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26 Nov 2008 : Column 1881W—continued
Banks
Mr. Austin Mitchell: To ask the Chancellor of the Exchequer if he will bring forward proposals to protect deposits made in international banks by British citizens; and if he will make it his policy that such proposals be included in arrangements for the Financial Services Compensation Scheme. [239416]
Ian Pearson: I refer the hon. Member to the paragraph 3.50-3.51 of the 2008 pre-Budget report.
Mr. Hague: To ask the Chancellor of the Exchequer what steps the Government have taken in light of the inclusion of (a) Bank Mellat (UK), (b) Bank Saderat plc and (c) Bank Tajerat (London) in the letter of 1 August 2008 (SI2008/520) from the Permanent Representatives of France, the United Kingdom and the United States to the President of the UN Security Council. [239499]
Ian Pearson: The letter of 1 August 2008 from the Permanent Representatives of France, the United Kingdom and the United States to the President of the UN Security Council provides a list of banks domiciled in Iran and their branches and subsidiaries abroad in order to facilitate the implementation of United Nations Security Council Resolution (UNSCR) 1803. UNSCR 1803 calls upon all states "to exercise vigilance over the activities of financial institutions in their territories with all banks domiciled in Iran, in particular with Bank Melli and Bank Saderat, and their branches and subsidiaries abroad, in order to avoid such financial support contributing to proliferation sensitive nuclear activities".
The Government have taken comprehensive steps to implement these vigilance requirements in the UK, in relation to both UK subsidiaries of Iranian banks and transactions with any other Iranian bank. The UK
made a significant contribution to the development of Council Regulation (EC) 1110/2008 which implements the vigilance requirements of UNSCR 1803 throughout the EU. The regulation requires enhanced vigilance over activity with Iranian banks, additional information in payment instructions, enhanced record-keeping, and establishes a new requirement on financial institutions to report transactions they suspect are related to proliferation finance. It also requires reporting of all transfers of funds by Bank Saderat plc.
The UK has also worked with international partners to secure common standards of implementation of the vigilance requirements of UNSCR 1803 for all members of the Financial Action Task Force (FATF), including those outside the EU.
Mr. Drew: To ask the Chancellor of the Exchequer what discussions he has had with the Bank of England on the re-introduction of capital controls requiring commercial banks to increase deposits held with the Bank of England. [239516]
Ian Pearson: Treasury Ministers and officials have meetings and discussions with a wide variety of organisations in the public and private sectors as part of the process of policy development and delivery. As was the case with previous Administrations, it is not the Government’s practice to provide details of all such meetings and discussions.
Banks: Finance
Adam Price: To ask the Chancellor of the Exchequer whether banks participating in the Government's recapitalisation scheme will be required not to issue dividends in the next 12 months. [230103]
Ian Pearson: The Government have, since the scheme was announced in October, indicated their willingness to consider early repayment of the preference shares that it holds at a price equal to 101 per cent. of par during the first six months, after the closing of the placing and open offer, and, thereafter, at a price to be negotiated based on prevailing market conditions at the time. Such repayment would be subject to FSA approval. As soon as the preference shares are repaid, payment of cash dividends would be permitted.
The banks have made clear in their public statements their intention to repay the Treasury's preference shares as soon as it is prudent to do so.
Banks: Iceland
Sir Alan Beith: To ask the Chancellor of the Exchequer whether the International Monetary Fund and associated international loans to the government of Iceland recently negotiated include any conditions relating to the Icelandic government’s guarantees to depositors in Icelandic banks in the Isle of Man and the Channel Islands. [239936]
Ian Pearson:
On 19 November the IMF announced the approval of a $2.1 billion two-year loan for Iceland to support an economic recovery programme to help Iceland restore confidence in its banking system and stabilize its currency. This includes Iceland's commitment to the principle of fair, equal and non-discriminatory
treatment of creditors and Iceland’s recognition of its obligations to depositors under its Deposit Guarantee Scheme.
