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Written Statements

Volume 600: debated on Monday 12 October 2015

Written Statements

Monday 12 October 2015

Business, Innovation and Skills

Low Pay Commission: National Minimum Wage

I am pleased to announce that the Government have published policy evidence to support the Low Pay Commission’s research towards recommendations due in 2016. I have written to the LPC to set out what we would like the Commission to consider on the national minimum wage and national living wage. This document contains policy information relating to the national minimum wage legislation and wider Government policy which may impact upon the Low Pay Commission’s recommendations.

Economic evidence will be published before the end of the year when the latest information on earnings and economic forecasts is available.

A copy of the evidence will be placed in the Libraries of the House and will be available from the BIS website at:


Sahaviriya Steel Industries UK Limited

I want to update the House on matters relating to SSI in Redcar, which entered liquidation on Friday 2 October 2015.

Both the Minister of State for Small Business, Industry and Enterprise and I were in Redcar during the recess. SSI’s work reviving steel making in Redcar has faced increasing challenges and this announcement came as deeply disappointing news, undoubtedly making for a tough time for the workforce and Teesside more broadly.

The Government cannot intervene in the liquidation process, which is now in the hands of the Official Receiver, however we are absolutely committed to helping the workforce and local economy.

The Government have announced a package worth up to £80 million to support people who have lost their jobs as a result of SSI’s liquidation, and mitigate the impacts on the local economy. The funding will include support for workers to retrain and help for local firms to grow and create jobs.

In addition, we have asked Amanda Skelton, Chief Executive of Redcar and Cleveland Borough Council, to chair a local taskforce which is examining what steps need to be taken to support the local economy and workforce.

Full details of the package are being worked through and discussed with local stakeholders, however I wanted to set out in more detail two of the elements of the support package that are already available to SSI’s employees.

First, both employees and contractors made redundant as a result of SSI’s liquidation will be able to access Jobcentre Plus’ rapid response service, which helps people to move quickly into alternative employment. This service is delivered locally with partners, is tailored to an individual’s needs, and can include some or all of the following elements:

Help with job searches including CV writing and, interview skills;

Help to identify transferable skills and skills gaps (linked to the local labour market);

Training to update skills, learn new ones and gain industry recognised certification that will improve employability;

Help to overcome barriers to attending training or securing a job or self-employment such as child care costs, tools, work clothes, travel costs etc.

This service has been mobilised and is delivering support to SSI employees following the first announcements of redundancies and Jobcentre Plus will continue to play a full part in the taskforce we have established.

Secondly, there are special arrangements in place to ensure employees who are dismissed on the insolvency of their employer receive a basic minimum of the debts they are owed from the National Insurance Fund. This includes payments for statutory redundancy, holiday and notice pay, and arrears of wages, subject to statutory limits.

The redundancy payments service (RPS) has issued SSI staff affected with a letter, explaining their rights and how to make an online claim for redundancy pay. If any SSI employees have not received this letter, they should contact the redundancy payments inquiry line on 0330 331 0020. The RPS has established a dedicated team to process these applications and make sure SSI employees receive their payments as quickly as possible.

Unpaid pension contributions are also payable, within specified legal limits, from the National Insurance Fund. If there are unpaid pension contributions, the pension fund trustee will lodge a claim with the RPS, so employees do not need to submit an application for this. If employees have concerns about their pension, they should contact their scheme administrator.

Turning to the steel industry more broadly, it is clear that the industry is facing extremely challenging economic conditions. We are working closely with the sector to help where we can, and as such, will be holding a Steel summit on 16 October to understand the challenges the sector faces and explore what more can be done to support the industry. I am pleased that not only the industry and the unions, but a number of MPs representing constituencies with close links to the steel industry have accepted the invitation.

Finally, I wish to place on record that on Friday 2 October 2015 an indemnity was provided to Ken Beasley, the Official Receiver, in his capacity as liquidator of Sahaviriya Steel Industries UK Limited.

