Written Ministerial Statements
Thursday 26 June 2008
Business, Enterprise and Regulatory Reform
UK Renewable Energy Strategy
The Secretary of State for Business, Enterprise and Regulatory Reform (Mr. John Hutton): As promised in my statement of 23 January 2008, I am publishing today a consultation on the ways the UK could increase renewable energy in order to meet the UK’s proposed share of the EU target to achieve 20 per cent. of all Europe’s energy from renewable sources in 2020.
Increasing renewable energy is a key element of our strategy for delivering our two key goals of tackling climate change and ensuring that the UK has a secure supply of affordable energy. Measures set out in the 2007 Energy White Paper will already triple our use of renewables from 1.5 per cent. overall energy in 2006 to 5 per cent. by 2020, but we recognise we need to do more. Investment in renewable generation will help reduce our dependence on fossil fuels at a time of rising prices, particularly oil and gas. This consultation will inform the UK renewable energy strategy to be published in spring 2009, once the final EU Directive implementing the target for EU renewable energy has been agreed and the UK share decided. The consultation will run for three months and we will publish the responses this autumn.
Currently, the proposed UK share of the EU target is to achieve 15 per cent. of our energy—electricity, heat and transport—from renewables by 2020. Our negotiating position has been to ensure that the targets contained in the draft directive are credible, by giving member states enough flexibility to deploy renewables in the most cost-effective manner. This need for credibility applies to other key parts of the draft directive, including the 10 per cent. renewable transport target for biofuels, so the UK has been pushing hard for robust sustainability criteria to be included.
The challenge that a target of 15 per cent. renewable energy represents should not be underestimated. It may require a tenfold increase in renewable generation in the UK from 2006 levels. This might mean, for example, needing up to an extra 4,000 onshore and 3,000 offshore wind turbines, a major challenge for the supply chain and UK business. We are also conducting a feasibility study on the range of tidal power options in the Severn estuary that could provide up to 5 per cent. of UK electricity. The consultation seeks views on how we can meet the 15 per cent. target in the most cost-effective way. Regardless of our final approach, success will require action right across the economy, from industry and investors, but also from the devolved Administrations, local and regional bodies and consumers.
This consultation outlines possible measures to facilitate a rapid expansion of renewables. It sets out ways to address the significant barriers and encourage the enormous level of investment required, signalling the business opportunities that this transformation could offer. The measures are wide ranging and include:
extending and raising the level of the renewables obligation to encourage up to 30 to 35 per cent. of our electricity to come from renewable sources by 2020;
introducing a new financial incentive mechanism to encourage a very large increase in renewable heat, including in homes and buildings;
delivering more effective financial support for heat and electricity microgeneration technologies in homes and buildings;
helping the planning system to deliver, by agreeing a clear deployment strategy at regional level similar to the approach established for housing;
ensuring appropriate incentives for new electricity grid infrastructure and removing grid access as a barrier to renewable deployment;
exploiting the full potential of energy from waste, by considering further restrictions on landfilling biomass, as far as is practical;
requiring all biofuels to meet strict sustainability criteria, to limit adverse impacts on food prices, or other social and environmental concerns;
encouraging the development of new renewable technologies by ensuring effective support, particularly where the UK has the potential to be a market leader;
maximising the benefits for UK business, by providing a clear long-term policy framework, working with Regional Development Agencies to tackle key blockages, considering support for specific technologies and
addressing skills shortages.
In the short term, the impact of our measures on utility bills is likely to be almost zero; however, such rapid action will not come without some associated cost. The extent of these rises will depend on the cost of alternatives, particularly fossil fuels, and we can limit their effect, both on energy bills and fuel poverty by promoting an essential, ongoing role for energy efficiency. As part of this, DEFRA will publish a consultation in the autumn looking at energy efficiency across all sectors with a particular emphasis on households, and within that, what we can do to improve the efficiency of our existing housing stock.
We are committed to developing the most cost-effective approach to delivering the scale of renewable energy required. To ensure we have investigated all the options, we are also consulting on the role that using provisions in the draft EU renewables directive relating to trading could play in reducing the overall cost to the UK of meeting the target.
There are costs associated with increasing renewable energy. However, we believe they are worth paying for. As the Stern review concluded, the costs of tackling climate change could be far higher in the longer term than the costs of taking action now.
The business benefits from an expansion in renewable energy in the UK could include up to 160,000 new jobs generated in the renewable energy sector by 2020. The Government’s ambition is to ensure that as many of these jobs are based in the UK as possible. Annual revenues from marine energy for example could be as much as £900 million by 2020. The consultation seeks views on how we can ensure the UK receives the maximum benefit from the rapid expansion of the renewable energy
sector and will be completed by a revised manufacturing strategy which we hope to bring out in the autumn.
