Written Ministerial Statements
Monday 7 November 2011
Business, Innovation and Skills
Bankruptcy and Company Winding Up
We are today launching a consultation about bankruptcy and company winding up.
The consultation document sets out detailed proposals to reform the application process for bankruptcy and compulsory winding up by replacing the current court route with a new administrative process. Uncontested applications would be determined by an adjudicator and the court would only be involved at the application stage to the extent that there is a dispute that can only be resolved by judicial intervention. I am placing copies of the consultation document in the Libraries of both Houses.
We propose allowing electronic applications to be made to an adjudicator, who will be a person appointed for that purpose by the Secretary of State and whose office would be within the Insolvency Service. Debtors who want to apply for bankruptcy for themselves would have the choice of submitting electronic or paper applications, and the option of making the requisite payment to enter the process by instalments. Where creditors are looking to instigate proceedings, a new mandatory pre-action process would incentivise debtors and creditors to communicate with each other and thereby reach a mutually satisfactory solution to the debt problem without recourse to a bankruptcy or winding-up application. This reflects our desire that people are empowered to make the right decisions for themselves about their finances, as set out in the Government response to the call for evidence about personal insolvency.
Litigation can be costly and time consuming. This new process should therefore deliver a more efficient service as well as saving valuable public and private resources. In order to ensure that the interests of both debtors and creditors are protected, the court would still have an important role. Not only would it decide the outcome of disputes, but certain petitions for the winding up of companies, such as those based on public interest grounds, would continue to be determined by the courts.
We intend actively to engage with interested parties throughout the consultation period, and welcome views on whether the proposals will deliver a workable and efficient application process for bankruptcy and most compulsory windings up. The consultation will close on 31 January 2012.
The Economic and Financial Affairs Council will be held in Brussels on 8 November 2011. The Chancellor will attend. The following items will be discussed:
Financial Transaction Taxes (FTTs)
The Commission will present its proposal on FTTs and ask for preliminary comments from member states. The tax would be levied on all transactions in financial instruments by financial institutions when at least one party to the transaction is located in the EU. Trading in shares, bonds and money market instruments would be taxed at a rate of 0.1% and derivative contracts at a rate of 0.01% on the notional value of the transaction. The Government do not support the Commission’s proposal; as it stands, it would have significant negative impacts on jobs and growth. I will continue to make clear that, to avoid relocation of trading, any FTT would need to apply in all financial centres (that is, not just the EU).
Energy Taxation Directive (ETD)
Depending on progress at officials’ level, Finance Ministers will hold an orientation debate on the ETD. The Commission published its proposal on this issue in April. Its stated aim is to bring EU rules on the taxation of energy products further into line with the EU’s energy and climate change objectives. The proposal would require member states to tax energy products by taking into account both CO2 emissions and energy content. The Government believe that revision of the ETD should focus on reviewing EU minimum levels of taxation, and do not support a mandatory EU-level carbon tax. In line with the principle of subsidiarity, member states should also retain the absolute right to set national duty rates on different types of energy products, as long as these are above EU-wide minimum rates of taxation. The presidency has drafted “orientations” to guide future work on the file, which are in line with the Government’s priorities in this area.
Follow-up to the October European Council, 23 October
ECOFIN will discuss the outcomes of the European Council, where leaders discussed the immediate challenges posed by the financial crisis, and agreed on measures to secure sustainable and job-creating growth. They also set the EU’s position for the G20 summit, giving top priority to maintaining financial stability and restoring growth, and discussed preparations for the Durban conference on climate change.
Follow-up to the G20 summit, 3-4 November in Cannes
The presidency will report on the G20 leaders’ summit held in Cannes on 3-4 November. The Council will discuss the outcomes from the summit, including: the
global economy and international monetary system; financial regulation; energy commodities and agriculture; and development. The session is also expected to look ahead to the Mexican presidency of the G20 in 2012, including where additional work is required in the G20 and EU to make further progress.