It was urgent and necessary to provide the Official Receiver with this indemnity, so that he felt able to accept the appointment as liquidator of the company and ensure that the company’s site could be secured and health and safety concerns associated with the site addressed from that point.

The indemnity is uncapped. However it is limited to liabilities arising as a consequence of the Official Receiver:

carrying out the proper performance of his duties as liquidator of the company, and

maintaining, securing and funding the ongoing operation of the company’s undertaking, and distributing the assets of the company in the ordinary course of his duties as liquidator of the company.

The Government can terminate the indemnity by giving at least 14 days’ notice to the Official Receiver.

In accordance with the guidance contained in “Managing Public Money”, on 8 October, I wrote to the Chairs of the Public Accounts Committee and the Business, Innovation and Skills Select Committee outlining the indemnity committed to on behalf of Government and the reasons for the urgency in this case.

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



Charter for Budget Responsibility: Autumn 2015 Update

Today I have laid before Parliament an updated Charter for Budget Responsibility. It sets out a fiscal framework to entrench a commitment to reach surplus and maintain it in normal times. It also includes the updates to the Charter recommended by the HM Treasury review of the Office for Budget Responsibility, led by Sir Dave Ramsden and clarifications on the operation of the welfare cap.

The updated Charter laid today was published in draft on 14 September 2015. The Charter was first published in draft as it includes modified guidance to the Office for Budget Responsibility. Under Section 6(4) of the Budget Responsibility and National Audit Act, if the Treasury proposes to modify the guidance to the Office for Budget Responsibility included in the Charter, a draft of the modified guidance must be published at least 28 days before the modified Charter is laid before Parliament.

A debate and vote in the House of Commons on the updated Charter has been scheduled for 14 October.


Communities and Local Government

Business Rates Reform

Last week the Chancellor announced the Government’s intention to make significant reforms to the way in which local government is funded while taking a major step forward in our plans to place more power in the hands of local communities.

Since 2013, local councils have retained 50% of the proceeds of business rates, to ensure that when local areas take steps to boost business growth in their area, they see the benefit. The Government now intend to go further, with plans to move to 100% retention of business rates by the end of the Parliament.

All income from local taxes will fund local services, giving local people more control over how their money is spent and providing incentives for growth. Specifically, by 2020:

Local government will retain 100% of local taxes - including all £26 billion of revenue from business rates - to spend on local government services. This means the Government will no longer take business rates income into Whitehall for redistribution as grant.

Local authorities will have the power to cut business rates to boost enterprise and economic activity in their areas. This will complement existing powers to grant reliefs to individual businesses and will allow authorities more discretion to reflect local circumstances in their local tax regimes;

Directly elected metro mayors will be able to add a premium to business rates to pay for new infrastructure. They will need to have support of local business leaders through the Local Enterprise Partnership and the power will be limited by a cap; and

As well as phasing out the Local Government grant from Whitehall, these new powers will come with new responsibilities to ensure the reforms are fiscally neutral. The Government will set out further details in the Spending Review.

Redistribution between councils will remain important, to reflect the different need of different authorities. In developing the reforms we will consider the responsiveness of the system to future changes in relative needs and resources, while maintaining a strong incentive for authorities to grow their local economies. We will also consider how risk and business rates volatility can be better managed and how to protect authorities against significant falls in income.

Over the coming months the Government will work with local government, businesses and other interested parties on the detailed design of these reforms.


Right to Buy: Agreement with Housing Associations

The Government are pleased to announce that they have reached an agreement with the National Housing Federation, which will extend Right to Buy discounts to at least 1.3 million more families across the country.

We want more people to be able to own a home of their own. The Right to Buy is a key part of this, and has already helped 2 million families to realise their dream of home ownership.

Until now, Right to Buy discounts have only been available to tenants in local authority properties and some former council properties. Extending these discounts to housing association tenants in England will end this unfairness, and will deliver our manifesto commitment to extend the Right to Buy to housing association tenants.

