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Written Ministerial Statements
Monday 20 October 2003
HOME DEPARTMENT
Extradition Bill (Draft Code of Practice)
The Parliamentary Under-Secretary of State for the Home Department (Caroline Flint): I am today drawing the House's attention to the publication of the responses received by the Home Office to its consultation on a draft extradition code of practice.
The draft code of practice, which sets out the application and operation of police powers under Part 4 of the Extradition Bill, was published on 9 June 2003 and comments on the draft were invited by 8 September 2003.
Twenty nine responses were received in total. Twenty six authors have given permission for their responses to be made public and these are now available in the Libraries of both Houses and can also be viewed on the Home Office website at www.homeoffice.gov.uk/crimpol/oic/extradition/bill/documents.html.
The Government will be publishing their response to the representations in due course.
Criminal Records Bureau (Basic Disclosures)
The Parliamentary Under-Secretary of State for the Home Department (Paul Goggins): On 9 April the Home Office issued a consultation paper seeking views on the Independent Review Team's recommendation, Official Report 27 February 2003, col. 33–36WS, that applications for basic disclosures should be routed through registered bodies. The consultation period closed on 30 June; 352 responses were received. I have today placed in the Library an analysis of those responses. We will consider carefully the views expressed in response to the consultation before deciding how best to proceed with the introduction of the basics service.
CABINET OFFICE
Efficiency Review
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr. Douglas Alexander): My right hon. Friend the Chancellor for the Exchequer announced an efficiency review of the public sector in his spring Budget speech. (House of Commons, Official Report, 9 April 2003, cols. 271–288). The review is being conducted by a joint team from the Cabinet Office and Her Majesty's Treasury.
I have today placed in the Libraries of the House copies of the consultation document "Efficiency Review—Releasing Resources to the Frontline". The consultation seeks the views of a wide range of public
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sector employees and other interested parties to inform the review, with initial views requested by the 21 November 2003. A more detailed consultation will be undertaken when specific proposals have been developed.
WORK AND PENSIONS
Guaranteed Minimum Pension
The Secretary of State for Work and Pensions (Mr. Andrew Smith): In our document "Action on Occupational Pensions" (Cm 5835), published on 11 June, the Government stated their intention to make it easier for employers to provide pensions by simplifying key areas of legislation while at the same time offering appropriate protection to scheme members. In particular, we proposed to explore options for a workable and affordable solution to the problems created by the complexity of the Guaranteed Minimum Pension (GMP) element of contracted-out schemes. I am now able to announce the results of this work.
We intend to introduce measures that will permit contracted-out defined benefit schemes to convert GMPs into scheme benefits. Where a scheme converts its liabilities in this way, it will no longer be required to offer a scale of benefits incorporating the complex GMP rules for the period 1978 to 1997 and will be free to design a benefit structure that best reflects the needs of its members. If schemes take up this option they will have to convert on the basis of actuarial equivalence: the trustees will be required to offer scheme benefits of equal accrued value in exchange for the benefits given up, including the GMP.
As a result of this and other measures announced previously, pension schemes will be able to achieve significant simplification in their administration. On top of the other proposals for simplifying contracting out in "Action on Occupational Pensions", we estimate that these measures should result in administrative savings for pension schemes of up to £16 million a year.
Because of the process of actuarial conversion, any resulting changes will not affect the value of individual accrued rights. Members' interests will also be protected by other measures already outlined in our Green Paper "Working and Saving for Retirement" and "Action on Occupational Pensions".
For example, the new Pensions Regulator will be able to issue a code of practice aimed at protecting the interests of members of schemes wishing to take advantage of the GMP conversion measure. Also, the Pensions Advisory Service and the Pensions Ombudsman will be able to consider any complaints that members have as a result of any change.
Nothing in these proposals forces schemes to change and we appreciate that many of them may not wish to do so. We are simply offering schemes the option to design their benefits more flexibly across the piece in this way, while protecting the value of members' accrued rights. This means we are striking the right balance between making it easier (and more cost effective) for employers to run schemes and safeguarding members' rights.
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CONSTITUTIONAL AFFAIRS
Fine Enforcement
The Parliamentary Under-Secretary of State for Constitutional Affairs (Mr. Christopher Leslie): Securing a sustained improvement in fine enforcement and increasing confidence in the Criminal Justice System are key Government priorities. That is why back in June this year we announced a seven-point plan to secure the level of enforcement improvement required.
The Department for Constitutional Affairs is taking forward a wide-ranging programme of change to deliver the seven-point plan. As part of this we have undertaken a review of the existing fine enforcement payment rate target to test whether it provides the right focus for those involved in enforcement activity and are now making changes.
