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Column 351
William M. MercerMarcial Exhenique & Partners Ltd.
Montrose
Price Waterhouse
Symond Construction Management
Touche Ross & Co.
Wendy Pritchard Associates
Wyatt Company (UK) Ltd.
Brunswick
Davis Polk & Wardwell
Dewe Rogerson
Kleinwort & Benson
Linklaters & Paines
Nishimura & Sananda
Slaughter & May
Solid Solutions
Stikeman Elliott
S. G. Warburg
Post Office
Mr. Chris Smith : To ask the Chancellor of the Exchequer if he will list, for each of the last 10 years, the annual contribution made by the Post Office to the Exchequer (a) in corporation tax and (b) in specific Treasury contributions under its external financing limit.
Mr. Dorrell : The information requested is as follows :
|Corporation|External
|£ million |£ million
------------------------------------------------
1984-85 |2 |-26
1985-86 |1 |-82
1986-87 |2 |-136
1987-88 |42 |-79
1988-89 |31 |-60
1989-90 |26 |0
1990-91 |70 |0
1991-92 |67 |-74
1992-93 |83 |-80
1993-94 |81 |<1>-182
<1> Latest estimate of outturn.
Income Tax
Ms Primarolo : To ask the Chancellor of the Exchequer how much revenue would be lost to the Exchequer by a 1p reduction in the basic rate of income tax ; and how much would be generated by an increase in the basic rate of one penny in the pound.
Mr. Dorrell : The direct revenue effect of a 1p reduction or increase in the basic rate of income tax in a full year would be £1.8 billion at 1994-95 levels of income.
Mr. Matthew Taylor : To ask the Chancellor of the Exchequer, pursuant to his answer of 17 May, Official Report, column 397, when the 1993 figures for uncollected schedule D tax will be available.
Mr. Dorrell : The figure for uncollected schedule D tax for the account year 1993 will be included in the Board of Inland Revenue's annual report in the autumn.
Personal Investment Authority
Mr. David Marshall : To ask the Chancellor of the Exchequer on what date the Personal Investment Authority will start operating ; and if he will make a statement.
Mr. Nelson : Recognition of self-regulating organisations under the Financial Services Act 1986 is a
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responsibility of the Securities and Investments Board. I understand that, subject to recognition, the Personal Investment Authority expects to begin regulating its members in July 1994.Mr. David Marshall : To ask the Chancellor of the Exchequer how many companies and independent financial advisers have joined the Personal Investment Authority.
Mr. Nelson : I understand that, as of 24 May, the personal investment authority had received 2,787 applications and that 299 firms had been accepted for membership.
Public Service Pensions
Mr. Morgan : To ask the Chancellor of the Exchequer what further changes there have been in the rules relating to abatement of public servants' pensions since 11 July 1991 ; and what proposals she has to provide a procedure for the consideration of abatement as regards those in receipt of early retirement pensions under the local government superannuation and teachers' superannuation scheme who are re-employed in (a) the same branch of the public service and (b) any other branch of the public service.
Mr. Portillo : There has been no change in the Government's policy relating to the abatement of public service pensions since the then Economic Secretary's reply to my hon. Friend the Member for Stevenage (Mr. Wood) of 21 December 1989, column 370 and the Minister for State's reply to my hon. Friend the Member for Gedling (Mr. Mitchell) of 11 July 1991, column 425 . Since then, the rules of the various public service pension schemes to which the policy applies will have been amended as necessary to give effect to it.
The policy remains that those in receipt of an early retirement pension from a public service scheme who are re-employed in the same public service may have their pensions abated. Those who are re-employed in a different public service can be subject to abatement of either their pay or pension if the criteria for appointment required earlier public service experience.
The detailed procedures for determining abatement are for the public services concerned.
Alternative Minimum Tax
Mr. Dewar : To ask the Chancellor of the Exchequer if he will update the answer given to the hon. Member for Newcastle upon Tyne, East (Mr. Brown) on 2 May 1991, Official Report, columns 296-97, estimating the effect on Treasury revenues in 1994-95 of introducing an alternative minimum tax.
