The Economic and Financial Affairs Council was held in Luxembourg on 9 June 2009. The following items were discussed:

Economic and financial development

a) Update on current situation

The Council took stock of the current economic and financial situation, based on an update from the Commission and the ECB. Ministers were also informed by the Commission of its intentions regarding budgetary surveillance procedures in the light of the latest fiscal notifications by the member states. The Government believe that continued communication between member states is key to ensuring a co-ordinated response to the crisis.

b) International accounting standards

The Council held an exchange of views with representatives from the International Accounting Standards Board (IASB) regarding international standards used for the valuation of financial instruments. Ministers reiterated calls made at the informal ECOFIN in April for standard setters to work urgently to achieve clarity and consistency in the application of standards used for the valuation of assets in distressed and inactive markets. The Government welcome further actions announced by the IASB on 29 May, which demonstrate its commitment to respond to questions raised by the Commission and member states, and look forward to the EU advancing this work in the context of the G20 call to improve standards for valuation of financial instruments.

Preparation of the June European Council 18-19 June 2009

a) European supervisory framework

Ministers adopted Council conclusions on financial supervision and regulation to prepare the discussion at European Council. This follows the European Commission’s response to the De Larosière report. The Government are content with the final conclusions, which reflect the concerns expressed by the UK. The conclusions incorporate strong safeguards at the Government’s request, including the commitment that any new powers granted to existing or proposed bodies would not impinge in any way on member states’ fiscal responsibilities.

Following the discussion at European Council, the Commission will present all necessary proposals by early autumn 2009 at the latest, with the aim of having the new European financial supervision system, comprising both macro-prudential and micro-prudential components, fully in place in the course of 2010.

b) Implementation of the European Economic Recovery Plan

The Council endorsed a report to the June European Council reviewing progress made on the European economic recovery plan (EERP). The UK is broadly content with the final document, which is a horizontal view of the structural and fiscal measures taken by member states following from the EERP.

c) Bank reform schemes

Following on from an interim oral report given to Ministers at the informal ECOFIN in April, Ministers agreed a report on the effectiveness of support schemes undertaken to ensure financial stability, including reporting of the UK’s own asset protection scheme and other measures. The Government believe the report provides a useful insight into the actions taken by member states to support the financial sector. The Council has asked the Economic and Financial Committee to further examine requirements for bank restructuring in return for state support and the pricing of state guarantees, and to report back to the Council in July.

d) International financing of climate change

ECOFIN adopted Council conclusions to inform discussions by heads in June, in preparation of the December Copenhagen conference on climate change. The UK supports the Council conclusions, which demonstrate the EU’s commitment to tackling this issue ahead of the finalisation of the EU negotiation regarding finance mechanisms, which is expected in October.

Taxation

a) Good governance in tax

Based on the Commission’s 28 April communication, ECOFIN adopted Council conclusions on further work relating to good governance in taxation. The conclusions encourage further work in relation to legislative proposals on the savings taxation directive, the administrative co-operation directive and the recovery directive, and urge the Commission to swiftly present the results of negotiations on an anti-fraud agreement with Liechtenstein. The UK is content with the conclusions, which represent a positive step forward on the three individual directives and on the wider good governance agenda, with its close links to the G20. The incoming Swedish presidency will report to the Council in the autumn on progress made.

The Foreign Secretary has previously provided figures for the total frozen assets in the UK under the sanctions against Burma and Zimbabwe. An aggregate figure for frozen assets is given in relation to a sanctions regime in order to ensure that principles of data protection and confidentiality are observed and the amount relating to any one individual or entity is not identifiable.

Total assets frozen in the UK under the sanctions against Iran

The total assets frozen in the UK under the EU and UN sanctions against Iran are approximately £976,110,000. This figure is the total reported frozen assets at the time sanctions were imposed and has been converted to sterling from the currencies in which it was reported using the appropriate exchange rate for the day on which it was reported.

I am today publishing a consultation document entitled “Greater Flexibility for Planning Permissions”, which sets out proposals to provide greater flexibility for local authorities, to give developers more support and scope to keep investment and activity ongoing during the economic downturn. This paper outlines a number of measures which do not require primary legislation. I intend to implement them rapidly, mainly in the autumn.

The consultation paper has three elements:

Extension of the time limits for implementation of existing planning permissions—We propose to give local authorities the discretion to extend the time limits for commencement of major developments. This will allow extension of the typical three-year time limit for a further period, which in most cases would be another three years. We intend this as a temporary measure, which will apply to all permissions for major developments which are extant at the time it comes into force. The measure will therefore be in operation for approximately three years, depending on the length of time which each individual permission has left to run.

