Skip to main content

Written Statements

Volume 519: debated on Friday 3 December 2010

Written Ministerial Statements

Friday 3 December 2010

Treasury

ECOFIN

The Economic and Financial Affairs Council was held in Brussels on 17 November 2010. The following items were discussed:

Directive and Regulation on VAT treatment of insurance and financial services

ECOFIN held an orientation debate on proposals to modernise the VAT exemption for financial services, reflecting market developments over the last 30 years. The Council agreed that discussions would continue at working group level, taking account of the views expressed by delegations.

Administrative Co-operation in the field of taxation

The presidency gave an update on negotiations on this directive, which aims to improve arrangements for exchange of information and bring the EU into line with OECD standards. The Council agreed that they would aim to reach political agreement on this issue at their December meeting.

Implementation of the 2009 budget

ECOFIN took note of the presentation by the Court of Auditors on its annual report on the management of the EU’s general budget. The Council called on all parties involved in the management of the EU budget to persist in their efforts to improve controls and to reduce margins of error in budgetary payments. The Government continued to press the case for value for money in the EU budget. The Council is expected to adopt the recommendation to discharge the budget at its meeting in February.

Follow-up to October European Council

The Council took note of the deliberations of the European Council. Ahead of the December ECOFIN, officials will prepare a report on the work of the economic taskforce. They will also take forward work on bank levies and on the how the impact of pension reforms should be accounted for in the implementation of the EU’s stability and growth pact.

Follow-up to the G20 Seoul Summit on 11-12 November

The Council discussed the follow-up to the G20 summit, including as regards the issues of macroeconomic imbalances and the reform of financial regulations.

Financing of measures against climate change

ECOFIN had a high-level discussion on the UN Secretary-General’s Advisory Group on Finance report, fast-start finance, and the green fund. The Council will further consider this issue at the December ECOFIN.

Pensions

The Council adopted conclusions on a report on pensions. The Government support this report, which emphasises the importance of fiscal sustainability and extending working lives.

EU statistics

The Council adopted conclusions on the annual report on EU statistics, which reviewed the progress made on statistical governance.

Other business

a) Baltic Sea Strategy

The Council took note of a presentation by the President of the European Investment Bank regarding the EIB’s contribution to the EU’s strategy for the Baltic sea region. The Government welcome the EIB’s work in the region, and support its intentions to extend the programme to the Danube region.

b) Representation of the Council at the G20 ministerial meetings

The Council discussed EU representation at G20 ministerial meetings. The Government do not see a need to change the existing arrangements, whereby the EU presidency represents the EU and the Commission is an observer.

c) Credit Rating Agencies

At the UK’s request, a statement was laid in the minutes of the Council outlining remaining concerns with an amending regulation for credit rating agencies. The Council took note of concerns expressed.

Meeting of the EU and EFTA Ministers of Finance and Economy

Ministers held a meeting with their European Free Trade Area counterparts. The meeting focused on the consolidation of Government budgets as well as on financial market regulation and supervision.

An extra Economic and Financial Affairs Council was held in Brussels on 28 November 2010.

Ministers unanimously agreed to grant financial assistance, in principle, in response to the Irish authorities’ request, in order to safeguard financial stability in the euro area and the EU as a whole.

Euro-area and EU financial support will be provided on the basis of a programme which has been negotiated with the Irish authorities by the Commission and the International Monetary Fund, in liaison with the European Central Bank.

The financial package of the programme will cover financing needs up to €85 billion, including €10 billion for immediate recapitalisation measures, €25 billion on a contingency basis for banking system supports, and €50 billion covering budget financing needs. Half of the banking support measures (€17½ billion) will be financed by an Irish contribution through the Treasury cash buffer and investments of the National Pension Reserve Fund. The remainder of the overall package should be shared equally (€ 22½ billion each) among:

the European Financial Stabilisation Mechanism (EFSM);

the European Financial Stability Facility (EFSF) together with bilateral loans from the UK, Denmark and Sweden; and

the IMF.

