Written Ministerial Statements
Tuesday 22 June 2010
The Chancellor of the Exchequer announced today as part of the Budget an increase in the standard rate of VAT to 20 % to take effect from 4 January 2011.
The Government have taken this step to contribute to tackling the deficit. To protect the public finances from artificial avoidance aimed at exploiting the change in VAT rate where there is no current economic activity, the Finance Bill 2010 will contain anti-forestalling legislation to ensure that the VAT rate change is fully effective.
Anti-forestalling legislation will apply from today to ensure that, in the circumstances specified, supplies with a basic time of supply after the VAT rate increase takes effect will be subject to the rate of VAT in force at that time. The provisions are designed to prevent artificial forestalling while not affecting genuine commercial transactions, and few businesses will need to operate them. The legislation is not intended to catch the normal commercial activity of providing goods and services.
The anti-forestalling legislation will apply from today, but any extra VAT arising from its operation will not become due at the earliest until the date of the VAT rate change. Until then, suppliers should continue to account for VAT as normal, applying the VAT rate at the time of the prepayment, VAT invoice issue or grant of the right or option.
Further guidance on the anti-forestalling legislation is available at www.hmrc.gov.uk. Copies of the guidance have been deposited in the Libraries of both Houses.
Double Taxation Agreement (United Kingdom and Hong Kong)
A new Double Taxation Agreement with Hong Kong was signed on 21 June 2010. The text of the agreement has been deposited in the Libraries of both Houses and made available on HM Revenue and Customs’ website. The text will be scheduled to a draft Order in Council and laid before the House of Commons in due course.
The Government have today announced a two-year pay freeze for all public sector workforces from 2011-12, but remain committed to honouring in full the three-year pay award recommended by the School Teachers’ Review Body. I can therefore confirm that the teachers’ pay uplift for this year will be implemented from September 2010, marking the last instalment of their three-year pay award.
Environment, Food and Rural Affairs
Agriculture and Fisheries Council
My hon. Friends the Minister of State and the Under-Secretary of State for Environment, Food and Rural Affairs, the Minister with responsibility for natural environment and fisheries, the hon. Member for Newbury (Richard Benyon), will represent the United Kingdom at the Agriculture and Fisheries Council in Luxembourg on 29 June. Richard Lochhead MSP will also attend.
There are a number of items on the agenda relating to agriculture and fisheries which are of significant interest to the United Kingdom. Discussion will take place on the following:
Simplification of agriculture legislation;
Quarterly report on the dairy market;
Commission communication on the consultation on fishing opportunities for 2011;
Reform of the common fisheries policy.
In addition, Council will vote on six decisions relating to GM maize food/feed, and may adopt conclusions on the international competitiveness of the European agri-food model. There are currently two items under any other business—information from the Commission on the implementation of the European fisheries fund (EFF); and information from the Netherlands on the “Conference on Agriculture, Food Security and Climate Change”.
Finally Ministers will discuss the reform of the common market organisation (CMO) for fishery and aquaculture products over lunch.
Foreign and Commonwealth Office
General Affairs Council and Foreign Affairs Council
The General Affairs Council (GAC) and Foreign Affairs Council (FCA) were held on 14 June in Brussels. My right hon. Friends the Foreign Secretary and the Development Secretary represented the UK at the FAC. I also attended, and represented at the GAC.
The agenda items covered were as follows:
Foreign Affairs Council (Development Ministers)
The provisional report of the meetings of both Development and Foreign Ministers, including conclusions, can be found at:
Development Ministers discussed the millennium development goals (MDGs), an EU gender action plan, and development and piracy in East Africa.
Ministers adopted conclusions on the MDGs (see web link above) which will form the basis for EU negotiations ahead of the New York UN MDG summit in September 2010. The Development Secretary strongly encouraged EU member states to uphold their collective commitment to provide 0.7% ODA/GNI by 2015, and called for annual leaders’ discussions on ODA.
