Written Ministerial Statements
Wednesday 1 February 2012
The Economic and Financial Affairs Council was held in Brussels on 24 January 2012. Ministers discussed the following items:
European Markets Infrastructure Regulation (EMIR)
Ministers agreed a Council position on outstanding issues relating to the authorisation of Central Counterparties (CCPs) on EMIR. This will facilitate trialogues with the European Parliament. The Government have been clear that the national competent authority (NCA) must retain a pre-eminent role with regard to the authorisation of CCPs. I secured agreement that the Council position retained this principle. The Council position means that in order to block authorisation, a significant majority of an authorisation college must vote against the NCA. Furthermore, the Government also secured safeguards that mean the NCA has the option to take the decision to binding mediation facilitated by the European Securities and Markets Authority (ESMA). Finally, in order to maintain the objectives of the process, I secured a clause stating that any vote against an NCA is explained in writing setting out which provisions of EMIR and/or EU law have not been met.
I also secured a clause in EMIR to prevent discrimination against any member state as a venue for clearing services in any currency. This is related to a wider concern for the UK in relation to the ECB’s location policy that states that non-euro area based CCPs, which includes UK-based CCPs, which clear a certain threshold of euro-denominated products should move to the euro area. The UK considers that this policy is contrary to fundamental principles of EU law and is challenging the location policy in the European Court of Justice. This challenge is ongoing.
Proposals from the Commission on Economic Governance
Ministers exchanged views on the two Commission proposals to strengthen economic governance in the euro area. The first proposal would require euro area member states to present their draft budgets at the same time each year and would give the Commission the right to assess them. The second proposal would strengthen economic and fiscal surveillance of euro area countries facing, or threatened with, serious financial instability. On the first proposal, some Ministers raised concerns about the administrative burden and timing of the reporting requirements. On the second proposal, several member states noted that the recommendation of a country to receive financial assistance should require a consensus vote, in line with decisions to grant financial assistance. The presidency asked the working group to consider these issues further.
Presentation of the Presidency work programme
The presidency presented Ministers with its programme for ECOFIN for the next six months, identifying important areas of work. First, the presidency emphasised the need to implement the six-pack and take forward the new two-pack proposals on economic governance. The second priority is to improve the stability of the European banking sector through progressing financial services dossiers. Thirdly, the presidency emphasised the importance of tax co-ordination. Finally, the presidency noted the need to co-ordinate the EU position in international forums. The Commission and Ministers supported the work programme and agreed to support the presidency.
The presidency work programme is available at: http://eu 2012.dk/en/Global/Soegeresultat?q=work+programme &size=10
European Semester (including Annual Growth Survey and EuroPlus Pact)
The presidency outlined the timetable for the European semester and the Commission set out its priorities. I intervened to emphasise that fiscal consolidation is a necessary but not sufficient condition for restoring growth. Structural reforms are also needed, and the Council should have substantial discussions on these issues. The EU should exploit its full potential as a single market and negotiate trade agreements with third parties, to stimulate growth within the EU and elsewhere. I stated that I would support an EU growth test, to ensure that the regulatory burden of proposals are fully considered, not only in ECOFIN but in other Councils. I also made it clear that the Council should not spend time discussing a financial transactions tax when it is clear that there is no unanimity on the issue. Other Ministers intervened in support.
Follow-up to the G20 Meeting of Finance Deputies (Mexico, 19-20 January 2012)
The presidency and the Commission gave a debrief of the G20 Finance Deputies’ Meeting. Deputies discussed the global economy and framework, strengthening financial regulation and IMF resources. G20 Finance Ministers and central bank governors will meet in Mexico on 25-26 February.
Implementation of Stability and Growth Pact
Ministers discussed the Commission’s assessments of Belgium, Cyprus, Malta, Poland and Hungary’s progress on correcting their excessive deficits. The Commission assessed that the first four member states had taken effective action and no further steps under the excessive deficit procedure (EDP) were necessary. The Commission proposed that Hungary had taken no effective action to bring the deficit below 3% of GDP in a sustainable manner. The Council voted in favour of the Commission’s proposal. As Hungary is not a member of the euro area it cannot face sanctions under EDP. However, failure to take effective action to correct their excessive deficit could lead to the suspension of Hungary’s cohesion fund commitments. The Government believe that sound public finances are essential for sustainable economic growth.
