§ 10. Sir Peter Fry
To ask the Chancellor of the Exchequer what plans he has to extend exemptions proposed for the new tax on insurance and assurance contracts.
§ Sir Peter Fry
I understand the need for few exemptions, but will my right hon. Friend bear in mind the difficulties that some health care bodies will experience, such as the Hospitals Guild in Northampton, which covers my constituency? That is a non-profit-making body, which passes on most of its surplus to the national health service and to charity. The effect of the tax will be to reduce that help considerably. Most of all, it will cause great difficulties in accounting for the tax on low premiums, some of which are as low as 20p a week. Does my right hon. Friend agree that there is a case for exempting those low premiums?
§ Sir John Cope
Of course I have received representations on that matter, but, as I made clear in the debate on Tuesday, we believe that it is best to apply the tax at a low rate over a wide area, rather than to pick and choose between different types of general insurance.
§ Ms Eagle
Will the Minister admit that the new tax is incredibly regressive and that it hits those who live in high-crime areas, who have much higher premiums as a result of suffering more crime? What can be more unfair than a tax on premiums, which taxes people's security? The Government are making money from people's fears.
§ Mr. Shersby
Will my right hon. Friend give careful consideration to continuing the exemption of tax on premiums for private health insurance for higher rate 1021 taxpayers who are pensioners? Is he aware that those pensioners relieve the national health service of a substantial burden of expenditure each year?
§ Sir John Cope
What my hon. Friend says is quite right. However, I do not think that it affects the insurance premium tax.