Mr. Dorrell : The information is as follows :
Additional tax liability arising from introduction of
alternative minimum
tax on gross income, 1994-95
Gross income Rate of minimum
tax
of individual |20 per cent. |25 per cent.
taxpayer (£) |£ million |£ million
--------------------------------------------------------
Over 40,000 |35 |180
Over 45,000 |30 |100
Over 50,000 |25 |75
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The estimates do not take account of any behavioural effects which might result from the introduction of the new arrangements.Personal Income
Mr. Cousins : To ask the Chancellor of the Exchequer if he will estimate the breakdown of personal income in the United Kingdom as between earned income, benefits and basic state pension, occupational pensions, and supplementary pension, interest, profits and dividends at 1970, 1980, 1985, 1989 and 1992.
Mr. Nelson : Information on households' income and expenditure is published annually at current prices in table 4.9 of the "Central Statistical Office Blue Book, United Kingdom National Accounts" and on the CSO database ; both sources are available in the Library.
Government Information
Mr. Llew Smith : To ask the Chancellor of the Exchequer when he plans to publish his departmental guidance on the implementation of the code of practice on access to Government information, as promised at paragraph 3(ii) of the code issued on 4 April ; and what has been the cause of the delay in publishing the departmental guidance.
Mr. Nelson : The guidance has been available since 4 April. A copy has been sent to the hon. Member and copies have also been placed in the Library of the House.
Life Assurance and Unit TrustRegulatory Organisation
Mr. David Marshall : To ask the Chancellor of the Exchequer if he will list in the Official Report all the companies who have been fined, and the amounts imposed, for breaching the existing LAUTRO regulations.
Mr. Nelson : To date, LAUTRO has imposed the following fines :
|£
------------------------------------
(i) during 1994
Norwich Union |300,000
Premium Life |300,000
Manulife |65,000
Aegon |225,000
Legal and General |180,000
Laurentian Life |70,000
Crown Life |130,000
LAS |145,000
(ii) during 1993
Canterbury Life |80,000
NMFM |45,000
Prosperity Life |75,000
Interlife |160,000
Colonial Mutual |130,000
Liberty Life |80,000
(iii) during 1992
Scottish Widows |120,000
G R E |100,000
London & Manchester |80,000
Cannon |50,000
G A Life |50,000
C U Life |50,000
Norwich Union |50,000
Column 354
Uncollected Tax
Mr. Matthew Taylor : To ask the Chancellor of the Exchequer, pursuant to his answer of 17 May, Official Report, column 396, when the 1993 figures on uncollected corporation tax will be available.
Mr. Dorrell : The figure for uncollected corporation tax for the account year 1993 will be published in the Board of Inland Revenue's annual report in the autumn.
Mr. Matthew Taylor : To ask the Chancellor of the Exchequer, pursuant to his answer of 17 May, Official Report, column 398, when the 1993 figures for uncollected PAYE and national insurance contributions will be available.
Mr. Dorrell : The figures for uncollected PAYE and national insurance contributions for the account year 1993 will be included in the Board of Inland Revenue's annual report in the autumn.
Mr. Matthew Taylor : To ask the Chancellor of the Exchequer, pursuant to his answer of 17 May, Official Report, column 397, when the 1993 figures for uncollected capital gains tax will be available.
Mr. Dorrell : The figure for uncollected capital gains tax for the account year 1993 will be published in the Board of Inland Revenue's annual report in the autumn.
Exchange Rates
Mr. Austin Mitchell : To ask the Chancellor of the Exchequer what has been the change in real exchange rates measured in terms of relative unit prices since the second half of 1973 ; and to what extent this affected the demand for, and supply of, skilled labour.
Mr. Nelson : I refer the hon. Member to the answer I gave him on 21 March 1994, Official Report, column 15, which provides references to exchange rate and price data, which can be used to calculate the information requested.
The real exchange rate is only one factor affecting the demand for, and supply of, skilled labour. It is difficult to isolate the effect of changes in the real exchange rate from that of other factors, such as the impact of structural reform of the labour market.
Scientific Research
Mr. Anthony Coombs : To ask the Chancellor of the Exchequer what consideration he is giving to the provision of further guidance by the Inland Revenue as to the meaning and scope of scientific research as outlined in section 139 of the Capital Allowances Act 1990.
