Written Ministerial Statements
Tuesday 24 May 2011
Business, Innovation and Skills
Draft Groceries Code Adjudicator Bill
The Government are publishing today the draft Groceries Code Adjudicator Bill and has invited pre-legislative scrutiny of it by Parliament. The groceries code adjudicator will be responsible for ensuring compliance with the groceries supply code of practice which is designed to curb abuses of power in the groceries supply chain and protect the long-term interests of consumers. The House of Commons Business, Innovation and Skills Select Committee has expressed its willingness to conduct such scrutiny.
Copies of a document setting out the Government’s policy for a groceries code adjudicator and the final regulatory impact assessment are being placed in the Libraries of both Houses.
The draft Groceries Code Adjudicator Bill is presented in a way that helps wider understanding of the purpose of the proposed new law and how it would work. This is part of the Government’s commitment to increase transparency and accountability of Parliament to the public. The Bill is drafted in simpler language and an explanation is given alongside each part of the legal text.
It is hoped that this approach will allow those affected by the legislation, parliamentarians, interested groups and the public, to engage more actively in the legislative process and understand the impacts of the Bill, without compromising its legal clarity and force.
The Government will be able to consider the suitability of the approach for other Bills in the light of the views they receive on this exercise.
On 6 April 2011 the Government announced a change in legislation to prevent tax avoidance. The Government have set out a clear strategy on preventing tax avoidance. We will not hesitate to take action to stop those who seek to take unfair advantage of unintended tax loopholes. The measure demonstrates our commitment to act quickly to close these.
Legislation published today for consultation will be introduced in Finance (No.3) Bill to prevent individuals from taking advantage of a tax loophole that would have emerged had the Government not taken action. It will provide that, notwithstanding the terms of a double taxation arrangement with another territory, a payment of a pension or other similar remuneration may be taxed in the United Kingdom where:
the payment arises in the other territory;
it is received by an individual resident of the United Kingdom;
the pension savings in respect of which the pension or other similar remuneration is paid have been transferred to a pension scheme in the other territory; and
the main purpose or one of the main purposes of any person concerned with the transfer of pension savings in respect of which the payment is made was to take advantage of the double taxation arrangement in respect of that payment by means of that transfer.
In the event that tax is paid in the other jurisdiction, appropriate credit will be available against the UK tax chargeable.
The legislation will have effect in relation to payments of pensions or other similar remuneration made on or after 6 April 2011.
Planned Tax Consultations
Since the June Budget 2010, the Government have taken a number of steps to improve tax policy-making, with consultation on policy and scrutiny of legislation as the cornerstones.
Budget 2011 announced a number of tax policy changes and longer-term tax reforms that will be subject to consultation. These are summarised in the tax consultation tracker, which is available on the HM Treasury website at:
HMRC and HM Treasury are today publishing the following documents:
Employer asset-backed pension contributions—A consultation on changing tax rules in relation to the tax relief given to employers when they make asset-backed contributions to their defined benefit pension schemes.
Machine games duty—A consultation on the design characteristics of a new machine games duty.
Incapacitated person—A modern definition—A consultation on how best to modernise the language used to define an incapacitated person for direct tax purposes.
The following consultations are expected to be published before Parliament returns from recess on 6 June:
Tax reliefs—A consultation on abolishing a number of tax reliefs announced at Budget 2011, following the Office of Tax Simplification recommendations.
Capital allowances for feed-in-tariffs and renewable heat incentives—A consultation on the capital allowances treatment of plant and machinery that could qualify for feed-in-tariffs or renewable heat incentives.
Capital allowances for fixtures—A consultation on proposed changes to the capital allowances fixtures rules.
Capital allowances anti-avoidance legislation—A consultation on improvements to capital allowances anti-avoidance legislation to make it clearer and more effective.
High-risk tax avoidance schemes—A consultation on proposals to list certain high-risk tax avoidance schemes in regulations. Users of listed schemes would be required to disclose their use to HMRC and be subject to an additional charge on tax underpaid as a result of using the scheme.
Establishing the future relationship between the tax agent community and HMRC—A consultation on options for implementing HMRC’s agent strategy, and ways in which tax agents and HMRC can work together more effectively.
Tackling VAT evasion on road vehicles brought into the UK—A consultation on the implementation and design of a joint HMRC-DVLA initiative to combat VAT evasion on road vehicles brought into the UK.
Any changes to these planned dates will be publicised on the tax consultation tracker.
Culture, Media and Sport
Lords Parliamentary Written Question (Correction)
My noble Friend, the spokeswoman for the Department of Culture, Media and Sport has made the following statement:
On 27 April 2011, I answered the following written PQ:
“Lord Laird: to ask Her Majesty’s Government what charges are made by mobile phone network providers for providing information to the public on location and incoming and outgoing calls on mobile phones removed during night-time dwelling burglaries [HL 8480]”, Official Report, column WA142.
