Universal Credit
Stephen Timms: To ask the Chancellor of the Exchequer for what reason he has decided to extend the working tax credit hours rule but not to impose an hours rule in respect of receipt of universal credit. [85096]
Mr Gauke: Under the current tax credits system, couples with children can claim the working tax credit, if one partner works 16 hours. Lone parents must work at least 16 hours to qualify for the working tax credit. This change makes the system fairer by reducing the disparity in the number of hours which lone parents and couples are obliged to work.
In 2013, universal credit will provide a new single system of means-tested support for working-age people who are in or out of work. The key aim of universal credit is to move claimants into work, more work or better paid work (and so towards self-sufficiency). To achieve that aim, a single taper rate and a simple system of earnings disregards will allow people in work to see clearly how much support they can get while making sure that people considering a job will understand the advantages of work, thereby smoothing the transition into work, and encouraging progression in work.
While there will be no hours rules under universal credit, the clear financial incentive provided by universal credit will be backed up by a strong system of conditionality; unemployed people who can work will be required to take all reasonable steps to find and move into employment. The Government intends to apply conditionality at a higher level of income under universal credit than it does under the current benefits system. This will enable the Government to apply work-related requirements to claimants who are in some work but who we expect to earn more than they currently do, in order to reduce
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their dependency on benefits. This will help people along a journey toward financial independence from the state.
Building Societies
Mr Jim Cunningham: To ask the Chancellor of the Exchequer what steps his Department has taken to ensure the interests of all building societies are taken into account in his Department's financial strategy. [84931]
Mr Hoban: Ministers and officials meet regularly with the Building Societies Association and individual building societies to discuss a range of policy issues.
The Government have been working with building societies to ensure a positive outcome in European discussions on the Capital Requirements Regulation.
Building societies have been consulted on the draft Financial Services Bill, which requires the new regulatory authorities to publish an analysis of how draft rules may affect mutual and non-mutual firms differently, and makes minor amendments to the Building Societies Act.
Building societies will be consulted on any legislation introduced to implement the findings of the Independent Banking Commission report. The Government will announce their response to the report by the end of this year.
Business: Loans
Stuart Andrew: To ask the Chancellor of the Exchequer what steps he is taking to reduce the cost of bank lending and credit for businesses. [84801]
Mr Hoban: At the autumn statement the Chancellor of the Exchequer announced the launching of a package of credit easing measures to help improve the flow of credit to businesses. The National Loan Guarantee Scheme will lead to reductions in the cost of bank loans for smaller businesses while the Business Finance Partnership will deliver additional finance for mid-sized businesses through non-bank lending channels.
Child Care Tax Credit
Stephen Timms: To ask the Chancellor of the Exchequer how many households in receipt of tax credits whose total weekly working hours are under 24 are in receipt of childcare tax credit; and how much they receive on average. [85095]
Mr Gauke: The working hours requirements for the child care element of working tax credit are 16 hours for a lone parent or 16 hours for each member of a couple (unless one member of the couple is incapacitated, in hospital or in prison). Therefore, apart from a negligible number of couples, all households working fewer than 24 hours and benefiting from the child care element of WTC would be lone parents.
The number of lone parents benefiting from the childcare element of working tax credit and working fewer than 24 hours as of April 2011 was 127,000. The average amount they received was £66 a week. These households would not be affected by the policy announced
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by the Government in the spending review of 2010 to restrict working tax credit for couples with children to those who work a combined minimum of 24 hours (with one member working at least 16 hours).
Employment Agency Standards Inspectorate
John McDonnell: To ask the Chancellor of the Exchequer pursuant to the answer of 5 September 2011, Official Report, column 352W, on minimum wage, what recent discussions he has had with ministerial colleagues in the Department for Business, Innovation and Skills on relocation of the Employment Agency Standards Inspectorate to the national minimum wage enforcement team in HM Revenue and Customs; and whether any (a) voluntary or (b) compulsory redundancies would result from such a relocation. [77702]
Mr Gauke [holding answer 2 December 2011]:Treasury Ministers and officials have discussions with a wide variety of organisations in the public and private sectors as part of the process of policy development and delivery.
