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Written Statements

Volume 475: debated on Wednesday 14 May 2008

Written Ministerial Statements

Wednesday 14 May 2008

Treasury

ECOFIN

The Economic and Financial Affairs Council will be held in Brussels on 14 May 2008. Items on the agenda are as follows:

Quality of Public Finances: Efficiency of Public Expenditure on Social Transfers and Education

Member states will be invited to adopt Council conclusions on the quality of public finances following a discussion at the informal ECOFIN in Brdo, Slovenia in April. This builds on conclusions on the quality of public finances agreed under the German and Portuguese presidencies in 2007.

Western Balkans Investment Framework

Member states will be invited to adopt Council conclusions on the next steps on the Western Balkans investment framework. Progress on the investment framework, which will bring together the donor funding streams for the Western Balkans, is a priority for the Slovenian presidency. The UK supports work on the framework, which was discussed at the informal ECOFIN.

Financial Services

i) Financial Stability Arrangements: Supervision, Including an Update of the Roadmaps

Following discussions at the informal ECOFIN, member states will be invited to agree a unified set of Council conclusions on arrangements on financial stability and supervision. The EFC has prepared the draft Council conclusions on supervision and an update of the roadmaps on “Review of the Lamfalussy Process”, “Strengthening EU Arrangements for Financial Stability”, and “On Actions Taken in Response to the Financial Turmoil”.

ii) Communication on Financial Education

The Council will be asked to agree to draft Council conclusions on financial education, which suggest some initiatives and practical assistance for helping member states to improve the levels of financial education within their countries.

iii) White Paper on Mortgage Credits

Member states will be invited to agree to draft Council conclusions on a possible single market for mortgages. The UK supports voluntary initiatives that may improve EU market efficiency rather than harmonising consumer protection rules.

Dialogues with Third Countries: Economic and Financial Issues

The Council will receive an oral update from the Commission on the state of play of the dialogues with third countries, and it will discuss the economic and financial issues of the EU-US summit preparation and the ASEM Finance Ministers Meeting.

Taxation

i) Indirect Taxation: Fight Against Tax Fraud

The Commission will debrief the Council orally on the state of play of the consideration of measures to combat tax fraud, as requested by the December 2007 ECOFIN. member states will also be asked to agree Council conclusions on VAT fraud. The UK is strongly supportive of work that will help in the fight against missing trader intra-community (MTIC) and other VAT fraud, while remaining committed to minimising the burdens on legitimate businesses.

ii) Savings Taxation

The Commission will provide an informal oral report on the functioning of the savings tax directive in view of recent developments involving Liechtenstein investment vehicles and following the request of the March ECOFIN Council. The UK strongly supports the Commission’s continued dialogue with third countries with a view to bringing them into the savings tax directive.

iii) Good Governance in the Tax Area

Member states will be invited to agree draft conclusions containing a specific provision on good governance in the tax area, which is to be added to relevant agreements to be concluded by the Community and its member states with third countries.

Strategy for the Evolution of the Customs Union

Following the presentation by the Commission of its communication “Strategy for the Evolution of the Customs Union” in April, marking the 40-year anniversary of the customs union, the Council will be invited to adopt draft Council conclusions prepared by the customs working party.

Preliminary Draft General Budget 2009

The Commission will present the preliminary draft general budget (PDB) for 2009 to the Council. The presentation and publication of the PDB signals the start of the annual budget procedure, of which the next step will be the “first reading” by the Council in July 2008.

Communities and Local Government

First Time Buyers

This statement sets out the steps we are taking to provide more opportunities for first-time buyers to access the housing market.

The vast majority of people in this country aspire to owning their own home. People value the security of homeownership, the sense of having a stake in the community, and the chance to build up assets.

Rising prosperity in this country over recent years, with high employment and low interest rates, has meant that more people have been able to aspire to homeownership. Since 1997, there are 1 million more households who own their own home. One hundred and ten thousand have benefited from our low cost home ownership programmes, enabling them to get a first foot on the property ladder.

However, a fundamental mismatch between supply and demand has now put house prices far beyond the reach of many, particularly first-time buyers. Ten years ago, the average house price was just 3.5 times the average income. Now, the average house costs more than seven times the average income. And while interest rates have fallen, the result is still that fewer first-time buyers are able to enter the market. Not only is this a potential brake on aspiration and social mobility, it may also cause stagnation in the rest of the market.

The long-term solution is to build more homes to overcome this housing shortage. This is why we are embarking on a major housing supply programme under which we want to see outputs rising to 240,000 new homes a year by 2016. But in the short-term, we want to do more to ensure that more potential first-time buyers are able to enter the property market.

The current market situation makes this more difficult. Last week we announced a package of measures to help support home owners, including measures to ensure that financial advice and support is available for borrowers who may be facing difficulties with their mortgage.

But we also want to see mortgages available for those who can sustain home ownership, and at the same time we want to support housebuilding.

Through our shared equity schemes, we already aim to help 75,000 more householders on to the property ladder over the next three years. Today I am announcing how we can go even further than that by focusing spending to support the housing market and those looking to get on the housing ladder. In the Budget the Government announced two new open market homebuy products offering greater affordability to first-time buyers. We have also announced a purchase assistance grant of £1,500 to the first 2,000 purchasers to help them with the costs of moving into a new home.

