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Local Government Finance

Mr. Pawsey: To ask the Chancellor of the Exchequer what was the total amount spent by local government in (a) 1979 and (b) 1990. [3104]

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Mr. Waldegrave: In the financial year 1979-80, the total amount spent by local government, by national accounts definitions, was £26 billion. In the financial year 1990-91 the total amount spent by local government, by national accounts definitions, was £69 billion.

Mr. Pawsey: To ask the Chancellor of the Exchequer how much funding for local government was provided by central Government for the current year; and what are the equivalent figures for the last year for which figures are available. [3105]

Mr. Waldegrave: For the financial year 1996-97, planned total central Government grants to local authorities in the United Kingdom totalled £62,060 million. For the financial year 1995-96 total central Government grants to local authorities in the Untied Kingdom were estimated at £61,979 million.

Taxation (Self-assessment)

Mrs. Roche: To ask the Chancellor of the Exchequer what tests the Inland Revenue has made of its computer systems relating to the self-assessment of taxation; and if the results were successful. [3257]

Mr. Jack [holding answer 12 November 1996]: EDS, the Inland Revenue's strategic partner, has worked with the Inland Revenue jointly to plan full testing of the computer system to support self-assessment. These tests included component, system, framework, integration and inter-system testing. They were supported by a full rehearsal of the system in local Inland Revenue offices during September. The system has been made available progressively from 4 November, since when it has been successfully available to local offices each day.

Mrs. Roche: To ask the Chancellor of the Exchequer what estimate he has made of the extra (a) letters and (b) telephone calls the Inland Revenue is likely to receive as a result of the introduction of self-assessment. [3261]

Mr. Jack [holding answer 12 November 1996]: The first self-assessment tax returns will be issued in April 1997. In the period to 31 March 1998 the Inland Revenue has planned to cope with up to 1.1 million letters and up to 11 million telephone calls which it expects to receive in relation to self-assessment.

Mrs. Roche: To ask the Chancellor of the Exchequer what has been the cost of new computer systems at the Inland Revenue to administer the self-assessment of taxation. [3258]

Mr. Jack [holding answer 12 November 1996]: The computer system for self-assessment is being developed and implemented by EDS, the Inland Revenue's information technology partner. So far, the Inland Revenue has paid approximately £200 million for this service.

European Union Membership (Cost)

Mr. Pawsey: To ask the Chancellor of the Exchequer what has been the net cost to the United Kingdom of membership of the European Union. [4093]

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Mr. Oppenheim: Between joining the European Community in 1973 and the end of financial year 1995-96, the total United Kingdom public sector net contribution to the European Community Budget was £26.5 billion.

Spreadable Butter

Mr. Austin Mitchell: To ask the Chancellor of the Exchequer when he was informed by the EC that New Zealand spreadable butter was not classified as butter.[4368]

Mr. Oppenheim: The head of the Agriculture Directorate General to the European Commission ruled in letter dated 27 June 1996 addressed to the Director of the European Court of Auditors that New Zealand spreadable butter did not meet the qualifying criteria for admission into the European Community at the reduced rate of customs duty. This correspondence was forwarded to HM Customs and Excise on 3 July 1996.

European Monetary Union

Mr. Denzil Davies: To ask the Chancellor of the Exchequer if the implementation of the stability pact which is proposed for stage III of EMU will require an amendment to the treaty of European union. [4394]

Mr. Kenneth Clarke: The proposed stability pact aims to spell out practical procedures for implementation of the excessive deficits procedure in article 104c of the Maastricht treaty. One element of the pact is a draft regulation based on article 104c(14) second subparagraph. Otherwise, no amendment or change to the provisions of the treaty is envisaged or required for the implementation of the pact.

Mr. Davies: To ask the Chancellor of the Exchequer what requirements in respect of a gross domestic product ceiling on member states' general Government debt are proposed for inclusion in the stability pact for EMU. [4393]

Mr. Clarke: The Commission's proposals for a stability pact were submitted to Parliament on 22 October 1996 and I submitted an explanatory memorandum on 31 October. The proposed stability pact aims to reinforce the operation of the excessive deficits procedure in article 104c of the Maastricht treaty. It does not aim to change the reference value for debt which is specified in protocol No.5 of the Maastricht treaty.