The Development Secretary also stressed the importance of maternal and child health, two of the most off-track MDGs, and was supported in his recognition of the importance of policy coherence, aid effectiveness and transparency. The Development Secretary further supported the adoption of an EU gender action plan for 2010-15, and welcomed the High Representative’s (Baroness Ashton) aim to launch a comprehensive strategy for the horn of Africa to deal with the problems of piracy and development in this region.
Foreign Affairs Council (Foreign Ministers)
Tony Blair, representing the quartet, briefed Ministers on Israel’s undertakings to ease the Gaza blockade and to hold an inquiry on the Gaza flotilla incident. Following a substantive discussion of the flotilla incident, Ministers set out their views on wider middle east process issues including Gaza access, and the helpful role played by other states in the region. The Council agreed conclusions that can be found at the web link quoted above.
Ministers heard a presentation from International Criminal Tribunal for former Yugoslavia (ICTY) Chief Prosecutor, Serge Brammertz, on Serbia’s and Croatia’s co-operation with the court.
Ministers agreed to submit Serbia’s stabilisation and association agreement to their respective parliaments for ratification. They also agreed to return to the issue of Serbia’s accession application at a later time.
The Council agreed conclusions welcoming the outcome of the high-level meeting on the Western Balkans in Sarajevo on 2 June, which emphasised the EU’s commitment to the European perspective of the Western Balkans countries in line with the Thessaloniki agenda. Ministers also expressed concern about the political situation in Albania and discussed the situation in the former Yugoslav Republic of Macedonia.
Ministers discussed Iran following the adoption of United Nations Security Council resolution (UNSCR) 1929 concerning Iran’s nuclear programme. The Foreign Secretary set out his strong support for the UNSCR and advocated an endorsement of a draft declaration for the June European Council.
Ministers agreed conclusions (see web link above). They also agreed a draft declaration for the June European Council inviting the next Foreign Affairs Council to agree measures to implement UNSCR 1929 and a range of additional EU measures.
Ministers agreed conclusions on child labour (see web link above).
Over lunch, Ministers heard a presentation from Rear Admiral Hudson (UK), the outgoing operational commander of the EU’s counter-piracy mission (Atalanta) now replaced by Major-General Buster Howes RM (UK). The Council agreed that the EU should extend the operation for a further two years and the Foreign Secretary stated the UK would be willing to offer Northwood as the operation headquarters until the end of 2012. When the formal Council decision to extend is prepared later this year, it will be subject to parliamentary scrutiny in the usual way. Ministers agreed conclusions (see web link).
Ministers discussed Cuba in the context of the evaluation of the EU’s common position. There were no conclusions, but Ministers may revert to the issue in September.
Haiti and Disaster Response
The Commissioner for International Co-operation, Humanitarian Aid and Crisis Response, Kristalina Georgieva, presented lessons learned on the EU’s Haiti disaster response. The Commissioner noted opportunities under the Lisbon treaty for better co-ordination and institutional management of responses and ensuring planned rather than ad hoc humanitarian, civil protection and military responses.
Baroness Ashton set out priorities ahead of the informal OSCE ministerial in July which will discuss the Corfu process.
This was added to the agenda following recent violence over the weekend. Ministers adopted conclusions that stressed the need to restore public order and respect for the rule of law, to pursue the political process, and underlined the need for dialogue. The conclusions also reflected the EU’s readiness to respond to the most urgent humanitarian needs.
General Affairs Council
The provisional text of the Council’s discussion and agreed conclusions can be found at:
European Citizens’ Initiative (ECI)
The presidency sought agreement for a revised “general approach” to its proposal implementing the ECI: an initiative from the Lisbon treaty that will enable EU citizens to ask the Commission to bring forward legislative proposals if there are at least 1 million signatories from a significant number of member states.
I supported the principles of the ECI, but expressed concern about the level of bureaucracy in the proposal; specifically, dual admissibility checks, verification processes and the lack of an impact assessment. However, I noted that this was only the start of a process, and that the “general approach” would evolve. As parliamentary scrutiny is still outstanding, I said that the UK would abstain from supporting at this time. The presidency concluded that it had sufficient support to proceed with the “General Approach”, but acknowledged the UK’s concerns and recognised that the UK had captured the mood of the Council.