In principle, the UK’s bilateral loan is for £3¼ billion, and the rate of interest on the loan will be similar to the rates levied by the IMF and the euro area.

The main elements of policy conditionality will be enshrined in Council decisions to be formally adopted at the ECOFIN Council on 7 December.

The president of the Eurogroup made it clear that the UK will not be part of the permanent bail-out mechanism, and that the European financial stability mechanism, agreed under the previous Government in May, and of which we are part, will cease to exist when that permanent eurozone mechanism is put in place.

Business, Innovation and Skills

Yorkshire Forward

I have decided to appoint Julie Kenny as the chair of Yorkshire Forward.

Julie will commence as chair designate, to ensure continuity of leadership from 6 December 2010 and take up post as chair from 14 December 2010.

The appointment will be until the close of Yorkshire Forward.

The appointment has been made in accordance with the Commissioner for Public Appointments code of practice.

Competitiveness Council

The EU Competitiveness Council took place in Brussels on 25 and 26 November 2010. The Minister of State for Universities and Science represented the UK on research and innovation items and Andy Lebrecht, the UK’s Deputy Permanent Representative to the EU represented the UK on industry, internal market and space items when a Minister was not in attendance. A summary of the discussions follows.

Industrial, Internal Market and AOB Items

There was a ministerial debate on the recent Commission communication setting out its new integrated EU industrial policy ahead of the adoption of Council conclusions at the December Competitiveness Council. The document received broad support and the majority of member states, including the UK, mentioned the importance of SMEs. The UK emphasised the need for a strong single market, smart regulation, keeping open markets, ensuring sectoral initiatives focus on areas where the EU can add value and the importance of the whole supply chain.

On green vehicles, the Commission presented their report on implementation of the clean and energy efficient vehicles strategy, and the presidency introduced a joint declaration on electro mobility. Nine member state signatories felt this should be given priority in research and development. On the EU patent some member states felt the enhanced co-operation procedure under the Lisbon treaty should be pursued to make further progress as member states were unable unanimously to agree to a language regime. The presidency said the issue would be discussed again as a full agenda item at the December Competitiveness Council.

Space

A resolution was agreed setting out priorities for future European work on space policy. There was broad agreement that the space sector could offer significant economic benefits. Ministers noted the importance of the global monitoring for environment and security (GMES) initiative and Galileo as two priority European space programmes. A number of member states expressed concern with Galileo’s budgetary situation. The UK also insisted the Commission should improve its management of the Galileo programme and emphasised the importance of completing the Galileo mid-term review without delay.

The role of space in Europe and the balance of responsibilities between the EU and the European Space Agency (ESA) were discussed. ESA said that this was an issue they and the Commission were currently reflecting on. Hungary said it would discuss the EU-ESA relationship under its EU presidency in the first half of 2011.

Innovation

The Competitiveness Council agreed conclusions reacting to the Commission’s EU2020 flagship communication, Innovation Union (the Commission’s recent strategy for improving Europe’s capacity to innovate).

Ministers debated how to overcome barriers to innovation in Europe. The UK offered strong support for the Commission’s European innovation partnerships concept, but felt access to finance for innovation was a problem. It believed EU funding could be used to augment existing national pre-commercial procurement schemes. The UK also pointed to problems relating to the implementation of the EU clinical trials directive which it saw as hampering innovation in the pharmaceuticals sector.

European Research Area

The Competitiveness Council adopted conclusions on joint programming (the voluntary process of co-ordinating national research programmes in certain scientific fields). The conclusions welcomed a biennial report on joint programming and endorsed voluntary guidelines for the process. One change was made to the draft and sent to Council at the request of the presidency—a reference to the importance of work on biomarkers in the pilot joint programming initiative on neurodegenerative diseases was weakened. The presidency updated the Council on recent efforts to strengthen the European research area and on the work of the strategic forum for international science and technology co-operation.

