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Written Statements

Volume 587: debated on Monday 3 November 2014

Written Statements

Monday 3 November 2014

Treasury

ECOFIN

A meeting of the Economic and Financial Affairs Council was held in Luxembourg on 14 October 2014. Ministers discussed the following items:

Measures in support of investment

Ministers discussed measures in support of investment, including the Commission-European Investment Bank proposal for a new taskforce to identify significant European investments which are not being realised for economic, regulatory or other business reasons.

Research and innovation as sources of renewed growth

The Council briefly discussed a Commission communication on research and innovation.

Follow-up to the G20 Finance Ministers and Governors’ meeting and annual meetings of the IMF and World Bank Group in Washington

The Commission updated the Council on the outcome of the G20 Finance Ministers and governors’ meeting on 9-10 October 2014 and annual meetings of the IMF and World Bank Group on 10-12 October 2014 in Washington.

Banking union: single resolution fund contributions

The Commission updated the Council on progress towards laying the delegated act on contributions to the resolution financing arrangements under the bank recovery and resolution directive (BRRD) and the single resolution mechanism (SRM).

Payment appropriations

The Commission updated Ministers on the state of play on payment appropriations, specifically the draft amending budget 3.

Mandatory automatic exchange of information in the field of taxation

The Council reached political agreement to the revised directive for administrative co-operation (DAC2), which will implement the OECD’s global standard for automatic exchange of taxpayer information (AEOI) in the EU.

Energy taxation

The Council held an exchange of views on the energy taxation directive, which sets minimum rates of tax for energy products used as heating fuel, motor fuel and electricity.

Ministerial dialogue with EFTA countries

Ministers met with EEA European Free Trade Association states at this ECOFIN and agreed a set of Council conclusions on incorporation of the EU European supervisory authorities regulations into the EEA agreement.

Business taxation

Following agreement at June ECOFIN, Ministers signed on a joint statement between member states and Switzerland on business taxation.

Public Spending

I am pleased to announce that Greater Manchester will be getting its own directly elected city-wide mayor with powers over transport, housing, planning and policing, as part of an agreement I have reached with the civic leaders from Greater Manchester.

This is a key part of our plan to create a northern powerhouse, to maximise the economic potential of the north and build a more balanced economy.

Under the agreement, Greater Manchester will see the first metro-wide elected mayor outside London and the Government will devolve a comprehensive set of powers to Greater Manchester. In addition to powers over transport, housing and planning, Manchester will also be given new powers to support business growth, skills, and help to join up health and social care budgets.

These mayoral proposals will create a powerful devolved administration with strong political leadership that can drive through policy to stimulate economic growth and plan strategically across the city, as well as representing the city nationally and internationally.

I hope that Manchester will be the first of many big cities to take advantage of greater devolution of powers. Any other city that wants to receive more powers and move to a new model of governance with an elected mayor should bring forward their proposals.

A new, directly elected mayor of Greater Manchester will receive the following powers:

Control of a £300 million housing investment fund.

Powers over strategic planning, including the power to create a statutory spatial framework for the city region. This will need to be approved by a unanimous vote of the mayor’s Cabinet.

Responsibility for a devolved and consolidated transport budget, with a multi-year settlement to be agreed at the next spending review, and responsibility for franchised bus services (subject to consultation by Greater Manchester) across the Greater Manchester region, and for integrating smart ticketing across all local modes of transport.

Control of a reformed earn back deal, within the current envelope of £30 million a year for 30 years, this gives Greater Manchester the certainty they need to extend the Metrolink to Trafford Park.

Take on the role currently covered by the police and crime commissioner.

The Greater Manchester combined authority will receive the following powers:

Responsibility for securing integrated business support services, including through the Growth Accelerator, Manufacturing Advisory Service and UK Trade & Investment (UKTI) export advice.

Control of the Apprenticeship Grant for Employers in Greater Manchester and power to re-shape and re-structure the Further Education (FE) provision within Greater Manchester.