Revised Code of Conduct of the Stability and Growth Pact
Ministers endorsed the revised code of conduct. The code of conduct provides guidelines on: the implementation of the stability and growth pact and the content of stability and convergence programmes. The code of conduct has been updated in light of the new economic governance legislation. The Government supported the revised code of conduct. The Commission and the Economic and Financial Committee will review the code of conduct again later in the year.
Eurogroup plus meeting on 23 January
Ministers met prior to ECOFIN on 23 January, to discuss the European stability mechanism (ESM) treaty and the intergovernmental treaty on stability, co-ordination and governance. Ministers reached agreement on the treaty establishing the ESM and agreed that entry into force of the treaty would be brought forward to July 2012. I intervened in order to secure agreement that, in line with the spirit of the agreement reached at the December 2010 European Council, there should be no new commitments from the European financial stabilisation mechanism as soon as the ESM is established. Heads of states and Government discussed the new intergovernmental treaty further at the Informal European Council on 30 January. The Government believe that the inter- governmental treaty should not undermine the operation of the single market, or otherwise infringe on areas of policy which are for discussion by all member states in the EU context. The intergovernmental treaty should not cut across the provisions and procedures in the EU treaties, or seek to bypass the prescribed procedures for amending the EU treaties.
The Commission debriefed Ministers of the eurogroup meeting over breakfast. The Commission are due to release their latest forecasts, which will take into account the downside risks the Commission identified last autumn. Ministers agreed that further discussion on euro area issues were needed.
Communities and Local Government
I would like to make a statement to update hon. Members on the coalition Government’s action on housing, following the publication of our housing strategy in November 2011.
We have acted quickly to ensure that the measures set out in the strategy have a rapid impact on delivering the new homes and jobs that the country needs and put power and incentives back into the hands of local communities.
Housing finance reform
My Department is today publishing the final determinations which will deliver a coalition agreement commitment to replace the discredited Housing Revenue Account subsidy system. This will involve a £19 billion deal between central and local government, delivering a new devolved system for financing council housing. Responses to our consultation show overwhelming support for our reforms. These reforms will give councils the resources, incentives and flexibility they need to provide high-quality, efficient housing services for their communities.
Under the current system. Government make a series of complex calculations each year about how much they think each council should be able to raise in rents and how much they should need to spend on their housing services. On the basis of this desk exercise in Whitehall, Government take money from some councils and give money to others.
In recent years, this has produced a national surplus for Government, currently forecast to be around £670 million in 2011-12. This so-called “tenant tax” would continue to grow each year under the current formula. Local authorities do not know from one year to the next how much they will gain or lose from this redistribution, making it hard for them to plan ahead.
Under the new system, councils will keep all their rent income and use it locally to fund their own homes. This will give councils the stability they need to develop long term business plans with the most efficient local mix of maintenance, repairs and replacement works. Instead of waiting to see what turns up in the annual subsidy round, councils will take responsibility for their homes. This will enable and encourage active local asset management to meet the future housing needs of communities.
Alongside this freedom from central control, councils will have more money to spend on their homes. The reforms do not change the rent policy established by the previous Government in 2001. But the new system deals with the chronic under-funding for capital works under the subsidy system which led to the huge backlog in Decent Homes works. The stock valuations on which the new system is based include higher assumed costs for management, maintenance and repairs, based on independent research. This will give councils on average 15% more to spend on services for tenants.
Today we are publishing the final determinations which provide the legal and financial framework for this new system. Copies have been placed in the Library of the House. The determinations and supporting documents are also available at:
The new system will replace the Housing Revenue Account subsidy from April this year.
The NewBuy Guarantee
We are announcing today that the new build mortgage indemnity scheme will be open for all new build houses and flats up to £500,000 and will be available to UK citizens buying their main home. The scheme will support up to 100,000 prospective borrowers to access a 95% loan to value mortgage. This scheme will particularly help first time buyers who currently find the size of a required deposit prohibitive.
We are also announcing today that the scheme will be known as the NewBuy Guarantee. We have already published a guide for those interested in the scheme on our website and house builders are already taking expressions of interest.
