Written Ministerial Statements
Monday 13 October 2008
Business, Enterprise and Regulatory Reform
Low Pay Commission (Government Evidence)
The Minister of State, Department for Business, Enterprise and Regulatory Reform (Mr. Pat McFadden): I am pleased to announce that the Government have written to the Low Pay Commission setting out the non-economic evidence on the national minimum wage. The evidence addresses enforcement, publicity and awareness and workers including vulnerable workers, migrant workers and staff receiving tips.
The Government will be submitting its economic evidence to the commission later this year.
A copy of the non-economic evidence will be placed in the Libraries of the House and will be available from the BERR website at www.berr.gov.uk.
Treasury
Contingencies Fund
The Chancellor of the Exchequer (Mr. Alistair Darling): On 8 October 2008, I announced that by order (The Transfer of Rights and Liabilities to ING Order 2008 No 2666) under the Banking (Special Provisions) Act 2008, the retail deposit business of two Icelandic banks, Kaupthing and Landsbanki, with UK subsidiaries, respectively, Kaupthing Singer & Friedlander (KSF) and Heritable, have been transferred to ING Direct.
Acting on the advice of the Bank of England and Financial Services Authority (FSA), and in order to ensure the stability of the UK financial system, the Treasury took action to protect the retail depositors in KSF, a UK-based banking subsidiary of Kaupthing, and in Heritable, a UK-incorporated banking subsidiary of the Icelandic bank Landsbanki. Landsbanki has entered an insolvency process in Iceland.
Heritable and KSF are regulated by the FSA. The FSA concluded on 7 October 2008 that Heritable no longer met its threshold conditions, and was likely to be unable to continue to meet its obligations to depositors. The FSA concluded on 8 October 2008 that KSF no longer met its threshold conditions, and was likely to be unable to continue to meet its obligations to depositors.
The FSA determined that for each bank there had been an event of default under the Financial Services Compensation Scheme (FSCS). It was then urgently necessary for the Treasury to intervene in the public interest. The Treasury has used the Banking (Special
Provisions) Act 2008 to ensure a resolution that fully protects UK retail depositors and preserves financial stability. Savers’ money is safe and secure, and customers will be able to access their accounts as usual.
This action by the Tripartite Authorities, protects savers’ money and provides continuity of business for retail depositors by transferring their deposits to ING Direct. The rest of the business has been put into administration. In time the Treasury will be able to make a claim in the administration of Heritable and KSF as the businesses are wound up and their assets are sold.
Under the Transfer Order, the FSCS has paid out approximately £3 billion to enable retail deposits held in Heritable and KSF and covered by the FSCS to be transferred to ING Direct. The FSCS has financed its payout through a short-term loan from the Bank of England, which will be replaced with a loan from the Government after a short period of time.
HM Treasury made a payment to ING Direct for retail deposit amounts not covered by the FSCS, amounting to approximately £600 million. In return, the FSCS and HM Treasury have acquired rights in respects of the proceeds of the wind-down and realisation of the assets of the remaining business of Heritable and KSF in public ownership
Parliamentary approval for additional provision of £600 million for this new expenditure will be sought in a Supplementary Estimate for HM Treasury. Pending that approval, urgent expenditure estimated at £600 million was met by repayable cash advances from the Contingencies Fund.
On 29 September 2008 the Government announced that by order (The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 No. 254) under the Banking (Special Provisions) Act 2008, Bradford & Bingley’s UK and Isle of Man retail deposit business along with its branch network has been transferred to Abbey National plc. This transfer follows a competitive sale process for this part of the business. The remainder of Bradford & Bingley’s business has been taken into public ownership. This action by the Tripartite Authorities, protects savers’ money by transferring their deposits to Abbey.
Following the turbulence in global financial markets, Bradford & Bingley found itself under increasing pressure as investors and lenders lost confidence in its ability to carry on as an independent institution. The FSA determined in the morning of Saturday 27 September that the firm no longer met its threshold conditions for operating as a deposit taker under the Financial Services and Markets Act 2000 and FSA rules.
