Written Ministerial Statements
Monday 8 June 2009
HM Treasury is today publishing further research, carried out by Ipsos MORI, on the second pilot of the Saving Gateway.
The Saving Gateway is a cash saving scheme, which aims to kick-start a saving habit among working age people on lower incomes, and to promote financial inclusion. The Government announced last year that the Saving Gateway will be introduced nationally, and that the first accounts will be available in 2010. The Saving Gateway Accounts Bill is currently before Parliament.
The Saving Gateway has been piloted twice, and both pilots have been independently evaluated. Ipsos MORI were also commissioned to undertake further research on the second pilot, following up participants around two years after their Saving Gateway had matured, in order to explore longer-term changes in saving behaviour and attitudes. This research is being published today, and has been placed in the Libraries of the House and is available on the HM Treasury website.
The research shows that 60 per cent. of participants were still saving regularly two years after the pilot ended. And three in ten participants were not saving regularly prior to taking part in the pilot, but were doing so at the time of the further research. Participants were also very positive about the Saving Gateway: 98 per cent. said they would open another Saving Gateway account if offered the chance, and 99 per cent. would recommend it to a friend.
Business, Innovation and Skills
EU Competitiveness Council (28 to 29 May 2009)
The EU Competitiveness Council took place in Brussels on 28-29 May 2009. The then Minister for Trade and Consumer Affairs represented the UK on the morning of 28 May, covering the then BERR agenda items on EU Industry Policy and the EU Small Business Act. In the afternoon session, Andy LeBrecht of UKRep Brussels represented the UK for the BERR agenda item on EU Better Regulation and the then BERR AOB items. The following is a summary of those discussions.
For the first substantive agenda item, the Commission presented a paper on EU industry policy, which was agreed after a long, wide-ranging discussion among member states. The Commission proposed an integrated approach to a competitive and sustainable industry policy for the EU and emphasised the importance of industry and small to medium enterprises (SMEs) to the European economy. In discussion, it was agreed that the EU should avoid protectionism and promote competitiveness. The Minister supported this and also highlighted the need for the EU to move towards a low carbon economy and for the simplification of red tape for business as much as possible. In addition the Minister also called for the European Investment Bank to increase its lending to viable businesses by 50 billion Euros over the next 2 to 3 years.
The Commission also presented an update on the implementation of the EU Small Business Act (SBA) set of measures to assist SMEs which was adopted in 2008. Progress on the three priority SBA areas was reviewed (improving SME access to finance, providing a supportive regulatory environment, and enhancing market access). In discussion the Minister emphasised the need for implementation of these priority areas and endorsed the Commission’s proposal to allow member states the option to adopt less burdensome accounting requirements for micro-entities (companies with ten or fewer employees).
In the afternoon the Council presented conclusions on EU better regulation and its proposals to reduce administrative burdens on EU businesses by 30 billion Euros, which would mostly help SMEs. In the discussion there was broad agreement among member states that better regulation would help avoid unnecessary burdens on business. The UK representative supported thorough impact assessments to avoid additional costs on business from new measures and also called for action on simplification and reduced administrative burdens. The UK also again expressed our support for less burdensome accounting requirements for micro-entities.
On the Any Other Business Points, the UK representative supported full harmonisation across the EU on the proposed consumer rights directive and also for consumers to retain the right to reject faulty goods. Other AOB points were agreed without discussion on the European private company statute, Transatlantic Economic Council, the role of tourism in the economic crisis, Lisbon strategy post-2010, outcomes of the informal ministerial Council and Swedish EU presidency priorities (which will be the EU Internal Market, better regulation and financing, eco-innovation, SMEs, research and innovation and Lisbon post-2010).
Culture, Media and Sport
Education, Youth and Culture Council
A meeting of the Education, Youth and Culture Council was held on 11-12 May. The Scottish Minister for Culture, External Affairs and the Constitution, Michael Russell, represented the UK for the cultural and audiovisual agenda items taken on 12 May.
The Council adopted the conclusions on culture as a catalyst for creativity and innovation which draw the link between culture and the Lisbon objectives and also reflect the role of creativity in responding to the economic crisis.
The Council held a draw to select the two member states which will each recommend an expert to sit on the selection panel and the monitoring and advisory panel for the European capital of culture initiative for the period 2010-12. Luxembourg and Romania were selected, with the assistance of the Council Legal Service. These two member states are expected to propose their candidates for Council experts before the end of June 2009 in order for the Council to officially nominate these experts at its November meeting.
The Council adopted a decision designating the cities of Guimarães (Portugal) and Maribor (Slovenia) as European capitals of culture 2012.
