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Written Statements

Volume 577: debated on Monday 10 March 2014

Written Statements

Monday 10 March 2014

Business, Innovation and Skills

EU Informal Foreign Affairs Council

My hon. Friend the Minister for Trade and Investment, Lord Livingston of Parkhead, has made the following statement:

The EU informal Foreign Affairs Council (Trade) took place in Athens on 27 and 28 February 2014. I represented the UK on all the issues discussed at the meetings. A summary of those discussions follows.

Dinner on 27 February

Doha Development Agenda (DDA)

At a working dinner on 27 February, there was consensus among member states that implementation of the package agreed at last year’s Bali World Trade Organisation (WTO) ministerial conference must remain the priority alongside the rapid conclusion of existing sectoral initiatives such as the information technology agreement. Ministers also recognised that further implementation of DDA would require some commitment on agriculture.

Main Meeting on 28 February


Commissioner De Gucht said there was a reasonable chance of reaching agreement on the financial responsibility regulation. Member states refuted pressure from the Commission to get this agreed before the final Session of the European Parliament in April.

Transatlantic Trade and Investment Partnership negotiations

Commissioner De Gucht gave an update on progress and Ministers discussed key chapters within the EU/US negotiations, in particular the importance of regulatory coherence and public procurement within the agreement. Commissioner De Gucht spoke of his desire to achieve as much as possible over the course of 2014.

Economic Partnership Agreements (EPAs)

Recent progress on the west Africa EPA was welcomed and the prospects for progress with EPAs with eastern and southern Africa were discussed.


Commissioner De Gucht highlighted that the trade agreement formed a major part of the association agreement. Ministers discussed the timing of implementation of trade liberalisation with Ukraine.


Commissioner De Gucht was optimistic on a possible exchange of offers in the coming months. The Commission undertook to consult with member states before presenting the EU offer and reminded the meeting that the next stock-take would be in September 2014.

Geographical Indications (GIs)

Ministers discussed the economic importance of GIs and the issues of counterfeit goods, consumer choice and labelling. I recognised the economic significance, citing the €5 billion export market for Scotch whisky, and stressed the importance of consumers being empowered to make informed decisions by being aware of the difference between genuine EU products and local imitations.

Cabinet Office

City Deal

Following the successful completion of the first wave of city deals in July 2012 with the “core cities”, the Government committed to work with a further 20 cities and their wider areas to negotiate a second wave of city deals in October 2012.

I can today inform the House that the Government and business and civic leaders in Southend-on-Sea and the South East local enterprise partnership have reached agreement on a city deal.

The Southend-on-Sea city deal capitalises on opportunities to increase the rates of entrepreneurship and innovation locally, to realise the full potential of this major centre within the South East local enterprise partnership area.

The city deal will deliver incubator space, a one-stop-shop for direct business support and bespoke business support programmes. This will drive jobs growth and increase business start-ups and survival rates.

Business and civic leaders in Southend-on-Sea anticipate that the deal will create or safeguard more than 555 jobs over the next three years and provide support to 1,350 businesses across south Essex. And as a result of the deal there will be a £1.3 million redevelopment of central library in Victoria avenue.


Defence Infrastructure Organisation

On 24 May 2012, I informed the House that the Defence Infrastructure Organisation (DIO) would commence a procurement process to assess whether the involvement of a strategic business partner offered the best value-for-money solution for defence. Today, following the successful conclusion of the competitive stage of the procurement process, I am pleased to announce our decision that the appointment of a strategic business partner does represent the best way forward for the DIO and value for money for the taxpayer. After analysis of the proposals received, I can inform the House that Capita, which is working in conjunction with URS and PA Consulting, is the preferred bidder. Final negotiations will now be concluded with a view to contracting in the spring.

Following the establishment of the DIO in April 2011, a significant transformation programme was put in place to ensure that the organisation would deliver better value for money for taxpayers. Alongside this process, the defence board considered the outline case for the introduction of a strategic business partner for the DIO. The case set out the potential financial and wider benefits of adopting a different business model in the DIO whereby a strategic business partner would be engaged to drive the transformation of the DIO further and deliver rationalisation and efficiency improvements.

