Written Ministerial Statements
Monday 2 July 2012
Business, Innovation and Skills
My noble Friend the Parliamentary Under-Secretary of State for Business, Innovation and Skills, Baroness Wilcox, has today made the following statement:
Today the Government are announcing part of their response (“the Response”) to the recent Copyright Consultation (“the Consultation”). These are Government proposals to take powers to authorise orphan works and voluntary extended collective licensing schemes, and put in place statutory codes for collecting societies that do not adhere to voluntary ones.
The Government have considered the responses to the consultation carefully, and intend to legislate as soon as possible. The Enterprise and Regulatory Reform Bill currently going through Parliament provides such an opportunity and the Government plan to lay amendments to introduce these measures in the Committee Stage of the Bill.
The response document sets out the broad parameters that the Government intend to set for these measures, and further information about their intentions regarding the regulation of collecting societies. Subject to parliamentary approval once the necessary legislation is in place, there will be further consideration of the regulations for the authorisation of orphan works and extended collective licensing schemes, generally through consultation. Similarly, there will be further consultation on the regulations for statutory codes of conduct.
The response will be published on the Business, Innovation and Skills, and Intellectual Property Office websites, at: http://www.ipo.gov.uk/response-2011-copyright.pdf and a copy will be placed in the House Libraries. Responses on other issues covered by the Copyright consultation—including the Government’s plans to modernise copyright through changes to the UK’s copyright exceptions and the proposed copyright notices scheme—will be set out in a subsequent document later this year.
The Government have welcomed the views of the Business, Innovation and Skills Committee on this area of work, and is considering the recommendations, from its recent report “The Hargreaves Review of Intellectual Property: Where Next?”.
In addition, the Government will be introducing an amendment which will take the form of a power to amend the Copyright Designs and Patents Act 1988 by regulations in order to implement EU directive 2011/77/EU on the term of protection for sound recordings. This power will allow the Government to implement the EU directive while maintaining the current level and scale of criminal penalties for infringement activity applicable under UK law.
The Economic and Financial Affairs Council was held in Luxembourg on 22 June 2012. Ministers discussed the following items:
Contributions to the European Council Meeting on 28-29 June 2012—European Semester
Following a ministerial discussion the Council approved the fiscal and economic elements of the draft country-specific recommendations under this year’s European semester for the 27 member states. The Council also approved draft recommendations on the economic policies of the member states of the euro area as a whole. Ministers also discussed the process by which the country-specific recommendations had been arrived at. The recommendations were taken forward for political endorsement at the European Council and are due to be formally adopted by the Economics and Financial Affairs Council in July.
Implementation of the Stability and Growth Pact
The Council adopted decisions closing excessive deficit procedures for Germany and Bulgaria, thus confirming that they have reduced their deficits below the EU’s 3% of GDP reference value. The Council also adopted a decision lifting the future suspension of commitments for Hungary from the EU’s cohesion fund.
Convergence Report from the Commission and the European Central Bank (ECB)
The Commission and the ECB provided an update on their assessment of the readiness for euro membership of the eight euro outs committed to joining the single currency (Bulgaria, Czech Republic, Latvia, Lithuania, Hungary, Poland, Romania and Sweden). This was followed by a brief discussion among Ministers. The assessment showed that none of these member states fulfils the convergence criteria at this stage.
Follow up to the G20 Summit (Mexico, 18-19 June 2012)
The Council was briefed by the presidency and the Commission on the outcome of the G20 summit in Los Cabos (Mexico) on 18 and 19 June. The summit focused on instability in the euro area, as well as on ways to strengthen international financial architecture and regulation; reduce food price volatility; promote “green” growth and greater investment in scientific and agricultural technology and research.
The presidency also looked ahead to the G20 Finance Minister’s meeting on 4 and 5 November in Mexico City, noting the implementation of the 2010 IMF quota and governance reforms, which will be discussed by the IMF executive board.
Financial Transactions Tax
Following a presentation by the presidency, Ministers debated the future direction of this dossier. A number of member states expressed concerns and stated their opposition to an FTT and I intervened to reiterate UK opposition to the Commission’s proposals in this area, given the negative impacts on jobs, growth and on financial activity across the EU at a time when we should be doing all we could to attract business and drive growth. I also underlined that any new proposal put forward for consideration under enhanced co-operation must provide clarity on the scope of the tax and what the revenues would be used for.