Minor material amendments to planning permissions—At present, when a developer wants to make a small, but material, change to a scheme that already has planning permission, it is often necessary to submit a further full planning application, which leads to considerable delay, cost and uncertainty for the applicant and additional work for the local planning authority. The consultation document seeks views on varying conditions to make the process more streamlined and also seeks initial views on more substantive changes which would require primary legislation. This element of the consultation document responds to a recommendation in the Killian Pretty review of planning applications.

Non-material amendments to planning permissions—The final part of the consultation document proposes changes to secondary legislation necessary to bring into effect a measure in the Planning Act 2008 which provides a simple and quick mechanism for making non-material amendments to planning permissions. Developers will not need to make a full planning application, but can instead apply simply to change one particular aspect of the permission.

We also want to encourage the use of Local Development Orders. I can confirm that next week we will commence a provision from the Planning Act 2008 that will allow an LDO to be set up independent of the local development plan, and I am also removing the requirement for local authorities to obtain approval of an LDO from the Secretary of State.

I am also announcing today the availability of small- scale start-up funding for a first wave of at least 12 LDOs. The Planning Advisory Service is working with the Department considering applications, and I can report that we have now offered support to the first two LDO schemes.

Amendments to the Building Regulations

I am today also publishing a consultation on changes to Part L (Conservation of Fuel and Power) and Part F (Ventilation) to deliver the next step towards zero carbon buildings—a 25 per cent. improvement on current standards for homes and other buildings from October 2010.

The proposals in the consultation could deliver savings of 3.3 million tonnes of carbon per year in 2020.

The proposed changes mean that homes would have to be built with a suitable combination of better insulation and draught-proofing, better low-energy lighting and more efficient boilers. By requiring higher levels of energy efficiency in new homes residents will benefit from lower fuel bills—up to £100 lower per year than for homes built to the current standard.

In the consultation, we are also seeking views on whether we should require energy efficiency standards for conservatories. We know that conservatories are a relatively cost-effective way of increasing the living space of a home. However, they can significantly increase carbon emissions—a 20m² conservatory with poor energy efficiency standards added to a house built since 2002 and heated to the same temperature as that house would approximately double its carbon emissions. So we are asking whether we should expect people to spend an estimated additional £400 on a £10,000 new conservatory to improve its energy efficiency.

Later, we will be consulting more fully on how to take forward the ambition from the March 2008 Budget that all new non-domestic buildings should be zero carbon from 2019. In the meantime, as we said in the zero carbon consultation in December 2008, it is important to take early steps to start to further improve the energy performance of non-domestic buildings. So, today’s Part L consultation also sets outs proposals for a 25 per cent. improvement on current standards for new non-domestic buildings from October 2010.

Finally, the consultation sets out proposals to tighten the standards for some standard building systems and components, like boilers and windows, which make a significant difference to carbon emissions from new buildings and when these items are replaced in existing homes.

The consultation will close on 17 September 2009 and any changes to the regulations are due to be made by March 2010 to come into effect from October 2010.

Copies of the consultation documents will be placed in the Library of the House.

Today I welcome publication of the first report by Ofsted on the quality of welfare and duty of care for recruits and trainees in the armed forces. Following up on the work previously undertaken by the Adult Learning Inspectorate, Ofsted has been engaged in inspecting the recruit journey from armed forces recruitment and careers offices through the selection process and into training.

Having implemented a number of policy and process changes designed to improve the training environment and the support provided to individuals and to reduce the risk to recruits and trainees, the armed forces are committed to a programme of continuous improvement which is supported by external inspection. This report, the first by Ofsted, draws on the evidence gathered by inspectors over a 15-month period of visits. It includes judgements on the provision of welfare and duty of care; on the capacity to improve; and on how well the armed forces are undertaking self-assessment activity. Self-assessment is a relatively new concept for much of the armed forces and, while the majority of units visited are progressing well, there remains more work to be done.

I am pleased that Ofsted concludes the overall effectiveness of the welfare and duty of care provision for recruits and trainees is ‘Satisfactory’. The report is largely positive and shows progress on a wide range of issues. Nevertheless, it is clear that there is further room for development in a number of areas in terms of the pace of improvement and the application of consistent practice. We should not be surprised that the pressures of conducting challenging and sustained operations at a level of intensity and commitment we have not experienced for some time are manifest in some of our training establishments. We are not complacent, however, and remain committed to continuing to improve the way in which our recruits are trained.

The initial training environment is dynamic and we must be sure that the impact of change is fully understood, which is why we will continue to place emphasis on self- assessment. Ofsted make a number of recommendations which, together with the findings from internal audit work, will feed into the overall continuous improvement programme.