Mr. Dorrell : Scientific research is defined in the Capital Allowances Act as covering
"any activities in the fields of natural or applied science for the extension of knowledge".
Whether any particular activities fall within this definition will depend on the facts of the case. However, in general terms, activities are scientific research if they involve the application of new scientific principles in an existing area of research or the application of existing principles in a new area of research. The essential test is innovation.
Column 355
Public Consultation
Mr. Kirkwood : To ask the Chancellor of the Exchequer in what circumstances it is his Department's practice, when issuing a public consultation document, to inform those consulted that their responses will be made public unless they explicitly ask for them to be kept confidential ; and if he will arrange for his Department to do so in all cases in future.
Mr. Nelson : No consistent pattern has been followed in the past. It is now the Treasury's policy, when issuing a public consultation document, to ensure that those responding are aware that their responses may be made publicly available unless they have requested otherwise.
Civil Rights (Disabled Persons) Bill
Mr. Alan Howarth : To ask the Chancellor of the Exchequer what is his estimate of the effects on employment, gross domestic product, total national insurance contributions and tax revenues of (i) the construction and (ii) the re-equipment activity arising from compliance with the requirements of the Civil Rights (Disabled Persons) Bill over (a) 10, (b) 15, (c) 20 and (d) 25 years ; and if he will explain the basis for his calculations.
Mr. Portillo : The information is not available and could be obtained only at disproportionate cost.
Government Bonds
Mr. Simon Hughes : To ask the Chancellor of the Exchequer who is currently the largest purchaser of Government bonds.
Mr. Nelson : A sectoral breakdown of purchases of Government securities is given at table 10.2F of the Central Statistical Office's "Financial Statistics".
Public Sector Companies
Mr. Simon Hughes : To ask the Chancellor of the Exchequer what was the combined output in 1993 as a percentage of gross domestic product of (a) the companies privatised in the last 15 years and (b) those still in the public sector.
Mr. Nelson : Information on the output of companies privatised in the last 15 years is not available on a national accounting basis. The estimates of output of companies still in the public sector are not yet available for 1993. However, for 1992 the output of these companies was 3.5 per cent. of gross domestic product.
Column 356
Excise Duties
Mr. David Porter : To ask the Chancellor of the Exchequer what steps he is taking to prevent differences between excise duties in the United Kingdom and France affecting pubs and clubs in the United Kingdom ; and if he will make a statement.
Sir John Cope : Customs are taking firm action against individuals attempting to evade duty and compete unfairly against legitimate trade by smuggling alcoholic drinks and tobacco. Those involved run the risks of losing the imported goods and the vehicle used to transport them, and of a prison sentence of up to seven years. In the 15 months to March 1994, customs made 1,588 detections involving £2.3 million in revenue.
Small Companies
Mr. David Porter : To ask the Chancellor of the Exchequer if he will make it his policy to consider further a scheme to enable small companies which have been established for about five years to expand their premises, their staff and their output through some tax-friendly assistance ; and if he will make a statement.
Mr. Dorrell : Proposals for measures to help business will be carefully considered in the run-up to the next Budget. Last year's Budgets included several measures to encourage the growth of small companies. In particular, the enterprise investment scheme and venture capital trusts will stimulate funds for unquoted trading companies. Relief on capital gains where proceeds are reinvested in unquoted trading companies, and retirement relief, also give an incentive to invest in small companies.
Welsh Office Block Grants
Mr. Ainger : To ask the Chancellor of the Exchequer what formula is used to calculate the Welsh Office block grant as a proportion of total expenditure.
Mr. Portillo : The Welsh Office block is determined under established formula arrangements, in accordance with which the block is adjusted by 6.02 per cent. of the changes made to plans for comparable English programmes.
Mr. Ainger : To ask the Chancellor of the Exchequer how much in percentage and cash terms of total public expenditure the Welsh Office block grants represented in each of the years between 1988-89 and 1994-95.