The presidency concluded that support for an FTT as proposed by the Commission was not unanimous, but that some member states wished to further consider enhanced co-operation on this dossier. The presidency noted that formal requirements for enhanced co-operation would have to be met, and that next steps will be handled by the incoming Cyprus presidency.
Energy Taxation Directive
The Council discussed progress on this directive and the presidency concluded that while there was agreement amongst member states that minimum tax levels should be laid down in the directive, member states should retain maximum flexibility to determine the structure of their national energy taxes.
Any Other Business
The presidency provided the Council with an update on progress on four financial services directives: the capital requirements directive (CRD4); the credit ratings agencies directive (CRA3); the EU mortgages directive and the directive on the harmonisation of transparency requirements for listed companies.
Over breakfast Ministers were debriefed on the previous evening’s Eurogroup
meeting. Ministers discussed the economic situation, as well as bank recapitalisation and developments in sovereign debt markets. They also discussed the possibility of a capital increase for the European Investment Bank.
Over lunch Ministers discussed the multi-annual financial framework for the 2014 to 2020 period.
Equitable Life Payment Scheme
The Treasury can confirm that the Equitable Life payment scheme has written to approximately 90% of all eligible individual policyholders to inform them of their status within the scheme, and that payments have been made to 288,823 policyholders. In addition, the scheme has today published a further progress report, which can be found at: http://equitablelifepaymentscheme. independent.gov.uk/ and I have arranged for a copy to be placed in the Libraries of both Houses.
In the coalition agreement published in May 2010, the Government pledged to
“implement the parliamentary and health ombudsman’s recommendation to make fair and transparent payments to Equitable Life policy holders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure”.
To honour that pledge the Government announced in October 2010 as part of the spending review that £1.5 billion would be made available to the scheme for distribution to up to 1 million eligible policyholders, and passed the Equitable Life (Payments) Act to establish the scheme. The Government met their commitment to start making payments by June 2011 and high volumes of automated payments were being made by December 2011.
In order to lessen the burden on policyholders, the scheme contacts policyholders directly with payment and there is no requirement to “make a claim” to receive a payment from the scheme. Therefore, the scheme committed to contact all the individual (i.e. non group) policyholders it could by June 2012 so that they knew their status within the scheme. This letter would either:
inform of a nil payment;
inform them that they would be paid by April 2014 and the amount of any payment due.
In the previous progress report, published in January 2012, the scheme reported that 95,000 policyholders had received payments totalling £77 million. The scheme can confirm today that 288,823 policyholders have received payments from the scheme totalling £277,727,668. This means that nearly two-thirds of all individual policyholders due a payment from the scheme have received it. Additionally, around 75% (27,671) of with-profits annuitants have now been contacted by the scheme about their first year payment, 25,215 of whom have received payment.
As of 30 June the scheme can confirm that it has written to 495,823 (circa 90%) individual policyholders to either:
inform of nil payment;
request further address verification in advance of making payment;
inform of eligibility within the scheme.
There is a group of individual (i.e. non group) policyholders for whom the data processing work to determine the payment status of their policies is ongoing. This means that while the scheme cannot confirm the amount of any payment due at this stage, the scheme can confirm their eligibility for the scheme.
The scheme has written to these policyholders to confirm their eligibility, that the data processing work is ongoing, and that any payment due should be made no later than April 2013. These policyholders need take no further action as the scheme has all the data it requires to confirm their payment status within the scheme and will be writing to them again in due course.
Following receipt of payment, the scheme has continued to receive low levels of response from policyholders—less than 0.25% of eligible policyholders have complained to the scheme. In addition, the scheme has established an independent process to assist those policyholders who are dissatisfied with any complaint response from the scheme.
As stated in June 2011, there are additional complexities in retrieving the contact details of those policyholders who bought their policy through a group (i.e. company) scheme. The scheme can confirm that it has begun the process of contacting group scheme trustees to obtain policyholder’s address details. Payment to these policyholders will start in the coming months.
The scheme can also confirm that hundreds of payments have already been made to the estates of deceased policyholders, and the process of identifying, tracing and contacting the estates of deceased policyholders continues. As this is an understandably complex area with some cases going back many years, this verification work will continue during 2012 and throughout the duration of the scheme. Payments to the estates of deceased policyholders are being made on completion of this tracing process.
Over the coming months the scheme will continue to make payments to policyholders and to contact the trustees of group schemes so that their eligible members can be paid.
