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Written Statements

Volume 488: debated on Tuesday 3 March 2009

Written Ministerial Statements

Tuesday 3 March 2009


Government Infrastructure Investment

I am announcing Government action today to ensure vital PFI infrastructure projects will go forward as planned despite current financial market conditions, so they can support jobs and the economy.

This action will ensure that crucial and valuable public investment will not be disrupted by problems in the financial markets. In total, £13 billion of public investment in procurement will be safeguarded. This protection will assure the future of a broad range of public infrastructure projects including £3.5 billion of waste treatment and environmental projects, £3.1 billion of transport projects and £2.4 billion of schools projects. It will also avoid the significant delays which would be entailed by switching these projects to alternative procurement approaches. These projects can therefore go ahead swiftly and support jobs and the economy and help prepare the country for the future recovery.

Around 110 PFI projects are currently in the pipe line, and PFI projects make up typically 10 per cent. of public capital investment. PFI projects have consistently demonstrated value for money and high levels of user satisfaction in vital areas of public service delivery.

PFI projects continue to be able to secure equity as private construction companies and investors are still willing to put money in and bear the risk of delays or cost overruns, rather than the taxpayer. Some projects, however, are finding difficulties obtaining sufficient debt as a result of the global credit crunch.

From today the Government will lend to those PFI projects that cannot raise sufficient debt finance on acceptable terms, lending alongside commercial lenders and the European Investment Bank. It will also be able, where necessary, to provide the full amount of senior debt required by a project. Funding will be provided from across Government, including initially from unallocated funds and Departmental underspends on previous projects. Equity investors will continue to bear the primary risk in these projects and, where available, private sector debt will continue to be provided.

The Government believe it is vital to get these infrastructure projects under way as swiftly as possible—to support jobs and the economy this year as well as delivering important public services. Switching to alternative procurement methods or conventional funding for these projects at this late stage would incur significant additional delays or risk projects failing. For that reason we have decided that providing additional debt finance is the most effective way to get construction underway swiftly and support the economy.

Retaining the PFI structure will mean that the private sector will continue to bear the risk of cost over runs and delays. A recent Ipsos MORI report on the operational benefits of PFI has shown that contract managers are highly positive about the overall performance of PFI projects, contract service levels are being achieved and user satisfaction is high.

The Treasury will use professional lending skills, and intends to lend to projects only where appropriate funding is not available from the market. It will be a temporary intervention. As with normal commercial lending these loans will bear interest and will be repaid over the life of the project. The Treasury envisages, however, selling the loans it makes prior to their maturity when favourable market conditions return.

I have agreed that all PFI projects in procurement (that have, to date, issued a notice in the Official Journal of the European Union (OJEU)) will be eligible for this finance from the Government. Future projects intending to go to market soon will also be eligible, provided they meet the usual value for money and affordability criteria, and subject to Treasury approval before issuing their OJEU notice.

Tax Law Rewrite Project

I am pleased to tell the House that Her Majesty’s Revenue and Customs will shortly publish drafts of the Tax Law Rewrite project’s sixth and seventh Bills.

These two Bills are a major landmark in the task of rewriting the legislation for the two main direct taxes which are of great importance to individuals and businesses. The project has, since its inception in 1996, been rewriting the income tax and corporation tax codes in a clearer and more understandable form, making them more accessible than at any time in recent memory. The Bills, when enacted, will complete this work.

One is the Corporation Tax Bill which is the second of two Bills by that name which will rewrite substantially the whole of the corporation tax code. (The first is presently before Parliament and will become the Corporation Tax Act 2009.) It is expected to become the Corporation Tax Act 2010. It includes provisions about the treatment of losses and gifts to charities, reliefs, distributions, particular types of companies and activities, avoidance and definitions.

The second is the Taxation (International and Other Provisions) Bill which includes provisions about double taxation relief, transfer pricing, advance pricing agreements and tax arbitrage. The Bill also seeks to help users by relocating and where appropriate rewriting provisions which would otherwise have been left unhelpfully in the Income and Corporation Taxes Act or one of the Finance Acts.

It is planned to introduce the Bills into Parliament by the end of 2009. Four previous Bills of the project were enacted as the Capital Allowances Act 2001, the Income Tax (Earnings and Pensions) Act 2003, the Income Tax (Trading and Other Income) Act 2005 and the Income Tax Act 2007.

The scope of these new Bills and the timing of consultation were agreed with the project's Consultative and Steering Committees which together include the main representative bodies and other users. They benefit from a style and structure that has been developed as a result of consultation over the previous rewrite Bills. Earlier versions of the legislation in these new Bills have been revised in the light of comments and suggestions from tax professionals and others who engaged in the consultation process. This has only been possible thanks to the close collaboration and co-operation between the project team and tax practitioners, the legal profession and business representatives.

Children, Schools and Families

Schools Capital Funding (2009-10)

I am today announcing that £919 million of capital spending on schools and children’s play areas will be brought forward from 2010-11 to 2009-10.

Of the total, £499 million is allocated among 116 local authorities. These authorities bid to have expenditure brought forward in response to an invitation we issued following last November’s pre-Budget report.

Some £390 million of capital funding devolved direct to all schools in England is also being brought forward to invest in smaller projects as they see fit. In addition, £30 million of investment in play facilities is being brought forward.

Bringing forward capital spending is a key plank of the Government’s fiscal stimulus package to boost the economy in the current downturn. It means that thousands of school modernisation projects across England can start 12 months early.

The full details of today’s capital acceleration package are:

£499 million allocated to 116 local authorities who bid for the capital made available in the pre-Budget report to be brought forward from 2010-11 to 2009-11 (all the authorities’ bids within the terms of the offer have been accepted). The allocation comprises:

£235 million for Local Authority Modernisation Grant

£76 million for Primary Capital Programme

£50 million for Locally Controlled Voluntarily Aided Programme

£138 million for Targeted Capital Fund for 14-19, SEN and disabilities fund.

