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10 Feb 2003 : Column 605W—continued

Home Insurance

Sir Sydney Chapman: To ask the Chancellor of the Exchequer pursuant to his answer of 14 January 2003, Official Report, column 514W, on home insurance, when the FSA will be consulting on the disclosure of fees charged by mortgage providers for switching insurance taken out as a condition of the mortgage; and if he will ask the FSA to consult additionally on whether these fees should be abolished. [96826]

Ruth Kelly: The Financial Services Authority (FSA) consulted on its proposals for the disclosure of fees charged for switching insurance in its consultation paper, CP 146. There will be a further consultation on this as part of its draft rules, and this paper will issue at the end of April 2003. This will provide a further opportunity for those interested to air their concerns on the matter. It is not for the Government to direct the FSA on the content of their consultation on mortgages.

Income Tax

Mr. McNamara: To ask the Chancellor of the Exchequer how many people paid the top rate of income tax in each year since 1994–95; and what revenue was gained from this tax bracket in each case. [93477]

Dawn Primarolo [holding answer 30 January 2003]: The information is given in the table.

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Tax Year	Higher Rate Taxpayers(56) (000s)	Higher Rate Tax Yield(56) (£million)
1994–95	2,000	27,360
1995–96	2,130	30,370
1996–97	2,080	33,160
1997–98	2,120	35,170
1998–99	2,350	41,530
1999–2000	2,480	44,874
2000–01	2,880	54,040

⁽⁵⁶⁾ Taxpayers with a taxable income above the higher rate threshold.

Note:

These estimates are based on the Survey of Personal Incomes

While it is too early to comment on the detail of the Green Paper, the Government fully recognise the importance of information sharing among different agencies and of ensuring children and families receive coherent services based on their needs. The Green Paper is looking at the issues of key workers and single assessments, and will be informed by the work of the ten information, referral and tracking trailblazers managed by the Children and Young People's Unit.

Income Tax Evasion

Matthew Taylor: To ask the Chancellor of the Exchequer pursuant to his answer of 27 January 2003, Official Report, column 614W, on fraudulent income tax evasion, how many prosecutions are under way; how many prosecutions have been undertaken but not completed since 1 January 2002; and if he will make a statement. [95253]

Dawn Primarolo: As at 31 January 2003, 23 cases, of which 21 have been registered since 1 January 2002, are under investigation working towards prosecution using the new offence of fraudulent evasion of income tax.

Inheritance Tax

Mr. Gerald Howarth: To ask the Chancellor of the Exchequer (1) what he estimates the percentage of estates liable to inheritance tax would be if the threshold were raised to (a) £500,000 and (b) £1 million; [95013]

(2) what he estimates the annual cost to the Exchequer would be of raising the inheritance tax threshold to (a) £500,000 and (b) £1 million. [95017]

Dawn Primarolo: The PBR estimate of inheritance tax yield is £2.6 billion for 2003–04. The full year cost of raising the inheritance tax threshold in 2003–04 to (a) £500,000 and (b) £1 million would be £1.6 billion and £2.3 billion respectively. The UK percentage of estates liable to inheritance tax would be about 1 per cent. and less than 0.5 per cent. respectively.

Matthew Taylor: To ask the Chancellor of the Exchequer if he will estimate the additional annual revenue from inheritance tax as a result of abolishing the ability to make gifts free of inheritance tax after (a) one year, (b) five years and (c) 10 years; and if he will make a statement. [96524]

Dawn Primarolo: Insufficient data is available on which to base yield estimates.

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Inland Revenue Qualifying Regimes

Mr. Pike: To ask the Chancellor of the Exchequer what representations he has received regarding the abolition of the Inland Revenue qualifying regimes; and if he will make a statement. [96195]

Ruth Kelly: The Sandler review of the market for medium and long-term retail savings, which was published last July, recommended two changes to the regime for taxing life insurance products. These changes are the abolition of the qualifying policy regime and the replacement of the so-called 5 per cent. tax-deferral rule which applies to withdrawals.

As we announced in the pre-Budget report, the Government are considering these proposals as part of the Budget process and are consulting the industry about their implications. They have received representations from the insurance industry and friendly society movement. The Association of Friendly Societies and the Association of British Insurers have been in frequent contact with Treasury and Inland Revenue officials. Their discussions include considering how the Sandler recommendation to abolish the qualifying policy regime for new life insurance policies would affect savings through qualifying policies, particularly by those on low incomes.

Large Companies Office

Mr. Hoban: To ask the Chancellor of the Exchequer if he will make a statement on the effectiveness of the Large Companies Office of the Inland Revenue in collecting tax over the period 1997 to 2002. [94922]

Dawn Primarolo: The Inland Revenue's Large Business Office (LBO), formed on 1 April 1997, is responsible for dealing with the tax affairs of most of the largest companies and employers operating in the United Kingdom. It ensures such companies' tax affairs are handled by highly knowledgeable and experienced tax officials. The office explains the Inland Revenue's view of how tax law applies in particular circumstances and oversees the process by which large businesses account for the tax they are due to pay.

