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Written Statements

Volume 572: debated on Wednesday 18 December 2013

Written Statements

Wednesday 18 December 2013

Attorney-General

Parliamentary Written Answer (Correction)

I regret to inform the House that a written answer I gave on 5 December 2013, Official Report, column 809W, to the right hon. Member for Haltemprice and Howden (Mr Davis) was incorrect.

The right hon. Member asked me how many libel settlements and of what value the Crown Prosecution Service made in each year between 2007 and 2012.

The data concerning the Crown Prosecution Service (CPS) were incorrect and it was stated that the CPS made no libel settlements between 2007 and 2012.

The correct answer is as follows:

Details of individual payments in respect of libel settlements are not specifically identified on the Crown Prosecution Service (CPS) accounting system. A review of manual records retained on civil claims indicates that in the period from 2007 to 2012 the CPS made two libel settlements:

Financial Year

2008-09

£52,000 made up of £25,000 initial damages, a subsequent additional £2,000 damages and £25,000 costs.

2010-11

£59,035 made up of £5,035 damages and £54,000 costs.

Although every effort has been made by the Department to ensure that the information provided is correct and comprehensive the manual nature of the records means that it is not possible to provide complete assurance. To do so would require a review of all payments made since 2007 which would incur a disproportionate cost.

Treasury

Banking Reform

In July 2013 the Government published a consultation, “Banking reform: draft secondary legislation”, which invited comments on four draft pieces of secondary legislation proposed under the Financial Services (Banking Reform) Bill. The consultation closed on 9 October 2013.

The consultation set out key details on the ring fence, including the scope of the ring fence, the prohibitions on ring-fenced banks’ activities, and on the framework for applying loss absorbency requirements to systemic banks. It also set out provisions to enable expenses incurred by the Treasury as a result of UK participation in international organisations concerned with financial stability or financial services to be reclaimed from the financial services industry.

The Government are today publishing a summary of the responses they received to the consultation. The summary can be found on the Government website. The Government will take into account responses to the consultation document when producing revised and final versions of the secondary legislation.

I am placing copies of this document in the Libraries of both Houses.

Business, Innovation and Skills

Assisted Areas Map 2014-20

I am today launching the “2014-2020 Assisted Areas Map Consultation Stage 2: Draft Assisted Areas Map and Government’s Response to Stage 1”. This consultation will establish the map of areas in the UK in which regional aid will be available during the period 2014-20. The new map will replace the current version which expires on 30 June 2014; it will cover the period 1 July 2014 to 31 December 2020. The second stage consultation will be open from today until Friday 7 February 2014, and follows the first stage which closed on 30 September 2013. Copies of the consultation document will be placed in the House Library.

The European Commission regional aid guidelines define the parameters for assisted areas for 2014 to 2020. Under the guidelines the UK’s overall regional aid coverage may cover a maximum of 27.05% of the UK population.

Assisted area coverage permits the UK to provide additional investment to firms in the designated areas. It does not bring specific funding, instead offering eligibility for certain forms of financial support. Other forms of financial support are available inside and outside assisted areas, including aid for research and development, to improve access to venture capital and to support environmental projects. Additionally, all areas of the UK will be eligible to apply for European structural and investment (ESI) funds, particularly through the European regional development fund or the European social fund.

Working within the Commission’s guidelines, the draft map published today represents a thorough, evidence-based approach to allocating the UK’s population coverage. We have proposed assisted areas based on a combination of the potential to use regional aid to encourage economic growth in localities through levering private sector investment, as well as the economic need of the locality. A strong principle underpinning the proposed map is to use our coverage to focus on areas that are able to use the flexibility provided. There are many deprived parts of the UK that do not have the scale of industrial or development sites necessary to exploit assisted area status.

The Government are seeking to refresh the map, not simply add coverage to those places that already have it. Economic geography evolves along with the rules which dictate coverage, and assisted area status does not benefit every ward in the country that currently has designation and could be economically beneficial to many wards that currently do not. Local enterprise partnerships (LEPs) in England and local authorities (LAs) in Scotland and Wales led in responding to stage 1 of the consultation, and 41 out of 49 of their returns sought increased coverage. We have ensured that allocation is given to those areas where it can make the most difference, and difficult decisions have had to be made as to which areas are included on the draft map. We now look forward to receiving the responses which will help shape the final assisted areas map 2014-20.

Contingencies Fund Advance

The Department for Business, Innovation and Skills wishes to report that a cash advance from the Contingencies Fund has been sought for the Office of Fair Trading (OFT).

The advance is required to meet an urgent cash requirement on existing services pending parliamentary approval of the 2013-14 supplementary estimate. The supplementary estimate seeks an increase in net cash requirement in order to facilitate the consumer credit fee rebate programme announced by the Government and to be operated by the Financial Conduct Authority (FCA). The OFT currently regulates the consumer credit market and this responsibility will transfer to the FCA from April 2014.

The Government have announced that, subject to certain eligibility criteria, OFT licence holders will qualify for a rebate of a proportion of the fees paid in recognition of the service that the OFT will not be able to provide after its closure on 31 March 2014.

Parliamentary approval for additional resources of £30 million will be sought in a supplementary estimate for the Office of Fair Trading. Pending that approval, urgent expenditure estimated at £30 million will be met by repayable cash advances from the Contingencies Fund.

World Trade Organisation (Accession of Yemen)

My noble Friend the Minister for Trade and Investment, Lord Livingston, has today made the following statement:

The WTO ministerial conference took place in Nusa Dua, Bali from 3 to 6 December 2013. The Trade Foreign Affairs Council meeting was held in the margins of the conference. My predecessor Lord Green of Hurstpierpoint represented the UK at both and acted as a vice-chair at the WTO ministerial conference.

The Trade Foreign Affairs Council was held in the margins of the WTO conference to allow any essential business pertaining to the conference to be finalised and only dealt with issues directly relating to the WTO summit.

The conference was a success with an agreement on Government’s objectives. The conference resulted in:

Political agreement on the text of an ambitious and legally binding trade facilitation agreement worth $100 billion annually to the global economy and $1.5 billion annually to the UK.

