Written Ministerial Statements
Thursday 21 June 2012
Business, Innovation and Skills
Today, as part of their ongoing review of employment law, the Government have launched a consultation on changes to the rules on collective redundancy. In the consultation we are seeking views on changes to both the legislative framework and the guidance on offer in order to create a regime that supports the labour market in Great Britain and promotes good quality consultation.
Evidence suggests that the current rules are too rigid and hamper employers’ ability to restructure effectively whilst drawing the focus of consultation toward the process and away from the most important issues, such as ways to mitigate the impact of the redundancies. The current minimum consultation period for large-scale redundancies is also much longer than most other EU countries. We want businesses to be able to react nimbly to changes in market conditions and to be confident about creating new employment opportunities.
We also want employers to consult their work force effectively over the big issues, including restructuring and redundancy. We do not want to create an uncaring, hire and fire culture; instead our aim is to promote good-quality consultation processes between employers and employees to ensure that the right decision is reached based on a full consideration of all relevant facts.
This consultation looks at how we can revitalise the process. We propose to reduce the 90-day minimum period before very large numbers of redundancies can take effect to either 45 or 30 days, alongside production of a new code of practice.
As well as these important proposals for change, there are some elements that we propose to leave as they are, most notably the protective award. The protective award currently stands at a maximum of 90 days’ pay for each employee affected by a failure to consult and is paid by the employer. As the level of the award is linked to the employer’s attempts to comply (and not to the length of the consultation period) we believe that this is right to keep this proportionate and dissuasive penalty.
The consultation will close (after 13 weeks) on 19 September 2012. During the consultation period we will seek views from a range of interested parties. Following consideration of the responses to the consultation, we will publish a Government response, setting out what we intend to take forward.
Copies of the consultation document have been placed in the Libraries of both Houses.
The Government have today introduced the Small Charitable Donations Bill into Parliament. This will enable charities to claim gift aid-style payments on the small cash donations that they receive. Charities and community amateur sports clubs (CASCs) can find it difficult to claim gift aid on donations collected in certain circumstances, for example bucket collections, where donors may be reluctant to stop and fill out gift aid declarations. This means that charities are currently missing out on potential income.
This new scheme will allow charities and CASCs to claim top-up payments of 25p for every £1 collected on small cash donations of £20 or less, up to a total of £5,000 of donations per year. The scheme is designed to allow top-up payments to charities on the donations for which they cannot easily get a gift aid declaration. It will supplement the main gift aid scheme, which provides over £1 billion a year in additional income for the charitable sector.
In developing the scheme, the Government have taken steps to ensure that it operates as fairly as possible, whilst keeping overall costs of the scheme affordable and also protecting against fraud. The scheme has been designed in order to make it fair and generous, and straightforward for charities to claim the top-up payments. HM Revenue and Customs will be issuing guidance for charities ahead of the scheme commencing.
A meeting of the Economic and Financial Affairs Council will be held in Luxembourg on 22 June 2012. The following items are on the agenda to be discussed:
Recovery and Resolution of Credit Institutions and Investment Firms Directive
The Commission will present its new proposals for a directive, following which the Council may then have a preliminary exchange of views on the proposal. The directive will require member states to ensure that their national supervisory and resolution authorities have a set of common tools and powers which will enable them to avert, and where necessary manage, the failure of a financial institution. The proposal seeks to prevent the systemic damage caused by the disorderly failure of such institutions, limiting public sector exposure and preventing wider economic damage.
Contribution to the European Council Meeting on 28-29 June 2012, European Semester
The Council will be asked to approve the fiscal and economic elements of the country specific recommendations (CSRs) for the 27 member states and the Euro area. For the UK, as happened last year, the UK has received CSRs in the areas of public finances; housing; workless households and access to finance, with an additional recommendation on infrastructure. The recommendations are in line with domestic reform priorities and messages given to the UK by the IMF and the OECD. For the UK, the recommendations are non-binding and there are no sanctions for non-compliance.
