HC Deb 31 July 1997 vol 299 cc453-4W
Mr. Malcolm Bruce

To ask the Chancellor of the Exchequer if he plans to continue personal equity plans and tax-exempt special savings accounts beyond 1999; and if he will make a statement. [11469]

Mr. Geoffrey Robinson

My right hon. Friend the Chancellor announced in his Budget that a new individual savings account will be introduced in 1999. This will extend the principle of TESSAs and PEPs to encourage people, through tax reliefs, to raise the level of their long-term savings. Individuals, including PEP investors, will have the opportunity during 1999 to switch to the individual savings account, which will provide a tax-free environment for savings. Consideration is being given, in consultation with interested parties, to the scope of a tax-free environment for savings after 1999. A consultative document will be published later in the year.

Mr. Bruce

To ask the Chancellor of the Exchequer if he will estimate the number of individuals who have invested in personal equity plans where the value of the investment is (a) more than £1 million, (b) between £500,000 and £999,999, (c) between £100,000 and £499,999 and (d) between £25,000 and £99,999 and if he will make a statement. [11470]

Mr. Robinson

This information requested is not available. PEP investors do not have to give details of the plans they hold onto their tax office; and PEP plan managers are not required to list the current value of individual plans when making their returns to the Inland Revenue.

Mr. Bruce

To ask the Chancellor of the Exchequer what assessment he has made of the total effect of the tax reliefs on tax-exempt special savings accounts and personal equity plans on the aggregate level of savings in the United Kingdom; and if he will make a statement. [11471]

Mr. Robinson

Research suggests that most of the funds going into TESSAs do not represent new savings, with a considerable amount coming from other deposit accounts, but for PEPs there may be a somewhat greater element of new equity investment. The new individual savings accounts will be attractive to a wider range of savers. Extension to those with little or no financial savings at present should make them more effective in attracting new savings.