The Treasury publishes a list of ministerial discussions with external organisations, available at:
http://www.hm-treasury.gov.uk/minister_hospitality.htm
Mortgage Express
George Eustice: To ask the Chancellor of the Exchequer how many buy-to-let properties have been repossessed by Mortgage Express in the last 12 months. [84620]
Mr Hoban: The Government do not publish data on arrears and repossessions. The Council of Mortgage Lenders collects data on buy-to-let repossessions across the UK. Specific repossessions data for Mortgage Express is not publically available.
George Eustice: To ask the Chancellor of the Exchequer how many cases concerning Mortgage Express have been referred to the Financial Ombudsman Service in the last 12 months. [84621]
Mr Hoban: The matter raised is for the Financial Ombudsman Service (FOS), whose day-to-day operations are independent from Government. The FOS publishes complaints data on their website at:
http://www.ombudsman-complaints-data.org.uk
Social Justice Committee
Michael Dugher: To ask the Chancellor of the Exchequer how many meetings of the Social Justice Committee Ministers in his Department have attended since its establishment. [85281]
Miss Chloe Smith: Information relating to the proceedings of Cabinet Committees, including when and how often they meet and which Ministers have attended, is generally not disclosed as to do so could harm the frankness and candour of internal discussion.
Taxation
Nick de Bois:
To ask the Chancellor of the Exchequer what recent assessment he has made of the
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likely effect on the economy of an increase in interest rates. [84789]
Miss Chloe Smith: An increase in interest rates would be particularly damaging to an economy with the UK's level of indebtedness. A one percentage point rise in the cost of government borrowing would add around £7.5 billion to debt interest payments by 2016-17. A one percentage point rise in effective mortgage rates would add £10 billion a year to households' mortgage interest payments.
Taxation: North-west England
Hazel Blears: To ask the Chancellor of the Exchequer what estimate he has made of the number of people in (a) Salford and Eccles constituency and (b) the North West who are subject to the (i) higher and (ii) additional rate of income tax. [84902]
Mr Gauke: An estimated 3.74 million taxpayers are liable to income tax at the 40% higher rate and 308,000 taxpayers are liable to income tax at the 50% additional rate in the United Kingdom in 2011-12.
In the north west, 318,000 taxpayers are liable to income tax at the 40 per cent higher rate and 18,000 taxpayers are liable to income tax at the 50% additional rate in the 2011-12
These and estimates for other UK Government Office Regions are published on the HMRC website in tables 2.1 and 2.2 which are available at the following addresses:
http://www.hmrc.gov.uk/stats/income_tax/table2-1.pdf
http://www.hmrc.gov.uk/stats/income_tax/table2-2.pdf
Reliable estimates for taxpayer marginal rates are not available at the parliamentary constituency level, due to greater uncertainties in projections for small geographical areas and small sample sizes.
These estimates are based on the 2007-08 Survey of Personal Incomes, projected using economic assumptions consistent with the Office for Budget Responsibility's March 2011 economic and fiscal outlook.
Estimates of income and tax by parliamentary constituency for 2007-08 and preceding years are available in table 3.1 5:
http://www.hmrc.gov.uk/stats/income_distribution/menu-by-year.htm
VAT: Business
Robert Halfon: To ask the Chancellor of the Exchequer if he will consider extending VAT exemptions for VAT-registered businesses in the construction industry building new properties to small firms in other sectors; and if he will make a statement. [84799]
Mr Gauke: It is not possible to extend existing VAT zero rating to the construction of commercial properties under EU law.
However, it should be remembered that a VAT registered business that is charged VAT on the construction of a new property will be able to recover the tax, subject to the normal VAT rules.
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Gordon Banks: To ask the Chancellor of the Exchequer what progress has been made by the Office of Tax Simplification in reviewing the VAT threshold for business registrations. [85318]
Mr Gauke: The information requested falls within the responsibility of the Office of Tax Simplification (OTS), and I have asked the OTS to reply.
