Written Ministerial Statements
Tuesday 8 May 2007
Treasury
ECOFIN
The Chancellor of the Exchequer (Mr. Gordon Brown): The Economic and Financial Affairs Council will be held on 8 May in Brussels. The items on the agenda are as follows:
Preliminary draft of the 2008 general budget
The Commission will give a presentation on its Preliminary Draft 2008 EC Budget, marking the formal beginning of a process that will see the 2008 Budget debated and amended by the Council and European Parliament during the course of the year until the Budget is finally adopted in December.
Ministers will be invited to adopt conclusions on Hedge Funds, as part of a consideration of their role in financial markets. The UK shares the consensus view of the positive role that hedge funds play in fostering the efficiency of the financial system.
White Paper on Asset Management
Ministers will be invited to adopt conclusions on the Commission's White Paper on enhancing the Single Market Framework for Investment Funds. The UK supports efforts to create an efficient and competitive single market in investment funds which will deliver value for investors and help the EU in meeting the challenges of an ageing population.
Ministers will be invited to adopt conclusions on a Financial Services Committee Report on the implications of ageing populations for financial markets. The UK supports efforts to boost the efficiency of pan-European markets for long-term savings products and work to examine the policy issues related to ageing and financial markets.
Inter-institutional Monitoring Group (IIMG): Second Interim Report Monitoring the Lamfalussy Process
Ministers will hear reports updating them on the state of play of the Inter-institutional Monitoring Group's work from the IIMG and the Commission. The UK supports the work of the IIMG to improve practical arrangements for the supervision of the European Financial services industry.
Informal ECOFIN
The Chancellor of the Exchequer (Mr. Gordon Brown): The Informal Economic and Financial Affairs Council (ECOFIN) took place in Berlin on 20 and 21 April 2007. The Informal Council discussed various aspects of sustainable public finances, efforts to combat VAT fraud and issues relating to financial markets.
The main discussion focused on approaches to optimising public finances to enable member states to meet the challenges posed by globalisation and demographic change, including building Social Bridges and human capital to improve employability and strengthen social inclusion, increasing the efficiency and effectiveness of public expenditure, and securing stable public revenues. Ministers shared national experiences and ideas for addressing these issues.
The Informal Council also discussed measures for combating VAT fraud, the Spring Meetings of the Bretton Woods Institutions, Hedge Funds and the current state of financial markets. Following up on the previous Informal Council meeting in Helsinki, the Informal Council was informed about ongoing work on precautionary arrangements to secure the stability of Financial Markets.
The UK was represented by the Economic Secretary to the Treasury.
Northern Ireland
The Chancellor of the Exchequer (Mr. Gordon Brown): Following the St Andrews Agreement in October 2006 and the historic agreement by the political parties on 26 March 2007 to the return of devolution, I am today setting out how the Government are meeting their commitment under the St Andrews Agreement to provide the incoming Northern Ireland Executive with a package to create long term economic and financial stability for Northern Ireland.
The return of devolution today provides a unique opportunity to create long-term peace and prosperity for all the people of Northern Ireland. The Government remain committed to ensuring the incoming Executive has the capacity to provide quality public services, to continue the process of necessary reform, to plan for the future, to make the long-term capital investments to underpin the economic transformation of Northern Ireland, as well as bringing long-term benefits for the island as a whole. In advance of restoration and to this end, the Secretary of State for Northern Ireland and I have had meetings with the First Minister and Deputy First Minister designate. I look forward to continued dialogue with the restored Executive.
In advance of the final outcome of the Comprehensive Spending Review, I am today however confirming the following guaranteed package to boost investment, competitiveness and employment.
I am today confirming a funding package of at least £51.5 billion comprising:
£35 billion based on existing spending for 2007-08 together with uprating by at least inflation over the next three years;
an £18 billion long term investment strategy from 2005 to 2017;
retention of value for money savings to be made over the period 2008-09 to 2010-11 expected to be at least £0.8 billion;
retention of asset sales to fund capital investment expected to be over £1 billion, with £500 million over the next four years;
additional spending over the next two years under the end-year flexibility scheme of £140 million resource DEL
(£75 million in 2007-08 and £65 million in 2008-09) and £180 million capital DEL (£100 million in 2007-08 and £80 million in 2008-09);
additional spending financed by EU receipts expected to be in excess of £0.5 billion;
the provision of £400 million, additional to the £35 billion above, including an upfront £100 million in 2007-08 from the Treasury's Reserve to enable an incoming administration to delay the introduction of water charges without affecting existing spending plans in Northern Ireland and introduce an innovation fund; and
confirmation of £200 million borrowing under the Reinvestment and Reform initiative from 2007-08. Borrowing under the Reinvestment and Reform Initiative will no longer be linked with the requirement to close the gap with GB council tax rates. This is in addition to the cap on rates and enhanced relief for pensioners already announced by the Secretary of State.
