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Construction Workers
Ms Lawrence: To ask the Chancellor of the Exchequer what plans he has to align the tax and national insurance treatment of construction workers who provide their services through an agency. [12272]
Dawn Primarolo: The exemption for construction workers from the agency tax rules will be removed with effect from 6 April 1998. So agencies that supply workers to the construction industry will, subject to the conditions set out in these rules, be required to operate pay-as-you-earn on payments to construction workers in the same way as other agency workers. Agencies are, of course, already obliged to account for employer and employees class 1 national insurance contributions, provided the relevant conditions are satisfied.
Tax Law Rewrite Project
Ms Lawrence:
To ask the Chancellor of the Exchequer what progress has been made on the tax law rewrite project. [12273]
31 Jul 1997 : Column: 450
Dawn Primarolo:
I am delighted to report that the tax law rewrite project continues to make good progress. The Inland Revenue has today published the project's first exposure draft containing draft clauses. Copies have been placed in the Libraries of the House. A number of innovative techniques have been adopted. The rewritten legislation incorporates easier to understand language, a more logical structure and shorter sentences.
I very much support this important project, which aims to bring clarity and certainty in our direct tax legislation for businesses and individuals. Full consultation is the key to its success, and I urge everyone with an interest in tax law to take this opportunity to comment.
Mr. Terry Lewis:
To ask the Chancellor of the Exchequer what plans he has for the refurbishment of ministerial offices in his Department; and what is the estimated cost of the works and the date of completion.[11868]
Mr. Geoffrey Robinson:
There are no plans to refurbish any ministerial offices in the Treasury.
Mr. Timms:
To ask the Chancellor of the Exchequer if he will make a statement on the proposal to refurbish the Treasury building in Great George street under the private finance initiative. [12274]
Mr. Robinson:
At a time when all Departments are undertaking comprehensive spending reviews and are subject to extremely tight expenditure controls, my right hon. Friend the Chancellor of the Exchequer was unwilling to embark on a major construction project of this scale, which would have involved substantial expenditure and significant financial risks for the other Government occupants of the building in terms of the disposal of property elsewhere. The plans to refurbish the main Treasury building under the private finance initiative represented good value for money in their own terms, but Ministers judged they had to have regard to wider considerations.
My right hon. Friend the Chancellor has therefore decided to terminate negotiations with our private sector partner, Exchequer Partnership plc.
31 Jul 1997 : Column: 451
Mr. Timms:
To ask the Chancellor of the Exchequer if he will make a statement about the financial position of the Securities and Investments Board. [12326]
Mr. Darling:
The Treasury has today laid a minute to inform the House that the Treasury has issued a non-statutory guarantee to the Securities and Investments Board for up to £8 million.
This exceptional course is necessary to ensure that SIB is able to raise a commercial loan in order to finance work on preparation for assuming additional regulatory responsibilities after Royal Assent to the legislation announced in the Chancellor's statement of 20 May. SIB cannot use the fees that it raises under the current powers in the Financial Services Act 1986 for this purpose. The process of transition is described in more detail in my right hon. Friend the Chancellor of the Exchequer's reply of today to my hon. Friend the Member for East Ham. In particular, the documents mentioned in that reply make it clear that SIB, and its successor, will receive no support from public funds.
The guarantee will cover a loan sufficient for all SIB's preparation costs which can be foreseen now. This sum does not at this stage cover accommodation. The guarantee may therefore need to be extended at some point in the future, in which case I will notify Parliament of it.
The guarantee will remain in place until SIB obtains powers under the legislation to reform the financial regulatory system, to recoup its operational costs from the industry it regulates. This power will apply to the cost of transition as well as to SIB's on-going administrative costs. It is thus likely that SIB will need the guarantee for at least two years. I will ensure that the contingent liability continues for as short a period as possible. While the liability is outstanding, Parliament will be kept informed in the usual way.
Mr. Heathcoat-Amory:
To ask the Chancellor of the Exchequer, pursuant to his answer of 15 July, Official Report, column 136, concerning the fine tuning of his modelling of the consequences of reducing value added tax on domestic fuel, if he will estimate the weekly benefit of the reduction, net of the consequential lower uprating of pension benefits next April, to an average (a) single pensioner, (b) pensioner couple and (c) single householder on average earnings. [9450]
Dawn Primarolo
[holding answer 18 July 1997]: The change in the VAT rate on domestic fuel will have no impact on the real value of the basic state pension. We are committed to uprating the basic state pension at least in line with prices and will consider the uprating of benefits at the normal time and in the normal way.
Households will on average gain £18 a year from the reduction in VAT on domestic fuel from 8 to 5 per cent.
Mr. Hammond:
To ask the Chancellor of the Exchequer how many people paid income tax in (a) 1978-79 and (b) 1997-98; and how many people
31 Jul 1997 : Column: 452
would have been paying income tax in 1997-98 if the tax regime had been indexed and maintained at 1978-79 levels. [10895]
Mr. Geoffrey Robinson
[holding answer 28 July 1997]: Estimated number of taxpayers are given in the table. This comparison is hypothetical since if an indexed version of the 1978-79 tax regime had prevailed over the last 19 years the income base would not have grown in the way it has.
| Number of individuals paying tax (million) | |
|---|---|
| 1978-79 | 25.9 |
| 1997-98(9) | 24.6 |
| 1978-79 indexed regime on 1997-98 income base(9) | 27.4 |
(9) The effect of changes in mortgage interest relief cannot be included in this comparison because most mortgage interest relief is now given at source and therefore is not recorded on individual tax records.
Disposable Incomes
Mr. Malcolm Bruce: To ask the Chancellor of the Exchequer, pursuant to his answer of 23 July, Official Report, column 591, on changes in disposable income, for what reason the effects of indirect tax changes including excise duties, in the July 1997 Budget were not included in his answer. [11367]
Mr. Geofrey Robinson [holding answer 29 July 1997]: The hon. Member asked for the percentage change in after-tax disposable income. Disposable income is generally defined in economic literature as personal income minus personal taxes, where personal taxes consist of inheritance taxes, property taxes and personal income taxes. Disposable income is that part of income which households may use in any way they wish. The amount of indirect taxes paid depends upon what individual households choose to consume--for instance, those households who choose to spend their income on cigarettes will pay more indirect tax than those who choose to spend their income on books.
For estimates of the effects of the tax changes, including indirect taxes, announced in the Budget, I refer the hon. Member to the reply given to the right hon. Member for Wells (Mr. Heathcoat-Amory) on 16 July Official Report, columns 167-68.
Public Sector Pay
Mr. Malcolm Bruce: To ask the Chancellor of the Exchequer when he expects to make an announcement on Government guidelines for the next public sector pay round; and if he will make a statement. [11374]
Mr. Darling [holding answer 29 July 1997]: The evidence to the pay review bodies will include evidence on economic considerations and public sector pay. We expect to publish it in the autumn.
Income Tax (Covenants)
Mr. Malcolm Bruce:
To ask the Chancellor of the Exchequer what is his estimate of the amount of income tax recovered by charities or charitable covenants for the latest year available. [10766]
31 Jul 1997 : Column: 453
Mr. Geoffrey Robinson
[holding answer 29 July 1997]: Income tax repayments and payments of tax credits to charities were £755 million in 1996-97, of which around £250 million were repayments at the basic rate of tax for donations under deeds of covenant.
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