The Government plan to introduce legislation to clarify the corporation tax treatment of manufactured payments received by companies in the course of certain sale and repurchase–“repo”–transactions. The amendment will ensure that manufactured payments must be taken into account in calculating profits chargeable to corporation tax, if they are taken into account in computing accounting profits.

The clarification follows a recent challenge to the repo legislation in Chapter 10 of Part 6 of the Corporation Tax Act 2009–the “repo” legislation–that manufactured payments received by companies may not have to be taken into account for tax purposes if the securities to which they relate are not recognised on the companies’ balance sheets.

That challenge could result in companies seeking to deduct, for tax purposes, manufactured payments that have contributed to their accounting profits. By excluding the payments, the companies’ taxable profits could be much lower than their actual profits. The Exchequer consequences could be very significant.

To ensure that there is no possibility of adverse consequences for the Exchequer, the proposed legislation will apply from 1 October 2007–the date the repo legislation was introduced–and will ensure that existing practice is followed and the previous general understanding of the tax position is maintained. The legislation cannot result in any company being charged tax on more than its actual profits but prevents the possibility of relief for artificial losses.

A copy of the draft legislation together with draft explanatory notes and full background material will be published today on HM Revenue and Customs website.

A new protocol to the double taxation agreement with Georgia was signed on 3 February 2010. The text of the protocol has been deposited in the Libraries of both Houses and will be made available on HM Revenue and Customs website. The text will be scheduled to a draft Order in Council and laid before the House of Commons in due course.

The Treasury has published today the UKLA’s annual objectives for 2010. The Financial Services Authority, acting in its role as the competent authority for listing, is referred to as the United Kingdom Listing Authority. Copies of the document have been deposited in the Libraries of the House.

I would like to set out the Government’s plans for product placement on television.

I announced on 9 November 2009 that the Government had decided to consult again on this issue, and we did so between that date and 8 January this year. We had approximately 1,480 responses to this consultation. I am publishing these on my Department’s website today and we will make a summary report of them available shortly.

As a result of this consultation the Government have concluded that we will be able to allow television product placement in a way which will provide meaningful commercial benefits to commercial television companies and programme makers while taking account of the legitimate concerns that have been expressed.

We have therefore decided to legislate to allow UK television companies to include product placement in programmes which they make or commission to appear in their schedules.

Adherence to our current position in which UK TV programme making cannot benefit at all from the income potentially to be generated by product placement would lead to continuing damage to its finances at a time when this crucial part of our creative industries needs all the support we can give it.

It has become the more important to make this move now that every other EU member state, with the sole current exception of Denmark, has either allowed television product placement already or has expressed a firm intention to do so. Not to do so would jeopardise the competitiveness of UK programme makers as against the rest of the EU, and this is something which we cannot afford to do.

UK audiences have been used to product placement in films and, subject to them not being unduly prominent, imported television programmes, especially from the United States, for many years. However, allowing television product placement in domestic UK programming will be an important departure. It is right for us to proceed with caution and in particular to be very careful about the types of product for which it is permitted.

Our legislation will therefore specify some important exceptions, in particular the prohibition of the placement of alcohol and foods and drinks high in fat, salt or sugar (HFSS foods). The Government also fully share the concerns that have been expressed about the potential impact of product placement on the editorial independence of broadcasters and viewers’ trust in what they see on television. We believe that our proposals will safeguard these.

Legislation

The Government will lay regulations under section 2 of the European Communities Act 1972, giving legal effect to the requirements of the EU audiovisual media services directive on TV product placement. However, TV product placement will not become permissible immediately the regulations come into effect.

Their effect will be to allow Ofcom to permit product placement under its code regulating the content of TV programmes, and Ofcom will need to run a public consultation on the detailed changes to this code before these can come into effect.

Only after that has happened, and Ofcom has amended its code, will it be possible for TV companies to show programmes which they have made or commissioned and which include product placement. We envisage that this stage would be reached later this year.

The EU directive requires that member states prohibit product placement but permits them to derogate from that in the four separate genres of “cinematographic works, films and series made for television or on-demand services, sports programmes, and light entertainment programmes”. Our legislation would therefore follow this pattern of imposing an overall ban on product placement except in these four genres.