The Council also adopted a decision designating Košice (Slovakia) and Marseille (France) as European capitals of culture 2013.
There was an exchange of views on the presidency paper on creative content online. The Commission were keen to learn about member states’ approaches to legislating online content and their ideas for future EU action. Most member states, including the UK, agreed that EU action would add most value where it ensured the exchange of good practice, particularly on intellectual property issues and the fight against piracy. The UK intervened to welcome the discussion on content online and give examples of domestic good practice, in particular the digital Britain and creative Scotland initiatives.
Under Any Other Business, the presidency gave reports on the conference held on the responsibilities of content providers and users and the forum for creative Europe. The presidency also provided Ministers with information on the MEDIA Mundus programme. The Greek delegation informed member states of the inauguration of their new Acropolis Museum due to take place in June 2009. The German delegation, supported by Austria, France and the Netherlands, expressed concern about the new Google Books initiative.
Forensic Science Service
The Forensic Science Service Ltd, formerly an Executive Agency of the Home Office, was vested as a Government-Owned Company (GovCo) in December 2005. My predecessor my right hon. Friend the Member for Leigh (Andy Burnham) set out in a written ministerial statement of 29 March 2006 the criteria to be applied in considering whether to maintain the status of a GovCo or to change it to that of a Public-Private Partnership. These criteria were, in order of importance:
The needs of the UK Criminal Justice System
The state of the UK Forensic Science Services marketplace
The needs of the Forensic Science Service
The needs of the Home Office as shareholder
We have considered carefully the criteria set out by Andy Burnham in his statement, which continues to underpin our approach to status change. He made clear that not all the criteria could be judged clearly at any one time and that a decision had to be taken in the round. He committed that no decision would be taken until summer 2007 and that he would share it with Parliament. In the event, it has not been appropriate to make any further announcement as it has been clear that the developing nature of the UK forensics market meant that the criteria for change have not been met in the ensuing years. The Criminal Justice System continues to be served by the FSS and its competitors. The UK forensic science market continues to develop, albeit at a slower pace than originally envisaged, and the police service is now engaged in a series of competitive tenders which will put the delivery of forensic services on a clearer contractual footing. GovCo status has provided a suitable platform on which the FSS can transition to a commercially effective and robustly competitive organisation.
The FSS is now about to embark on a major transformation programme, with the support of the Home Office shareholder, and I judged that the time was right to inform Parliament of our current plans. Since vesting, and in particular throughout 2008, the FSS has analysed the emerging market in order to clarify the scale of transformation required to reflect its reduced share of the overall market and to optimise its commercial potential. That thinking has been crystallised in the production of a strategic business plan, details of which were presented to the Home Office in December and, after rigorous consultation with HM Treasury, that has now been approved. On Monday 8 June, the FSS embarks upon formal consultations with its staff in which it will set out its intentions to move to a new business model, delivering the same integrated service, more quickly and efficiently, with a reduced but more targeted work force, and potentially working from a reduced estate. The full details remain subject to the conclusions from the consultation.
The future status of the FSS has been a matter of interest to the House generally and to some hon. Members in particular. I want therefore to make clear that we have decided that there will be no change of status for the FSS for the foreseeable future. That will give sufficient time for the FSS to complete its transformation plan and provide more evidence of the operation of the commercial market in forensic science. In recognition of the House’s continued interest in this key component of our criminal justice system, the original commitment to share any decision to change the status of the company remains in place.
Boundary Commission for England (Appointment)
I should like to inform the House that I have made the following appointment under Schedule 1 to the Parliamentary Constituencies Act 1986:
The Honourable Mr Justice Sales appointed as Deputy Chair of the Boundary Commission for England, effective from 1 June 2009 until 31 May 2012.
National Offender Management Service (Drug Strategy)
Tackling drug issues remains a key priority for Government. In the last 12 years prison drug treatment funding has risen year on year and now stands at over 13 times that of 1997. In this time drug use in prison, as tested by random mandatory drug tests, has fallen by 63 per cent. In the community the use of drug rehabilitation requirements (DRRs) has also risen, with courts using them in over 16,000 community orders in 2007-08. Now we need to look at the next steps.
In the 2008 drug strategy “Drugs: protecting families and communities” the Government announce that the National Offender Management Service (NOMS) would develop a new NOMS drug strategy to complement the national strategy and provide a framework for responding to drug misuse among offenders.
