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Written Statements

Volume 495: debated on Monday 29 June 2009

Written Ministerial Statements

Monday 29 June 2009

Treasury

Tax Administration/Anti-Avoidance

Her Majesty’s Revenue and Customs (HMRC) has today published a consultation document on the implementation of a code of practice on taxation for banks.

The Government are committed to developing and safeguarding a UK tax system whereby everyone pays their fair share. Tax avoidance compromises the effectiveness of the tax system and unfairly results in a greater tax burden being borne by compliant taxpayers. This undermines public confidence and imposes significant costs on society.

The Government have consistently tackled avoidance since 1997—making reforms to the tax system, introducing the disclosure regime and closing legislative loopholes. We vigorously challenge tax avoidance, through the courts if necessary. The UK also plays a leading role in international efforts to counter avoidance through sharing of information and intelligence.

Tax avoidance schemes continue to be developed and marketed and it is right that the Government act to close them. No country has found an agreed or enforceable definition of avoidance—much avoidance reduces tax in ways that go beyond the spirit, but not the letter, of the law.

We seek to ensure that anti-avoidance rules are properly targeted so that they only affect those aiming to avoid tax, and where appropriate to consult with businesses on the detail of the legislation. Business has welcomed this approach and it has led to better legislation. We continue to develop our strategy and practice for tackling tax avoidance and we are today publishing a code of practice for banks which builds on the key themes of good governance and transparency with HMRC that have been key components of the Government’s approach to the administration of company tax.

Banks play a vital role in the UK. They are important contributors of tax, and alongside firms in other sectors, banks will want to arrange their tax affairs efficiently. But it is clear that some banks have been involved in tax avoidance that goes well beyond reasonable tax planning. Given their access to capital and financial markets as well as their range of contacts, banks are uniquely placed to enter into transactions designed to avoid tax, offer transactions of this sort to their customers, or simply to provide the very large amounts of funding and other financial instruments these transactions can require. The code seeks to change behaviours and attitudes towards tax avoidance in the banking sector

We, and the public, rightly expect banks, and financial services firms more generally, to show a high degree of responsibility, the highest standards of corporate governance and to have an open, transparent and professional relationship with HMRC. When the Government have provided significant support to strengthen the financial system, it is right that measures are taken to introduce a higher level of public transparency. This will not happen overnight and we need to work with the banks and other stakeholders to achieve it.

This consultation is a starting point in changing the behaviour of banks in relation to tax avoidance. Over the coming months we will be speaking to banks to develop a shared understanding of where banks should draw the line, where we want them to raise and resolve issues with HMRC and to ascertain the appropriate level of accountability for behaviours at a senior level that they can achieve; and what they can expect from HMRC in return.

The consultation document can be found on HMRC’s website at: www.hmrc.gov.uk. A copy has also been deposited in the Libraries of both Houses.

Communities and Local Government

Right to Manage Companies

I have today published a consultation paper that proposes new prescribed articles for Right to Manage (RTM) Companies.

The Commonhold and Leasehold Reform Act 2002 introduced a right for long leaseholders to take over the management of the premises containing their flats without proving any fault on the part of their landlord. Prescribed memorandum and articles of association were provided to govern the operation of these companies. These reflected current company law requirements.

With the changes that are being made by the Companies Act 2006 there is now a need for these prescribed documents to be updated for RTM companies that are incorporated on or after 1 October 2009. This is to ensure consistency between the requirements of these RTM companies and other companies.

The consultation seeks views on the proposed updated company articles and will run for seven weeks until 16 August 2009. The Government would welcome responses to their proposals up until that date.

Copies of the consultation document have been placed in the Library of the House.

Culture, Media and Sport

Digital Switchover Help Scheme

The Secretary of State for Work and Pensions and I have been made aware that the Digital Switchover Help Scheme (the Help Scheme) has sent out a number of inaccurate letters regarding eligibility for help under the scheme. This was as a result of incorrect or incomplete information provided by the Department for Work and Pensions (DWP).

The Help Scheme is run by the BBC under an agreement with the Government. It offers older and disabled people help to switch one TV to digital during switchover in their region. People are eligible if they:

are aged 75 or over; or

have lived in a care home for six months or more; or

get or could get disability living allowance, mobility supplement, attendance allowance or constant attendance allowance; or

are registered blind or partially sighted.

There are two categories of letters involved: letters sent to people who were not eligible; and letters sent to people informing them that they would have to pay a £40 charge when they were, in fact, entitled to the help for free. The DWP apologises for these mistakes and has informed the Information Commissioners Office. DCMS, DWP and the Help Scheme are working closely to ensure that these errors do not occur again.

Letters sent to people who are ineligible

The first set of letters has offered help to people who are not eligible for the Help Scheme.

Approximately 65,000 people were incorrectly sent a letter telling them that they were eligible for help. Almost all live in the Llandudno postcode area; some are in the Llandrindod Wells area and there may be small numbers in Liverpool, Chester, Newport and Lancaster. The Help Scheme and DWP will today write to around 55,000 ineligible people who have not already applied for help or responded to the original letter. This letter apologises for the error and for any inconvenience that may have been caused.

If someone who received the original letter has already applied for help, they will get help exactly as if they had been eligible in the first place. We believe that this will be fewer than 2,000 people.

