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Written Statements

Volume 520: debated on Tuesday 21 December 2010

Written Ministerial Statements

Tuesday 21 December 2010


Consumer Credit Regulation

Today the Government have published a consultation document on transferring consumer credit regulation from the Office of Fair Trading (OFT) to the new Consumer Protection and Markets Authority (CPMA). The Government announced the creation of the CPMA as part of their wider reform of the financial regulatory architecture in July, and committed to consult on the merits of transferring responsibility for consumer credit regulation to this new body.

The consultation document sets out the Government’s proposed approach of bringing the regulation of consumer credit into line with that of financial services generally. This proposal is part of the Government’s wider programme to reform financial regulation, to improve consumer protection and strengthen financial stability.

Copies of the consultation document have been placed in the Libraries of both Houses, and are available on the websites of HM Treasury and the Department for Business, Innovation and Skills.

Infrastructure Cost Review

The Government have today published the report of an investigation into how to reduce the costs of delivery of civil engineering works for major infrastructure projects.

The report identifies a number of drivers for the higher cost of construction in the UK compared to other EU countries and supports the view that higher costs for UK infrastructure are mainly generated in the early project formulation and pre-construction phases. Efficiency improvements could lower the costs of delivery and realise potential benefits of £2 billion to 3 billion per annum. A number of specific areas where the Government are considering taking action to deliver these benefits have been identified. A prioritised work programme for implementation will be finalised and announced around the time of Budget 2011.

Copies of the document have been deposited in the Libraries of both Houses and are available on the Treasury website at:

Cabinet Office

Civil Service Compensation Scheme

I am laying before Parliament today the Civil Service Compensation Scheme (Amendment No.2) Scheme 2010 and the associated revisions to the Principal Civil Service Pension Scheme.

The new scheme will replace the old scheme which the previous Government tried to reform in February 2010. I first announced that the coalition Government intended to reform the civil service compensation scheme on 6 July 2010, following which the Superannuation Bill was introduced to Parliament on 15 July to ensure that reform of the scheme could not be vetoed by any one of the unions. Extensive discussions then took place between officials and Ministers and the civil service trade unions. Proposals were put to the Council of Civil Service Unions on 24 September. In the event, the council did not accept those proposals, but five of the unions—Prospect, the FDA, the Prison Officers’ Association (POA), the GMB and Unite—approached the Government directly and asked to continue discussions on those terms. There followed an intensive period of meetings between the five unions and officials, which on 5 October resulted in an agreement being reached between the negotiators on terms that might form the basis of a new compensation scheme. The five unions wrote to confirm that these terms had accurately recorded an agreement, that all their negotiating teams were able to recommend positively to their executives, as being the best that might be achieved in negotiation.

Subsequently, the POA’s executive committee voted to distance itself from that agreement and to request further discussion. The sixth union, the Public and Commercial Services (PCS) Union, had decided not to take part in the talks at the point when the five other unions had agreed to negotiate separately with the Government.

The Superannuation Act 2010, which received Royal Assent on 16 December, amended the Superannuation Act 1972 so as to remove the requirement for agreement of the civil service unions to any changes that could reduce the benefits of the compensation scheme. However, during the passage through Parliament of the Superannuation Bill, the Government agreed a number of changes to it, including a further amendment to the Superannuation Act 1972 so as to introduce a clear requirement that future consultation on any changes that would reduce the value of the civil service compensation scheme must be undertaken

“with a view to reaching agreement”

and that a report is made to Parliament setting out the details of the consultation that has been carried out with the unions.

During the Superannuation Bill’s passage through Parliament, the Government remained committed to trying to reach an agreement with the Council of Civil Service Unions and offered every opportunity to those unions that wished to engage constructively in negotiations. Five of them did so, and their proposals formed the basis of the discussions and subsequent agreement on which the new proposed scheme is based.

On 9 November, the Council of Civil Service Unions wrote with suggestions for areas that could be considered in further talks, and I responded on 15 November. The suggestions made in the council’s letter would have had the effect of reducing the level of compensation paid to many lower-paid civil servants, and I therefore did not wish those suggestions to form the basis of further discussions. Having a new scheme that provides genuinely better protection for the lowest-paid civil service workers, many of whom are members of the PCS, has been an important aim of the Government throughout the discussions on reform.

