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Written Statements

Volume 569: debated on Friday 25 October 2013

Written Statements

Friday 25 October 2013

Business, Innovation and Skills

Departmental Contingent Liability Notification (Royal Mail)

It is normal practice when a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority for the Minister concerned to present a departmental minute to Parliament giving particulars of the liability created, explaining the circumstances and to refrain from incurring the liability until 14 parliamentary sitting days after the issue of the statement, except in cases of special urgency and/or confidentiality.

During the preparatory phase of the Royal Mail transaction, there was a need for strict confidentiality as to the content of the preparatory work, including the scope of the Royal Mail transaction liabilities and the transaction timetable.

On 10 September 2013, following the “non-standard notification” procedure outlined in “Managing Public Money” (annex 5.4), I wrote to the Chairs of the Public Accounts Committee and the Business, Innovation and Skills Select Committee outlining the proposal to provide certain indemnities on behalf of Government.

As a matter of record I have placed a departmental minute in the Libraries of both Houses explaining the procedure followed and containing a description of the liabilities undertaken.


Tax Avoidance

This Government are committed to delivering a progressive tax system that is affordable, fair and encourages growth.

As announced by the Chief Secretary to the Treasury on 17 September 2013 the Government will introduce legislation to stop people avoiding tax by using rules known as compensating adjustments.

The rules are being exploited in two areas. In the first, partnerships pay companies for services at cost price and use the tax rules to create a mark-up which is not actually paid, but which reduces the income tax bill of individual partners.

In the second type of case individuals lend money to a company in which they are a shareholder, charging excessive interest payments on which they do not pay full income tax.

The Government have consulted on technical detail and will introduce in the next Finance Bill legislation, effective from today, to stop this exploitation by denying compensating adjustments for transactions between income tax payers and connected companies.

In certain circumstances the compensating adjustment will be treated for tax purposes as a distribution of profits.

Further details on these measures are contained in a technical note published today, together with the draft legislation.

Foreign and Commonwealth Office

Afghanistan (Monthly Progress Report)

I wish to inform the House that the Foreign and Commonwealth Office, together with the Ministry of Defence and the Department for International Development, is today publishing the 31st progress report on developments in Afghanistan since November 2010.

I announced draw-down plans for the Helmand provincial reconstruction team (PRT) in a written statement on 9 September 2013, Official Report, column 40WS. The PRT has already begun to decrease in size. By December 2013 we envisage a small PRT political and governance team moving to Camp Bastion, followed by the final closure of the PRT in March 2014.

On 3 September, the Independent Election Commission (IEC) co-chaired a meeting of the ELECT II Project Board with the United Nations Assistance Mission in Afghanistan (UNAMA). The IEC provided an update on voter registration and preparations for the elections, and donors pledged additional funds to support the electoral preparations. Overall donors pledged $134 million.

The UN High Commissioner for Human Rights, Navi Pillay, visited Afghanistan 15-17 September. Her visit focused on three key areas—the importance of ensuring gains made on human rights are consolidated, the issue of violence against women and the future of the Afghan Independent Human Rights Commission.

On 1 September, President Karzai appointed Omar Daudzai, the previous Afghan ambassador to Pakistan, as acting Interior Minister, replacing Mujtaba Patang.

The Home Secretary visited Afghanistan 22-24 September, meeting President Karzai, the Ministers of Interior and Refugees, the Head of the National Directorate of Security (NDS), Afghanistan’s Intelligence Agency, and international ambassadors. The visit focused on a range of security and criminal issues affecting the UK (principally terrorism, drugs and migration).

On 1 September, the UK assumed lead nation status at the Afghan national army officer academy. The academy, which is designed to develop the future leaders of the Afghan national army, will begin training by the end of October.

On 27 September, the Prime Minister announced that the UK will host the 2014 NATO summit in what will be the final year of the international security assistance force (ISAF) combat mission in Afghanistan. The precise date for the summit has yet to be finalised but its themes will be discussed in greater detail at the October NATO defence ministerial meeting in Brussels.

I am placing the report in the Library of the House. It will also be published on the website (


Mental Health Act (Post-legislative Scrutiny)

We have today laid before Parliament “Post-legislative Scrutiny of the Mental Health Act 2007: Response to the Health Committee of the House of Commons” (Cm 8735).

The response addresses the specific recommendations in the Committee’s report. These include (in the Mental Health Act 1983) the important issues of independent mental health advocate services, supervised community treatment, places of safety and (in the Mental Capacity Act 2005) the deprivation of liberty safeguards.

The Department will feed consideration of all the recommendations into future work programmes, including the revision of the “Code of Practice Mental Health Act 1983” in 2014.

I would like to put on record my thanks to the Committee for their thoughtful comments.


Intercity East Coast Franchise Competition

Today I have published the intercity east coast prospectus, pre-qualification documents and submitted for publication an Official Journal of the European Union (OJEU) notice. These steps mark the start of the formal competition to find a new private sector partner to run passenger rail services on intercity east coast. The prospectus explains the current business as it stands today and sets out the opportunities it presents to a new operator. It also provides some indications of how we will be specifying intercity east coast when we release the invitation to tender (ITT) which is planned for February 2014. The prospectus will provide potential applicants with a large amount of information that will help them decide whether they can be the right partner for this vital and historic railway.

I am also publishing the intercity east coast consultation summary report that brings together the responses we received to the consultation conducted in 2012. This report is being published now to enable those who responded to the consultation; potential bidders for the franchise; and other interested parties to see the key concerns and issues raised in advance of the publication of the ITT.

We have seen great improvements on our railways since privatisation, with unprecedented growth in passenger numbers and the best safety record in Europe, and this Government are committed to the principle that partnership between the public and private sector works. We want to further strengthen our partnership with the private sector and continue to build on this growth so as to deliver world-class railways for passengers and best value for the taxpayer. Private sector partnership on this route will deliver, among other things, the investment in the design, build and maintenance contract for the new class 800/801 trains procured through the intercity express programme.

I am confident that through the partnership approach the Department for Transport is taking, combined with the skills, investment and innovation of the private sector, we can deliver a new railway for the intercity east coast, one that meets the Secretary of State’s three objectives for franchising across the network: that the passenger gains; the industry thrives; and the taxpayer benefits.