Extending the Right to Buy
On 22 December, my Department published a consultation on proposals for reinvigorating the Right to Buy, suggesting that we offer tenants a £50,000 cap on discounts across England, more than tripling the cap that currently exists in most of London and also giving a substantial increase for the rest of England. This proposal sits alongside plans to deliver one-for-one replacement so that for every home sold under the Right to Buy, a new Affordable Rent home is built.
Unlocked stalled sites
On 22 December, my Department also published a prospectus for the £420 million “Get Britain Building” investment fund, which sought expressions of interest from developers by 30 January 2012. This will help unlock progress on stalled sites that have planning permission and are shovel ready, thereby helping to create jobs and economic growth and the delivery of up to 16,000 new homes by December 2014. We halved the paperwork required and the response from industry has been positive with thousands of visits to the web page.
Regenerating surplus public land
The Government have moved rapidly to take forward the next phase of our programme to free up redundant, formerly used public sector land and buildings to support new homes. We are working with smaller landholding Departments and agencies, such as the Ministry of Justice and Home Office, to maximise the release of their surplus land for housing. We are working not just with Government Departments and agencies, but also the BBC, Network Rail and the Royal Mail.
We are putting in place support that Departments can draw on to help unlock release of their land, including through the Homes and Communities Agency, and a small advisory group of experts which will start meeting shortly, and provide practical advice to Departments on disposal of key sites.
Fairness in social housing
We are also pressing ahead rapidly with our plans to make social housing fairer, including consultations on new allocations guidance for local authorities to ensure that social homes go to people who genuinely need and deserve them the most, such as hard working families and ex-servicemen and women; and proposals to tackle fraud in social housing.
Streamlining building regulations
My Department has also launched yesterday a consultation on streamlining building regulations to save businesses money by cutting excessive red-tape while delivering safer and more sustainable buildings. The consultation includes proposals for the next steps to improve the energy efficiency of new homes, to pave the way for the introduction of zero-carbon homes from 2016, and for help with the roll out of the Green Deal this autumn.
Strengthening protection for leaseholders
Last year, my Department consulted on proposals for increasing the value limits that determine the eligibility of residential long leaseholders (those with a lease of more than 21 years) to rights in two specific areas.
These are rights to remain in their properties at the end of their lease terms as an “assured tenant” and to extend the lease or purchase the freehold of their leasehold house on particular terms. Legislative change would be subject to parliamentary approval.
Today I am publishing the summary of responses to the consultation and I can confirm our plans to bring outdated protections for leaseholders back in pace with changing property prices. The Government propose to raise the £25,000 “value limit”—or notional annual rental value—outpaced by house price inflation since it was set in 1990 to £100,000, enabling many leaseholders to stay in their home when their lease comes to an end. A copy of the summary has been placed in the Library of the House.
New Homes Bonus
We are announcing today the final payments for the second round of New Homes Bonus. Commenced in April 2011, the bonus is based on the council tax of additional homes and those brought back into use, with an additional amount for affordable homes, for the following six years.
The bonus will be paid in respect of 159,000 homes from October 2010 to October 2011 including 22,000 long-term empty properties brought back into use. The allocations also include the first affordable homes enhancement, which totals £21 million in respect of 61,000 new affordable homes.
This means we will pay councils £432 million of New Homes Bonus for local authorities in England. This includes the second instalment of £199 million in respect of year 1 and £233 million for housing growth in year 2. We will also address losses of New Homes Bonus in areas affected by last summer's riots through a separate grant from riot recovery funds.
We are confident that the New Homes Bonus will continue to support local authorities in engaging local communities in a debate about the benefits that growth can bring. The Department has written to local authorities confirming their final allocations and I have written to all Members of Parliament in England. A full list of the allocations is being placed in the Library of the House. Further information on the bonus can be found at: www.communities.gov.uk/housing/housingsupply/newhomesbonus
Supporting infrastructure: Growing Places
I am also, together with my right hon. Friends, the Secretary of State for Transport, and the Chief Secretary to the Treasury, confirming individual Growing Places Fund allocations.
This funding will benefit the 39 Local Enterprise Partnerships across the country. It will get 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, bringing private sector expertise to help deliver significant infrastructure projects.