The Climate Change Bill reinforces our commitment to tackle climate change and the Energy White Paper 2007 sets out our broader commitments to save energy, develop cleaner energy supplies and to ensure secure supplies of energy. This consultation and the policies that will follow sit together with those on nuclear and carbon capture and storage (CCS) to facilitate a diverse mix of low carbon energy sources. Our position on nuclear is clear, and in support of our position as a world leader in CCS we will making further announcements on the UK CCS Demonstration project and publishing a consultation on the regulation of CCS next week. The consultation seeks views on the further regulatory steps we could take to prepare for deployment of CCS.
A copy of the UK renewable energy strategy consultation has been deposited in the Libraries of both Houses and published on the BERR website.
Communities and Local Government
Home Loss Payments
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): The Secretary of State has today laid regulations to update the home loss payments thresholds in section 30 of the Land Compensation Act 1973 (as amended). Home loss payments are paid at a rate of 10 per cent. of the market value to owner-occupiers who are displaced from their homes as a result of compulsory purchase or certain housing orders. They are paid in addition to the compensation awarded for the value of the property taken, which is based on the open market value of the property together with disturbance payments. Home loss payments are subject to maximum and minimum thresholds. Tenants receive a flat rate equal to the minimum payment to owner-occupiers.
With effect from 1 September 2008, the maximum payment to owner-occupiers displaced from their home will be increased from £44,000 to £47,000 and the minimum payment will be increased from £4,400 to £4,700. The flat rate will be increased from £4,400 to £4,700.
The period of two months between laying the regulations and commencement will give acquiring authorities reasonable notice to revise their budgets for compensation. This is similar to the notice period given in previous years for revisions to the home loss payments thresholds.
Council Tax
The Minister for Local Government (John Healey):
On 27 March I made a statement to the House on council tax capping for eight authorities. I announced the start of a process that could lead to capping, and said that in the following weeks we would listen carefully to the representations made by the authorities concerned. Those eight authorities were Portsmouth city council, and the police authorities of Bedfordshire, Cheshire,
Leicestershire, Lincolnshire, Norfolk, Surrey and Warwickshire. All eight authorities were ‘designated’, and the Government proposed maximum 2008-09 budget requirements for each authority under the Local Government Finance Act 1992.
All eight authorities exercised their right to challenge their proposed maximum budget requirements and made written submissions in support of their cases. I met a delegation from Portsmouth city council and was joined by the Minister for Security, Counter-Terrorism, Crime and Policing to meet delegations from each of the seven police authorities to hear all of the cases in person.
Having carefully considered the representations all authorities have made, both orally and in writing, and having taken into account all relevant information I can now confirm decisions on how the Government intend to proceed in each case. In putting forward their challenges, no authority has, in the Secretary of State’s view, presented strong arguments as to why an excessive increase was necessary. Furthermore, no authority has demonstrated that the pressures identified acted disproportionately upon them to any significant extent compared to other authorities. We intend therefore to take action in all cases.
After careful consideration, taking account of both service and tax impacts on residents in the areas concerned, the Secretary of State has decided on the following actions:
to ‘designate’ Lincolnshire at £100,638,000 compared to the original proposed cap of £94,926,000. The authority will therefore have to reset its budget and precept;
to cancel the designation of the police authorities of Cheshire, Leicestershire and Warwickshire, but nominate all three authorities for 2008-09, designating them in 2009-10 and 2010-11. This ‘designation after nomination’ will provide protection to council taxpayers by limiting the authorities’ capacity to increase council tax in 2009-10, and allow the authorities a phased return to setting non-excessive budget requirements. We intend to limit increases in the budget requirements of these authorities to the equivalent of an increase of 3 per cent. in council tax precept in both 2009- 10 and 2010-11. This firmly protects taxpayers but avoids the need for re-billing; and
to cancel the designation of the police authorities of Bedfordshire, Norfolk and Surrey and of Portsmouth city council, but nominate them with a proposed notional budget requirement for each authority for 2008-09 at the level of the maximum budget requirement originally proposed when they were designated. For Bedfordshire police authority the proposed notional budget requirement is £95,790,000, for Norfolk police authority £137,901,000, for Portsmouth city council £148,530,000, and for Surrey police authority 189,622,000. Nomination and setting a notional budget for Bedfordshire, Norfolk and Surrey police authorities and for Portsmouth city council will limit these authorities’ capacity to set excessive increases in future years by measuring for capping purposes future budget requirement increases against their 2008-09 notional budget requirement. This will provide their council taxpayers with extra protection in future years.
