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TREASURY
Income Tax
12. Mr. Amess: To ask the Chancellor of the Exchequer what recent representations he has received on income tax levels. [14183]
Mr. Waldegrave: We have received a number of representations welcoming the income tax cuts in the Budget. We now have the lowest headline rate of tax for 60 years and more than a quarter of all taxpayers pay tax at only 20p in the pound.
Tax Allowances (Teachers)
13. Mr. Day: To ask the Chancellor of the Exchequer what representations he has received regarding tax allowances for teachers who carry out work at home. [14184]
Mr. Jack: A limited number of representations have been received from teachers.
Mortgage Tax Relief
14. Mr. Gallie: To ask the Chancellor of the Exchequer if he will make it his policy to maintain mortgage tax relief at existing levels; and if he will make a statement. [14185]
Mr. Jack: As my right hon. and learned Friend the Chancellor of the Exchequer said in his 1995 Budget speech, mortgage interest relief will remain unchanged for the lifetime of this Parliament. Beyond that, the level of mortgage interest relief is a matter to be considered each year in the Budget.
Business Investment
16. Mr. John Marshall: To ask the Chancellor of the Exchequer if he will make a statement about prospects for business investment in 1997. [14187]
Mr. Waldegrave: The prospects for business are excellent. The Government's policies have produced low inflation and steady growth, and low interest and tax rates. Demand has strengthened and profitability is high. The latest CBI and British chambers of commerce surveys show that companies are expecting to increase investment in plant and machinery in 1997. The current climate is one in which businesses can expand and invest with confidence.
Business Taxation
17. Mr. Mans: To ask the Chancellor of the Exchequer what assessment he has made of current levels of business taxation. [14188]
Mr. Jack:
In 1995-96, total tax on business raised £63.2 billion, 25 per cent. of total taxes and social security contributions. The UK tax burden on business is the lowest of the major European economies and is among the lowest in the G7. Low tax rates help to make the UK the No. 1 destination for inward investment into the EU.
13 Feb 1997 : Column: 312
18. Mr. Nigel Griffiths:
To ask the Chancellor of the Exchequer what estimate he has made of the revenues from VAT on fuel for each of the first two quarters of 1997-98. [14190]
Mr. Oppenheim:
No forecasts are made of VAT receipts at this level of disaggregation.
19. Mr. Legg:
To ask the Chancellor of the Exchequer if he will make a statement on the impact on the United Kingdom economy of the level of taxation in the United Kingdom relative to that in other major EU countries. [14191]
Mrs. Angela Knight:
The overall burden of taxation on the economy in the United Kingdom was 35.75 per cent. of GDP in 1995-96. This represents one of the very lowest levels in Europe and is below that of France, Germany and Italy.
The Government are committed to low taxation and a tax system that raises revenue in ways that do least damage to the economy and encourage enterprise.
20. Mr. Trickett:
To ask the Chancellor of the Exchequer if he will make a statement on current investment levels in the United Kingdom. [14192]
Mrs. Angela Knight:
UK businesses have invested more in relation to GDP in the 1990s than in the 1980s, having invested more in the 1980s than in the 1970s. In setting the right climate of low inflation and steady growth, the Government's economic policies are encouraging business to expand and invest with confidence.
22. Mr. Gordon Prentice:
To ask the Chancellor of the Exchequer what assessment he has made of the economic consequences to the United Kingdom of entering a single currency in circumstances when the convergence criteria have not been fully met by each of the participating countries. [14194]
Mr. Kenneth Clarke:
For the single currency area to be successful, there must be a high degree of sustainable economic convergence among the countries participating. If the single currency were to proceed without reliable convergence, we would not be part of it.
23. Mr. Harry Greenway:
To ask the Chancellor of the Exchequer what he expects to be the cost of the mortgage interest relief at source scheme in the current year; and if he will make a statement. [14195]
Mr. Jack:
In 1996-97, the estimated total cost of mortgage interest relief is about £2.3 billion, of which £2.2 billion is given through the MIRAS scheme.