Now that funding has been confirmed, Local Enterprise Partnerships and their local authority partners will be able to get to work allocating funds to address the constraints which they consider to be a priority. A number have already identified their priorities, and others are assessing options—we expect funding to be put to work quickly to support local economic growth. Funding will be paid towards the end of February 2012.
In summary, the coalition Government are getting on with the job of delivering the commitments set out in the Housing Strategy—bringing to life proposals to deliver more new homes, built to the highest quality; to get housebuilders building again; and to support tenants and prospective buyers to own their own home.
I am today announcing a grant of £10 million over two and a half years, to support activities for young people in England.
The grant will be used by Youth United, an initiative set up by HRH The Prince of Wales, which is a coalition of organisations that collectively provide volunteer-led volunteering opportunities for 1.5 million young people. The Youth United youth member organisations are: Air Training Corps, Army Cadets, Boys’ Brigade, Fire Cadets, Girlguiding UK, Girls’ Brigade, Marine and Sea Cadets, The Scouts Association, St John Ambulance, Volunteer Police Cadets.
Youth United will use this funding to recruit and train up 2,700 new adult volunteers to run 400 new groups of their member organisations in communities across the country. This will mean over 10,000 more young people will be able to join a pack or troop over the next two and a half years.
Youth United will target this funding towards areas with few resources, where there are currently limited opportunities for young people and where too few adults have the skills and experience to support existing groups or to establish new ones.
The areas identified where this money can make the biggest impact are:
Youth United will also work in an additional four areas which will be targeted as HRH Prince of Wales’s priority areas for helping young people:
Broadwater Farm Estate (Tottenham)
Redcar (Redcar and Cleveland)
This funding will enable 400 new groups to start. Once established, these new groups are expected to be permanently self-sustaining, raising their own running costs through local fundraising activity and/or subscriptions. I fully expect that these new groups will continue to provide valuable skills and opportunities for young people for many years to come.
National Security Through Technology
I am pleased that we are publishing today our White Paper on “National Security Through Technology: Technology, Equipment, and Support for UK Defence and Security” which has been developed jointly with the Home Office. This fulfils one of our commitments in the strategic defence and security review and follows on from the Green Paper “Equipment, Support and Technology for UK Defence and Security: A Consultation Paper”. As its title implies, the White Paper emphasises the contribution that using, sustaining and developing technology makes to our security.
This is the first time that the UK Government have set a formal statement of our approach to defence and security technology, equipment, and support. This is our high-level policy until the next strategic review, which is expected to be held in about 2015. It supersedes the defence industrial strategy 2005 and the defence technology strategy 2006.
We must ensure that our armed forces, national security, and law enforcement agencies have the best capabilities we can afford at the best value for money for the taxpayer. Balancing these considerations appropriately is even more important given the economic situation we face.
Wherever possible, therefore, we will seek to fulfil the UK’s defence and security requirements through open competition in the domestic and global market, buying off-the-shelf where appropriate. We will look first for products that are proven, that are reliable and that meet our current needs. This is the best way of ensuring that our armed forces and security services have access to the equipment they need at the time they need it and at a price the nation can afford.
However, and importantly, where essential for national security, we will protect the UK’s operational advantages and freedom of action; when we do this it will mean sustaining the necessary people, skills, infrastructure, and intellectual property that allow us to build and maintain our national security.
Technology underpins this approach so it is our intention to end a long period of declining budgets and maintain MOD’s investment in science and technology at a minimum of 1.2% of the defence budget as protection for our future.
Defence and security procurement has a significant industrial and economic impact. Our policy on technology, equipment and support for UK defence and security also supports our wider economic policy objective to achieve strong, sustainable and balanced growth for the UK. A healthy and competitive defence and security industry in the UK contributes to growth and a re-balanced economy.
The White Paper reaffirms our commitment to doing our utmost to assist UK-based suppliers in obtaining export orders and to increase opportunities for small and medium-sized enterprises (SMEs) to fulfil their potential. We will continue to create the right conditions for SMEs to deliver the innovation and flexibility that we need and which they bring. We are doing this because of the benefits to the companies themselves, to the wider UK economy and to the security of the United Kingdom.