In addition there will be a major package of integrated investment in infrastructure, including for a substantial new roads programme. In addition to the £18 billion allocated to the revised Investment Strategy for Northern Ireland, the Irish Government have made £400 million available for the investment in infrastructure projects.
Within this package, I recognise the need to provide resource this financial year and therefore there will be £700 million available in 2007-08 above existing Departmental Expenditure Limit plans.
Following representations from all the political parties on differential tax rates, I announced on 22 March a review led by Sir David Varney to report on how current and future tax policy, and including the tax changes announced in the Budget, can support sustainable growth of businesses and long-term investment in Northern Ireland. The review will consider this in the context of the tax environment across the EU, including the Republic of Ireland. Sir David will report in the autumn.
A new Northern Ireland corporate tax office is being established to promote the competitive tax position that Northern Ireland enjoys, working closely with Invest Northern Ireland to promote indigenous and inward investment.
Provision is being made available to facilitate the new Executive to create an innovation fund focusing particularly on levering in private sector investment and promoting collaborative research. Upfront funding from within £100 million in 2007-08 is being made available along with funding of £36 million from the Irish Government targeted specifically on collaborative research and development.
I also agreed on 22 March to further discussions between an incoming Executive and officials of Her Majesty's Revenue and Customs (HMRC) with regard to excise duties and measures to tackle fraud in Northern Ireland.
To enhance Northern Ireland's competitive positioning in the global economy and, in particular, its ability to attract foreign direct investment, we will work with the Executive to organise a major conference in Northern Ireland for prospective investors in the autumn with a follow up meeting in America next spring.
Increasing employment opportunities
In 2006 the unemployment rate in Northern Ireland was 4.2 per cent. compared to 8.9 per cent. in 1997. To build further on this progress, I also announced a new local employment partnership that will help create 5,000 jobs for the unemployed in Northern Ireland. It will be established between five leading employers in the retail sector—Asda, B&Q, Marks and Spencer, Sainsburys and Tesco—along with the British Retail Consortium and the Employment Service in Northern Ireland to support long-term benefit claimants into work, building on the successful approaches these retailers have already established.
Work will also take place in discussion with the construction industry on the development of a similar partnership, and extending this to the hospitality and hotel sector.
Looking ahead and building on this unique package, the Government look forward to continuing engagement between the Treasury and the incoming administration, working in partnership to create a dynamic Northern Ireland economy and world class public services for all in Northern Ireland and, together with the Irish Government, to create a strong all of Ireland economy.
Communities and Local Government
Code of Conduct (Local Councillors)
The Minister for Local Government (Mr. Phil Woolas): In April, the Government issued the Local Authorities (Model Code of Conduct) Order 2007, promulgating a simpler, clearer and more proportionate model code of conduct for local councillors. The Order came into effect on 3 May.
The revised code delivers the promise we gave in the Local Government White Paper, “Strong and Prosperous Communities”, last October, that the Government would provide a simpler, clearer and more proportionate code of conduct for local authority members and amend the rules on personal and prejudicial interest to support members' advocacy role.
These changes to the code remove the barriers, which have prevented councillors speaking up for their constituents. In particular, for example, members of a council's planning or licensing committee will have more opportunities to represent their constituents on planning and licensing issues that affect their wards. The changes also ensure that the remit of the code in respect of conduct in a member's private capacity is restricted to conduct for which a criminal conviction has been received.
We have also, in particular, had regard to the over 900 responses we received to our recent consultation on the proposed changes to the code and amended the text of the code to improve its accessibility and user friendliness. We believe that overall the new revised code will help to maintain public confidence and trust in local government, which is necessary if councils are to fulfil their leadership role.