Agreement on a limited number of agricultural issues which would be of benefit to developing and least developed countries.

A monitoring mechanism for special and differential treatment for developing and least developed countries.

WTO ministerial decisions of interest to least developed countries (LDCs): the operationalisation of the services waiver—preferential rules of origin and cotton;

Extension of the moratorium on charging customs duties on electronic transmissions and the extension of the moratorium on bringing non-violation and situation complaints under the trade related aspects of intellectual property agreement.

The accession of Yemen to the WTO.

UK JHA opt-in to Council Decision relating to the Accession of Yemen to the WTO

I also wish to inform the House that the Government have opted in to the Council decision relating to the accession of Yemen to the World Trade Organisation. Opting in will help to achieve the Government’s trade policy objectives of expanding the WTO’s membership.

The Government have supported the accession of least developed countries (LDCs) such as Yemen to the WTO. Becoming a Member of the WTO will allow Yemen to benefit from WTO market access and global trading rules and the transparency of the WTO trading system. It will also be able to use the WTO dispute settlement mechanism to solve its differences with other members and fully participate in the ongoing negotiations to design the trade rules of the future.

The accession of Yemen (and therefore the Council decision) extends the geographical scope of the EU’s commitments in mode 4 (the temporary movement of persons who supply services across national borders). These commitments are an integral part of our trade commitments at the WTO. It is the presence of these commitments which triggers the UK Justice and Home Affairs opt-in.

In the case of the decision on the accession of Yemen, I regret that it was not possible to allow the normal eight weeks for parliamentary scrutiny. This was due to the late conclusion of the negotiations and the consequent late presentation by the Commission of the relevant draft Council decision, while we still needed to agree positions in Council ahead of the WTO ministerial on 3 to 6 December.

UK Commission (Triennial Review)

The coalition Government made a commitment to review public bodies, with the aim of increasing accountability for actions carried out on behalf of the state. The triennial review of the UK Commission is one of the Department for Business, Innovation and Skills’ (BIS) reviews of non-departmental public bodies (NDPBs) scheduled to commence during the third year of the programme (2013-14). The review will commence in January 2014.

The review will be conducted as set out in Cabinet Office guidance, in two stages.

The first stage will:

Identify and examine the key functions of the UK Commission and assess the requirement for these to continue;

If continuing, then assess delivery options and where the conclusion is that a particular function is still needed examine how this function might best be delivered, including a cost and benefits analysis where appropriate;

If one of these options is continuing delivery through the UK Commission then make an assessment against the Government’s “three tests”: technical function; political impartiality and need for independence from Ministers.

If the outcome of stage 1 is that delivery should continue through the UK Commission as a non-departmental public body, then the second stage of the project will be to ensure that it is operating in line with the recognised principles of good corporate governance, using the Cabinet Office “comply or explain” standard approach.

When completed the report of the review will be placed in the Libraries of both Houses.

Communities and Local Government

Firefighters Pension Scheme

People are now living much longer and, as a result, the cost of public service pensions has increased by around a third. Despite recent reforms, most of these increased costs are being met by taxpayers. As a result, all public service pension schemes, including the firefighters’ pension scheme, are being reformed.

I have today published a consultation on regulations to implement the firefighters’ pension scheme 2015 as set out in the proposed final agreement (May 2012). The consultation will run for 12 weeks and will conclude on 12 March 2014. My proposals will ensure that firefighters continue to get one of the most generous pensions available in the public sector, with guaranteed levels of benefit and inflation proofing. The proposals are fair to both firefighters and to taxpayers.

Firefighters are the only public service work force where new recruits will not see any increase in their retirement age. A normal pension age of 60 was introduced in 2006 and will be the same as for the police and armed forces. A greater proportion of firefighters are protected from changes than any other large public service work force and less than a quarter of firefighters will see any change in their retirement age in 2015. All benefits accrued up to April 2015 will be linked to the member’s final salary on retirement and can be taken at their current pension age.

For every £1 a firefighter pays into the scheme, taxpayers now pay in an extra £5 to meet scheme costs. A firefighter, who earns £29,000 and retires after a full career aged 60, will get a pension of £19,000 rising to £26,000 with a state pension. The same pension from a private sector provider would require double the level of contributions that will be made by firefighters.

A consultation on fitness and capability issues concluded recently and a Government response will be published in due course. This builds on the constructive round table discussion that I held on 4 December including the fire service representative bodies and the employers.

I have placed a copy of the consultation paper on reforms to the firefighters’ pension scheme in the Library of the House

Local Government Finance

I am today publishing the coalition Government’s formal proposals on funding for English local authorities for 2014-15. This is effectively the second year of the two-year settlement that was published last year, and represents a continuation of the new decentralised system of local government finance following the Local Government Finance Act 2012.

Delivering sensible savings and improving services

The autumn statement recognised that the local government sector has risen to the challenge of reducing the budget deficit left by the last Administration. Indeed, opinion polling suggests that satisfaction with local government is either constant or improved compared to 2010, despite the need for councils to make savings to tackle that deficit.

The autumn statement ensured that the local government budget is protected next year so that councils can deliver a council tax freeze. Councils now have more stability and certainty to plan budgets and move ahead with transforming local services and ongoing efficiency. English local government accounts for £1 of every £4 spent on public services, and is expected to spend some £117 billion in 2013-14. So the settlement that we are proposing recognises the responsibility of local government to find sensible savings and make better use of its resources. This settlement marks the second year of business rates retention, and leaves councils with considerable total spending power, with an overall reduction, excluding the Greater London Authority, for next year of just 2.9%. We expect the average spending power per dwelling to be some £2,089.

Supporting rural areas

We accepted in 2013-14 that, based on the available evidence, rural areas had been comparatively under-funded. We therefore made an adjustment to recognise the additional costs of delivering services in rural areas. We will be providing an efficiency support for sparse areas grant worth £9.5 million so that the most rural local authorities can continue to drive forward efficiencies in their area. This is an increase on the grant paid for this purpose in 2013-14 and we intend that the grant will be rolled in to the settlement in 2014-15, offering further protection for the most rural authorities.