This assistance for SMEs is part of our wider work to ensure public procurement promotes growth, and includes publishing medium-term procurement pipelines; simplifying procurement processes to reduce burdens on industry, and engaging with potential suppliers at a much earlier stage, before formal procurement begins, to increase their opportunities to participate.
The defence and security sectors are vital to the success of the UK economy. In 2010 the UK was the second biggest exporter in the world with £6 billion of sales and the UK security industry was the fifth most successful exporter of security products with £2 billion of sales. The Government remain committed to robust and effective national and global controls to help prevent exports that could undermine our own security or core values of human rights and democracy; to protect our security through enhancing strategic defence relationships; and to promote our prosperity by allowing UK defence and security companies to operate effectively in the global defence market.
We are proud of the strength of the UK defence and security industries. They help provide the UK armed forces, national security, and law enforcement agencies with some of the very best kit available. They are better equipped now than they have ever been. We recognise the wider impact that Government spending choices on defence and security can have and we are therefore establishing a new ministerial working group to co-ordinate the cross-Government aspects of our new approach.
This White Paper, alongside the publication later this year of the MOD’s 10-year equipment plan, is intended to be a high-level guide to our approach to meeting the requirements of our armed forces. At a time of financial constraint across Government, it is even more important to provide the clarity that will help industry to invest in the right areas, protecting both our security and the contribution these companies make to the UK economy. We plan to continue to invest a significant amount in defence equipment and its support: over £150 billion over the next 10 years.
The White Paper is part of a broader defence transformation programme, which also includes implementation of the Levene review, the Materiel Strategy, and Lord Currie's review of Government Single Source Pricing Regulations.
As the companies offering defence and security products and services become increasingly aligned, these steps will encourage a vibrant UK-based industry that is able to win a significant share of the world market, and to meet the varied and changing capabilities required by our armed forces and security services.
Energy and Climate Change
Offshore Oil and Gas Licensing
I am pleased to inform the House that I am today inviting applications for petroleum licences for unlicensed seaward blocks which will form the 27th round of offshore petroleum licensing.
Supporting around 350,000 jobs and spending around £14 billion a year, the UK oil and gas industry plays a vital role in the UK economy and in meeting our energy needs. Indigenous oil and gas production supplies the equivalent of about one half of the UK’s primary energy demand. It is vital that we continue to do all we can to maximise economic recovery of indigenous hydrocarbon reserves. The licensing of new areas forms an essential part of this process enabling the exploration necessary to ensure we tap into, and fully realise, our remaining reserves—which could equate to around 20 billion barrels or perhaps more.
DECC’s draft plan to offer licences for offshore oil and gas exploration and production through a 27th licensing round was the subject of a strategic environmental assessment (SEA) completed in October 2011.
The assessment can be viewed here:
The SEA includes commissioned reports on various components of the natural environment and effects of previous activities.
The potential implications of the exploration and production activities that could follow if the draft plan was adopted were considered at an expert assessment workshop and a series of stakeholder workshops. The results of these workshops were assessed further and documented in an environmental report that then formed the basis for consultation with consultation bodies and the public. The three-month consultation period on DECC’s draft plan and the environmental report was advertised in a number of local and national newspapers and emailed to a wide range of individuals and organisations.
DECC has considered all responses and a post consultation report for the latest offshore energy SEA was prepared and in August 2011 placed on the SEA website.
The post-consultation report can be viewed here:
This summarises consultee comments and DECC responses to them. In the 12 October 2011 statement to Parliament on the assessment we announced our intention to make preparations to proceed with this 27th offshore licensing round.
In deciding to proceed with a 27th offshore licensing round, DECC has had regard to the conclusions and recommendations of the environmental report and consultation feedback. As a result of the SEA process, blocks in the deepest waters of the south-west approaches are currently not being offered as part of the 27th round of offshore petroleum licensing because of inadequacy of data including data on potentially vulnerable components of the marine environment.
A number of blocks excluded from earlier licensing rounds on the basis of recommendations of previous SEAs, or currently in the process of appropriate assessment consultation, are currently not being offered as part of the 27th round of offshore petroleum licensing.
The environmental report recommended the blocks in or overlapping with the boundaries of the Moray Firth and Cardigan Bay SACs should also be withheld from this licensing round for the present pending conclusion of the further assessments initiated following the 24th licensing round applications. We have therefore excluded at present 14 blocks in the Cardigan Bay area and 12 in the Moray Firth from this round of offshore petroleum licensing.
