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14 Mar 2007 : Column 406W—continued
Business: Orders and Regulations
Tony Baldry: To ask the Chancellor of the Exchequer what his most recent estimate is of the (a) one-off cost and (b) recurring costs of implementing the Money Laundering Regulations 2003 to (i) businesses and (ii) the regulators. [126672]
Ed Balls: The Full Regulatory Impact Assessment for the Money Laundering Regulations 2003 lists the following costs for sectors:
Legal and accountancy: £80-£100 million per annum;
Estate agents: £10-£15 million for the first year. £5-£7.5 million thereafter;
High Value Dealers: £350 per firm per year.
HM Treasury’s simplification plan ‘Delivering Better Regulation’, published in December 2006, identified a net administrative burden of £921,617 (per annum). This relates to the supervisory arrangements for Money Service Businesses and High Value Dealers, as set out in Part 3 of the Regulations.
The Regulations have brought benefits in detecting, deterring and disrupting money laundering and terrorist financing.
HM Treasury is committed to reducing regulatory burdens where possible. Work on identifying simplification measures to reduce the burden for industry of applying anti-money laundering controls is ongoing.
Departments: Africa
Mr. Francois: To ask the Chancellor of the Exchequer how many officials accompanied him on each visit he made to an African country in January 2005; what the cost of hotels was for (a) him and (b) his officials on each visit; and whether (i) he and (ii) his officials stayed in accommodation provided by the UK’s high commission or embassy in each country. [126921]
John Healey: In respect of overseas travel by Cabinet Ministers, since 1999 the Government have published an annual list of all visits overseas undertaken by Cabinet Ministers costing £500 or more during each financial year. Copies of the lists are available in the Library for the reference of Members. All ministerial travel is undertaken in accordance with the rules set out in the “Ministerial Code” and “Travel by Ministers”, copies of which are available in the Library for the reference of Members. For information on subsistence costs for HM Treasury I refer to the answer I gave on 16 October 2006, Official Report, column 1060W to the hon. Member for Welwyn Hatfield (Grant Shapps). All official travel is undertaken in accordance with the requirements of the “Civil Service Management Code”, a copy of which is also available in the Library for the reference of Members.
Departments: Conferences
Mr. Hoban: To ask the Chancellor of the Exchequer pursuant to the answer of 19 February 2007, Official Report, column 483W, on Members: correspondence, whether his Department will assist in the organisation of the conference. [126604]
John Healey: The organisation of this conference is not a matter for the Treasury.
Departments: Ministerial Policy Advisers
Mr. Hoban: To ask the Chancellor of the Exchequer whether any members of the Council of Economic Advisers were involved in the formulation of his announcement on Citizenship and Immigration of 27 February 2007. [126576]
John Healey: I refer the hon. Member to the answer I gave him on 13 March 2007, Official Report, column 280W.
Mr. Hoban: To ask the Chancellor of the Exchequer whether he has received representations on the number of special advisers he employs. [126574]
John Healey: All advisers are employed in line with the Ministerial Code.
Departments: Standards
Mr. Francois: To ask the Chancellor of the Exchequer what the characteristics are of a Red RAG (Red, Amber and Green) score for a departmental programme. [126879]
Mr. Timms: RAG assessment is a common tool used in a number of contexts across the public and private sector. The description of what constitutes a rating in any given RAG system will differ. HMT does not maintain a standard definition.
Disposable Income
Mr. Laws: To ask the Chancellor of the Exchequer how much and what proportion of disposable income was paid on average in (a) direct taxes, (b) indirect taxes by (i) working age households with dependent children, (ii) working age households without dependent children and (iii) pensioner households in each of the last three years, broken down by income decile. [126508]
John Healey: The information requested falls within the responsibility of the National Statistician, who has been asked to reply.