I explained to the Council of Civil Service Unions that, in the absence of detailed proposals from the PCS, work would have to proceed on drafting the rules for a new scheme. On 6 December 2010 officials sent the draft rules for the new compensation scheme to the Council of Civil Service Unions to seek its views. Those rules form the basis of the new compensation scheme, which is being laid before Parliament today.

The Superannuation Act 2010 provides a fall-back position by introducing statutory caps on compensation which would be applied if, for any reason, the Government cannot implement the new proposals. The Government are now in a position to be able to repeal the caps set out in the Act through the Superannuation Act 2010 (Repeal of Limits on Compensation) Order 2010, which comes into force today. The repeal means that the statutory caps of a maximum of 15 months’ pay for voluntary departures and 12 months’ pay for compulsory departures, will not apply to the new civil service compensation scheme that is starting on 22 December 2010. The key points of the new civil service compensation scheme are as follows:

Voluntary Redundancy

Below normal pension age (either aged 60 or 65)—one month’s pay per year of service up to 21 months, with a taper of between a maximum of 21 months’ and six months’ compensation for those approaching pension age;

At or above normal pension age—one month’s pay per year of service up to a maximum of six months;

Staff who have reached minimum pension age (either aged 50 or 55) can choose to opt for early retirement on their current pension entitlement. Staff will be asked to surrender some (or all) of their severance payment to meet the cost of receiving this pension early.

Period of notice

All staff will be entitled to at least three months’ notice.

Compulsory Redundancy

One month’s pay per year of service up to 12 months. All staff who may face compulsory redundancy will first have had the opportunity to exit under voluntary terms.

Low and high pay thresholds

All staff earning less than £23,000, on a full time equivalent basis, will be treated as if they earn £23,000 for the purpose of calculating their redundancy payments.

There will also be an upper pay threshold of £149,820. Staff earning more will have their salary capped at this figure for the purpose of calculating their redundancy payments.



I am today setting out our proposed apprenticeships provisions in the forthcoming education Bill.

Apprenticeship offer to Young People—The Apprenticeships, Schools, Children and Learners Act 2009 (sections 91-99) introduced an “apprenticeship offer” for all suitably qualified young people who wanted one. Those young people are:

young people aged 16-18;

young people aged 19-24 who have a disability or learning difficulty; and

young people aged 19-24 who have been in local authority care.

This was to be achieved by placing a duty to secure sufficient number and variety of apprenticeship places for those eligible young people on the chief executive of skills funding. The sections of the Act covering the “offer” have not been commenced.

The education Bill will redefine the “offer”. It will place a higher duty on the chief executive of skills funding to prioritise funding for apprenticeship training for the same people who were covered by the apprenticeship offer and who have secured an apprenticeship.

This new duty will constitute a much more robust deal for these young people because it will ensure that the chief executive of skills funding gives priority for funding apprenticeship training to those eligible for the “redefined offer”. We will continue to work with those key stakeholders representing vulnerable and disadvantaged young people to ensure that they have equal access to “redefined offer”. This new duty will be more straightforward, more meaningful and less bureaucratic than the apprenticeship offer set out in sections 91-99 of the Apprenticeships, Schools, Children and Learners Act 2009 “apprenticeship offer”.

Amendments to functions of the Chief Executive of Skills Funding—The Apprenticeships, Schools, Children and Learners Act 2009 (section 6) names the chief executive of skills funding as the certifying authority for apprenticeships. We propose to amend this section in order to give the Secretary of State powers to designate the person or persons to be the certifying authority for apprenticeships in a manner which broadly mirrors similar provisions in Wales.