In addition, some blocks are currently withheld from this round of offshore petroleum licensing at the request of the Crown estate as they overlie the Cleveland potash mine, and some at the request of the Ministry of Defence due to them being used for intense military testing and training.
Licensing of the blocks not currently included in this round may be revisited in the future, as more information on those blocks becomes available.
In addition, a number of blocks may be licensed but with conditions attached restricting or prohibiting certain marine activities. It should be noted that the—Offshore Petroleum Production and Pipe-lines (Assessment of Environmental Effects) Regulations 1999—(as amended) and the—Offshore Petroleum Activities (Conservation of Habitats) Regulations 2001—(as amended) variously require that all major activities undertaken in connection with UK offshore hydrocarbon exploration and production are subject to environmental assessment before consent can be given for these activities.
Before any licence awards are made, DECC will assess whether the grant of licences applied for in the 27th round is likely to have a significant effect on the management of any protected conservation sites. Where such effects cannot be excluded, a further detailed assessment will be needed to determine whether there are any adverse effects on the integrity of these protected conservation sites. This is required under Council Directive 92/43/EEC on “the conservation of natural habitats and wild fauna and flora”, and UK implementing regulations.
DECC has, with industry and statutory environmental advisers, established an offshore oil and gas environmental monitoring committee charged with co-ordinating the strategic monitoring of potentially significant environmental effects of the industry, including those that could arise from the implementation of the plan to hold a 27th round of offshore licensing.
Legal Aid, Sentencing and Punishment of Offenders Bill
I have today arranged for copies of the Government’s response to the report of the Joint Committee on Human Rights to be placed in the Libraries of both Houses. The response was published on 30 January 2012.
The Committee issued its report on 19 December 2011. I am grateful to the Committee for its work in relation to the Bill.
Parliamentary Question (Correction)
I regret that the oral answer given to the hon. Member for North Down (Lady Hermon) on 25 January, Official Report, column 290, contained an error. The case of Lisa Dorrian, raised by the hon. Member for North Down, falls outside the remit of the Independent Commission for the Location of Victims’ Remains. The commission was established to obtain information, in confidence, which may lead to the location of the remains of victims of paramilitary violence, “The Disappeared”. “The Disappeared” is defined for this purpose as those killed and buried in secret by illegal organisations prior to 10 April 1998 as a result of the Northern Ireland conflict. Lisa Dorrian disappeared in 2005 and therefore her case is outside this remit.
The correct answer is as follows:
: I suspect that the only thing that can give partial closure to the hon. Lady’s constituents is the location of this individual. I am not certain whether the hon. Lady has signed the early-day motion, but if she has not I urge her to do so. Clearly, if the information is there the Police will act on it, but the case of Lisa Dorrian does not lie within the commission’s remit as her disappearance occurred in 2005. The commission is only able to examine the cases of those who disappeared before 10 April 1998, as a result of the Northern Ireland conflict. In terms of the remaining cases of the Disappeared that the commission is dealing with, I can assure the hon. Lady that it will be properly resourced for this work both by ourselves and by the Irish Government. We are absolutely determined that we will work our way through as many of the missing as we can, but I stress that this is an information-led process and we urge anyone and everyone with any information to bring it before the two commissioners.
Garage Customer Experience
Maintaining vehicle road worthiness and servicing is one of the most important costs of running a car for most motorists. I am today announcing the Government’s intention to work with industry and motoring organisations to improve the motorists’ confidence and experience when they have to take their car, motorcycle or other private vehicle to a garage.
Motorists are generally not experts in the mechanics, electronics or component parts of their vehicles—what matters to them is that the vehicle is safe to be on the road, that they are paying a reasonable price and that what they are paying for is necessary work carried out to a good standard. Motorists want reliable servicing and MOTs from garages they trust and it is in the interests of reputable garages to deliver to a high quality.
Almost every motorist has to visit a garage or other authorised testing station at least once a year for their vehicle to undergo an MOT test—and for many people, that minimum statutory spot-check of a vehicle’s roadworthiness is either combined with an annual service or leads to repairs and further work. Each year in Great Britain some 35 million MOTs take place at some 21,000 authorised premises—the annual cost to motorists of the test alone is in the region of £1 .5 billion. The UK car service and repair sector is worth around £9 billion per year to the GB economy.