I am today announcing the publication of the NOMS drug strategy, which draws together the broad range of actions that NOMS and its partners in the public, private and third sectors are taking to build upon the considerable progress we have made in tackling offenders who misuse drugs. This includes:
continuing to improve the quality of prison drug treatment by further rolling-out the integrated drug treatment system across the prison estate; and
increasing the provision of wings within the prison estate where prisoners who are committed to leading drug-free lives can gain the extra motivation and support that they need.
The strategy also builds on the progress we have made in implementing the recommendations in the Blakey report, “Disrupting the Supply of Illicit Drugs into Prisons”, published in July 2008. I will report to the House shortly on progress with this report.
Addressing drug misuse among offenders is a vital component of NOMS’ wider vision to protect the public and reduce re-offending, not only by carrying out the punishments ordered by the courts, but also by addressing the causes of criminal behaviour, and helping rehabilitate and resettle offenders into law abiding lives.
Copies of the strategy and its supporting documents will be placed in the Library of both Houses, the Vote Office and the Printed Paper Office.
Civil Legal Aid
My noble friend the Parliamentary Under-Secretary of State (Lord Bach) has made the following written ministerial statement.
“Members of the public who receive civil legal aid for a money or property dispute, and who succeed in obtaining a financial benefit from their case, are required to repay their legal aid costs, so resources can be recycled to help others.
If someone is unable to repay their legal aid costs immediately, these can be postponed as a statutory charge on their property. Where charges are postponed against property, persons are not obliged to make any repayments, or to repay the charge in full until their financial circumstances change, or the property changes hands. However, in order to encourage clients to repay their postponed charge where they can, the charge accrues 8 per cent. simple interest. Although the interest rate on postponed legal aid charges is entirely separate from the bank rate, the Government have been considering whether the existing interest rate should be changed.
The Government have decided that the interest rate should remain at 8 per cent. simple. The simple interest which accrues on the legal aid charge is entirely different from the compound interest charged by commercial institutions. For an average statutory charge which is repaid after seven years, 8 per cent. simple interest is approximately equivalent to 5.3 per cent. compound interest. We consider that this compares favourably with other commercial alternatives, particularly for the majority of clients who receive legal aid, who could be charged high compound interest rates by commercial lenders.
There is also no requirement to make regular repayments against the charge, unlike commercial products. Funded clients will also benefit from lower legal costs, as their lawyers will have been paid at controlled legal aid rates, which will significantly reduce their legal costs. Taking all of this into account, we consider that the charge should remain at 8 per cent. simple interest to encourage those who can repay to do so. This is important because when legal aid charges are repaid, this money is recycled to provide legal help for others. For example, lowering the simple interest rate by half could deny civil advice to 30,000 people per year.”
Crown Court Means Testing Central Funds Reform
My noble friend, the Parliamentary Under-Secretary of State, Lord Bach, has made the following written ministerial statement.
“In October 2006, the Government introduced a means testing scheme for legal aid for defendants being tried in the magistrates’ courts. Since then, net savings of over £80 million have been delivered. Following a consultation process, the Government now intend to fulfil their stated commitment to extend means testing to defendants and appellants appearing in the Crown Court.
The consultation exercise began on 6 November 2008, and concluded on 29 January 2009. Ministers have been considering their proposals in the light of that exercise. A response to consultation and impact assessment on Crown Court means testing is today being published by the Ministry of Justice. These documents are accompanied by a separate, but associated, response to consultation and impact assessment on reforming payments from central funds to acquitted defendants.
Copies of the responses to consultation and impact assessments in respect of both Crown Court means testing and reforming payments from central funds have been placed in the Libraries of both Houses, the Vote Office and the Printed Paper Office.”
London and Continental Railways
My right hon. and noble Friend the Secretary of State for Transport has made the following ministerial statement.
“I am today announcing a financial restructuring of London and Continental Railways Ltd (LCR). This is a further step toward this Government’s stated intention to complete the restructuring and sale of LCR and its assets, following the enactment last year of the Channel Tunnel Rail Link (Supplementary Provisions) Bill. The financial and operational restructuring of LCR’s interests in the high speed line to the Channel Tunnel and in Eurostar operations will establish these businesses on a commercial basis, with the aim of delivering the best return for the taxpayer from previous significant public investment.
As part of this restructuring LCR is transferring ownership of its finance subsidiaries, which together are liable for £5.169 billion of debt in the form of bonds and securitised notes, to the Government. This debt is already supported by a range of Government guarantees. Separately, the Government are purchasing, for a nominal sum, the shares of LCR, taking it into direct Government ownership. The Government have held a special share in LCR since 1999 which has given them a wide range of controls over the company. LCR and its liabilities are already accounted to the public debt; consequently, there is no change to existing public borrowing requirements.