Protections for councils

Alongside this we have increased the protection that the safety net will offer, so that no council will face a loss of more than 6.9% in their spending power in 2014-15, a higher level of protection than we offered both last year and the year before. We have achieved this by increasing the amount we have made available to protect councils through the efficiency support grant, now worth some £9.4 million in 2014-15. But we will expect the councils in receipt of that funding—in line with the efficiencies that we are asking all councils to deliver—to improve services. It is unfair on the rest of local government to expect them to subsidise other councils’ failure to modernise public services. In order to further facilitate effective budget planning, we are also making available illustrative figures for 2015-16, and we announced in June that we will be making £3.8 billion worth of pooled budgets available between health and social care. This is the largest ever financial incentive for councils and NHS organisations to jointly plan and deliver joined up services.

In 2013-14, we introduced business rates retention which ensures that those councils who bring in jobs and business will be rewarded for backing local growth and local jobs. Similarly, the new homes bonus remunerates those councils who build more homes and bring empty properties back into use. The new homes bonus is worth more than £650 million this year and will be some £916 million in 2014-15, as announced to the House on Monday. In response to consultation we have also reduced the amount that we proposed to set aside in the settlement to pay for new homes bonus allocations.

Keeping council tax down for hard-working people

We expect local authorities to protect taxpayers and help bear down on the cost of living. That is why we have provided up to £550 million of extra funding to local authorities so they can freeze council tax for the next two years. This means we have provided an unprecedented five years of freeze funding worth potentially up to £1,100 for an average band D taxpayer over the lifetime of Parliament.

From April 2014, funding for 2011-12 and 2013-14 freezes is now in the main local government settlement total for future years. I can also announce that the Secretary of State has agreed with the Chancellor that the funding for the next two freeze years will also be built into the spending review baseline. We hope this will give maximum possible certainty for councils that the extra funding for freezing council tax will remain available, and there will not be a “cliff edge” effect from the freeze grant disappearing in due course. We have done our part—we now expect councils to do theirs in helping hard-working people with the cost of living.

We will announce the council tax referendum threshold principles separately in the new year. We are particularly open to representations suggesting that some lower threshold be applied to all or some categories of authorities, given the strong need to protect taxpayers wherever possible from unreasonable increases in bills, and given next year’s elections on 22 May across the country allow for referendums to be held at minimal cost. We should trust the people.

The final referendum principles will then be subject to the approval of the House of Commons. In addition, subject to approval by Parliament of the Local Audit and Accountability Bill, which is currently before Parliament, the principles will include levies and will therefore be based on the level of band D council tax. This will mean the principle will relate to the actual increase which appears on people’s bills—again reducing costs for taxpayers.

Parish councils and local council tax support

We have also set out previously that there is some £3.3 billion in the settlement this year for council tax support schemes. There is an element within this national pot that is there specifically to reflect reductions in the parish tax base. We have not separately identified the money because it is not ring-fenced and as caseloads change and schemes evolve, the amount that different parishes need will change. It would be wrong to try to manage that centrally. But we have been clear that we expect billing authorities to carry on passing on support to town councils and parishes to help mitigate any reduction in their taxbase due to the local council tax support scheme.

Consultation process

Today marks the start of a period of statutory consultation with local government on the settlement and I welcome their responses. Consultation closes on 15 January 2014. I shall be making available full supporting information online at:

www.gov.uk/government/collections/provisional-local-government-finance-settlement-england-2014-to-2015.

I have placed copies of the consultation paper and supporting information in the Vote Office and the Library of the House. The House will have the opportunity to debate and vote on the settlement in due course.

We have tried to be fair to every part of the country - north and south, rural and urban, metropolitan and shire. Of course, it is inevitable that individual local councils will wish to call for more funding for their area. Unlike the old system which encouraged councils to talk down their local areas to win more funding, the decentralisation of local government finance now puts councils in the driving seat: rewarding them for supporting local enterprise, building more homes and backing local jobs.

Onshore Oil and Gas Development (Planning Applications)

The coalition Government are committed to a diverse, efficient and low-carbon energy supply, but recognise that gas and other low-carbon technologies, will continue to play an important role in our energy mix in the coming decades as the country moves to a low-carbon economy. In particular, shale gas has the potential to provide our country with greater energy security, growth and jobs.

As announced on 2 September 2013, Official Report, column 9WS, my Department has been consulting on making technical improvements to the process for planning applications for handling extraction of onshore oil and gas (including shale gas). Today, my Department has laid secondary legislation in relation to application requirements for onshore oil and gas development. These seek to amend the way in which landowners and tenants are notified of an application.

We have introduced these changes because underground operations for oil and gas operations are different in character from other forms of development. This is because the development on the surface is limited in scale and takes place on a relatively small surface area. The associated underground extraction takes place very deep below the earth’s surface, over a wide geographical area. As a result, it is often not possible to identify the exact route of any lateral drilling.

Without the changes to the secondary legislation, the widely-drawn area on planning applications for onshore oil and gas projects would require the notification of a disproportionately large number of individuals and businesses. This would be unnecessarily excessive when other forms of complimentary notification exist.

In practical terms, in place of the blanket notification, the changes mean that applicants who are applying for planning permission for onshore oil and gas projects will now be required to publish a notice in a local newspaper and put up site displays in local parishes. In addition, a new requirement has been introduced for a site display to be set up in every local authority ward where no parish exists, or where the parish only covers part of the ward.

These measures do not affect or alter any voluntary pre-application consultation between the applicant and local communities (including landowners), or any other publicity or consultation requirements that planning applications must go through. The local authority and local councillors are also able to supplement this with any further moves to increase public awareness that they deem appropriate.

We consider that these measures strike the right balance between the need to notify land owners and tenants, while ensuring the implementation for applicant is proportionate and pragmatic in the unique circumstances of onshore oil and gas development.

