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Written Statements

Volume 524: debated on Wednesday 9 March 2011

Written Ministerial Statements

Wednesday 9 March 2011


Tax Avoidance

The Government are fully committed to tackling tax avoidance and will take necessary steps to protect the Exchequer and maintain fairness in the tax system.

As part of their work to improve tax policy making and the stability of the tax system, the Government published a discussion document on 9 December 2010 setting out a draft protocol on tax announcements outside scheduled fiscal events. This set out the criteria that Ministers will apply when deciding whether an announcement of immediate change is justified.

In line with that draft protocol, the Government are making such an announcement today, to tackle an aggressive tax avoidance scheme that has been disclosed to HMRC. By acting immediately, the Government are seeking to protect the Exchequer and maintain fairness in the tax system.

A lessee under a plant or machinery long funding lease can claim capital allowances. Some large businesses have entered into contrived, circular transactions involving the sale, leaseback, and reacquisition of their plant and machinery, over a period of three or four weeks, with the aim of claiming tax relief twice on one amount of expenditure.

HMRC has recently become aware that the scheme has been widely marketed and implemented with associated significant risk to the Exchequer. To date instances of the scheme that HMRC are aware of have involved expenditure in excess of £1 billion, putting hundreds of millions of pounds of tax at risk.

Legislation, which will have effect from today, will be introduced in the Finance Bill 2011 to confirm that lessees engaging in transactions of this type are only entitled to tax relief up to the actual amount of their expenditure on plant or machinery. This ensures that the rules continue to apply as intended by Parliament and will protect future losses to the Exchequer.

There should be no impact on commercial leasing arrangements, as the intended amount of relief will continue to be available. The legislation will simply put beyond any doubt that it is not possible to claim relief for some expenditure twice.

The legislation will apply both to new arrangements and to existing arrangements where payment under a guarantee has not been made prior to today.

Further details have today been published on HMRC’s website together with the proposed draft legislation and a tax information and impact note.


Armed Forces Compensation Scheme

I have today published a report entitled, “The Review of the Armed Forces Compensation Scheme—One Year On”. The report summarises the recommendations from the review and provides an overview of the work undertaken by the Ministry of Defence over the past 12 months to implement the recommendations. Copies of the report are available in the Library of the House or can be accessed at the following website:

The outcome of Admiral the Lord Boyce’s review of the armed forces compensation scheme was announced in February 2010. While the review found that the scheme was fundamentally sound, it made a number of recommendations for improvement. I made some early legislative changes last summer.

I am today pleased to announce the completion of all remaining changes that will lead to significant increases in the value of awards under the scheme. Most notable is the change to guaranteed income payments—paid from the point of service discharge for life—which will be increased to reflect the lasting impact of more serious injuries on future likely promotions and on the ability to work up to age 65.

Other changes include:

An increase, which averages in excess of 25%, to all lump sum award payments. This is except the top award which was recently doubled to £570,000;

Nearly tripling the maximum award for mental illness from £48,875 to £140,000 in order to reflect accurately the impact of the most serious mental health conditions;

The creation of a new independent medical expert group to advise on compensation for specific, relevant illnesses and injuries such as hearing loss and mental health;

A revised approach to awarding compensation for multiple injuries, whereby all injuries sustained will receive some compensation.

No one will lose out as a result of these changes. All those who have already received an award under the scheme will have their case automatically revisited and will receive an uplift.


EU Education Council (14 February 2011)

Andy Lebrecht, Deputy Permanent Representative, represented the UK at the Education Council, on behalf of the Department for Education and the Department for Business, Innovation and Skills.

Ministers adopted conclusions on the role and contribution of education and training to the implementation of the Europe 2020 strategy. These conclusions are consistent with the European Council conclusions agreed by the Prime Minister in June and we were therefore able to support them.

There was also a policy debate between delegations on the contribution of education and training to the European semester and annual growth survey. Member states supported the overall annual growth survey messages but there was wide agreement that national targets in member states’ national reform programmes (as part of the Europe 2020 strategy) should be realistic as well as ambitious.

Member states outlined their national reform programmes, with basic skills, adult education, the professionalism of teachers, and prevention of early school leaving given as key areas for action. Mobility issues were also raised, in particular by Germany, France and Finland. Germany also stated that, in their view, education should not be subject to the same Europe 2020 monitoring as fiscal areas and they specifically opposed country-specific recommendations in education.

The UK intervention supported the annual growth survey and recognised the importance of education to jobs and growth, explaining the focus of reforms in the UK following the education White Paper. On national targets, the UK was clear that we were not mirroring the EU targets. Instead we were using nationally owned indicators to measure and drive change. These indicators would enable us to measure progress against the headline targets.