As well as criminal fines properly due, the existing target includes, among other things, civil payments and judicially remitted fines. I have now reviewed it so that the target is to collect a set proportion of fines which are properly due. This will provide a clearer focus for Magistrates' Courts Committees and enable relative performance to be more easily assessed.
The effect of the revised form of measurement is to change the existing target of 68 per cent. to a value of 75 per cent. Performance data under the "new" measure will first be available from January 2004 and information under both the "old" and the new measure will be available for at least the remainder of 2003–04. Performance in areas no longer captured by the payment rate target will be monitored and managed separately.
Implementation of the overall fine enforcement programme will in time enable targets to be set at higher levels.
TREASURY
Stamp Duty Land Tax
The Financial Secretary to the Treasury (Ruth Kelly): I am pleased to announce the next steps in the process of modernising stamp duty on land transactions. These include:
- A significant change to the proposed charge on the rental element when a new lease is granted ("lease duty"), reducing tax bills by £1500 per lease on commercial transactions (£600 per lease on residential transactions), which will be of significant benefit to smaller businesses
A new relief for businesses raising finance through the sale and leaseback of their land and buildings and relief for "chain-breaking" and similar companies which help to ensure an active housing market
Further consultation on how the new regime might apply to partnerships.
These proposals along with those announced in Budget 2003, will help to achieve the Government's aim of a modern, efficient, system of taxing land transactions which promotes fairness between taxpayers, reduces
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distortions and prevents avoidance. I am also pleased that our proposals, which follow extensive and valuable consultation with interested parties, will be of particular help to small and medium-sized enterprises and business start-ups.
The Inland Revenue is today publishing a news release, supplemented by a technical note, giving details of the proposed changes. I will be laying regulations to give effect to the changes before the House shortly. The Inland Revenue is also publishing for consultation draft clauses on the Stamp Duty Land tax treatment of partnership transactions.
The Government's proposals on lease duty follow extensive consultation over the last 18 months. I am extremely grateful to all who participated in the consultation process. A good deal of valuable information and data was provided by participants and some important work was done in partnership. Throughout the consultation process the Government has been particularly keen to have regard to the effect of any new structure on small and medium-sized enterprises and business start-ups.
Having considered all the contributions made I now propose to modify the structure contained in the Finance Act 2003, by way of regulations under section 112 of that Act, as follows:
- The Finance Act charges Stamp Duty Land Tax on the "Net Present Value" ("NPV") of rent payable under a lease. NPV sums the discounted values of the rents. This discount recognises that future rent payments will be of less value. The Government believe that NPV represents a fair way of assessing the amount on which Stamp Duty Land Tax should be charged and proposes to retain it.
The Finance Act sets a threshold of £150,000 for commercial leases, and £60,000 for residential leases. If the NPV does not exceed the threshold no Stamp Duty Land Tax is charged on the rental element. These thresholds mean that 60 per cent. of commercial leases and 90 per cent. of residential leases will pay no Stamp Duty Land Tax on the rental element. The Government believe these thresholds are fair and intend to retain them
The Finance Act provides that once the threshold is exceeded Stamp Duty Land Tax is charged at 1 per cent. of the full amount of the NPV. The Government propose to modify this so that Stamp Duty Land Tax is charged at 1 per cent. of the excess over the threshold. This means that on any commercial lease chargeable to Stamp Duty Land Tax the tax payable will be £1,500 less than under the Finance Act provisions.
- A lease for 18 years at an annual rent of £15,000 will have an NPV of £197,845. Under the Finance Act provisions Stamp Duty Land Tax of £1,978 would be payable. Under the Government's proposals only £478 will be payable.
I also propose (by way of regulations made under section 109 of the Finance Act 2003) to widen the reliefs in sections 58 and 59 of that Act to include companies who help to ensure an active housing market, by "chain-breaking" (buying property when a prospective sale falls through) and by buying houses from the personal representatives of people who have died. I also propose
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to give relief for sale and lease-back transactions (where a company raises finance by selling a property for a capital sum and leasing it back at an annual rent).
In his Budget statement my right hon. Friend the Chancellor of the Exchequer announced that certain transactions involving partnerships would remain within the existing stamp duty regime until at least 2004 to give time for further consultation. These are: transactions between a partnership and an incoming partner, changes in partnership interests and transactions between a partnership and a departing partner.
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The Inland Revenue is today publishing draft clauses which bring these transactions, so far as they involve dealings in land, within the scope of Stamp Duty Land Tax. As with the Government's other proposals the aim is to give fairness between taxpayers, reduce distortions and prevent avoidance.
My officials will be meeting interested parties to discuss these proposals but would welcome comments from others. The Government's intention is that the clauses will be included in the Finance Bill 2004 and will take effect from the date of royal assent to that Bill 2004.