The legislation will not provide more precise definitions of these terms. Instead, it will allow Ofcom to intervene in the event that broadcasters unacceptably stretch the envelope and include product placement in programming which cannot properly be seen as falling into any of these permitted categories. The existing powers, including the code-making powers, which Ofcom have allow them to do that in an appropriate and effective way.

The responses to our consultation have confirmed that there is concern about the possibility of product placement in current affairs, consumer and religious programming. The Government share these concerns, since some programmes in these categories could be seen as falling into the “series” genre specified by the directive, and we have concluded that it is important that our legislation ensures that product placement is not allowed in them. It will therefore contain specific prohibitions to that effect.

News programmes and bulletins are not covered by the four genres of programme which the EU directive permits to contain product placement. Our legislation will therefore have the effect of preventing product placement in any TV news programming, as the directive requires.

Our legislation will not permit product placement in the BBC’s licence fee funded services. This will continue to be prevented by the BBC’s charter and its agreement with the Government.

Products

The directive prohibits the placement of two specific types of product, that is tobacco products (as well as any other placement by or on behalf of a company whose principal activity is the manufacture or sale of tobacco products) and prescription medicines. The Government have decided to move significantly beyond this. Our legislation will specifically prohibit the placement of products and services in the following categories:

alcoholic drinks;

foods and drinks high in fat, salt or sugar;

gambling;

smoking accessories;

over-the-counter medicines; and

infant formula and follow-on formula.

In reaching this decision the Government have had the issue of potential effects on health and welfare, and especially children’s health and welfare, particularly in mind. The directive contains a ban on product placement in “children’s programmes”, and our legislation will enact that. However, children’s viewing is not confined to children’s programmes.

An alternative to a ban on placement of HFSS foods and alcohol might have been restrictions of some kind on their placement in shows which have a large child audience, or which are shown before the watershed. But this would be complex to administer and would not provide the certainty which the Government seek.

In the circumstances we intend to legislate for a complete bar on placing these products. This is an important aspect of the cautious approach that we need to take.

Other safeguards

Our legislation will also, as required by the directive, specify that product placement should not affect editorial independence, be unduly prominent, or directly encourage purchase. Ofcom will have the task of policing adherence to these requirements.

Ofcom will also be able to set further conditions for ensuring editorial integrity, including in relation to the prominence of products which have been placed in a television programme. The directive requires that audiences are alerted to the presence of product placement in a programme by “signalling” at the beginning and end and after advertising breaks. The legislation will contain this requirement and it will be for Ofcom to determine, after their own consultation, how it is met.

The legislation will not affect requirements in respect of the presence of product placement in imported, non-EU, programmes which are transmitted by UK television broadcasters. This will continue to be permissible within the boundaries set by the directive, provided that it meets Ofcom’s overall requirements about, in particular, the avoidance of undue prominence.

I am delighted to announce, together with the Parliamentary Under-Secretary of State, Department for Transport, my hon. Friend the Member for Gillingham (Paul Clark), that the Ministry of Defence and the Department for Transport have chosen the Soteria Consortium as the preferred bidder for the joint search and rescue helicopter project following a competition under the private finance initiative.

The Government are committed to sustaining the effectiveness and high standards of the United Kingdom search and rescue helicopter service, currently provided by the Ministry of Defence and the Maritime and Coastguard Agency. The new service, which is anticipated to begin with a phased introduction from 2012, will replace the existing Ministry of Defence helicopters at the end of their service life, and the Maritime and Coastguard Agency service contract when it comes up for renewal.

The new service will bring together the Ministry of Defence and Maritime and Coastguard Agency search and rescue helicopter provision into one highly effective and harmonised service under one single contract. The entire fleet of modern helicopters, some 30 per cent. faster than the current Sea Kings, will be able to attend low-level overland night-time incidents, will have forward-looking infrared equipment and be fitted with fully integrated de-icing equipment for much improved performance in severe winter conditions, thus providing the UK with an excellent SAR helicopter service with the ability to save lives well into the future.

