Skip to main content

Written Statements

Volume 497: debated on Tuesday 13 October 2009

Written Ministerial Statements

Tuesday 13 October 2009

Children, Schools and Families

Official Receptions

The Secretary of State for Children, Schools and Families (Ed Balls): I have today published a list of official receptions held by my Department in the financial year 2008-09.

The total cost of official receptions held by Ministers at the Department for Children, Schools and Families for the financial year 2008-09 was £4,763.00 (£12.00 per head).

Official Receptions Hosted by Ministers at the Department for Children, Schools and Families 2008-09






Summer drinks with Stakeholder


Secretary of State and Ministers


Annual Summer reception for media correspondents


Secretary of State and Ministers


SEN Information Bill reception


Parliamentary Under-Secretary of State for Schools and Learners


Annual Winter reception for media correspondents


Secretary of State and Ministers


Christmas drinks with Stakeholders


Secretary of State and Ministers


Child Health Strategy Stakeholder reception


Secretary of State and Ministers

Foreign and Commonwealth Office

Sri Lanka

My right hon. Friend the Secretary of State for International Development and I would like to inform the House about the Government’s ongoing active engagement in Sri Lanka following the end of the conflict almost five months ago between the Liberation Tigers of Tamil Eelam (LTTE) and the Government of Sri Lanka.

When I visited Sri Lanka with French Foreign Minister Bernard Kouchner in April our three areas of focus were to:

urge the Government and LTTE to minimise the humanitarian impact of the then ongoing hostilities and to improve conditions for internally displaced persons (IDPs);

to call for a strengthening of the rule of law to address human rights concerns;

and to encourage urgent action on setting out a political process to address the grievances of minorities. I will cover each of these in turn.

In summary, as I explained to Foreign Minister Bogollagama in New York at the end of last month, we remain deeply concerned about the situation, not least but not only because of the forthcoming monsoon. Lives are at stake but so is the long term health of Sri Lanka.

Humanitarian Situation

The last stage of fighting created almost 300,000 IDPs, the majority of whom were moved to camps in the north of Sri Lanka, near Vavuniya. Approximately 253,000 still remain inside IDP camps. The latest UN figures of 28 September show that only 7,000 people have returned to their place of origin and a further 8,000 vulnerable IDPs have been released to host families. I can report some improvement since my hon. Friend the Parliamentary Under-Secretary of State for International Development, my right hon. Friend the Member for Kilmarnock and Loudoun (Des Browne) and I visited the camps in three separate visits in late April and early May. Sanitation facilities have improved and malnutrition cases have decreased markedly. Access for humanitarian agencies is better but remains adhoc and there is scope for further improvements. The IDPs continue to have inadequate access to health care and following a drop in the river level delivery of adequate water has been problematic in recent weeks. Unusually heavy rains during August demonstrated that the camps are ill-equipped for the sustained heavy rains expected from mid-October to December during the monsoon season.

We are concerned over the lack of freedom of movement for the IDP population because of the nature of the ‘closed’ camps and over the ongoing separation of families and the heavy military oversight of the camps. We are also concerned that there is no independent visibility of the process by which over 11,000 IDPs have been identified as suspected LTTE cadres and moved to separate camps and that the UN and International Committee of the Red Cross (ICRC) have had no access to them since July.

The seriousness in which we continue to hold the humanitarian situation was demonstrated by the visit last week of my hon. Friend the Parliamentary Under-Secretary of State for the Department for International Development. He visited areas of the former conflict zone, IDP camps and centres for the rehabilitation of former child combatants. He saw for himself the conditions for civilians inside the camps and ongoing contingency preparations for the monsoon.

