§ Sir John WheelerTo ask the Secretary of State for the Home Department if he has completed his review of the ITV levy rates; and if he will make a statement.
§ Mr. Kenneth BakerOn 1 January 1990 a mixed levy on profits and advertising revenue was introduced, with the intention of recovering in the 1990–92 ITV contract extension period broadly the same yield as would have arisen under the 66.7 per cent. levy on domestic profits which operated until 1986, other things being equal.
Although advertising revenue is likely to rise in real terms in 1992, to date it has been considerably lower than was expected when the new rates were set. This means that over the three years the levy is likely to raise more than we intended. I therefore propose to adjust the levy rates for the final year of the levy's existence in its current form. The free slice on net advertising revenue—NAR—will be raised from £15 million to £25 million and the rate of NAR levy reduced from 10 to 2.5 per cent. The levy on profits will remain unchanged.
These changes will take effect once the necessary regulations have been approved by both Houses of Parliament.