Special Educational Needs and Disability

Today the Government publish “Support and aspiration: a new approach to special educational needs and disability”.

This Green Paper is about the children and young people in this country who are disabled, or identified as having a special educational need. It is about their aspirations and their hopes. Their desire to become, like every child and young person, independent and successful in their chosen future, and, to the greatest extent possible, the author of their own life story.

It is about their families—who have consistently called for better support for their children and themselves. It is about families of the most disabled children who are providing 24-hour care from birth, or the families of children struggling at school who do not know where to turn for help.

It is also about their teachers, their college lecturers, and the many skilled staff from the health and social care professions who do their best, day in and day out, to provide the right support and encourage the highest aspirations.

Case for change

Life chances for the approximately 2 million children and young people in England who are identified as having a special educational need (SEN), or who are disabled, are disproportionately poor. By the time they leave school these young people are more than twice as likely to be out of education, training or employment as those without a special educational need.

We know that there is much that is excellent in the support for these children, young people and their families. But we also know that this is not happening nearly enough. While the circumstances of children, young people and their parents differ greatly; from young people requiring a few adjustments in class to children with life-limiting long-term conditions, hundreds of thousands of families with have a disabled child or a child with SEN have many shared concerns. Parents say that the system is bewildering and adversarial and that it does not sufficiently reflect the needs of their child and their family life.

Successive reports, such as the 2006 report of the Education Select Committee and Brian Lamb’s report in 2009, have described a system where parents feel they have to battle for the support they need, where they are passed from pillar to post, and where bureaucracy and frustration face them at every step.

Disabled children and children with SEN tell us that they can feel frustrated by a lack of the right help at school or from other services. For children with the most complex support needs, this can significantly affect their quality of life.

Children’s support needs can be identified late; families are made to put up with a culture of low expectations about what their child can achieve at school; parents do not have good information about what they can expect and have limited choices about the best schools and care for their child; and families are forced to negotiate each bit of their support separately. According to the Council for Disabled Children, on average a disabled child experiences 32 assessments as they grow up. Resources that could be spent on support and teaching are diverted into bureaucracy.

Proposed reforms

Our proposed reforms respond to the frustrations of children and young people, their families and the professionals who work with them. The vision set out in the Green Paper is informed by the views and expertise of families and national and local organisations working with them.

We want to put in place a radically different system to support better life outcomes for young people; give parents confidence by giving them more control; and transfer power to professionals on the front line and to local communities.

To support better life outcomes for young people from birth to adulthood we will help professionals: identify and meet children’s needs early by ensuring that health services and early education and childcare are accessible to all children; work in partnership with parents to give each child support to fulfil their potential; and join up education, health and social care to provide families with a package of support that reflects all of their needs. We propose:

a new approach to identifying SEN in early years settings and schools to challenge a culture of low expectations for children with SEN and give them effective support to succeed. A new single early years setting-based category and school-based category of SEN will build on our fundamental reforms to education which place sharper accountability on schools to make sure that every child fulfils his or her potential; and

a new single assessment process and “Education, Health and Care Plan” by 2014 to replace the statutory SEN assessment and statement, bringing together the support on which children and their families rely across education, health and social care. Services will work together with the family to agree a straightforward plan that reflects the family’s ambitions for their child from the early years to adulthood, which is reviewed regularly to reflect their changing needs, and is clear about who is responsible for provision. The new “Education, Health and Care Plan” will provide the same statutory protection to parents as the statement of SEN and will include a commitment from all parties to provide their services, with local assessment and plan pathfinders testing the best way to achieve this.

To give parents confidence by giving them more control over the support their family receives, we will introduce more transparency in the provision of services for children and young people who are disabled or who have SEN. Parents will have real choice over their child’s education and the opportunity for direct control over support for their family. We propose:

local authorities and other services will set out a local offer of all services available to support children who are disabled or who have SEN and their families. This easy-to-understand information for parents will set out what is normally available in schools to help children with lower-level SEN, as well as the options available to support families who need additional help to care for their child; and

the option of a personal budget by 2014 for all families with children with a statement of SEN or a new “Education, Health and Care Plan”, many of whom will have complex support needs. Key workers will be trained to advise families and help them navigate the range of help available across health, education and social care.

