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TREASURY

Taxation

12. Mr. Riddick: To ask the Chancellor of the Exchequer what plans he has to alter the rates of tax for people who earn more than £34,000 per annum. [28501]

Mr. Jack: My right hon and learned Friend the Chancellor will announce any of his taxation proposals in November.

Late Payments

14. Mr. Dowd: To ask the Chancellor of the Exchequer what plans he has to deal with the problems caused to small businesses by late payment of invoices. [28503]

Mrs. Angela Knight: The Government have implemented a number of measures to tackle late payment, including improving Government Departments' payment performance, requiring large companies to state their payment policies in their annual reports, developing a British standard for prompt payment and improving court procedures for debt recovery.

Tax Cuts

16. Mr. Mullin: To ask the Chancellor of the Exchequer what plans he has for tax cuts; and if he will make a statement. [28505]

Mr. Jack: The Government are committed to a low-taxation economy and will cut taxes when it is right for the economy to do so.

Gross Domestic Product

17. Mr. Alan W. Williams: To ask the Chancellor of the Exchequer what was the rate of growth of GDP (a) in the last quarter and (b) in the last 12 months for which figures are available. [28506]

Mr. Waldegrave: The economy continues to grow steadily. In the first quarter of 1996, it is estimated that GDP was 0.4 per cent. higher than in the previous quarter, and 2.0 per cent. up on a year earlier.

Public Sector Borrowing Requirement

18. Mr. Skinner: To ask the Chancellor of the Exchequer what is the latest estimate of the PSBR for 1996-97 and 1997-98. [28507]

16 May 1996 : Column: 564

Mr. Waldegrave: The Budget forecast of the PSBR was £22½ billion in 1996-97 and £15 billion in 1997-98. An updated forecast of the PSBR will be published in the summer economic forecast on the 9 July.

27. Mr. Morgan: To ask the Chancellor of the Exchequer what proposals he has to improve the accuracy of forecasts of the public sector borrowing requirement. [28516]

Mr. Waldegrave: Treasury forecasters, and the tax forecasters in the Inland Revenue and Customs and Exercise, are always looking for way to improve the accuracy of their forecasts.

Unemployment

19. Mr. Mackinlay: To ask the Chancellor of the Exchequer what were (a) the highest and (b) the lowest levels of unemployment recorded in the period of each Parliament since 1979. [28508]

Mrs. Angela Knight: Figures for claimant unemployment are:

Million

Parliament	Highest	Lowest
May 1979 to May 1983	2.78	1.04
June 1983 to May 1987	3.12	2.80
June 1987 to March 1992	2.84	1.59
May 1992	2.98	2.18

Privatisation (Debt)

20. Mr. Gordon Prentice: To ask the Chancellor of the Exchequer how much debt has been written off by the Government since 1979 in those industries and organisations that have been privatised. [28509]

Mr. Jack: In cash terms, the amount of debt written off in companies privatised since 1979 is £16.24 billion, but £9.73 billion of new debt was also injected.

Income Tax

22. Mr. Hawkins: To ask the Chancellor of the Exchequer what income tax rates were (a) in 1978 and (b) in 1995; and what plans he has for further reduction in income tax. [28511]

Mr. Jack: In 1978-79, the first £750 of taxable income was taxed at 24 per cent. and the next £7,250 at the basic rate of 33 per cent. There were nine higher rates of tax, beginning at 40 per cent. and culminating in a rate of 83 per cent. on taxable income over £24,000.

In 1996-97, the first £3,900 of taxable income is taxed at 20 per cent., and the next £25,500 is taxed at the basic rate of 24 per cent. All income above this level is taxed at a single higher rate of 40 per cent. It is our intention to reduce tax rates when it is right for the economy. My right hon. and learned Friend the Chancellor will announce his plans for taxation in November.

Economic Forecasts

23. Mr. David Atkinson: To ask the Chancellor of the Exchequer if he will make a statement on his current forecasts for the principal economic indication over the medium term. [28512]

16 May 1996 : Column: 565

Mr. Waldegrave: Illustrative projections for economic growth and inflation over the medium term are given in table 3.9 of the 1996-97 "Financial Statement and Budget Report", which show output growing at a rate of 2¾ per cent. to 3 per cent., whilst underlying inflation falls to 2 per cent.