The Government, on the advice of the FSA and the Bank of England, acted immediately to maintain financial stability and protect depositors, while minimising the exposure to taxpayers. It worked over the weekend to bring about the part public, part private solution that best meets those objectives.
The transfer of the retail deposit book has been backed by cash from HM Treasury and the FSCS. The FSCS was triggered following the determination by the FSA that Bradford & Bingley was unable or likely to be unable to satisfy claims against it, prior to the making of the Transfer Order.
Under the Transfer Order, the FSCS has paid out approximately £14 billion to enable retail deposits held in Bradford & Bingley and covered by the FSCS to be transferred to Abbey. The FSCS has financed its payout through a short-term loan from the Bank of England, which will be replaced with a loan from the Government after a short period of time.
HM Treasury made a payment to Abbey for retail deposit amounts not covered by the FSCS, amounting to approximately £4 billion, this sum being net of £612 million receipt from Abbey. In return, the FSCS and HM Treasury have acquired rights in respects of the proceeds of the wind-down and realisation of the assets of the remaining business of Bradford & Bingley in public ownership
Parliamentary approval for additional provision of £4.6 billion for this new expenditure will be sought in a Supplementary Estimate for HM Treasury. Pending that approval, urgent expenditure estimated at £4.6 billion was met by repayable cash advances from the Contingencies Fund.
An Out of Turn Supplementary Estimate will restore the Contingencies Fund to normal levels, as well as providing for the funding of the recapitalisation scheme measures announced today. The action we have taken demonstrates the Government’s commitment to do whatever is necessary to ensure the stability of the financial system, while also protecting consumers and safeguarding the interests of the taxpayer.
Children, Schools and Families
14-19 Framework
The Secretary of State for Children, Schools and Families (Ed Balls): Today I would like to update the House on progress with our 14-19 education reforms, and the next steps in realising our ambition that all young people should participate and achieve in learning until at least their 18th birthday.
Last month saw first teaching of the new diploma qualification. My Department has received much positive feedback from young people taking the new diploma qualification, describing how exciting and enjoyable they have found their studies, and from teachers who have been impressed by how successfully the distinctive new curriculum, combining theoretical studies with practical work based experiences, has engaged their students.
Our reform programme has also received positive and constructive external scrutiny. In September, Ofsted published a progress report on the implementation of 14-19 reforms so far. The report confirmed the positive impact that local 14-19 strategies were already having in raising achievement, increasing participation and retaining learners in education and training, and setting out the areas where further work was needed in order to ensure the reforms secured the best possible outcomes for our young people.
Earlier this month the Public Accounts Committee produced a report commending the diploma for the opportunity it provided young people to study for qualifications integrating academic and vocational learning,
but also rightly pointing out the importance of ensuring that all schools, colleges and work based learning providers are supported to teach diplomas, not just those teaching from this September. We now have support programmes in place for those teaching diplomas in 2009 and 2010, as well as those who have not yet applied successfully to deliver the diploma.
The latest information we have from local consortia indicates that around 12,000 young people are currently working towards a diploma qualification. Our focus continues to be on the standard of teaching of the diploma, and on supporting the system to build the capacity to deliver these reforms to the quality our young people deserve and at all times putting quality before quantity as we take forward the diploma programme.
Legislation currently before the House would have the effect of raising the age to which young people must participate in learning from 16 to 17 in 2013, and 18 in 2015. If this legislation is passed, then the around 600,000 young people starting secondary school last month will be the first young people who will have to stay on in learning beyond 16. That is why I am today publishing “Delivering 14-19 Reform: next steps”, an implementation plan setting out in detail the journey we and our partners will take between now and 2015 to ensure every young person in the country is able to reach their full potential, enjoying first rate educational provision which both stretches and engages them, and prepares them to progress on to Higher Education or skilled employment. It also sets out the support which will be made available to ensure that young people continue to be able to access this provision, whatever financial or challenging personal circumstances they might face.