I have today placed copies of the report: “The quality of welfare and duty of care for recruits and trainees in the Armed Forces”, in the Library of the House.

External inspection provides the armed forces with the opportunity to consider good practice from outside of the Ministry of Defence and I am grateful to the Chief Inspector Ofsted for this report and the contribution it makes to ensure that the care and welfare of recruits and trainees in the armed forces continues to improve.

The majority of diplomatic missions in the United Kingdom pay the national non-domestic rates requested from them. They are obliged to pay only 6 per cent. of the total national non-domestic rates value which represents payment for specific services such as street cleaning, lighting, maintenance and fire services. The total amount outstanding from all diplomatic missions is approximately £634,205. As at 6 May 2009, missions listed below owed over £10,000 in respect of NNDR.

Since a letter about outstanding NNDR bills was sent to missions on 25 March, £154,402 has been repaid. Many missions have cleared their bills and some others have entered into arrangements to pay by instalments.

The number of outstanding fines incurred by the diplomatic missions in the United Kingdom for non-payment of the London congestion charge since its introduction in February 2003 until 18 February 2009 was £26,721,464. The table below shows the 53 diplomatic missions with outstanding fines totalling £100,000 or more.

In 2008, there were 4,257 recorded outstanding parking and other minor traffic violation fines incurred by diplomatic missions and international organisations in the United Kingdom. These totalled £448,580. In March this year, the Foreign and Commonwealth Office wrote to all diplomatic missions and international organisations concerned, giving them the opportunity to either pay their outstanding fines or appeal against them if they considered that the fines had been issued incorrectly. As a result of subsequent payments totalling £18,620 and formal appeals lodged, there remains a total of 4,021 (£429,960) unpaid fines for 2008. The table below details those diplomatic missions and international organisations that have outstanding fines totalling £1,000 or more.

In 2008, ten serious offences allegedly committed by people entitled to diplomatic immunity were drawn to the attention of the Foreign and Commonwealth Office. “Serious Offences” are defined as offences that would, in certain circumstances, carry a penalty of 12 months or more imprisonment. Some 25,000 people are entitled to diplomatic immunity in the United Kingdom.

The table below lists those foreign missions whose diplomats allegedly committed serious offences and the type of offence from 2004-2008.

Chapter 5 of our pharmacy White Paper, “Pharmacy in England: Building on strengths—delivering the future” addressed the need to raise awareness of the many and varied services and benefits offered by pharmacies and pharmacists.

In the light of further public research, we have prepared a communications programme to support the delivery of key messages to patients, public, the NHS and other stakeholders. Summary copies of the research have today been placed in the Library of the House, are available to hon. Members from the Vote Office and can be found at:

www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_083815

This programme represents the first step in improving awareness and understanding of the roles of pharmacy in providing services. This is an important but necessary prelude to expanding the range of clinical services we want to see available as outlined in the White Paper.

We have identified key target audiences for this programme with a particular focus on people with long-term conditions and those affected by health inequalities. The next phase will turn this information into a campaign plan. We will work with key pharmacy stakeholders to develop this campaign plan. It will be supported by further research this summer among the pharmacist profession to identify their preparedness and ability to deliver the range and quality of services that patients and public should expect in future.

We consulted on a number of structural and legislative changes affecting community pharmacy last autumn. Our proposals for reforming the current primary legislation are contained in the Health Bill published in January and now before the Commons.

As part of this work, I am today announcing the formation of a regulatory advisory group to help implement these changes, subject to parliamentary approval of our provisions in the Bill.

I have asked Mr Paul Burns to lead and chair this group. Mr Burns is leaving his current post of Chief Officer of the NHS Litigation Authority Appeal Unit at the end of this month. He has an unrivalled wealth of experience of NHS pharmacy legislation. He will be inviting key organisations and stakeholders to join him in formulating the detailed regulations needed to bring our reform proposals to reality.

The terms of reference for this important work are:

“Subject to parliamentary approval of proposals in the Health Bill 2009, to consider and advise on, and to help the Department devise, regulations to implement a duty on NHS primary care trusts to develop and to publish pharmaceutical needs assessments and on subsequent regulations required to use such assessments as the basis for determining the provision of NHS pharmaceutical services”.

We expect the group to complete its programme by spring 2011.

Pending this longer-term reform, I have considered whether or not further changes are needed to the current arrangements for pharmacies prepared to provide NHS services for at least 100 hours per week. We also consulted on this last autumn. I fully recognise the strength of feeling this issue has generated. While reforms now may have potential benefits, I am not persuaded, after full consideration, that there should be further changes to the current arrangements for what will be a relatively short interim period before new permanent arrangements are in place.