The end of the first year of the scheme marks a significant milestone in the life of the scheme, and bringing closure to the Equitable Life issue. Eligible policyholders who have not yet heard from the scheme should contact the scheme via its call centre on: 0300 0200 150. The scheme will then be able to advise of the next steps a policyholder should take to receive further details on their status within the scheme.
Education for Young People
We are committed to raising the age of compulsory participation in education or training to 17 in 2013 and 18 in 2015. This will ensure that every young person has the opportunity to continue their studies and go on to skilled employment or higher education.
The raising the participation age (RPA) legislation makes it clear that education and training does not necessarily mean full-time study in a school or college. Employment with training is, for many young people, an excellent option, either through an apprenticeship or through full-time work with part-time training alongside. We want to do all we can to support employers who want to hire young people.
The legislation introduced by the previous Government included duties on employers to check evidence of young employees’ enrolment in education or training and, where necessary, to agree working hours to fit around those courses. It also introduced powers for local authorities to take enforcement action against young people who are not participating and their parents, which could ultimately have led to a fine.
Ministers stated during the passage of the 2011 Education Bill (now Act) that the Government’s intention was to commence all of the provisions of the RPA legislation, except the enforcement against young people and parents, to the original timetable.
However, our recent consultation suggested that the introduction of the employers’ duties, together with associated potential fines, could act as a powerful disincentive to firms hiring 16 and17-year-olds, particularly at a time when the labour market for young people is extremely difficult. This would be damaging both for the economy and for the prospects of young people.
We have decided that we must not at this point put in place barriers that may deter businesses from employing young people. We have therefore decided that we will not commence the two duties on employers within the RPA legislation (in chapter 3 of the Education and Skills Act 2008) in 2013.
As a result, we will not require employers to check that a young person is enrolled on a course before employing them, nor arrange work to fit round training as would previously have been the case. Nor will we subject employers to fines for failure to discharge one or more of these duties.
The duties on employers, together with the enforcement process against young people and parents, will remain in statute. We will review implementation regularly after 2013 and will have the option to bring these elements into force if and when they are needed.
The duties on young people, local authorities and learning providers will be brought into force as planned in 2013 (and 2015). Sixteen and 17-year-olds in work will be required to participate in education or training and local authorities will have a duty to support them to do so.
A copy of this statement and the report of the recent consultation will be placed in the House Libraries.
We need to reform the education system for young people aged over 16, particularly for students who want to pursue vocational courses. Around 1.6 million 16 to 19-year-olds are in education each year, but as Professor Alison Wolf stated in her review of vocational education, as many as 350,000 are on courses which do not benefit them.
This year’s annual skills survey from the CBI found that more than two-fifths of employers were not satisfied with the basic literacy of school and college leavers, and more than a third were unhappy with levels of numeracy. Reform is vital if we are to ensure that all young people are given the best chance of getting good jobs, succeeding in life and continuing their education.
To ensure a better experience for all young people a number of changes need to take place. One of the principal barriers to improving vocational education has been the system for funding education for young people aged over 16. At present schools and colleges are funded per qualification and so the more qualifications students take and pass, the more money schools and colleges receive. This means that the most rational course of action for schools and colleges is to enter students for easier qualifications—whether vocational or academic. Furthermore, the funding system is not geared towards activity that does not lead to qualifications, such as work experience, even though evidence shows its high value in securing future employment.
We are therefore introducing reforms to programmes of study and funding so that schools and colleges are freed to improve vocational education. Rather than funding per qualification, we will fund institutions “per student” allowing sufficient income for each student to undertake a full programme of study, whether vocational or academic.
As a result of these changes, every 16 to 19-year-old will have the opportunity to undertake high quality study which will help students move on to skilled work or further or higher education. Young people will be able to take up valuable work experience opportunities. Students without a good pass at 16 in English and maths—the subjects most valued by employers—will have to continue to study those subjects to age 18. We will publish data for each institution showing whether students progressed into work and further or higher education. This will enable students and their parents to make informed choices about programmes of study and institutions. It will also encourage schools and colleges to offer the courses and qualifications employers and higher education institutions value.
Young parents in particular can face barriers to participating in post-16 education and so I am today also publishing the results of the consultation on the Care to Learn childcare support scheme. This confirms that we will continue the scheme in its current form and the support it offers to this group of young people.