A private sector strategic business partner will enable the DIO to make a significant contribution to departmental savings and asset realisation targets, as set out in the 2010 strategic defence and security review and will strengthen and enhance the service the DIO provides across defence. The strategic business partner will focus on improving the skills base across the DIO, enhancing commercial expertise and change management skills and will bring additional capability to the DIO, including access to market-competitive knowledge and skills via the partner’s parent organisations; better incentivisation and management of staff against performance through the introduction of a more commercial approach to the business and access to private funding for “spend-to-save” efficiency improvements.

Capita has been selected as the preferred bidder for a 10-year contract, with payment for services to be made through an incentive-based arrangement. Following contract award in spring 2014, the strategic business partner will integrate an executive management team into the DIO and assume full executive responsibility for the organisation once the mobilisation activities have been completed. For the first phase of the contract, the DIO will remain fully within the Ministry of Defence. During this period, however, the strategic business partner will help the DIO prepare to move to an incorporated model, currently assumed to occur in 2016, which will entail the creation of a Government Company (GovCo) to manage defence infrastructure. This would be a separate legal entity, 100% owned by the Secretary of State for Defence and managed by the strategic business partner under contract. Under this innovative arrangement, the MOD will oversee the activities and performance of the new company through a governing authority set up within the Department.

The selection of the preferred bidder to be the strategic business partner to the DIO, represents an important step in the fundamental reform of defence following Lord Levene’s independent review in 2011, which recommended that

“enabling services should be delivered as efficiently, effectively and professionally as possible.”

It demonstrates the Department’s continuing commitment, and ability, to bring in private sector skills, where doing so will increase efficiency by cutting costs and improving delivery.


Contingencies Fund Advance

The Ministry of Justice requires an advance to discharge its commitments which are set out in its supplementary estimate 2013-14, published on 12 February 2014 as HC 1006 (CG supply estimates, supplementary estimates).

Parliamentary approval for additional resources of £954.167 million for existing services has been sought in a supplementary estimate for the Ministry of Justice. Pending that approval, urgent expenditure estimated at £93 million will be met by repayable cash advances from the Contingencies Fund. This is a temporary cash advance due to the timing of Royal Assent for the Supply and Appropriation (Anticipation and Adjustments) Bill 2013-14, and does not reflect an overspend.

Prisoners (Release on Temporary Licence)

Carefully managing prisoners into the community on temporary licence toward the end of their sentence is a key part of efforts to rehabilitate them back into society. But this should never be at the expense of public safety which remains our absolute priority.

In the summer of 2013, in separate incidents, three prisoners failed to comply with the conditions on which they were temporarily released from prison with terrible consequences. One of these prisoners has since been convicted of murder and another of attempted armed robbery. The case in respect of the third prisoner is still subject to the legal process.

Such failures should not happen and, as a result, I immediately commissioned two reviews. We have undertaken an internal review of the policy and practice of the temporary release of prisoners. I also asked Her Majesty’s chief inspector of prisons to examine circumstances around these three serious incidents. I have accepted the recommendations of the chief inspector’s report, which cannot yet be published due to those outstanding legal proceedings. The chief inspector’s report and recommendation was focused on the three specific incidents and I have incorporated these recommendations into a fundamental and wider reform of the policy and its procedures.

Release on temporary licence (ROTL) describes the arrangements under which prisoners can be released into the community towards the end of their sentences for rehabilitative purposes. It will continue to play an important role in public protection by ensuring that offenders are tested in the community under strict conditions before being released. It also provides a valuable means of helping prisoners prepare for their resettlement in the community by, for example, finding work or rebuilding links with their families, which helps to reduce reoffending.

In the vast majority of cases ROTL is used effectively and successfully. Prisoners fail to comply with licence conditions in less than 1% of cases. In 2012, around five in every 100,000 releases were recorded as resulting in failure due to arrest on suspicion of a further offence.

However, the failures of last summer have highlighted a number of weaknesses in current arrangements which I am determined to address.

I am making changes to all ROTL releases to improve the decision making across the system. ROTL is not a right. At all times during their sentence a prisoner will have to demonstrate the right behaviour and commitment to change. For ROTL to be granted, there will need to be a very clear benefit to how it will aid rehabilitation and increase the chances of an offender leading a crime-free life on release. There will also be a more thorough assessment of the risks before temporary release is authorised and a more consistent and robust response for prisoners who fail to comply with their licence.

I am also introducing a new scheme of restricted release on temporary licence for those prisoners who have committed serious crimes in the past. This new process will feature:

More stringent risk-assessment procedures carried out by highly trained probation professionals.