Under the agreement, all homes sold to tenants will be replaced on a one for one basis, delivering an overall increase in housing supply. Housing associations have a strong track record in the delivery of new homes, playing a major role in exceeding the Government’s 2011-15 affordable homes target by delivering nearly 186,000 homes.

The agreement will mean that the first housing association tenants will be able to start to buy their homes from next year.

In summary, the deal will enable the following:

One point three million families will be given the opportunity to purchase a home at right to buy level discounts, subject to the overall availability of funding for the scheme and the eligibility requirements. The presumption is that housing associations will sell the tenant the property in which they live.

The Government will compensate the housing association for the discount offered to the tenant, and housing associations will retain the sales receipt to enable them to reinvest in the delivery of new homes.

Housing associations will use the sales proceeds to deliver new supply and will have the flexibility, but not the obligation, to replace rented homes with other tenures such as shared ownership.

Government will continue to work with the National Housing Federation and its members to develop new and innovative products, so that every tenant can buy a stake in their home.

As part of the agreement, the Government will also implement deregulatory measures which will support housing associations in their objectives to help support tenants into home ownership and deliver additional supply of new homes.

We will now be working closely with the sector on the implementation of the deal, and I will update hon. Members in due course on the next stage of the implementation.



Members of the Reserve Forces in Support of UK Operations to Counter the Threat of ISIL

With the expiry of the call-out order made on 1 October 2014, on 21 September 2015 a new order was made under section 56(1 B) of the Reserve Forces Act 1996 to enable Reservists to be called into permanent service in support of United Kingdom operations to counter the threat of Islamic State of Iraq and the Levant (ISIL).

Under the call-out order made on 1 October 2014, 85 Reservists have been called out for operations. We anticipate a continued requirement for Reservists, with the right skills and experience, over the period the new order will be in force. This is fully in line with our policy of having more capable, usable, integrated and relevant Reserve Forces.

The order takes effect from 30 September 2015 and ceases to have effect on 29 September 2016.


Reserve Forces Call-Out Orders: Defence Objectives

Changes made by the Defence Reform Act 2014 allow for Reservists to be called out under section 56(1B) of the Reserve Forces Act 1996 if it appears to the Secretary of State that it is necessary or desirable to use members of a reserve force for any purpose for which members of the regular services may be used. Reservists called out under this power may be required to serve for a period of up to 12 months.

With the expiry of the orders made on 1 October 2014, on 21 September 2015 I made four new call-out orders under section 56(1B) of the Reserve Forces Act 1996 to continue to allow Reservists to be called into permanent service to support defence engagement activities (for example the provision of short term training teams and military capacity building overseas); global counter-terrorism and counter-piracy; the operation of our permanent joint operating bases (PJOBs) in the South Atlantic islands, British Indian ocean territory, Cyprus and Gibraltar; and maritime security objectives.

Under the orders made on 1 October 2014, 280 Reservists have been called out (193 for defence engagement, 66 for global counter-terrorism and counter-piracy, 10 for maritime security operations and 11 for the operation of PJOBs). We anticipate a continued requirement for Reservists, with the right skills and experience, over the period the new orders will be in force.

For operations that fall outside the scope of these orders, for example military aid to the civil authorities, or warfighting, or for operations which are likely to involve a large number of Reservists, I would expect to make separate call-out orders.

These orders take effect from 30 September 2015 and cease to have effect on 29 September 2016.


Future Unmanned Air Systems Capability

The UK’s intelligence surveillance and reconnaissance capabilities and equipping our special forces are two high priority issues for the strategic defence and security review.

We have reached some early decisions in these two key areas. We will more than double the number of remotely piloted air systems in the RAF’s fleet, as we start to replace the 10 current Reapers with over 20 of the very latest air vehicles. We will also provide our special forces with new specialist weapons and clothing, as part of a programme to ensure that they remain at the cutting edge of technology.