Today I am announcing an expansion of the eligibility criteria for these products so that more people can benefit. It is right that we continue to give priority to key workers and tenants in the social rented sector. But from today both the new build homebuy and open market homebuy products will also be open to all first-time buyers with a household income below £60,000 who could not otherwise afford to buy. This will allow, for instance those who work in public services but who are employed by the private sector, to access this support.

In addition we are focusing up to £100 million spending to expand open market homebuy to help an additional 2,500 first-time buyers purchase a newly built home in 2008-09. Purchasers will be able to apply to use the new shared equity products announced on the 1 of April to purchase a new-build home of their choice on the open market. The new products help to improve affordability to buyers by offering an equity loan of up to 50 per cent. of property value. This scheme will make a wide choice of new property open to prospective buyers while also helping to support the new build market and maintain housing supply.

This change will more than double the number of families helped by the new open market homebuy products this year.

Alongside this, we are maintaining our commitment to deliver much needed social rented homes, keeping up delivery in 2008-09 and with a target of 45,000 such homes in 2010-11.

The current market also provides opportunities for housing associations to buy new properties from housebuilders at competitive prices. The Housing Corporation has already been working with housing associations and housebuilders to take advantage of these opportunities. In the first three months of the year, housing associations bought 1,800 homes from developers through the national affordable housing programme. Nearly 840 of these were for low cost home ownership and 935 were for social rent.

I have today asked the Housing Corporation to use flexibilities available to them in their current programme to fund more such purchases where they represent good value for money. The corporation estimates that it may be able to fund an additional £200 million of direct purchases from housebuilders in the current financial year, helping yet more families into low cost home ownership and rented accommodation.

A marketing campaign for all the homebuy products will be launched in partnership with lenders and housing associations in order to raise awareness of the new criteria. Government will work with the TUC and individual trade unions to promote these opportunities to their members.

Following Government’s meeting with the Council of Mortgage Lenders and lenders, we will continue to work with a range of lenders to support a fair and well functioning UK mortgage market. We will also work with lenders to encourage them to develop their own shared equity products.

Defence

Mr. Baha Mousa

In my statement of 25 January (Official Report, columns 65-66WS), I promised to make an announcement once I had reached a decision on what form any future inquiry into the circumstances surrounding the death of Mr Baha Mousa in Iraq in September 2003 might take.

After wide consultation and after considering the representations that I have received, and with the full support of the military chain of command, including the Chief of the Defence Staff and the Chief of the General Staff, I have decided that the right thing to do is to establish a public inquiry under the Inquiries Act 2005. The inquiry will examine the circumstances surrounding the death of Baha Mousa. The terms of reference and other details will be made public once they have been established in accordance with the provisions of the Act, and the inquiry report will be published.

This reinforces my determination, and that of the Chief of the General Staff, to do everything we can to understand how it came to be that Mr Mousa lost his life. The Army has no wish to hide anything in this respect. It has looked at itself very critically since 2003, and has made a number of significant changes that were enumerated in Brigadier Aitken’s report of January this year. It nevertheless remains anxious to learn all the lessons that it possibly can from this disturbing incident.

Overall, the conduct of tens of thousands of our people in Iraq has been exemplary; it is a tiny number who have caused a stain on the reputation of the British Army. But that does not mean we can allow these events to pass without looking into them thoroughly.

I hope this independent inquiry will reassure the public that no stone has been left unturned. The Army and the Ministry of Defence will be giving the fullest co-operation to this inquiry.

Justice

Oakhill Secure Training Centre

In my written ministerial statement of 12 July 2007 (Official Report, col. 69WS), I undertook to update the House in relation to Oakhill secure training centre. The Ministry of Justice and the Department for Children, Schools and Families have joint responsibility for youth justice. My right hon. Friend the Member for Stretford and Urmston (Beverley Hughes) is the lead minister for the Department for Children, Schools and Families.

My right hon. Friend and I wish to inform the House that the Youth Justice Board has decided to issue rectification notices to STC Milton Keynes Limited, the contractor responsible for the delivery of services at Oakhill STC. The contractor will be required to remedy the identified deficiencies. Rectification will include improvement in the number and training of staff provided and the education service.

This is the latest step taken by the Youth Justice Board in its management of this contract to ensure that the contractor delivers the services specified. The safety of the young people in the STC is of paramount importance and the YJB will be monitoring the position closely.

Leader of the House

Draft Legislative Programme 2008-09

I am pleased to announce that I am today publishing “The Government’s Draft Legislative Programme 2008-09—Preparing Britain for the Future” (CM7372). The details of which will be available at www.commonsleader.gov.uk/draftprogramme and in the Vote Office later today.

The website will contain details of regional events being hosted by regional Ministers (www.commons leader.gov.uk/regionalactivity). It will also contain a section where the public can comment on the Government’s proposals (www.commonsleader.gov.uk/yourvoice). The consultation will close on 6 August 2008.

A summary of the programme will also be available at www.direct.gov.uk/draftprogramme.

I will announce shortly the date when Members will have the opportunity to debate this on the Floor of the House.

Prime Minister

Prison Service Pay Review Body

I have reappointed Jerry Cope for a second term as chairman of the Prison Service Pay Review Body, commencing April 2008. This reappointment has been conducted in accordance with the Office of the Commissioner for Public Appointments guidance on appointments to public bodies.