My Department has also published the technical draft regulations to clarify the arrangements that the fee payable for onshore oil and gas should be calculated on the basis of the area of the above ground works only. Together, we consider that these changes will help provide certainty to councils, residents and industry.

I would add that the planning system is accompanied by separate environmental and health and safety provisions (overseen by the Department of Energy and Climate Change, by the Environment Agency and by the Health and Safety Executive) ensuring that a robust, comprehensive and safe regulatory regime is in place.

Deputy Prime Minister

Electoral Administration

Following the debates in Committee of the House of Commons and House of Lords this month to consider the statutory instruments necessary to commence individual electoral registration, the Government confirm their intention to bring individual electoral registration into force as planned on 10 June 2014 in England and Wales and 19 September 2014 in Scotland.

This confirms the intended date for the introduction of individual electoral registration which was envisaged in the Electoral Registration and Administration Act 2013, and which was set out in the Government’s White Paper, “Individual Electoral Registration”, in 2011.

Confirmation of this timetable follows the advice of the Electoral Commission, who published in October their assessment of readiness for implementation, which advised that there is no reason to delay implementation. The Government agree with this judgment.

Individual electoral registration will provide a secure, modern way to register to vote, replacing the outdated system whereby a “head of household” is responsible for registering to vote all members of the household without a requirement to confirm the identity of those placed on the electoral register.

Instead, people will be individually registered, with their identity being confirmed either automatically, through a check against existing Government databases, or by submitting their date of birth and national insurance number, or if this is not available, other approved evidence. Initial testing has established that over three quarters of voters will automatically be included in the electoral register without any requirement to fill in a form. It will be possible, for the first time, to make an online application to be on the electoral register.

The Government will fully fund the costs of transition to individual electoral registration. All electoral registration officers have been notified of the funding they will receive next year to deliver the change at a local level. This has been welcomed by electoral registration officers, who have also been advised that if local circumstances incur higher costs, they will be reimbursed where they have been credibly established.

This extra funding is in addition to the local resources that are annually devoted by electoral registration officers to meeting their statutory obligation to produce a complete and accurate register. The Government expect local authorities to continue this level of funding. The Government will fund and promote work to maximise registration during the transition to individual electoral registration, at a local and national level.

As a transitional arrangement, eligible electors who appear on the electoral register before the introduction of individual electoral registration will continue to be entitled to vote in elections, including the 2015 general election, whether or not they have registered individually. It remains the Government’s intention to conclude this transitional arrangement in 2015, but the Electoral Registration and Administration Act will allow the next Parliament to make the decision, following the advice and assessment of the Electoral Commission, as to whether the transition should conclude in 2015 or 2016.

Education

Funding Allocations

I am today announcing capital funding to provide the extra places needed for our growing population, and to implement the universal infant free school meals entitlement. I am also pleased to publish Sebastian James’s review of progress since his original 2011 report on education capital. I am also announcing the Government’s main school funding allocations for 2014-15 through the dedicated schools grant (DSG) and the education services grant (ESG).

This Government’s overriding priority for capital investment is to ensure every child has a place at school. Demographic pressures have put strain on schools in many parts of the country. That is why we have more than doubled funding for new places to £5 billion in this Parliament. By May 2013, this investment had already helped to create an additional 260,000 school places with more still to come.

Today I am announcing further funding for new school places up to 2017. We are giving local authorities longer-term allocations for new school places, which will give them more certainty in their planning. We are targeting funding more effectively, based on local needs, through using data we have collected from local authorities about the size of schools and forecast pupil projections. We are also analysing local authority capital expenditure on new school places, so that there is greater accountability and transparency around how they use these funds.

The major investment I am announcing today will enable local authorities to make sure that there are enough school places for every child who needs one in the years to come. The number of pupils in England is rising and is set to continue to rise well into the next Parliament. Ensuring that every child is able to attend a good or outstanding school in their local area is at the heart of the Government’s comprehensive programme of reform of the school system. To achieve this we will provide an additional £2.35 billion to support local authorities to plan and create new school places that will be needed by 2017. This is additional to the £5 billion that has been allocated between 2011-15. Extending the allocations to a three-year period will allow local authorities to plan strategically for the places they need. I have listened to the particular challenges faced by London, and therefore the methodology used to allocate funding for 2015-17 takes into account the higher costs of building in the capital.

I am also announcing further details about capital investment in 2014-15 to support universal free school meals for children in reception, year 1 and year 2 in state-funded schools. As part of the autumn statement the Chancellor confirmed £150 million of capital funding for improving school kitchen and dining facilities in order to offer every infant pupil a free nutritious school meal at lunchtime. Universal free school meals for primary school pupils were a key recommendation of the independent school food plan produced for the Department by Henry Dimbleby and John Vincent in July 2013. The aim is to improve academic attainment and healthy eating, and save families money.

Turning to revenue funding, the distribution of the dedicated schools grant (DSG) to local authorities will continue to be based on the current “spend-plus” methodology for 2014-15, set out in three spending blocks for each authority: an early years block, a schools block and a high-needs block. The underlying schools budget will be kept at flat cash per pupil for 2014-15. To protect local authorities with falling pupil numbers we will continue with arrangements to ensure that no authority loses more than 2% of its budget in cash terms.

Although the overall schools budget will stay at the same level on a per pupil basis before the addition of the pupil premium, the actual level of each school’s individual budget will vary. To protect schools from significant budget reductions, we will continue with a minimum funding guarantee that ensures that no school sees more than a 1.5% per pupil reduction in 2014-15 budgets—excluding sixth-form funding—compared with 2013-14 and before the pupil premium is added.

As part of the DSG, I am announcing 2014-15 revenue funding allocations to local authorities to secure early learning places for two-year-olds from lower income households. From 1 September 2013 early learning became a statutory entitlement for around 20% of two-year-olds across England, which will extend to 40% of two-year-olds from September 2014. To deliver this, the Government are today allocating £760 million to fund the extended programme in 2014-15.

