Written Ministerial Statements
Tuesday 12 May 2009
Business, Enterprise and Regulatory Reform
EU Informal Competitiveness Council
The following statement provides information on the EU Informal Competitiveness Council which took place in Prague on 5 May 2009, at which my official Claire Durkin, director of Europe International Trade and Development at BERR, represented the UK.
The meeting started with the Commission presenting a paper on lessons learned from the 2004 EU enlargement and the future of the EU internal market. The Commission suggested that the priorities for improving the EU single market and responding to the economic crisis were services (implementation of the services directive), intellectual property (agreement on Community patent and a single patent court) and completing the interconnection of the EU’s network industries (telecommunications, postal services, energy and transport sectors).
In discussion, member states agreed with these three priorities and that the single market was essential for EU economic recovery and growth. In addition, several member states highlighted the importance of avoiding protectionism and better implementation of single market legislation. All member states agreed that EU enlargement since 2004 had brought positive benefits to the EU. Member states suggested that future EU developments should be an increased focus on skills, innovation, the low-carbon economy, promoting EU standards externally, more cross-border internet sales, boosting consumer and social benefits, or delivering concrete achievements, such as a Community patent.
The UK agreed with the forward looking suggestions by the Commission and other member states. We stressed the need for the EU to be at the high-end of the value chain, noting in particular business opportunities in low-carbon, digital and services. We also pointed out that the UK is the sixth largest manufacturing country in the world and that we wanted the single market to work equally well for the manufacturing sector. In addition, we welcomed the Larosiere report on EU financial supervision and called for an integrated approach to better regulation and enforcement of EU single market rules.
The Commission also presented a paper on the EU better regulation programme and invited member states to share best practice from national programmes. Most member states were supportive of the EU action programme on administrative burden reductions. Several member states wanted the action programme to take account of new and amending regulations. Member states also wanted better impact assessments on Commission administrative burden reduction proposals. The UK representative stressed the need for co-operation and dialogue between member states on better regulation policies and for stronger EU impact assessments. We also suggested that the EU services directive should be an exemplar for EU legislation and that its implementation by the end of 2009 was important for EU’s future competitiveness.
The UK strongly supported the Commission’s proposal to allow member states the option to exempt micro-entities (companies with ten or fewer employees and less than €1 million turnover) from the EU accounting directives, which would bring major cost savings for the EU’s smallest businesses. Germany, Denmark and Romania also stated their support for the proposal.
National Minimum Wage
In March 2008 the Government asked the Low Pay Commission to produce their next report on the national minimum wage by the end of February 2009. Due to the exceptional economic circumstances the Low Pay Commission asked the Government for more time to produce their report to allow them to take into account more recent economic data when making their recommendations. The Government granted this request and asked the Low Pay Commission to report by 1 May 2009. I would like to thank the Commissioners for all their hard work.
Low Pay Commission’s 2009 report
The main recommendations put forward by the Low Pay Commission concern the rates of the minimum wage. The Commission have recommended that the adult hourly rate of the minimum wage should increase from £5.73 to £5.80. The Commission have recommended increasing the development rate, which covers workers aged 18 to 21-year-olds, from £4.77 to £4.83. They have recommended that the rate for 16 to 17-year-olds moves from £3.53 to £3.57. It is recommended that these changes take place in October 2009.
The Commission has also recommended that the accommodation offset increases from the current £4.46 to £4.51 in October 2009.
In addition, the Government accept the Commission’s recommendations that a policy of “naming and shaming” be implemented for those employers who show wilful disregard for national minimum wage; accept that 21-year-olds should be moved on to the adult rate of the national minimum wage; accepts that commissioning policies of local authorities in respect of social care reflect the true cost of care provision including national minimum wage; and accepts that consideration should be given to tackling non-payment of minimum wage in the informal economy.
The Government note the Commission’s recommendations that they wish to explore a national minimum wage rate for apprentices and that more resource should be dedicated to increase the number of prosecutions.
Government’s response to individual recommendations in the Low Pay Commission’s 2009 report
National Minimum Wage Rates
We recommend that the adult minimum wage rate should increase from £5.73 to £5.80 in October 2009.
