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EMU Preparation Unit

Mrs. May: To ask the Chancellor of the Exchequer if he will make a statement on the establishment of the EMU preparation unit in his Department, with particular reference to the terms of reference for the unit, and its membership. [24118]

Mrs. Liddell: The euro preparations unit in HM Treasury has been established to help preparations for EMU. Its aims are to ensure UK business and public authorities are ready for the introduction of the euro in other EU countries on 1 January 1999 and to complete the necessary planning and preparation to enable UK entry early in the next Parliament, if this is what the Government, Parliament and people decide. The Government are committed to ensuring that businesses in the United Kingdom are ready for the introduction of the euro in other countries in 1999. The Unit will comprise around 15 members of staff drawn from the Treasury, DTI, other Government Departments, and business. As part of its work, it will support the Standing Committee on preparations for EMU and other similar bodies.

27 Jan 1998 : Column: 152

MIRAS

Mr. Moore: To ask the Chancellor of the Exchequer what was the cost of mortgage interest relief at source in Scotland for (i) 1995-96 and (ii) 1996-97; and what is his provisional estimate for MIRAS in Scotland for 1997-98. [24393]

Dawn Primarolo: The cost of mortgage interest relief in Scotland was estimated to be £200 million in 1995-96 and £180 million in 1996-97. The amount of relief given through MIRAS--mortgage interest relief at source scheme--was estimated to be £190 million in 1995-96 and £170 million in 1996-97.

These estimates are based on the regional distribution of the cost of mortgage interest relief from analyses of family expenditure surveys up to 1995-96. The estimates for 1996-97 are projections based on applying the same regional distribution as in 1995-96 to the total figure for 1996-97. It is not possible to provide reliable estimates below United Kingdom level for 1997-98.

VAT (School Uniforms)

Mr. Loughton: To ask the Chancellor of the Exchequer what estimate he has made of the impact on revenue of zero rating for VAT purposes if applied to items of clothing and footwear for use only as part of an approved school uniform, for schoolchildren under the age of 16 years. [24435]

Dawn Primarolo: None. This information is not available and could be provided only at disproportionate cost.

Child Benefit

Mr. Cousins: To ask the Chancellor of the Exchequer if he will estimate the tax revenue derived in (a) the current year and (b) the two previous financial years from the taxation of child benefit (i) on the present individual tax base and (ii) on the basis of a household tax assessment system. [24009]

Dawn Primarolo [holding answer 20 January 1998]: Child benefit is not liable to income tax. If it had been taxed over the past three financial years (including the current year), the estimates of the tax yield are given in following table.

Yield in a full year (£ million)

1995-961996-971997-98
Child Benefit taxed as:
Father's or lone mother's income1,3001,3001,400
Mother's or lone father's income700700700

These estimates are given on the basis of the system of independent taxation.


Fuel Poverty

Dr. Iddon: To ask the Chancellor of the Exchequer if he will extend the reduced rate of VAT on energy efficient products used in Government-sponsored schemes for people in fuel poverty, proposed in his pre-budget paper, to all products manufactured for the purposes of energy efficiency. [24505]

27 Jan 1998 : Column: 153

Dawn Primarolo: EC VAT law does not at present permit an unrestricted reduced rate for energy efficient products. As the Chancellor of the Exchequer announced in his pre-Budget statement on 25 November 1997, Official Report, colums 773-98, we shall be raising the matter with our European partners to explore the possibility of change.

Exchange Rate

Mr. Mitchell: To ask the Chancellor of the Exchequer if he will list the changes in the real and nominal exchange rate of sterling against deutschmark (a) for each quarter of the last three years and (b) in total; and what assessment he has made of the impact of these changes on (i) German exports to the United Kingdom and (ii) the balance of payments between the United Kingdom and Germany. [24732]

Mrs. Liddell: The real and nominal exchange rate movements of sterling against the deutschmark from 1994Q4 until 1997Q4 are given in the table. The effects of exchange rate movements on the balance of payments are difficult to isolate. However, recently the UK's deficit on trade in goods with Germany has been similar to its level three years earlier.

PeriodNominal exchange rate change percentage, DM/£(16)Real exchange rate change percentage, DM/£(17)
1994Q4-1995Q1-4.4-3.3
1995Q1-1995Q2-4.7-3
1995Q2-1995Q30.92.7
1995Q3-1995Q4-1.30
1995Q4-1996Q11.32.7
1996Q1-1996Q23.14
1996Q2-1996Q30.40.9
1996Q3-1996Q47.28.7
1996Q4-1997Q189.3
1997Q1-1997Q23.74.9
1997Q2-1997Q34.65.8
1997Q3-1997Q4-0.71
Total exchange rate change18.824.3

(16) A minus sign denotes depreciation of sterling.

(17) Nominal exchange rate changes adjusted for changes in relative consumer prices.


Mr. Mitchell: To ask the Chancellor of the Exchequer what representations he has made to his counterparts in Germany and France about (a) their monetary and exchange rate policies and (b) the impact of those policies on the exchange rate of the deutschmark and franc against sterling. [24734]

Mrs. Liddell: The Chancellor meets his German and French counterparts on a regular basis, including at ECOFIN, where monetary policy and exchange rate issues are regularly discussed.

Unemployment Figures

Dr. Cable: To ask the Chancellor of the Exchange if he will calculate the current level of unemployment on (a) a claimant basis and (b) labour force survey basis rebased to the methodology used for calculating unemployment in (i) 1980, (ii) methodology used for calculating unemployment in (i) 1980, (ii) 1985 and (iii) 1990. [25233]

27 Jan 1998 : Column: 154

Mrs. Liddell: The information requested falls within the responsibility of the chief executive of the Office for National Statistics. I have asked him to arrange for a reply to be given.

Letter from Tim Holt to Dr. Vincent Cable, dated 27 January 1998:








Sterling (Trade-weighted Value)

Dr. Cable: To ask the Chancellor of the Exchequer what estimate he has made of the impact of a 10 per cent. rise in the trade-weighted value of sterling on (a) real GDP, (b) manufacturing output, (c) manufacturing employment, (d) export volumes and (e) import volumes. [25232]

Mrs. Liddell: The effects of a rise in the exchange rate are difficult to isolate and estimate with confidence. Generally, a sterling appreciation in the short term will tend to lead to lower GDP, manufacturing output, employment, and exports, and to higher imports, all compared to what they otherwise would have been. But such effects may be masked by other factors such as the relative strength of demand in the UK compared with the rest of the world and policy responses.


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