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Written Statements

Volume 551: debated on Monday 15 October 2012

Written Ministerial Statements

Monday 15 October 2012


Ireland Loan (Revised Agreement)

I have today placed in the Libraries of both Houses revised copies of the agreement providing a credit facility to Ireland of £3,226,960,000.

This agreement was negotiated between HM Treasury and Ireland and originally signed on the 22 December 2010 following enactment of the Loans to Ireland Act, which received Royal Assent on 21 December 2010.

Parliament will be aware that in July 2011, following the euro area’s commitment to lower the interest rate on their loans to Ireland, the Chancellor committed in principle to lower the interest rate on the UK’s bilateral loan to Ireland. The Chancellor took the view that the UK had been unable to lower the interest rate on its loan to Ireland before that point without effectively subsidising the higher interest rates applicable to the European financial stability facility (EFSF). Changing the rate now ensures that all of the benefit goes to Ireland and not to higher interest rates paid to euro area Governments.

The UK’s loan agreement has now been revised to reflect this change in the interest rate, in which the UK has more than covered its costs of funds. The new rate that will apply to each tranche of the loan represents the UK’s cost of funds plus a service fee of 0.18 percentage points per annum. The UK’s cost of funding is defined as the weighted average yield on gilt issuance in the six months prior to the disbursement of a tranche.

The new interest rate will apply retrospectively to those tranches of the loan already disbursed, to ensure Ireland receives the full benefit of the lower rate. The rates, which apply to the tranches already disbursed on 14 October 2011, 30 January 2012, 28 March 2012 and 1 August 2012, are 3.373%, 2.559%, 2.546%, and 2.534% respectively.

The revised loan agreement also contains further minor amendments, which include taking account of changes made to Ireland’s agreements with other financial support facilities. These amendments maintain the effect of the provisions in clause 7 of the original bilateral loan agreement, on prepayment and cancellation of the loan.

HM Treasury has provided a further report to Parliament in relation to Irish loans as required under the Loans to Ireland Act 2010 alongside this statement.

Communities and Local Government

DCLG (Conference Recess Work)

I would like to update hon. Members on the main items of business undertaken by my Department since the House rose on 18 September.

Freezing council tax for hard-working families and pensioners

On 8 October, the Government announced new support to local authorities to enable them to freeze council tax and keep taxpayers bills down for the third year running. Freezing bills again will really help hard-working families and those on fixed incomes, such as pensioners with their cost of living.

The Government will set aside an extra £450 million to help freeze council tax bills in England. The support for local authorities means that taxpayers living in an average band D home in England could save up to £72 compared to a 5% rise in council tax.

The £450 million will be made available, through a new grant scheme, to local authorities which decide to freeze or reduce their council tax next year. If they do, councils, police and fire authorities in England will stand to receive £225 million of funding in both financial years 2013-14 and 2014-15, equivalent to raising their 2012-13 council tax by 1%. Funding will also be provided to devolved Administrations as a Barnett consequential.

Over the last two years the Government have provided grants of around £2 billion to help freeze council tax. A freeze in council tax in 2013-14 would represent a real terms cut of around 2% and a fall of 9% in real terms over the past three years.

For 2013-14, the Government will propose to lower the local authority tax referendum threshold to 2%, to protect against excessive council tax rises. My Department will set out further detail on the excessiveness principles in due course; the final principles are subject to the approval of the House of Commons.

Handing power back to local communities

We are determined to put people back at the centre of local decision making and give them the opportunity and power to shape the future of their area.

On 21 September, the community right to bid, created by the historic Localism Act, came into force, allowing communities to “stop the clock” on the sale of valuable local assets, giving them time to put in a takeover bid and preserve assets for the benefit of the community.

This new right gives voluntary and community organisations and parish councils the opportunity to nominate an asset to be included on a list of “assets of community value”, pausing the sale of a successfully listed asset for six months. On 4 October, my Department published advice for local councils to ensure they have all of the information they need to support local communities in their right to bid.

On 5 October, my Department launched a new community shares unit to help local people claim a stake, and become part-owners of, treasured local assets and services. The new unit aims to grow the community shares market with the ambition of launching over 200 share issues over the next three years.

Helping troubled families turn round their lives

On 8 October, my Department confirmed that the troubled families programme is on schedule to meet the Prime Minister’s pledge to turn around the lives of 120,000 troubled families by 2015. Over 40,000 claims have been made for up-front “attachment fees” worth over £100 million as part of the groundbreaking payment-by-results programme, meaning councils are committed to working with one third of families in the first year of the three-year programme.

Under the deal with local authorities, Government will pay councils up to £4,000 per eligible family if they reduce truancy, youth crime and antisocial behaviour or put parents back into work. The Government’s £448 million three-year budget is drawn from across seven Departments in a bid to join up local services dealing with these families on the front line.