Since September 2008, the Government have allocated £12.5 million of humanitarian aid to Sri Lanka. In the final stages of the war we used our funding to help the ICRC and the UN to deliver critical humanitarian assistance to civilians trapped in the conflict zone and to ensure facilities in IDP camps met minimum standards. Following the end of the conflict we have continued to support critical work inside the IDP camps, for example funding UN agencies to vaccinate children against polio and measles and to provide emergency drainage in an attempt to minimise the impact of the forthcoming monsoon rains. However, in recent months we have increasingly focused our support on activities designed to facilitate the speedy return of civilians to their home areas. For example, we have funded the International Organisation for Migration (IOM) to provide temporary identity cards to IDPs and transport for those returning to their homes and funded the Mines Advisory Group (MAG) to demining civilian areas of the former conflict zone. All of the UK’s humanitarian funding continues to be channelled through neutral and impartial humanitarian aid agencies to help those who need it most.

My hon. friend the Parliamentary Under-Secretary of State for International Development used his visit to highlight our concern about the lack of progress on returning IDPs to their homes and to urge the Sri Lankan Government to meet their own target of returning the majority of IDPs by the end of the year. He further encouraged the Sri Lankan Government to release IDPs who have already been screened. He made clear that it was not acceptable to transfer IDPs from one closed camp to another in a different part of the country, as has happened in some cases.

Freedom of movement for the IDP population is critical if a humanitarian crisis is to be averted in the IDP camps when the monsoon rains fall. The humanitarian gains made in the IDP camps risk being lost from the resulting deterioration in water and sanitation facilities and consequent effect on health indicators. We are working with others to press for freedom of movement to be restored to the IDPs.

During his visit, my hon. Friend the Parliamentary Under-Secretary of State for International Development confirmed that once the critical monsoon season is over we will only fund life-saving emergency interventions in the existing ‘closed’ camps and that we will not support people simply being transferred from the existing ‘closed’ camps to new ‘closed’ camps. A £4.8 million of UK funding remains available to help the Sri Lankan Government in the process of recovery from the conflict in the areas of demining, support to enable the return of the IDPs to their places of origin and to help them recover their livelihoods.

We continue to support multilateral engagement in Sri Lanka. The UN has a key role in focusing international concern; co-ordinating the international humanitarian response; and providing advice and support to the Government to help heal the rifts that divide Sri Lanka’s communities. We welcome the involvement by UN agencies on the ground in Sri Lanka and the ongoing senior level engagement that has included visits to Sri Lanka since the end of the war by UN Secretary-General Ban Ki-moon, Lynn Pascoe the Under-Secretary General for Political Affairs and Walter Kaelin, the UN’s Special Representative for the human rights of IDPs. The UN’s experience and expertise in working in post-conflict environments is widely acknowledged and I urge the Sri Lankan Government to engage constructively with all levels of the UN.

At the International Monetary Fund (IMF), the UK took the decision in July not to support the stand-by arrangement for Sri Lanka. While we acknowledged the need to help Sri Lanka avoid a damaging balance of payments crisis that would have disproportionately affected the poorest and most vulnerable members of society, we judged that the risks of a default had diminished and that the humanitarian and political situations posed risks to implementation of the programme. The programme was passed by the IMF board and we will now turn our attention to monitoring the programme’s implementation through a robust review process.

Human Rights

The wider human rights situation in Sri Lanka remains very worrying following the end of the conflict. Although reduced, reports of extra-judicial killings, abductions, disappearances and intimidation have continued. Media and civil society organisations who are critical of the Government remain at particular risk and continue to be the victims of anonymous death threats and, in some cases, violent attack. The recent sentencing of a journalist, Tissainayagam, to 20 years imprisonment sent a very negative message about media freedom in Sri Lanka. A culture of impunity continues, with no progress towards identifying the individuals behind recent high profile human rights abuses, such as the murder in January of Lasantha Wickrematunge, a leading newspaper editor. We welcome the fact that in two recent cases, the alleged abduction of a university student and the killing of two youths in southern Sri Lanka, the Government have ordered investigations into alleged police involvement and action is being taken through the Sri Lankan courts. The Sri Lankan Government continue to retain extraordinary emergency powers which limit the fundamental democratic freedoms of its citizens. With the LTTE defeated and a substantially reduced terrorist threat we hope to see the Emergency Regulations lifted soon.