LCR owns HS1 Limited, the company which operates St. Pancras International Station and the high speed line to the Channel Tunnel. It also owns the UK’s interest in the Eurostar international joint venture and a range of property development interests.
These are successful businesses.
LCR managed the construction and commissioning of the new railway, St Pancras and the other stations, and the substantial associated land development and regeneration projects. It did so on time and within budget and remains the right vehicle and management to drive through the next phase of the High Speed 1 project.
High Speed 1 is Britain’s first high speed railway, and first new railway for over 100 years. It provides fast international connections and starting this year will see the introduction of high speed commuter services from Kent. It is an essential component of our rail capacity plans for London and the South East and also of the Olympic transport network. It has the capacity and potential for freight, international and domestic service growth. Performance on the line currently averages at five seconds infrastructure delay per train—world class standards.
Thanks to the opening of St Pancras and the new line, Eurostar last year carried a record number of passengers—over nine million—a 10 per cent increase in passenger numbers. It has a market share of over 75 per cent on the London Paris and London Brussels routes. This success in attracting passengers away from short-haul airlines has saved an estimated 40,000 tonnes of carbon over the last two years. It is the pre-eminent international passenger train operator.
This success has been enabled by substantial public investment, represented in the debt now held by LCR and its subsidiaries and which is already underwritten by the Government. The Government therefore want to see the taxpayer benefit from the value which has been created in these companies, as well as realising further benefits to passengers in terms of more and new products and services.
This was signalled in the statement made by the then Secretary of State for Transport in March 2006 when he said:
“The Government’s objective will be to ensure continuing value for taxpayers’ money, including the successful delivery of the Channel Tunnel Rail Link and the continuing safe and efficient operation of Eurostar.”
On 14 May this year the Government received state aid clearance from the European Commission to undertake a financial restructuring of LCR. In announcing its approval, the Commission said:
“The operation notified by the United Kingdom involves public support mainly in the form of debt cancellation and puts in place a sustainable financial structure for the high-speed rail link...It will benefit competition and users in view of the forthcoming liberalisation of international passenger transport by rail in 2010.”
The Commission also said that it: “...regarded positively the unbundling of operation and infrastructure activities and the future significant reduction of access charges.”
The purpose of the restructuring is to separate HSl Limited and Eurostar from their past construction liabilities. This will enable HSl Limited to charge a commercial rate for access to the line and thereby attract more trains and a wider choice of operators. Being charged a proper market rate also offers Eurostar the best chance to develop its customer products and services on a sustainable commercial basis. It is for this reason that the Government have taken separate ownership of the finance subsidiaries currently within LCR that hold these past liabilities. This recognises the existing underwriting by Government of these debts and will see the cancellation of all the associated guarantees and future liabilities from Government to LCR and its operating subsidiaries.
Doing so returns considerable value to LCR and its operating subsidiaries. The Government are determined that value accrues in full amount to the taxpayer. The simplest and most direct way of securing this is for Government to take ownership of LCR, making comprehensive the extensive rights already held in the company by virtue of Government’s existing special share.
With the completion of this restructuring, the next step will be to prepare for the sale of a long-term concession in High Speed 1, the value of which will be used towards offsetting the public investment made in the construction of the railway. It is the Government’s intention to proceed with the sale of this concession as soon as the necessary contractual and regulatory structures are put in place in support of the future operation of High Speed 1 independent of Government and LCR and as and when market conditions allow.
In parallel, the Government are discussing the future of the Eurostar joint venture with our international partners in order to determine the best future strategy for the business: one that capitalises on past success; offers the best opportunity for sustainable future development; and properly reflects the full value of the UK contribution.
As well as leading these negotiations on the part of Government, LCR will continue to manage the development of its substantial property interests, the value of which will be realised on a case-by-case basis, at a time which reflects the best balance of value and risk to the taxpayer.”
Work and Pensions
UN Convention on the Rights of Persons with Disabilities
I am delighted to announce that later today the UK will ratify the UN Convention on the Rights of Persons with Disabilities in New York. In addition, we aim to start the parliamentary process for ratification of the Optional Protocol to the Convention shortly.
There are an estimated 650 million disabled people in the world, including over 10 million in the UK. The UN Convention is a powerful and explicit statement that they have—and must be able to enjoy on an equal basis—the same human rights as others. The Convention is therefore a very significant landmark, both for disabled people and for Government and society as whole.
Ratification of the Convention is further demonstration of the Government’s commitment to equality of human rights for disabled people, and of our determination to achieve equality by 2025.