The Department of Energy and Climate Change (DECC) announced on 10 December 2012, that all state-funded schools in England will be withdrawn from participating in the CRC energy efficiency scheme from April 2014. This means that local authorities will no longer be required to administer the CRC energy efficiency scheme on behalf of schools. A deduction of £50.5 million will be made from the DSG for 2014-15 to compensate the Exchequer for the loss of revenue resulting from local authorities no longer needing to meet the costs of purchasing carbon allowances for schools under the scheme. As schools will no longer need to meet these requirements, they will be no worse off as a result of this change.

The distribution of the education services grant (ESG) is based on a total figure of £1.03 billion transferred from local government funding as announced in December 2012. The new grant will be allocated on a simple per pupil basis to local authorities.

Details of today’s announcement will be sent to local authorities and be published on the Department for Education website. Copies will be placed in the House Library.

Energy and Climate Change

EU Energy Council

I am writing to report discussions at the Energy Council on 12 December, where I represented the UK.

The Council discussed the proposal to amend the renewable energy directive and the directive relating to the quality of petrol and diesel fuels with the aim of reaching political agreement. The proposal is intended to address indirect land use change (ILUC), which occurs when production of biofuels from crops grown on existing agricultural land results in the displacement of production on to previously uncultivated land. The Council was unable to reach agreement on the proposal as Ministers could not find a compromise between those who wanted high ambition on ILUC—including the UK—and those who wanted to protect the interests of their biofuels industries. It is hoped that this dossier will be taken forward under the Greek presidency.

The Council report on the internal energy market was approved by the Council with one amendment relating to the need to prioritise interconnection between member states that were below the 10% electricity interconnection target, endorsed by the European Council in 2002. A number of Ministers emphasised that member states should protect the internal energy market by adopting EU solutions to address security of supply concerns rather than national measures.

The Council agreed the progress report on EU external energy policy with no changes. The Commissioner presented a round-up of recent and upcoming events and developments in international energy relations. He welcomed the decision to extend the energy community for another 10 years and suggested that there was a need for stronger interconnections in south-east Europe, in particular a new interconnector between Bulgaria and Greece.

The incoming Greek presidency outlined its priorities for the next six months. It will focus on the internal energy market, particularly ending energy isolation for the EU’s peripheral regions and funding options for infrastructure projects; energy costs and vulnerable consumers; and the nuclear safety directive.

The presidency gave an update on nuclear energy. A number of member states noted that they considered the proposal for the nuclear safety directive to be premature. Over lunch, Ministers discussed energy prices and competitiveness.

Smart Meters

Today, I am pleased to announce the publication of the second DECC annual progress report on the roll-out of smart meters.

Smart meters will transform consumers’ relationship with energy, bringing considerable benefits for both them, for the energy industry and for Great Britain. Smart meters will for the first time put consumers in control of their energy use, allowing them to take energy efficiency measures that can help save money on energy bills, offset price increases and reduce carbon emissions.

The annual report provides an explanation of smart metering and its benefits. It describes the work that is being undertaken by the Government, energy suppliers and other stakeholders during the foundation stage of the roll-out and in particular the progress that has been made during 2013, to prepare for the period between autumn 2015 and 2020 when most consumers will receive smart meters. This work will help to ensure that everything is in place to handle a roll-out of this scale—over 50 million meters to be installed in 30 million premises—and that consumers will have a good experience, which is crucial for realising the benefits. Energy suppliers are already testing and trialling the new technology, and some consumers are already receiving smart meters from their energy suppliers and starting to see the benefits.

The annual report is being placed in the Library of the House and can also be found at: https://www.gov.uk/government/collections/annual-progress-report-on-the-roll-out-of-smart-meters.

State Aid

The European Commission has today announced its decision to open an investigation into the state aid case for the proposed Hinkley Point C investment contract. I welcome the investigation and the consultation that will follow which will seek views to enable the Commission to make a legally robust decision. Such investigations on the part of the European Commission are a standard part of the process for interventions that are novel and complex and the raising of doubts, questions or concerns as part of this process is also to be expected. Indeed, this is what happened on the Royal Mail, property tax on telecommunications infrastructure and Nuclear Decommissioning Authority state aid cases, all of which were subject to investigations by the Commission and all of which were ultimately cleared by the Commission.

The European Commission’s decision represents another important step forward in progression of the state aid case for Hinkley. Alongside Royal Assent, today, of the Energy Bill and my Department’s publication tomorrow of the electricity market reform (EMR) delivery plan and revised version of the contracts for difference (CfDs) terms, this opening decision for Hinkley demonstrates excellent progress in delivering the Government’s EMR programme. Investment contracts, such as those proposed for Hinkley, are in effect early CfDs and, like CfDs, they are a market-oriented instrument designed to incentivise investment in new low-carbon generation while ensuring an appropriate allocation of risks between generators and consumers. This investment is needed at scale if the UK is to play its part in meeting the EU’s common security and diversity of supply and decarbonisation objectives, all at least cost to the consumer. EMR, taken together with our other energy interventions, for example in relation to energy efficiency and the pursuit of interconnectors with other member states, will help ensure that the UK is able to make its fullest contribution to achieving a single EU energy market.

The UK’s electricity market reforms are groundbreaking, with much of Europe following our progress with close interest. This is particularly so in the case of CfDs. CfDs are necessary given the current market failures and are an innovative intervention, with impacts on competition and trade limited to the very minimum required to ensure that security of supply and decarbonisation objectives can be achieved. For example, as set out in the commercial agreement on key terms for the proposed Hinkley Point C investment contract that I announced on 21 October this year, any contract awarded to EDF for Hinkley would include in-built mechanisms to prevent overcompensation. These include construction and refinancing gain shares and operating cost reviews taking place at 15 and 25 years into the contract term. Indeed, CfDs are less distortive and less generous to generators than some other interventions, which have previously been approved by the Commission.

We have already provided a substantial amount of information and evidence to the Commission to support its assessment of the Hinkley case and have been discussing the case and EMR more generally with the Commission for the past 18 months. I now look forward to considering the opening decision, and continued close engagement with the Commission on Hinkley and other EMR-related state aid cases. The Hinkley investigation will include a public consultation period during which third parties can provide views to the Commission and there will of course be opportunity for the UK Government to provide further evidence to the Commission on why the agreement we have reached with EDF is consistent with state aid rules under the European treaty.