We recommend that the youth development rate should increase from £4.77 to £4.83 in October 2009 and that the rate for 16 to17-year-olds should increase from £3.53 to £3.57 in October 2009.
We recommend that the accommodation offset should increase from £4.46 per day to £4.51 per day in October 2009.
We recommend again that 21-year-olds should be entitled to the adult rate of the national minimum wage.
The Government accept that 21-year-old should be entitled to the adult rate of minimum wage. However, as employment for young people is particularly vulnerable in an economic downturn, this change will be implemented from October 2010.
Naming and shaming
We recommend that a “name and shame” policy should be put in place to expose those employers who show wilful disregard for the minimum wage.
We believe greater transparency in this area is valid, particularly in the light of the fact that the NMW has now been in place for 10 years and is an established part of labour rights.
We recommend that a minimum wage for apprentices should be introduced under the national minimum wage framework.
We recommend that the Government ask the Low Pay Commission, as part of the work for its 2010 report, to consider the detailed arrangements for an apprentice minimum wage under the national minimum wage framework, and to recommend the rate and arrangements that should replace the existing exemptions, together with the timing for its introduction.
We recognise the central role that apprentices play in developing skills in our economy. This is reflected in the Government’s target of 250,000 people a year starting an apprenticeship in England by 2020 and our commitment that one in five young people will be on an apprenticeship by 2013.
Therefore we note this recommendation, and will respond to the recommendation in full at the time of setting the LPC’s remit for 2010, which we plan to do in June.
We recommend that the commissioning policies of local authorities and the NHS should reflect the actual costs of care, including the national minimum wage.
Sufficient resource to increase numbers of prosecutions
We recommend that the Government allocate sufficient resources to HMRC to increase significantly the number of errant employers prosecuted in a criminal court.
We recognise the importance of the role that criminal prosecution plays in enforcing the NMW. Prosecutions are focused on cases that will do most to promote compliance with the law by deterring employers who deliberately disregard NMW requirements, and the Employment Act 2008 strengthened HMRC’s ability to investigate suspected NMW offences. We will keep our approach to NMW enforcement under review to ensure that we have the most effective balance of civil and criminal enforcement activities.
Consideration of measures to tackle the informal economy
We recommend that the Government give urgent consideration to measures that can be taken to effectively tackle employers in the informal economy.
Tips and the National Minimum Wage
Although this is not part of the LPC’s recommendations, the Government announced last year that we would change the regulations to stop the practice of tips being used to make up the NMW. We intend to proceed with this change in October alongside the LPC recommendations.
Children, Schools and Families
Safeguarding - Progress in Delivering ContactPoint
On 26 January, I announced to the House the first steps to deploy the Government’s online directory—ContactPoint. I can today provide an update on progress in delivering ContactPoint, and outline the next steps.
ContactPoint has been developed in response to a key recommendation of Lord Laming’s inquiry into the tragic death of Victoria Climbié and is a vital tool designed to help keep children safe. In order to protect children it is crucial to ensure that the right agencies are involved at the right time and to improve the sharing of information between practitioners. ContactPoint will also help practitioners to improve outcomes for all children. It is a tool for practitioners to support better communication among practitioners working with children and young people across education, health, social care and youth offending services in the statutory and voluntary sectors. It will provide a quick way for those practitioners to find out who else is working with the same child or young person and ensure their best interests are promoted.
Under current arrangements, if a practitioner believes that a child is at risk or may need additional support, for example if they have a disability, they may have no way of knowing whether other services have been, or are already in contact with that child. In addressing these issues, the Government estimate that ContactPoint, when fully operational, can save at least 5 million hours of professionals’ time, currently spent trying to track down who else, if anyone, is helping the child. Supporting professionals in this way is an important element of the plan of action I announced last week in response to Lord Laming’s report on child protection. Lord Laming said in that report: “The new ContactPoint system will have particular advantages in reducing the possibility of children for whom there are concerns going unnoticed”.
Since January, important progress has been made. Seventeen early adopter local authorities in the north west of England, along with leading national charities, Barnardo’s and KIDS, now have trained management teams in preparation for practitioners to start to use the system. At the same time, as part of the extensive ContactPoint security arrangements, local authorities have shielded the records of children who are potentially at greater risk if their whereabouts were to become known, to provide an additional layer of security, (for example, if a child is fleeing domestic violence or is under witness protection, or in some cases where children have been adopted). Approximately 52,000 records have now been shielded on ContactPoint.