Implementation of the Stability and Growth Pact
The Council will be asked to adopt the Council decision abrogating the excessive deficit procedures for Germany and Bulgaria. The Council will also be invited to take a decision to lift the suspension of the commitments from the cohesion fund for Hungary. The latter decision will be based on a proposal from the Commission concerning the assessment of effective actions taken by Hungary in order to bring the situation of an excessive Government deficit to an end. The UK agrees with the Commission assessment that the necessary progress has been made in both cases and will support the proposed decisions.
Convergence Report from the Commission and the ECB
The Commission and the ECB will provide an update on their assessment of the progress made by Bulgaria, the Czech Republic, Latvia, Lithuania, Hungary, Poland, Romania and Sweden in fulfilling their obligations regarding the achievement of economic and monetary union. There are no policy implications for the UK.
Follow up to the G20 Summit (Mexico, 18-19 June 2012)
The Commission will provide a read-out of the G20 summit in Los Cabos that occurred on 18 and 19 June.
Financial Transactions Tax
The presidency will update the Ministers on their assessment of discussions so far on the proposals for a financial transactions tax. The Council will be invited to discuss orientations for future work on this dossier. The Chancellor has made clear on a number of occasions that the UK does not support the Commission’s proposal for an FTT. As it stands, the proposal will have significant negative impacts on jobs and growth across the EU. To avoid a damaging relocation of financial trading, FTTs would need to apply in all financial centres, and not just the EU.
Energy Taxation Directive
The presidency will update Ministers on progress on this directive and will ask the Council to discuss orientations for future work. The UK opposes several elements of the revision proposal and supports the approach of the current energy taxation directive where EU minimum rates are established but it is then for member states to determine the structure of their national taxes.
Eurogroup will meet on 21 June. Ministers will be debriefed on the Eurogroup discussions before the formal ECOFIN starts on the 22nd. Ministers are likely to discuss the current economic situation, the most recent trends on sovereign debt markets and proposals to strength the single currency.
The multiannual financial framework will be discussed based on a presidency issues note negotiations on the MFF have progressed under the Danish presidency, which is working to present a “negotiating box” at the June European Council setting out the options member states have discussed. There remain a number of options in the negotiating box which are unacceptable to the UK, such as a change to our abatement and the introduction of new EU taxes to fund the EU budget. We will strongly defend the abatement and oppose new EU taxes to fund the EU budget. The maximum acceptable increase in spending in the next MFF is a real terms freeze in payments on current levels of actual spend.
Statutory Residence Test and Reforms to Ordinary Residence
In June 2011, the Government consulted on introducing a statutory residence test and reforming the concept of ordinary residence.
On 6 December 2012, the Government announced that legislation would take effect from April 2013, rather than April 2012 in order to give the time to consider the detailed issues raised in consultation.
The Government are today publishing their response to the 2011 consultation together with draft legislation to be included in Finance Bill 2013. This sets out the changes that will be made to the statutory residence test following consultation and confirms that ordinary residence will be abolished as announced at Budget 2012. It also contains further consultation questions on which the Government invite comments. The document is available on the HM Treasury website at:
http: www.hm-treasury.gov.uk/consult_statutory_ residence_test.htm
The Government remain committed to their timetable of introducing the statutory definition of tax residence and reforms to the concept of ordinary residence in Finance Bill 2013.
Energy and Climate Change
I represented the United Kingdom at the EU Energy Council in Luxembourg on 15 June 2012.
The Commission and presidency gave progress reports on negotiations of the proposal for a regulation on guidelines for trans-European energy infrastructure and on the proposal for a regulation on safety of offshore oil and gas. A number of member states spoke about the need for infrastructure in order to integrate renewables in the internal energy market. The Commission noted that the future of renewable energy would depend on the construction of cross-border infrastructure. On the regulation on the safety of offshore oil and gas, the Commission acknowledged the high safety standards applied by the UK and Norway in the North sea and signalled that it could be flexible on the legal form of the proposal. I welcomed this flexibility, with the support of several other member states.
Conclusions on the “2050 Energy Roadmap” were tabled as presidency conclusions, following late amendments by one member state. The presidency conclusions were supported by 26 member states.
The Commission presented their recently published communication “Renewable energy: a major player in the European energy market”. I welcomed the communication and noted that it should be seen in the context of the energy road map and the completion of the internal energy market, whilst emphasising that sectoral or technological targets should be treated with caution.
