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Economic and Monetary Union
26. Dr. Julian Lewis: To ask the Chancellor of the Exchequer if he will make a statement on the economic tests to be met before any British application to join the single European currency. [87083]
Ms Hewitt: In his statement to the House of Commons in October 1997, the Chancellor of the Exchequer set out five economic tests which will have to be met before any decision to join a successful single currency can be taken. Applying the economic tests, the Government have concluded that there is no realistic prospect of the UK economy having demonstrated, before the end of this Parliament, convergence which is sustainable and settled. Barring any fundamental and unforeseen change in economic circumstances, making a decision, during this Parliament, to join is not realistic. This position was restated by the Prime Minister in a statement to the House of Commons on 23 February 1999, Official Report, columns 179-84.
30. Mr. Beard: To ask the Chancellor of the Exchequer if he will make a statement on the effects of UK non-membership of EMU on his policy of ensuring economic stability. [87088]
Ms Hewitt: Locking in stability is a key element of the Government's economic strategy. Reform of the macroeconomic policy framework through a new, open and transparent monetary framework and a new fiscal framework is helping to deliver low inflation and sound public finances.
Achieving sustainable convergence with the euro area is one of the five economic tests which will have to be met before any decision to join is taken.
Income Tax (Self-assessment)
28. Mr. Gordon Prentice: To ask the Chancellor of the Exchequer how many people have been surcharged for failing to return their completed self-assessment forms on time. [87085]
Dawn Primarolo: People who fail to return their completed self-assessment forms on time are charged a penalty of £100, and a further penalty of £100 if the return is more than six months late. Surcharges are applied to people who are late in paying the tax due on their self-assessment. There is a 5 per cent. surcharge where payment is more than 28 days late, and a further 5 per cent. surcharge where payment is more than six months late.
The numbers of surcharges and penalties are increasing all the time as more late-issued returns become overdue. However, the great majority of returns are issued in April, and returns and payments become due at the end of the following January.
Figures for the main issue of returns are as follows:
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29. Mr. Dalyell:
To ask the Chancellor of the Exchequer what (a) has been and (b) he estimates will be the effect on the contingency fund of (i) the conflict in Kosovo and (ii) the measures to be taken following the peace agreement relating to Kosovo. [87086]
Mr. Milburn:
The Ministry of Defence estimates the total additional cost of Kosovo military operations up to the end of May was £43 million (excluding the costs of munitions). It has been agreed that military costs will form the basis of a claim on the Reserve to the extent that they cannot be absorbed without detriment to other priorities.
It is too early to say what the costs to Departmental Expenditure Limits or the Reserve will be of all the measures to be taken following the peace agreement.
31. Mr. Burns:
To ask the Chancellor of the Exchequer what estimate he has made of the change in tax payable in the last two years. [87089]
Dawn Primarolo:
Figures for tax receipts were published in table B10 of the Financial Statement and Budget Report.
32. Mr. Healey:
To ask the Chancellor of the Exchequer what plans he has for the reform of the landfill tax. [87090]
Ms Hewitt:
My right hon. Friend announced a number of changes to the landfill tax in his 1999 Budget. The case for any further changes will be examined as and when the need arises.
33. Mr. Swayne:
To ask the Chancellor of the Exchequer if he will make a statement on the proposed climate change levy. [87091]
Ms Hewitt:
The climate change levy will make a very significant contribution to meeting the Government's legally binding target for reducing greenhouse gas emissions set under the Kyoto Protocol, and their domestic goal of a 20 per cent. cut in carbon dioxide emissions by 2010. The levy will encourage energy efficiency in business and is expected to save around 1.5 million tonnes of carbon a year by 2010.
The design of the levy reflects closely the recommendations made by Lord Marshall. It will entail no increase in the overall burden of tax on business as revenues will be fully recycled via a 0.5 percentage point cut in the main rate of employer National Insurance Contributions. Business will also benefit from an additional £50 million for schemes aimed at promoting energy efficiency and support for renewable sources of energy, like solar and wind power.
The Government recognise the need for special consideration to be given to the position of energy intensive industries given their energy usage and exposure to international competition. Consequently, the Government intend to set significantly lower rates of tax for those energy
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intensive sectors that agree targets for improving their energy efficiency and these detailed negotiations are now underway.
The Government also want to work with business on the detailed design and administration issues relating to the levy and have just completed a consultation covering these issues.
Mr. Martyn Jones:
To ask the Chancellor of the Exchequer for what reasons the climate change levy is to be imposed on combined heat and power schemes. [87681]
Ms Hewitt:
It is the intention that climate change levy should be charged on industrial and commercial use of electricity. The levy will be charged at the point of supply to the final consumer which means that the input to generation will be exempt.
Combined Heat and Power (CHP) schemes are a form of electricity generation. The Customs and Excise consultation document asked for views on whether they should be treated as conventional generators, by relieving their input fuels and applying the levy to their outputs, or afforded special treatment whereby their input fuels are subject to the levy and the electricity they produced relieved. Officials are currently analysing responses to this exercise.
34. Mr. Ben Chapman:
To ask the Chancellor of the Exchequer what fiscal steps he is taking to ensure economic stability. [87092]
Mr. Milburn:
The Chancellor's recent Budget continued to lock in sound public finances and to ensure that our tough fiscal rules will be met. By providing a £6 billion boost to the economy, the Budget is supporting monetary policy and helping to steer a course of stability and lay the foundations for high and sustainable levels of growth and employment.
36. Mr. Gerrard:
To ask the Chancellor of the Exchequer if he will make it his policy to allocate funds raised by particular taxes to specified services. [87094]
Dawn Primarolo:
No. The Government determine their expenditure according to their priorities. However, we look at each case on its merits.
Mr. Chaytor:
To ask the Chancellor of the Exchequer what is the UK's policy advice to developing countries on capital controls; and what assessment he has made of IMF agreements which prohibit a Government from imposing capital controls. [86942]
Ms Hewitt
[holding answer 14 June 1999]: We encourage emerging markets to carry out capital account liberalisation in a careful and well sequenced manner. However, the use of controls on capital inflows may be justified during transitional periods as emerging markets strengthen the institutional and regulatory environment in their domestic financial systems. Controls on capital outflows may sometimes be necessary in exceptional
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circumstances. But controls on capital flows, particularly on outflows, carry costs and are no substitute for necessary reforms.
1996-97 tax return, issued in April 1997
First fixed filing penalty (issued in February 1998)--670,000
Second fixed filing penalty (issued in August 1998)--335,000
First surcharge for late payment (issued in March 1998)--142,000
Second surcharge for late payment (issued in August 1998)--59,000
1997-98 tax return, issued in April 1998
First fixed filing penalty (issued in February 1999)--748,000
First surcharge for late payment (issued in March 1999)--180,000.
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