7th Framework Programme (FP7)

Ministers discussed a presentation on the interim evaluation of the EU’s current R&D funding programme over lunch. Areas considered for improvement in the review included low female participation rates, underperformance of many newer EU member states and low business participation rates. The interim review recommended that the framework programme should: be amended to help develop Europe’s innovation capacity and the research base; enhance large-scale research facilities; maintain its current level of funding for future programmes; be radically simplified; not include any new types of funding instrument; be linked better to the structural funds; and be opened up more strategically to non-EU countries.

International Thermonuclear Experimental Reactor (ITER)

The Commission set out its proposals for reforming the governance of the ITER programme, and called for voting in the governing board to be amended so that vote weights were linked directly to financial contribution. The Commission also noted the failure of the Council and European Parliament to reach an agreement on meeting the ITER funding shortfall in 2012-13. The Commissioner hoped agreement would be reached shortly. The UK argued in its intervention on Innovation Union that ITER procurement contracts needed to be more accessible for SMEs.

Communities and Local Government

Council Tax

The coalition Government are clear that there should be no unexpected council tax revaluation rises in the next five years. We recently announced that we would therefore cancel council tax revaluation due in England in 2015 and confirmed the Government would not carry out revaluation in England during the lifetime of this Parliament. It is right that Welsh taxpayers have the same protection.

I am therefore pleased to announce that the Government intend to include in the forthcoming localism Bill the necessary provisions to:

cancel the legal requirement for a council tax revaluation in Wales that was due to take place in 2015;

devolve the power to Welsh Assembly Government Ministers to decide the timing of council tax revaluations in Wales, rather than being bound to the timetable set out in legislation passed following the Local Government Act 2003.

As a result of the last council tax revaluation in Wales in 2005, four times as many homes moved up one or more council tax bands than moved down. Two-thirds of the net rises were amongst homes originally in bands A to C. We believe this hit the less well-off households the hardest.

This Government want to see Welsh taxpayers get the same certainty about revaluation as English taxpayers. It will be a matter for the Welsh Assembly Government to decide whether they will now issue the same reassurances to Welsh taxpayers as have been given to English taxpayers. No revaluation will now take place unless the Welsh Assembly Government Minister determines otherwise.

Defence

Operational Logistics Information Capability (Improvements)

I am pleased to announce that the Ministry of Defence (MOD) has signed an 11-year contract with Boeing Defence UK (BDUK) for the future delivery of operationally essential logistics information across defence.

The new contractual arrangement has been developed under the umbrella of the Future Logistics Information Services (FLIS) project, and represents a step-change improvement to the quality of logistics information available to the armed forces. Logistic support is vital across the full range of military tasks, including those in support of military operations in Afghanistan.

At present, logistics information is delivered by a complex set of contractual arrangements, supported by an MOD in-house team. Those posts will transfer to BDUK under Transfer of Undertakings (Protection of Employment) Regulations 2006. Under FLIS, BDUK have been appointed as the single incentivised contractor, at a cost of £800 million over 11 years, to deliver MOD’s logistics information capability. FLIS is a modern commercial arrangement with BDUK as the single supplier responsible for delivery of current systems in a more effective and financially efficient manner. BDUK will manage a number of sub-contractors, many of whom are currently prime suppliers to MOD.

The new arrangement will ensure the long-term delivery of operationally essential logistics information to both MOD and industry and the significant financial efficiencies will contribute to the Government’s strategic deficit reduction programme, without reducing operational capability.

This new contract with BDUK provides an effective framework which will improve the delivery of today’s logistics information needs, and enable future changes to be made as a result of the strategic defence and security review to reflect the changing needs of defence.

Home Department

Forced Marriage and Learning Disabilities (Practice Guidelines)

To mark the International Day of Disabled Persons today, on behalf of Her Majesty’s Government, the Forced Marriage Unit (a joint Home Office/Foreign and Commonwealth Office unit) launches multi-agency practice guidelines for supporting people with learning disabilities.