The presidency reported on the first reading agreement with the European Parliament on the energy efficiency directive. I and several other member states congratulated the presidency on concluding negotiations of a complex dossier. The presidency informed the Council that proposals to amend an existing regulation and agreement on an energy efficiency labelling programme would be presented to the Council.
The Commission reported on the progress of nuclear “stress tests” and outlined the next steps on the review of the nuclear safety directive.
The Commission updated the Council on a number of international energy-related items, including EU-OPEC, the EU-China high-level meeting on energy, EU-Russia and the southern corridor.
Finally, Cyprus outlined priorities for its presidency, principally taking forward the draft proposals on infrastructure and safety of offshore oil and gas, and communications on renewable energy and the internal energy market.
Environment, Food and Rural Affairs
Following the review of the Bovine TB Eradication Group for England (TBEG), I am pleased to announce that DEFRA will be establishing a new Bovine TB Eradication Advisory Group for England (TBEAG).
TBEG was set up in November 2008 to provide advice to Government on tackling bovine TB which continues to be one of the most pressing animal health issues in England. It is a devastating disease, leading to the slaughter of over 26,000 cattle last year and costing the taxpayer about £100 million a year in England alone.
I would like to thank the members of TBEG, whose valuable work will be continued by the new group. TBEAG’s membership will be broadened to include additional areas of scientific expertise and conservation knowledge as well as a wider range of farming experience. The new advisory group will bring together the farming industry, veterinary profession, Government and other stakeholders to provide expert advice on how we can best work together to tackle this terrible disease.
TBEAG will operate as a sub-group of the Animal Health and Welfare Board for England (AHWBE).
TBEAG will be chaired by John Cross, current chairman of the English Beef and Lamb Sector Body (EBLEX); a former chair of the animal health and welfare committee of the National Farmers Union and farmer of a mixed livestock and arable enterprise in Norfolk.
The group will help to develop a long-term strategy to stop the spread of bovine TB and move towards its eradication. It will consider a comprehensive and evidence-based package of measures, making best use of all the available tools. TBEAG will also consider the respective roles and responsibilities of Government, the farming industry, the veterinary profession and other stakeholders, and will advise on funding and budgetary issues. The group will advise on compliance with EU legal requirements and on the development of the UK’s EU-funded eradication plan. It will provide advice on the full range of issues relating to bovine TB at the request of the AHWBE or Ministers.
Foreign and Commonwealth Office
European Court of Justice (Appointment of New Judges and Advocates-General)
I would like to update the House on progress made with regards to the partial renewal of the European Court of Justice’s judiciary this October.
I am pleased to announce that Mr Christopher Vajda QC was appointed as the new UK judge to the European Court of Justice. Mr Vajda will take up his new position in October this year, for an initial term of six years.
Mr Vajda was nominated by the UK following an open domestic recruitment process in which an expert selection and interview panel comprising of lay, judicial and legal members recommended his candidacy to Ministers. Mr Vajda has extensive knowledge of both European and domestic law, and the corresponding European and domestic legal systems, having practised as a barrister for the past 30 years, appearing before both UK and European Courts on numerous occasions. He has been a QC since 1997. Mr Vajda has also sat as a recorder within the Crown Court for the past eight years. I am sure hon. Members will join me in congratulating Mr Vajda on his appointment. We are confident that he will make a significant contribution to the workings of the Court during his term.
The nominations put forward by a number of other member states have also been approved by the UK, all of which have been scrutinised by the independent panel established under article 255 of the treaty on the functioning of the European Union:
Eleven renewals of sitting judges at the European Court of Justice:
Alexander Arabadjiev (Bulgaria)
Jiri Malenovský (Czech Republic)
Thomas Von Danwitz (Germany)
Jean-Claude Bonichot (France)
George Arestis (Cyprus)
Egils Levits (Latvia)
Egidijus Jarašiunas (Lithuania)
Alexandra Prechal (Netherlands)
Maria Berger (Austria)
Gustav Fernlund (Sweden)
Paolo Mengozzi (Italy)
One nomination for a new judge:
José Luís Da Cruz Vilaça (Portugal)
Two nominations for the renewal of an Advocate-General:
Antonio Tizzano (Italy)
Yves Bot (France)
Two nominations for new Advocates-General:
Melchior Wathelet (Belgium)
Nils Wahl (Sweden)
Britain's Diplomatic Network (Latin America and the Caribbean)
The Government are committed to strengthening and reinvigorating Britain’s diplomatic network overseas.