Building on this work, we will continue to take an incremental and steady approach to delivery. We are now moving ahead with the second phase of delivery. From 18 May, and over a period of several weeks, ContactPoint early adopters will train around 800 practitioners to use ContactPoint. They have been hand-picked to ensure they reflect the broad range of professionals working for children’s services organisations who will use ContactPoint when the directory is fully rolled out. We will carefully monitor the activity of those practitioners considering what further improvements may be required in the light of their experience of using the system.
From June to August, we will train management teams in the other local authorities and national partners. This will allow them to prepare for deployment of ContactPoint more widely in due course.
Throughout this second phase, we will continue to evaluate the experience of early adopters. This will ensure that the deployment of ContactPoint continues to take account of the experience of new users in the next stages of delivery.
ContactPoint continues to be supported by major children’s organisations, such as NSPCC, Barnardo’s, Action for Children and KIDS, teachers’ unions including NASUWT, as well as the Association of Chief Police Officers, the British Association of Social Workers, the Royal College of General Practitioners and the Children’s Inter-Agency Group whose members include the LGA and the Royal College of Paediatrics and Child Health.
Communities and Local Government
Park Home Site Licensing Provisions
I have today published a Consultation Paper, “Park Home Site Licensing—Improving the Management of Park Home Sites”, that proposes the introduction of an improved park home site licensing system.
Licensing of park home sites is currently governed by the Caravan Sites and Control of Development Act 1960 (the 1960 Act), but the existing site licensing regime does not fully meet the needs of this part of the housing sector. Authorities in general are obliged to grant licences to anyone owning a park home site regardless of their suitability and cannot impose any condition relating to its management. Some sites are therefore run by unscrupulous or incompetent persons, and residents’ rights and expectation are often not met, some becoming victims of exploitation and intimidation.
The Government want a thriving and well run sector that provides sites where people want to live. We want a licensing system that raises and maintains standards on sites and ensures they are safe, well planned and properly managed with appropriate facilities and services to meet the needs of residents.
The consultation builds upon decisions about proposals taken following an earlier consultation in 2005 and sets out for further consideration how the new licensing system might look. Persons engaged in the management of park home sites will need to demonstrate they have the relevant competences to manage sites. The new system will give local authorities duties to impose management conditions in licences and a range of enforcement tools to ensure that site licensing conditions are complied with. It will also allow local authorities to recover their costs in connection with their duties under the new provisions by charging appropriate fees. The proposals are intended to drive up the management standards in this sector and, in those parts of it where that is not possible, we intend to give local authorities powers to put alternative management arrangements in place.
I have also today published a paper setting out the Government’s response to the May 2008 consultation “A new approach for resolving disputes and to proceedings relating to Park Homes under the Mobile Homes Act 1983 (as amended)”. The paper sets out the Government’s intention to transfer the jurisdiction on appeals and applications under the Mobile Homes Act 1983 from county courts to Residential Property Tribunals. The paper also includes a short consultation on additional protections for residents subject to proceedings in relation to the termination of their agreements following on from the previous consultation.
The aim of the transfer of the jurisdiction is to provide residents of mobile homes (including caravans) and the owners of sites on which they are located with a level playing field in the resolution of disputes, by providing access to a dedicated, low-cost specialist (housing) tribunal, which can deal with cases quickly and without the parties needing to be legally represented.
Park home residents and the sector more widely will benefit from the introduction of these proposals and will build upon work already done to assist and support residents and others with an interest in park homes. This also includes the recent publication of four new fact-sheets giving key information and basic guidance about commonly raised issues concerning park home sites.
The consultation on site licensing runs until 4 August 2009, and on the additional protections in relation to termination of agreements until 9 June 2009. Both publications have been placed in the Library of the House.
Right to Enfranchise Provisions
I have today published a consultation paper that proposes the non-implementation and repeal of the Right to Enfranchise (RTE) provisions in the 2002 Commonhold and Leasehold Reform Act (the 2002 Act).
