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26 Nov 2008 : Column 1897W—continued
Floods: EU Grants and Loans
Mrs. Villiers: To ask the Chancellor of the Exchequer how much the EU has granted to the UK for flood relief since the 2007 floods. [218664]
Yvette Cooper: Based on the exchange rates at the time of application, the net benefit of the €162.4 million in EU Solidarity Fund assistance paid by the EU in relation to the summer 2007 flooding is around £31 million. This takes account of the increase to the EC budget and the impact on the size of the UK abatement. The exact size of the net benefit will depend on exchange rates on 31 December 2008, which are used to calculate the size of the UK's contribution for next year. The Government announced that £31 million would be made available to English local authorities through the Restoration Fund and to the devolved Administrations of Wales and Northern Ireland.
Mrs. Villiers: To ask the Chancellor of the Exchequer what proportion of the EU funds given to the UK for flood relief as a result of the 2007 summer floods was (a) retained by the Treasury and (b) allocated to affected local authorities. [218665]
Yvette Cooper: Based on the exchange rates at the time of application, the net benefit of the €162.4 million in EU Solidarity Fund assistance paid by the EU in relation to the summer 2007 flooding is around £31 million. This takes account of the increase to the EC budget and the impact on the size of the UK abatement. The exact size of the net benefit will depend on exchange rates on 31 December 2008, which are used to calculate the size of the UK's contribution for next year. The Government announced that £31 million would be made available to English local authorities through the Restoration Fund and to the devolved Administrations of Wales and Northern Ireland.
Formula One Holdings
Adam Price: To ask the Chancellor of the Exchequer what (a) briefing and (b) minutes the then Chancellor of the Exchequer received from (i) 10 Downing Street and (ii) ministerial colleagues in relation to the taxation affairs of Formula One Holdings and its associated companies in November 1997. [228813]
Angela Eagle [holding answer 21 October 2008]: HM Revenue and Customs (and its predecessor departments, the Inland Revenue and HM Customs and Excise) is bound by a statutory duty of confidentiality to taxpayers.
Gold: Sales
Mr. MacNeil: To ask the Chancellor of the Exchequer how much gold has been sold by the Treasury since 1997, expressed in current retail prices; and how much was received in respect of the sales. [228882]
Ian Pearson: 395 tonnes of gold were sold from the reserves between July 1999 and March 2002 and re-invested in interest-bearing foreign currency assets. Other central banks have adopted similar policies. The total proceeds were around $3.5 billion, equivalent to around £2.3 billion (using exchange rates at the time of the sales).
Horses: Animal Breeding
Mr. Hancock: To ask the Chancellor of the Exchequer what tax measures are in place relating to the breeding of thoroughbred racehorses; and whether any such measures provide incentives to breed such horses. [239188]
Mr. Timms: There are no tax measures in place which cover the breeding of thoroughbred racehorses specifically.
HM Revenue and Customs operate a VAT registration scheme for racehorse owners. Owners who comply with the conditions of the scheme are considered to be in business, and are entitled to register for VAT. This means that they can recover VAT incurred on all expenditure connected with racehorse ownership, although they must also charge VAT on sponsorship income, prize money, appearance money, and the sale of racehorses. For the purposes of the scheme, 'owners' include breeders, dealers, trainers and racing clubs. Full details of the scheme are set out in VAT Public Notice 700/67.
For income and corporation tax purposes, the breeding of thoroughbred racehorses is treated as farming. There are a number of direct tax rules which apply to farming generally, reflecting the particular aspects of farming activity. These rules apply to the breeding of thoroughbred racehorses in the same way as they do to any other farming business.
Income Tax
Mr. Meacher: To ask the Chancellor of the Exchequer what estimate he has made of the number of (a) persons and (b) households with assets over (i) £1 million, (ii) £5 million, (iii) £10 million and (iv) £20 million; and if he will estimate the revenue which would accrue to the Exchequer of an annual levy of (A) 1 per cent. of the wealth of those with assets over £1 million, (B) 1.5 per cent. of the wealth of those with assets over £5 million, (C) 2 per cent. of the wealth of those with assets over £10 million and (D) 3 per cent. of the wealth of those with assets over £20 million. [239818]
Mr. Timms: An estimate of the number of individuals with wealth above £1 million for the latest year available is provided in footnote 2 to National Statistics Table 13.5
Equivalent estimates for households and for those with wealth at higher levels are not available.
