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Written Ministerial Statements

Wednesday 25 July 2007


Economic Affairs

The Chancellor of the Exchequer (Mr. Alistair Darling): I propose to present the pre-Budget report and the conclusions of the Comprehensive Spending Review in a single statement to the House in October.


The Chancellor of the Exchequer (Mr. Alistair Darling): The Economic and Financial Affairs Council was held on 10 July in Brussels. The items on the agenda were as follows:

Presidency Work Programme

The Portuguese presidency presented its work programme for the next six months. This includes: economic policy, in particular the enlargement of the euro area, the implementation of the Stability and Growth Pact, improving the quality of public finances, the Lisbon strategy for jobs and growth, and the mid-term review of the European growth initiative; the EU’s better regulation initiative; completion of the EU’s internal market; and the EU’s budget for 2008.

Implementation of the Stability and Growth Pact

Ministers agreed Council Opinions on the Stability Programme for Austria and the Convergence Programme for the Czech Republic. Euro area member states are required every year to present stability programmes, and non-euro area member states convergence programmes under the terms of the Stability and Growth Pact. Ministers agreed a decision that the Czech Republic has not complied with the terms of its Excessive Deficit Procedure, and examined a communication from the Commission which concludes that Hungary is taking sufficient action in response to its Excessive Deficit Procedure.

The Euro

Ministers adopted decisions allowing Cyprus and Malta to join the euro on 1 January 2008, and regulations setting permanent conversion rates for the Cypriot pound and the Maltese lira against the euro.

Public Finances in 2007

Ministers held an exchange of views on the Commission report, which contained proposals aimed at strengthening the functioning of the preventive arm of the Stability and Growth Pact. Ministers expect to return to the topic at ECOFIN in October.

International Accounting Standards Board: Governance and Financing

Ministers agreed conclusions emphasising the importance of International Financial Reporting Standards for EU financial markets and the need for strong governance and stable funding of the International Accounting Standards Board.

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Global Navigation Satellite System (GALILEO)

Ministers held an exchange of views on the possible additional public financing of Galileo, the EU’s global satellite navigation system. The UK continued to push for full clarity on costs and a solution that avoids any re-opening or revision of the financial perspective.

IMF Managing Director

Following the resignation of the IMF director, Rodrigo de Rato, ECOFIN also discussed the appointment of a successor. Dominique Strauss-Kahn was suggested as a European candidate. While the Chancellor stressed that he would be a strong and credible candidate, he said it was important for the IMF to run an open and competitive process for the managing director post.

Managing Public Money

The Chief Secretary to the Treasury (Andy Burnham): Today the Treasury publishes “Managing Public Money”. Formally it will replace “Government Accounting” from October. It is part of a suite of documents of which the Code of Good Practice on Corporate Governance in Central Government Departments is the apex. It can be found on the Treasury website. Copies are available in the Library of the House.

The new document makes no significant change to the high standards of stewardship expected of those responsible for handling public resources. Rather, it brings out clearly and concisely how important it is that public money is well managed and achieves good value. At the same time it emphasises that Parliament expects these standards to be honoured and will hold public servants accountable against them.

Tax Credit Administration

The Financial Secretary to the Treasury (Jane Kennedy): HM Revenue and Customs (HMRC) has identified an administrative problem with a number of older tax credit awards. It has come to my attention that officials did not follow the correct procedure when reopening some of these cases. This now needs to be remedied.

HMRC have estimated that they need to review around 160,000 awards in total from 2003-04 and 2004-05, out of the 6 million households that are benefiting from tax credits. These are cases where information that reduced the households’ entitlement came to light after the award for that year had been finalised and closed.

HMRC will shortly be writing to these households to inform them that their case is being reviewed in order to correct this administrative error. HMRC will contact them again once they have completed their review.

Those affected will not need to take any further action themselves, and no household who has their case reviewed as a result of this issue will have their tax credit award reduced.

Although the revised award was an accurate reflection of the households’ new circumstances, the process by which HMRC took this into account was not correct. HMRC should have notified recipients in writing at the time that it was examining the award after finalisation, but did not do so in certain cases.

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HMRC is now putting in place correct procedures for all subsequent cases, to make sure this problem does not arise again. As part of this, HMRC will also write to around 90,000 households about their 2005-06 awards to make sure they are finalised correctly.

Value Added Tax (Betting, Gaming and Lotteries) Order 2007

The Exchequer Secretary to the Treasury (Angela Eagle): The above order subject to the affirmative procedure largely maintains the status quo on the taxation of participation fees for gaming and extends the scope of taxation for charges made for games played against the operator and also to gaming provided illegally. The measure also includes some minor changes resulting from amendments to social law. The provisions of the order are explained in the explanatory memorandum, which is available in the Vote Office and the Library of the House.

The order is being laid today and will come into force on 1 September 2007 because:

Time will be made available to debate the order as soon as possible after the House returns from the summer recess.

Business, Enterprise and Regulatory Reform

Regulatory Reform (Next Steps)

The Secretary of State for Business, Enterprise and Regulatory Reform (Mr. John Hutton): The Government are today publishing the document “Next Steps on Regulatory Reform”, which sets out a range of initiatives that will help realise the benefits of better regulation for businesses, third sector organisations and the public sector front line.

I have placed copies in the Libraries of the House.

