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TREASURY
Departmental Expenditure
Mr. Malcolm Bruce: To ask the Chancellor of the Exchequer what assessment he has made of the expenditure of his Department, agencies and non-departmental public bodies on all external consultants including management consultants for each of the years (a) 1979-80, (b) 1989-90, (c) 1991-92, (d) 1993-94, (e) 1994-95 and (f) 1995-96 (i) to date and (ii) as estimated for the whole year; what estimate he has made of such expenditure for 1996-97; and if he will estimate the savings accruing to his Department from the use of consultants in each of these years. [11367]
Mrs. Angela Knight [holding answer 25 January 1996]: Information prior to 1991 and details of savings accruing, which are not held centrally, could be provided only at disproportionate cost.
| £ million (excluding VAT) | |
|---|---|
| 1991-92 | 9.1 |
| 1993-94 | 6.4 |
| 1994-95 | 5.5 |
| 1995-96 (to date) | 1.9 |
| 1995-96 (whole year estimate) | 2.0 |
Detailed figures as to expenditure on consultants in future years are not yet available.
Pensioners
Mr. Redmond: To ask the Chancellor of the Exchequer what action he is taking to ensure that pensioners will benefit from any increased prosperity of the United Kingdom; and if he will make a statement. [15060]
Mr. Waldegrave: As a result of the Government's successful economic policies, average pensioner incomes have risen by more than 50 per cent. in real terms since 1979.
Tax-exempt Investments
Mr. Frank Field: To ask the Chancellor of the Exchequer how much of the investment in (a) personal equity plans and (b) tax-exempt special savings accounts is new investment; if he will estimate the proportion and sources diverted from other forms of savings; and if he will list the research his Department has (i) commissioned and (ii) evaluated in respect of this data. [15195]
Mr. Jack:
Both PEPs and TESSAs have been very successful in achieving the objectives, respectively, of widening share ownership and encouraging longer-term saving. The most directly relevant research on savings is based on 1991 market research data from RSGB Ltd.,
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from which Inland Revenue purchased additional analyses, and on work that is now part of the Institute for Fiscal Studies savings project, for which HM Treasury and Inland Revenue are among the sponsors, using data from the financial research survey. Both sources suggest that most of the funds going to TESSAs do not represent new savings, which a considerable amount coming from other deposit accounts, but for PEPs the IFS work so far suggests that there may be a somewhat greater element of new equity investment.
Mr. Elletson:
To ask the Chancellor of the Exchequer what guidelines govern the Inland Revenue's powers to make assumptions as to the annual amount of work undertaken by firms in the construction and building industries for cash payments; and if he will make a statement. [15386]
Mr. Jack:
Where business accounts have not been submitted to the Inland Revenue or, if submitted, the tax inspector is not satisfied that the full extent of the profits have been declared, the inspector may make an assessment to tax to the best of his or her judgment. The Revenue has not issued guidance specific to the construction industry, but its general guidance to inspectors is to estimate as reasonably and accurately as possible the likely income, cash or otherwise. In making estimated assessments, inspectors will take into account the facts and circumstances of each case--for example, profits agreed in previous years, trends in the particular trade of profession, specific evidence of the extent of the taxpayer's income and so on. Any assessment is open to appeal by the taxpayer to the independent appeal commissioners.
Mr. Frank Field:
To ask the Chancellor of the Exchequer, pursuant to his answer of 16 January, Official Report, column 582, if he will estimate the value of pension entitlement which has accrued in each of the unfunded public sector pension schemes. [15397]
Mr. Waldegrave:
Precise and up-to-date figures are not held centrally and could be provided only at disproportionate cost. The latest information available, for the main unfunded public service schemes referred to in the answer of 16 January, relates to 31 March 1993 data and salary levels. The estimate of total liabilities in respect of the then active and former members, accrued to that date--including allowance for anticipated future salary and pension increases--is about £230 billion, made up approximately as follows:
| £ billion | |
|---|---|
| NHS | 55 |
| Teachers | 70 |
| Civil Service | 40 |
| Armed Forces | 35 |
| Police | 25 |
| Fire | 5 |
| Total | 230 |
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Taxation
Mr. Andrew Smith:
To ask the Chancellor of the Exchequer if he will update to include information from 1993-94 to 1997-98 the figures for the burden of direct and indirect taxation in the format used in his answer of 19 December 1994, Official Report, columns 944-50, taking account of changes made in the November 1995 Budget, listing separately the effects of the council tax and value added tax. [15106]
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Mr. Jack
[holding answer 14 February 1996]: A family on average earnings should be around £450 a year better off next year than this after tax and inflation, taking the total rise since 1978-79 to £4,500 a year. The tables show estimates of tax payments for various specimen households for the years 1993-94 to 1996-97. Changes in tax payments between years mainly reflect assumed growth in average earnings and should not be taken as the impact of Budget measures.