Financial assistance to Greece—disbursement of next instalment
Given the current situation in Greece, it is unlikely that this will remain on the ECOFIN agenda. After the referendum announcement, euro area countries and the IMF made clear they would not disburse the next instalment of the Greek financial assistance programme, which euro area countries had informally agreed to disburse on 26 October. While the referendum now seems to be off the table, the situation in Greece is still fluid, and euro area countries might want to hold off disbursement until Greece is able to commit to the second financial assistance programme also agreed on 26 October. The UK Government will not be part of any decision on the disbursement. However, it is extremely important for the euro area to implement the comprehensive package agreed on 26 October, and that the other elements are not delayed as a consequence of the situation in Greece.
Economic governance—surveillance of macro-economic imbalances: design of the “scoreboard”
The Council will discuss draft Council conclusions on a scoreboard for assessing macro-economic imbalances. The scoreboard will be a new monitoring mechanism under the excessive imbalances procedure, and a key part of a more effective European semester. The Government support measures designed to help restore and maintain macro-economic stability in the EU.
Preparation of the 17th Conference of Parties (COP-17) of the United Nations Framework Convention on Climate Change (UNFCCC) in Durban, South Africa
ECOFIN will discuss draft climate finance conclusions which endorse the EU’s “fast start finance report” setting out the EU’s contributions in 2011. The conclusions will also consider the report to the G20 on long-term sources of finance, which was led by the World Bank. The Government support the further development of the EU’s position in advance of the UNFCCC negotiations in Durban.
Annual Meeting of EU and European Free Trade Association (EFTA) Economy and Finance Ministers
This meeting will take place over breakfast, before the formal ECOFIN begins. It will focus on improving regulation in order to secure financial stability, where the Government’s priority is to have robust, internationally consistent regulatory standards that will benefit the economy in the long run. It will also be an opportunity to exchange views on respective strategies in the current macro-economic environment in Europe, where the Government believe the priority is to achieve fiscal consolidation and lay the foundations for growth.
Environment, Food and Rural Affairs
Agriculture and Fisheries Council
On Thursday 20 October I represented the UK on agricultural issues at the first day of the Agriculture and Fisheries Council in Luxembourg. I was accompanied by my right hon. Friend the Minister of State, Department for Environment, Food and Rural Affairs, the Minister with responsibility for agriculture and food. On Friday 21 October my hon. Friend the Under-Secretary of State for Environment, Food and Rural Affairs, the Minister with responsibility for natural environment and fisheries, the Member for Newbury (Richard Benyon) represented the United Kingdom on the fisheries items. Richard Lochhead MSP, Michelle O’Neil MLA and Alun Davies AM were also in attendance.
The main item on Thursday was a Commission presentation of the seven proposals which make up the package for reform of the common agricultural policy from 2014. Commissioner Ciolos began by stating that sustainable competitiveness, linked to food security, was at the heart of the proposals before going on to say that greater convergence of payment rates within and between member states was necessary. He stated that direct payments should be made up of basic income support (70%), with the remaining 30% available only if farmers met certain environmental or “greening” conditions. Commissioner Ciolos went on to underline his belief that the first pillar of the CAP should apply in a uniform manner across all member states, with the second pillar offering member states flexibility to respond to national priority needs.
Two full table rounds followed giving member states a first opportunity to offer views on the package. Views varied widely with no unconditional support for the package but the UK made it clear that the proposals represented a missed opportunity, doing nothing to move EU farmers towards a situation in which they could be competitive without direct payments. As tabled, the proposals risked rewarding farmers for normal good practice or, worse, preventing them from making the right decisions for sustainability.
On the detail of the proposals, some themes emerged during the two discussions. On convergence of direct payments, a number of member states had serious misgivings about redistribution of funding between member states with some expressing the view that proposals went too far while others believed it did not go far enough, while the UK, with the support of a number of other member states, repeated opposition to the capping of direct payments.
Proposals for the “greening” of pillar 1 received some support in principle, but the majority of member states questioned the rigid, one-size-fits-all system proposed which appeared to deliver more red tape than actual environmental benefit. This debate led to a discussion of the broader issue of simplification. Member states were of the view that the Commission had promised simplification, but that the package as a whole, with a multi-layered direct payment scheme consisting of various mandatory elements, would increase the burden for both farmers and national administrations.
Few member states had fundamental problems with the proposals on rural development, though all were clearly interested in the allocation criteria for pillar 2 payments for which the UK called for a faster move to objective allocation criteria.