Copies of the order have been placed in the Libraries of both Houses and circulated to local authorities and other stakeholders.
Defence
RAF Communications (Hub Delay)
The Minister of State, Ministry of Defence (Mr. Adam Ingram): I announced on 17 January 2006, Official Report, column 25WS, that to enable the more effective use of Defence resources, an RAF Communications Hub would be formed at RAF Leeming. I also announced that communications personnel would move from RAF Sealand to RAF Leeming by April 2006 and that communications personnel from RAF Brize Norton and RAF High Wycombe would move to RAF Leeming in 2007.
The initial move has been successfully completed on time in April 2006 and around 90 communications personnel from RAF High Wycombe are on schedule to move this year. However, there will now be a phased relocation of communications personnel from RAF Brize Norton to RAF Leeming beginning in summer 2008 as technical and domestic accommodation becomes available. The delay in provision of new-build accommodation has been occasioned by the routine adjustment of funds to ensure that our resources are allocated in line with Defence priorities.
Service Life Insurance Scheme
The Minister of State, Ministry of Defence (Mr. Adam Ingram): Today, I am announcing that the MOD, in association with Sterling Life, has launched a new voluntary life insurance scheme, Service Life Insurance (SLI). In the run-up to Operation TELIC, life insurance companies reacted to what they saw as the increased risk to Service personnel by closing schemes to new applicants, increasing premiums or excluding benefits for chemical, biological, radiological or nuclear weapons. The Department has been actively pursuing an enduring solution.
MOD selected Sterling Life through an EU-wide competitive tender process to provide appropriate life insurance for which applications will be accepted from today. SLI guarantees worldwide war and terrorism life cover to all Service personnel, by means of a unique partnering agreement between MOD and Sterling Life. The SLI Scheme is designed to be self-funding, and the Department has accepted a potential liability which received Parliamentary approval in May 2005, for excessive operational deaths.
The SLI Scheme complements the excellent death- in-service arrangements already available to Service personnel and offers an attractive addition for long-term life insurance requirements for members of our Armed Forces.
SLI premiums are extremely competitive, particularly for those individuals whose military trade usually results in an additional premium being applied.
SLI has no extra premiums for any military trade, even such as being a member of a bomb disposal or special forces unit. It will accept all Regulars and Reservists— even if they are on operations or under orders to deploy. Applicants will be accepted without any medical underwriting and SLI will cover all service-recognised hazardous sports. Premium rates are guaranteed not to increase for the life of the policy. These are significant new SLI benefits from Sterling Life.
I am delighted to announce the launch today of this Service Life Insurance Scheme which provides a ground-breaking new choice for all Regulars and Reservists. I am confident that through our agreement with Sterling Life we have today provided a world-class solution to a worldwide problem. I will arrange for copies of the SLI brochure, which gives further details of the Scheme, to be placed in the Library of the House.
Home Department
Young Adult Offenders
The Parliamentary Under-Secretary of State for the Home Department (Mr. Gerry Sutcliffe): In November 2005, the then Under-Secretary of State, my hon. Friend the Member for Slough (Fiona Mactaggart), announced the National Offender Management Service Young Adult Offenders (YAOs) Project, as part of the new approach to offender management, to consider the implications of abolishing DYOI and the regime that would need to be in place to ensure sufficient safeguards for this age group both in custody and the community.
The project has reviewed the needs of YAOs, the appropriate age range, the use of the prison estate, the regimes and interventions required in prison and in the community and considered the implications of abolishing Detention in a Young Offender Institution (DYOI).
There has been full consultation with internal and external stakeholders. Significant representatives of voluntary and community groups have been consulted in particular Barrow Cadbury, Prison Reform Trust, NACRO and Rainer. Consideration has been given to HM Inspectorate's recent thematic report on young adult offenders. Future implementation will include consideration of Baroness Corston's recommendations regarding women offenders in the Criminal Justice System.
We have concluded that taking account of the constraints posed by current prison capacity and the need to undertake further work to test out an approach to Young Adult Offenders the time is not yet right to abolish Detention in a Young Offender Institution (DYOI).
However, we are firmly committed to further work to ensure we plan for appropriate provision to address the specific needs of 18 to 24-year olds. We will progress a suite of proposals to enable us to test the best approaches both in custody and in the community by:
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