In our bilateral contacts we have encouraged the Government of Sri Lanka to tackle the culture of impunity in Sri Lanka. In this light we welcome the investigations and subsequent legal action against police officers involved in alleged abuses and encourage the Government to take similar action in all cases where such allegations are made. We have also been active in working with the EU to call for an improvement in human rights in Sri Lanka. An improvement is important too in the context of the investigation by the EU Commission looking at whether Sri Lanka should continue to benefit from the EU trade scheme, GSP+ which is dependent on the implementation of a number of human rights-related conventions. We have consistently encouraged the Sri Lankan Government to engage constructively with the Commission.

Political Settlement

At the end of May the Sri Lankan President issued a joint statement with UN Secretary-General Ban Ki-moon recognising the need to work ‘towards a lasting political solution ....fundamental to ensuring long-term socio-economic development’, and to take measures ‘to address possible violations of international humanitarian law during the conflict.’ The Government of Sri Lanka have stated their intention to begin a process of political reform and reconciliation after elections which are expected in the first half of 2010. They have made some welcome moves to reach out to minority communities in the interim. For example, the President recently opened a dialogue with the Tamil National Alliance, the principal grouping of Tamil politicians inside Sri Lanka, and for the first time in over 25 years the police force have begun a recruitment process in Jaffna, a majority Tamil area in northern Sri Lanka. The Government have publicly recognised that the Tamil Diaspora can play a positive role in helping shape the future direction of Sri Lanka. I encourage the Government to continue with, and to broaden, their initial contacts with representatives of the Diaspora. We are concerned that the Government have yet to make clear how it intends to address concerns that both sides may have been responsible for violations of international humanitarian law during the conflict.

The UK has consistently maintained that one of the prerequisites for lasting peace in Sri Lanka is a political settlement that fully takes into account the legitimate grievances and aspirations of all communities. When the my right hon. Friend the Prime Minister spoke to President Rajapakse on 18 May he urged him to be magnanimous in victory. On the same day I pressed Foreign Minister Bogollagama to seize the historic opportunity—and duty—to lay the foundations for the peaceful, secure and prosperous Sri Lanka that we all want to see. Despite some recent welcome developments the Government need to show greater urgency in making clear their plans for future political reforms if they are serious about wanting to win the confidence of Tamils, Muslims and other communities in Sri Lanka. We hope to see an inclusive, genuine political process initiated as soon as possible.

We have consistently called for a credible process of accountability, most recently during the visit to the UK of the Sri Lankan Attorney-General and Justice Permanent Secretary in early October and the visit of the Sri Lankan Justice Minister in September. Addressing accountability could play an integral role in the process of reconciliation and will be essential in creating conditions for a sustainable end to the conflict. The recent broadcast of mobile phone footage purporting to show members of the Sri Lankan military summarily executing Tamils underlines the importance of lifting the fog of uncertainty surrounding events of the final months of fighting when independent observers had no access to the conflict zone.

The Government remain actively involved in working for a peaceful Sri Lanka. We have urged the Sri Lankan Government, in a number of direct contacts, to make greater progress on improving conditions inside the camps, on returning IDPs to their homes and on working for reconciliation. We urge that freedom of movement be returned to IDPs, and highlight the urgency of doing so before the monsoon. We also encourage swifter progress on the development of an inclusive political process to address minority concerns and for an improvement in the rule of law, including accountability for possible violations of international humanitarian law, as both would be essential for a sustainable end to the conflict.

We continue to work with other international partners, such as the US and India, the EU and the UN. My right hon. Friend the Prime Minister’s Special Envoy for Sri Lanka, my right hon. Friend the Member for Kilmarnock and Loudoun, visited Washington and the UN (in New York and Geneva) in September to exchange views on Sri Lanka with other partners and will be writing to hon. Members this week to inform them of his visits.

The final death toll of the 25-year conflict may never be known, but it is likely that over 100,000 Sri Lankans of all communities died over the course of the conflict. The Sri Lankan Government need to steer the country away from the violence that has troubled the country for so long and towards long-term peace, security and prosperity for all their citizens. The Government will continue to work with the Sri Lankan Government and with other partners to help bring this about.