In conclusion to the debate, Commissioner Ciolos stated that, in his view, the proposals had received broad support as the basis for future discussion but that he realised the allocation of payments would be the most contentious issue and that further work was needed. However, he rejected arguments that the package did not deliver simplification for producers and would be writing to Ministers outlining how his package delivered in this area.
Also on the agenda was a discussion of the food for deprived persons scheme. The presidency and Commission together urged the blocking minority of six member states (Germany, UK, Sweden, Denmark, Netherlands and Czech Republic) to reconsider their positions and agree to the revised proposal. A number of member states, led by France, intervened to express their frustration that this dossier was being blocked. The presidency then asked members of the blocking minority to confirm that they still opposed the revised proposals. All did, and the UK commented that the revised legal base only confirmed that this was a social scheme for action at a national rather than EU level.
The final agriculture item for discussion on the substantive agenda related to the achieving of an EU common position on four draft resolutions of the International Organisation for Vine and Wine (OIV). The UK remained silent as it is not a member of the OIV and the presidency noted that there remained a blocking majority against adoption of the resolutions.
Under any other business Council heard an update from Commissioner Dalli on implementation of the laying hens directive, which comes into force on 1 January 2013. The Commission was clear that there would be no postponement of the ban on battery cages even though at least 11 member states were unlikely to have complied with the directive by the start of next year. The Commission said it would exercise powers, beginning targeted inspection visits at the start of 2013, and would begin legal proceedings against non-compliant member states. While there was an argument that non-compliant eggs should be destroyed, this would not make political or economic sense. Instead, the use of non-compliant eggs would be limited to production of egg products within the member state of origin. There was no opportunity for member states to intervene.
The second day of Council saw consideration of two fisheries agenda items. The first related to 2012 fishing opportunities in the Baltic sea. The Commission stressed the need for a cautious approach, particularly for stocks where there was no scientific advice; and the need to respect existing scientific advice and management plans where relevant. The aim should be to reach maximum sustainable yield (MSY) levels for all stocks. Member states challenged the Commission’s generic approach of proposing cuts of 25% or 15% for stocks for which there was insufficient advice (“data poor”) and pushed back against the Commission’s ambition to reach MSY sooner than the internationally agreed date of 2015, where possible. The Commission agreed to treat data-poor stocks on a case-by-case basis; an important shift for forthcoming fishing opportunities negotiations of interest to the UK and other fishing member states.
After extensive bilateral discussions and a compromise proposal from the presidency, the Commission was pressed in a final negotiating session to offer reduced decreases across most stocks.
The final fisheries item related to the EU-Norway fisheries agreement for 2012. Ministers had an exchange of views to orientate the Commission’s approach to this forthcoming set of negotiations governing stocks jointly managed by the EU and Norway, and the exchange of fishing opportunities. The UK is the member state with the largest fishing interest in the agreement.
The Commission noted the importance of reaching a balanced agreement on behalf of the EU as a whole and that member states had to be realistic in what they felt should be offered to Norway to secure access to the Arctic cod allocation offered. On this issue the UK said Norway should be pressed to use external waters stocks, while other member states pressed for maximum Arctic cod uptake and stressed the importance of an EU-Faroes agreement. The UK also stressed the importance of ensuring Iceland and the Faroes behaved responsibly and reached a reasonable agreement on mackerel as well as the extension of the “catch quota” scheme which has been shown to reduce discards.
Strengthening Women's Voices in Government
The “Strengthening Women’s Voices in Government” consultation exercise was undertaken between 7 March and 15 June 2011. The consultation set out proposals for a new approach to engaging and listening to women, and invited views and feedback on the proposals.
The consultation set out the principles for the new approach, which are:
Women across the UK can be heard and are enabled to influence and shape Government policy;
The new approach must be genuinely cross-Government and Departments are committed to listening to women, taking their views into account, and feeding back the results, and
Women know what central Government are doing across the breadth of policies and are able to act on that knowledge.
The new approach should transform the way in which women’s voices are brought to Government, delivering an engagement framework which is direct, inclusive and transparent.
