Written Ministerial Statements
Thursday 5 July 2012
Business, Innovation and Skills
The Government are committed to unlocking the full growth potential of our cities. We want powerful, innovative urban communities that are able to shape their own economic destinies, boost their surrounding economic areas and make a vital contribution to national economic growth. Achieving this requires a major shift in the control of resources and responsibilities from central Government to the leadership of each city, which is the purpose of the city deals programme.
I have laid in the Library a paper which summarises the deals that have been concluded. The first wave of city deals has focused on the eight largest English cities outside London and their wider economic areas. Each deal is bespoke and reflects the different needs of each community. However, each deal aims:
To give cities greater powers to drive local economic growth.
To facilitate specific projects that will boost local economies.
And to strengthen the governance arrangements of each city.
Each agreement represents a genuine deal—with both cities and Government offering and requiring things in return.
We have concluded deals with Greater Birmingham and Solihull, Bristol and the west of England, Greater Manchester, Leeds city region, Liverpool city region, Nottingham, Newcastle and Sheffield city region.
The core cities have estimated that the first wave of deals will create 175,000 jobs over the next 20 years and 37,000 new apprenticeships. If achieved, this would be a significant contribution to our economy—creating opportunities where they are needed most.
Each deal is different, a locally-determined combination of the following key components:
Greater powers and incentives to invest in growth, which include:
Earn back—a new payment by result model that incentivises a city to invest in growth in return for a share of the national tax take. (Greater Manchester)
New development deals—the freedom to deliver critical infrastructure through tax increment financing, with the ability to borrow against future business rate income in key development zones. (Newcastle, Sheffield and Nottingham)
Economic investment funds—the power to pool multiple funding streams and business rate income into a single investment fund, leverage private sector capital and invest in local priorities.
Cities will be able to create self-sustaining investment funds that will reduce dependence on central Government grants. (Greater Birmingham and Solihull, Bristol and west of England, Greater Manchester, Leeds city region, Liverpool city region and Sheffield city region)
A range of enhanced powers for the delivery of jobs and skills, which include:
Local skills funding model—a new model of skills funding that will match local contributions (public and private) with national funding to provide a skills budget that cities will control to invest in the skills that local businesses need. (Sheffield city region)
Skills bank—an employer owned mutual that will match public sector funding with private sector investment and allow businesses to buy the skills and apprenticeships that their local economy needs. (Liverpool city region)
Outcome incentives—new models to give cities greater influence over the skills system by using incentive payments or payment by results. (Greater Manchester and Liverpool city region)
City apprenticeship hubs—enabling cities to boost apprenticeship numbers by supporting SMEs take on apprentices through apprenticeship training agencies, brokerage and incentive payments. (Bristol and the west of England, Greater Manchester, Leeds city region, Newcastle and Nottingham)
Localised youth contracts—local alternatives to the national 16-17 youth contract programme, with cities having the power to design and deliver local models to reduce NEETs. (Leeds city region, Liverpool, Newcastle)
New opportunities to support local businesses, which include:
Local venture capital fund—a localised model that will match national funding with local contributions to create a venture capital fund that will invest in high-tech start-up and growth businesses across an economic area. (Nottingham)
Business growth hubs—city led business hubs that bring together all the support, advice and services that investors and local businesses need to locate, grow and trade. (Greater Manchester and Bristol and west of England)
New opportunities to drive critical infrastructure development, which include:
Rail devolution—devolving greater responsibility for commissioning and managing franchise arrangement for local and regional rail services. (Bristol and west of England, Leeds city region, Greater Manchester and Sheffield city region)
Devolution of local transport majors funding—matching local resources with devolved transport budgets so cities have the power and resources to make strategic transport investments. (Greater Birmingham and Solihull, Bristol and west of England, Leeds city region, and Sheffield city region)
Localised asset management—joint investment programmes that bring together local and national assets in an economic area to unlock resources for housing development and regeneration. (Greater Birmingham and Solihull, Bristol and West of England, Greater Manchester, Liverpool and Newcastle)
Low-carbon pioneering cities—local programmes that will help cities make critical investment in green infrastructure and technology; generate low-carbon jobs; and accelerate reductions in emissions. (Greater Birmingham and Solihull, Leeds city region, Greater Manchester, Newcastle, Nottingham)
These new powers and responsibilities are supported by strengthened governance and accountability arrangements. Liverpool and Bristol have voted to have directly elected mayors complemented by strong decision-making structures across the wider economic area; Leeds and Sheffield have joined Greater Manchester in forming combined authorities—in the west Yorkshire and south Yorkshire areas, respectively; Newcastle is working with authorities across their economic area to take steps towards forming a north east combined authority; Birmingham is an unusually large local authority and its local enterprise partnership has established strong private sector leadership; and Nottingham’s city deal is focused on a particular area of the city—its creative quarter—which is wholly within the city centre authority area.