I would encourage all interested stakeholders to participate in the consultation. Investment contracts and CfDs are a vital measure which the UK must implement in order to achieve its energy objectives and I have no doubt that we will be able to provide robust responses to any lines of inquiry which the Commission sets out as part of its opening decision on Hinkley.

Health

Health Council

The health part of the Employment, Social Policy, Health and Consumer Affairs (EPSCO) Council met on 10 December 2013 in Brussels. I represented the UK.

The presidency provided a progress report on the medical devices regulations and asked member states for an exchange of views on how to improve the supervision process for medical devices and on the reprocessing of medical devices intended for single use. Member states provided a range of opinions on these questions and the presidency and Commission thanked member states for their views. The effectiveness of market surveillance and safety of medical devices was also addressed in a lunchtime discussion.

The Council adopted the Council conclusions on the reflection process on modern, responsive and sustainable health systems.

Under any other business, the presidency provided progress reports on the clinical trials regulation, the European Medicines Agency pharmacovigilance fees regulation and the tobacco products directive.

The Commission provided information on the transposition of the cross-border health care directive and the joint procurement agreement on medical countermeasures.

The Italian delegation—supported by several other member states—raised concerns about the UK voluntary nutritional labelling system, to which I responded. I highlighted that the UK scheme is non-discriminatory and certainly does not label certain foods as “bad”, nor, being entirely voluntary, will it negatively impact on EU quality schemes. The Commission confirmed the legality of the UK scheme.

Home Department

Police Funding

I have today placed in the Library the Home Office’s proposals for the aggregate amount of grant to be paid to local policing bodies in England and Wales for 2014-15, for the approval of the House. Copies are also available in the Vote Office.

Today, the Department for Communities and Local Government (DCLG) will be publishing proposals for the distribution of funding to English local authorities for 2014-15. Council tax freeze grant relating to the 2011-12 and 2013-14 schemes and local council tax support (LCTS) grant previously paid to police and crime commissioners (PCCs) in England by DCLG will in 2014-15 be paid to PCCs by the Home Office. This is a result of our ambition to simplify police funding arrangements.

The Welsh Government will shortly be setting out their proposals for the allocation of funding in 2014-15 for local policing bodies in Wales.

Earlier this month, the Chancellor announced further reductions to departmental budgets for 2014-15 and 2015-16 in his autumn statement. For 2014-15, the Home Secretary has decided that central Government revenue funding to the police will be protected from further reductions. This decision means that the overall police funding settlement for 2014-15 will remain at £8.5 billion, as announced at the time of the spending round.

Decisions on the impact of the Chancellor’s autumn statement on police funding for 2015-16 will be made at a later date after careful consideration of all Home Office budgets. This decision will take time and we have therefore decided not to publish indicative allocations for 2015-16 in this statement.

In my statement accompanying the provisional police grant report 2013-14, I announced that current damping arrangements would continue in 2014-15. This means that every police force area will face the same percentage reduction in core central Government funding.

The police reforms we have introduced have seen the biggest change to the policing landscape in a generation. These reforms are working and crime is falling. We have put policing back in the hands of the public through directly elected police and crime commissioners. We have given chief constables greater operational independence by scrapping national targets. We are improving police skills through the new College of Policing. We have made sure we reward skills, not just time served, through the Winsor reforms to pay and conditions. And we have established the National Crime Agency to lead the fight against serious and organised crime.

These are the most radical reforms in the history of policing. And as Her Majesty’s Inspectorate of Constabulary’s July 2013 “Policing in Austerity” report states, the police continue to rise to the financial challenge. The proportion of officers on the front line is increasing, crime continues to fall and victim satisfaction is up.

In 2014-15 we have decided to establish a police innovation fund worth £50 million, funded through a top-slice from police main grant, which builds on the recently announced £20 million precursor fund for 2013-14. The police innovation fund will provide police and crime commissioners with the opportunity to submit bids on initiatives that will promote collaboration, including with other forces, emergency services, criminal justice agencies and local government, and improve their use of digital working and technology in order to deliver sustainable improvements and efficiencies in the way their police force operates in future.

The Home Secretary has also decided to allocate funding to other specific areas where there is a national policing interest. We have already announced that the Independent Police Complaints Commission will be expanded in order that it is able to deal with all serious and sensitive cases involving the police. In 2014-15 we are providing an additional £18 million from the police settlement to build up the resource and capability of the IPCC to begin taking on additional cases from next year. We are also providing funding of up to £0.8 million from the wider Home Office budget in 2013-14 to help with transition costs as well as a further £10 million in capital in 2014-15.

In 2014-15 the Home Secretary has also decided to provide HMIC with £9.4 million from the police settlement to fund a new annual programme of all force inspections. This will enable the public to see how well their force is performing when it comes to cutting crime and providing value for money.

Our decisions on police funding in 2014-15 will provide the police with the resources they need to carry out their important work. We recognise that the funding settlement remains challenging. However, as HMIC has identified, there are areas where the police can continue to make further savings without affecting the level of service to the public, for example through greater collaboration across operational and support services, through improved procurement of goods and services, and by improving productivity. The Home Secretary and I are confident that police and crime commissioners will continue to deliver these efficiencies.

I have set out below how we propose to allocate the police funding settlement between the different funding streams in 2014-15.

The Police Grant Settlement 2014-15

Table 1: Police Revenue Funding - Proposed Figures for 2014-15

2014-15

£m

Total General Funding

Comprising:

Police Core Settlement

4583

of which Home Office Police Main Grant

4407

of which National, International and Capital City Grant (MOPAC only)

176

DCLG

2949

of which formula funding

2924

Of which Ordnance Survey

2

Of which Legacy Council Tax Freeze

23

Welsh Government

140

Total Home Office Specific Grants:

728

Comprising…

Welsh Top-up

13

Counter Terrorism Specific Grant

564

Police Innovation Fund

50

National Police Co-ordination Centre

2

Independent Police Complaints Commission (for the transfer of integrity functions)

18

College of Policing (for direct entry schemes)

3

City of London Capital City Grant

2

HMIC for regular force inspections

9

Legacy Council Tax Freeze Grants**

of which Council Tax (11-12) Freeze Grant

59

of which Council Tax (13-14) Freeze Grant

7

PFI

73

Total Government Funding*

8479

% cash change in Total Government Funding***

-3.30%

*Includes a small amount of contingency funding which is not shown in the tab.