A total of 1,229 responses were received, of which 1,166 were from people responding online, with the remaining 63 being submitted as a written response. An estimated 600 people attended consultative events and fed back their views about the proposals.
The consultation asked for views on the most important or challenging issues facing women in the UK today. The top priorities identified were:
Issues relating to the workplace, and women’s experience of work including promotion; better work-life balance; child care and setting up a business.
Tackling violence against women and girls;
A strong appetite for greater equality for women;
Access to leadership positions, both in politics and business;
More engagement with women, including with senior women in business/women entrepreneurs.
Moving forward, we will consider a cross-Government programme of action and encourage participation from a wide and diverse range of women and women’s organisations.
A copy of the consultation response is available in the Library of the House.
The changes in the immigration rules being laid before the House today are as a result of the Supreme Court judgment in R (on the application of Quila and another) (FC) v. Secretary of State for the Home Department and R (on the application of Bibi and another) (FC) v. Secretary of State for the Home Department  UKSC45.
On 12 October 2011, the Supreme Court found that while it recognised that the Secretary of State was pursuing a legitimate and rational aim of seeking to address forced marriage, a rule (increasing the minimum marriage visa age from 18 to 21) disproportionately interfered with the article 8 rights of those who were in genuine marriages. Accordingly, the Secretary of State has decided to revert to a minimum age of 18.
The changes will take effect on 28 November and will reduce the minimum age at which a person may be granted entry clearance or leave as the spouse, civil partner, fiancé(e), proposed civil partner, unmarried or same-sex partner of a sponsor, and the minimum age at which a person may sponsor such an application, from 21 to 18 years. It will also delete references to a minimum age of 18 for entry clearance or leave as the spouse, civil partner, fiancé(e), proposed civil partner, unmarried or same-sex partner of a HM forces sponsor, and the minimum age at which a member of HM forces may sponsor such an application. Guidance for those affected by the judgment will be published on the UK Border Agency website.
There is no place in British society for the practice of forced marriage. It is a breach of human rights and a form of violence against the victims. That is why the Prime Minister has announced that the Government will criminalise the breach of Forced Marriage Civil Protection Orders and that there will be a consultation on making forcing someone to marry an offence in its own right.
We are also investigating what more we can do to identify and protect those young people who have been placed at additional risk.
Renewable Energy Directive
Today I am publishing our response to the comments received in the consultation on our proposals for implementing the transport aspects of the renewable energy directive (RED), confirming action we will take to implement this directive in the UK.
The RED requires the UK to source 10% of energy used in transport from renewable sources by 2020 and is closely related to the fuel quality directive (FQD) which requires fuel suppliers to land-based transport and similar applications to deliver a 6% reduction in lifecycle greenhouse gas emissions from their fuels by 2020.
Our policy on biofuels is relevant to both directives. There remain a number of uncertainties regarding the sustainability of biofuels and their best use. However, I do believe that genuinely sustainable biofuels have an important role to play in our efforts to tackle climate change and in security of energy supply. This is particularly so in areas where there is no viable alternative fuel on the horizon such as for HGVs and aviation.
It is crucial that we do all we can to ensure that biofuels both deliver real greenhouse gas emission reductions and do not cause unacceptable environmental and social side effects in the process. There is much work being undertaken, nationally and internationally, to understand better the indirect effects related to biofuels and to investigate how the negative indirect effects can be reduced.
As the directives currently stand, they do not take into account these indirect effects. While the extent of these impacts remains uncertain, there is robust evidence that widespread use of some biofuels can lead to significant indirect greenhouse gas emissions through the process known as indirect land use change (ILUC). The UK takes the issue of ILUC seriously. Earlier this year we published research on the scale of ILUC impacts and we are continuing to lead work on how to tackle these as well as encouraging the European Commission to address this issue on a Europe-wide scale with a robust solution. I have written to the European Commission twice, expressing the Government’s concerns regarding ILUC and pressing for robust and proportionate action to be taken to address the impacts of ILUC.