The Digital Switchover (Disclosure of Information) Act 2007 allows the DWP to disclose some limited information to the BBC or Eaga, the contractor appointed by the BBC to run the scheme. Such information, however, should only relate to people who are eligible for the Help Scheme.

Letters stating that help was available for £40 instead of for free

It costs £40 to participate in the scheme except where eligible people are also entitled to certain income-related benefits. Unfortunately a second batch of letters has been sent to people stating that they would have to pay £40 to participate in the scheme when they should have been informed that it was available to them for free. These are recipients of the income-related component of the new Employment and Support Allowance which was introduced in October 2008. These people should have been entitled to free help from the scheme and the DWP are urgently working to establish the numbers and names. We believe the numbers affected to be small.

Once the people affected have been identified by DWP, letters will be sent to them apologising for this error and making it clear that they can have assistance under the scheme for free. Anyone who has already participated in the scheme will have their £40 reimbursed as soon as possible.

The DWP has now made the necessary changes to the way in which it identifies people eligible for free help and is confident that this error will not happen again.

Environment, Food and Rural Affairs

Veterinary Medicines Directorate (Annual Report and Accounts)

Leader of the House

Government's Draft Legislative Programme (2009-10)

I am pleased to announce that the Government are today publishing their Draft Legislative Programme 2009-10, as a part of the Government’s proposals for “Building Britain’s Future”.

This is the third year that the Government have published their legislative programme in draft for consultation in advance of the Queen’s Speech. This year it is being published as part of the Government’s broader plan for “Building Britain’s Future”. This provides an opportunity for both the public and Parliament to see how the Draft Legislative Programme forms part of the action the Government are taking to build a more prosperous, stronger and fairer country.

The aim of publishing the Draft Legislative Programme is to be transparent about what the Government are planning to achieve through legislation. This provides an opportunity to look across the programme as a whole and take a view as to whether the balance of priorities is right, whether there are important areas that have been missed out or areas of the programme that should be given lower priority. This, in turn, enables views to be fed into the development of the programme before the final programme is announced in the Queen’s Speech towards the end of the year.

As a draft programme, the Government expect it to develop and change over the course of the year, as a result both of consultation and as new issues arise. For example, on 10 June the Prime Minister announced the start of public engagement on further democratic reform, some parts of which could require primary legislation—this exercise will be running in parallel with consultation on the Draft Legislative Programme.

The Government are currently proposing to introduce 11 Bills in key areas in the next session of Parliament (two of which, the Equality and Child Poverty Bills, have recently been introduced but will be largely considered in the next session and one, the Constitutional Renewal Bill, is intended for introduction before the end of this session). The Government have also recently introduced the Parliamentary Standards Bill, intended for Royal Assent before the summer recess, to create an Independent Parliamentary Standards Authority to revise, monitor and administer the system of MPs’ allowances; to set and enforce the rules relating to the registration of MPs’ financial interests; to create new criminal offences for MPs of making false or misleading claims for allowances, failing to register a financial interest and engaging in paid advocacy and to provide for the code of conduct for Members to be placed on a statutory footing.

These Bills are:

Constitutional Renewal Bill

Bribery Bill

Financial Services And Business Bill

Digital Economy Bill

Energy Bill

Flood and Water Management Bill

Improving Schools and Safeguarding Children Bill

Equality Bill

Policing, Crime and Private Security Bill

Child Poverty Bill

Cluster Munitions Prohibition Bill

The Government have already made significant reforms to the House of Lords and will bring forward further reform through the Constitutional Renewal Bill. To complete this final phase of reform, the Government will then set out proposals and publish a draft Bill for a smaller and democratically constituted second chamber.

The Government are keen to receive the public’s views on the Draft Legislative Programme, in particular whether people think the Draft Legislative Programme reflects the right priorities for the United Kingdom and, if not, what other issues do you think the Government should be addressing?

Further information about the programme and how people can comment is available on the Office of the Leader of the House of Commons website (www.commonsleader.gov.uk). The consultation will close on 21 September 2009.

Government Equalities

Equality Bill (Age Discrimination)

The Equality Bill, which is currently before Parliament, will outlaw unjustifiable age discrimination against adults aged 18 or over in the provision of services and the exercise of public functions. It also includes powers to make exceptions from the ban.

We often treat people differently according to their age and this is often appropriate because people’s needs, expectations and circumstances change with their age. Age-based treatment can play an important role in ensuring that people of all ages can participate socially and economically in their community and that services meet people’s differing needs and are delivered efficiently, benefiting individuals and society in general. Different treatment because of age will continue to be allowed when it can be objectively justified or where there are exceptions to the ban on age discrimination.

The powers will be used to put in place a number of specific exceptions, to allow age-based treatment to continue. This will provide a greater degree of legal certainty for service providers to ensure that they do not end beneficial practices or withdraw services out of concern that they may be open to legal challenge. It will also ensure the process of having to justify age-based treatment does not undermine service providers’ ability to continue to provide the service or function on an economic basis or at all.

The consultation issued today —“Equality Bill: Making it work—Ending age discrimination in services and public functions—A consultation” outlines how we are developing our proposals for particular services where we think additional legal certainty is important to encourage beneficial practices and services to continue. It asks specific questions to help shape the exceptions from the ban and obtain further information. The consultation runs until 30 September 2009.

We are placing copies of the document in the Libraries of both Houses. Copies will also be available on the Government Equalities Office website at: www. equalities.gov.uk