The first RAF Reapers were deployed to Afghanistan in 2007, and are now flying vital missions over Iraq and Syria. We want to expand our capability as this area of technology rapidly develops, so we will start to introduce the new Protector aircraft. With its greater range and endurance, it will significantly increase our ability to identify, track, deter, and ultimately counter potential threats. Previously known as the Scavenger programme, Protector will substantially enhance the UK’s global intelligence surveillance and reconnaissance capability.

The new special forces equipment package will ensure we maintain clear operational advantage over adversaries, and enhance their ability to work with our key allies.

This investment will enable us to address sophisticated dangers both at home and abroad, and is only possible because this Government have committed to increase defence spending, meeting the NATO investment pledge and spending 2% of GDP on defence for the rest of this decade.


Jordanian Armed Forces: Gifting of Equipment

I have today laid before the House a departmental minute describing a package of equipment, with a total value of £2,407,450 which the UK intends to gift to the Jordanian armed forces .

Conventional Jordanian forces lack the agility, as well as the training, equipment and command structures, to allow them to counter emergent threats on their Syrian and Iraqi borders. The new quick reaction force (QRF), a British-led multinational initiative is designed to address this by being able to deploy approximately 500 personnel at speed, to counter the ISIL and extremist threat at Jordan’s borders.

This gift will greatly enhance the QRF’s capacity and comprises a range of non-lethal command and control, manoeuvre and protective equipment.

Gifting is expected to begin soon after the completion of the departmental minute process.


Deaths of Corporal James Dunsby, Lance Corporal Craig Roberts and Lance Corporal Edward Maher: Inquest

On 15 July 2015 I made a statement regarding the inquest into the deaths of three Army Reservists, Corporal James Dunsby, Lance Corporal Craig Roberts and Lance Corporal Edward Maher who died as a result of training activity on the Brecon Beacons in Wales. I confirmed that following the conclusion of her inquest into the incident, HM Senior Coroner for Birmingham and Solihull highlighted a number of failings which contributed to the deaths of the three soldiers and made a number of recommendations to prevent future deaths. I responded to the Coroner on 14 September 2015 and, after allowing a short period for the Coroner and families to consider my response, I have today placed a copy of my response in the Library of the House. In addition to the improvements outlined in my letter we have a service inquiry under way to look at the wider safety aspects of such training and I will keep the House informed. My thoughts remain with the families of Corporal Dunsby, Lance Corporal Roberts and Lance Corporal Maher and we are committed to doing all we can to ensure such a tragic event cannot happen again.


Ukraine: Operation Orbital

Further to my statement to the House on 25 February, Official Report, column 321 and my written statement of 6 March this year, Official Report, column 83, I wish to update the House on our support for the Ukrainian armed forces.

The February ceasefire agreement, which came into effect at the beginning of September, has seen a reduction in violence in much of the conflict zone. We very much hope that this will bring an end to the fighting and generate substantial progress with the other measures agreed at Minsk.

This Government are committed to supporting Ukraine’s sovereignty, independence and territorial integrity. As a result of their prolonged engagement in this crisis, the Ukrainian armed forces have faced a serious shortage of training and basic equipment and have requested help. The Ukrainians value highly the UK’s support to training their personnel through Operation ORBITAL, welcoming our flexibility and responsiveness to their requests for assistance, and highlighting that our training has made a tangible difference on the ground to their capability.

So far this year the armed forces have deployed 19 teams to train nearly 1,600 members of the Ukrainian armed forces. Over 2,000 troops will have been trained by April 2016. Given the continued importance of our support in developing the resilience of Ukraine’s armed forces I have agreed that the UK should extend our training into the next financial year, with the continued deployment of short-term training teams to deliver training to meet the Ukrainian armed forces requirements.

For the financial year 2016-17 this will see an increase from the current 75 personnel, announced last February, to around 100 deployed to Ukraine at any one time. This uplift will ensure we have sufficient flexibility to meet evolving Ukrainian requests without unnecessarily constraining activity. The UK co-ordinates our training support with allies, from November there will be a UK liaison officer in the new US-led joint multinational training group based in western Ukraine. In addition to Operation ORBITAL activity, the UK will continue with its wider support to institutional capacity building and defence reform in Ukraine.