Mr. Portillo : The information requested is contained in the table :
Column 355
q
£ million
|1988-89 |1989-90 |<1>1990-91|<1>1991-92|1992-93 |1993-94 |1994-95
-----------------------------------------------------------------------------------------------------------------
Total public expenditure |156,058 |175,115 |193,378 |212,513 |232,345 |244,500 |251,300
Welsh Office Block |3,482 |3,698 |4,329 |5,153 |5,825 |6,110 |6,410
As percentage of total
public expenditure |2.2 |2.1 |2.2 |2.4 |2.5 |2.5 |2.6
<1> The increase from 1990-91 to 1991-92 is accounted for by an increase in the Community Care grant of £268
million. From 1992-93 onwards responsibility for Training in Wales was transferred from the Department of
Employment.
Column 357
Taxation
Ms Harman : To ask the Chancellor of the Exchequer (1) if he will provide estimates for the years 1978-79 to 1995-96 of the proportion of income taken in (a) direct tax, (b) indirect tax and (c) total tax for single pensioners aged over 75 years on (i) average pensioner income, (ii) half average pensioner income and (iii) twice average pensioner income ;
(2) if he will provide estimates for the years 1978-79 to 1995-96 of the proportion of income taken in (a) direct tax, (b) indirect tax and (c) total tax for single pensioners aged 65 to 74 years on (i) average pensioner income, (ii) half average pensioner income and (iii) twice average pensioner income ;
(3) if he will provide estimates for the years 1978-79 to 1995-96 of the proportion of income taken in (a) direct tax, (b) indirect tax and (c) total tax for pensioner couples aged 65 to 74 years on (i) average pensioner income, (ii) half average pensioner income and (iii) twice average pensioner income ;
(4) if he will provide estimates for the years 1978-79 to 1995-96 of the proportion of income taken in (a) direct tax, (b) indirect tax and (c) total tax for pensioner couples aged over 75 years on (i) average pensioner income, (ii) half average pensioner income and (iii) twice average pensioner income.
Mr. Dorrell [holding answer 19 May 1994] : Figures for direct tax payments are in the table. Information on indirect tax payments is not available. For the hypothetical family types examined, real after-tax income rose, between 1978-79 and 1992-93, by over £30 per week for the single pensioner with an average income and by over £80 per week for a couple at 1992-93 prices.
Income tax as percentage of gross income
Multiples of
average
pensioner income
|" |1 |2
----------------------------------------------------
Single aged 65-74
1978-79 |0 |3.8 |17.0
1979-80 |0 |2.5 |15.4
1980-81 |0 |3.3 |16.6
1981-82 |0 |7.6 |18.8
1982-83 |0 |6.4 |18.2
1983-84 |0 |5.4 |17.7
1984-85 |0 |5.1 |17.6
1985-86 |0 |4.2 |17.1
1986-87 |0 |4.8 |16.9
1987-88 |0 |6.1 |16.5
1988-89 |0 |5.0 |15.0
1989-90 |0 |5.5 |15.3
1990-91 |0 |6.4 |15.7
1991-92 |0 |6.9 |16.0
1992-93 |0 |6.1 |15.5
Increase in real net income, after tax
1978-79 to 1992-93 (percentage) |44.7|41.3|47.5
Single aged 75+
1978-79 |0 |3.8 |17.0
1979-80 |0 |2.5 |15.4
1980-81 |0 |3.3 |16.6
1981-82 |0 |7.6 |18.8
1982-83 |0 |6.4 |18.2
1983-84 |0 |5.4 |17.7
1984-85 |0 |5.1 |17.6
1985-86 |0 |4.2 |17.1
1986-87 |0 |4.8 |16.9
1987-88 |0 |5.3 |16.1
1988-89 |0 |4.2 |14.6
1989-90 |0 |4.7 |14.9
1990-91 |0 |5.7 |15.3
1991-92 |0 |6.2 |15.6
1992-93 |0 |5.5 |15.1
Increase in real net income, after tax
1978-79 to 1992-93 (percentage) |44.7|42.1|48.1
Couple, aged 65-74
1978-79 |0 |8.4 |23.7
1979-80 |0 |7.1 |21.4
1980-81 |0 |7.8 |21.8
1981-82 |0 |11.5|23.1
1982-83 |0 |9.8 |22.5
1983-84 |0 |10.3|22.7
1984-85 |0 |9.7 |21.9
1985-86 |0 |10.3|22.0
1986-87 |0 |10.3|21.4
1987-88 |0 |11.5|20.7
1988-89 |0 |10.6|19.2
1989-90 |0 |10.2|19.0
1990-91 |0 |2.8 |13.9
1991-92 |0 |3.6 |15.0
1992-93 |0 |3.0 |14.4
Increase in real net income, after tax
1978-79 to 1992-93 per cent. |46.9|55.6|64.7
Couple, aged 75+