£390 million being allocated a year early direct to every school in the country—bringing forward 40 per cent. of all indicative Devolved Formula Capital allocations for 2010-11 to 2009-10. It means:

a typical unmodernised primary school of 250 pupils will now get £47,600 this year, including £13,600 brought forward from its 2010-11 allocation. A primary school newly built, rebuilt or refurbished in the last eleven years will now get £23,800—up from £17,000.

a typical unmodernised secondary school of 1000 pupils will now get £158,200, including £45,200 brought forward. A secondary school newly built, rebuilt or refurbished in the last eleven years will now get £79,100—up from £56,000.

£30 million of investment for play facilities brought forward from 2010-11 to 2009-10.

All accelerated spending will be taken off the 2010-11 local authority and school allocations.

The 2008-11 local authority capital settlement in October 2007 set out that £6,669 million would be invested in 2008-09; £7,024 million in 2009-10 and £8,235 million in 2010-11. The revised national figures for 2009-10 and 2010-11 are now: £7,943 million and £7,316 million. This is a significant real-terms increase from just £700 million a year in 1997.

Capital allocations remain available for all local authorities to bring forward, including the 33 local authorities who have chosen not to bid so far.

The relevant table has been placed in the library.


Volunteering Across the Criminal Justice System (Government Response to Baroness Neuberger's Report)

My right hon. Friend the Home Secretary, my right hon. and noble Friend the Attorney-General and I are today publishing the Government’s response to Baroness Neuberger’s report on volunteering across the Criminal Justice System. We are grateful to Baroness Neuberger for her work on the report and for highlighting the key role of volunteers across the Criminal Justice System.

We recognise and value the huge contribution that thousands of volunteers make right across the CJS. We have already taken important steps to strengthen the role of volunteering and we will drive this work forward as part of our commitment to promote community engagement and active citizenship and to deliver first class public services. This is why my hon. Friend, the Parliamentary Under-Secretary of State, Ministry of Justice, the Member for Dewsbury (Mr. Malik), who leads on community involvement in justice issues, has been appointed as the cross-CJS ministerial champion for volunteering.

Our focus is on practical action that enables volunteers to contribute to the delivery of high quality value for money services. It is also important that people from all backgrounds are encouraged and empowered to play their part.

The champion will work with criminal justice agencies to identify practical opportunities to enhance their work through the use of volunteers and improve our engagement with the community.

Copies of the Government’s response have been placed in the Libraries of both Houses. Copies of the response will also be available on the Criminal Justice System website at:

Work and Pensions

UN Convention on the Rights of Persons with Disabilities

I am pleased to announce that the Explanatory Memorandum and Command Paper for ratification of the UN convention on the “Rights of Persons with Disabilities” will be laid before Parliament later today.

In taking this important step, the Government have confirmed their commitment both to this convention, and to the principle that it enshrines that disabled people have, and should be able to enjoy, the same human rights as other people.

In working towards this point, Government Departments and the devolved Administrations have been checking their legislation, policies, practices and procedures against the convention’s provisions. The UK does not ratify any international treaty until it is in a position to ensure that it can implement the provisions and therefore comply with its obligations. The Explanatory Memorandum which has been laid explains the basis on which the Government proposes the UK should now ratify the convention, and the handful of reservations and interpretative declarations that are required in order that we may do so.

A reservation is proposed in respect of service in the armed forces to preserve the position already reflected in the Disability Discrimination Act 1995 as amended (DDA). Service in the armed forces is exempt from the employment provisions of the DDA. This approach is entirely consistent with EU Council Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation. Service in any of the naval, military or air forces of the Crown are excluded from the DDA’s employment provisions to preserve their combat effectiveness. The Government decided to exclude members of the armed forces in the DDA because armed forces personnel need to be combat effective in order to meet a world wide liability to deploy, and to ensure that military health and fitness remain matters for Ministry of Defence Ministers based on military advice, not for the courts.

An interpretative declaration is proposed to make clear that the UK general education system includes both mainstream and special schools, thereby clarifying how the UK Government interpret the convention. This will make it clear that special schools are considered part of the UK’s general education system and that parents have the right to express a preference for a special school. A reservation is proposed to allow for circumstances where disabled children’s needs may be best met through specialist provision, which may be some way from their home—so they will need to be educated outside their local community. This also maintains parental choice for schools outside the local community.

A general reservation is proposed in order to retain the right to apply immigration rules and to retain the right to introduce wider health screening for applicants entering or seeking to remain in the UK, particularly in the event of a global health emergency, if this is considered necessary to protect public health. This clarifies the Government’s understanding that the convention does not create new or additional rights for non-UK national disabled people relating to the entry into, stay in and departure from the United Kingdom. This reservation will be subject to review 12 months after the UK has ratified the convention in order to assess whether there is a continued need for it in practice.

A reservation is proposed in respect of article 12.4, which concerns safeguards for the exercise of substituted decision-making and includes a requirement for “regular review” by a competent, independent and impartial authority or judicial body. There is currently no review system for Department for Work and Pensions (DWP) appointees; that is, people who are appointed to claim and collect benefits on behalf of another person due to that person’s lack of physical or mental capacity. Those appointee arrangements are not at present subject to the safeguard of regular review, as the Government believe this article requires. DWP is therefore actively working towards a proportionate system of review to address this issue.

Moving towards ratification is a major achievement. I believe that this step will be welcomed, along with the signing of the optional protocol to the UN convention last week. Together, these two actions send out a very strong signal—the Government are serious about achieving equality of human rights for disabled people and are making real progress towards their goal of disability equality by 2025.