Foreign and Commonwealth Office

Informal Meeting of EU Foreign Ministers (Gymnich)

I attended the informal Foreign Ministers meeting on 4-5 September in Luxembourg.

The informal format of the Gymnich allows EU Foreign Ministers to engage in a free-ranging discussion on a number of issues. In contrast to the formal Foreign Affairs Council (FAC), Ministers do not agree written conclusions. The next FAC is due to be held on 12 October. The Gymnich was chaired by the High Representative of the European Union for Foreign Affairs and Security Policy, Federica Mogherini. Discussion centred on the Middle East Peace Process, Russia/Eastern Partnership and the migration crisis. As the discussion on migration overran significantly, Ms Mogherini decided to postpone the final discussion on Iran.

Johannes Hahn, Commissioner for European Neighbourhood Policy and Enlargement Negotiations also attended. Fernando Gentilini, EU Special Representative for the Middle East Peace Process, took part in the discussion on the Middle East Peace Process. Elmar Brok MEP, Chairman of the European Parliament’s Committee on Foreign Affairs attended the discussion on Russia/Eastern Partnership. Foreign Ministers from EU Candidate Countries joined EU Ministers for a session on migration.

Gymnich discussion

Middle East Peace Process

Ms Mogherini used her opening remarks at the Gymnich to announce a meeting of the Quartet with key Arab countries in the margins of the United Nations General Assembly. Her statement can be found at

Ms Mogherini provided a sobering analysis of the situation on the ground including the fact that the humanitarian situation in Gaza remained dire.

I agreed with Ms Mogherini’s priorities for Gaza (access and port) and added power supply as a third priority. I also echoed other speakers in calling for the implementation of existing EU legislation applicable to settlement products.

Russia / Eastern Partners

There was general agreement that Ukraine needed continued EU support as the winter approached both in terms of security and continued reform. There was universal condemnation of Russia’s role in eastern Ukraine. There was however recognition of the constructive role Russia can play in international security issues, as it did in the Iran nuclear talks.

Ms Mogherini recalled that the Eastern Partnership was not just about Ukraine and highlighted the differentiated engagement needed with Moldova, Georgia, Belarus, Armenia and Azerbaijan.


The external aspects of the migration crisis were discussed in detail. The common view among member states was that this was the single biggest challenge facing the Union. There was recognition of the heavy burden currently being carried by some of the candidate countries, in particular Turkey. It was agreed that more work was needed on readmissions and returns. There was broad support for setting up ‘hotspots’, both inside and outside EU territory, to bring together EU institutions involved to deliver an integrated service in managing migrants.

A number of Ministers pointed to the need to address the factors prompting migrants to leave their homes, and increase the incentives for them to stay close to their source countries. We also needed to address the people-smuggling networks. Otherwise, there was a risk that the flow of migrants and refugees into the EU would increase to unmanageable levels. The Valletta Conference in November would provide an opportunity to develop such a strategy with African partners. There was discussion of a second possible international conference focusing on the Eastern Mediterranean/Western Balkans route.

Ms Mogherini concluded that all aspects of a comprehensive migration strategy needed to be pursued.


Ministerial Correction

During the Westminster Hall debate “Arms Sales (Human Rights)” on Thursday, 17 September (HC Deb, col 407WH) I told my right hon. Friend, the Member for Twickenham (Dr Mathias), that Bahrain was “an example of a country that is on the list of concern”, referring to the Foreign and Commonwealth Office’s list of 27 countries of human rights concern, as set out in the 2014 Annual Human Rights and Democracy Report. In fact, Bahrain was not featured in the report as a country of concern, but rather as a country case study: http://www.hrdreport.

Country case studies were introduced in 2012 as a way to report on countries which do not meet the overall threshold for a country of concern, but which we judge nonetheless to be facing human rights challenges, or to be on a trajectory of change with regard to their human rights performance.