The rationale for this amendment is that this Government want to see the responsibility for issuing apprenticeships certificates remain with sector skills councils and other sector bodies rather than the national apprenticeships service, to whom the chief executive of skills funding would delegate this role. The national apprenticeships service will continue to have end to end responsibility for apprenticeships. However, under the new statutory apprenticeship arrangements, the intention is for sector skills councils and sector bodies to issue apprenticeship frameworks and are best placed therefore to ensure that the English framework requirements for the issue of a certificate in respect of the statutory completion conditions are met. In addition, there are currently no contingencies in the England provisions. The amended section will allow the same contingencies in England as in Wales that the Secretary of State may act as the certifying authority where there are no other appropriate persons to do so.

Foreign and Commonwealth Office

General Affairs Council and Foreign Affairs Council

The Foreign Affairs Council and General Affairs Council were held on 13-14 December in Brussels. My right hon. Friend the Foreign Secretary and I represented the UK.

The agenda items covered were as follows:

Foreign Affairs Council (FAC)

The FAC was chaired by Baroness Ashton. A provisional report of the meeting and adopted conclusions can be found at: data/docs/pressdata/EN/foraff/118456.pdf


Conclusions were adopted (see link).

Dame Rosalind Marsden, EU Special Representative in Sudan, briefed Ministers on preparations for the 9 January referendum. The Development Commissioner (Piebalgs) highlighted engagement with southern Sudan and the need to tackle Sudan’s debt burden.

The Foreign Secretary stressed the need to focus on the EU’s contingency planning, building capacity in the south, and engaging with the north.


During a broad discussion on Somalia, many Ministers stressed the need for a more comprehensive EU strategy covering development, support for the Transitional Federal Government, counter-piracy and security work, and engaging the regional states. The Foreign Secretary encouraged the European Commission to enhance its engagement with Puntland.

Côte d’Ivoire

Conclusions were adopted (see link).

Ministers exchanged views on the recent presidential election. The conclusions include an intention to adopt restrictive measures against those who are obstructing peace and national reconciliation and jeopardising the proper outcome of the electoral process.


Baroness Ashton summarised recent developments in Afghanistan and the NATO summit, which she had attended. The Foreign Secretary and others emphasised the need for the EU to focus on supporting governance, training capacity and delivering on the EU action plan agreed in October 2009 (see link below). data/docs/pressdata/en/gena/110789.pdf.

Middle East Peace Process

Conclusions were adopted (see link).

The Foreign Secretary welcomed the adoption of the conclusions, particularly the readiness of the EU to assist in the reconstruction and economic recovery of Gaza.

Baroness Ashton acknowledged frustrations over the lack of progress with the peace process, but noted the EU’s collective commitment to continue supporting US-led efforts.

Western Balkans

Ministers briefly discussed the Kosovo elections of 12 December. Baroness Ashton and the Enlargement Commissioner (Füle) made a statement on this:

There was broad consensus on the need for the EU-facilitated dialogue between Belgrade and Pristina to start as quickly as possible. There was a brief discussion of the situation in Bosnia and Herzegovina, and agreement that there should be a fuller discussion early next year.


Baroness Ashton briefed Ministers over dinner on the talks she attended with the E3+3 countries (France, Germany, UK, China, Russia and the US) and the Iranian nuclear negotiator in Geneva on 6-7 December. Details were set out in my earlier written ministerial statement looking ahead to this FAC/GAC.

Strategic Partners

Baroness Ashton set out her thoughts on the EU’s relation with strategic partners, particularly China, Russia and the US, ahead of her presentation to the European Council on 16 December. There was a broad agreement for the UK’s suggestion to operationalise Baroness Ashton’s ideas with objectives and deliverables for each strategic partner. This was also discussed at the GAC (see December European Council below).

Priorities for 2011

Baroness Ashton presented her priorities for the external action service. These include the Western Balkans, the Middle East Peace Process, Iran, Syria, Maghreb, Sahel, Turkey and the Eastern Neighbourhood.


Ministers had a brief exchange on Moldova’s elections of 28 November and the continuing negotiations on forming a Government.

OSCE Summit

Ministers assessed the outcome of the OSCE summit in Astana of 1-2 December. Baroness Ashton underlined that the summit declaration provided a mandate to take forward work on the action plan which the EU would support. See link:

Lithuania set out its 2011 OSCE chairmanship-in-office programme. Priorities will include: developing a dialogue with Central Asia; greater co-operation between the OSCE, EU and NATO; media freedoms; and energy and cyber security.