The Government have always been clear that the city deal programme represents a point of departure not a destination. We fully intend that the process of decentralisation should be deepened over time—and also extended beyond the initial participants. Nevertheless, the first wave of the programme represents a major transfer of power from central Government to local people, one which should inspire the highest ambitions of our greatest cities.
Asset Protection Agency
The annual report and accounts 2011-12 of the Asset Protection Agency (APA) has been presented to Parliament today.
The report contains commentary on key developments in relation to the APA and the asset protection scheme (APS) over the period from 1 April 2011 to 31 March 2012.
I am pleased to note the statements in the report that the probability of the Royal Bank of Scotland (RBS) being able to make a claim under the APS is highly unlikely.
Future Reserves 2020
The report of the independent commission to review the United Kingdom’s reserve forces led by General Sir Nicholas Houghton, Vice Chief of the Defence Staff, was published on 18 July 2011. I am most grateful to the members of the commission, including my hon. Friend the Member for Canterbury (Mr Brazier), for their efforts in producing this invaluable report. The Government accept the broad thrust of the Commission’s recommendations, which encompassed the Army reserves —the largest reserve component—the Royal Naval and Royal Marines Reserves and the Royal Auxiliary Air Force.
To achieve the redesign of the Army required by Army 2020 will require us to expand the volunteer Army reserve to 30,000 trained strength and better to integrate the regular and reserve components of the future Army. Army 2020 has defined the Army reserves’ role and we are establishing more predictable scales of commitment in the event that reserves are committed to enduring operations. In the past, the reserve was essentially designed to supplement the regular Army; in future, the reserve will be a vital part of an integrated Army. The principle of greater integration was established in the commission’s report and, based on their findings, our concept for Army reserves sees them ready and able to deploy routinely at sub-unit level and in some cases as formed units. They will be trained, equipped and supported accordingly. Officers and soldiers will have command opportunities which have not always been available in the recent past.
The process of reshaping the reserves for their future role has already begun: we are recruiting reserves now for all three services. The Army has started overseas reserve training exercises at company level (26 this year, and increasing in number significantly by 2015); we are putting in place routine partnered training of Army reserve and regular units, including for operational deployments. More equipment is arriving in the form of modern support vehicles, the Wolf Land Rover and Bowman radios. We plan that, over time, the personal equipment of reservists will be on a par with that used by regulars. The greater reliance on the reserve envisaged in Future Force 2020, and the additional £1.8 billion over 10 years that we have committed to the reserves, ensures that reservists will receive the kit and the training they need. But in exchange we expect them to commit to specific amounts of training time and, for the Army in most cases, to accept a liability for up to six-months deployed service, plus pre-deployment training, in a five-year period, dependent on operational demand. There will be opportunities for shorter periods of deployed service commitment for those in some specialist roles.
The Navy’s maritime reserves will expand to a trained strength of 3,100 to deliver a greater range and depth of capability, within its well established and integrated model, to provide individual augmentees to the Royal Navy and Royal Marines in specialist and generalist roles. Key areas of growth will be in a range of command and communication, intelligence and surveillance disciplines, including cyber, support to the Fleet Air Arm and the exploitation of niche capabilities in the role of maritime security. The aim is to build maritime reserves that are fully integrated and able to provide the naval service with a range of flexible manpower, including greater access to civilian skills. The expansion will be supported by an infrastructure programme to provide modem and efficient training facilities.
