§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer (1) if he will estimate the cost of introducing taper relief for capital gains tax for each year up to 2009–10; what margin of error is associated with such estimates; what assumptions underlie such estimates; and if he will make a statement; [46768]
(2) if he will estimate the reduction in Exchequer revenues which will result from the introduction of his policy of a taper relief on capital gains tax; and if he will make a statement. [46771]
§ Dawn Primarolo[holding answer 22 June 1998]The available information on the effect on Exchequer revenues of the capital gains tax package of reforms is as follows:
year £million (+)yield/(-)cost 1998–99 Negligible 1999–2000 -25 2000–2001 +25 For later years, the Exchequer effects will depend to a considerable extent upon movements in future asset prices, any behavioural changes and other factors. In the long term the aim is for the changes to be broadly revenue neutral. It is inappropriate to estimate the cost of taper relief in isolation from other elements of the reform package.
The assumptions for inflation and asset price growth used in calculating the revenue effects of these measures are consistent with the economic assumptions referred to on pages 108 and 109 of the March 1998 "Financial Statement and Budget Report" (FSBR, HC620 published on 17 March 1998). Equity prices are assumed to grow at the same rate as gross domestic product (GDP) at current market prices—"money GDP".
§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer if he will delay the implementation of capital gains tax taper relief for a period of one year to allow for further consultations on its effects and implications; and if he will make a statement. [46770]
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§ Dawn Primarolo[holding answer 22 June 1998]No. It is important that the benefits of the reforms flow through as early as possible.
The hon. Gentleman's amendments to the Finance Bill on this matter was discussed by a Committee of the Whole House on 29 April and rejected in a vote.
§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer which Ministers were involved prior to the March 1998 Budget in formulating the new policies on capital gains tax, including the taper relief on capital gains tax; and if he will make a statement. [46769]
§ Dawn Primarolo[holding answer 22 June 1998]The Chancellor is responsible for all Budget measures. He receives advice from his Ministerial team and officials as appropriate.
§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer how many written representations he has received on his 1998 Budget proposals on taper relief for capital gains tax; how many of such representations were(a) favourable and (b) unfavourable; and if he will make a statement. [46767]
§ Dawn Primarolo[holding answer 22 June 1998]Around 200 comments were received on the Budget proposals, of which approximately 80 mentioned taper relief. Seventy per cent. supported the principle of taper relief. There were varying comments on the detail.