The garage sector is regulated in several ways. The sector has to comply with business laws and consumer protection legislation. The MOT scheme is regulated by the Vehicle and Operator Services Agency (VOSA) of the Department for Transport. Self-regulation has an important role to play also. For example, around 6,500 garages self-regulate their customer service through the Motor Codes Ltd Code on Service and Repair which has full approval status under the approved codes system (OFT). And nearly 1,000 garages have been accredited with the BSI Kitemark scheme for automotive services.
The package of measures I am announcing today does not duplicate these existing controls and arrangements. But they will add value for the motorist and enhance their experience when having to deal with garages whether for an MOT test or more generally.
I am taking two immediate steps today. First, having listened closely to the very many views put forward and considered the available evidence, I have decided that I am not going to carry out further work in relation to relaxing the first test date or the frequency of testing.
Secondly, I am publishing for the first time today information gathered by VOSA about the standards of MOT testing. VOSA’s MOT compliance survey 2010-11 showed that, despite large parts of the MOT test being subjective, 88% of testers were applying correct and consistent standards. There were 12% of testers who had their overall assessment of the vehicle’s roadworthiness challenged by VOSA, suggesting there is still room for improvement. Publication of these data represents a considerable increase in transparency on the accuracy of MOT tests.
VOSA already carries out targeted work to improve this figure. However, I want to go further and make it easier for consumers to take action if they have not received the service they need from MOT testers. Further short term steps I am therefore taking are to:
engage the key motoring organisations in surveying their members over the next few months to determine the most significant and frequent problems they encounter at garages, how transparent and consistent charging and service standards are and what examples of best practice customer service they have experienced—and to publish their results;
identify and work with organisations able to carry out mystery shopper exercises that could supplement those which VOSA already carry out as part of their targeted supervision of the scheme;
work with the Motorists’ Forum to establish a sub-group to bring together a broad range of relevant motoring and industry organisations, such as the MOT Trade Forum, to help deliver the package that follows.
Over the next six months my Department will carry out the following actions:
so that consumers can be confident that the garage they choose has signed up to deliver to the highest standards, we will work with the industry and stakeholders to encourage much wider adoption of existing codes (such as that provided through the SMMT and Motor Codes Ltd) and to develop those codes to include MOT testing services. Our ambition is that it should be the norm for garages to comply with such codes;
in order to make more information available to help motorists know how the scheme is supervised, which garages perform well and which less well, we will review the MOT data gathered by VOSA and—informed by the surveys above—further improve transparency;
we will also work with industry, motoring organisations and others to make it easier for consumers to give feedback on their experiences of garages in a transparent way that others can view, and to boost awareness of existing consumer feedback tools;
we will help motorists to spot clocked vehicles by arranging for MOT test certificates to show mileage information for the last three years, and encouraging car buyers to check the full MOT history of vehicles by accessing online the authoritative MOT database;
to help motorists know how long wear and tear items such as brakes and tyres are likely to last after an MOT test, we will work with the MOT trade initially to consider whether to adjust the MOT technical test standard.
The Government intend to develop with the Motorists’ Forum sub-group a robust means by which we can measure consumer confidence over time across all garage services.
I see the above package of measures as an important element in our overall road safety policy, alongside delivering increased confidence and value for money for motorists having their vehicles MOT tested or serviced. I expect more ideas and measures to develop once the Motorists’ Forum sub-group is established, and there will be opportunities for all interested parties to contribute to the debate.
Work and Pensions
Workplace Pension Reform
I am pleased to be able to publish today the Government’s response to consultation on workplace pension reform. The formal consultation, which ran from 18 July to 11 October 2011, addressed the legislative changes recommended by the Making Automatic Enrolment Work review, and sought views on draft regulations published alongside the consultation document.
I would like to thank all those people and organisations who have offered their views and advice in response to our recent consultation.
The Government response document and guidance for those certifying pension schemes will be made available on the Department’s website today. The final versions of the regulations will be available on the Department’s website later today.
I will also place a copy of the Government response document and the guidance in the Library.