Patient Safety (Government Response to Select Committee Report)

We are today laying before Parliament the Government’s response (Cm 7709) to the Health Select Committee (HSC) report “Patient Safety”, which was published on 3 July 2009.

“High Quality Care for All”, the final report of the “NHS Next Stage Review”, published in June 2008, set out a vision of an NHS that has quality of care at its heart; and works in partnership with patients and the public, providing people with more information and choice.

Securing the safety of patients applies to all healthcare disciplines and it is a challenge faced by healthcare systems all over the world. Safety is a core dimension of quality and relies on a whole system if patients are to receive the highest level of care. The key to achieving this is creating a culture that is open and fair—open to patients and fair for staff. This requires a broad range of actions in organisational leadership, performance improvement, environmental safety, risk management and clinical engagement.

The Health Select Committee’s report praises the Government for being the first in the world to adopt a policy, that makes patient safety a priority and welcomes the creation of the National Patient Safety Agency and the work of the National Reporting and Learning System to facilitate systematic reporting and learning from adverse events involving patients.

The Committee was concerned that not all services are safe enough yet and made several recommendations for the future improvement of patient safety.

The Government response welcomes the Health Select Committee’s report and sets out the measures that the Government have been taking to improve patient safety as part of its quality agenda.

Today’s publication is in the Library and copies are available to hon. Members from the Vote Office.

Home Department


I write today to inform the House of changes we are making to the way in which we register initial asylum applications and further submissions, where someone whose appeal rights have been exhausted asks us to re-examine their claim on the basis of further information or a change in their personal circumstances.

In February 2003 we announced that anyone wishing to make an asylum claim would need to do so in person, and postal applications for asylum would no longer be accepted. We expect individuals to make their claim at a port of entry, where they will be screened and any request for support will be considered. This change was made as part of our reform of the asylum system and has ensured that applications are gripped at the beginning of the system, identity of the applicant is verified and cases are routed quickly to the responsible caseowner to progress the case.

Since then, we have made great progress in processing asylum applications as quickly as possible. We reached our target of concluding 60 per cent. of new asylum cases within six months in December 2008 and we continue to set ourselves challenging targets for the conclusion of cases. We have also been working closely with the UNHCR to improve the quality of our decision making.

There are, however, parts of the system where information is not gripped as quickly, and it is this we are seeking to address with the changes we will make today. When applicants have exhausted their appeal rights, they often provide further submissions asking us to reconsider their claims. Currently, individuals can still make their further submissions by post.

From 14 October, anyone wishing to make a further submission will need to do so in person by appointment, and we will stop accepting further submissions by post. The following arrangements will be in place:

those who claimed asylum before 5 March 2007, and whose case is being managed by CRD, will be required to make any further submissions by appointment and in person at Liverpool Further Submissions Unit;

those who claimed on or after 5 March 2007 will be required to make any further submissions in person at a specified reporting centre in their region.

In the very exceptional case where a person is genuinely unable to attend one of these sites, alternative arrangements will be made to ensure that person can still make further submissions.

It is important that anyone seeking asylum does so at the first opportunity, and we continue to expect individuals to make their asylum claim at the port of entry, on arrival.

From 14 October, it will no longer be possible for initial asylum applications to be made in Liverpool, and anyone wishing to make an initial asylum application in country will be required to do so in person at the Asylum Screening Unit in Croydon.

Identity Cards

I am pleased to announce that provisions in the Identity Cards Act 2006 are being commenced as from Tuesday 20 October 2009 so as to enable applications to be made for identity cards at a fee of £30. This will apply to people working in the Home Office, the Identity and Passport Service and elsewhere who are engaged on work relating to the issue of identity cards, and will be extended later in 2009 to residents of Greater Manchester and airside workers at Manchester and London City airports and in early 2010 to other locations in the North-West.

Anti-social Behaviour

I am today announcing a number of measures to step up action on anti-social behaviour.