The Royal Auxiliary Air Force (RAuxAF) provides resilience and strength in depth to the Royal Air Force contribution to Defence capability by providing individual augmentees to regular forces. It will grow to a trained strength of 1,800. The principal growth will be in the specialist areas of logistics, flight operations, medical, intelligence, media, RAF police and cyber; individual augmentees will be trained to a sufficient standard to be folly integrated with the regulars as part of the whole force concept. Five new reserve squadrons will be established: No 502 (Ulster) Squadron will form at JHC Station Aldergrove; 611 (West Lancashire) Squadron will form in Liverpool and 614 (West Glamorgan) Squadron will form in south Wales, most likely at RAF St Athan. These squadrons will be general service support squadrons representing various trades and branches from within the RAF. At RAF Brize Norton in Oxfordshire, 2624 (County of Oxford) Squadron will re-form in the force protection role and 622 Squadron will stand up as the reserve unit for aircrew augmenting the RAF’s air mobility force.
Delivering this step change in the size and role of the reserves will require a change in the relationship between Defence, the employer and the reservist. Many employers already give excellent support to reservists, for which we, and the nation, are grateful. But we need a new framework of partnership, with public and private sector employers, that gives us the confidence that trained reservist manpower will be available when it is really needed. We are examining how this might work through, for instance, the “Partnering for Talent” programme, which seeks to identify clear business benefits for employers who support the reserves. The public sector is already a major employer of reservists, and should set an example. Cross-Government work, led by the head of the civil service, is promoting the benefits of employing reservists within Government.
This scale of change needs the support of society as a whole and of employers in particular. I intend therefore to publish a consultation paper in the autumn, setting out our detailed proposals. Following consultation, we will be able to make informed decisions early next year on terms and conditions of service, employer engagement, the Government’s own commitments as an employer, and on any legislation necessary to underpin and support our vision for the reserves. I have also set up an independent external scrutiny team to assess progress in implementation of our vision for the reserves. This will be led by Lieutenant General (Retired) Robin Brims, who will make his first report in the summer of 2013.
Foreign and Commonwealth Office
Alleged Offences (Diplomatic Immunity)
In 2011, 13 serious offences allegedly committed by people entitled to diplomatic immunity were drawn to the attention of the Foreign and Commonwealth Office. Eight of these were driving-related. This is a decrease on the figures for 2010 (15 alleged offences, 12 driving-related). We define serious offences as those that could, in certain circumstances, carry a penalty of 12 months or more imprisonment. Also included are drink-driving and driving without insurance.
Some 22,500 people are entitled to diplomatic immunity in the United Kingdom and the majority of diplomats abide by UK law. The number of alleged serious crimes committed by the diplomatic community is proportionately low.
Under the Vienna Convention on Diplomatic Relations 1961, those entitled to immunity are expected to obey the law. The FCO does not tolerate foreign diplomats breaking the law.
We take all allegations of illegal activity seriously. When instances of alleged criminal conduct are brought to our attention by the police, we ask the relevant foreign Government to waive diplomatic immunity where appropriate. For the most serious offences, we seek the immediate withdrawal of the diplomat.
Alleged offences reported to the FCO in 2011 are listed below.
Driving under the influence of alcohol
Driving without insurance
Actual bodily harm
Equipped for burglary/Threatening behaviour
Equipped for burglary/robbery
Figures for previous years are available in my written statement to the House on 19 July 2011, Official Report, column 102WS.
Diplomatic Missions and International Organisations (Outstanding Congestion Charge and Fines)
The value of unpaid congestion charge debt incurred by the diplomatic missions in London since its introduction in February 2003 until 31 December 2011 was £58,022,119. The table below shows those diplomatic missions and international organisations with outstanding fines of £100,000 or more.
Number of Fines
Total outstanding (£)
ANTIGUA AND BARBUDA
Diplomatic Missions (Outstanding National Non-Domestic Rates Bills)
The majority of diplomatic missions in the United Kingdom pay the national non-domestic rates (NNDR) requested from them.