**The police will separately receive £434.4 million in Local Council Tax Support Grant. This will be paid by the Home Office.

***This is the difference in total central government funding to the police compared to 2013-14 which included additional funding relating to the PCC elections. The reduction in core Government funding (i.e. funding that is subject to damping) is 4.8%

Provisional allocations of these grants (with the exception of counter-terrorism police grant) for each force area in England and Wales for 2014-15 are set out in table 3.

Counter-terrorism

I will continue to allocate specific funding for counter-terrorism policing and have provided ring-fenced funding for this throughout the spending review period to ensure that critical national counter-terrorism capabilities are maintained. We have allocated at least £564 million to support counter-terrorism policing in 2014-15.

Police and crime commissioners will receive full counter-terrorism funding allocations in the new year. For security reasons these allocations will not be available in the public domain.

National Police Co-ordination Centre (NPoCC)

Funding will continue to be provided from the police settlement to the National Police Co-ordination Centre for ensuring effective mobilisation of national assets when required. It will provide a co-ordination facility in times of crisis, assessing national capacity and capability in relation to the strategic and national policing requirements, and maintaining information on availability of specialist assets.

Independent Police Complaints Commission (IPCC)

From 2014-15, I will start providing funding from the police settlement to expand the IPCC to deal with all serious and sensitive cases involving the police. I expect it to take three years for the IPCC to reach full capacity. In 2014-15, I am providing £18 million from the police settlement. This will be used to build up the resource and capability of the IPCC to begin taking on additional cases from next year. I am also providing funding of up to £0.8 million from the wider Home Office budget in 2013-14 to help with transition costs as well as a further £10 million in capital in 2014-15.

New Funding Streams

College of Policing

Funding will be provided to the College of Policing to commence direct entry schemes at inspector and superintendent level. This will cover the costs of the courses concerned and initial salaries of the officers on the courses.

City of London Police

The City of London police will be provided with additional funds in recognition of the national and international capital city functions they carry out. My decision to provide this funding follows an assessment by Her Majesty’s Inspectorate of Constabulary.

Council Tax Referendum Principles

The Communities Secretary, following consultation with the Home Secretary, will today give an indication of the council tax referendum principles he is proposing for 2014-15. After considering any representations, he will set out the final principles in a report to the House and seek approval for these in parallel with the final report on the local government finance settlement. Council tax in Wales is the responsibility of Welsh Ministers.

Legacy Council Tax Grants

From 2014-15, I will start providing council tax freeze grant relating to the 2011-12 and 2013-14 schemes and local council tax support (LCTS) funding previously paid to PCCs in England by the Department for Communities and Local Government. This will total £500 million. The Common Council of the City of London and the Greater London Authority (on behalf of the Mayor’s Office for Policing and Crime) also receive council tax freeze grant relating to the 2011-12 freeze grant scheme (the GLA also receive an amount for the 2013-14 scheme). These amounts will continue to be paid outside of the police funding settlement. This will also be the case for any future council tax freeze grants.

Her Majesty’s Inspectorate of Constabulary (HMIC)

In 2014-15 I have decided to provide HMIC with £9.4 million from the police settlement to fund a new annual programme of all force inspections. This will enable the public to see how well their force is performing when it comes to cutting crime and providing value for money.

Other funding

Police Capital

As in previous years, a portion of capital will be top sliced in 2014-15 to fund the National Police Air Service. The proposed figures are set out in table 2.

Table 2: Proposed Division of Police Capital between Funding Streams

2014-15

£m

Capital Grant

109

National Police Air Service

10

Special Grant Capital

1

Total

120

I still intend to allocate the majority of capital funding directly to local policing bodies. Like last year all local policing bodies will receive the same percentage change in capital grant. I win also continue to maintain a capital contingency. These proposed allocations (set out at table 4) are the same as those announced in the written ministerial statement laid in January 2012.

Royal Parks Policing

Funding in respect of policing the Royal parks will be provided by the Home Office to the Greater London Authority on behalf of the Mayor’s Office for Policing and Crime. In 2014-15 a total of £6.8 million will be provided from outside the police funding settlement.

Table 3: Provisional Revenue Allocations for England and Wales 2014-15

Local Policing Body

2014-15

HO Core (incl. Rule 1)

Welsh Top-up

WG

Ex-DCLG Formula Funding

Legacy Council Tax Grants (total from HO)