Since this Government introduced ASBOs in 1998 there have been real changes in how people feel about ASB—17 per cent. of people felt that levels of ASB in their areas were high in 2008-09 compared to 21 per cent. in 2002-03. The tools and powers introduced by this Government over the last 11 years are working: the 2006 NAO report on anti-social behaviour found that 93 per cent. of people desisted from ASB after the third intervention. A significant package of practitioner support has also been provided including workshops, the ASB telephone ActionLine service and the ASB action website.

I am determined to ensure that we continue to improve our response; tackling, not tolerating ASB. Too many people continue to suffer at the hands of a small number of individuals intent on behaving anti-socially.

Today, I am announcing a package of measures to improve the collective response to ASB. Action will be stepped up on tackling breach, on ensuring that minimum service standards are in place locally and on providing more practical help to victims and witnesses of ASB.

Improving local ASB services is key. There is a comprehensive range of tools and powers that local agencies can use to tackle ASB. These must be utilised fully and we will provide training on civil powers to local practitioners and others involved in tackling ASB.

Alongside this, we will step up action on breach of ASBOs. ASBOs are designed to inhibit the behaviour of perpetrators and protect victims and so we must ensure that, once given, they are enforced and any breach dealt with appropriately. The Office for Criminal Justice reform will write shortly to LCJB chairs to ask them to assess how effectively breaches are being dealt with, seeking assurance that swift and appropriate action is being taken in all cases which we plan to back up with new guidance. There will be an expectation that information from the original ASBO case will be taken into account before sentencing of breach. This will include a community impact statement where there is one. We are currently piloting the use of community impact statements in cases when an ASBO has been breached with a view to rolling the scheme out nationally. We will also legislate shortly to make parenting orders mandatory in cases where a child breaches an ASBO.

Local areas will also be encouraged to set and publicise minimum service standards over the next six months so that the public will know what to expect. These standards will vary from area to area, but at a minimum should cover a commitment from partners to:

reduce perceptions of ASB year on year;

take reported cases of ASB seriously; recording, investigating and keeping victims informed of action taken;

provide regular information to residents on what action is being taken to tackle ASB;

offer support and practical help to victims of ASB;

ensure an effective link between neighbourhood policing and neighbourhood management;

provide residents with a right of complaint to CDRPs/CSPs if effective action is not taken by local agencies through existing channels.

Targeted support and challenge will be provided to areas where more than 25 per cent. of the population think anti-social behaviour is a big or very big problem. Over the next three months we will offer support and develop individual solutions to local problems in these areas, reflecting the varying forms that ASB can take.

Central to renewed action on ASB, is the need to improve services to victims. I have announced an extension of the funding in “Justice Seen Justice Done” pioneer areas, for new, local victims champions in the targeted areas. The role of the champions will be to promote the needs of ASB victims and coordinate local services to ensure victims receive the support and information they want and need. They will deliver a more intensive package in the areas where ASB perceptions are highest. We will also extend victim support services to all victims and witnesses of ASB in magistrates court and we will introduce a national training programme for ASB coordinators to improve their work.

This new set of measures will help improve the way local partners deal with anti-social behaviour. We must take concerted action now to get our response to ASB right. The perpetrators must face swift and appropriate action. And this must be delivered alongside adequate support for both victims, witnesses and the wider community. Local councils, the police, social landlords and other local partners must listen to their communities, understand their concerns and respond to them effectively.


Boundary Commission for Wales

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 Lloyd Jones re-appointed as Deputy Chair of the Boundary Commission for Wales effective until 31 December 2013.

Legal Aid

It is 10 years since the Legal Services Commission (LSC) was established under the Access to Justice Act 1999. In that time there has been considerable change in the way that legal aid has been delivered, with a strong focus on ensuring that the people who need help most—the vulnerable in our society—have access to justice.

Legal aid expenditure amounts to £2.1 billion a year. This is comparably one of the most generous schemes in the world. Costs per head of population run at £38 per head1 compared with £30 in Scotland, £36 in Northern Ireland and the following in comparable common law countries: £8 in the Republic of Ireland, £5 in Canada, £8 in New Zealand and £9 in Australia. In the current climate, it is even more important that this public money is managed efficiently and effectively. We have worked with the LSC to take necessary action to protect public funds and focus them on helping those in need.