The question was amended and should have been answered as follows:
“To ask Her Majesty’s Government what charges are made by mobile phone network providers for providing information to the police on location and incoming and outgoing calls on mobile phones removed during night-time dwelling burglaries.[HL8480]”
The police and other designated public authorities may use part 1, chapter 2 of the Regulation of Investigatory Powers Act (RIPA) to require a communications service provider to disclose certain information about a communication, which may include details on the location and incoming and outgoing calls, when it is necessary and proportionate to do so. The Act allows for communications service providers to be recompensed for the cost of carrying out such disclosures.
Sovereign Base Areas
As part of the follow-on work to the strategic defence and security review, my right hon. Friend the Prime Minister, my right hon. Friend the Foreign Secretary and I have agreed that a separate study of the British sovereign base areas in Cyprus should be undertaken. The study will be informed by independent advice and the noble Lord, Lord Ashcroft has agreed to undertake the role of senior independent adviser along with the hon. Member for Newark (Patrick Mercer). The study is expected to be complete by the end of 2011.
EU Directive (Third Country Nationals)
I wish to inform the House that the Government have decided to maintain the position that the UK should not opt in to the European Union directive providing for minimum standards on sanctions and measures against employers of illegally staying third country nationals: Directive 2009/52/EC of the European Parliament and of the Council of 18 June 2009.
While sympathetic to the objectives behind this measure, the UK did not opt in under title V of the treaty on the functioning of the European Union during the negotiations because there were significant aspects of the draft directive which the UK did not support. These included the creation of additional administrative burdens on both employers and the public sector in requiring employers to notify the authorities every time they recruit new third country national employees and in requiring compliance inspections. The directive also extended the legal definition of employment in a manner creating further costs and liabilities to both employers and the authorities. This would mean, for instance, that enterprises utilising subcontractors might be held liable for instances of illegal employment by the subcontractor. The directive also guaranteed additional rights to illegally staying employees, including provision of back payments where an employee has earned less than the minimum national wage, which would be difficult to administer and would send the wrong message by rewarding breaches of immigration legislation.
Having reviewed the text post-adoption, the Government have noted that these difficulties remain and that our existing domestic provisions achieve similar outcomes without the additional burdens and costs the directive would impose on both business and the public sector. We have therefore concluded that it would not be in the UK’s national interest to participate. UK legislation already provides strict controls on the employment of third country nationals who do not have the right to work in this country. Between March 2008 and the end of January 2011, the UK Border Agency issued over 5,660 penalty notices under the Immigration, Asylum and Nationality Act 2006 and collected over £11 million in penalty payments.
A decision not to opt in to this particular directive does not prevent the UK from engaging with the EU on other matters relating to immigration and asylum and the UK continues to play a prominent part in developing EU strategy in these areas.
British Transport Police
The Government are committed to the security of the country and as such keep our capabilities under constant review. As part of this, I am today announcing, with the agreement of my right hon. Friend the Home Secretary, that the security of the railways and London Underground will be further enhanced by the development of a British Transport police (BTP) armed capability that will be deployed as appropriate in response to the terrorism threat level at any given time.
The Government have been considering the resilience of the overall police armed capability and have concluded that it would be beneficial to enhance this by providing the BTP with an armed capability of its own. The timing of this is not as a result of any specific threat: it is a sensible and pragmatic approach to ensuring that our police forces have the right resources to be able to respond as and when needed to protect the public.
By sanctioning the development of this armed capability, we will reduce the burden on other police forces which currently provide armed support to the BTP. This is not a major new capability in terms of overall armed policing, but by training BTP officers to carry out armed patrolling of the rail network it equips BTP with a capability already available to other police forces. Armed patrols will be deployed according to operational need—it will not be a daily event to see armed officers at stations.
We will continue to work with the BTP and others to assess the use of this capability and its effectiveness and impact. I would like to reassure Parliament that this is a measured and proportionate approach to supporting the BTP in maintaining public safety on the railway.
Work and Pensions
Defined Contribution Pension Schemes
I am pleased to be able to publish today new guidance to help those involved in offering a default investment option for people who are automatically enrolled into defined contribution pension schemes.
The pensions landscape is changing. Automatic enrolment into workplace pensions will see millions of individuals newly saving for their retirements. Many of these people will not choose to make an active investment choice. It is likely that, from 2012, automatic enrolment into default options will be the norm. Therefore, it is important that suitable default options are available.
The guidance sets out the Government’s expectations on how default options should be designed, governed, communicated and reviewed. It is intended to provide useful information that will support good decision making and help protect members’ interests.
I would like to thank all those groups who have been engaged on this issue and responded to our consultations.
The guidance will be placed in the Library, and be made available later today on the Department’s website.