Control of an expanded Working Well pilot, with central Government funding linked to good performance up to a fixed DEL limit in return for risk sharing.

Opportunity to be a joint commissioner with Department for Work and Pensions (DWP) for the next phase of the Work programme.

The GMCA and Greater Manchester clinical commissioning groups will be invited to develop a business plan for the integration of health and social care across Greater Manchester, based on control of existing health and social care budgets.

The Government will now prepare legislation to enable these changes with the potential for the mayoral election to take place in 2017.

Further powers may be agreed over time. The Government will keep Parliament fully informed.

Business, Innovation and Skills

British Business Bank

On 26 June 2014, I made a written statement to the House providing an update on progress in setting up a new British business bank to support the provision of finance to small and medium-sized businesses in the UK.

I am pleased that I am now able to tell the House that the bank began full operations as an independent entity on 1 November 2014.

The commencement of operations by the bank has been contingent on receiving state aid approval from the European Commission. On 15 October 2014 the European Commission gave its approval, relating to the bank’s funding, remit and operating model.

In advance of receiving state aid approval, the business bank team has achieved significant progress in supporting lending to small businesses while operating out of the Department. Eight hundred and twenty nine million pounds of new lending and investment to small UK firms was generated through the business bank programmes in the 12 months to June 2014, taking the total number of businesses benefiting from the bank’s programmes to over 35,000.

Given the breadth of the bank’s activities, the bank will operate through the following three subsidiaries, as set out in the terms of the state aid approval:

a ‘mandated’ subsidiary––British Business Finance Ltd––which will be able to offer funding and guarantees to banks and other financial intermediaries so incentivising them to offer more finance to small firms;

a ‘commercial’ subsidiary––British Business Bank Investments Ltd––whose remit is unfettered by state aid constraints, though in line with the state aid approval for the bank it must operate on fully commercial terms, including its funding, operations and investment activity; and

a ‘service’ subsidiary––British Business Financial Services Ltd––which will provide services to Government including managing specific programmes which remain on Government’s balance sheet.

The subsidiaries will operate under the British business bank brand, with the exception of the commercial subsidiary which will operate under the British business bank investments brand.

My Department has entered into a keep-well agreement with British Business Finance Ltd under which my Department will, subject to certain conditions being met, agree to provide funding to British Business Finance Ltd in circumstances where British Business Finance Ltd would not otherwise be able to meet its payment obligations.

This model will permit the bank, through the mandated arm, to make commercial or aided investments to firms eligible under the EU general block exemption regulations, as well as loans or investments to businesses within the specified de minimis limits. The bank will also gain significant extra flexibility through the commercial and service arms.

My Department has also been working to ensure that the company would be ready to begin operations soon after the receipt of state aid approval. On 30 October 2014, the board of British Business Bank plc resolved that the company would be ready to begin full operations as an independent entity on 1 November, having concluded that the necessary systems, processes and personnel would be in place. The assets which are transferring to the bank transferred on 1 November.

The Government will provide funding to the bank under section 228 of the Banking Act 2009.

Agency Workers Regulations (Review)

As part of the red tape challenge, Government committed to examining the paperwork obligations of the agency workers regulations (AWR). The purpose of the review was to ensure that the practical arrangements for employers were as simple as possible. While the review was completed late last year, Government delayed an announcement of findings until after the publication of the European Commission’s review of the implementation of the agency workers directive. This was published on 21 March this year.

The review focused on the record-keeping requirements of the AWR. The AWR are not prescriptive as to what records should be kept by either a recruitment business or a hiring business––it is up to the businesses themselves to determine their own approach. However, in the course of the review it was clear that businesses needed to record information about agency workers in order to demonstrate compliance with the regulations.

Views were collected from temporary work agencies, business, and trade and employee representative organisations.

The review found that, while temporary work agencies reportedly invested much time and resource in updating their processes and systems to ensure they were compliant when the AWR were brought in, there was consensus that the AWR work relatively well.