Bradford and Bingley
Anne Main: To ask the Chancellor of the Exchequer what fees were paid to (a) Morgan Stanley and (b) other third parties in relation to the sale of Bradford and Bingley's UK and Isle of Man retail deposit and branch network. [231785]
Ian Pearson: Consultancy and advisory costs are included in HM Treasury's annual Resource Accounts.
Mr. Redwood: To ask the Chancellor of the Exchequer for how long he plans to borrow the funds required to finance the transfer of Bradford and Bingley deposits to Abbey Santander; and what interest rate he expects will apply to such borrowing. [239601]
Ian Pearson: The funds required to finance the loan to the Financial Services Compensation Scheme (FSCS) that enabled the transfer of Bradford and Bingley deposits to Abbey Santander are included in the revised Central Government Net Cash Requirement (CGNCR) of £152.9 billion announced in the pre-Budget Report. Following standard practices the Government do not identify the financing of each individual component of the CGNCR. The financing plans for the revised CGNCR are shown in Table B21 of the pre-Budget Report.
Mr. Redwood: To ask the Chancellor of the Exchequer what estimate he has made of the monetary value of claims upon the Financial Services Compensation Scheme which will arise from the transfer of Bradford and Bingley deposits to Abbey Santander. [239602]
Ian Pearson: I refer the hon. Member to the written answer I gave to the hon. Member for St. Albans (Anne Main) on 10 November 2008, Official Report, column 935W.
Building Societies: Finance
Mr. Drew: To ask the Chancellor of the Exchequer if he will make it his policy to release additional funds to the building society sector. [239535]
Ian Pearson: It has not proved possible to answer the hon. Member's question, of which Treasury Ministers first received notice on 24 November 2008, before Parliament is prorogued later today.
Mr. Drew: To ask the Chancellor of the Exchequer if he will make it his policy to assist smaller building societies with set-up costs in order to allow them to access the special loan liquidity scheme. [239537]
Ian Pearson: The main set-up costs that banks and building societies will incur in accessing the Government's liquidity support schemes relate to legal advice and administrative matters. The significance of these costs as a proportion of the available assistance will depend on the circumstances of each institution.
The Government are taking steps in the Banking Bill to ensure that building societies have the same access to
liquidity support as banks, however it is not aware of any instances where the set-up costs for building societies have been so prohibitive as to prevent a society from seeking to access assistance under the various liquidity schemes.
Building Societies: Local Authorities
Mr. Drew: To ask the Chancellor of the Exchequer if he will make it his policy to encourage local authorities to divert investment into the building society sector. [239536]
Ian Pearson: Local authorities should continue to follow the guidance on investments issued by the Department for Communities and Local Government, available at
Building Societies: Mortgages
Mr. Drew: To ask the Chancellor of the Exchequer if he will provide a financial stimulus to the mortgage market, with specific reference to the operations of building societies. [239530]
Ian Pearson: In pre-Budget report 2008, the Government announced that they are establishing a Lending Panel to bring together Government, trade bodies, regulators, and industry and consumer groups to monitor lending to businesses and homeowners.
The Government are taking steps in the Banking Bill to ensure that building societies have the same access to the Government's liquidity support schemes as other financial institutions.
Capital Gains Tax
Paul Farrelly: To ask the Chancellor of the Exchequer (1) what the estimated cost to the public purse of the new entrepreneurs relief from capital gains tax is in (a) 2008-09, (b) 2009-10 and (c) 2010-11; [238307]
(2) what his estimates are of the effect of the flat 18 per cent. capital gains tax (CGT) rate on CGT receipts from disposals by (a) higher rate taxpayers and (b) basic rate taxpayers of (i) business assets and (ii) non-business assets for (A) 2008-09, (B) 2009-10 and (C) 2010-11. [238308]
Mr. Timms: No such estimates are available. The latest estimate of the Exchequer yield from the capital gains tax reforms was published in the 2008 Budget Report and is available on the HM Treasury website at:
Paul Farrelly: To ask the Chancellor of the Exchequer what his estimate is of the cost to the public purse of the annual £9,200 exempted amount in respect of the payment of capital gains tax in (a) 2008-09, (b) 2009-10 and (c) 2010-11. [238309]
Mr. Timms: The estimated cost of the annual exempt amount is published in Table A3.1 of the FSBR and can be found on the HMT website at: http://www.hm-treasury.gov.uk/d/bud08_chaptera.pdf. Updated figures were published in Table 7 of the Tax Ready Reckoner available from Monday 24 November 2008.
