Written Ministerial Statements
Tuesday 23 April 2013
Business, Innovation and Skills
Transposition of EU Legislation
The Government’s guiding principles for EU legislation were put in place to end the so-called gold-plating of EU legislation so that British businesses are not put at a disadvantage relative to their European competitors. The guiding principles were introduced in December 2010 and were updated in June 2011 to incorporate three operating principles on early influencing, negotiating positions, and holding the EU institutions to account on their better regulation commitments.
I am today informing the House that the Government have now agreed a revised version of the guiding principles for EU legislation and accompanying guidance on how to implement European directives effectively. These amendments introduce a new principle emphasising the importance of minimising regulatory burdens when implementing EU legislation and ensuring that the UK does not go beyond the minimum requirements of EU legislation when transposing it into UK law. Copies of the revised guiding principles will be placed in the Libraries of both Houses and are available at the following links:
The Government are determined to ensure that UK businesses are not put at a competitive disadvantage compared with their European counterparts. By making these amendments, the Government will ensure that no unnecessary legislative burdens are placed on UK businesses when transposing EU law.
The Government will continue to scrutinise the implementation of all EU legislation to ensure that it is transposed in the least burdensome way possible. We will also continue to work with partners in Europe to reduce the burden of red tape on business that flows from Brussels.
HM Treasury is today laying before Parliament a copy of the report of Peter Bloxham’s review of the Investment Bank Special Administration Regulations 2011.
Those regulations, made under the Banking Act 2009, came into force on 8 February 2011. In accordance with section 236 of the Act, the Treasury arranged for a review of the effect of the regulations to be completed within two years of the date on which those regulations came into force. Mr Bloxham was appointed on 28 November 2012, and reported to the Treasury on 7 February 2013.
The Act requires a review of investment bank insolvency regulations to consider, in particular, how far the regulations are achieving the objectives specified for the special administration regime, and whether the regulations should continue to have effect. The specified objectives are:
identifying, protecting, and facilitating the return of client assets;
protecting creditors’ rights;
ensuring certainty for investment banks, creditors, clients, liquidators and administrators;
minimising the disruption of business and markets; and
maximising the efficiency and effectiveness of the financial services industry in the United Kingdom.
Mr Bloxham’s terms of reference set out a two-stage process. The first stage asked him to answer the statutory questions set out above in a report to Treasury. The second stage asks him to consider further possible changes to the special administration regime to improve its operation, as well as wider changes which might provide for a better administration process beyond the narrow bounds of the regime itself.
He concludes that the special administration regime does fulfil a useful purpose and should therefore be retained, but subject to amendment. His report goes on to make a number of recommendations for possible improvement.
The Treasury welcomes this report and accepts the conclusion that the investment firm special administration regime should be retained. The Treasury also accepts that amendments to that regime will be necessary if it is to be better able to fulfil the objectives set for it.
I have therefore asked Peter Bloxham to consider further possible changes to the regime, as recommended in his report. I expect him to report to the Treasury over the summer. The Treasury will also lay that report before Parliament and make a further statement.
The Government have published the second paper in the Scotland analysis programme series to inform the debate on Scotland’s future within the United Kingdom.
“Scotland analysis: Currency and monetary policy” analyses the characteristics of the current arrangements of the UK as a full monetary, fiscal and political union; and investigates the advantages and disadvantages of the potential currency options open to an independent Scotland.
The analysis sets out that the UK is one of the most successful monetary, fiscal and political unions in history, and the current arrangements bring significant benefits to Scotland. Taxation, spending, monetary policy and financial stability policy are co-ordinated across the whole UK to the benefit of all parts of the UK.
In the event of independence, Scotland would be faced with very difficult choices about its currency and monetary arrangements.
Entering a formal sterling currency union with the continuing UK would be very different from a continuation of the current arrangements. It would require detailed negotiations with the continuing UK and any agreement would be likely to involve significant constraints on the tax and spending plans of an independent Scotland. But even with such constraints in place, the economic rationale for the UK to agree to enter a formal sterling union with a separate state is not clear.
If a formal currency union could be agreed, it could be seen as unstable—in particular given that an independent Scotland as a member of the European Union could be obliged to commit to adopt the euro. This could lead to speculative activity in financial markets that would put immediate pressure on the arrangements.
Other options—such as joining the euro, using the pound without the UK’s formal agreement, or introducing a new Scottish currency—would involve their own costs, constraints and risks.
The analysis concludes that continuing membership of the UK is in the best economic interests of Scotland and the rest of the UK. None of the options under independence would serve Scotland as well as the current arrangements within the United Kingdom.
This paper follows the independent expert legal opinion published by the Government alongside the paper “Scotland Analysis: Devolution and the Implications of Scottish Independence” on Monday 11 February. This concluded that, in the event of a vote for independence, Scotland would become a “successor state” and would be required to create a new set of domestic and international arrangements.
Future papers from the Scotland analysis programme will be published over the course of 2013 and 2014 to ensure that people in Scotland have access to the facts and information ahead of the referendum.
Energy and Climate Change
Overseas-owned Plutonium in the UK
In December 2011 the Department of Energy and Climate Change (DECC) published its response to the consultation on plutonium management.
The response said that Government’s preferred option was to reuse plutonium as mixed oxide fuel (MOX). It noted that while Government believe they have sufficient information to set out a direction, they cannot yet make a specific decision to proceed with procuring a new MOX plant. If a satisfactory means of implementation cannot be found then the way forward may need to be revised.
In addition the Government said that overseas owners of plutonium stored in the UK could have that plutonium managed in line with UK plutonium, subject to commercial terms that are acceptable to the UK Government. In addition, subject to compliance with inter-governmental agreements and acceptable commercial arrangements, the UK is prepared to take ownership of overseas plutonium stored in the UK as a result of which it would be treated in the same way as UK-owned plutonium. The Government consider that there are advantages to having national control over more of the civil plutonium in the UK, as this gives us greater influence over how we ultimately manage it.