My officials are writing to all authorities today informing them of these decisions. Subject to approval of an order I am laying before the House today, Lincolnshire police authority will need to re-set its budget requirement and precept. This means that its residents will be re-billed for a lower council tax.
The three authorities subject to designation after nomination will have an opportunity to challenge their proposed designation for 2009-10 when they are notified in due course. We intend to start this process at the same time as we commence consultation on the provisional local government finance settlement later this year.
The four authorities nominated in 2008-09 and set a notional budget requirement have 21 days from receipt of the notification in which to challenge their proposed notional budget requirement.
In taking this necessary action, I recognise that local government generally has done a great deal to ensure that they do not place unnecessary pressures on their council taxpayers. More than 98 per cent. of authorities did not set excessive increases—and the average Band D council tax increase in England for 2008-09 is 4.0 per cent., the lowest increase for 14 years and the second lowest ever.
There is no excuse for excessive increases in council tax, and authorities should be in no doubt that the Government will use its full range of capping powers to deal with excessive increases and protect council tax payers in future years.
Housing and Regeneration Bill (Contingency Fund)
The Minister for Housing (Caroline Flint): The Department for Communities and Local Government has obtained approval for an advance from the contingencies fund to allow the early recruitment and appointment of the boards and senior executives with support arrangements, for the Homes and Communities Agency (HCA) and the Tenant Services Authority (TSA) before Royal Assent.
The Homes and Communities Agency will bring together the current work and programmes of the Housing Corporation, English Partnerships and a significant part of Communities and Local Government’s own housing programmes.
The Tenant Services Authority will encompass the current regulatory functions of the Housing Corporation and implement the recommendations of the Cave review.
Bringing forward this expenditure through a contingencies fund advance will accelerate the introduction of the new agencies so they can begin to deliver their programmes more expeditiously. It will also enable efficiency savings to be achieved earlier and will provide significant reductions in public spending.
An earlier advance of £930,000 was approved to cover the costs of recruiting the chairs and chief executives of HCA and TSA as well as their salary and support costs. Parliamentary approval for additional resources of £430,000 for these new services will be sought in the Department’s 2008-09 winter supplementary estimate for Communities and Local Government. Pending that approval and Royal Assent of the Housing and Regeneration Bill, urgent expenditure estimated at £430,000 will be met by repayable cash advances from the contingencies fund.
Local Government
The Minister for Local Government (John Healey): On 2 April 2008, I laid before Parliament a written ministerial statement on provisional payments under the three-year Local Authority Business Growth Incentives scheme (LABGI). I am now in a position to announce the final payments, which will be made shortly. These payments include reward for Years 1 and 2 of the scheme and new payments for Year 3 of the scheme, distributing a total of approximately £296 million to 371 local authorities in England.
Authorities were given until 16 May 2008 to comment on the methodology outlined on 2 April 2008. The Department received 28 responses, and the Valuation Office Agency received 59 enquiries directly. Most queries sought clarification of how the calculations had been performed or about data which had been used, timing of payments or confirmation that their proposed allocation was correct, whilst a few responses raised specific points on the methodology.
We have considered all responses received, and I am content that the published methodology has been correctly applied. I do not, therefore, propose to amend the methodology as published in the technical note (http://www.local.communities.gov.uk/finance/labgi/technote0708.pdf), or the way in which it has been applied. However, in a small number of cases, the proposed payment has been adjusted in response to a specific point raised by an authority or in relation to a previous overpayment.
Details of the payments to be made to each qualifying authority under the Government’s proposals can be found at: http://www.local.communities.gov.uk/finance/labgi/seconddtmn0708.pdf.
As a result of the adjustments made, approximately £101 million remains to be distributed and this will be retained as a contingency, as I explained on 2 April (Official Report, Column 56WS).
Foreign and Commonwealth Office
Diplomatic Missions (Traffic Violation Fines: 2007)
The Secretary of State for Foreign and Commonwealth Affairs (David Miliband): In 2007, there were 6,241 recorded outstanding parking and other minor traffic violation fines incurred by diplomatic missions and international organisations in the United Kingdom. These totalled £656,275. In March this year the Foreign and Commonwealth Office wrote to all diplomatic missions and international organisations concerned, giving them the opportunity to either pay their outstanding fines or appeal against them if they considered that the fines had been issued incorrectly. As a result of subsequent payments totalling £27,300 and formal appeals lodged, there remains a total of 5,093 (£538,745) unpaid fines for 2007. The table below details those diplomatic missions and international organisations that have outstanding fines totalling £1,000 or more:
| Diplomatic mission / international organisation | Number of fines outstanding (excluding congestion charge) | Amount(£) | |||
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