The service will continue to be managed jointly by the Ministry of Defence and the Maritime and Coastguard Agency and will retain a proportion of military aircrew alongside civilian aircrew trained to the same high standards.

We will now be working with the Soteria Consortium to finalise the contract, which we expect to award later in 2010.

I announce changes to the internal arrangements for formulating and delivering science and technology (S and T) to the UK armed forces. From 1 April 2010, the science innovation and technology (SIT) top level budget (TLB) within the Ministry of Defence will stand down. The task of setting MOD’s S and T policy and strategy will move to the centre TLB under the direct control of the MOD chief scientific adviser. This will ensure that this key aspect of defence is at the heart of future policy and decision making.

The MOD will continue to look to the broadest possible supplier base for the delivery of the majority of its S and T requirements. Delivery will be supported by an enhanced defence science technology laboratory (DSTL) which will continue to be the MOD’s in-house focus for S and T knowledge, skills and advice. Under the new structure, DSTL will also be responsible for the planning and delivery of the defence research programme. However, DSTL, as now, will only undertake research activity which, by its sensitive, operationally critical or international nature, should only be performed in Government.

These changes will enable a clearer organisational structure for defence S and T and will reduce overheads within defence S and T management to reinvest in research. As a consequence of these changes, around 100 posts will be removed from the current S and T organisational structure.

Implementation of these changes will be undertaken by a project team, reporting to the chief scientific adviser, which will work with the MOD trade unions to ensure delivery of defence S and T, particularly for operations, is unaffected.

I would like to announce the publication today of a public consultation on the implementation of two key pieces of European pesticides legislation.

In September 2009 the European Council of Ministers agreed two new pieces of legislation: the Plant Protection Products Regulation¹ (the Regulation) and the Directive on the Sustainable Use of Pesticides² (The Directive). These are part of the EU’s thematic strategy on pesticides which aims to minimise the risks to health and the environment from the use of pesticides.

This consultation is the first of a two-stage consultation process; its purpose is to seek views on the transposition of the Directive, and two measures relating to the provision of public information on pesticides under the Regulation. We are also seeking views on how the UK should use charging arrangements provided by this legislation and another regulation on maximum residue levels of pesticides in food and feed. The second stage will be to consult on the draft legislation transposing the Directive.

Sustainable Use Directive 2009/128/EC

This directive will need to be transposed and implemented by member states by November 2011. Its overall objective is to establish “... a framework to achieve a sustainable use of pesticides by reducing the risks and impacts of pesticide use on human health and the environment and promoting the use of integrated pest management and of alternative approaches or techniques such as non-chemical alternatives to pesticides”.

Key features of the Directive include: the establishment of national action plans; compulsory testing of application equipment, certification of operators and distributors, and access to certification for advisors; a ban (subject to derogations) on aerial spraying; special measures to protect the aquatic environment, public spaces and conservation areas; minimising the risks to human health and the environment through handling, storage and disposal; and the promotion of low-input regimes, including integrated pest management.

Plant Protection Products Regulation (EC) No 1107/2009

The Regulation is essentially a revision of directive 91/414/EEC that currently governs the approvals regime for plant protection products, but with some new elements. The Regulation’s overall objective is to “... lay down rules for the authorisation of plant protection products in commercial form and for their placing on the market, use and control within the Community [and] ... ensure a high level of protection of both human and animal health and the environment and to improve the functioning of the internal market through the harmonisation of the rules on the placing on the market of plant protection products including active substances, while improving agricultural production.”

The Regulation updates the existing regime and aims to increase the level of protection for people and the environment as well as speeding up decision making and providing clearer rules. The majority of the Regulation is directly binding and is not therefore included in this consultation. There are, however, two discretionary provisions in the Regulation where we have undertaken to consult.

The two provisions are:

Article 31: Authorisations–Notification of Neighbours

Article 67: Recording and Disclosing Information on pesticides

They concern the provision of information in two main categories: advance notification to neighbours who could be exposed to crop-spraying activity; and making available records of plant protection products used, on request by the competent authority.

