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Written Statements

Volume 542: debated on Tuesday 13 March 2012

Written Ministerial Statements

Tuesday 13 March 2012



The Government are committed to tackling tax avoidance to ensure the Exchequer is protected and fairness is maintained for the taxpayer.

HMRC has recently become aware of an avoidance scheme that seeks to generate loss relief from a property business that holds an agricultural estate. It is intended that this loss can then be set-off by users of the scheme against their other income. This scheme relies on arrangements that have a tax avoidance purpose. The Government do not accept that these arrangements have the effect that is sought, but to remove any doubt prompt action is being taken to protect the Exchequer.

I am today announcing that legislation will be introduced in the Finance Bill 2012 to prevent property business loss relief being given where allowable agricultural expenses arise from arrangements entered into in which the main purpose, or one of the main purposes, is to obtain a tax reduction. The legislation will have effect from today and will protect significant amounts of revenue.

We have acted quickly to prevent the use of this particular scheme and we will not hesitate to close down other schemes representing a significant risk to the Exchequer as we become aware of them.

Since the scheme that HMRC has become aware of is the third avoidance scheme that has targeted trading and property reliefs, there is a risk that further schemes may seek to exploit one or other of these reliefs.

I am therefore also announcing that the Government will introduce further legislation in the Finance Bill 2012 to prevent post-cessation property relief being given where a qualifying payment or qualifying event arises from arrangements entered into in which the main purpose, or one of the main purposes, is to obtain a tax reduction. This legislation will also have effect from today.

Draft legislation and further details of this measure are being published on HMRC’s website today.


Armed Forces' Pay Review Body Report

The 2012 report of the Armed Forces’ Pay Review Body (AFPRB) has now been published. I wish to express my thanks to the chairman and members of the review body for their report. I am pleased to confirm that the AFPRB’s recommendations are to be accepted in full.

In line with the Government’s 2010 emergency Budget, which announced a two-year pay freeze for all public sector employees, the AFPRB basic military salary recommendations are only for those personnel earning £21,000 or less where the recommendation is for an increase of £250. The AFPRB also recommended a reduction in the qualifying interval between levels of longer separation allowance. There is also an increase to food and accommodation charges. These recommendations will be effective from 1 April 2012. The Government have also accepted the AFPRB recommendation to harmonise the pay for graduate and non-graduate officers and this will be effective from

Copies of the Armed Forces’ Pay Review Body report are available in the Vote Office.

Deputy Prime Minister

Bill of Rights Commission (Membership)

The Government made a written ministerial statement on 18 March 2011, Official Report, column 31WS, announcing the establishment of an independent Commission to investigate the creation of a UK Bill of Rights. The membership of the Commission has now changed.

The Commission is chaired by Sir Leigh Lewis KCB, a former permanent secretary at the Department for Work and Pensions with a long career in public service. Sir Leigh Lewis is joined on the Commission by: Jonathan Fisher QC, Martin Howe QC, Baroness Kennedy of the Shaws QC, Lord Lester of Herne Hill QC, Philippe Sands QC, Anthony Speaight QC, Professor Sir David Edward QC and the recently appointed Lord Faulks QC.

The terms of reference for the Commission remain unchanged. The Commission is investigating the creation of a UK Bill of Rights that incorporates and builds on all our obligations under the European Convention on Human Rights, ensures that these rights continue to be enshrined in UK law, and protects and extends our liberties. It is examining the operation and implementation of these obligations, and considering ways to promote a better understanding of the true scope of these obligations and liberties. The Commission reports jointly to the Deputy Prime Minister and the Secretary of State for Justice. The Commission is supported in its work by a small secretariat of civil servants.


Early Intervention Foundation

The Government recognise that early intervention is an important area. It makes sense, wherever possible, to prevent problems or address them early on. Taking this preventive approach will support children to achieve their full potential, reducing costs to the state of later educational failure and offering a wide range of associated benefits in participation, productivity, behaviour, health and social cohesion. Offering early help is central to the Government’s commitment to unlock social mobility and tackle child poverty.

On 27 February 2012, Official Report, column 11, in answer to a question from the hon. Member for Nottingham North (Mr Allen) I confirmed that the Government plans to procure the early intervention foundation.

The new foundation will have two key roles:

providing advice and support to local commissioners on evidence, social finance and payment by results relating to early intervention to assist their own procurement and evaluation; and

building the evidence base on what works in early intervention in the UK.

The Department will issue a public notification shortly in advance of an open and competitive procurement. Government have always been clear that an open and competitive tender process is the best way to ensure value for taxpayers’ money.

The Government have secured £3.5 million to fund the foundation for a two-year period. The contract will run for up to two years after which it will become self-financing, and Government funding will cease.