Veteran and Classic Vehicles

24. Mr. Robert G. Hughes: To ask the Chancellor of the Exchequer how many veteran and classic vehicles over 25 years old have been relieved from vehicle excise duty under the provisions of the Finance Act 1996. [28513]

Mr. Heathcoat-Amory: An estimated 166,000 veteran and classic vehicles over 25 years old were exempted from vehicle excise duty by the Finance Act 1996.

Government Borrowing

25. Mr. Tony Banks: To ask the Chancellor of the Exchequer what estimate he has made of the level of Government borrowing next year. [28514]

Mr. Waldegrave: The Budget projection of the 1997-98 public sector borrowing requirement was £15 billion.

Private Finance Initiative

26. Sir Sydney Chapman: To ask the Chancellor of the Exchequer if he will report progress on the private finance initiative. [28515]

Mr. Jack: Some £4.76 billion of agreed private finance initiative deals were announced in 1995-96, and a further £300 million were at preferred bidder stage. The total of agreed, announced projects has now risen to £4.92 billion with the announcement of a preferred bidder for the Croydon tramlink project. More than £300 million more of deals are due to be agreed in the next few weeks.

On 3 April, I announced the publication of new procurement guidelines, to smooth the procurement process, with case studies of two prisons built under the PFI. To assist further the development of the private finance initiative, a training course was introduced last in January. So far, nearly 1,400 civil servants have either received training or are committed to attend future courses.

Telecommunication Charges

28. Mr. Congdon: To ask the Chancellor of the Exchequer what assessment he has made of the economic benefits of reduced telecommunication charges. [28517]

Mr. Jack: The Treasury has not carried out a detailed study of the effect of lower telecommunications prices on the UK economy. However, I would expect the very substantial falls in prices since privatisation--they are down some 40 per cent. in real terms--to have provided significant economic benefits to businesses and their competitiveness, particularly those for whom communication is a key element. The UK is now one of the cheapest countries in the world in which to make telephone calls, and UK charges and the cheapest in Europe, thus reaffirming our own economic competitiveness.

16 May 1996 : Column: 566

Retail Prices Index

Mr. David Evans: To ask the Chancellor of the Exchequer what representations he made about including green peppers in the retail prices index and the contribution they make to monitoring price inflation in the United Kingdom. [28504]

Mrs. Angela Knight: This year, green peppers were included for the first time in the list of goods covered by the retail prices index--RPI. The Office for National Statistics--ONS--updates this list every year to reflect changing consumer patterns. All fresh vegetables, including green peppers, account for only 0.7 per cent. in the RPI.

Living Standards

Mr. Michael Brown: To ask the Chancellor of the Exchequer what has been the annual change in average United Kingdom living standards for each year since 1966. [28510]

Mr. Jack: Real personal disposable income per head increased by 90 per cent. over the period 1966 to 1995, an annual rate of growth of 2.2 per cent.

Transfer Pricing Practices

Mr. Cousins: To ask the Chancellor of the Exchequer what estimate he has made of the tax revenues lost as a result of transfer pricing practices by multinational companies in the last five tax years. [27345]

Mr. Jack: The Inland Revenue devotes significant resources to ensuring that the transfer pricing legislation is complied with, and any evidence of non-compliance is carefully investigated. Over the past five tax years, the estimated total tax from inquiries made by the specialist section at the Inland Revenue which deals with the largest cases with international aspects, including transfer pricing, was £793 million. This does not include additional tax arising from work in the Inland Revenue's local offices or at the oil taxation office, separate records of which are not kept but which would significantly increase the total. It is not possible to estimate the amount of tax revenue lost through any failures to follow the transfer pricing legislation of which the Inland Revenue has not become aware. The United Kingdom regards transfer pricing as a very significant aspect of international taxation and the Inland Revenue is consistently on the alert for failures to comply with the legislation.

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