They are obliged to pay only 6% of the total NNDR value which represents payment for specific services such as rubbish collection, street cleaning and street lighting.
Following representations by the Foreign and Commonwealth Office, historic debt of £149,799 owed by missions has been settled during the last 12 months.
As at 1 June 2012, the total amount outstanding from all diplomatic missions was £565,646. This represents a very small reduction on the previous year’s total. Missions listed below owed over £10,000 in respect of NNDR.
Diplomatic Missions and International Organisations (Unpaid Parking Fines)
In 2011, there were 4,741 parking fines incurred by diplomatic missions and international organisations in the United Kingdom which were brought to our attention by councils. These totalled £477,287.
The Foreign and Commonwealth office has held face-to-face meetings with a number of missions about outstanding parking fine debt. In addition, in March this year we wrote to diplomatic missions and international organisations concerned giving them the opportunity to either pay their outstanding fines or appeal against them if they considered that the fines had been issued incorrectly.
Subsequent payments (including amounts waived by councils) totalled £145,964. There remains a total of £331,323 in unpaid fines for 2011.
The table below details those diplomatic missions and international organisations that have outstanding fines totalling £1000 or more, as of 15 June 2012.
Diplomatic Mission/International Organisation
Number of Outstanding Fines (Excluding Congestion Charge)
Amount in £
United Arab Emirates
European Union Act 2011 (Section 5)
A statement has been laid before the House today, 5 July. This has been made pursuant to section 5 of the European Union Act 2011 as to whether the protocol on the concerns of the Irish people on the treaty of Lisbon falls within section 4 of the Act.
Copies of the section 5 statement are available from the Vote Office and Printed Paper Office.
Consultation on Standardised Packaging of Tobacco Products
My right hon. Friend the Secretary of State for Health announced on 16 April the Government’s consultation on standardised packaging for tobacco products, Official Report, column 11WS. A large number of responses have already been received from a variety of individuals and organisations.
The Government have been asked to provide more time for people to respond to the consultation. We want to maximise the opportunity that people have to provide their views and evidence.
The Government are, therefore, extending the consultation period for an extra month. The new closing date of the consultation is Friday, 10 August 2012.Through this consultation, we are exploring whether action on tobacco packaging has the potential to bring public health benefits over and above those from our current initiatives. The Government have an entirely open mind on standardised packaging, and want to know more about the possible benefits and consequences of taking action in this area.
Any decisions to take further policy action on tobacco packaging will be taken only after full consideration is given to consultation responses, evidence and other relevant information.
Legal Services Board and Office for Legal Complaints Triennial Reviews
On Tuesday 10 January, I made a written statement to Parliament announcing the triennial reviews of the Legal Services Board and the Office for Legal Complaints. I am pleased to announce the conclusion of the reviews and publication of the report today.
Established in 2009, the Legal Services Board and the Office for Legal Complaints were formed, respectively, as the oversight regulator for the legal profession and the administrator of a new, independent and fair ombudsman scheme for service complaints against authorised persons, under the Legal Services Act 2007.
The reviews have concluded that there is a continuing role for both the Legal Services Board and the Office for Legal Complaints. The Legal Services Board should continue as an executive non-departmental public body and the Office for Legal Complaints as a statutory body. However, the next triennial review in 2015 will provide a good opportunity to revisit this, due to the considerable changes to the legal services market happening now and expected over the next three years. Both the Legal Services Board and the Office for Legal Complaints have excellent standards of corporate governance and the recommendations of the report are minor improvements to strengthen the openness and transparency of each body.
The triennial reviews have been carried out with the participation of a wide range of stakeholders and users, in addition to the bodies themselves. The reviews were publicised on my Department’s website and stakeholders were invited to contribute through a call for evidence and a series of meetings. In addition to the project board which oversaw the reviews, a critical friends group challenged the evidence used to make conclusions. Membership of this group included representation from the Cabinet Office, the National Audit Office and the Department for Business, Innovation and Skills. A peer reviewer also challenged the evidence for stage two of the reviews.
I am grateful to all who contributed to these triennial reviews. The final report has been placed in the Libraries of both Houses.