1978-79 |0 |8.4 |23.7
1979-80 |0 |7.1 |21.4
1980-81 |0 |7.8 |21.8
1981-82 |0 |11.5|23.1
1982-83 |0 |9.8 |22.5
1983-84 |0 |10.3|22.7
1984-85 |0 |9.7 |21.9
1985-86 |0 |10.3|22.0
1986-87 |0 |10.3|21.4
1987-88 |0 |10.9|20.7
1988-89 |0 |10.1|19.2
1989-90 |0 |9.8 |19.0
1990-91 |0 |2.3 |13.5
1991-92 |0 |3.1 |14.6
1992-93 |0 |2.6 |14.0
Increase in real net income, after tax
1978-79 to 1992-93 per cent. |46.9|56.2|65.5
Notes:
1. The estimates use figures for the average gross
incomes of singles and couples where the head is
over 65 obtained from the Family Expenditure
Survey. These figures are for calendar years and
are only available up to 1992. Separate figures for
the average incomes of those aged 65-74 and over 75
are not readily available. All figures are subject
to sampling error. They are also not strictly
comparable over time because of changes in the
Family Expenditure Survey.
2. The estimates assume that all income is taxable
and that the pensioners have no tax allowances
other than the personal and married couple's
allowance.
3. Gross income is assumed to be split between the
husband and wife in the ratio 70:30. None of the
wife's income is assumed to be from earnings.
Ms Harman : To ask the Chancellor of the Exchequer (1) if he will provide estimates for the years 1978-79 to 1995-96 of the level of income at which pensioner couples aged over 75 years start to pay income tax (a) in cash prices, (b) in 1994-95 prices, (c) expressed as a proportion of average earnings and (d) expressed as a proportion of average pensioner income ;
(2) if he will provide estimates for the years 1978-79 to 1995-96 of the level of income at which pensioner couples aged 65 to 74 years start to pay income tax (a) in cash
Column 359
prices, (b) in 1994-95 prices, (c) expressed as a proportion of average earnings and (d) expressed as a proportion of average pensioner income.Mr. Dorrell [holding answer 19 May 1994] : Only 30 per cent. of pensioners currently pay income tax. Available information on tax thresholds is given in the
Column 360
table. The figures show that the tax thresholds for pensioners have risen significantly in real terms. For the single pensioner with an average income, real after-tax income rose by over £30 per week between 1978-79 and 1992-93 and for a married couple the increase was over £80 at 1992-93 prices.Column 359
Tax threshold<1> Tax threshold<1> Tax threshold<1> Tax threshold<1>
at current prices at constant as percentage as percentage
1994-95 prices<2>
of average of average income
earnings<3>
of a pensioner
couple<4>
|Aged 65-74|<5>Aged 75|Aged 65-74|<5>Aged 75|Aged 65-74|<5>Aged 75|Aged 65-74|<5>Aged 75
|or over |or over |or over |or over
|£ |£ |£ |£ |Per cent. |Per cent. |Per cent. |Per cent.
--------------------------------------------------------------------------------------------------------------
1978-79 |2,075 |2,075 |5,933 |5,933 |43 |43 |68 |68
1979-80 |2,455 |2,455 |6,059 |6,059 |43 |43 |73 |73
1980-81 |2,895 |2,895 |6,139 |6,139 |42 |42 |74 |74
1981-82 |2,895 |2,895 |5,507 |5,507 |38 |38 |62 |62
1982-83 |3,295 |3,295 |5,856 |5,856 |40 |40 |67 |67
1983-84 |3,755 |3,755 |6,379 |6,379 |42 |42 |66 |66
1984-85 |3,955 |3,955 |6,392 |6,392 |41 |41 |68 |68
1985-86 |4,255 |4,255 |6,496 |6,496 |41 |41 |66 |66
1986-87 |4,505 |4,505 |6,662 |6,662 |41 |41 |65 |65
1987-88 |4,675 |4,845 |6,651 |6,892 |38 |40 |58 |60
1988-89 |5,035 |5,205 |6,755 |6,983 |38 |39 |57 |59
1989-90 |5,385 |5,565 |6,701 |6,925 |37 |38 |59 |61
1990-91 |5,815 |6,005 |6,601 |6,817 |37 |38 |59 |61
1991-92 |6,375 |6,575 |6,904 |7,121 |37 |38 |56 |57
1992-93 |6,665 |6,875 |7,000 |7,221 |37 |38 |55 |57
<6>1993-94 |6,665 |6,875 |6,882 |7,098 |36 |37 |N/a |N/a
<6>1994-95 |6,865 |7,075 |6,865 |7,075 |35 |36 |N/a |N/a
<1>Married man's allowance for years prior to 1990-91. Personal allowance plus married couple's allowance for
1990-91 onwards.