Tackling unauthorised development

On 10 October, my Department announced proposals to give councils greater freedom to stop unauthorised traveller sites being set up and prevent long, drawn-out stalemates like Dale Farm.

The proposals will allow councils greater freedom to choose when to use “Temporary Stop Notices” in relation to caravans which are used as main residences and are in breach of planning control and any person guilty of this offence is liable to a fine of up to £20,000 (or unlimited on conviction on indictment).

Under the current system councils are constrained as to when they can use these powers against caravans which are main residences. A small minority have sought to abuse the planning system, this proposal will assist local councils in taking immediate effective action and enable them to safeguard their local area from the emergence of unauthorised sites. A technical consultation on these proposals will be published in due course.

Improving homes and getting empty homes back into use

On 27 September, my Department published statistics that show bringing thousands of empty properties back into use has unlocked over £63 million of additional funding that is directly benefiting local communities through the successful new homes bonus scheme.

In total, local authorities have brought nearly 38,000 long-term empty homes back into use over the past two years—helping to tackle the housing shortage and providing a roof over the heads of hard-working families across the country.

On 28 September, my Department confirmed nearly £1 billion to 41 councils over the next two years to bring over 86,000 homes up to a decent living standard while at the same time offering a boost to local businesses up and down the country. The investment secures the continuation of the decent homes programme until the end of this Parliament.

Helping first time buyers

We are determined to help people meet their aspirations for a home of their own and to help first time buyers take their first step on to the property ladder. The Firstbuy scheme has proved a huge success, with developers reporting more than 8,000 reservations by the end of August this year.

On 11 October, my Department announced that £40 million will go to 41 developers to help 2,500 first-time buyers this year. This is the first allocation from a £280 million pot to extend the Firstbuy scheme, which is set to help a total of 27,000 first time buyers.

The £280 million boost to Firstbuy forms part of the housing and growth package announced in September, and is one of a range of measures designed to get Britain building and kick start the economy.

Delivering locally-led regeneration

Since its designation as a new town in 1967, Milton Keynes has been subject to central Government involvement. On 2 October my Department announced proposals to transfer planning functions, currently undertaken by the Homes and Communities Agency, back to Milton Keynes council. This will enable the council to plan more strategically in the area and allow local residents to have a greater say in how that land is developed.

The Department has made a major contribution to the redevelopment of the Olympic park and surrounding areas in east London. On 1 October, the London Legacy Development Corporation was given powers to become the local planning authority for this area, with the planning decisions team of the Olympic Delivery Authority and two planning staff from the London Thames Gateway Development Corporation. The London Legacy Development Corporation is now fully equipped to secure the regeneration of its area—its mandate under the Government’s Localism Act 2011.

Preserving Ironbridge Gorge

On 4 October, my Department announced £12 million to preserve and protect the world heritage site at Ironbridge Gorge. My Department will pay a total of £2.2 million during 2012-14 for the stabilisation of Ironbridge Gorge and provide a further fund of up to £9.8 million in 2014-15, subject to approvals.

Each year the Ironbridge Gorge draws in over half a million tourists from near and far to the area and pumps £20 million into the economies of Telford and Wrekin and the wider Shropshire area. Funding will be used to preserve the site which is under threat from landslides and slippage that could damage and even destroy the historic site and tourist industry it supports.

Commemorating the first world war

To commemorate the 100th anniversary of world war I, on 11 October, the Prime Minister announced that my Department, alongside the Department for Education, would invest £5.3 million to give pupils and teachers from every maintained secondary school in England the chance to go on a tour of the great battlefields and take part in remembrance ceremonies on the western front.

This flagship scheme, part of the centenary education programme, will allow pupils to learn at first hand about the sacrifices made by troops and help ensure that this significant aspect of our history and the impact it had on our nation’s culture and heritage is passed on for generations to come. A procurement process will be run to decide on a single tour operator before the visits start in spring 2014, running until spring 2019.

Copies of the associated press notices and documents have been placed in the Library of the House.


HMS Caroline

I am pleased to inform the House that I am today laying a departmental minute, which proposes the transfer of HMS Caroline and its fixtures and fittings to the National Museum of the Royal Navy (NMRN).

HMS Caroline is considered to be the second most important ship in the UK National Maritime collection after HMS Victory; she is the only surviving veteran afloat of the Battle of Jutland (1916). The ship is a significant example of early 20th century engineering and shipbuilding, constructed of riveted steel plate with three-inch belt armour reducing to one inch at the keel. Laid down on 28 January 1914 at Camel Lairds yard in Birkenhead, she was commissioned into active service on 17 December of that year making her the fastest built major warship to date. She was propelled by two Parson’s steam turbine engines which remain onboard as the world’s only “in situ” example of the engines which revolutionized maritime propulsion. HMS Caroline has been moored in Belfast since January 1924, just over two years after the state of Northern Ireland was established and she has built a considerable social history as a witness to the province’s story. As a depot ship and Royal Naval reserve training ship she has benefited from continual occupation and some 85% of the vessel is in its original form.

