Written Ministerial Statements
Tuesday 18 March 2008
Treasury
Northern Rock
The Chancellor of the Exchequer (Mr. Alistair Darling): As I have previously announced, continuing to support Northern Rock will require the approval of the European Commission under state aid rules. On 5 December 2007, the European Commission announced that it had authorised, under state aid rules, the Government’s package of measures to support Northern Rock. Also in line with the rules, the Government were obliged to notify by 17 March 2008 a restructuring plan for Northern Rock.
Accordingly, the Government yesterday formally notified the European Commission of their proposals to continue to provide state aid to Northern Rock to support a restructuring of the company during the period of temporary public ownership.
The Board of Northern Rock is today setting out in general the future direction of the business during the period of temporary public ownership. The company will submit a final business plan to HM Treasury for approval by the end of March. Thereafter, I will report to the House further.
I have placed in the Library of the House a copy of the statement issued today by Northern Rock. This sets out the basis for the removal of Government support through the creation of a smaller, more focused, financially viable mortgage and savings bank, which will be returned to the private sector.
On this basis, the Government’s state aid notification sets out that Northern Rock's future will be based around four strategic priorities:
Contracting to a smaller, sustainable business through a reduction of around half in the asset base by 2011, whilst maintaining a modest level of new loan origination.
Progressive repayment of the Bank of England loan and release of the Government guarantees over the next three to four years, while increasing the level of retail deposits modestly to form a larger share of total funding.
Restructuring the organisation and its operations so that these are aligned to the business objectives. The company’s initial assessment is that this will involve staffing levels falling by around a third by 2011, with the majority of the reduction likely to occur in the first year. The final figure will depend on the business plan ultimately adopted, and the evolution of the business in the light of market and economic developments.
Strengthening risk management in key business areas.
Northern Rock has said that it is committed to doing all it can to communicate openly with staff and provide the best possible support through the changes ahead, including working closely with UNITE and other employee representatives. The bank proposes to provide outplacement services to help affected staff find alternative employment in the region, working closely with local agencies.
The Government are mindful of the impact on the employees of this important regional employer and will support the implementation of the plan. To help those people affected I have asked the chief executive of the Regional Development Agency, ONE NorthEast, to lead the Government’s response. ONE NorthEast have already begun constructive discussions with Northern Rock and will work with local authorities, Jobcentre Plus, Business Link NorthEast, the Learning and Skills Council and Northern Rock’s management to co-ordinate the Government’s support for those involved.
As set out in Budget 2008, the Bank of England financing arrangements for Northern Rock will remain in place for an interim period, and will be replaced by a direct Treasury loan over the course of 2008-09. The Government will set out the arrangements for the repayment of the loan when the business plan is finalised.
The existing Government guarantee arrangements remain in place. Depositors’ money continues to be safe and secure.
I will continue to keep the House informed and will report further when the business plan is completed.
Children, Schools and Families
Youth Taskforce Action Plan
The Minister for Children, Young People and Families (Beverley Hughes): Today I am publishing the action plan for the youth taskforce. The youth taskforce in my Department was created in October 2007 from the respect task force to build on Government’s success in tackling antisocial behaviour. Copies will be placed in the Libraries of the House.
The new taskforce will concentrate on the minority of young people who get into serious trouble, including anti-social behaviour, and cause serious problems in their neighbourhoods. It will work with local partners—children’s services, the police, schools and community safety teams—to ensure that across the country every area has an effective approach for dealing with young people in serious difficulty.
The approach needed to change young people’s behaviour and deal with the problems that concern communities, must combine:
tough enforcement where young people’s behaviour is unacceptable
non-negotiable support to help young people overcome underlying problems where they have arisen
prevention to ensure we are dealing with emerging problems before they become serious and entrenched
Working with the Home Office—which retains responsibility for the overall response to antisocial behaviour—and other Departments across Government as well as local areas, the youth taskforce will help to ensure that young people and their families get the right package of intervention, challenge and support not only to curtail bad behaviour but to change it.
This action plan sets out 18 commitments it will deliver, and a total funding package of up to £218.5 million. Key measures include:
New intensive intervention projects to address the most challenging young people. We will apply the principles used successfully in family intervention projects (FIPs) to the most challenging and antisocial young people. Over 80 per cent. of families involved in a FIP reduced or ceased antisocial behaviour. I will invest £13 million over three years to establish 20 pioneering schemes to turn round the lives of around 1,000 of the most challenging young people each year.
New early intervention “challenge and support” projects. These projects will systematically identify young people involved in or at risk of antisocial behaviour and crime, and intervene early to nip problems in the bud. Help will be offered, but will not be optional—where necessary tools like parenting orders and individual support orders which are court orders will be used to make individuals take the help they need. I will invest £13 million over three years to work with around 15,000 young people involved in or at risk of anti-social behaviour per year.
Continued investment to support local services to tackle antisocial behaviour. Over the next three years, the Government will continue to invest more than £100 million to support action to tackle antisocial behaviour: antisocial behaviour teams in every area; the successful national network of family intervention projects tackling the most anti-social families; and parenting experts working with families of young people behaving badly.
Help every local authority area put in place the targeted youth support reforms by December 2008. The youth taskforce will put additional resources into reforming support services for at risk teenagers in England. This will enable local authorities to identify vulnerable young people early, provide swift support to stop problems from escalating, and ensure young people receive joined-up, effective support and challenge through multi-agency teams. I will invest £5 million to provide expert support from the Training and Development Agency (TDA) to help local areas implement the reforms, with most help to those areas facing the greatest challenges.