These figures are provisional. They are based on the assumption, by convention, of no change from the current estimated average building society interest rate of 6.43 per cent.
13 Feb 1997 : Column: 313
24. Mr. Connarty:
To ask the Chancellor of the Exchequer what is his Department's current estimate of revenue from VAT for the current financial year. [14196]
Mr. Oppenheim:
The most recent forecast of VAT receipts for 1996-97 published in the "Financial Statement and Budget Report" is £47.5 billion.
Mr. Hinchliffe:
To ask the Chancellor of the Exchequer if he will make a statement on the scope of VAT. [14177]
Mr. Oppenheim:
Value added tax in the UK applies to about 60 per cent. of consumer expenditure on goods and services.
Mr. Trotter:
To ask the Chancellor of the Exchequer what is his estimate of the additional tax that would be raised if VAT were imposed on (a) private education fees and (b) public health provision charges. [14870]
Mr. Oppenheim
[holding answer 10 February 1997]: Based on information in HM Treasury's "Tax Ready Reckoner and Tax Reliefs", the estimated revenue costs of (a) the VAT exemption of private education fees and (b) the zero rating of drugs and medicines on prescription are approximately £1,050 million and £750 million respectively in 1996-97. The estimates exclude the effect of behavioural changes and may tend to overestimate the extra revenue from withdrawing the exemption of zero rating.
25. Mr. Bayley:
To ask the Chancellor of the Exchequer how much money has been collected by HM Customs and Excise since April 1992 as a result of the extension of VAT to domestic fuel. [14197]
Mr. Oppenheim:
Domestic fuel and power has been subject to VAT only since April 1994. The total revenue raised from VAT on domestic fuel and power since the 8 per cent. was introduced is estimated to be as follows:
26. Mr. Brazier:
To ask the Chancellor of the Exchequer what is the cumulative debt as a percentage of gross domestic product of (a) Britain and (b) other major EU countries. [14198]
Mr. Waldegrave:
The Budget forecast of the ratio of gross general Government debt (GGGD) to gross domestic product (GDP) was 55¼ per cent. at end-March 1997. The latest European Commission estimates of the corresponding ratios of GGGD to GDP in Germany, France, Italy and Spain at end-December 1996 are 61½ per cent., 56 per cent., 124½ per cent. and 67¾ per cent. respectively. The European Commission estimates that Luxembourg is the only EU country with a lower ratio of GGGD to GDP than the UK.
Mrs. Gorman:
To ask the Chancellor of the Exchequer if he will make a statement on the United Kingdom's ability to meet stage 3 of EMU. [14174]
13 Feb 1997 : Column: 314
Mr. Kenneth Clarke:
I believe that the United Kingdom economy is highly likely to satisfy the economic conditions of low inflation, low fiscal deficit and a low burden of public debt required to contemplate stage 3 of EMU.
Mr. David Evans:
To ask the Chancellor of the Exchequer what plans the European Community has for the harmonisation of taxation with special reference to VAT on food. [14186]
Mr. Oppenheim:
There are no specific EC plans for harmonisation of VAT on food. The European Commission aspires more generally to further harmonisation of VAT rates as part of its suggested programme for a common system of VAT. There are no legislative proposals on rates on the table and the UK's zero rates--including that for food--are fully safeguarded under existing EC agreements. These cannot be changed without our approval.
Mr. Booth:
To ask the Chancellor of the Exchequer what was the real take-home pay of a family on average earnings in (a) 1991-92 and (b) 1996-97. [14193]
Mr. Jack:
Real take-home pay in 1996-97 prices for a family on average earnings around £296.40 per week in 1991-92 and £311.05 per week in 1996-97. This same family should be around £370 better off next year.
1994-95: £850 million
1995-96: £1,100 million
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