<2>Assumes a growth in the retail prices index of 3.25 per cent. in 1994-95 in line with the forecast in the
November 1993 Financial Statement and Budget Report.
<3>Average earnings are taken to be the average gross annual earnings of all full-time males on adult rates
with pay unaffected by absence. These are assumed to be equivalent to £347.70 a week in 1992-93, £359.90 in
1993-94 and £374.40 in 1994-95, based on illustrative earnings growth assumptions of 3" per cent. in 1993-94
and 4 per cent. in 1994-95.
<4>Average income of a pensioner couple is derived from Family Expenditure Survey data and relates to
calendar years. It is not possible to separately identify wife's income and so all income is assumed to be
taxed as the husband's income.
<5>Aged 80 or over for 1987-88 and 1988-89.
<6>Provisional.
Disabled People
Mr. Alfred Morris : To ask the Chancellor of the Exchequer how much disabled employees will have to pay at the maximum in additional income tax on the cost of the necessary alterations to a company car for their use ; and if he will make a statement.
Mr. Dorrell [holding answer 26 May 1994] : The new system for taxing employees on the private use of company cars is based on 35 per cent. of the price of the car for tax purposes. The price of a car for tax purposes includes the price of accessories with the car. The amount of income tax any individual taxpayer has to pay on a company car depends on the list price of the car and the price of the accessories. "Accessories" includes optional extras such as an automatic gearbox or power steering, and special equipment for disabled people.
Income tax is not charged if a car is provided for travel to and from work because a person is severely and permanently disabled to the extent that he or she can get to work no other way ; the car has been specially adapted to the employee's needs ; and no other non-business use of the car is permitted or made.
If such a person uses the specially adapted car for other private travel the journeys to and from work are treated as if they were "business" travel. This means those journeys count towards the discounts from the car benefit charge.
Column 360
In addition, disabled people may be entitled to the mobility component of the disability living allowance which gives extra financial help to those whose disability impairs mobility.Private Schools
Mr. Allen : To ask the Chancellor of the Exchequer how much would be netted by putting value added tax on private school fees.
Mr. Byers : To ask the Chancellor of the Exchequer what is the estimate of the revenue which would be received by removing the exemption from value added tax for private schools.
Sir John Cope [holding answer 26 May 1994] : The Treasury publication "Tax Ready Reckoner and Tax Reliefs" shows an estimate for the total revenue forgone from the VAT exemption of education as being £600 million in 1993-94. This includes universities. No separate estimate has been made for private schools. Many types of establishment may fall under the general description of "private school". Some of these establishments provide education that is subject to the standard rate of VAT.
Column 361
Vehicle Licences, Northern Ireland
Mr. Connarty : To ask the Chancellor of the Exchequer what financial provision was made in the current financial year for the payment of commissions to the Post Office for the issuing of vehicle licences in Northern Ireland.
Mr. Tim Smith : I have been asked to reply.
Although no specific financial allocation was made in the current financial year for payment to Post Office Counters Ltd. for the issuing of vehicle licences in Northern Ireland, the agency responsible for vehicle licensing in Northern Ireland has been allocated £4.433 million for 1994-95 from which it has to deliver all its services.
Nuclear Waste
Mr. Llew Smith : To ask the Chancellor of the Exchequer what costing evaluation of the undiscounted lifetime costs for the proposed national repository for nuclear waste in Cumbria has been conducted by his Department.
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