The most significant obstacle experienced by temporary work agencies was obtaining information from hiring businesses about employment terms and conditions of comparable workers who are hired directly by the hirers. Without this information agencies found it difficult to ensure temporary agency workers receive the same basic working and employment conditions after completing the 12-week qualifying period.

But temporary work agencies were clear that they did not want the main guidance on the regulations to be changed. Amending the guidance would risk being perceived as changing the AWR, and thus create confusion among temporary work agencies and hiring businesses.

They did, however, suggest that additional guidance should be issued on the regulations specifically targeted at hirers to explain what information agencies would require from them and why. This will reduce the administrative burden on temporary work agencies which is brought about by having to make repeated requests to hirers.

Officials will now work with interested parties to simplify the existing guidance into three distinct sections––one for workers, one for temporary work agencies and additional guidance specifically targeted at hirers.

Energy and Climate Change

Wood Review

In June 2013 I commissioned Sir Ian Wood to undertake a comprehensive review of the regulation and stewardship of the UK’s hydrocarbon reserves. Sir Ian published his report on 24 February which made clear that the size of the prize on offer is considerable. The review estimated that full and rapid implementation could deliver 3 billion to 4 billion barrels of oil equivalent more than would otherwise be recovered over the next 20 years. Today, the Government are publishing the Impact Assessment (IA) which accompanies the Phase 1 proposals to implement the Wood review recommendations - the powers to charge a levy and the establishment of the maximising economic recovery UK principles in statute, currently contained in the Infrastructure Bill. Without further secondary legislation these will not have a direct impact on business. The IA does however provide an estimate of the potential net benefit to business associated with the implementation of all the review’s recommendations of between £20.7 billion and £56.3 billion (net present value), primarily as a result of greater oil extraction from the North sea. This reconfirms the importance of ensuring the Wood Review recommendations are fully implemented as quickly as possible. I will be depositing a copy of the impact assessment in the Library of both Houses.

Health

Language Controls (Healthcare Professionals)

The Department of Health has been working with the General Dental Council (GDC), the Nursing and Midwifery Council (NMC), the General Pharmaceutical Council (GPhC) and the Pharmaceutical Society of Northern Ireland (PSNI), along with other stakeholders to look at ways to ensure that the English language capability of nurses, midwives, dentists, dental care professionals, pharmacists and pharmacy technicians working in the UK is sufficient. We greatly value the contributions that health care professionals from all over the world have contributed, and continue to contribute to our NHS, but it is essential that they have a sufficient knowledge of the English language, in order to provide safe patient care. Earlier this year, changes were introduced to strengthen the law around language controls for doctors, by introducing language controls for European economic area (EEA) doctors wishing to practise in the UK. Ministers from the four UK Health Departments are firmly committed to improving public protection by preventing health care professionals who do not have sufficient knowledge of English from working in the UK.

Today the Government launched their consultation “Language Controls for nurses, midwives, dentists, dental care professionals, pharmacists and pharmacy technicians—proposed changes to the Dentists Act 1984, the Nursing and Midwifery Order 2001, the Pharmacy Order 2010 and the Pharmacy (Northern Ireland) order 1976”. The consultation document consults on proposals to amend the legislation governing the GDC, NMC, GPhC and PSNI so as to give them more explicit powers to satisfy themselves about the English language capability of EEA applicants for registration, as well as to take action where concerns arise about a registered professional’s ability to communicate adequately in English. The draft Health Care and Associated Professions (Knowledge of English) Order 2015 has also been published alongside the consultation document.

The consultation will close on 15 December 2014 and the Government welcome views on the proposals and invite comments through the consultation process.

“Language Controls for nurses, midwives, dentists, dental care professionals, pharmacists and pharmacy technicians––Proposed Changes to the Dentists Act 1984, the Nursing and Midwifery Order 2001, the Pharmacy Order 2010 and the Pharmacy (Northern Ireland) order 1976” and the draft Health Care and Associated Professions (Knowledge of English) Order 2015 have been placed in the Library of the House. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.