---

1 Nov 2005 : Column 980W—continued

Corporation Tax

Mr. Philip Hammond: To ask the Chancellor of the Exchequer what plans he has to change the timing of corporation tax payments for small and medium companies. [23848]

John Healey: As a matter of course, the Government keep all taxes under review, and any changes to taxation are announced as part of the normal Budget cycle.

Court of Auditors

Chris Huhne: To ask the Chancellor of the Exchequer what steps he is taking to encourage the European Commission (a) to improve budget accountability and (b) to enable the EU Court of Auditors to approve the annual accounts. [24319]

 
1 Nov 2005 : Column 981W
 

Mr. Ivan Lewis: The United Kingdom presidency has prepared draft conclusions to be agreed at ECOFIN in November, in response to the Commission's Communication On a Roadmap to an Integrated Internal Control Framework". The conclusions will require the Commission to prepare an action plan to fill gaps in internal control; to assess compliance with regulations; and to assess the effectiveness of present controls. These actions, in addition to those proposed for member states, should improve financial management and control and ultimately achieve the objective of a positive Statement of Assurance from the European Court of Auditors. But this will take time.

Chris Huhne: To ask the Chancellor of the Exchequer what assessment he has made of progress in reforming EU budget procedures towards enabling the accounts to be signed off by the EU Court of Auditors. [24320]

Mr. Ivan Lewis: Many improvements have been made during the past few years, including the revision of the Financial Regulation, the introduction of the Integrated Administration and Control System in Agriculture, the annual certification of payments in agriculture by member states, and the annual activity reports by Commission Directorate-Generals, which include declarations of assurance. But there is still much more to do and that is why the United Kingdom presidency has taken forward the response to the Commission's Communication On a Roadmap to an Integrated Internal Control Framework" by preparing draft conclusions for the November ECOFIN Council, outlining actions which could ultimately achieve the objective of a positive Statement of Assurance from the European Court of Auditors.

Defence Expenditure

Mr. Arbuthnot: To ask the Chancellor of the Exchequer what percentage of the UK's gross domestic product has been spent on defence in each of the
 
1 Nov 2005 : Column 982W
 
past five years; what he forecasts this percentage to be in each of the next three years; and if he will make a statement. [22186]

Mr. Des Browne: Defence expenditure as a proportion of the UK's gross domestic product over the past five years, with and without the costs of military operations, is as follows:

	Percentage GDP including military operations	Percentage GDP excluding military operations
2000–01	2.6	2.5
2001–02	2.4	2.4
2002–03	2.5	2.3
2003–04	2.4	2.3
2004–05	2.4	2.3

The Government's planned defence expenditure over the next three years was set in the 2004 spending review. It represents 1.4 per cent. average annual real terms growth in defence expenditure over the three years to 2007–08 which taken together with the resources allocated in the 2000 and 2002 spending reviews, represents seven consecutive years of planned real-terms growth, the longest such period for over 20 years. Planned defence expenditure as a percentage of forecast GDP is as follows:

	Forecast percentage GDP excluding military operations
2005–06	2.2
2006–07	2.2
2007–08	2.2

Departmental Consultation

Mr. Peter Ainsworth: To ask the Chancellor of the Exchequer if he will list formal consultations being sponsored by his Department and its agencies; and what the (a) commencement date and (b) deadline for responses is in each case. [22578]

John Healey: The following, formal consultations, are currently being undertaken by the Chancellor's Departments:

Department/agency	Consultation subject	Consultation commencement	Deadline for responses
HM Treasury	Proposed changes to the eligibility rules for establishing a pension scheme	30 September 2005	23 December 2005
HM Treasury	The Reform of Film Tax Incentives: promoting the sustainable production of culturally British films	29 July 2005	21 October 2005
HM Revenue and Customs	VAT: A review of the scope of the VAT exemption for medical services	1 September 2005	16 December 2005
HM Revenue and Customs	Proposed changes to the eligibility rules for establishing a pension scheme	30 September 2005	23 December 2005
Government Actuary's Department	Proposed assumptions for calculating national insurance rebates for contracted-out pension arrangements for the five years from April 2007	19 September 2005	12 December 2005
Office of National Statistics	Economic consultation on National Accounts Manuals being updated	7 September 2004	31 December 2005

Departmental Spending

David T.C. Davies: To ask the Chancellor of the Exchequer how much the Department spent on items of art in 2004–05. [23466]

John Healey: HM Treasury did not purchase any items of art during 2004–05.

Departmental Travel

Dr. Cable: To ask the Chancellor of the Exchequer (1) what percentage of business journeys taken by staff in his Department were by (a) private and (b) public transport in each of the last five years for which records are available; [23388]
 
1 Nov 2005 : Column 983W
 

(2) how many business journeys taken by staff in his Department were (a) by motorised vehicles, (b) by aircraft, (c) by train or tube, (d) by bicycle and (e) on foot in each of the last five years for which records are available; [23389]

(3) what percentage of business journeys taken by staff in his Department were made using (a) standard and (b) first or business class tickets in each of the last five years for which records are available. [23650]

John Healey: HM Treasury do not keep a central record of the type and number of individual journeys made. An answer could be provided only at disproportionate cost.

Enterprise Management Incentives

Dr. Cable: To ask the Chancellor of the Exchequer (1) what his estimate is of the total revenue cost of introducing enterprise management incentives in the March 2000 Budget to allow smaller high risk companies to issue the tax-advantaged share options to key staff in each year from 2000–01 to 2009–10; what assessment has been made of the economic effects of this scheme; and if he will make a statement; [22701]

(2) what the total cost of the Enterprise Management Incentive (a) has been in each year since 2001–02 and (b) is expected to be in each year to 2009–10; what assessment has been made of the effects of this scheme; and if he will make a statement. [22702]

John Healey: National Statistics giving the estimated income tax relief cost of Enterprise Management Incentives (EMI) have been published on HM Revenue and Customs (HMRC) website for 2000–01 to 2003–04. A forecast of the income tax and national insurance contributions relief cost of EMI for 2004–05 was first published in the Tax Ready Reckoner at pre-Budget report 2004. No longer-term forecasts have been made. Income tax and national insurance relief is given on the gains employees make when they exercise EMI options. The published figures together with national insurance contribution relief estimates for 2000–01 to 2003–04 are:

	Income tax	National insurance	Total
Estimates
2000–01	neg	neg	neg
2001–02	neg	neg	neg
2002–03	50	10	60
2003–04	50	10	60
Forecast
2004–05	60	10	70

An evaluation programme has begun which aims to assess the economic impact and cost-effectiveness of EMI against its stated policy objectives of helping smaller higher risk companies to recruit and retain the people they need to grow and succeed.

Take-up of EMI has been strong, with 5,944 companies having granted options over £1.3 billion in shares to 75,000 employees by 2004–05. Some initial
 
1 Nov 2005 : Column 984W
 
qualitative research among companies using EMI has also been completed, which suggests that it is working well in helping to meet their business needs. This was commissioned from external research contractors as part of the HMRC research programme. The research report is available on the HMRC website.

---