NHS Pay Review Body

I am responding on behalf of my right hon. Friend the Prime Minister to the 26th report of the NHS Pay Review Body (NHSPRB). The report has been laid before Parliament today (Cm 8298). Copies of the report are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office. I am grateful to the chair and members of the NHSPRB for their report.

We welcome the NHS Pay Review Body’s 26th report, note its observations and accept its recommendations in full. In the light of a tough economic climate, I am pleased to confirm that lower paid NHS staff earning £21,000 or less will receive a flat rate increase of £250 from 1 April 2012. This will support continuing NHS service improvements and the position of lower paid NHS staff.

Review Body on Doctors' and Dentists' Remuneration

I am responding on behalf of my right hon. Friend the Prime Minister to the 40th report of the Review Body on Doctors’ and Dentists’ Remuneration (DDRB). The report has been laid before Parliament today (Cm 8301). Copies of the report are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office. I am grateful to the chair and members of the DDRB for their report.

We welcome the 40th report of the Review Body on Doctors’ and Dentists’ Remuneration and note its observations and recommendation to the Scottish Government. The Scottish Government are still considering the recommendation and expect to be in a position to make a decision by the end of the month. We will take forward the suggested actions, which will help us continue to improve our support for the DDRB’s important work.

Home Department

Transit Visa Requirements (Syrian, Libyan and Egyptian Nationals)

Today my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs and I will inform the Governments of Syria, Libya and Egypt that we will be introducing a change to the transit visa regime for the citizens of Syria, Libya and Egypt travelling to the United Kingdom. We see this as a necessary measure to protect the security of our borders.

Britain is a major hub for transit passengers travelling on long haul flights. The volume of traffic passing through the UK is increasing and poses new challenges. Since 2003 certain nationalities have been required to obtain a visa before they travel, including if they are in transit to another destination and are arriving at and leaving from the same airport. This is known as a Direct Airside Transit Visa (DATV). Since the introduction of the DATV regime a number of countries have been added to the list of those required to obtain a transit visa before transiting the UK. This has been done as a direct response to emerging security and immigration threats to the UK, and we will continue to monitor risks and threats.

The implementation of the DATV regime allows us to run comprehensive checks on those transiting the UK, and prevents high harm individuals from travelling here. Since the original introduction of the DATV there has been a noticeable fall in transit passengers destroying their travel documents before claiming asylum. The visa process means that we are able to collect pre-travel information as part of the application process which makes identification and checks more robust.

The situation in Syria continues to pose a serious concern to us and the wider international community. Libya and Egypt are emerging from a period of instability. We therefore assess that requiring nationals of these countries to obtain a visa for transit through the UK is both a sensible and proportionate response to the threat posed to the UK’s national and border security.


Prison Service Pay Review Body (11th Report)

The 11th report of the Prison Service Pay Review Body (PSPRB) (Cm 8300) has been laid before Parliament today. The report makes recommendations for staff within the remit group who earn the full-time equivalent of £21,000 and below, and who are eligible for an increase in 2012-13 under the Government’s announced pay policy for public sector workforces. Copies have been placed in the Vote Office, the Printed Paper Office and the Libraries of both Houses. I am grateful to the Chair and members of the PSPRB for their hard work in producing these recommendations.

The PSPRB key recommendations for 2012 are as follows:

a consolidated increase of £250 to all pay points at or below £21,000, including the first two points on the closed prison officer scale;

endorsement of the introduction of the new bands 2 and 3 as part of the wide-scale reforms to pay systems being introduced across NOMS. Bands 2 and 3 will apply to new prison officer and OSG entrants and existing prison officer 2 and OSG staff who wish to opt into the new bands from 1 April 2012;

an increase of 5% to the hourly rate of the Operation Tornado Emergency Response payment;

all other allowances and payments to be frozen.

The PSPRB’s recommendations will be implemented in full. The cost of the award will be met from within the delegated budget allocation for the National Offender Management Service.

Prime Minister

Review Body on Senior Salaries (34th Report)

The 34th report of the Review Body on Senior Salaries (SSRB) is being published today. This makes recommendations about the pay of the Senior Civil Service (SCS), Senior Military Personnel, the Judiciary and Very Senior NHS Managers. Copies have been laid in the Vote Office, the Printed Paper Office and the Libraries of both Houses. I am grateful to the chairman and members of the review body for their work.

In the June 2010 Budget, the Government announced a two-year pay freeze from 2011-12 for public sector workforces, except for those earning a full-time equivalent salary of £21,000 or less, where the Government would seek increases of at least £250 per year. This policy is helping us to protect jobs and the quality of public services as we look to restore the public finances to a sustainable position.

At the same time, we are mindful of the need to ensure that we are capable of recruiting, retaining and motivating public sector workers with the skills that are needed. It is on this basis that the Government will carefully consider the post pay freeze principles set out by the review body and any wider recommendations made by them in relation to recruitment, retention and other aspects of the affected workforces.