The 2002 Act sought through the RTE provisions to prevent what was at that time acknowledged to be a fairly limited problem: qualifying leaseholders being deliberately excluded when fellow leaseholders exercised statutory rights to purchase the freehold of the building containing their flats (called collective enfranchisement). However, it has become clear that implementation of the provisions would introduce a considerable amount of additional burdens, complexity and cost into the process.
The Government’s view is that this would be to the overall detriment of leaseholders in general who are benefiting from the changes that have been made by the 2002 Act and earlier legislation to remove unreasonable barriers to enfranchisement.
Leaseholders will in due course also benefit from the introduction of regulations on accounting for leaseholders monies which will complete the programme of reform introduced under the 2002 Act.
The consultation runs until 3 August 2009 and the Government would welcome responses to their proposals up until that date. Copies of the paper, “A consultation paper on the right to enfranchise (RTE) provisions”, have been placed in the Library of the House.
Gypsy and Traveller Caravan Count
The Government have today published the “Count of Gypsy and Traveller Caravans on 19 January 2009”.
Copies have been placed in the Library of the House and can be accessed via the Communities and Local Government website at:
Housing and Planning Delivery Grant
I am today announcing the release of a consultation into proposed changes to the allocation mechanism for years 2 and 3 (2009/10 and 2010/11) of Housing and Planning Delivery Grant (HPDG). HPDG was established in 2007 to reward local authorities for improved delivery of housing and other planning outcomes as part of their strategic, place shaping role and to provide more support to communities and local councils who are actively seeking to deliver new homes. The decision to review the grant scheme follows our public commitment to monitor the grant in light of changes in economic circumstances.
Changes to the funding profile
The quantum of funding available for HPDG was set in a different economic context than where we are today. We remain committed to the short and long-term objective of increased housing supply and will continue to invest significant sums through HPDG for local authorities who deliver more homes, with funding doubling from £100 million in year 1 to £200 million in year 3. In addition, there will no longer be a capital element to the grant. However, current economic conditions have created new priorities both for Government and local authorities; we have therefore taken the decision to scale back the increase in HPDG and focus on delivering real help to the people who need it—and so have halved the rent increases facing council tenants this year.
Proposed changes to the allocation mechanism
We are also consulting on changes to the way the grant is allocated to ensure it recognises current challenges and encourages positive action by local authorities to facilitate recovery. Key reforms being proposed are:
To reduce the threshold of net additional homes needed to qualify for the housing element in year 3 in recognition of the more challenging conditions in the housing market.
To introduce additional eligibility requirements for demonstrating land for housing in order to reinforce existing requirements in planning policy statement 3 and increase confidence in the land supply position across the county.
To increase the percentage of the planning element awarded for demonstrating land for housing in year 2 in recognition of the importance of land supply in supporting development.
We are also consulting on proposals for an additional HPDG element in year 3 specifically to incentivise the delivery of affordable housing.
Meaningful community involvement is an integral part of the planning system. The White Paper “Communities in Control: Real People, Real Power” announced up to £4 million additional funding for local planning authorities to promote community participation in planning. This funding is in addition to HPDG; however, we propose to use the HPDG mechanism to distribute this additional funding. The proposed allocation criteria would support those authorities whom we would expect to be undertaking significant community engagement work, either in developing their core strategy or delivering high levels of new housing, and who have already identified community empowerment as a priority for their overall performance.
A copy of the consultation document has been placed in the House Library and is available on the Communities and Local Government website at:
Probation Board for Northern Ireland (Business Plan 2009-10)
I have today published the “Probation Board for Northern Ireland Business Plan for 2009-10”. The plan sets out the board’s key objectives and performance targets for the coming year.
Copies have been placed in the Libraries of both Houses.
Work and Pensions
Agency Targets and Business Plans
I am today able to announce the annual performance targets for 2009-10 for the two executive agencies of the Department for Work and Pensions. The targets I have agreed are set out.
Further information on the plans of Jobcentre Plus and the Pension, Disability and Carers Service in 2009-10 is contained in their individual “Business Plans” which have been published today. Copies have been placed in the Library.