As part of that process LBO staff make inquiries into companies' tax returns on the basis of an assessment of the risk to the Exchequer. This can result in large adjustments to profits returned for tax, which sometimes require litigation. The additional tax recovered as a result of such LBO action may therefore fluctuate from year to year. The annual yield has been 1998–99—£1.9 billion; 1999–2000—£1.9 billion; 2000–01—£2.2 billion; and 2001–02—£1.6 billion. The office has met the overwhelming majority of its operational targets and has been highly effective, a view confirmed in the Government's 2001 Review of Links with Business and more recent taxpayer research.

Lisbon and Stockholm Objectives

Mr. Stephen O'Brien: To ask the Chancellor of the Exchequer (1) if he will make a statement on progress towards the Lisbon and Stockholm objectives of (a) speeding up liberalisation in areas such as gas, electricity and transport, (b) speeding up liberalisation in postal services, (c) concluding work on proposals to update public procurement rules, (d) ensuring that

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Community and Government procurement can take place online, (e) setting out a strategy for further co-ordinated action to simplify the regulatory environment, (f) implementing the financial services action plan, (g) ensuring full implementation of the Risk Capital Action Plan, (h) making progress on proposals on takeover bids and (i) concluding the pending tax package on efficient and implemented markets; [96840]

(2) if he will make a statement on progess towards the Lisbon and Stockholm objectives on (a) developing priority actions addressed to specific target groups within member states choosing amongst those actions according to their particular situations and reporting subsequently on their implementation, (b) producing a detailed work programme on the follow-up of the objectives of education and training systems, (c) achieving interim transposition target of 98.5 per cent., (d) presenting a proposal to tackle the barriers identifed in the internal market for services, (e) presenting a strategy for regulatory simplification and quality before the end of 2001, (f) implementing the Financial Services Action Plan, (g) integrating securities market, (h) implementing the Risk Capital Plan and achieving a well-functioning capital market, (i) demonstrating a downward trend in state aid in relation to GDP and (j) agreeing on the tax package as a whole; [96842]

(3) if he will make a statement on progress towards the Lisbon and Stockholm objectives on (a) defining common approaches to maintaining and improving the quality of work, (b) updating existing legislation on implementing the principle of equal treatment of men and women as regards access to employment, vocational training and promotion and working conditions, (c) agreement on a regulatory framework for radio spectrum policy and broadband networks, (d) adopting in co-decision with the European Parliament on the sixth Community Research Framework Programme, (e) examining a specific strategy for mobility within the European Research Area, (f) presenting proposals to promote a more interactive dialogue with the public on issues of science and technology, (g) examining measures required to utilise the full potential of biotechnology, (h) reviewing progress in integrating the sustainable development aims into the Lisbon strategy, (i) evaluating the Luxembourg process and (j) facilitating a successful outcome of COP-6; [96843]

(4) if he will make a statement on progess towards the Lisbon and Stockholm objectives on (a) alleviating the tax pressure on labour and improving the employment and training incentives of tax and benefits systems, (b) redirecting public expenditure towards increasing the relative importance of capital accumulating and supporting research and development, innovation and information technologies, (c) ensuring the long-term sustainability of public finances, (d) facilitating a substantial annual increase in per capital investment in human resources, (e) cutting the number of 18 to 24-year-olds with only lower-secondary level education, (f) developing schools and training centres into multi-purpose local learning centres, (g) creating a European framework to define the basic skills to be provided through lifelong learning, (h) establishing a European diploma for basic IT skills, (i) taking steps to remove obstacles to teachers' mobility, (j) developing

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a common European format for curricula vitae, (k) giving priority lifelong learning, (l) increasing employment services, (m) furthering all aspects of equal opportunities and making it easier to reconcile working and family life, (n) setting a new benchmark for improved child care provision, (o) raising the total EU employment rate to 70 per cent. and (p) increasing the number of women in employment to 60 per cent.; [96841]

(5) if he will make a statement on progress towards Lisbon and Stockholm objectives on (a) ensuring all schools have access to the internet, (b) all the teachers needed are skilled in the use of computers, (c) mapping of research and development excellence in all member states, (d) improving the environment for private research investment, R&D partnerships and high technology start-ups, (e) taking steps to remove obstacles to the mobility of researchers in Europe and attracting and retaining high-quality researchers in Europe and (f) ensuring a Community patent is available. [96839]

Ruth Kelly: As stated in the 2002 pre-Budget report, the Government will publish a progress report in early 2003 on developments in European economic reform since the February 2002 White Paper "Realising Europe's Potential".

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