Letter from Karen Dunnell, dated 14 March 2007:
As National Statistician, I have been asked to reply to your recent Parliamentary Question asking how much and what proportion of disposable income was paid on average in (a) direct taxes, (b) indirect taxes by (i) working age households with dependent children, (ii) working age households without dependent children and (iii) pensioner households, broken down by income decile in each of the last three years. (126508)
Estimates of the proportion of income paid in both direct and indirect taxes appear in the ONS analysis ‘The effects of taxes and benefits on household income’. The latest analysis for 2004/05 was published on the National Statistics website on 12th May 2006 at http://www.statistics.gov.uk/taxesbenefits. The analysis is based on data from the Expenditure and Food Survey (EPS), which is a sample survey covering approximately 7,000 households in the UK. The analysis for 2005/06 will be published on the National Statistics website on 17 May 2007.
The tables below show the amount of direct and indirect taxes paid by each of the three different types of household. They also show the average payment of direct and indirect taxes as a
proportion of income. However, since disposable income is that received after the payment of direct taxes, the proportion of disposable income paid in direct taxes is zero by definition. So only indirect taxes are shown as a proportion of disposable income. To enable a comparison, both direct and indirect taxes have been shown as a proportion of gross income.
Figures have been provided for the last three years, and they have been taken from (or calculated from) figures appearing in the three most recent ‘effects of taxes and benefits’ articles, those for 2002/03, 2003/04, and 2004/05. The figures for non-retired households with children have been taken from Table 21, the figures for non-retired households without children from Table 20, and the figures for retired households from Table 18. Retired households are those where the income of retired household members accounts for more than half of the household gross income.
Direct taxes include income tax, national insurance contributions and council tax. The indirect taxes include VAT, duties, intermediate taxes (see background notes), and a number of smaller items such as television licences.
When comparing estimates over these three years, it should be remembered that the estimates are based on a sample, and that there is some uncertainty around the estimates. While there will have been some changes in the taxes paid by households over this period, the underlying changes are difficult to distinguish from the movements arising from sampling error, especially in the figures for decile groups. Given this, these figures are best interpreted as indicating the average level of tax payments over this three year period, rather than interpreting them as measuring how the tax burden has changed over these three years.
There was a change to the way that tax credits were treated from 2003/04 onwards. Up until 2002/03 tax credits were treated
as cash benefits. From 2003/04, they are classified as negative income tax, but only to the extent that income tax less tax credits, remains greater than or equal to zero for each family. So for households paying relatively little or no income tax, tax credit payments were still regarded either partially or wholly, as cash benefits. Based on figures for 2003/04, the effect of this change was to reduce the overall estimate of direct taxes as a proportion of gross income for all households, by 0.3%.
Indirect taxes, when expressed as a proportion of either gross or disposable income appears particularly high for the bottom income decile, although this result needs to be interpreted carefully. Estimates of indirect taxes are estimated based on household expenditure. It should be remembered that measured expenditure will not necessarily balance with measured income for the year. This is especially true for the bottom income decile where average measured income is significantly lower than average expenditure. For these households, indirect taxes (which reflect expenditure) are not being met solely from current income, and so indirect taxes are very high when expressed as a proportion of either gross or disposable income.
There are a number of plausible reasons why for some households, expenditure might exceed income. Households with low incomes may draw on their savings or borrow in order to finance their expenditure. In addition, the lower decile in particular includes some groups, who have, or report, very little income (for example, self-employed people starting a business or someone who has just been made redundant). In these cases, expenditure is not being met from current income. Some types of receipts are not included as income in the EFS e.g. inheritance and severance payments. In some cases, the information given on expenditure is not consistent with that on income received because of timing differences.
| Table 1: Direct and indirect taxes paid by non-retired households with children by decile group, 2002-03 to 2004-05 | |||||||||||
| Decile groups of all non-retired households with children ranked by equivalised disposable income | |||||||||||
| Bottom | 2nd | 3rd | 4th | 5th | 6th | 7th | 8th | 9th | Top | All households | |
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