I believe that there should be a high level of transparency and public access to information about the approval system. The Regulation provides an opportunity to consider the introduction of measures that would provide greater transparency of pesticides use post-approval. Despite the precautionary nature of the approval system and the high level of protection that it affords people, animals and the environment, people may wish to know about pesticides that they see being used. This section of the consultation explores the costs and benefits of options for providing access to this information.

Charging arrangements

The Regulation, the Directive and regulation (EC) No 396/2005 on maximum residue levels (the MRLs regulation) all provide for member states to recover the costs of work carried out under that legislation. The Regulation introduces new requirements to the regulatory regime that will be charged to pesticide authorisation holders. All three pieces of legislation provide for member states to recover certain costs that are not currently recoverable.

The consultation invites views on how charging arrangements in the UK should operate in future, and our top priority will continue to be the protection of human health and the environment.

The chemicals regulation directorate of the Health and Safety Executive is the delivery body for DEFRA’s responsibilities for pesticides and is undertaking this consultation on behalf of DEFRA. The consultation covers England, Scotland, Wales and Northern Ireland. Each administration will consider its own approach to the outcome of the consultation.

I will be holding meetings with key stakeholder groups during the consultation period to listen to their views. A copy of the consultation has been deposited in the libraries of both Houses and is available on DEFRA’s website at:

http://www.defra.gov.uk/corporate/consult/pesticides/index.htm

¹ http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L: 2009:309:0001:0050:EN:PDF

² http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L: 2009:309:0071:0086:EN:PDF

The Government welcome the report of the Select Committee on Reform of the House of Commons. The Government fully support 21 of the recommendations and conclusions in the report and has tabled 16 motions which are required to give effect to these recommendations. Some of the report’s other recommendations do not require motions to be brought before the House at present.

The House will have an opportunity to debate the report on Monday 22 February, on a general motion. The House will then be asked to approve individual motions. This debate provides a real opportunity for a positive decision by the House to ensure that there is immediate progress on many of the measures included in the report.

For any motions which are opposed, we will make time for a further debate and, if necessary, votes. We are considering providing a day to do this no later than the week following the debate, provisionally at the sitting on Thursday 4 March. This will be confirmed during the business statement in the normal way.

The Government support the Committee’s recommendation for the election of Select Committee Chairs by secret ballot of the whole House. We have tabled two motions for new Standing Orders, one to provide for the ballot and one to allow elected Chairs either to resign voluntarily, or to be removed if they have lost the confidence of their Committee.

The Government support the election of Select Committee members by each party, and believe that each party should be free to devise its own arrangements, whether by secret ballot or otherwise. To enable this now to go forward, we have tabled a motion to take note of the Committee’s recommendation. We have also tabled a motion to approve the Committee’s recommendation that Select Committees ought to be appointed within six weeks of the beginning of the new Session following an election.

We have also tabled a motion to approve the recommendations relating to the development of a system of private Members’ motions for debate and decision of the House.

The Government accept the recommendation for the establishment of a Back-Bench business committee, to schedule non-Government business. This was one of the central areas that the Prime Minister invited the Committee to look at. We welcome the Committee’s proposals and believe that more work is required, both to clarify the scope of Back-Bench business and to give further consideration to the Committee’s proposals relating to procedure in the Committee. We have therefore tabled a motion to approve the recommendation in principle, with further consideration in the next Parliament.

We do not believe that the time is right to take forward proposals for a House business committee, particularly in advance of having the benefit of considering how the Back-Bench business committee will work in practice. However, we will listen to the views of Members on this issue during the debate on the 22 February, and will consider further in light of the views expressed.

In addition to these major proposals, we have tabled motions to approve the following recommendations:

amendment of Standing Orders to replace the word chairman with the word chair throughout, and to change the name of the Chairmen’s Panel to Panel of Chairs. This gives effect to the Committee’s recommendation on terminology (recommendation 3);

amendment to Standing Order No.152, which would standardise the size of departmental Select Committees at 11, with the exception of Northern Ireland Affairs, which will retain its membership of 13 (recommendation 9);

examination by the Liaison Committee of the role, resources and tasks of Select Committees (recommendation 11);

a vote on September sittings in next parliament (recommendation 31);

a more open approach to scheduling Public Bill Committee evidence; more opportunities for the public to influence draft legislation (recommendations 38 and 42);

investigation by the House of a system of petitions requiring debate (recommendation 43);

more work on e-petitions (recommendation 44);

trial of debates on petitions (recommendation 47);

provision of more information for petitioners by House authorities (recommendation 48); and

notice of petitions to be given on the Order Paper (recommendation 49).

