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11 Jun 2003 : Column 857W—continued
Financial Services (CAT Standard)
Mr. Lazarowicz: To ask the Chancellor of the Exchequer (1) what steps the Government is taking to raise awareness amongst the public of the CAT standard for financial services products; [118174]
- (2) how he plans to encourage the take-up of the CAT standard in the mortgage industry. [118175]
Mr. Boateng: CAT standards are designed to identify a range of straightforward savings and mortgage products that are simple, clear and fair so that savers and borrowers should feel confident about choosing them. But the promotion of products is ordinarily a matter for individual firms.
Nevertheless, the Government and the FSA make appropriate references to CAT standards whenever they can. For example, the FSA explain CAT standards in their ISA and mortgage literature, and show whether an ISA or mortgage meets the standard in the relevant comparative tables to be found on its website.
ECOFIN
Mr. Hood: To ask the Chancellor of the Exchequer what the outcome was of the ECOFIN Council held on 3 June; what the Government's stance was on the issues discussed, including its voting record; and if he will make a statement. [118069]
Mr. Gordon Brown: At the ECOFIN on 3 June, the UK was represented by our Permanent Representative to the EU and by the Treasury's Managing Director of Macroeconomic Policy and International Finance.
ECOFIN formally adopted all elements of the tax package—the directive on the taxation of savings, the Code of Conduct on harmful business taxation and the directive on interest and royalties—on the basis of the 19 March ECOFIN Conclusions. The adoption of the tax package is a major success for the UK. The directive on the taxation of savings will tackle the problem of tax evasion on savings income by exchange of information rather than through an EU-wide withholding tax that would have damaged the interests of the City of London. And the Code of Conduct sets an
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important principle because it demonstrates what member states can achieve, working together to achieve unanimous political agreement, and rejects tax harmonisation in favour of fair tax competition.
The Italian request for a Council decision under Article 88(2) on the repayment of Italian milk quota fines was approved, as was the Belgian Article 88(2) request on co-ordination centres. ECOFIN noted a Commission presentation on the progress of the anti-fraud negotiations with Switzerland.
The Council adopted a Decision on the existence of a French excessive deficit. It also agreed, by qualified majority with Denmark and the Netherlands voting against, a Recommendation calling on France to bring back its deficit below 3 per cent. by 2004 at the latest. ECOFIN agreed, by qualified majority with Denmark and the Netherlands voting against, a report on the Broad Economic Policy Guidelines (BEPGs) for 2003–05 for submission to the European Council at Thessaloniki. Finance ministers also agreed a covering note to the European Council highlighting the key priorities to boost growth, in particular more flexible labour markets. The note, which has been published on the Council Website, states that:
- "It is essential to achieve higher and sustainable growth in our economies through appropriate macroeconomic policies and structural reforms. We have made progress with the Lisbon economic reform agenda, but much remains to be done. We must step up the pace of reform and achieve more flexible economies that show a stronger resilience in the face of uncertainty and shocks".
Ministers took note of Commission reports on the Financial Services Action Plan and on ED financial integration. They also agreed, together with the accession countries, a Council Statement calling on the US to exempt EU audit firms from the compulsory registration requirement with the new US Oversight Board, under the Sarbanes- Oxley Act.
The Presidency outlined progress on the Investment Services Directive. The UK expressed support for the objectives of the directive, but raised concerns about the proposals on mandatory quote disclosure rules and the treatment of execution only business.
A vote was taken on the Recommendation to France on their excessive deficit and on the Broad Economic Policy Guidelines. The UK was part of the qualified majority.
EU Savings Tax Directive
Mr. Brady: To ask the Chancellor of the Exchequer what agreements the EU has made with Switzerland in relation to the adoption of the EU Savings Tax Directive. [118515]
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Dawn Primarolo: The European Commission, in close conjunction with the Presidency, is conducting negotiations with Switzerland and other key non-EU countries (Liechtenstein, Monaco, Andorra, and San Marino) to ensure the adoption in those countries of measures equivalent to those in the Savings Directive.