We are committed to raising the age of compulsory participation in education or training to 17 in 2013 and 18 in 2015. Young people will either study full or part-time at a school or college, or be in work but released for training opportunities. The Government want to do all they can to support employers who want to hire young people. We are today making a separate statement that explains why we have decided not to commence the duties placed on employers by the raising the participation age legislation in 2013. The Government have decided that we must not at this point put in place barriers that may deter employers from employing young people.
I realise that these changes may cause concern for institutions which offer a primarily academic programme of study. I very much value the commitment of schools, colleges and students to achieving academic excellence and entry to top universities. To protect institutions while discussions about academic qualifications take place, I am guaranteeing that no institution will see its funding per student fall as a result of these changes for at least three years.
I am establishing a ministerial working group to assist us in ensuring that these reforms work in the best interests of all young people. I will be inviting representatives from further education colleges, sixth form colleges, schools (including grammar schools) and other providers of post-16 education to consider the best way to implement the reforms to the programmes of study and associated funding changes.
Taken together, the reforms I am announcing today will set us on a clear path to giving young people greater choice and higher quality provision. It will mean that, whatever their ambitions or aspirations, they will reach adulthood with the rigorous qualifications, experience and skills that higher education and employers require.
Copies of the documents we are publishing today will be placed in the House Libraries.
Victim and Witness Strategy
The Government will, today, publish their response to the consultation “Getting it right for Victims and Witnesses” which began on 30 January and ended on 22 April 2012.
When I published the consultation document I observed that victims too often feel themselves to be an afterthought for the criminal justice system. Despite improvements over the last two decades, the system has continued to fall short—whether in relation to helping victims recover in the aftermath of a crime, supporting them through the stresses of investigation and trial, or providing the right services, funded as far as possible by offenders rather than the taxpayer.
That is why I set out a package of proposals to remedy these weaknesses, and deliver a more intelligent and coherent service for victims. My plans included increasing spending on victims’ services, with extra money coming from offenders themselves; reforming the criminal injuries compensation scheme so that it is focused on seriously injured victims of serious crime, and strengthening victims, rights so that victims feel less like accessories to the system, kept in the dark about their case, or expected to sit next to families of perpetrators in court.
The consultation elicited over 350 written responses, which we have carefully considered. They have helped us refine our proposals. We are taking forward a package of reforms that will, I believe, meet the whole range of ambitions I set out in the consultation document.
The response I am publishing today includes summaries of the comments received on our proposals and it sets out the policies we will now take forward. The reforms are wide ranging.
First, I intend to proceed with plans to make improvements to the support available for victims, raising up to an additional £50 million from the perpetrators of crime through the victim surcharge and other financial impositions. The way in which support for victims is purchased will also be subject to reform. We will move to a mixed model of national and local commissioning. The budget for the bulk of services will be devolved at local level to police and crime commissioners who will decide which services are needed in their communities. For some specialist support services, including rape support centres and support to those bereaved by homicide, my Department will continue to commission services nationally. Police and crime commissioner (PCC) elections will be taking place this November. The decision on when funding for victims services will transfer to PCCs will be made in due course but we would not envisage this happening any later than April 2015.
Secondly, our system of criminal injuries compensation will be reformed so it is properly focused on victims of the most serious crimes. The revised scheme will, for the first time, be placed on a sustainable footing. There will be an end to payments for minor injuries, and to those with serious criminal convictions.
There will be a revised victims’ code, setting out more clearly what victims can expect from the criminal justice system and ensuring that victims are treated always with dignity and respect. We will consult on a new draft code next year.
These reforms will also, among other things, aim to increase the use of restorative justice and of the victim personal statement. Both can help victims to cope and recover, both have a valuable role to play in the criminal justice process.
We will also put in place the first statutory compensation scheme for British victims of terrorist atrocities abroad. It will see Britons who are targeted in future terrorist attacks overseas compensated in the same way as domestic victims of terrorism.
In the light of the major reforms that the Government are announcing today to improve services for victims and introduce greater local accountability, the Government will consider how best to ensure that victims’ interests are well represented and review the role of the victims’ commissioner while the new framework for victims is established.
I will lay the following secondary legislation before Parliament today:
The draft Criminal Injuries Compensation Scheme 2012. This replaces the 2008 scheme. It provides compensation to victims of violent crime in Great Britain, including bereaved relatives.
The draft Victims of Overseas Terrorism Compensation Scheme 2012. This is a new scheme to compensate British, EU and EEA nationals resident in the UK who may be injured or have a relative killed in a future act of overseas terrorism designated as such by the Foreign Secretary for the purposes of the scheme.