To transfer power to professionals on the front line and to local communities we will: strip away unnecessary bureaucracy so that professionals can innovate and use their judgment; establish a clearer system so that professionals from different services and the voluntary and community sector can work together; and give parents and communities much more influence over local services. We propose to:

give parents a real choice of school, either a mainstream or special school. We propose to strengthen parental choice by improving the range and diversity of schools from which parents can choose, making sure they are aware of the options available to them and by changing statutory guidance for local authorities. Parents of children with statements of SEN will be able to express a preference for any state-funded school—including special schools. Academies and free schools—and have their preference met unless it would not meet the needs of the child, be incompatible with the efficient education of other children, or be an inefficient use of resources. We will also prevent the unnecessary closure of special schools by giving parents and community groups the power to take them over; and

introduce greater independence to the assessment of children’s needs, testing how the voluntary and community sector could co-ordinate assessment and input from across education, health and social care as part of our proposals to move to a single assessment process and “Education, Health and Care Plan”.

Next steps

The Green Paper marks an important milestone in the development of the Government’s approach to supporting children and young people with SEN or who are disabled and their families. This marks the start of a four-month consultation period on our proposals.

Central Government cannot achieve this ambitious programme of reform through directing and managing change itself. The proposals we set out are for practical testing in local areas. From September 2011, local pathfinders will help demonstrate the best way to achieve our key reforms. We will also be working across Government and with our local and national partners to set out detailed plans by the end of the year.

Copies of the Green Paper “Support and aspiration: a new approach to special educational needs and disability” will be placed in the House Libraries.


Parliamentary Written Question (Correction)

I regret that the written answer given to the hon. Member for Gravesham (Mr Holloway) on 11 February 2011, Official Report, column 477W, was partly incorrect.

Having given further consideration to the issue raised, I realise that the answer provided did not make it clear that while the protections provided to “employees”, under the Public Interest Disclosure Act 1998 (PIDA), do not apply to general practitioners (GPs) who provide primary medical services as independent contractors engaged under general medical services (GMS) contracts for services by local primary care trusts (PCTs), there are certain other protections under PIDA which do apply.

PIDA, which is inserted into the Employment Rights Act 1996 (ERA), is primarily designed to protect individuals who raise certain whistleblowing concerns (as defined in PIDA) relating to their work or workplace from suffering a detriment as a result of speaking out. This legislation has two layers of protection.

The first is for those who are “employees” of a particular organisation, who are protected from dismissal as well as other detrimental treatment such as being overlooked for promotion, denied training or a bonus. The second is for “workers”, which is defined in section 230(3) ERA, and includes those who work under a contract to personally perform work where their status is not that of client or customer. They have a more limited level of protection of not being subject to a detriment but they do not have unfair dismissal rights.

Generally, “workers” would not include self-employed individuals such as self-employed doctors. However, for the purpose of whistleblowing, PIDA has widened the definition of “worker” specifically to include other individuals. Section 43K(ba) ERA, includes a person who

“works or worked as a person performing services under a contract entered into by him with a Primary Care Trust under section 84...of the National Health Service Act 2006”.

Section 84 of the National Health Service Act 2006 relates to GMS contracts with GPs, and accordingly GPs who enter into such contracts with PCTs will be deemed to be “workers” for the purposes of PIDA.

Therefore if a GP raises a concern in the public interest (that falls within the PIDA criteria), relating to their GMS contract to the PCT with which they have the contract, this would be a protected disclosure. They would have a right to bring a claim under PIDA if they should suffer a detriment as a result.

While the Government’s priority since May 2010 has been to raise awareness for NHS employees about their rights and protections and to ensure that staff have a contractual right to raise concerns, the hon. Member for Gravesham has raised an important point about awareness of existing protection for GPs.

Tobacco Control Plan (England)

The Government are today publishing “Healthy Lives, Healthy People: A Tobacco Control Plan for England”.

The recently published “Healthy Lives, Healthy People” White Paper sets out the coalition Government’s determination to improve the health of the nation and to improve the health of the poorest, fastest. The White Paper recognises that reducing smoking rates represents a huge opportunity for public health, and makes commitments to publish a number of follow-on documents on how we will improve public health in specific areas. The tobacco control plan is the first of these.

Smoking remains one of our most significant public health challenges, and causes over 80,000 premature deaths in England each year. While rates of smoking have continued to decline over the past decades, 21% of adults in England still smoke. Smoking prevalence has fallen little since 2007 and we need renewed action to drive smoking rates down further.

Smoking has a devastating impact on health and well-being in our communities and we must keep up the momentum to reduce the health harms of tobacco use. Smoking contributes significantly to health inequalities and is the single biggest cause of inequalities in death rates between the richest and poorest in our communities.

Localism will be at the heart of the Government’s new radical approach to the delivery of public health services, with directors of public health, jointly appointed by local authorities, to be the strategic leaders for evidence-based public health. They will also lead action in their local communities to reduce health inequalities.