General Affairs Council (GAC)

The GAC was chaired by the Belgium Deputy Prime Minister and Minister of Foreign Affairs, Steven Vanackere (EU Presidency). The President of the Council, Herman Van Rompuy, joined Ministers over lunch.

A provisional report of the meeting and adopted conclusions can be found at: data/docs/pressdata/EN/genaff/118495.pdf.

European Citizens Initiative

The Council endorsed an agreement on the initiative, which aims to make it possible for EU citizens to call for a legislative proposal to be made on specific issues. I said that we agreed in principle with the initiative, but regretted that more was not done to minimise the burdens on member states. For this reason, and for reasons of parliamentary scrutiny, I noted that the UK would abstain from the vote.

December European Council

The main part of this discussion took place over lunch with Herman Van Rompuy.

Ministers examined draft conclusions for the Council to be held on 16-17 December. The December Council will look at the outline of a permanent crisis mechanism to safeguard the stability of the euro area and a limited amendment to the EU treaties required to create such a mechanism. Additionally, Ministers reviewed the EU’s relationship with strategic partners ahead of Baroness Ashton’s presentation to the December European Council.

I set out UK concerns about treaty change. There should be no transfer of competence to the EU. I emphasised that article 122(2) of the treaty of the functioning of the EU (TFEU) should not be used to provide assistance for economic or financial crises; that absolute clarity was necessary that the UK would not be bound by the new provisions; and that no liability should accrue to the EU budget or to non-participating states. On strategic partners, there was considerable support for my proposal for an annual review of the EU’s relations with partners at European Council level.

EU Enlargement

After much discussion. Ministers agreed enlargement conclusions (see link) on the basis of the Commission’s enlargement package published 9 November. I successfully argued for the inclusion of language on the need to protect the credibility of the enlargement process to ensure members states’ continuing support and our ability to advance reforms in candidate countries. The UK’s key concerns were protected in the individual country conclusions. One issue was referred to the European Council: the Commission’s recommendation to grant candidate status to Montenegro.

February European Council

There was a brief review of the agenda for the February European Council, which includes energy policy and innovation.

Europe 2020

The presidency made a short presentation on the implementation of the Europe 2020 strategy for jobs and growth. The next step will be a publication of the annual growth survey on 12 January. Europe 2020 will also be reviewed at the December European Council.

Cohesion Policy

There was short presentation by the Commissioner for Regional Policy (Johannes Hahn) on the Commission’s report on structural cohesion funds (see link).

UK/Russia Embassies

On 10 December we requested that the Russian embassy in London withdraw a member of their staff from the UK. This was in response to clear evidence of activities by the Russian intelligence services against UK interests.

Russia responded on 16 December by requesting the removal of a member of our embassy staff in Moscow. We reject any basis for this action.

Both staff members have now been withdrawn.

We remain open to a more productive relationship with Russia, as with any other country, on the basis of respect for our laws.


Funding and Commissioning Routes for Public Health

Today I am publishing a consultation document, “Healthy Lives, Healthy People: Consultation on the funding and commissioning routes for public health”, seeking views on proposals that were initially outlined in the White Paper “Healthy Lives, Healthy People: Our Strategy for public health in England” (Cm7985).

We are consulting on proposals for the commissioning and funding arrangements for delivery of public health services in the future. The consultation also asks questions about how the Department should implement some of our proposals.

The White Paper described a new era for public health, with a higher priority and dedicated resources. There will be ring-fenced public health funding from within the overall NHS budget. Local authorities will have a new role in improving the health and well-being of their population as part of a new system with localism at its heart and devolved responsibilities, freedoms and funding.

Directors of Public Health will be the strategic leaders for public health and reducing health inequalities in local communities, working in partnership with the local NHS and across the public, private and voluntary sectors. There will also be a new, dedicated, professional public health service—Public Health England—that will be part of the Department of Health.