I have today published the Government Olympic Executive’s Annual Report—“London 2012 Olympic and Paralympic Games Annual Report, February 2010”.

The document fulfils the commitment to report to Parliament biannually, on details of progress across the Olympic programme and the funding for the games.

The London 2012 Olympic and Paralympic games remain on time and within budget. The current anticipated final cost (AFC) is £7.262 billion, compared to £7.241 billion at the end of the last quarter. This represents an increase since the last quarter of 0.3 per cent. The majority of contingency—well over £l billion—remains unreleased and the Olympic Delivery Authority (ODA) continues to make strong progress in preparing the venues and infrastructure in the Olympic park.

With more than two and half years to go, all the milestones for the Olympic build have been hit, the construction programme is nearly 50 per cent. completed, the transformation of East London is well under way, and legacy plans are more advanced than for any previous games.

London 2012 is continuing to provide economic and social benefits. More than 1,000 companies—98 per cent. of which are UK-based—have won £5 billion-worth of direct contracts from the ODA, opening up thousands more business opportunities along the supply chain and helping to support employment around the country. During 2010, the workforce on the Olympic park and the Olympic village will peak at 11,000. Of the 6,277 people currently working on the Olympic park, 20 per cent. are resident in the five host boroughs and 11 per cent. were previously unemployed.

Meanwhile, the free swimming scheme launched last year produced more than 10 million free swims in its first six months, our target of offering five hours sport per week to under-16s will be on offer in every school sports partnership in England by September 2010, more than 10,000 schools around the country have registered with the 2012 Get Set education programme, and a total of 5 million people have now participated in London 2012 Games-related projects.

I have today placed in the Libraries of both Houses copies of a memorandum of understanding between the Government and the Olympic Lottery Distributor (OLD). Under this MOU the Government will ensure that the OLD will receive a proportionate share, as laid down in the grant memorandum between OLD and ODA of any income received in relation to the Olympic village or other assets funded by OLD. This includes receipts from the disposal of the Olympic village which should repay the cashflow funding OLD expect to contribute to the village. This commitment applies whether such income is received by the ODA or another public body, or the rights and associated income are retained by the ODA or transferred to another public body.

I would like to commend this report to the Members of both Houses and thank them for their continued interest and support of the London 2012 Olympics.

Copies of the annual report 2010 are available at: www.culture.gov.uk and will be deposited in the Libraries of both Houses.

The Government’s aim is to build a fair and family-friendly labour market where everyone has the opportunity to develop their skills and experience.

The action we have taken to improve the position of women in the workplace has provided sound foundations. Women now make up almost 46 per cent. of the economically active population and the difference in average hourly pay between men and women has narrowed significantly from 27.5 per cent. in 1997 to 22 per cent. in 2009. However, as the national equality panel reported last month, our labour market is still failing to make the best use of women’s talents. The norm remains full-time work for an adult lifetime, which does not reflect the life experiences of women who still do the majority of caring responsibilities, nor, increasingly, of men who wish to do more.

The document we are publishing today, “Working Towards Equality: A Framework for Action”, explains why a fair and family-friendly labour market is necessary to boost economic growth, support families and reduce child poverty. It responds to both the substance and specific recommendations of the 2009 women and work commission report, and sets out an action plan to ensure our labour market offers women genuine choices, equal opportunities and career structures which enable them to progress and to fulfil their potential. This includes commitments to challenge gender stereotyping in education, to investigate the barriers to sustainability in the child care sector and to stimulate the supply of quality part-time work.

We are placing copies of the document in the Libraries of both Houses. Copies will also be available on the Government Equalities Office website at: www.equalities.gov.uk.