The Criminal Justice Act 2003 (Surcharge) Order 2012. This will increase the victim surcharge payable by an adult on a fine and extend the surcharge to conditional discharges, community sentences and custodial sentences including suspended sentences. Similar provision will be made in respect of juveniles.
Copies of the draft schemes and their associated documents will be deposited in the Libraries of both Houses.
Copies are available in the vote office and the printed paper office. The response to the consultation can be found on the Ministry of Justice website at: www.justice.gov.uk.
Work and Pensions
Child Support Maintenance Calculation Regulations 2012
Later today I will be publishing the Government’s response to the consultation on the regulations governing the calculation methodology for the new statutory child maintenance scheme. The consultation was held between 1 December 2011 and 23 February 2012.
The Government want to encourage and support parents to make their own family-based arrangements, but are committed to also providing a statutory service for those separated parents for whom this is not possible.
As part of the Government’s child maintenance reform programme, the existing two failing Child Support Agency statutory schemes will be replaced with a new, single scheme from October 2012 using a pathfinder approach.
The aim of the new scheme is to produce a faster, more accurate and transparent process for assessing child maintenance payments. This will be achieved with a new administrative framework which will include a single set of calculation rules, a single computer system and a link to information from HM Revenue and Customs (HMRC) tax systems.
We intend to lay the Child Support Maintenance Calculation Regulations 2012 later today, they complement existing primary legislation by establishing the amended statutory framework the new scheme will operate within. They cover the calculation of maintenance, including how income is determined and the circumstances in which calculations may be varied.
There were 36 responses to the consultation, all of which have been carefully considered. I maintain that the proposals outlined in the consultation provide a stable footing on which the new scheme can operate.
The Government consulted on increasing the flat rate paid by non-resident parents on certain prescribed benefits, or whose income is £100 or less, further than the £7 proposed by the previous Government. I am announcing today that we will increase the flat rate to £10 when we open the new scheme to all new applicants, in order better to reflect the costs of bringing up a child and reduce the gap between child maintenance paid by employed and unemployed non-resident parents.
The Government also consulted on reducing the percentage reduction from the non-resident parent’s income for those children who live in their household. This is to get closer to equalising the treatment in the calculation of those children living with and those living apart from the non-resident parent. I can confirm today that we will do that by changing these reductions to 11% for one child, 14% for two children and 16% for three or more.1
I believe that these changes will help provide a fairer system for all of those parents who use the statutory child maintenance service in the future.
I will place copies of the consultation response and impact assessments in the House Library later today. The consultation response, impact assessments, regulations and explanatory memorandum will also be available on the Child Maintenance and Enforcement Commission (CMEC) and Department for Work and Pensions websites later today. See:
1A non-resident parent usually pays less maintenance if they are supporting a child living as a member of their household. The statutory calculation does this by reducing the amount of income used to set maintenance by one of three specified percentages.
Workplace Pension Reform (Qualifying Schemes)
Later today the Government will publish the following documents:
“Automatic enrolment: Guidance for employers on certifying defined benefit and hybrid pension schemes”;
“Automatic enrolment: Guidance for actuaries on certifying defined benefit and hybrid pension schemes”;
The Hybrid Schemes Quality Requirements Rules 2012; and
The Government response to the consultation on “Automatic enrolment: career average schemes as qualifying schemes”.
We will also be publishing an updated version of:
“Automatic enrolment: Guidance on certifying money purchase pension schemes”.
The guidance and rules were the subject of consultation in 2011 and we are grateful to all of those individuals and organisations who provided responses on these as well as those who responded to the career average scheme consultation.
The guidance will help employers who are already providing good workplace pension schemes to continue to do so under the reforms.
Our response to the consultation on career average schemes confirms that we intend to lay an amended draft regulation before Parliament. The changes that this introduces will give career average schemes greater flexibility over the way in which they can provide for the revaluation of benefits that is required for them to be used as qualifying schemes.
I will place a copy of these documents in the House Library. They will also be available later today on the Department’s website at:
www.dwp.gov.uk/policy/pensions-reform/workplace-pension-reforms/guidance/ and www.dwp.gov.uk/ consultations/2012/auto-enrol-career-ave-qual-sch.shtml.
The hybrid schemes rules were signed on 29 June 2012 and took effect on 1 July 2012.