Mr. Austin Mitchell: To ask the Chancellor of the Exchequer what proposals in respect of budget disciplines have been made for (a) countries in monetary union and (b) countries outside the monetary union by (i) the European Commission and (ii) the German Government. [4367]

Mr. Clarke: The Commission's proposals for a stability pact were published on 16 October 1996 and submitted to Parliament on 22 October. I submitted an explanatory memorandum on 31 October. The idea of a stability pact has been under discussion since the German Government first proposed clarifying existing provisions in article 104c of the Maastricht treaty in November 1995. Proposals in the stability pact on fiscal discipline would affect only member states which participate in the single currency.

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Energy-saving Materials (VAT)

Mr. Malcolm Bruce: To ask the Chancellor of the Exchequer what is his estimate of the annual revenue cost to the Exchequer of reducing the rate of value added tax from 17.5 per cent. to 8 per cent. on energy-saving materials, manufactured for the purpose of (a) cavity wall insulation, (b) loft insulation, (c) underfloor insulation, (d) insulating hot water tanks, (e) insulating pipes and other plumbing fittings, (f) draught proofing, (g) controlling domestic heating systems, (h) external and internal wall cladding and (i) providing low emissivity glazing; and if he will make a statement. [4270]

Mr. Oppenheim: The information is not available. The cost of reducing VAT on these products has been estimated by the Association for the Conservation of Energy a trade lobby group, at £10 million in a full year.

Personal Tax Allowance

Ms Primarolo: To ask the Chancellor of the Exchequer what estimate he has made of (a) the cost in excess of indexation of raising the personal tax allowance to £4,000 per annum and (b) the number of employees who would be taken out of the PAYE system, in addition to those who would be exempted by indexation. [4468]

Mr. Jack [holding answer 18 November 1996]: The full year cost in 1997-98, after allowing for statutory indexation, of increasing the non-age personal allowance to £4,000 and increasing the age allowances by an equivalent amount would be about £980 million. This would take about 350,000 people out of income tax including employees, self-employed people and pensioners, compared with statutory indexation.

VAT Overpayments

Mr. Malcolm Bruce: To ask the Chancellor of the Exchequer what is his estimate of the cost of extending the allowable period for the reclaim of overpaid value added tax to (a) four years, (b) five years and (c) six years; and if he will make a statement. [4742]

Mr. Oppenheim [holding answer 19 November 1996]: Because, by its nature, overpaid value added tax is an unknown quantity until it is discovered and reclaimed, it is not possible to make reliable estimates.

Mr. Bruce: To ask the Chancellor of the Exchequer what representations he has received from the Confederation of British Industry on the Government's plans to restrict the time period for reclaiming overpaid value added tax to three years while retaining the ability of Her Majesty's Customs and Excise to claim VAT underpaid over a six-year time period; what assessment he has made of the effects of such a policy on small and medium businesses; and if he will make a statement. [4741]

Mr. Oppenheim [holding answer 19 November 1996]: The CBI has made representations in writing and in the forum of the joint VAT consultative committee. Representatives of Customs and Excise and the Treasury also attended a special meeting organised by the CBI at which businesses were able to discuss their concerns about the proposed time limit on recovery of overpaid tax. I have taken careful note of the points raised and the impact of the proposal on all sectors of business.

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Mr. Bruce: To ask the Chancellor of the Exchequer what meetings there have been within the last two months between the head of the international and supply division of the VAT policy directorate of Her Majesty's Customs and Excise and the European Commission, represented by the head of the VAT unit of DGXXI; if he will publish the minutes of these meetings; what advice was given by the Commission's representative to the United Kingdom Government on the subject of the time limits applying to the reclaiming of VAT for (a) taxpayers and (b) Her Majesty's Customs and Excise; and if he will make a statement. [4743]

Mr. Oppenheim [holding answer 19 November 1996]: The head of the international and supply division of the VAT policy directorate of Her Majesty's Customs and Excise and the head of the VAT unit of DGXXI have met on several occasions in the last two months, most recently on 4 and 5 November. No formal minutes have been produced and the content of such bilateral discussions, which covered a range of issues, is regarded as confidential.

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