Paul Farrelly: To ask the Chancellor of the Exchequer what estimate he has made of (a) the cost to the Exchequer of taper relief claimed from capital gains tax on the disposal of (i) business assets and (ii) non-business assets in each year from 1998-99 to 2007-08 and (b) the cost to the Exchequer of taper relief from capital gains tax in respect of carried interest claimed by individuals working in the private equity industry in each year from 1998-99 to 2007-08. [238858]
Mr. Timms: No such estimate has been made. The latest estimate on the cost of taper relief is published in Table 1.5 on the HMRC website at:
An updated figure was published in Table 7 of the Tax Ready Reckoner available from Monday 24 November 2008.
Figures for earlier years can be found on the HMT website in the PBR “supplementary documents” (or “other documents published today”) section for the relevant year.
Paul Farrelly: To ask the Chancellor of the Exchequer (1) how many individuals used all or part of their annual £9,200 exemption to capital gains tax in 2007-08; and what estimate he has made of the proportion of those who paid income tax at the higher rate; [238862]
(2) if he will estimate the level, based on estimated receipts for 2007-08, at which a combined personal tax allowance covering income and capital gains could be financed by abolition of (a) the separate annual capital gains tax exemption of £9,200 and (b) that exemption together with separate entrepreneurs' relief from capital gains tax. [239496]
Mr. Timms: Figures on the number of individuals using all or part of their annual exempt amount and therefore the requested breakdowns are unavailable.
Paul Farrelly: To ask the Chancellor of the Exchequer (1) what factors he took into account when deciding to set capital gains tax at a flat rate of 18 per cent; and what consideration he gave to setting capital gains tax at (a) the basic rate of income tax and (b) the individual’s marginal rate of income tax; [239497]
(2) what the reasons are for (a) maintaining the existence of a separate annual allowance for exemption to capital gains tax (CGT) and (b) the difference between the level of the CGT exemption and the annual personal allowance for income tax. [239502]
Mr. Timms: The Government take a range of factors into consideration when formulating tax policy, and keep all aspects of policy under review.
Carbon Monoxide: Alarms
Mr. David Anderson: To ask the Chancellor of the Exchequer if he will exempt domestic carbon monoxide alarms from value added taxation. [239272]
Mr. Timms:
The scope of exemptions from VAT is limited by European agreements under which it is not possible to exempt domestic carbon monoxide alarms from VAT. Similarly, under VAT agreements with our
European partners signed by successive Governments, we can retain our existing VAT zero rates (which do not include carbon monoxide alarms) but may not extend them or introduce new ones.
Child Benefit
Mr. Philip Hammond: To ask the Chancellor of the Exchequer how many nationals of each A8 country were receiving child benefit for a child or children living outside the UK at the end of September 2008; and in respect of how many such children child benefit was being paid on that date. [237404]
Mr. Timms: Around 7.5 million families are currently claiming child benefit for around 13 million children. Out of that total, at the end of September 2008, there were 26,180 child benefit awards to A8 nationals recorded as receiving child benefit for 42,759 children living in another EEA member state, which equates to around one-third of 1 per cent. of all child benefit awards. The UK makes these awards to comply with its obligations under EC social security co-ordinating regulations. The estimated breakdown by nationality is as follows:
| Country | Number of awards at 30 September 2008 | Number of children included in awards |
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