Letter from John Whiting, dated 2 December 2011:
Gordon Banks MP has submitted a written parliamentary question about the VAT threshold for business registrations. The question was:
“To ask Mr Chancellor of the Exchequer, what progress has been made by the Office of Tax Simplification in reviewing the VAT threshold for business registrations.”
The OTS's interim report on small business taxation was published on 10 March 2011. The report included a short section (paragraphs 4.61-4.66) on VAT, which did address the question of the registration threshold. Our conclusion was: “On balance we think the registration threshold should stay as it is, though it is an area that is worth further study.”
The Chancellor responded to this report in Budget 2011, and commissioned the OTS to look into tax administration in their final report on small business taxation. On 9 May 2011, the Exchequer Secretary to the Treasury wrote to the OTS Chairman, Rt Hon Michael Jack, outlining the Government's response and setting out priorities for the next stage of the Office's work in more detail(1).
(1) This letter has been published on the OTS website:
http://www.hm-treasury.gov.uk/d/ots_xstletter_small_business_tax_review_090511.pdf
As set out in the Exchequer Secretary's letter, the remit of the work on tax administration will require the OTS to “examine closely small businesses1 experience of tax administration and their contact with HMRC at key stages of their annual cycle” and to “give specific consideration of the issues involved in starting and growing a new business.” The terms of reference for this work are attached in the annex of this document.
Since the interim report on small business taxation, the OTS has been gathering evidence and conducting research to determine the areas of tax administration that ought to be prioritised. As highlighted in the interim report, the OTS is interested in the administrative difficulties, including those related to VAT and international trade, which pose particular problems for small businesses. The operation of VAT registration is, therefore, very much within the remit, although we understand that HMRC is already working hard to improve the registration process. The OTS has not, however, been asked to review the VAT registration threshold limit.
The OTS has been asked to deliver recommendations on tax administration for small business ahead of Budget 2012. We would be happy to inform the questioner when the report is published.
I hope this is helpful, and would like to thank Mr Banks for his interest in our work.
VAT: Charities
Andrew Rosindell: To ask the Chancellor of the Exchequer what his policy is on reviewing the charging of irrecoverable value added tax for charities providing healthcare services; and if he will make a statement. [84685]
Mr Gauke: HM Treasury officials are currently reviewing the VAT position of charities providing health care services and discussions between the sector and the Department are ongoing.
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Welfare Tax Credits: Uprating
Rachel Reeves: To ask the Chancellor of the Exchequer if he will estimate the cost to the public purse of uprating tax credits using a consumer prices index level of (a) 2.5, (b) 3, (c) 3.1, (d) 3.5, (e) 4, (f) 4.3, (g) 4.5, (h) 4.6, (i) 4.9, (j) 5.1 and (k) 5.2 per cent. in 2012-13. [82750]
Mr Gauke: As of the June Budget 2010, most tax credit elements are uprated by CPI each year. By convention, the CPI for September 2011 would be used to uprate these elements in 2012-13. The official ONS estimate for CPI for September 2011 is 5.2%.
The following table gives the estimated savings against this baseline for 2012-13 if CPI were to be at the specified levels.
| Savings in 2012-13 of different uprating percentages in 2012-13 for the elements that are currently uprated by CPI | |
| Uprating | £ million |
In this comparison, we have assumed the following tax credit elements are uprated by CPI in 2012-13:
Disability element
Severe disability element
Child element
Disabled child element
Severely disabled child element
This answer assumes the couple and lone parent elements of working tax credit are frozen in 2012-13, as announced in the autumn statement 2011. In addition, the basic and 30 hour elements of working tax credit are frozen for three years from 2011-12, as announced at spending review 2010.
Working Tax Credit
John Mann: To ask the Chancellor of the Exchequer how many people receive working families tax credit in each constituency; and what the total amount paid was. [84846]
Mr Gauke: The latest information on the number of households in receipt of child tax credit and working tax credit and average award sizes in each constituency can be found in table 3 of the HMRC statistical publication “Child and Working Tax Credits Statistics: finalised annual awards 2009-10-geographical analysis”, available at:
http://www.hmrc.gov.uk/stats/personal-tax-credits/cwtc-geog-final-awards-may11.pdf