Estimates of the revenue from an annual levy on wealth are also not available.
Income Tax: Tax Rates and Bands
Mr. Byers: To ask the Chancellor of the Exchequer if he will estimate the level to which the higher threshold for income tax would need to be raised for the same number of people to be paying the higher rate now as in 1997. [229737]
Mr. Timms [holding answer 23 October 2008]: The point at which tax is paid at 40 per cent., the higher rate threshold, has increased in each year since 1997-98. Changes to taxpayer numbers since 1997 have been the result of changes in employment and income growth. Information on the number of taxpayers for the period 1990-91 to 2008-09 can be found in Table 2.1 “Number of individual income taxpayers” on the HM Revenue and Customs website at:
Inheritance Tax
Dr. Cable: To ask the Chancellor of the Exchequer what estimate his Department has made of the cost to the public purse of raising the individual inheritance tax threshold to £1 million and maintaining the transferability of the allowance between spouses; and if he will make a statement. [234128]
Mr. Timms [holding answer 10 November 2008]: The cost of increasing the inheritance tax nil rate band to £1 million while retaining transferability of the allowance between spouses and civil partners with effect from April 2009 is estimated at £700 million in 2009-10, £1.7 billion in 2010-11 and £1.8 billion in 2011-12.
These estimates are consistent with Budget 2008 forecasts of current receipts.
Insolvency
Justine Greening: To ask the Chancellor of the Exchequer what estimate his Department has made of the number of company insolvencies in which HM Revenue and Customs was a creditor in each of the last four years, broken down by (a) compulsory liquidations, (b) creditors’ voluntary liquidations, (c) company voluntary arrangements, (d) administrations and (e) receiverships; and what projections his Department has made for (i) 2008-09 and (ii) 2009-10. [238837]
Mr. Timms [holding answer 24 November 2008]: Details of the numbers of company administrations and receiverships in which HM Revenue and Customs was a creditor in England and Wales since 2005-06 are as follows:
| 2005-06 | 2006-07 | 2007-08 | 2008-09( 1) | |
| (1) Part year to end of October 2008 | ||||
The other information is not available in the format requested without disproportionate cost.
Justine Greening: To ask the Chancellor of the Exchequer what estimate his Department has made of the number of individual insolvencies in which HM Revenue and Customs was a creditor in each of the last four years, broken down by (a) administration orders, (b) individual voluntary arrangements, (c) bankruptcies and (d) bankruptcies involving trading debts; and what projections his Department has made for (i) 2008-09 and (ii) 2009-10. [238838]
Mr. Timms [holding answer 24 November 2008]: Details of the total numbers of bankruptcies in which HM Revenue and Customs was a creditor since 2006/07 are as follows:
| Bankruptcies | |
| (1) England, Wales, Scotland (2) England, Wales and Scotland. Northern Ireland from June 2007 (3) To end October 2008 | |
In the period from 6 April to the end of October 2008, a total of 3,308 individual voluntary arrangements in which HMRC had a claim were recorded. For information on the number of individual voluntary arrangements approved in England and Wales for earlier years, I refer the hon. Member to the answer given to the hon. Member for Runnymede and Weybridge (Mr. Hammond) on 23 October 2007, Official Report, column 250W.
The other information requested could be provided only at disproportionate cost.
Interest Rates
Mr. Jim Cunningham: To ask the Chancellor of the Exchequer what steps the Government plans to take to encourage banks and building societies to pass on Bank of England interest rate cuts to their customers. [235372]
Ian Pearson [holding answer 17 November 2008]: Banks should pass on interest rate cuts to their customers wherever they can. The Chancellor has met with the CEOs of the major UK banks to make this clear.
The Chancellor announced at pre-Budget report 2008 that the Government are establishing a Lending Panel, bringing together Government, regulators, lenders, trade bodies and consumer groups to monitor lending to both households and businesses. The new panel will encourage and drive up best practice in lending decisions and treatment of borrowers.
Mr. Ancram: To ask the Chancellor of the Exchequer what criteria he expects the Bank of England to follow in setting interest rates in circumstances where inflation is below the target figure. [239559]
Ian Pearson: The Chancellor wrote to the Governor of the Bank of England on 11 March 2008 to specify the inflation target as 2 per cent. measured by the 12-month increase in the CPI.
