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Written Answers
Thursday, 25th June 1998.
Rights of Audience in the Higher Courts
Lord Hogg of Cumbernauld asked Her Majesty's Government:
- When they will announce their proposals for modernising rights of audience in the higher courts.[HL2429]
The Lord Chancellor (Lord Irvine of Lairg): I have this morning published a paper, Rights of Audience and Rights to Conduct Litigation in England and Wales: The Way Ahead, copies of which have been placed in the libraries of both Houses. Comments are invited by 14 September 1998.
Poorer Families: Tax Changes
Lord Tebbit asked Her Majesty's Government:
- Whether the burden of tax upon the poorest families has risen since 1 May 1997; and[HL2089]
Whether the burden of tax upon average families has risen since 1 May 1997.[HL2090]
Lord McIntosh of Haringey: The available information, which shows tax payments for a couple with two children with earnings at multiples of median full-time earnings is given below.
The introduction of the Working Families Tax Credit in 1999 will be a significant help to low income families. For example, a one-earner couple with two children with half median earnings (£168.50 per week) will gain £18.68 a week from the introduction of the WFTC (11 per cent. of gross earnings).
The childcare tax credit within the WFTC will also provide substantial help for working families. A two-earner couple on median earnings, with two children and childcare costs of £80 per week will gain £46 per week towards this cost. No family with earnings less than £220 per week will pay income tax.
Income Tax, National Insurance, Child Benefit and Family Credit/Working Families Tax Credit for multiples of median full-time earnings.
| 50% | 75% | 100% | ||
| 1997-98 | ||||
| Gross Income | 161.50 | 242.25 | 323.00 | |
| Income Tax (net of Child Benefit and Family Credit) | -47.65 | 8.79 | 28.70 | |
| NICs | 11.19 | 19.27 | 27.34 | |
| Net Income | 197.96 | 214.19 | 266.96 | |
| Percentage of earnings | ||||
| Income tax | -29.51 | 3.63 | 8.89 | |
| NICs | 6.93 | 7.95 | 8.46 | |
| Income tax and NICs | -22.58 | 11.58 | 17.35 | |
| Net Income | 122.58 | 88.42 | 82.65 | |
| 1998-99 | ||||
| Gross Income | 168.50 | 252.75 | 337.00 | |
| Income Tax (net of Child Benefit and Family Credit) | -55.04 | 3.86 | 30.24 | |
| NICs | 11.73 | 20.16 | 28.58 | |
| Net Income | 211.81 | 228.74 | 278.18 | |
| Percentage of earnings | ||||
| Income Tax | -32.7 | 1.5 | 9.0 | |
| NICs | 7.0 | 8.0 | 8.5 | |
| Net Income | 125.70 | 90.50 | 82.54 | |
| 1998-99 | ||||
| Assuming tax and benefit measures announced in the Budget and | ||||
| due to be introduced in 1999 | ||||
| (MCA at 10%, abolition of employee NI entry fee, introduction of WFTC) | ||||
| Gross Income | 168.50 | 252.75 | 337.00 | |
| Income Tax (net of Child Benefit and WFTC) | -74.99 | -24.57 | 25.85 | |
| NICs | 10.45 | 18.88 | 27.30 | |
| Net Income | 232.44 | 257.84 | 283.25 | |
| Percentage of earnings | ||||
| Income Tax | -44.5 | -9.7 | 7.67 | |
| NICs | 6.2 | 7.5 | 8.10 | |
| Net Income | 137.9 | 102.0 | 84.1 | |
Notes:
1. Income tax payments are calculated on the basis that the households receive no tax reliefs other than the standard allowances and only have income from employment. All earners are assumed to pay Class 1 national insurance contributions at the contracted-in rate.
2. Earnings are taken to be the median gross weekly earnings of all full-time employees on adult rates with pay unaffected by absence. (Median earnings are more representative of the population as a whole than mean male full-time earnings.) The level of earnings in 1998-99 is based on a stylised assumption in line with the actual outturn for the year to January 1998.