June European Council (JEC)
Ministers examined draft conclusions for the European Council meeting to be held on 17 June. The discussion covered: jobs and growth and the adoption of the Europe 20202 strategy; preparations for the G20 summit in Toronto millennium development goals; and climate change. The Prime Minister will report to Parliament on the outcome of the JEC.
I set out the UK’s positions on MDGs, economic governance and education targets.
European External Action Service (EAS)
The presidency and the High Representative set out progress in the ongoing negotiations with the European Parliament on the establishment of the EAS.
The Council also agreed conclusions on:
economic and social cohesion in the EU;
the EU’s outermost regions;
common practices in consular assistance and crisis co-ordination;
Court of Justice of the European Union (CJEU): Judicial Reappointments
At a conference of representatives of Governments of member states on 23 June 2010, 11 sitting judges to the General Court are to be reappointed.
The judges to be reappointed are: Frimodt Nielsen (Denmark); Franklin Dehousse (Belgium); Heikki Kanninen (Finland); Irena Wiszniewska-Bialecka (Poland); Josef Azizi (Austria); Juraj Schwarcz (Slovakia); Küllike Jürimäe (Estonia); Marc Jaeger (Luxembourg); Maria Eugénia Martins de Nazaré Ribeiro (Portugal); Otto Czúcz (Hungary); and Savvas Papasavvas (Cyprus).
Following favourable opinions of the candidates from the Judicial Appointments Panel (Article 255 Treaty on the Functioning of the European Union) and having consulted with the Justice Secretary and Attorney-General, the Foreign Secretary agrees with the proposal to reappoint the 11 judges.
EU Transport Council
I will attend the second Transport Council of the Spanish presidency which will take place in Luxembourg on 24 June.
A wide-ranging EU-US air transport agreement came into effect in April 2008. Its provisions included removal of all commercial restrictions on flights between the EU and the US; and improved co-operation in safety, security, competition, consumer protection and the environment. Negotiations for “Stage 2” of the agreement began in May 2008. The negotiations have led to a solid outcome, which includes recognition of the importance of greater access for airlines to global capital markets and a widening of the reach of the agreement in environmental matters. I propose to agree to the signature of the Stage 2 agreement at the Council. A signing ceremony is planned for later in the day.
The Commission will present to the Council its report on the EU response to the consequences of the recent volcanic ash cloud on air transport. The Commission’s report was produced at the request of an extraordinary session of the Transport Council on 4 May. The Commission is expected to provide an overview of the technical work that has been taking place at national, European and global level to increase the understanding of safe flying in areas affected by ash and to examine how the rules and guidance might be improved. My intention would be to encourage further co-operation in this area in order to ensure that airlines and passengers are subjected to the minimum of disruption internationally should there be another eruption. The issue of financial assistance for companies affected by the ash disruption may arise. While recognising the significant financial impact of lost revenue and/or passenger assistance, I do not intend to raise any expectations and would propose to emphasise that budgetary constraints make any support from UK taxpayers unlikely.
The Council will be asked to adopt conclusions following the Commission Communication on Urban Mobility, which set out an action plan. We support the principles of the action plan, and the opportunity to spread best practice across the Community. The conclusions take a common-sense approach by making use wherever possible, of existing institutions, programmes and instruments. I welcome the recognition that intelligent transport systems offer strategic options for improving urban mobility as this is an area that the UK has focused on. I also welcome the focus in the conclusions on research of all kinds on clean and energy-efficient vehicles. It is important that the action plan does not lead to further legislation, and that cities and city regions retain the freedom to pursue and implement locally relevant solutions.
There will be a policy debate on the role of transport in the “Europe 2020 strategy for smart, sustainable and inclusive growth”. No conclusions are expected and no decisions will be taken. I will take the opportunity to highlight how EU transport policy can and should promote jobs and growth.
Notable among the AOB items is a report from the Commission on security scanners. This report concludes that security scanners at airports could help to reinforce passenger security and, where deployed, should be covered by common EU-wide standards covering performance, fundamental rights and health provisions. Scanners are currently deployed at several UK airports.