This consultation is an opportunity to collect the views of public health professionals, NHS commissioners, local authorities, service providers—particularly the voluntary and independent sector—and all other interested parties.

The consultation will close at the end of March 2011.

The document has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.

Contaminated Blood

On 14 October 2010 I issued a written ministerial statement, Official Report, columns 30-31WS, announcing a review of aspects of support available to individuals infected with hepatitis C and/or HIV by NHS-supplied blood transfusions or blood products, In that statement, I said I expected to be able to report the outcome of this work and my intentions by the end of 2010. The review has been completed and submitted to Ministers, and I will update the House early in January when I publish the report.

Home Department

Changes to the Immigration Rules

I am today laying before the House a statement of changes to the Immigration Rules pertaining to tier 1 and tier 2 of the points-based system. Copies of which will be available from the Vote Office.

On 28 June the Home Secretary announced in the House of Commons that the Government would introduce an interim limit on economic migration in anticipation of the introduction of a permanent limit in April 2011. This limit applied to out-of-country main applicants to tier 1 (general) between 19 July 2010 and April 2011, and numbers entering through this route would be equal to those entering in the equivalent period for 2009-10. The limit also applied to the number of migrants who can be offered jobs by sponsor employers through tier 2 (general). This route was to be reduced in the interim period by 1,300 migrants, the equivalent of a 5% reduction across the relevant routes of tiers 1 and 2.

The first of the changes in the statement of changes to the Immigration Rules will close the tier 1 (general) category of the Immigration Rules to persons applying from outside the United Kingdom. I am taking this step as a result of the volume of applications that have been received since 19 July 2010, the date I set the interim limit on tier 1 general.

The second of these changes, specifying the level of the tier 2 (general) interim limit in the Immigration Rules, is being made to take account of the divisional court judgment of 17 December 2010 in the cases brought by the Joint Council for the Welfare of Immigrants and the English Community Care Association. The divisional court determined that in order for the Government’s interim limit policy to have legal effect the level of the limit should be specified in the Immigration Rules, as opposed to UK Border Agency guidance.

The statement of changes remedies the matter. The interim limit on tier 2 (general) will apply from 21 December 2010 until 5 April 2011. The level of the limit is 10,832 and will apply to the number of certificates of sponsorship available to licensed tier 2 (general) sponsors. The changes will take effect immediately to ensure that employers and other users of the UK’s immigration system have certainty about its operation. I would welcome the opportunity to debate these immigration rules changes should Members choose to pray against the statement of changes.

The Home Secretary has been granted a certificate to appeal; either directly to the Supreme Court if it grants permission or, if not, to the Court of Appeal.

Tier 1 (general) will be closed to out-of-country applications because of the number of applications that have been received since 19 July 2010. The route is not being closed in response to the divisional court’s decision.

The statement of changes to the Immigration Rules laid before Parliament on 28 June 2010 was constructed to provide for the application of interim limits on the number of applications for entry clearance granted under the tier 1 (general) category. Under the Immigration Rules as amended by the changes made on 19 July, applications over and above this upper interim limit would be rolled over for consideration in a subsequent grant period. However, as the Home Secretary announced to Parliament on 23 November, the Government have decided tier 1 (general) route will not continue in its current form and will be refocused as a route aimed at entrepreneurs, investors and the exceptionally talented. This means that there will be no additional allocation of places under the tier 1 (general) category under which rolled-over applications could be considered once the current interim limit is reached.

We should not continue to accept applications under the existing route if they cannot be granted once the current interim limit is reached. We expect, taking into account current trends in applications and refusal rates, the interim limit to be reached imminently. The statement of changes to the Immigration Rules therefore removes existing provision for the granting of entry clearance in the tier 1 (general) category.

I regret that, given the difficulty in anticipating the date on which the interim limit would be reached, it has not been possible to observe the usual convention of laying such a statement of changes before Parliament 21 days in advance of its entry into force. I also wish to clarify that the numerical limit applied to tier 1 applications under the interim limit is 5,100 and not 5,400 as the Merits of Statutory Instruments Committee has previously been informed. The latter figure was the limit that would have applied if interim limits had commenced on 1 July 2010, whereas in fact they commenced on 19 July 2010.