3. Income tax includes Child Benefit, Family Credit and Working Family Tax Credit.
Lord Cocks of Hartcliffe asked Her Majesty's Government:
Whether they will encourage the Financial Services Authority to recommend that all financial services provided by banks which are members of the new single ombudsman scheme should be covered by the scheme; and[HL2290]
Whether they will encourage the Financial Services Authority to recommend that credit cards should be covered by the new single ombudsman scheme.[HL2291]
Lord McIntosh of Haringey: The Government intend that a single ombudsman scheme for financial services should be set up under the planned legislation to reform the financial services regulatory structure.
The scheme will have both a compulsory and a voluntary jurisdiction. The compulsory jurisdiction will apply to all firms which are authorised under the reform legislation, such as banks, building societies, insurance companies and investment firms. All of the regulated activities of these firms, such as taking deposits, entering into insurance contracts and dealing in shares will be brought within the compulsory jurisdiction. The Financial Services Authority will also be able to bring other activities of these firms within the compulsory jurisdiction where the legislation provides powers for these activities potentially to be regulated. These activities could include, for example, mortgage lending, subject to the Government's proposed review of the case for regulation.
The scheme's voluntary jurisdiction could apply to the financial services activities both of authorised firms, where these activities do not fall within the compulsory jurisdiction, and of other firms. Decisions on whether to offer the scheme's services to firms on a voluntary basis will be for the ombudsman scheme with the approval of the Financial Services Authority.
It will be possible to bring all credit cards offered in the UK and other financial services provided by banks within the jurisdiction of the ombudsman scheme. Where the provider is not authorised, or where an activity is not subject to the compulsory jurisdiction,
the ombudsman's jurisdiction will apply only with the agreement of the firm.
The draft legislation that the Government intend to publish for consultation in the summer will include the proposed statutory framework for the ombudsman scheme.
Lord Higgins asked Her Majesty's Government:
Lord McIntosh of Haringey: The new monetary policy arrangements are very clear. The Government have the overall responsibility for the economic objectives and they set the inflation target. The Bank of England's Monetary Policy Committee (MPC) has the operational responsibility for setting interest rates to achieve the inflation target.
Lord Gregson asked Her Majesty's Government:
Lord McIntosh of Haringey: The standing committee on preparations for EMU met for the second time on 20 May. A copy of the minutes of the meeting has been placed in the Library of the House. Government departments and other public authorities have been engaged in a wide range of preparations for the launch of the euro in other member states on
1 January 1999, especially to help businesses in the UK meet the challenges of responding to the change in the business environment across Europe. A copy of a booklet, EMU: Steps for 1999, published by the Treasury on 18 May, which describes these activities and which responds to recommendations made by the Business Advisory Group on EMU has also been deposited in the Library.
Copies of a series of 10 factsheets to help businesses, especially small and medium-sized companies, to prepare for the launch of the euro on 1 January 1999 were sent by Lord Simon to all Peers on 15 June. The factsheets are being distributed to businesses through a variety of channels, including trade and business associations and a dedicated telephone line.
Lord Desai asked Her Majesty's Government:
The Minister of State, Department of Trade and Industry (Lord Clinton-Davis): The Prototype Fast Reactor (PFR) at Dounreay was not a commercial reactor, it was built to develop east reactor technology. While the safe generation of electricity using this technology was the overall aim of the project, its principal objective was delivering the Fast Reactor Research and Development Programme. The through life cost for construction and operation of the PFR was £495 million and, UKAEA's estimate for the undiscounted cost of decommissioning is £488 million in a range of £259 million-£709 million. PFR generated a total of 9.3 terrawatt hours (Twh) of electricity from January 1975 until it was shut down in March 1994 and supplied 8.4 Twh to the grid worth about £230 million at current average pool prices, which offset part of the costs to date.
Whether they will encourage the Financial Services Authority to recommend that the American Express Bank credit card be included in the new single ombudsman scheme; and[HL2289]
Further to the remark by the Lord McIntosh of Haringey on 17 June (H.L. Deb., col. 1563), whether it is their view that short-term interest rates have any effect on the money supply; and, if so, how the independent operations of the Bank of England in affecting the money supply are controlled by the Treasury.[HL2372]
What was the outcome of the most recent meeting of the standing committee on preparations for European Monetary Union (EMU), and what preparations have been made by public authorities to prepare for the launch of the euro in other member states on 1 January 1999.[HL2428]
What has been the cost of maintaining the nuclear power plant at Dounreay, both in terms and per unit of electricity produced and supplied.[HL2200]
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