Senior Civil Service

The Government will consider the post pay freeze principles and any wider recommendations set out by the review body in relation to the SCS.

Senior Military Personnel

The Government will consider the post pay freeze principles set out by the review body in relation to the senior military personnel.


The Government note the review body’s comments about judicial remuneration and thanks it for its ongoing work in this area.

The Government continue to consider the recommendations that the review body made last year following its most recent major review of the judicial salaries structure, and in the context of the announcement in the autumn statement in November 2011, that public sector pay awards will average 1% for the two years following the implementation of the current two-year pay freeze. As such, the Government will respond to the major review recommendations as a whole, rather than individually, when able to do so. It would not be right to implement new judicial pay increases during a period of pay freeze.

Very Senior NHS Managers

The Government will consider the post pay freeze principles set out by the review body in relation to very senior NHS managers.

Other Review Body reports for 2012-13

My right hon. Friends the Secretaries of State for Justice, Health and Defence are making statements today on the reports of the Prison Service Pay Review Body, the Doctors’ and Dentists’ Review Body, the NHS Pay Review Body and the Armed Forces’ Pay Review Body in respect of pay for the relevant workforces for 2012-13. The Government’s response to those reports is consistent with the need for senior staff in the public sector to show leadership in the exercise of pay restraint


Street Works Overrun Penalties

Today I am announcing the coalition Government’s plans to increase the penalties that local authorities can impose where street works by utility companies and others overrun their agreed duration. This follows a consultation launched by the previous Government.

The maximum charge for the busiest streets will rise from £2,500 a day to £5,000 a day for the first three days of overrun and £10,000 a day thereafter, rather than the £25,000 per day planned by the previous administration. I consider that the new charge level will result in a decrease in the number of works which overrun their agreed period, and better reflect the congestion costs overrunning works impose on society.

I also intend to change the regulations such that works planned to be only of a short duration attract the same overrun charge as those of longer planned durations, in recognition of the fact that all these works cause equivalent disruption to the road user.

These changes are in line with the Government’s commitment to ensure regulatory proposals are proportionate, our desire to see congestion caused by roadworks reduce, and for utilities and others who work in our streets to be held accountable for that congestion.

The full consultation response can be found on the Department’s website.

To take forward these proposals, I will lay regulations before this House in the summer. It is my intention that the changes come into force in October of this year.

Work and Pensions

Social Justice (Transforming Lives)

When the Government came into power, the Prime Minister set up the Social Justice Cabinet Committee to look across Government at issues relating to poverty, equality and social justice, and improve the way that we deliver services to those in our society that face the greatest and most complex disadvantages.

I am pleased to announce that today this work has taken a significant step forward with the launch of the Government’s social justice strategy. This strategy sets out an ambitious new vision for supporting the most disadvantaged individuals and families in the UK, as well as outlining where the Government are already making progress on this agenda. The strategy embeds two key principles into the heart of Government policy delivery.

First, a focus on prevention throughout a person’s life, targeting the root causes rather than the symptoms of social breakdown to stop people falling off track and into difficult circumstances. This starts with support for the most important building block in a child's life—the family—but also covers reform of the school and youth justice systems, the welfare system, and beyond to look at how we can prevent damaging behaviours like substance abuse and offending.

Secondly, the strategy sets out the Government’s vision for a ‘second chance society’. When problems do arise, people must be able to access the help and support they need to turn their lives around. This strategy cements the principle that this support must be focused on recovery, independence, and life change, not simply on maintaining people in the circumstances they are in.

This strategy also sets out a new approach to delivery, based on locally designed and delivered solutions. New, innovative approaches to service delivery are also integral to the strategy, including the use of social investment, smarter commissioning and intensive key worker led support.

This approach will not be delivered by Government alone. It is essential that we harness the expertise and dedication of local leaders, commissioners and delivery organisations at all levels, including the voluntary and community sectors.

This strategy sets out an ambitious approach, but one that aspires to deliver lasting change. This strategy aims to do more than simply increase family income, but address the root causes of poverty and deliver change that will transform lives.

Social Security Advisory Committee

I have today launched a review of the Social Security Advisory Committee (SSAC). As part of the Government’s continuing drive for efficiency and effectiveness, all Departments are required to review their arm’s length bodies at least once every three years to challenge whether the functions they perform are still necessary and, if so, whether it is still appropriate for them to be delivered in the same way. The review of the Social Security Advisory Committee will look at the Committee’s functions and whether it needs to continue to exist. If the review determines that the Committee should continue, it will go on to examine its corporate governance mechanisms. I will inform the House of the outcome of the review when it is completed and place a copy of the outcome in the Library.