Real progress has been made on regulatory reform in the UK over the past 10 years. The UK is taking forward an ambitious and wide-ranging regulatory reform agenda. Delivering on this is central to our overall economic aims - meeting the challenges of globalisation, improving productivity and promoting innovation - in a modern and fair society.

Major improvements include:

The new Department for Business, Enterprise and Regulatory Reform (BERR) leads the Government's drive on better regulation. The Next Steps on Regulatory Reform document sets out how the new Department
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will continue to improve its own regulatory performance, plus the steps the Government as a whole will take to drive improvement.

Action will be taken forward in three principal areas:

A. Targeting simplifications to improve the effectiveness of regulation

(i) BERR's own Simplification Plan

Rethinking Consumer Protection Legislation

BERR is launching a review of the consumer protection regime in the UK. This will:

Working to make employment law more straightforward for all parties

BERR will be working to implement the Gibbons Review of Employment Tribunals, and has an ambitious programme to improve the use of guidance and tools to give business more confidence in dealing with employment issues.

(ii) Relieving the burden of health and safety risk assessment in small and lower risk businesses

The Health and Safety Executive (HSE) is launching a widely applicable set of concise, practical and sector-specific example risk assessments for a convenience store/newsagent, an estate agent and a general office cleaning contractor. These bring together in one document a sensible response to all their health and safety risk assessment requirements. Example assessments for dry cleaning, hairdressing, cold storage warehousing and catering are planned for launch in November.

(iii) Health and Safety—improving outcomes, easing the burden on low risk businesses

The Government, with support from HSE, are launching a review to consider, from the perspective of low-risk businesses (especially small firms), what more can be done to deliver strong health and safety outcomes in a modern working environment while minimising the burden on business and maintaining the confidence of society. The review is to report by Spring 2008.

B. Helping people understand regulation

(i) High quality and timely guidance

The Government are announcing that they will improve their performance in producing good quality and timely guidance for complying with regulation which has an impact on business. This would be achieved through a package of changes including developing a code of practice for guidance and working to give greater prominence to guidance in the regulatory process.

(ii) Better communication of change

For the next Common Commencement Date in October 2007 the Government will pilot a new approach to providing businesses with information on regulatory change. They will produce a summary document highlighting the most important changes and ensure that this is seen by as many businesses as possible.

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C. Holding Government and regulators to account

(i) Working with Parliament

The Government would like to work together with key members of both Houses on how Parliament can play an even fuller part in scrutinising their work to deliver regulatory reform.

(ii) Creating a statutory duty on regulators to address burdens

The Government will work with regulators to frame a power which would allow such a duty to be introduced through secondary legislation at a future date. They would require those regulators whose focus is primarily on business to keep burdens under review and take action to minimise unnecessary burdens.

(iii) Applying the principles of the Regulators' Compliance Code to public service inspectorates

For regulators whose primary work is with business, the Government are developing a Compliance Code which puts risk based enforcement on a statutory footing. The Government will review the case for applying the principles of the code to those regulators whose principal responsibility lies in the public sector.

Small Firms Loan Guarantee

The Minister for Competitiveness (Mr. Stephen Timms): I am today laying a copy of the first Annual Report to Parliament on the operation of the Small Firms Loan Guarantee (SFLG) scheme. SFLG is the Government's principal intervention in the debt market designed to help Small and Medium-sized Enterprises with viable business propositions but insufficient collateral to secure a loan for debt finance.

An independent review, the Graham Review, recommended changes to modernise and streamline SFLG in 2004, changes which were implemented from December 2005. The new form of the scheme focuses on start-ups and young businesses under five years old, simplifies the eligibility criteria, and enables participating lenders to take all operational decisions regarding individual loans, providing their normal commercial lending criteria but for the lack of security are met. BERR has been engaging strategically with lenders to gain a better understanding of how the scheme is being used. Whilst it is too early to assess the full impact of the new form of the scheme on the debt finance gap, the Annual Report highlights initial indications of progress against each of the benchmarks set by the Graham Review. Going forward the focus now will be to continue to build strategic relationships with existing lenders to ensure the full potential of SFLG is exploited, and to extend the lender base to further broaden availability of the scheme. Copies of the report have been placed in the Libraries of the House.

UK Civil Plutonium and Uranium Figures

The Minister for Energy (Malcolm Wicks): The Department will be placing the figures for the United Kingdom's stocks of civil plutonium and uranium as at 31 December 2006 in the Libraries of both Houses. In accordance with our commitment under the “Guidelines for the Management of Plutonium”, we will also send the figures to the Director General of the International
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Atomic Energy Agency (IAEA), who will circulate them to Member States. The figures will be available on the Health and Safety Executive (HSE) and the IAEA websites.

The figures show that stocks of unirradiated plutonium in the UK totalled 106.9 tonnes at the end of 2006. Changes from the corresponding figures for 2005 are a consequence of continuing reprocessing operations (e.g. as reflected in the increased quantity of unirradiated separated plutonium in product stores at reprocessing plants. High enriched uranium (HEU) stocks decreased mainly as a result of down-blending material recovered during decommissioning of the UK's gas diffusion enrichment plant. The increase in the civil depleted, natural and low enriched uranium figures reflects the increased stocks at the UK enrichment plant at Capenhurst.

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