This change is effective from 23 December and applications for entry clearance as a tier 1 (general) migrant made on or after that date will not be accepted. Applications for entry clearance as a tier 1 (general) migrant made before that date will still be considered against the existing Immigration Rules. These changes do not apply to those who have existing leave in the tier 1 (general) category and require an extension of stay, nor do they apply to those presently in the United Kingdom in another category of stay and are applying for a variation of leave as a tier 1 (general) migrant.

As noted above, tier 1 of the points-based system will be redesigned to make enhanced provision for entrepreneurs and investors and to incorporate new provisions for the exceptionally talented. This will ensure that tier 1 continues to offer a route for those who are able to make the greatest economic contribution to the United Kingdom. These changes will be introduced in April next year and I will announce the detail of these new arrangements to Parliament in due course.


Winter Resilience Review

As I explained to the House yesterday, in light of the early and severe onset of winter last month I asked David Quarmby CBE to follow up his earlier review of winter resilience with an urgent audit of how well highway authorities and transport operators in England have coped with the cold weather between 24 November and 9 December 2010. David’s report to me is published today (transportwinterresilience.independent. and copies have been placed in the Libraries of both Houses.

In the main, he has found that the country’s transport systems coped well with the early severe weather during that period. However, given the more recent extreme cold snap, and that forecasts predict snow into the new year, we welcome David’s recommendations on how we can further bolster our resilience. It is now vitally important that those to whom they are addressed take these recommendations forward without delay.

The audit emphasises the volatile nature of British weather, but notes the Met Office’s view that the three severe winters are genuinely independent events. However, as I explained to the House yesterday, I will be assessing advice from the Government’s chief scientific adviser, Professor Sir John Beddington, on the longer-term implications of the changing climate and the way in which they should influence our investment decisions across the sector in relation to winter resilience.

The report finds that local highway authorities generally coped well with the extreme and early winter conditions, but used a significant amount of their salt stocks in doing so. To assist with salt supply over the Christmas and new year holiday period when deliveries from the mines tend to become more infrequent, I am making available to highways authorities 30,000 tonnes from the national strategic salt supply which was established earlier in the year in response to Quarmby’s first review. I have also asked the Highways Agency to make arrangements for the import of further supplies of salt, up to an additional 250,000 tonnes, to strengthen further our resilience. This is expected to start arriving in January.

But we need to ensure that we make the best possible use of existing stocks, new mine production and imported supplies. As we cannot be sure how long the current severe weather will persist, or how often it will recur this winter, prudence requires that all highway authorities should critically examine their current levels of usage and look for economies to maximise the duration of existing stocks.

Varying spread rates between local highway authorities have been identified as a concern for David Quarmby. I have already asked the UK Roads Liaison Group and the National Winter Service Research Group to prepare additional straightforward guidance on spread rates based on all evidence available, so that all highway authorities can adopt the practice of the best.

The report also refers to the extraordinary events that occurred on the M25 at junction 3 on 30 November. Highways Agency officials have already briefed me on these events, and I look forward to a full report in due course analysing the incident and setting out the lessons that the agency have learnt.

The rail network has been particularly badly affected by the weather this year, perhaps in contrast to the two previous winters. Quarmby’s recommendations here are for the longer term; and I am asking the rail industry to formulate proposals on contingency timetables, real-time information and third rail alternatives. I will also ask them to conduct the recommended review of their operational performance.

Although the focus today is very much on aviation and the problems at Heathrow in particular, this was less of an issue during the period that this report covers and there are therefore no specific recommendations directed at the aviation sector. It is clear, however, that, as a separate piece of work, we will need to work with BAA and the airlines to understand exactly what went wrong at Heathrow over the weekend and why it has taken the airport so long to recover.

I would like to thank David Quarmby, who has delivered this audit report to a very challenging timetable. As with his previous reports, his analysis and recommendations are clear-sighted, and will help the transport sector to improve its resilience to winter weather.