One of the first steps is to conduct a review of legal aid and to consider ways in which the delivery of legal aid services might be improved. The Access to Justice Act (section 2) envisaged that the Government may eventually want to separate the Community Legal Service (CLS) and the Criminal Defence Service (CDS) to ensure that CLS resources are not swallowed up by the CDS and that the latter plays its full part in delivering an efficient and effective criminal justice system.

I have invited Sir Ian Magee to conduct a review. The terms of reference of the review are as follows:

To review the existing delivery and governance arrangements of the legal aid system, and make recommendations that:

explore the separation of the CDS and CLS and options for doing so effectively and efficiently should that be the recommended way forward;

provide for effective and transparent financial management of both funds and their administration;

provide for effective ministerial accountability and policy direction in respect of both the CDS and CLS, while continuing to ensure that every application to the CLS and CDS funds are decided fairly, within the criteria, at arms length from Government;

identify appropriate delivery models for both the CDS and CLS and their relationship with the Ministry.

In addition to this review, the Ministry of Justice and the LSC are reviewing the current financial and governance frameworks to ensure that where there are any potential opportunities for immediate improvement, these are taken forward without delay.

1 Costs per head for “legal aid” are shown as much lower in most mainland European systems but their costs are not comparable with common law countries because the systems are so different and many costs attributed to legal aid in common law jurisdictions are subsumed within the total costs of the judicial systems in mainland Europe—see European Commission for the Efficiency of Justice: European Judicial Systems.

HM Courts Service Estates

The Government are committed to ensuring that everyone has access to justice and that justice is provided locally. We need to ensure that we have a modern court estate that is properly aligned to where services are needed, that the estate is efficiently utilised and that courts have the necessary facilities for victims and witnesses and to allow proper access for court users with disabilities.

The Government must always look to ensure there is an effective and efficient system to deliver justice so that we can continue to provide these vital public services at a level that offers real value for money for the taxpayer. Having carefully considered this, and following a recommendation from the HM Courts Service Board, I am today announcing our intention to consult on the closure of the following courts:

Bourne Magistrates Court

Bridport Magistrates Court

Cheshunt Magistrates Court

Cullompton Magistrates Court

Dorking Magistrates Court

Eastleigh Magistrates Court

Gainsborough Magistrates Court

Havant Magistrates Court

Launceston Magistrates Court

Leigh County Court

Louth Magistrates Court

Midenhall Magistrates Court

Minehead Magistrates Court

Sherbone Magistrates Court

Sleaford Magistrates Court

Stamford Magistrates Court

Wantage Magistrates Court

Wareham Magistrates Court

Wells Magistrates Court

Whitby Magistrates Court

Widnes Magistrates Court

The majority of these courts are currently significantly under utilised. Local representative groups, including members of the judiciary and HMCS staff, have been consulted and as a result decisions have already been taken not to list any work in these courts. In all cases there are alternative courts within a reasonable travelling distance where services will continue to be provided.

It is right that going to court should not place undue stress on the victims and witnesses of crime; Her Majesty’s Courts Service has made significant improvements in the facilities for these court users over recent years, these improvements have helped to make giving evidence in court less stressful. We need to ensure that court buildings have suitable facilities for all court users. Many of the courts listed above do not have adequate facilities for victims and witnesses; in addition a number of the buildings do not allow adequate access for disabled court users. Due to the low utilisation rates and in some courts, physical constraints, I do not believe it would provide good value for money to spend taxpayers’ money to bring these buildings up to the required standard at the taxpayers’ expense.

I am keen to hear the views of court users and other interested parties; the consultation exercises will allow them to express their views on the proposals. I will make a decision on how to proceed after consideration of those representations.

Following an earlier consultation exercise on the future of Nelson County Court, I have decided that the court should be closed. I have come to that conclusion based on the arguments set out in the consultation paper and the view of the majority respondents that the court should close.