Rail Investment

On 30 September, I was pleased to confirm that work to electrify TransPennine and Midland Mainline railways would resume under plans announced as part of Sir Peter Hendy’s work to reset Network Rail’s upgrade programme.

Sir Peter Hendy, the Chair of Network Rail, outlined to me how work could continue. I replied to him asking Network Rail to un-pause this work.

Network Rail will work with the Department for Transport (DFT) and Rail North to develop a new plan for electrification of the TransPennine line between Stalybridge and Leeds and on to York and Selby to focus on delivering key passenger benefits as quickly as possible. This is an improvement on the previous plan which only changed the power supply of the trains.

The new plan will deliver faster journey times and significantly more capacity between Manchester, Leeds and York. The upgrade is expected to provide capacity for six fast or semi-fast trains per hour, take up to 15 minutes off today’s journey time between Manchester and York and be complete by 2022. When the work is finished, the whole route from Liverpool to Newcastle—via Manchester, Leeds and York—will be fully electrified and journey times will be significantly reduced compared to today’s railway.

Network Rail will also recommence work to electrify the Midland Mainline, the vital long-distance corridor which serves the UK’s industrial heartland. Sir Peter Hendy proposed that line speed and capacity improvement works already in hand are added to, with electrification of the line north of Bedford to Kettering and Corby by 2019 and the line north of Kettering to Leicester, Derby/Nottingham and Sheffield by 2023.

New Northern and TransPennine rail franchise awards will be announced before the end of the year. The new franchises will deliver new train carriages and remove out-dated Pacer trains; introduce free WiFi on trains; and offer a one-third increase in capacity with 200 additional services on weekdays and Saturdays and 300 more train services on Sundays.

Connecting up the great cities of the North is at the heart of our plan to build a northern powerhouse. The total programme of rail electrification and upgrades will completely transform the railways for passengers in the North and Midlands and help ensure that every part of Britain benefits from a growing economy.


Vehicle Emissions

I wish to inform the House of the latest developments on vehicle emissions testing, following the revelations of Friday 18 September that Volkswagen Group had been fitting so-called defeat devices to some of its vehicles.

Volkswagen Group has admitted that defeat devices are present on almost 1.2 million vehicles in the UK. These are diesel-powered vehicles tested and approved under the Euro 5 standard. Other vehicle manufacturers have confirmed that defeat devices do not exist on their vehicles. We, of course, will be testing this for ourselves.

I have taken a series of actions to defend the interests of UK consumers, both in the immediate and longer terms. The actions of the Government will continue to be guided by the over-riding principle of protecting consumers.

First, I have applied considerable pressure on the company in the UK and on EU Ministers to resolve the immediate situation with speed and efficiency. This means clear information for affected drivers and acting quickly to put right the affected vehicles. I have been clear that I expect VW to take every step necessary to protect its UK customers but it is right that the Government carry out their own thorough and independent investigation.

Therefore, secondly, I have announced a UK programme to retest vehicles. The Vehicle Certification Agency, the UK regulator, is running laboratory tests starting with those VW Group vehicles for which VCA has provided approvals. These tests will compare real world driving emissions against laboratory performance. We are taking steps to ensure independence; neither the cars nor the testing facilities will be provided by the vehicle industry themselves.

Thirdly, I have called for swift action by the European Commission to co-ordinate a pan-European approach. This is vital for ensuring that test results are available to consumers on a timely basis and to avoid duplication across different European countries.

Fourthly, a key element of regaining consumers’ long-term trust in vehicle emissions testing is to have tests that mean what they say. The UK was in the minority among member states earlier in 2015 in calling for “real driving emissions” to be speedily introduced. These tests will provide useful information that consumers can trust.

I met my fellow EU Transport Ministers in Luxembourg on 8 October and tabled the issue of vehicle emissions testing. I pushed for both a co-ordinated approach to retesting of vehicles across Europe and for real driving emissions to be introduced as quickly as practicably possible. I will continue working with my European colleagues to achieve the UK’s objectives.