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Written Answers to Questions

Thursday 28 February 2002

TREASURY

Euro

11. Tom Brake: To ask the Chancellor of the Exchequer what representations he has received from the tourism industry on the impact of the level of the pound against the euro since 1997. [35752]

Ruth Kelly: The Chancellor and other Treasury Ministers receive regular representations from across the business community on many issues and we value their insights. The Government fully appreciate that the weakness of the euro, together with a sharp slowdown in the world economy last year, has made conditions difficult for tourism and other exporting industries.

The Government's commitment to helping the tourism industry has been underlined by Monday's announcement of the unique package of match funding with the industry for promotion of the UK overseas. This 20 million package means than an extra 38 million has now been granted from the reserve, in support of tourism promotion, since the start of foot and mouth. This is at a time of great economic pressure.

18. Mr. Nicholas Winterton: To ask the Chancellor of the Exchequer what assessment he has made of the performance of the euro since 1 January. [35761]

Ruth Kelly: It is not appropriate for the Government to comment on day-to-day developments in the foreign exchange market. The Government are pleased that the euro area is experiencing a broadly smooth changeover.

29. Mr. Hopkins: To ask the Chancellor of the Exchequer what recent discussions he has had with his German counterpart on the European single currency.[35774]

Ruth Kelly: The Chancellor has frequent discussions on a wide range of issues with his European counterparts.

Working Families Tax Credit

12. Mr. Pike: To ask the Chancellor of the Exchequer how many families in the north-west are receiving working family tax credit. [35753]

Dawn Primarolo: There are currently more than 181,000 families in the north-west benefiting from WFTC.

Voluntary and Community Sectors

13. Vera Baird: To ask the Chancellor of the Exchequer what steps he is taking to support the voluntary and community sectors. [35754]

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Mr. Andrew Smith: We value greatly the contribution of the voluntary and community sectors and have provided extensive support through a variety of fiscal and other measures.

Competitiveness

14. Mr. Syms: To ask the Chancellor of the Exchequer if he will make a statement on policy measures he intends to take by way of taxation to improve the competitiveness of the UK economy.[35756]

21. Mr. Tom Harris: To ask the Chancellor of the Exchequer what fiscal measures he is taking in relation to the productivity gap between Britain and her main European competitors. [35765]

Dawn Primarolo: This Government have made significant progress in creating a modern corporate tax regime, providing long-term stability and the best possible environment for investment. The UK now has its lowest ever corporation tax rate, and the lowest rate of any major industrialised nation.

The Pre-Budget Report announced new measures to further encourage growth and improve competitiveness, including: further reduction in the CGT rate for business assets; an R&D tax credit for large companies; and a doubling of the size limit for the Enterprise Management Incentives employee share option scheme.

15. Sir Michael Spicer: To ask the Chancellor of the Exchequer if he will make a statement on the impact of productivity on the UK's competitiveness. [35757]

Mr. Andrew Smith: The Government recognise the importance of productivity for competitiveness and is raising the sustainable rate of productivity growth through both macroeconomic stability and measures to promote competition, enterprise, skills and investment.

22. Mr. Barker: To ask the Chancellor of the Exchequer what assessment he has made of the impact that changes in regulation have had on the competitiveness of UK industry since 1997. [35766]

Dawn Primarolo: The Government have not made an aggregated assessment of the impact of regulation since 1997. Establishing such an assessment would undoubtedly involve significant practical difficulties.

The impact of changes to a single regulation is considered at the policy development stage. A Regulatory Impact Assessment is completed for regulatory proposals unless the regulation has no or negligible costs. A RIA sets out the impact, in terms of costs, benefits and risks of the proposed regulation which could affect businesses, charities or the voluntary sector. This process helps policy makers to think through the consequences of proposals, improving the quality of advice to Ministers and encouraging informed public debate.

Where Ministers choose a regulatory option, they must be satisfied that the benefits justify the costs.

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Debt Relief

16. Ann McKechin: To ask the Chancellor of the Exchequer what assessment he has made of the impact of the heavily indebted poor countries' debt relief process in delivering a sustainable exit from debt for eligible countries. [35759]

Ruth Kelly: The UK continues to work hard to ensure that the heavily indebted poor countries (HIPC) initiative delivers an exit from unsustainable debt for eligible countries. We also call on other countries to follow our leads on bilateral policies, such as 100 per cent. relief at decision point, and in holding payments in trust for those countries yet to receive debt relief. Already 25 countries have qualified for debt relief, and they will benefit from over $60 billion in debt reduction, which will bring their debts to below the developing countries average.