The ship, currently berthed in Belfast, is in an increasingly fragile state and was decommissioned on 31 March 2011.

The contents of the ship known as the “Caroline Collection” were the subject of a separate gift (valued at less than £250,000) made in July 2011. The National Museum has already assumed responsibility for ongoing running costs of the ship. Following the gift, the NMRN intend to apply for Heritage Lottery funding in order to restore the ship as a heritage attraction in Belfast.

The proposed transfer would enable the NMRN to access external funding sources in order to restore and preserve this historically significant ship as a heritage attraction in its current location in Belfast following an agreement between the Department of Enterprise, Trade and Investment in Northern Ireland and the National Museum of the Royal Navy.

The detailed arrangements proposed envisage that the NMRN would assume responsibility for the restoration and preservation of the ship. I expect the new arrangements to be in place by 1 April 2013.

Deputy Prime Minister

First Minister of Wales (Functions as Privy Counsellor)

In a number of situations advice is by convention given by a Minister of the Crown to Her Majesty in respect of the exercise of her functions.

The majority of Her Majesty’s functions in respect of which she receives advice from a Minister of the Crown relate to the making of appointments and the use of the royal prerogative. Her Majesty receives advice from the Secretary of State for Wales in respect of the exercise of her functions in relation to Wales. By convention, the Secretary of State for Wales has taken the advice of the Welsh Ministers in areas which are devolved in Wales before advising Her Majesty.

Following a formal request from the First Minister of Wales, the Secretary of State for Wales and I (as Lord President of the Council) have agreed that the First Minister of Wales will henceforth advise Her Majesty in respect of the exercise of her functions which are within devolved areas of competence.

These are:

The appointment of the chief inspector and inspectors of education and training in Wales under section 19 of the Education Act 2005;

Functions in relation to further and higher education in Wales under the Education Reform Act 1988; and

The appointment of fire inspectors in Wales under section 28 of the Fire and Rescue Services Act 2004

The First Minister of Wales will advise Her Majesty so long as the office holder is a member of the Privy Council. The Secretary of State for Wales will continue to advise Her Majesty in respect of her other functions in relation to Wales.

No formal order is required to give effect to the new arrangements. However, an amendment to section 19(6) of the Education Act 2005 will be required to allow the First Minister to advise Her Majesty on the appointment of the chief inspector and inspectors of education and training in Wales. The UK Government will work with the Welsh Government to effect this change.

Home Department

Immigration Rules (Temporary Concessions)

I am today announcing the introduction of concessions to the immigration rules for Syrian nationals lawfully in the UK.

In the light of the ongoing violent conflict occurring in Syria I have decided that the UK Border Agency should operate some discretion to enable Syrians legally in the UK to extend their stay here.

Syrians in the UK with valid leave (or leave which has expired within the last 28 days) will be able to apply to extend their stay, or switch into a different category from within the UK (with some restrictions) rather than being required to return home first. Those applying would need to meet the requirements of the relevant visa category, pay the appropriate fee, and adhere to the normal conditions of that category—no access to public funds, for example. If a required document is not accessible due to the civil unrest in Syria UKBA may apply its discretion and the requirement to provide that document may be waived where appropriate.

These concessions will remain in force for five months from today. The Government continue to monitor the situation in Syria closely in order to ensure our response is appropriate and that any emerging risks are addressed.


West Coast Main Line

On Wednesday 3 October 2012, I announced the cancellation of the inter-city west coast franchise procurement following the discovery of significant technical flaws in the way the franchise process was conducted by the Department for Transport.

I immediately ordered two independent investigations to be undertaken urgently. The first, led by Sam Laidlaw, who is the chief executive of Centrica, lead non-executive on procurement across the Government, and lead non-executive member of the departmental board is examining what happened during the west coast procurement and why, with the aim of establishing the lessons to be learned. The second review, led by Richard Brown, chairman of Eurostar, is focusing on any lessons to be learned for the upcoming franchising programme.

I also announced, that the ongoing franchising programme should be paused, pending the outcome of the two investigations. This included pausing the live competitions on Essex Thameside, Great Western and Thameslink.

This morning at 7 am, I have made a further announcement to the London stock exchange, that the Department for Transport is commencing negotiations with Virgin Rail Group with a view to them remaining as operator of passenger services for the west coast main line for a short period, of around nine to 13 months while we run a competition for an interim franchise agreement. This interim agreement, which would be open to any bidders, will then run until a new long-term west coast franchise is ready to commence.

I shall update the House further, later today.