. Hanley : Fifteen Harrier GR7 pilots have received night low- level training at United States Marine Corps air station, Yuma. There has only been one detachment to date which took place between 13 April and 12 May 1993. Each pilot, who must already be combat ready by day, must complete a syllabus of 36 sorties in order to qualify as night combat ready. The syllabus includes a mixture of low and medium-level sorties with a minimum altitude flown of 200 ft. Twelve aircraft are currently committed to the task. The additional cost of carrying out this training at Yuma rather than the United Kingdom or Goose Bay is approximately £250,000, as the squadron pilots and groundcrew have to be accommodated commercially. There is also the opportunity cost of the air transport and tanker aircraft required to deploy and recover the aircraft.

Mr. Llwyd : To ask the Secretary of State for Defence what is his Department's policy on the institution of disciplinary proceedings against military aircrew in respect of unpremeditated or inadvertent breaches of flying regulations which come to light as a result of reports submitted under (a) the CONDOR system, (b) the APHAZ reporting system and (c) the air miss reporting system.

Mr. Hanley : There is no current record of reports submitted under the CONDOR system bringing to light cases of unpremeditated or inadvertent breaches of flying regulations. To take disciplinary action in such circumstances however, directly as the result of a CONDOR report, could seriously undermine a system which depends for its success on its confidentiality and which is of great value in assisting the furtherance of flight safety in the RAF. Under the air miss and APHAZ reporting systems, where aircrew are found to have been negligent, their unit commanders will take disciplinary action under the Air Force Act. The degree of the disciplinary action depends on the nature of the breach.

Mr. Llwyd : To ask the Secretary of State for Defence if he will list the categories of incident during military aircraft flying operations which are required to be reported under the CONDOR system.


Column 128

Mr. Hanley : The confidential direct occurrence

report--CONDOR--system allows aircrew and ATC personnel to report human error incidents anonymously. There are no categories of incident under the CONDOR system.

Mr. Llwyd : To ask the Secretary of State for Defence how many instances of unauthorised penetration of controlled or restricted airspace in the United Kingdom by military aircraft climbing out from low level have been reported in each year since 1987.

Mr. Hanley : The number of reported incidents of unauthorised penetration of United Kingdom controlled and/or restricted airspace by military aircraft climbing out from low level is as follows :


3

Year             |No. of incidents                 

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

1987             |3                                

1988             |6                                

1989             |5                                

1990             |7                                

1991             |0                                

1992             |4                                

1993             |<1>2                             

<1> To date.                                       

Mr. Llwyd : To ask the Secretary of State for Defence what representations have been received since 1981 from civil aviation interests seeking relaxation of the rules prohibiting entry into the highlands restricted area.

Mr. Hanley : Since 1981 the national air traffic services have received 79 requests for entry into the highlands restricted area from a total of 20 civil aviation operators.

Mr. Llwyd : To ask the Secretary of State for Defence if he will list the locations in the United Kingdom low-flying system where flow control has been (a) introduced and (b) withdrawn since the information given by his Department to the Defence Committee inquiry into low flying in 1989-90 ; and if he will state in each case the direction of the required flow.

Mr. Hanley : The information requested cannot be provided without disproportionate cost and effort. In September 1993, however, the Civil Aviation Authority published a chart entitled "The Chart of UK Areas of Intense Aerial Activity (AIAA), Aerial Tactics Areas (ATA) and Military Low Flying System" showing details of all current unidirectional flow controls in the United Kingdom low-flying system. A copy of the chart will be placed in the Library of the House.

Mr. Llwyd : To ask the Secretary of State for Defence how many cases have occurred of unauthorised entry of aircraft into the highlands restricted area, in contravention of Statutory Instrument 1981 No. 1171 ; and what action was taken against the aircrew involved.

Mr. Hanley : Military aircraft are not subject to Statutory Instrument 1981 No. 1171.

Mr. Llwyd : To ask the Secretary of State for Defence if he will list the titles, dates and type of aircraft involved in all planned RAF participation in flag and similar air exercises in north America over the next 12 months.

Mr. Hanley : The aircraft planned to take part in the exercises are as follows :


Column 129


Dates-1994                    |Exercise                     |Aircraft Type                                              

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

January/February              |Red Flag 94-2                |Tornado GR1s                                               

                                                                                                                        

May/June                      |Maple Flag                   |Jaguars                                                    

                                                                                                                        

June/July                     |Cope Thunder/Distant Frontier|Tornado GR1s and F3s                                       

                                                                                                                        

August/September              |Air Warrior                  |Harriers                                                   

                                                                                                                        

October/November              |Red Flag 95-1                |Tornado GR1s and F3s                                       

Mr. Llwyd : To ask the Secretary of State for Defence what are the rules governing interception of low-flying aircraft by air defence aircraft in flow control areas of the United Kingdom low-flying system.

Mr. Hanley : Where air defence aircraft intercept low-flying aircraft in flow control areas of the United Kingdom low-flying system, all aircraft must be flown in compliance with the direction of the flow control.

Mr. Llwyd : To ask the Secretary of State for Defence how many aircraft, and of what types, took part in the tactical leadership course at RAF St. Mawgan in October 1992 ; how many low-level sorties were undertaken ; and how many of these were authorised down to a height of 100ft.

Mr. Hanley : The tactical leadership training course held at RAF St. Mawgan in October 1992 involved six Tornado GR1, five Tornado F3, four Jaguar, four Buccaneer, two Hawk and two Sea Harrier aircraft. One hundred and six low-level sorties were flown overland ; none of them were authorised down to a height of 100 ft.

Mr. Redmond : To ask the Secretary of State for Defence how many low -level sorties were flown by British military aircraft in each of the 250 low-flying areas in Germany in each month in 1989.

Mr. Hanley : There were a total of 21,100 recorded entries by British military fixed-wing aircraft into the 250 low-flying areas in the Federal Republic of Germany during 1989. A breakdown by month and area is not available.

Mr. Redmond : To ask the Secretary of State for Defence what is the current requirement for Royal Navy Sea Harrier pilots to maintain qualifications to fly at less than 250 ft.

Mr. Hanley : There is no current requirement for Royal Navy Sea Harrier pilots to maintain qualifications to fly at less than 250 ft.

Mr. Redmond : To ask the Secretary of State for Defence how many low -level sorties were flown over the United Kingdom by the two German Air Force Tornados which were deployed to RAF Mildenhall between 19 and 21 July ; and what was the minimum authorised altitude for each sortie.


Next Section

  Home Page