There are concerns regarding the best use and deployment of biofuels. These concerns also extend to the issue of best use of biomass across all sectors. Since our consultations on the RED and FQD opened, the Committee on Climate Change has published advice on renewable energy. The Government are now considering this advice and awaiting the Committee’s further advice on the best use of bioenergy across all sectors. Further evidence will also be drawn from the results of the Department’s research into the best use of biofuels across transport modes and the Department’s call for evidence on the future of aviation policy: “Developing a sustainable framework for UK aviation: Scoping document”.1 In addition, the Government are working in a cross-departmental way to develop a bioenergy strategy which will look at the use of sustainable bioenergy across transport, heat and power as well as the impacts on other sectors.
The results of these reports and studies will establish a robust evidence base. When we have this evidence we will set biofuel targets beyond those set out to 2014 under the current Renewable Transport Fuel Obligation (RTFO).
On the other hand, in response to those who have called for biofuel targets to be scrapped entirely, we continue to be of the view that there is a place for sustainable biofuels in our wider policy on carbon reduction. The UK must, in law, comply with the RED. Biofuels will be a key component in the achievement of these targets before that work has been completed.
We will prioritise implementation of the RED over that of the related FQD in order to ensure that financial reward is no longer given to those biofuels that do not meet the RED sustainability criteria. Most of what will be delivered through the FQD will be delivered by the closely related RED, which we expect to be implemented through an amended renewable transport fuel obligation in December 2011, subject to the parliamentary process.
Our consultations on proposals to implement the RED and FQD revealed a number of concerns regarding expansion of the RTFO to include fuels use in non-road mobile machinery (NRMM). Industry has requested additional time to prepare for this and we are considering how best to achieve this change. As such, we do not propose to bring into force any expansion of the RTFO to include NRMM fuels before April 2013.
In addition there remains uncertainty regarding key implementing measures for the FQD, which are currently being discussed at the European level.
However, we do intend to introduce new regulations to transpose the FQD requirement to reduce emissions by 6% by 2020, alongside new annual reporting requirements for fossil fuels and biofuels. We will be working towards putting the necessary legislation in place as soon as possible during the course of 2012.
The response published today sets out our decision to transpose fully all the sustainability criteria set out in the RED to ensure that the UK only rewards the supply of sustainable biofuel. Until we have a more robust evidence base, we cannot confidently set biofuel targets beyond those established under the current RTFO.
I would like to thank all those who took the time to respond to these consultations.
1 http://www2.dft.gov.uk/consultations/open/2011-09/ consultationdocument.pdf
Communities and Local Government
Together with my right hon. Friends, the Secretary of State for Transport, and the Chief Secretary to the Treasury, I am today announcing details about the operation of the Government’s £500 million Growing Places Fund.
The fund will be available to get stalled sites for housing development moving again; provide additional funding for infrastructure projects already in the pipeline; and promote wider economic growth.
Local areas will be in the driving seat, with funding directed to local enterprise partnerships, which will bring private sector expertise to the prioritisation and delivery of significant infrastructure projects.
We are publishing a short prospectus today which sets out the key features of our approach and invites expressions of interest for funding from local enterprise partnerships. We are inviting these by 20 December, with the intention of announcing allocations in January. A copy of the prospectus will be placed in the Library of the House, and will also be available on my Department’s website.
The fund will be a major boost to local areas in unlocking the potential for development and we will advise further as we take decisions on allocations.
Work and Pensions
Pension Protection System (Administration Levies)
The administrative resource costs of the Pensions Advisory Service and the pensions ombudsman and some of the administrative resource costs of the pensions regulator are recovered by a general levy on pension schemes. The administration costs for the Pension Protection Fund are recovered through the PPF administration levy paid by eligible schemes. The rates for both levies are set in regulations and reviewed annually.
I am pleased to announce that for 2012-13 we are proposing that the rates for both the PPF administration levy and the general levy will be reduced from the levels that have remained unchanged since 2008-9. We propose that the PPF administration levy rates will reduce by at least 25%, and the general levy rates will reduce by at least 12%.
Levy rates in-year are set to avoid frequent changes and do not directly reflect forecast future costs, but also take into account accumulated deficits or surpluses in expected levy collection.
The proposed new rates for both levies meet forecast future administration costs for the respective pensions bodies. In proposing to reduce the rates, the Government are seeking to lessen cost pressures on pension schemes. This proposed reduction will be welcomed by levy payers, as well as pension scheme trustees, members and sponsoring employers.