In the absence of firm evidence that such pharmacies have had serious adverse impacts on the provision of NHS services locally, and that some of the earlier problems reported to us are settling down, I have concluded that these current arrangements should continue pending our longer-term strategic vision for NHS services to be commissioned against local needs. I consider this is the right path to follow.

Once the new arrangements are in place, applications, including those offering extended hours, will be determined against those assessments. Existing pharmacies currently opening at least 100 hours per week who want to reduce their hours will in due course be able to apply to the PCT for determinations based against those assessments. Otherwise, they will have to maintain their commitment to open for at least 100 hours per week.

This Government remain determined to transform the delivery of pharmaceutical services. By developing community pharmacists’ clinical role and expanding the range of services they offer, we want to ensure that people have a wider choice of, and greater access to modern, effective, frontline health care. I believe we are on course to achieve that.

I am today announcing the outcome of the recent consultation on Civil Court Fees.

The consultation paper published on 10 December 2008 proposed a package of fee increases designed to raise an additional £38 million a year in fee income. The consultation closed on 4 March 2009. Fifty-two responses were received from law professionals, local authorities, the judiciary, individuals and other stakeholder bodies.

After careful consideration of these, my right hon. Friend the Secretary of State for Justice and Lord Chancellor has decided to proceed with the increases, subject to a number of adjustments to reflect particular points raised by respondents.

These changes to the charging regime in the civil courts are to be introduced in order to target taxpayers’ money more effectively while continuing to help those in financial difficulty.

They are being introduced so that fees reflect the true cost of the work done by the courts—currently subsidised by the taxpayer and fee-payers in other types of cases.

This is in the best interests of people on low incomes and of taxpayers. Those who cannot afford to pay a court fee deserve the taxpayer’s help. But court fees need to reflect the true cost of court proceedings. Together with a system that waives or reduces fees for those who cannot afford them, that is the right balance to ensure fair access to justice, fairness to the taxpayer and proper funding of courts’ running costs now and in the future.

There are changes to 30 types of civil court fee, out of the 200-plus fees in operation. Most of the changes relate to applications to enforce judgments that have already been made in debt claims between private parties, and which are recoverable from defaulters who can but will not pay their debts.

For example, the fee for sending a bailiff to collect a debt or seize the debtor’s goods to pay it rises to £100 (currently there are two fees of £35 and £55). The creditor pays the fee but it is then automatically added to the debt.

Fees are waived automatically for people on means-tested benefits, such as income support or on low incomes, for example; £13,000 for a single person with no children and £29,720 for a couple with four children.

People who do not meet either of those criteria can still apply to the court for a full or partial fee waiver based on an assessment of their disposable income, that is, taking account of rent and other key household expenditure.

The scheme granted £23 million in full or part waivers in over 160,000 civil or family court cases in the year to October 2008 alone.

The civil and family courts are principally concerned with resolving private disputes between individuals or companies. These are not criminal cases. The Government do not believe that it is right for the taxpayer at large to continue to provide a general untargeted subsidy for resolution of these disputes in courts.

However, there currently remains a large general subsidy from the taxpayer in some areas of court business, from which all court users in those areas benefit regardless of their ability to pay. For example, magistrates court civil fees currently cover only 55 per cent. of the cost of doing the work. The changes made will mean that fees in this area of business will in future reflect the full cost.

At the moment, fees for enforcement processes do not reflect the full cost of those processes. This means that they are effectively subsidised by the fees paid in cases where enforcement is not required. This is unfair on the creditors and debtors in those cases. It is therefore right, particularly in the current economic climate, that enforcement fees should be set to reflect the true cost.

While we are keen to ensure that those who can but will not pay are pursued effectively through the courts, we are keen to help people with debt problems to avoid court in the first place, especially in the current economic climate.

The legal process provides ample opportunity, both before and during court proceedings, for debtors to come to payment agreements with those to whom they owe money. The Government have introduced a number of initiatives to encourage and facilitate this, and in particular to ensure that debtors receive timely information about the availability of free debt and legal advice. These include:

a new requirement, introduced this April, that any business wanting to take an individual debtor to court must first write to them, including details about how to find free debt advice;

all county courts now display posters giving details of free advice providers;

an advice desk in each of the 154 courts that account for the majority of possession claims;

HM Courts Service’s online possession claim system now includes details for all defendants on where they can find local financial advice;

a Housing Arrears Pre-Action Scheme, currently at pilot stage, involves courts inviting tenants with rent arrears to meet with local advice providers at the court before a claim is issued;

the judiciary issued guidance in November 2008 on ensuring that lenders demonstrate they have taken all the steps expected to resolve mortgage arrears before they take the matter to court.