On 11 May 2011, I announced plans to open six new embassies and up to seven new consulates-general and to increase our diplomatic representation in more than 20 countries worldwide.
On 2 February 2012, I announced additional plans to open an embassy in Liberia, and on 15 May 2012 I announced plans to open an embassy in Laos and a British interests office in Burma in Naypyitaw.
Today, I can announce further steps to strengthen British diplomacy in Latin America and the Caribbean:
The Foreign and Commonwealth Office will now reopen the British embassy in Paraguay which was closed in 2005, and we will establish British diplomatic representation in Haiti for the first time since 1966. This builds on our decision to reopen the British embassy in El Salvador which was closed in 2003 and the new British consulate in the Brazilian city of Recife. It amounts to a considerable diplomatic advance in Latin America and the reversal of the previous Government’s policy of closing posts in the region.
Paraguay is the country with the largest economy in the world that does not have resident British diplomatic representation and was the fastest growing economy in south America in 2010. This new embassy will further strengthen British diplomatic engagement in the region. It will help to unlock commercial opportunities for British companies in this significant market. And it will allow us to work closely with Paraguay on regional issues such as counter-narcotics and organised crime.
The new British embassy in Haiti will report to our ambassador in the Dominican Republic. It will place us in a stronger position to support our objectives in Haiti and the region. The UK is a major contributor both to reconstruction and development in Haiti through multilateral agencies. We are also one of the major financial contributors to the United Nations Stabilization Mission in Haiti (MINUSTAH), the UN peacekeeping operation. It is in Britain’s interest as a P5 member of the UN Security Council to play a more active role in guaranteeing stability and creating the conditions for growth and prosperity.
The strength of our overseas network is a signal to the world of our engagement and commitment to international peace and security. And our posts themselves are the essential infrastructure of our country’s international influence and of our economic recovery. They provide an early warning system for threats to peace and security and assist British nationals in time of crisis. They support our economy and help British businesses, and they promote our values across the world.
The strengthening of our global diplomatic network will therefore remain a central objective of the Government. On current plans by 2015 we will have deployed 300 extra staff in more than 20 countries and we will have opened up to 11 new British embassies and eight new consulates or trade offices. I will keep the House informed of any further developments.
Work and Pensions
Employment, Social Policy, Health and Consumer Affairs Council (Agenda)
The Employment, Social Policy, Health and Consumer Affairs Council will be held today, 21 June 2012 in Luxembourg. I will represent the United Kingdom.
The main discussion will be a policy debate on the Europe 2020 strategy: contribution to the European Council (28 and 29 June 2012)—European semester. I will intervene to state that Council recommendations are the most important contribution that the Employment and Social Policy Council (EPSCO) can make to the European Council on structural reforms for growth. I will further state that the Commission should work more with member states to develop recommendations which are still ambitious and challenging but take into account the national context so that they are also credible and deliverable.
There will be progress reports on four topics: legislative initiatives for posting of workers, the European globalisation adjustment fund (2014-20), minimum health and safety requirements regarding the exposure of workers to the risks arising from physical agents (electromagnetic fields) and the principle of equal treatment of persons irrespective of religion or belief, disability, age or sexual orientation.
In addition, Ministers will consider two sets of Council conclusions, covering responding to the demographic challenges through enhanced participation in labour market and society by all, and gender equality and the environment; enhanced decision-making, qualifications and competitiveness in the field of climate change mitigation policy in the EU.
The presidency will seek the support of the Council for a partial general approach on the programme for social change and innovation (PSCI). Ministers will also be invited to endorse the main messages from the Social Protection Committee’s report on pensions’ adequacy.
Under any other business, the Commission will provide information on national Roma integration strategies and the ratification and implementation of the UN convention on the rights of people with disabilities and the presidency will provide information on the conferences held during the Danish presidency. The Commission and presidency will report on the G20 meeting of Labour and Employment Ministers, and finally, the Cypriot delegation will outline the work programme of their forthcoming presidency.