Indeed, just last week Ghana reached decision point qualifying for $3.7 billion of debt relief from the international community, and the UK is playing its part writing off over 200 million of debt owed by Ghana.

At their meetings in November last year, both the International Monetary and Financial Committee (IMFC) and the IMF and Development Committee of the World Bank and the IMF, recognised that lower global growth prospects and declining terms of trade are likely to adversely affect many low-income countries. The IMFC, chaired by the Chancellor, called on the IMF, in close collaboration with the World Bank, to respond flexibly and proactively to the needs of Heavily Indebted Poor Countries (HIPCs), including through additional concessional financing and debt relief where appropriate.

Dr. Tonge: To ask the Chancellor of the Exchequer what plans he has to discuss the reform of the HIPC initiative to ensure that debt sustainability is consistent with achieving the 2015 development goals at the Financing for Development Conference in Mexico in March. [39254]

Ruth Kelly: The UK Government continue to work hard to ensure that the heavily indebted poor countries (HIPC) initiative is a success and that it delivers a robust exit from unsustainable debt for eligible countries. The UK has been pushing to ensure that both donor countries and the international financial institutions respond flexibly and proactively to the needs of HIPCs in the current economic climate, and help those HIPCs that have yet to benefit from debt relief (such as those in conflict). In addition, the UK has pressed for all countries participating in the Financing for Development Conference in Monterrey, Mexico in March, to agree that future reviews of debt sustainability should also bear in mind the impact of debt relief on progress towards the achievement of the development goals contained in the Millennium Declaration (as can be seen from the draft Monterrey Consensus outcomes document, available at http://www.un.org/esa/ffd/).

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Dr. Tonge: To ask the Chancellor of the Exchequer what plans he has to discuss greater and faster debt relief with (a) the International Monetary Fund, (b) the World Bank and (c) the regional development banks.[39253]

Ruth Kelly: The UK Government have consistently been at the forefront of the international debate on debt relief issues, and have repeatedly pushed for the process to be speeded up.

Out of 42 HIPCs in total, the UK Government are pleased that 25 have already reached decision point. However, most of the remaining countries are in conflict or have governance problems. For this reason the UK Government argued strongly last year for the creation of an International Monetary Fund post-conflict assistance account, and the UK is the first country to make a contribution.

This account will help these countries to make progress towards peace, good governance and a sound economic framework so that they can secure the full benefits of debt relief under the HIPC initiative.

Moreover, in November last year, in his role as chair to the International Monetary and Financial Committee of the International Monetary Fund, the Chancellor urged the World Bank and IMF to update their debt sustainability analyses in light of the global economic slowdown and declines in terms of trade. We should be proactive and flexible in order to supply additional debt relief at completion point for HIPCs, to ensure that the initiative delivers a robust exit from unsustainable debt.

The United Nations Financing for Development Conference in Monterrey, Mexico in March and the spring meetings of the International Monetary Fund and the World Bank in April will provide an opportunity for the UK Government to discuss greater and faster debt relief with international financial institutions.

Dr. Tonge: To ask the Chancellor of the Exchequer what plans he has to discuss his proposal to hold the debt repayments of those countries without agreed poverty reduction strategy papers in a trust until a PRSP is agreed with other donor countries at the Financing for Development Conference in Mexico in March. [39255]

Ruth Kelly: The UK Government continue to use international meetings to push other donor countries to follow the UK's lead on its Xhold in trust" policy, and hold all debt payments in trust for the day they can be returned to fund poverty reduction for all countries still to secure debt relief under the heavily indebted poor countries (HIPC) initiative because of civil wars, external conflict or the absence of a poverty reduction programme. We also urge other countries to continue to help those heavily indebted poor countries (HIPCs) that have yet to benefit from debt relief by providing them both technical and financial assistance on concessional terms and this year, we have spent 130 million on technical advice and capacity building, to support the PRSP process.

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Dr. Tonge: To ask the Chancellor of the Exchequer what plans he has to discuss the reform of poverty reduction strategy papers to take account of the financial resources required to achieve the 2015 development goals at the Financing for Development Conference in Mexico in March. [39256]

Ruth Kelly: The UK Government have been at the forefront of pressing for the development of Poverty Reduction Strategy Papers as a key element of the HIPC debt relief process. PRSPs already provide an excellent framework for countries to set out their own spending priorities and needs, in order to achieve country owned goals, including the Millennium Development Goals.

However, so far only 10 full PRSPs have been prepared although more than another 30 are under preparation. At the Financing for Development Conference the UK Government will continue to press for the development of well designed and costed PRSPs in all eligible countries. The UK Government will also continue to be calling for a substantial increase in development assistance in order to provide the financing required to meet the Millennium Development Goals.


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