The remit of the Monetary Policy Committee (MPC) of the Bank of England sets a symmetric inflation target, in which an undershooting is taken as seriously as an overshooting.
The Bank of England has operational independence in meeting the inflation target set by the Government. It is not the Government's policy to comment on or have input into, individual interest rate decisions taken by the MPC.
Interest Rates: Borrowing
Mr. Havard: To ask the Chancellor of the Exchequer if he will bring forward proposals to (a) raise the limits and (b) review the interest rates on prudential borrowing by local authorities. [238054]
John Healey: It is for local authorities, under the Local Government Act 2003, to determine and keep under review the amount they can afford to borrow without Government support; and to choose which financial institution to borrow from.
Interest Rates: Mortgages
Chris Grayling: To ask the Chancellor of the Exchequer what the average interest rate payable on mortgages was in each of the last 10 years. [239892]
Ian Pearson: The Bank of England publishes the effective interest rate for outstanding UK mortgages for the period from 1999, available at:
This is the weighted average of all interest rates across each type of mortgage of the reporting banks.
The Office for National Statistics publishes the average interest rate for outstanding mortgages with UK building societies, for the period 1984 to 2007, available at:
Interest Rates: Small Businesses
Stephen Hammond: To ask the Chancellor of the Exchequer what factors HM Revenue and Customs took into account when setting the interest rate it charges to small businesses at 7.5 per cent.; and what consideration was made of the Bank of England base rate. [238550]
Mr. Timms: There is no rate of interest for small businesses specifically. Instead there are a number of tax specific rates. All interest rates charged and paid out by HMRC are determined by referenced formulae set out in legislation. This provides that the starting point for these interest rate formulae is the ‘reference rate’. This rate is an average of the basic lending rate applied by six of the UK’s banks.
HMRC recalculates its interest rates following any rate reduction announced by the MPC in line with the procedures laid down in legislation. As a result of this procedure, from 6 December the rate charged on late payments of the main taxes will reduce to 5.5 per cent.
In July HMRC published “Interest—working towards a harmonised regime” which consulted on harmonising and simplifying the rules for interest on tax paid late
and on repayments of tax overpaid. Responses to the July consultation informed the latest consultation on interest that was announced in the pre-Budget report. This seeks views on proposals for greater alignment of the interest rules across the different taxes, including using and tracking the bank of England base rate as a basis for setting HMRC interest rates.
Kaupthing Bank
Mr. Austin Mitchell: To ask the Chancellor of the Exchequer what proportion of the assets of Kaupthing Bank that were frozen in the UK belonged to Kaupthing, Singer and Friedlander (Isle of Man). [239285]
Ian Pearson: On 8 October, the Treasury made Landsbanki Freezing Order 2008 in order to freeze funds and financial assets relating to Landsbanki. Landsbanki is the only Icelandic bank which has been made the subject of a freezing order.
On the same day, 8 October, the FSA decided that Kaupthing Singer and Friedlander Ltd no longer met the FSA's threshold conditions and the firm went into administration.
Under UK insolvency law, KSF IoM ranks like any other creditor of KSF; KSF IoM will have been fully aware of this. It could have chosen to put its money elsewhere and to have diversified the deposits made rather than making a single large deposit, which concentrated the credit risk to which it was exposed.
Mr. Austin Mitchell: To ask the Chancellor of the Exchequer what level of protection applied to deposits with the Derbyshire (Isle of Man) upon its takeover by Kaupthing, Singer and Friedlander Ltd; what action the Government has taken against such deposits; whether any deposits have been transferred to Kaupthing, Singer and Friedlander (Isle of Man); and if he will make a statement. [239286]
Ian Pearson: Derbyshire Offshore (the trading name for Derbyshire Building Society’s Isle of Man subsidiary) was established in the Isle of Man in 1990 and was regulated by the Isle of Man Financial Supervision Commission. The transfer of Derbyshire Offshore to Kaupthing, Singer and Friedlander Isle of Man (KSF IoM) was a commercial decision for the firms concerned and a matter for the Isle of Man authorities including the financial regulator, Isle of Man’s Financial Supervision Commission.
Deposits with both Derbyshire IoM and KSF IoM were subject to the Isle of Man Deposit Compensation Scheme.
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