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1. Income tax payments are calculated on the assumption that the households receive no tax reliefs other than the standard allowances and only have income from employment. All earners, including wives, are assumed to pay class 1 NI contributions at the contracted-in rate. Child benefit is treated as a negative income tax in order to provide comparability with support given through child tax allowances.
2. Earnings are taken to be the average gross weekly earnings of all full-time males on adult rates with pay unaffected by absence. Estimates of earnings in 1995-96 and 1996-97 are based on earnings growth assumptions of 3½ per cent. in 1995-96 and 4 per cent. in 1996-97.
3. Figures for indirect taxes include estimates of the intermediate taxes on households as well as the impact of taxes on final goods and services. Estimates of the impact of taxes on final goods and services assume that these taxes are fully incident on households. Estimates of the impact of intermediate taxes are based on the relation between intermediate production costs and final consumption derived using input-output techniques.
4. Estimates for most indirect taxes are based on equations derived from the 1985 Family Expenditure Survey uprated to later years using forecasts of aggregate tax receipts. Estimates of VAT on domestic fuel and power, airline passenger duty and insurance premium tax are based on equations using results from the 1991 and 1992 Family Expenditure Survey uprated using a similar methodology. All estimates are based on the illustrative assumption that 10 per cent. of disposable income is saved.
5. Estimates of net council tax payments are based on analysis of the Family Expenditure Survey for the relevant year. Payment data for these years is affected by uncertainty about transitional relief, appeals and late payment. The estimates are therefore particularly uncertain and subject to a wide margin of error. No reliable estimates are available for 1993-94.
6. Estimates of indirect taxes are very approximate, even within the range for which figures are shown, because spending patterns vary widely between households with the same composition and income. The margin of error is even higher outside the range shown, and even illustrative estimates cannot be made. Because of sampling variation, there can be substantial differences between estimates obtained from Family Expenditure Surveys for different years.
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1. Income tax payments are calculated on the assumption that the households receive no tax reliefs other than the standard allowances and only have income from employment. All earners, including wives, are assumed to pay class 1 NI contributions at the contracted-in rate. Child benefit is treated as a negative income tax in order to provide comparability with support given through child tax allowances.
2. Earnings are taken to be the average gross weekly earnings of all full-time males on adult rates with pay unaffected by absence. Estimates of earnings in 1995-96 and 1996-97 are based on earnings growth assumptions of 3½ per cent. in 1995-96 and 4 per cent. in 1996-97.
3. Figures for indirect taxes include estimates of the intermediate taxes on households as well as the impact of taxes on final goods and services. Estimates of the impact of taxes on final goods and services assume that these taxes are fully incident on households. Estimates of the impact of intermediate taxes are based on the relation between intermediate production costs and final consumption derived using input-output techniques.
4. Estimates for most indirect taxes are based on equations derived from the 1985 Family Expenditure Survey uprated to later years using forecasts of aggregate tax receipts. Estimates of VAT on domestic fuel and power, airline passenger duty and insurance premium tax are based on equations using results from the 1991 and 1992 Family Expenditure Survey uprated using a similar methodology. All estimates are based on the illustrative assumption that 10 per cent. of disposable income is saved.
5. Estimates of net council tax payments are based on analysis of the Family Expenditure Survey for the relevant year. Payment data for these years is affected by uncertainty about transitional relief, appeals and late payment. The estimates are therefore particularly uncertain and subject to a wide margin of error. No reliable estimates are available for 1993-94.