The tobacco control plan sets out how comprehensive tobacco control will be delivered over the next five years within the new public health system, and includes confirmation of our intentions for ending tobacco displays in shops and for further work to explore the plain packaging of tobacco products. The plan includes specific ambitions to reduce smoking prevalence by the end of 2015:

to 18.5% or less among adults (from a baseline of 21.2%);

to 12% or less among 15-year-olds (from a baseline of 15%); and

to 11% or less among pregnant mothers (from a baseline of 14%).

These ambitions represent faster reductions in smoking rates in these groups in the next five years than we have seen in the past five years.

The plan is built around the six strands of comprehensive tobacco control that are recognised internationally:

stopping the promotion of tobacco;

making tobacco less affordable;

effective regulation of tobacco products;

helping tobacco users to quit;

reducing exposure to second-hand smoke; and

effective communications for tobacco control.

Take-up of smoking by young people is a particular concern. Smoking is an addiction largely taken up in childhood and adolescence, and so it is crucial to reduce the number of young people taking up smoking in the first place. Nicotine is extremely addictive and young people can develop dependence on tobacco very rapidly. Each year in England an estimated 320,000 children under 16 first try smoking and the majority of adult smokers were smoking regularly before they turned 18 years of age. The plan recognises that we must do as much as we can to stop the recruitment of new young smokers.

We know that teenagers are susceptible to experimenting even when there is clear evidence of the dangers. We believe that eye-catching displays encourage young people to try smoking. They also undermine quit attempts by adults by tempting them to make impulse buys of tobacco.

This is why we are implementing legislation to end tobacco displays in shops. This will help to change perceptions of the social norms around smoking, especially by young people who are often the target of tobacco promotion.

While maintaining the expected public health gains, we will amend the display regulations to mitigate burdens on business. The growth review announced by the Chancellor of the Exchequer in November 2010 aims to reduce the regulatory burden on small and medium enterprises and micro businesses. In keeping with this approach, we will make the legislation more practical by:

giving retailers longer to prepare by delaying commencement until 6 April 2012 for large shops and 6 April 2015 for small shops;

increasing the size of temporary displays allowed when serving customers and re-stocking (from 0.75 square metres to 1.5 square metres); and

adding to the circumstances in which such displays can occur, for example, to carry out stock-taking and other activities necessary in running a business.

In this important area, I am interested in any measure with the potential to promote positive social norms around tobacco use and to diminish the impact of anything which promotes tobacco use, especially as this affects young people. We must continue to try new approaches, particularly those that may encourage behaviour change. We will, therefore, explore whether the introduction of plain packaging would bring additional public health benefits. The Government have an open mind on this and we want to hear what people think.

The tobacco control plan confirms a commitment to consult by the end of this year on options to reduce the promotional impact of tobacco packaging. To do this we must review the evidence and draw up an impact assessment on the costs and additional public health benefits of policy options. We will, as well, explore the competition, trade and legal implications, and the likely impact on the illicit tobacco market of options around tobacco packaging. While similar measures are currently being considered actively by a number of Governments around the world, we must be sure about the impacts of policy options in the legal and trading circumstances of tobacco control in this country. Only after this work, and gathering views and evidence from public consultation, will we be in a position to know whether, or how, to proceed.

An academic review “The Impact of Smokefree Legislation in England: Evidence Review” has been published today.

The Medicines and Healthcare products Regulatory Authority (MHRA) has also published today the outcome of the consultation on the regulation of nicotine-containing products. The MHRA will co-ordinate a period of further scientific and market research to inform decisions about the regulation of nicotine-containing products.

All documents have been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.


Supporting Community Transport

Today I am announcing £10 million of new funding to be distributed to rural local transport authorities to kick-start the development of community transport services in their area.

In addition, we have formed a partnership with the Community Transport Association to provide each of the 76 rural local authorities in England with £2,600-worth of consultancy advice on how to establish, manage and make sustainable community transport operations within their area. There is the option for local authorities to supplement this with their own funds to receive further services.

This additional funding complements our recently announced local sustainable transport fund, which allows local authorities to bid for a share of £560 million over four years, aimed at encouraging sustainable transport solutions, including community transport, that will create economic growth and cut carbon.

Public transport remains a key element in the sustainability and independence of rural communities: offering young people access to education and employment opportunities, linking customers to shops and services, and providing a lifeline to those without access to a car.

Where commercial bus services are not viable, community transport can play a valuable role in preventing isolation. I therefore strongly encourage local authorities to work in partnership with operators and local communities to examine how more flexible services might be provided.

Services such as dial-a-ride can, in some areas, be more efficient, effective and sustainable in the long term. I know that there are already many good examples of community groups and local authorities working together to deliver innovative solutions to rural transport needs and this is something we wish to see increased.

Today’s package of support for community transport represents an important opportunity to invest in the future to provide more sustainable transport for local communities.