If taken to court, defendants can complete an admission form and make a proposal for payment; if the claimant refuses to accept the proposal, the court will then step in and make an assessment for repayment based on the debtor’s income and expenditure. If ultimately enforcement action is required, it is right that debtors who can, but will not, pay face the full cost of their decision to let things get that far.

Equally, creditors should be discouraged from taking enforcement measures against vulnerable debtors who genuinely cannot afford to pay. Charging the true full cost for enforcement processes—for example, warrants or charging orders—will encourage creditors to consider more carefully whether they are throwing good money after bad. These fee changes are therefore a further measure to help those in financial difficulties by discouraging inappropriate or premature enforcement process against them.

In the light of the responses to consultation, my right hon. Friend has decided to make a number of changes to the proposals on which we consulted. The details of all these are set out in the two explanatory memoranda accompanying the statutory instruments. There are two main changes:

First, the Lord Chancellor has decided not to align the fee payable for a detailed assessment of costs in a legally aided case with the banded fees payable in private cases. Respondents argued that this was inappropriate because legal aid assessments were simpler and significantly less time-consuming for the courts than other assessments.

Secondly, we have listened to concerns expressed about the proposal to replace the three existing fees payable in general civil proceedings in magistrates courts by a single up-front fee. Responses suggested that a significant proportion of these cases never required a contested hearing, and should not have to pay a fee that reflected the costs incurred by those that did. We are therefore introducing a two-stage structure, with a single application fee equal to the existing three fees, and a second fee payable only once there is a contested hearing.

Three statutory instruments containing the new civil, family and magistrates court fees were laid before Parliament today and will come into effect on 13 July 2009. A report summarising the responses to the consultation paper in more detail is also being published today.

I attended the second Transport Council of the Czech presidency, in Luxembourg on 11 June.

The Council adopted a decision, which the UK supported, authorising the Commission to open negotiations with Georgia on a comprehensive air transport agreement.

Under AOB, the Commission presented its recent proposal for a directive on aviation security charges, which aims to ensure transparency, non-discrimination and consultation of airlines when fixing the level of security charges and to ensure that charges are cost-related. I called for the directive to match the airport charges directive as closely as possible. I also emphasised that there should be no restriction on member states’ ability to impose more stringent measures swiftly when the situation demands it, and that the proposal should take into account the principles of subsidiarity and proportionality.

The Council reached a political agreement on a proposal for a regulation concerning a European rail network for competitive freight. This draft regulation seeks to improve the efficiency and competitiveness of international rail freight in Europe. I joined several other Ministers in expressing the view that the text put to the Council struck the right balance in terms of passenger transport and the designation of rail corridors. Some minor changes were made to address remaining concerns of some member states and the political agreement was reached.

Under AOB, the Commission reported on the current position regarding liberalisation of rail transport in the EU. The UK supported the Commission in its call for all member states to ensure that the provisions on liberalisation set out in the first railway package are properly and comprehensively transposed.

There was a progress report and policy debate on a proposal for a regulation on the rights of passengers in bus and coach transport. The proposal aims to make bus and coach travel more attractive and accessible to all passengers, including disabled people and people with reduced mobility, and to create a level playing field across Europe, both between operators and different modes of transport. In the debate, Ministers were invited to comment on options for the scope of the draft regulation. I stressed that the proposed exemption for urban, suburban and regional transport operated under public service contracts that provide a comparable level of passenger rights was discriminatory in respect of those member states, such as the UK, whose markets have moved to open competition beyond public service contracts, and that such a condition should not be attached to the exemption. On that basis I joined a large number of Ministers in calling for its scope to be limited to long-distance and international journeys.

There was a progress report on a proposed amendment to Regulation (EC) 1321/2004 on the establishment of structures for the management of the European satellite radio-navigation programmes. The amendment, which the UK supports, will bring the regulation into line with recent changes to the finance, governance and procurement procedures for Galileo. Work on it will continue under the Swedish presidency.

There was also a progress report on the proposal for a directive laying down the framework for the deployment of Intelligent Transport Systems in the EU. The Swedish presidency will now take forward negotiations in the working group.

The Council adopted conclusions, which the UK supported, on transport trans-European networks (TEN-T). The conclusions follow a Commission Green Paper, which took stock of TEN-T policy in the light of recent EU enlargement and the need to address the challenges posed by climate change.