£m

£m

£m

£m

£m

Avon & Somerset

112.5

58.7

14.7

Bedfordshire

43.2

24.3

4.6

Cambridgeshire

52.0

25.3

6.0

Cheshire

65.9

46.7

7.7

City of London

19.7

35.4

0.1

Cleveland

49.4

40.3

7.7

Cumbria

30.8

32.3

4.8

Derbyshire

66.6

39.3

8.7

Devon & Cornwall

110.1

65.7

15.5

Dorset

44.2

17.9

7.3

Durham

45.8

38.7

6.1

Dyfed-Powys

33.2

6.2

13.6

0.0

-

Essex

110.1

58.1

13.1

Gloucestershire

36.8

20.3

5.6

Greater London Authority

1101.1

782.9

119.7

Greater Manchester

242.8

189.7

24.5

Gwent

46.2

30.7

0.0

-

Hampshire

128.6

65.6

12.9

Hertfordshire

76.5

37.7

8.9

Humberside

72.0

48.6

10.0

Kent

113.9

69.4

13.3

Lancashire

107.7

82.7

12.8

Leicestershire

70.0

41.3

8.9

Lincolnshire

41.1

21.1

6.8

Merseyside

131.2

118.2

15.6

Norfolk

53.8

29.9

9.3

North Wales

47.9

6.9

22.3

0.0

-

North Yorkshire

44.7

28.2

7.9

Northamptonshire

46.2

25.1

6.6

Northumbria

118.0

112.5

7.8

Nottinghamshire

83.5

50.1

9.7

South Wales

95.8

73.4

0.0

-

South Yorkshire

107.8

81.0

10.9

Staffordshire

71.2

41.6

10.7

Suffolk

43.6

23.8

6.4

Surrey

66.6

30.3

9.2

Sussex

104.8

56.0

13.2

Thames Valley

151.3

76.7

15.3

Warwickshire

33.2

18.1

5.2

West Mercia

71.1

45.2

12.0

West Midlands

268.7

188.2

19.0

West Yorkshire

183.8

135.1

16.7

Wiltshire

40.2

21.5

5.2

Total England and Wales

4583.3

13.1

140.0

100.5

Table 4: Proposed and Indicative capital Allocations for England and Wales

Local Police Body

2014-15

£m

Avon & Somerset

2.4

Bedfordshire

1.0

Cambridgeshire

1.2

Cheshire

1.5

City of London

0.9

Cleveland

1.2

Cumbria

0.9

Derbyshire

1.5

Devon & Cornwall

2.6

Dorset

1.0

Durham

1.2

Dyfed-Powys

0.8

Essex

2.2

Gloucestershire

0.9

Greater Manchester

5.5

Gwent

1.1

Hampshire

2.8

Hertfordshire

1.4

Humberside

1.7

Kent

2.5

Lancashire

2.6

Leicestershire

1.6

Lincolnshire

0.9

Merseyside

3.2

Metropolitan

29.0

Norfolk

1.3

North Wales

1.1

North Yorkshire

1.0

Northamptonshire

1.0

Northumbria

3.0

Nottinghamshire

1.8

South Wales

2.3

South Yorkshire

2.6

Staffordshire

1.6

Suffolk

1.0

Surrey

1.5

Sussex

2.2

Thames Valley

3.5

Warwickshire

1.0

West Mercia

1.7

West Midlands

5.9

West Yorkshire

4.3

Wiltshire

1.0

Total England and Wales

109.3

Leader of the House

Parliamentary Privilege

The Government made a commitment in the programme for government to

“prevent the possible misuse of Parliamentary privilege by MPs accused of serious wrongdoing.”

In April 2012 the Government published a Green Paper that gave detailed consideration as to whether a change in the law is needed with regard to parliamentary privilege. The Green Paper focused on the following main areas:

freedom of speech and whether the protection of privilege should be disapplied in cases of alleged criminality;

exclusive cognisance and the desirability of a number of possible reforms in this area, for example codifying the two Houses’ enforceable powers; and

other privileges that do not fall under the two main headings of freedom of speech and exclusive cognisance such as the desirability of changes to the law on reporting of parliamentary proceedings.

These issues were scrutinised by a Joint Committee on Parliamentary Privilege, whose subsequent report made a number of recommendations. The Government’s responses form part of the Command Paper on parliamentary privilege, which has been published today.

The Government are grateful to the Joint Committee on Parliamentary Privilege for its detailed consideration of this issue; these are Parliament’s privileges and it is therefore right for Parliament to have a proper opportunity to reflect on their continuing purpose.

The Government continue to believe, and share the opinion of the Joint Committee, that there is no strong case for a comprehensive codification of privilege. However, as rightly recognised in the Joint Committee’s report, this does not mean that steps cannot be taken both by Parliament and by Government to clarify and improve the application of privilege where appropriate.

Further details of the Government’s response to the report of the Joint Committee are in the “Government’s Response to the Joint Committee on Parliamentary Privilege” Command Paper (ref Cm 8771), laid before Parliament today.

Wales

Draft Wales Bill

On 18 November, the Government announced their response to the Silk commission’s part 1 recommendations on fiscal devolution to Wales.

I am pleased today to publish the draft Wales Bill for pre-legislative scrutiny. The Bill implements almost all of the recommendations from the Silk commission’s first report on the devolution of tax and borrowing powers to the National Assembly for Wales and the Welsh Government.

Specifically, it will enable the Assembly to legislate about devolved taxes—a Welsh tax on transactions involving interests in land (replacing stamp duty land tax in Wales) and a Welsh tax on disposals to landfill (replacing landfill tax in Wales); it establishes a mechanism by which the Assembly can trigger a referendum in Wales on the question of whether a part of income tax in Wales should be devolved; and, subject to a vote in favour in a referendum, the Bill will enable the Assembly to set a Welsh rate of income tax, in the same way as the Scottish rate of income tax is set in Scotland.

These changes will give Wales more fiscal autonomy, and will make the Assembly and the Welsh Government more accountable to people in Wales for raising the money they spend.

The draft Bill also grants the Welsh Government new powers to borrow for capital expenditure and extends the circumstances in which they can borrow in the short term to manage their budget. These powers will enable the Welsh Government to borrow to invest in renewing Wales’s infrastructure and support growth in the Welsh economy.

In addition, as I announced to the House in March, the draft Wales Bill sets out how we intend to implement important changes to elections to the National Assembly for Wales. The draft Bill extends Assembly terms permanently from four to five years, making it less likely that Assembly elections will coincide with Westminster parliamentary elections in future; it will remove the prohibition on candidates in Assembly elections standing in a constituency and on a regional list; and it will prohibit “double jobbing”, by preventing MPs from also being Assembly Members.

The draft Bill also makes minor changes to the Welsh devolution settlement that we have agreed with the Welsh Government. These include changing the name of the Welsh Assembly Government to the “Welsh Government”; providing for HM Treasury to set an aggregate borrowing limit for local housing authorities in Wales and for the Welsh Ministers to set limits for each local housing authority; and enabling the Law Commission to provide advice and information to Welsh Ministers on devolved matters.

Taken together, this is a significant package of reforms which provides the opportunity for devolved governance in Wales to be fairer, more accountable and more able to support economic growth in Wales.