Jobcentre Plus (2009-10 Targets) Job Outcome Target (million points) To achieve a total points score of 9 million based on our priority customer groups. Interventions Delivery Target To make sure that specified Jobcentre Plus labour market interventions take place within set timescales in 85% of cases checked. Employer Engagement Target At least 92% of employers placing their vacancies with Jobcentre Plus will have a positive outcome. Customer Service Target To achieve an 86% customer service level in the delivery of the standards set out in the Customer and Employers Charters. Fraud and Error To play a key role to prevent and detect overpayments and underpayments of benefit consistent with the Department’s aspiration to reduce total overpaid expenditure across all benefits to 1.8% and underpaid expenditure to 0.7% by March 2011. The target is supported by a suite of non-published measures of activities to pay our customers the right benefit at the right time. Average Actual Clearance Times Tartet1 To process claims within specified Average Actual Clearance Times: Jobseeker’s Allowance 11.5 days Income Support 10 days 1A shadow target for Employment and Support Allowance is under development and will be monitored closely during 2009-10 to inform target-setting for 2010-11.
Jobcentre Plus (2009-10 Targets)
Job Outcome Target (million points)
To achieve a total points score of 9 million based on our priority customer groups.
Interventions Delivery Target
To make sure that specified Jobcentre Plus labour market interventions take place within set timescales in 85% of cases checked.
Employer Engagement Target
At least 92% of employers placing their vacancies with Jobcentre Plus will have a positive outcome.
Customer Service Target
To achieve an 86% customer service level in the delivery of the standards set out in the Customer and Employers Charters.
Fraud and Error
To play a key role to prevent and detect overpayments and underpayments of benefit consistent with the Department’s aspiration to reduce total overpaid expenditure across all benefits to 1.8% and underpaid expenditure to 0.7% by March 2011.
The target is supported by a suite of non-published measures of activities to pay our customers the right benefit at the right time.
Average Actual Clearance Times Tartet1
To process claims within specified Average Actual Clearance Times:
1A shadow target for Employment and Support Allowance is under development and will be monitored closely during 2009-10 to inform target-setting for 2010-11.
Pension , Disability and Carers Service (2009-10 Targets) Benefit take-up To deliver at least 255,000 successful new Pension Credit applications. Accuracy Pension Credit financial accuracy of new claims and changes of circumstance: 93% first half year; 94% second half year. State Pension financial accuracy of new claims and changes of circumstance: 98%. Financial accuracy of Carers Allowance: 98%. Accuracy of decisions for Disability Living Allowance (DLA): 94%. Accuracy of decisions for Attendance Allowance (AA): 94%. New Claims Clearance Times Clear new applications for Pension Credit (measured from date all evidence is received) within an average of 15 days. Clear 95% of new claims for State Pension within 60 days. Clear new claims for Disability Living Allowance within an average of 38 days. Clear new claims for Attendance Allowance within an average of 16 days. Clear new claims for Carer’s Allowance within an average of 13.5 days. Fraud and Error Reduce the proportion of benefit overpaid due to fraud and error in Pension Credit to 4.5% by March 2011. Telephony At least 93% of calls to be answered by an adviser. Less than 1% of calls receiving an engaged /busy tone.
Pension , Disability and Carers Service (2009-10 Targets)
To deliver at least 255,000 successful new Pension Credit applications.
Pension Credit financial accuracy of new claims and changes of circumstance: 93% first half year; 94% second half year.
State Pension financial accuracy of new claims and changes of circumstance: 98%.
Financial accuracy of Carers Allowance: 98%.
Accuracy of decisions for Disability Living Allowance (DLA): 94%.
Accuracy of decisions for Attendance Allowance (AA): 94%.
New Claims Clearance Times
Clear new applications for Pension Credit (measured from date all evidence is received) within an average of 15 days.
Clear 95% of new claims for State Pension within 60 days.
Clear new claims for Disability Living Allowance within an average of 38 days.
Clear new claims for Attendance Allowance within an average of 16 days.
Clear new claims for Carer’s Allowance within an average of 13.5 days.
Fraud and Error
Reduce the proportion of benefit overpaid due to fraud and error in Pension Credit to 4.5% by March 2011.
At least 93% of calls to be answered by an adviser.
Less than 1% of calls receiving an engaged /busy tone.