In addition to tagging, more robust monitoring arrangements when an offender is on temporary licence in the community

In the future, all prisoners who are allowed release on temporary licence will be tagged, regardless of the nature of their previous offences. The next generation of tagging contracts, which are due to come into operation next year, will improve the way we monitor prisoners’ whereabouts while they are in the community. The use of this new technology will also serve as a strong deterrent as prisoners will know that their location can be accurately checked.

These changes will be implemented in the coming months. The new restricted ROTL scheme will be operational by the autumn. We will introduce electronic location monitoring as the technology becomes available.

Taken together, this package of measures will improve the consistency, risk assessment and monitoring of releases on temporary licence, ensuring we make more effective use of this tool in safely preparing prisoners for permanent release and better protecting the public.


Mersey Gateway Bridge

The Chief Secretary to the Treasury on 4 December re-confirmed as part of the national infrastructure plan that funding would be made available to the Mersey gateway bridge scheme subject to successful completion of procurement and Government approval.

As part of that approval process, the Government have agreed to provide a commitment to Halton borough council (“Halton”), the promoters of the scheme, to stand behind any shortfall to the level of toll revenue required to meet Halton’s financial obligations and I am today laying in the House a departmental minute giving particulars of the contingent liability created. I will also lay a copy of the minute in the Library of the House of Commons.

The Mersey gateway bridge project involves the construction of a new 1 km long cable-stayed, dual three-lane bridge over the River Mersey between Widnes and Runcorn plus associated changes to approach roads. Congestion associated with the Silver Jubilee bridge is seen as a constraint to economic regeneration and growth both locally, within the borough, and across the wider Liverpool city region and the north-west.

The bridge’s construction and maintenance has been procured under a design, build, finance and operate (DBFO) contract which is on a fixed-price basis and under which payments do not start to flow until it opens. The initial development costs, land purchase, decontamination and other project costs will be funded through a grant from the Department for Transport (the Department), Halton BC contributions and other third-party contributions.

Following operations start, the majority of the funding will be provided through users in the form of tolling of both the new bridge and existing Silver Jubilee bridge over the 26.5-year DBFO contract. In addition the Department is providing a graduated, decreasing resource availability support grant funding over 12 years starting in 2017-18 (following the opening of the bridge) to 2028-29.

As Halton is a small authority with limited resources, to ensure that the scheme can proceed the Department intends to commit that in addition to the availability support grant it will stand behind any shortfall to the level of toll revenue required to meet Halton’s financial obligations. Full details of the Department’s proposed commitment can be found in the departmental minute.

The likelihood and scale of the additional availability support grant required would depend on the robustness of the base case toll volumes and revenues and also the scale of the shortfall of the actual revenues against the project costs. In an (unrealistic) worst case scenario where the bridge opens with zero toll revenues, the Department would pay all costs. In addition to the committed departmental availability support grant, under this scenario the additional availability support grant which represents the contingent liability would be up to circa £16.6 million in the first year (following utilisation of the £19.0 million liquidity reserve), c. £37.6 million in 2018-19 and thereafter rising by an average of c. £2 million per annum. The total contingent liability on this basis over the 26.5 years would be c. £1,698 million (following utilising of the £19.0 million liquidity fund).

If the liability is called, provision for any payment will be sought through the normal supply procedure.

Subject to successful completion of all remaining approvals and completion of financial close, construction of the scheme is scheduled to start in April 2014 with the scheme opening in 2017.

Work and Pensions

Employment, Social Policy, Health and Consumer Affairs Council

The Employment, Social Policy, Health and Consumer Affairs Council will be held on 10 March 2014 in Brussels.

The Council will seek a general approach on a Council decision on the guidelines for the employment policies of the member states, and agreement in principle on a text of a decision on a tripartite social summit for growth and employment. As the latter is subject to the European Union Act 2011, its final agreement and adoption will require the approval of Parliament by primary legislation.

There will be a policy debate on the European semester, for a contribution to the March European Council.

The Council will be invited to adopt a recommendation on a quality framework for traineeships and the Council conclusions and subsequent reports on the 2014 annual growth survey and joint employment report and the social situation in the EU.

The Commission will present its communication on the “The EU 2020 headline targets” which will be followed by an exchange of views.

Under “any other business”, the Commission will present its proposals for the gender recast directive report and the report on the two anti-discrimination directives. The presidency will report on ongoing issues and there will be a presentation from the Chairs of the Social Policy Committee and the Employment Committee on their 2014 work programmes.