The Department of Energy and Climate Change has agreed to the Nuclear Decommissioning Authority (NDA):
Participating in a series of swaps of plutonium material which will result in the NDA taking ownership of around 750 kg of plutonium stored in the UK, previously owned by certain German utilities.
Facilitating a swap of plutonium ownership between Japanese and German utilities which will result in a decrease of about 650 kg of German-owned plutonium in the UK and an equivalent increase in Japanese-owned plutonium in the UK.
Taking ownership to around 1850 kg plutonium that was originally allocated to repay plutonium loans—to France—in relation to historic MOX fuel subcontracts.
Taking ownership of around 350 kg of material previously owned by a Dutch utility.
These transactions, which have been agreed by the Euratom supply agency, will not result in any new plutonium being brought into the UK and will not therefore increase the overall amount of plutonium in the UK, but will enable a net reduction in the total amount of separated plutonium stored in Europe through it being used as fuel in nuclear reactors.
We have agreed to these transactions as they offer a cost-effective and beneficial arrangement, which: removes the need to transport separated plutonium to France; allows the UK to gain national control over more of the civil plutonium in the UK; enables German utilities to receive MOX fuel ahead of the German national reactor shutdown programme; and enables an outstanding loan agreement with France to be settled.
In line with the DECC policy statement, the Nuclear Decommissioning Authority is engaging with other third parties regarding taking ownership of further overseas plutonium in the UK arising from overseas reprocessing contracts. As well as UK Government approval, these transactions will require consent from the relevant overseas Governments and regulatory bodies, and thereafter Euratom supply agency agreement, before any contracts are enacted.
The UK has committed to publish annual figures for national holdings of civil plutonium at the end of each calendar year to improve transparency and public confidence. The most recent data can be found at:
This data will be updated in due course to reflect the changes described above.
I have today laid and published the Government’s response to the engagement exercise “Judicial Review: proposals for reform”, which ran from 13 December 2012 to 24 January 2013.
The Government sought views on a series of proposals which aimed to reduce the burdens placed on public authorities by judicial review while maintaining access to justice and the rule of law. Over 250 responses were received from a range of stakeholders including professional lawyers, representative bodies, businesses, public authorities and interested individuals.
Having carefully considered the views of stakeholders we have decided to take forward the following proposals outlined in the engagement exercise:
We intend to shorten the time limit for bringing a judicial review from three months of the grounds giving rise to the claim to six weeks in planning cases and 30 days in procurement cases.
We will remove the right to a reconsideration at a hearing of the application for permission to bring judicial review in cases where the application is certified as totally without merit by the judge considering the application on the papers.
We have decided to introduce a fee for an oral renewal hearing. The fee will be set at the same level as the fee to fix a substantive hearing for a judicial review, which is currently £215. The fee for a full hearing will be waived if permission is granted at the oral renewal.
Responses also highlighted certain practical difficulties with some of the proposals. In view of this we have decided not to take forward proposals on clarifying the rules on when the time limit starts in cases with continuing grounds, and removing the right to an oral renewal if the same matter had already been litigated in a prior judicial hearing.
We believe that the proposals we are taking forward will tackle delays and reduce the burden of judicial review by filtering out weak, frivolous and unmeritorious cases at an early stage, while ensuring that arguable claims can proceed to a conclusion without delay.
The Government intend to invite the Civil Procedure Rules Committee to consider the necessary changes to the civil procedure rules to give effect to the reforms to time limits and the procedure for applying for permission. We will bring forward secondary legislation for the fee for an oral renewal in due course.
Work and Pensions
Automatic Transfers: Consolidating Pension Savings
Later today I intend to publish the Command Paper: “Automatic transfers: consolidating pension savings” (Cm 8605).
Reform of the UK’s pension system is already well under way. Last year saw the introduction of automatic enrolment, confirmation of our plans to fundamentally reform the state pension, and the publication of our strategy for reinvigorating private pensions.
At the heart of our overall strategy is our commitment to support people in building up a better income for their retirement. At the moment every time a person moves job there is a significant risk that they will leave behind a small pension pot, which may never get consolidated to achieve a decent retirement income. Automatic transfers will help people consolidate their savings so they get a clearer view of how these savings build up over their working lifetime and help to ensure they do not miss out on valuable retirement income. By 2050, we estimate that our proposals would halve the number of dormant pots created by automatic enrolment.
Our consultation document: “Meeting future workplace pension challenges: improving transfers and dealing with small pension pots” (Cm 8184) set out options to create an automatic transfer system to deal with the problem of small pots. In July 2012 the Government response to this consultation (Cm 8402) confirmed this intention, and proposed a “pot follows member” automatic transfer system where broadly speaking, peoples’ pension savings move with them when they move jobs.
Since then we have been taking forward work on how we might design and deliver our policy and have been talking to a wide variety of people, including pension providers, third-party administrators, consumer representatives and employers. We were grateful to hear their views. We have made good progress and this Command Paper will set out in more detail how a system of automatic transfers might work in practice. We intend that a broad framework would be provided for in primary legislation, the detail will be set out in secondary legislation which will, of course, be subject to formal consultation. The relevant primary powers will be created in the forthcoming Pensions Bill.
This paper will also confirm my earlier announcement to withdraw short-service refunds from those in money purchase schemes. I will do this at the earliest opportunity following Royal Assent to the forthcoming Pensions Bill as early as 2014.
We will keep working with interested parties to develop and put in place a viable and cost-effective automatic transfer process for schemes and members.
The Command Paper will be available later today at: www.gov.uk/dwp#consultations.