Increase young people’s participation in positive activities. I set out in “Aiming High for Young People: A Ten Year Strategy for Positive Activities” the importance of enabling young people to take part in constructive activities in their leisure time. Well-supported activities also increase community cohesion by bridging gaps between young and old, and between different income, ethnic and faith groups. The taskforce will support implementation of “Aiming High” by working with 50 local areas to target activity and invest £22.5 million next year to increase young people’s participation in activities in the most deprived areas, and to make sure facilities are there, and open at the times young people and communities need them—Friday and Saturday nights.
Helping every parent do their best for their child. In the children’s plan I made clear that the state does not bring up children—parents do. But parents are a key influence and I am making extra help available to ensure they meet their responsibilities. I will invest up to £60 million to expand the successful parenting early intervention pathfinders. These projects have improved the support available for parents of children aged 8-13 at risk in 18 areas across the country. They have almost halved the number of parents who considered their children have significant behavioural difficulties. We will expand this programme over the next three years to the majority of local authorities, to reach over 18,000 people each year and ensure that more parents receive the support they need to help with their child’s behaviour.
Communities and Local Government
Building Control System
The Minister for Housing (Caroline Flint): I am today publishing a consultation document on proposals for the future development of the building control system.
Home owners have the right to expect their homes to be built and renovated to minimum standards set out in building regulations. I want to make life more difficult for the cowboy builders that are out there whilst letting the high quality majority of the industry get on with the job. This should reduce the cost and burden of the process on both the industry and local authorities.
The building control system is critical to our ability to deliver a range of wider aims on housing supply, sustainability and other key health and safety related issues. Following discussion with stakeholders over the last two years it has become apparent that while the system is not broken, there are a number of issues which needed to be addressed to ensure that the system is fit for purpose now and in the future.
This consultation document also ensures we have a customer-focused building control system in which industry is able to plan with certainty and which is fully able to support the delivery of our housing supply and zero carbon housing targets in a way which delivers high levels of compliance at a reduced burden to industry and other stakeholders.
This consultation follows the paper published in March 2007 which set out the key areas for reform that we believed had the potential to address the main weaknesses in the system.
The proposals fall into the following five areas:
developing a vision for building control
establishing a better approach to the way we deliver regulations and guidance
modernising inspection and enforcement
providing alternative routes to compliance
enabling improved performance and capacity
The consultation is accompanied by impact assessments. Copies are available in the Libraries of both Houses, or it can be accessed via the Communities and Local Government website at: www.communities.gov.uk/futurebuildingcontrol
Consultation closes on 10 June 2008.
Environment, Food and Rural Affairs
Agriculture and Fisheries Council
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Jonathan Shaw): I am representing the United Kingdom at this month's Agriculture and Fisheries Council in Brussels.
The presidency hopes to adopt Council conclusions on the Commission’s communication “Preparing for the ‘Health Check’ of the CAP Reform”. And it is also likely that the Commission’s proposal to increase milk national quotas by 2 per cent. will be adopted.
The following issues will be raised under any other business:
The Agriculture Commissioner will provide an update of the agricultural strand of WTO-DDA negotiations. France will table a memorandum for debate on competition policy in agriculture to address the organisation of the agrifood sectors.
Ireland will express concerns about the future development of the sheep sector. Poland will ask the Commission for a further extension of market support measures to alleviate the difficulties currently being experienced in the pigmeat sector.
Foreign and Commonwealth Office
FCO Services (Performance Targets)
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Meg Munn): My noble Friend Lord Malloch-Brown has made the following written ministerial statement:
FCO Services will become a trading fund of the Foreign and Commonwealth Office (FCO) on 1 April 2008.1 have set the following performance targets for 2008-09:
An in-year surplus before interest and tax of at least £1.3 million.
A return on capital employed of at least 3.5 per cent. (weighted average).
A wider market revenue growth of 10 per cent. on that achieved in 2007-08, assessed on a normalised baseline.
A customer satisfaction rating derived from an independent, quantitative survey of at least 85 per cent. satisfied or very satisfied.
A utilisation rate of revenue earning staff of at least 65 per cent.
A contribution to the FCO’s comprehensive spending review commitments by delivering £2 million of cash savings, achieved through price stabilisation.
FCO Services will report to Parliament on its success against these targets through its annual report for 2008-09.
General Affairs and External Relations Council
The Minister for Europe (Mr. Jim Murphy): My right hon. Friend the Foreign Secretary, my hon. Friend the Parliamentary Under-Secretary of State for Trade and Consumer Affairs, the Member for Harrow, West (Mr.Thomas), and I represented the UK at the General Affairs and External Relations Council (GAERC) in Brussels on 10 March 2008.
The agenda items covered were as follows:
Preparation of the European Council
The Council discussed preparations for the European Council on 13 and 14 March. The European Council will focus on the launch of a new three-year cycle of the EU’s strategy for growth and jobs; an integrated climate and energy policy; and the stability of financial markets.
My right hon. Friend the Foreign Secretary supported the presidency’s focus on delivering for the EU’s citizens, and agreed with the priorities identified for action, particularly in taking forward the EU’s commitment to delivering on the ambitious climate change goals set last year at the spring European Council and the need for the EU to lead wider international work towards a comprehensive climate change agreement for the post-2012 period.
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