Today we are also publishing a discussion paper of the future provision of magistrates court in London. This paper is aimed at court users and other people affected by the provision of magistrates courts services in London having regard to the possibilities presented by virtual courts. It will form a basis for HMCS managers to discuss how magistrates court services should best be arranged to meet the needs of the communities they serve. The conclusions from this will form the basis of a formal consultation on a proposed way forward. The paper is available on the Ministry of Justice website ( Together these proposals set out a positive step forward to ensuring that HMCS provides sufficient accessibility whilst directing and prioritising its resources to where they most matter for the communities it serves.

The consultation documents and the response to the consultation paper on Nelson County Court will be published on the Ministry of Justice website. Copies will be placed in the Libraries of both Houses, and in the Vote Office and the Printed Paper Office.

Northern Ireland

Equality Commission for Northern Ireland

I am pleased to announce the appointment of four new Commissioners to the Equality Commission for Northern Ireland. Anna Carragher, Lyn McBriar, Dermot Nesbitt and Peter Sheridan took up office on 21 September 2009

Equality for all is at the heart of the Government’s vision of a modern, fairer society. The Equality Commission is a key institution of the Belfast Agreement and plays a vital role in protecting and promoting equality for all members of our diverse society in Northern Ireland. The Commission is now marking its 10th anniversary and it is facing new challenges, not least working with an increasingly diverse, multicultural society in a testing economic environment.

I am confident that the four new Commissioners bring a wealth of knowledge, skills and understanding, helping the Commission to meet the challenges ahead and build on their considerable achievements over the past 10 years.


Tier One UK Airports (Economic Regulation)

My right hon. and noble Friend the Secretary of State for Transport, Lord Adonis, has made the following ministerial statement:

In March this year, the Government published their consultation on reforming the economic regulation of airports. This contained a package of proposals to strengthen the financial resilience of major airports, support investment and ensure the continuation of operations in the event of financial difficulties for airport operators.

These are challenging and uncertain times for the aviation sector. Following representations, I am bringing forward announcements on the financial elements of the review to help provide as much certainty as possible for both the industry and its investors. We will be responding to the other elements of the consultation later this year.

To this end, I can announce that the Government will introduce, as soon as parliamentary time will allow:

A new duty on the Civil Aviation Authority (CAA) to ensure that airports can finance their licensed activities. This will sit as a supplementary duty to a primary duty to promote the interests of existing and future passengers.

A package of licence conditions to introduce financial ring-fencing. Following careful analysis of the evidence, the Government have concluded that the costs of introducing certain elements of the ring fence would exceed the benefits. There will therefore be derogations for those elements of the ring fence that would cut across existing financing arrangements.

A licence condition requiring airport operators to maintain a minimum creditworthiness.

Adequate protection for consumers is our priority, so I can also announce that we will consult further before the end of year on the following additional measures which will further improve the resilience of major airports:

The possible introduction of a licence condition requiring airport operators to produce and maintain a continuity of service plan, setting out how the airport could continue to serve passengers through an insolvency procedure, thus further reducing the risk of airport closure.

A mechanism for the regulator (CAA) to “switch on” and “switch off” ring-fencing provisions. The regulator might decide to switch on ring-fencing if circumstances were to change and where the benefits outweigh the costs, for example because an operator had moved from a secured to an unsecured financing structure.

These measures replace the introduction of a Special Administration regime proposed in the consultation document which I have decided not to proceed with. The March consultation was clear that these proposals would only be taken forward if it could be shown that the costs of introducing such a scheme were not excessive.

Following careful analysis of the consultation evidence, the Government have concluded that the implementation costs of introducing Special Administration would outweigh the benefits, and could significantly restrict airport operators’ ability to commit to ongoing investment in the airport infrastructure, adversely affecting passengers. Given this and the relatively low risk of airport closure upon insolvency, we have concluded that the measures better serve the interests of passengers.

This announcement today supports the sustained investment by airport operators and protects the interest of passengers. We will publish our response to the remaining elements of the March consultation later this year including a summary of consultation responses and a full impact assessment. At the same time we will begin our consultation on the possible additional measures that I have outlined.