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9 Dec 2002 : Column 85W—continued

Economic Cycles

Mr. Howard: To ask Mr. Chancellor of the Exchequer pursuant to paragraph A37 of the Pre-Budget Report November 2002 (Cm 5664), what further data is required before a definitive judgement can be made on the start date for the present economic cycle; and when he expects to be in a position to make that judgement. [85538]

Ruth Kelly [holding answer 5 December 2002]: It is inevitably much more difficult to judge whether or not an on-trend point occurs when output hovers close to

9 Dec 2002 : Column 86W

trend as it did in mid-1999 than when output clearly passes through trend. As paragraph A37 of the Pre-Budget Report states:


Only future GDP revisions could change the current judgement that the present cycle started in mid-1999.

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Mr. Howard: To ask the Chancellor of the Exchequer pursuant to Chart A4 of the pre-Budget report November 2002 (Cm 5664), if he will make a statement on the projected end date of the current economic cycle. [85542]

Ruth Kelly [holding answer 5 December 2002]: As set out in paragraph B7 of the pre-Budget report November 2002 (Cm 5664), the current economic cycle is projected to end in 2005–06.

Economic Growth

Mr. Howard: To ask the Chancellor of the Exchequer whether he will publish the estimates of actual UK trend growth prior to 2002 he has received from (a) the OECD, (b) the EC, (c) the OEF and (d) Goldman Sachs; and what reasons underlay his decision on the use of these estimates in the estimate of trend growth. [85539]

Ruth Kelly [holding answer 5 December 2002]: Estimates of trend growth for the UK produced by the OECD, the EC, OEF and Goldman Sachs, among other organisations, are set out in Table 4.1 on page 26 of the Treasury paper, XTrend Growth: Recent Developments and Prospects" published at the time of the 2002 Budget.

Mr. Howard: To ask Mr. Chancellor of the Exchequer if he will make a statement on the effect of the reduction in assumed trend growth from 2007–08 on the public finances from that financial year. [85546]

Ruth Kelly [holding answer 5 December 2002]: The forecast for the public finances in Budget 2002 covers the years to 2006–07. However paragraph 3.41 of the accompanying paper, Trend Growth: Recent Developments and Prospects, signalled that population effects could affect growth projections in 2007–08. Under the Pre-Budget Report assumptions on spending for 2007–08, set out in paragraph B20, changes in growth projections affect both spending as well as receipts.

Mr. Howard: To ask Mr. Chancellor of the Exchequer pursuant to his statement of 27 November, Official Report, column 318, on what evidence he based his statement that in 2003, Britain and North America are forecast to continue to be the fastest growing of all the major economies. [85549]

Ruth Kelly [holding answer 5 December 2002]: According to the latest Consensus Forecasts, published in November 2002, growth in 2002 and 2003 is expected to be higher in the US, Canada and the UK than in the any of the other G7 economies.

Economic Tests

Mr. Prisk: To ask the Chancellor of the Exchequer if he will set a date for the publication of a verdict on whether Britain has met the five economic tests for Euro entry. [86204]

Ruth Kelly: A comprehensive and rigorous assessment of the five tests will be made within two years of the start of this Parliament. Once the assessment is complete, it will be published and will be subject to intensive public scrutiny and debate.

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Mr. Prisk: To ask the Chancellor of the Exchequer what discussions he intends to have with the Governor of the Bank of England on whether the five economic tests for entry to the Euro are being met. [86205]

Ruth Kelly: The Chancellor meets regularly with the Governor of the Bank of England to discuss a range of issues.

The assessment of the Five Economic Tests will be a Government assessment, and the work will be carried out by the Treasury.

Employers' Liability Premiums

Andy King : To ask the Chancellor of the Exchequer what representations he has received about the increase in employers' liability premiums. [86043]

Ruth Kelly: We receive a great many representations from both industry and individuals on this matter and on a variety of subjects.

Mr. Stephen O'Brien : To ask the Chancellor of the Exchequer what plans he has to use revenue from insurance premium tax above the revenue projected by his Department to provide a pool for employers' liability insurance. [85965]

Ruth Kelly: None.

Equitable Life

Mrs. Iris Robinson: To ask the Chancellor of the Exchequer if he will publish in full the Penrose report into Equitable Life; and when the report will be published. [85405]

Ruth Kelly: The Penrose Inquiry is independent of the Government and the timetable for conducting the inquiry is a matter for Lord Penrose. However, Lord Penrose has recently said that he hoped that the inquiry would be able to report to Ministers next summer.

I very much hope to be able to publish the full report of the inquiry. However, it may be that parts of the report will be subject to legal and commercial confidentiality restrictions. I will not be in a position to know whether or not we can publish in full until I have seen Lord Penrose's report. These legal and commercial confidentiality restrictions will be the only constraints on publishing in full. However, Lord Penrose is also aware of these issues and he assures me that he is proceeding on the basis that the report will be published.

Chris Grayling: To ask the Chancellor of the Exchequer what Government schemes exist to compensate policyholders in Equitable Life in the event that it should go into receivership. [85502]

Ruth Kelly: The Government established the Financial Services Compensation Scheme as part of the Financial Services and Markets Act 2000. The Scheme became operational on 1 December 2001 and acts as an industry financed 'safety net' for customers of finance sector companies which become insolvent. The Scheme would first seek to take measures to safeguard policyholders, for example by trying to ensure that policies are transferred to another company. If this is not possible, compensation may be payable subject to the rules of the Scheme.

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Mrs. Iris Robinson : To ask the Chancellor of the Exchequer what assessment he has made of the effectiveness of the regulators in dealing with Equitable Life. [85753]

Ruth Kelly: Under the terms of the Financial Services and Markets Act 2000, the FSA is obliged to produce an annual report assessing performance against its statutory objectives of maintaining confidence in the financial system, promoting public understanding of the financial system, securing an appropriate degree of protection for consumers and reducing the potential for financial firms to be used for financial crime. This is the primary mechanism for holding the FSA accountable to Ministers and Parliament.

In August 2001 the Government announced an independent inquiry under Lord Penrose into the events surrounding Equitable Life. The terms of reference of the Inquiry, which covers events going back over 50 years, include the need to identify any lessons to be learnt for the conduct, administration and regulation of life assurance business. The Government looks forward to receiving Lord Penrose's report as soon as he is able to complete it. In addition, the Government published a report by the Financial Services Authority in October 2001 which reviewed the regulation of Equitable Life from 1 January 1999 to 8 December 2000 and which has been submitted as evidence to the inquiry conducted by Lord Penrose.

Gateway and Child Trust Fund

Mr.Howard: To ask Mr. Chancellor of the Exchequer what estimate of cost for the saving gateway and child trust fund is factored into his public finance projections. [85541]

Ruth Kelly [holding answer 5 December 2002]: Funding for the Saving Gateway in the pilot phase is included within current spending plans. Consistent with the Code for Fiscal Stability, the public finances projections presented in the Pre-Budget Report do not take account of measures proposed for consultation, including the Child Trust Fund, or other proposals where final decisions have yet to be taken,

including the details of the Saving Gateway.


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