6. Estimates of indirect taxes are very approximate, even within the range for which figures are shown, because spending patterns vary widely between households with the same composition and income. The margin of error is even higher outside the range shown, and even illustrative estimates cannot be made. Because of sampling variation, there can be substantial differences between estimates obtained from Family Expenditure Surveys for different years.
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1. Income tax payments are calculated on the assumption that the households receive no tax reliefs other than the standard allowances and only have income from employment. All earners, including wives, are assumed to pay Class 1 NI contributions at the contracted-in rate. Child benefit is treated as a negative income tax in order to provide comparability with support given through child tax allowances.
2. Earnings are taken to be the average gross weekly earnings of all full-time males on adult rates with pay unaffected by absence. Estimates of earnings in 1995-96 and 1996-97 are based on earnings growth assumptions of 3½ per cent. in 1995-96 and 4 per cent. in 1996-97.
3. Figures for indirect taxes include estimates of the intermediate taxes on households as well as the impact of taxes on final goods and services. Estimates of the impact of taxes on final goods and services assume that these taxes are fully incident on households. Estimates of the impact of intermediate taxes are based on the relation between intermediate production costs and final consumption derived using input-output techniques.
4. Estimates for most indirect taxes are based on equations derived from the 1985 Family Expenditure Survey uprated to later years using forecasts of aggregate tax receipts. Estimates of VAT on domestic fuel and power, airline passenger duty and insurance premium tax are based on equations using results from the 1991 and 1992 Family Expenditure Survey uprated using a similar methodology. All estimates are based on the illustrative assumption that 10 per cent. of disposable income is saved.
5. Estimates of net council tax payments are based on analysis of the Family Expenditure Survey for the relevant year. Payment data for these years is affected by uncertainty about transitional relief, appeals and late payment. The estimates are therefore particularly uncertain and subject to a wide margin of error. No reliable estimates are available for 1993-94.
6. Estimates of indirect taxes are very approximate, even within the range for which figures are shown, because spending patterns vary widely between households with the same composition and income. The margin of error is even higher outside the range shown, and even illustrative estimates cannot be made. Because of sampling variation, there can be substantial differences between estimates obtained from Family Expenditure Surveys for different years.
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1. Income tax payments are calculated on the assumption that the households receive no tax reliefs other than the standard allowances and only have income from employment. All earners, including wives, are assumed to pay Class 1 NI contributions at the contracted-in rate. Child benefit is treated as a negative income tax in order to provide comparability with support given through child tax allowances.
2. Earnings are taken to be the average gross weekly earnings of all full-time males on adult rates with pay unaffected by absence. Estimates of earnings in 1995-96 and 1996-97 are based on earnings growth assumptions of 3½ per cent. in 1995-96 and 4 per cent. in 1996-97.
3. Figures for indirect taxes include estimates of the intermediate taxes on households as well as the impact of taxes on final goods and services. Estimates of the impact of taxes on final goods and services assume that these taxes are fully incident on households. Estimates of the impact of intermediate taxes are based on the relation between intermediate production costs and final consumption derived using input-output techniques.
4. Estimates for most indirect taxes are based on equations derived from the 1985 Family Expenditure Survey uprated to later years using forecasts of aggregate tax receipts. Estimates of VAT on domestic fuel and power, airline passenger duty and insurance premium tax are based on equations using results from the 1991 and 1992 Family Expenditure Survey uprated using a similar methodology. All estimates are based on the illustrative assumption that 10 per cent. of disposable income is saved.
5. Estimates of net council tax payments are based on analysis of the Family Expenditure Survey for the relevant year. Payment data for these years is affected by uncertainty about transitional relief, appeals and late payment. The estimates are therefore particularly uncertain and subject to a wide margin of error. No reliable estimates are available for 1993-94.
6. Estimates of indirect taxes are very approximate, even within the range for which figures are shown, because spending patterns vary widely between households with the same composition and income. The margin of error is even higher outside the range shown, and even illustrative estimates cannot be made. Because of sampling variation, there can be substantial differences between estimates obtained from Family Expenditure Surveys for different years.
26 Feb 1996 : Column: 351
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