§ Mr. Deakinsasked the Chancellor of the Exchequer (1) which social benefits Her Majesty's Government intend to adjust so as to protect low-paid workers against the adverse effects of food price increases resulting from entry into the European Economic Community;
(2) to what extent he estimates wages and salaries in the United Kingdom will be increased in the transitional period if the United Kingdom joins the European Economic Community.
§ Mr. Patrick JenkinEntry into the European Economic Community should result in a faster improvement in living standards and thus should benefit workers generally. For low-paid workers there will be available the Government's policies for family support and other social benefits.
§ Mr. Arthur Lewisasked the Chancellor of the Exchequer whether, during the discussions held in the National Economic Development Council recently regarding the introduction of value-added tax and his assurance that this would not be imposed on food, apart from certain items at present charged with purchase tax, he dealt with the position of how these taxes will apply if Great Britain enters the European Economic Community; and whether he can now give an assurance that entry will not in any way mean the imposition of value-added tax on food.
§ Mr. HigginsAs the E.E.C. countries have not yet agreed on harmonisation of rates or coverage of their value-added taxes, member States are free to determine their own rates and coverage; entry would not, therefore, involve any obligation to impose V.A.T. on food.
§ Mr. Arthur Lewisasked the Chancellor of the Exchequer whether he will now publish in the OFFICIAL REPORT details of the fuel oil taxes in the countries of the European Economic Community, as compared with the 1p per gallon charged in Great Britain, in accordance with the details as sent by him to the hon. Member for West Ham, North under date of 7th June, 1971.
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§ Mr. HigginsYes.
TAXES ON HEAVY FUEL OIL IN THE E.E.C. Product W. Germany France Italy Belgium and Luxembourg Netherlands Fuel Oil per 100 Kilograms per hectolitre (hl)/100 Kilograms (100Kg) per 100 Kilograms per hectolitre (hl)100 Kilograms (100Kg) per 100 Kilograms Used for combustion purposes 2.50 Deutsch marks Domestic fuel oil no. 2:1.83 Francs/hl Special combustible oils Medium—30 Francs/hl (Luxembourg) 1.40 Florins Gas oil 5,400 Lire 45 Francs/100 Kg (Belgium) Other fuel oil exempt Other Other 10 Exempt— combustible oils Francs/l00Kg navigation and international air travel —heavy: 250 Lire —medium: 320 Lire —light 1: 370 Lire —light 2: 440 Lire for use in agriculture: (combustible fuel or motor fuel) Exempt Used as basic industrial materials Exempt Domestic fuel oil no. 2 with a flash point less than 120°c: 35.40 Francs/hl or Exempt* For use in petrochemistry:Exempt Exempt Exempt Other fuel oils: 27.00 Francs/l00Kg or Exempt* Others Lubricants: 38.85 Deutsch marks Motor fuel: Hydrocarbon research: 250 Lire As for combustion 1.40 Florins Domestic fuel oil no. 2 with a flash point less than 120°c: 35.40 Water works: 250 Lire Francs/hl Other: 27.00 Francs/l00Kg Electricity generation: 250 Lire Other fuel oils: 27.00 Francs/l00Kg Agriculture Domestic fuel oil no. 2: 1.83 Fixed motors: 250 Lire Francs/hl Other fuel oils: Exempt For making panels in wood fibre: 2,000 Lire Lubricants Domestic fuel oil no. 2 with a flash-point less than 120°c Motor testing: 2,000 Lire 35.40 Francs/hl Use in refineries (heavy oils): 175 Lire Other: 27.00 Francs/100 Kg Other fuel oils: 27.00 Francs/100 Kg Other: 1,000 Lire * This exemption is allowed to the products enumerated in the list on condition that they are used in refineries for the conduct of the vusiness. Note: In the United Kingdom the substantive rate of duty is lp per gallon. Repayment of duty is allowed on oil used in fishing boats and in lifeboats belonging to the Royal National Lifeboat In stitution and their ancillary tractors and gear: it is also allowed on heavy oils used as fuel for ships (other than pleasure yachts) in home waters and for certain horticultural purposes. There is relief for oils used as materials solvents, extractants, preservatives or finishes in the course of manufacture in this country of articles other than hydrocarbon oils. Imported oils used in approved refineries as raw material for chemical synthesis are exempt from duty.
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§ Mr. Arthur Lewisasked the Chancellor of the Exchequer whether he will publish in the OFFICIAL REPORT as much detailed information as may be available giving for 1968, 1969 and 1970 the direct United Kingdom investment abroad, excluding oil, insurance and banking, United Kingdom oil company net assets abroad, United Kingdom insurance company direct investment in the United States of America, portfolio investment, banking and commercial claims; and how much of these amounts in each instance relate to the countries in the European Economic Community.
§ Mr. HigginsGlobal estimates of the items referred to were published in the Bank of England Quarterly Bulletin for June, 1971. Such detailed information as is available for certain of these items has also been published. Details of the published sources are:
Detailed information on Published in Book values of direct overseas investment (excluding oil, insurance and banking), 1962 to 1968. Business Monitor M4—Overseas Transactions (published April, 1971). United Kingdom banks' external advances and overdrafts in sterling, 1963 onwards*. (A)—Table 25. (B)—Table 24. United Kingdom banks' external claims in non-sterling currencies, 1963 onwards. (A)—Table 20. (B)—Table 20. (A) Bank of England Statistical Abstract. (B) Bank of England Quarterly Bulletin, June. 1971. * EEC figures are as follows: end 1962, £13 million; end 1969, £21 million; end 1970, £28 million
§ Mr. Arthur Lewisasked the Chancellor of the Exchequer whether he is aware that the West German Government recently floated the Deutschemark without international consultation; and whether, in the current negotiations for Great Britain's entry into the European Economic Community, Her Majesty's Government will now press for freedom to float the £ sterling with similar lack of obligation to consult the countries of the Six.
§ Mr. HigginsThe action of the Federal German Government was taken after consultation with their Community partners. The matter raised in the second part of the Question does not arise in the accession negotiations.
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§ Mr. Skinnerasked the Chancellor of the Exchequer what tax relief is available to companies which incur expenditure on advertising circulars advocating entry to the Common Market.
§ Mr. Patrick JenkinSuch expenditure is allowable as a deduction in computing profits for tax purposes only if it is shown to have been incurred wholly and exclusively for the purposes of the company's trade.