Mr. Brady: To ask the Chancellor of the Exchequer whether it is his Department's policy that Bermuda should be excluded from the EU Savings Tax Directive. [118516]
Dawn Primarolo: I refer the hon. Gentleman to the reply I gave him on 12 December 2002, Official Report, column 471W.
Mr. Brady: To ask the Chancellor of the Exchequer what plans his Department has to undertake an assessment of the impact of the EU Savings Tax Directive on overseas territories. [118521]
Dawn Primarolo: I refer the hon. Gentleman to my reply to the hon. Member for Romford (Mr. Rosindell) on 3 June 2003, Official Report, columns 192–93W.
Euro
Mrs. Calton: To ask the Chancellor of the Exchequer what assessment he has made of the impact introduction of the euro would have on (a) the economy of and (b) tourism in the North-West of England. [117881]
Mr. Boateng: I refer the hon. Member to the Treasury's assessment of the five economic tests that was published on 9 June following the Chancellor's statement to the House of Commons (Cm 5776).
Foreign Direct Investment
Mr. Menzies Campbell: To ask the Chancellor of the Exchequer what the total foreign direct investment (FDI) was in the UK in (a) 2001, (b) 2002 and (c) 2003; what proportion these figures represent of the total FDI of the EU; and if he will make a statement. [117907]
Mr. Boateng: The most recent official statistics for direct investment into the UK can be found in the latest Office for National Statistics (ONS) UK balance of payments release, available on the ONS website: http://www.statistics.gov.uk/pdfdir/bop0303.pdf An international comparison of direct investment flows for 2001, the latest year for which full statistics are available, can be obtained from the United Nations Conference on Trade and Development (UNCTAD) 'World Investment Report' publication.
Inheritance Tax
Mr. Wray: To ask the Chancellor of the Exchequer what plans he has to further increase the threshold for payment of inheritance tax; and what assessment he has made of the effects the tax has on people of lower incomes living in larger properties. [118276]
Dawn Primarolo: The Chancellor considers all taxes as part of his annual Budget judgment.
Insurance Industry (Genetic Information)
Dr. Kumar: To ask the Chancellor of the Exchequer what measures are planned to ensure that people identified
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with hereditary or latent genetic predispositions toward certain conditions are not unfairly discriminated against by insurance companies and other financial service providers. [118165]
Mr. Boateng: The Government is committed to working with the industry, patient groups and other stakeholders to formulate and agree a long term policy on the use of genetic information by insurance companies. The Association of British Insurers' Genetic Testing Code of Practice provides that insurance applicants must not be asked to undergo a genetic test in order to obtain insurance. Under a five year moratorium introduced in October 2001, a person can apply for a total of up to £500,000 of life insurance and £300,000 of certain types of health insurance without having to tell the insurer the results of any predictive tests already taken. If insurance above these amounts is required, insurers may only take into account the results of genetic tests which the Government's Genetics and Insurance Committee has decided are reliable and relevant for that type of insurance. The Committee provides independent scrutiny of compliance with the ABI Code of Practice and the moratorium and can consider unresolved complaints from insurance applicants about the way an insurance company has dealt with their application under the moratorium.
Merchant Shipping
Mr. Wray: To ask the Chancellor of the Exchequer what domestic taxation is placed upon UK merchant shipping; what discussions he has had with industry representatives on the tax burden on UK shipping; and what proposals he has to reduce the burden. [118274]
Dawn Primarolo: In common with other sectors of the economy, the UK shipping industry is subject to a range of taxes and duties and benefits from a range of allowances and reliefs, consistent with the Government's desire to maintain a fair and broad-based tax system raising sufficient revenue for investment in our public services while maintaining the international competitiveness of UK businesses. The shipping industry also benefits from special tax reliefs and regimes, which reflect the particular needs and circumstances of the industry.
The Government takes into account the overall tax burden on different sectors when setting tax rates and reviewing tax policies, and holds regular discussions where appropriate with representatives from such sectors, including the shipping industry, to take their views into account when considering policy changes.
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