The guidelines have been developed to assist frontline professionals, such as the police, children and adults social care services, education and health professionals, care workers, charities and volunteers handling cases of forced marriage involving people with learning disabilities. It covers issues relating to a person’s capacity to consent and the use of the Mental Capacity Act 2005 to establish this.

The document draws on research carried out by the Ann Craft Trust in partnership with the Judith Trust, and statistics on reports to the Forced Marriage Unit’s helpline. It complements the “Multi-Agency Practice Guidelines: Handling cases of forced marriage” published by the FMU last year and should be read in conjunction with these.

The guidelines can be downloaded from on the Forced Marriage Unit’s webpage at: www.fco.gov.uk/forcedmarriage and hard copies will be placed in House Libraries.

Work and Pensions

Employment, Social Policy, Health and Consumer Affairs Council (Agenda)

The Employment, Social Policy, Health and Consumer Affairs Council will be held on 6 December 2010 in Brussels. I will represent the UK, except for the agenda item on the pregnant workers directive where the UK will be represented by the Minister responsible for employment relations, consumer and postal affairs, my hon. Friend the Member for Kingston and Surbiton (Mr Davey).

There will be two orientation debates. The first is on the pregnant workers directive, which is being renegotiated in a co-decision procedure between the Council and the European Parliament. As the European Parliament’s position goes much further than the Commission’s original proposal, and would require 20 weeks’ fully paid maternity leave, two weeks’ paternity leave and 20 weeks’ adoption leave, the UK will not agree to these changes.

The second is on retirement pensions, in particular maintaining a “living standard to a reasonable degree” and our reaction to the Commission’s Green Paper. This will include the presentation of a joint report from the Social Protection (SPC) and Economic Policy Committee (EPC) on pensions. The UK will stress the need to ensure that pensioners have the income to live with dignity in retirement and that each member state should find its own balance for public pensions.

There will be an exchange of views on the Employment Policies in Europe 2020 and the European Semester. This will include information from the Commission and presidency on the EU 2020 flagship projects “New Skills and Jobs” and “Youth on the Move”, approval of two Employment Committee (EMCO) opinions, on employment and climate change and an initial country analysis of the draft national reform programmes, and approval of a joint EMCO-SPC opinion on the Joint Assessment Framework and the Employment Monitor. The UK will stress how important it is that employment is at the heart of the Europe2020 strategy and that there must be a robust methodology for assessments, but it is important to recognise that this should not lead to policy prescriptions in an area that is primarily member state competence.

There will be a discussion of the general approach to the European Year of Active Ageing 2012 which proposes to promote active ageing and to do more to mobilise the potential of the rapidly growing population in their late 50s and above.

There will be a progress report on the directive on equal treatment where some progress has been made under the Belgian presidency. The Commission will also present its joint report with the SPC on the social dimension of the crisis.

The Commission will present the biannual report on social services of general interest which annexes a voluntary framework that was developed collaboratively with member states and stakeholders. The report is an overview of the initiatives implemented to guarantee and assess the quality of social services.

Ministers will consider a number of Council conclusions. There are two sets on gender; one on the implementation of the strategy on equality between women and men, and one on the fight against inequalities in salaries between women and men. There are also conclusions on the fight against poverty and social exclusion, employment policy for the low carbon economy, the impact of the ageing workforce, adequate and sustainable pensions, the social dimension of the Europe 2020 strategy and social services of general interest.

Under any other business, there will be information from the Commission on the New Disability Strategy 2010-2020 and the presidency will provide information on the second Euromed conference, the third conference of Asia-Europe meeting (ASEM), conclusions of the 5th Report on Economic, Social and Territorial cohesion, and the Equality summit. There will also be information on various conferences under the Belgian presidency and the Hungarian delegation will outline the programme and events for their forthcoming presidency.