In addition, it confirms our commitment to ensuring that the ideas and energy of the young people themselves should directly impact upon the planning and delivery of reforms at a local level. We will establish a pilot scheme involving some of those areas delivering from September 2010 to see how the student voice can be taken into account most effectively, which will inform a firmer requirement on consortia to demonstrate how they take the views of young people into account in the fourth diploma gateway. We will also establish a national 14-19 learner panel by spring 2009.
Higher Education and business support for the diploma has also continued to grow. Wellington college has confirmed its intention to offer the diploma in engineering as early as September 2009. All of the Russell and 1994 groups of universities have publicly stated that they will consider applications from diploma students. Our network of diploma employer champions has now expanded to over eighty, including such household names as Land Rover, Vodafone and Toshiba.
I am also announcing today the criteria against which bids for the £55 million worth of funding available for the development of exemplary diploma facilities, announced in July, will be assessed. This will allow work to begin on the development of a series of projects that will create world class diploma facilities to benefit learners and act as showpieces to inspire the whole sector.
Just one example of the exciting new projects already under way are the plans for a new academy, sponsored by JCB, that would be at the forefront of diploma
delivery at levels 1, 2 and 3 in engineering and manufacturing and product design. The academy would be located next to JCB’s world headquarters in East Staffordshire and would admit pupils from across Staffordshire, Stoke, Derby City and Derbyshire.
There is much more work to be done to guarantee the successful implementation of our reforms, but I am highly encouraged by our progress to date.
Defence
PFI Contract
The Parliamentary Under-Secretary of State for Defence (Mr. Kevan Jones): I am very pleased to announce that the Ministry of Defence has awarded a contract to the Inteq Consortium for the redevelopment of, and provision of services to, the Basil Hill site in Corsham, Wiltshire. The contract was awarded on 1 August.
The purpose of this Private Finance Initiative, part of the Corsham09 programme, is to maximise defence operational effectiveness and business by providing a coherent information infrastructure and assuring the delivery of integrated information solutions throughout the MOD and to our Armed Forces, both at home and abroad.
The modernisation and redevelopment of the Basil Hill site will enable defence equipment and support military and civilian personnel and other MOD staff, who are currently located on various sites in the Corsham area, to be brought together on the one site. This will provide a greater unity of purpose against the developing backdrop of high tempo global operations and coalition partnering, and will improve the effectiveness and efficiency of the organisation, thus enabling us to continue to provide world-class communications systems and services to our Armed Forces.
The Corsham09 PFI contract, worth some £690 million over the next 25 years, will deliver modern living and working accommodation for up to 2,200 personnel, including the provision of some 180 en-suite bed spaces for servicemen and women. The contract also includes provision for the delivery of a wide range of services, including catering, cleaning, vehicle management and utilities. Some 80 MOD civilian posts will transfer to the new service provider, Inteq. No redundancies are anticipated as a result of the transfer, which will be handled in accordance with existing legislation and the Ministry of Defence’s Transfer of Undertakings (Protection of Employment) Regulations (TUPE) code of practice. The trade unions have been involved throughout the process, and a formal consultation period is currently underway.
Some of the services that, in future, will be delivered by Inteq are already provided under contract to the MOD. As a result, approximately 100 people currently employed by contractors will also transfer, in accordance with TUPE legislation, to the Inteq Consortium.
The agreement we have reached with Inteq will not only benefit our Armed Forces, but also the local community and economy, as well as the wider UK economy. The PFI contract will help to secure existing jobs in the local area with the potential for new jobs to
be created. Furthermore, the redevelopment of the Basil Hill site will enable up to 55 hectares of land in Corsham to be released for disposal.
90th Anniversary of Great War Armistice
The Parliamentary Under-Secretary of State for Defence (Mr. Kevan Jones): Further to the announcement that my predecessor made on 22 May 2008, I am pleased to be able to provide further details of the Ministry of Defence’s plans to mark this year’s 90th anniversary of the Great War Armistice on Tuesday 11 November.
We very much hope that the principal participants on 11 November will be remaining veterans of World War One who will lay wreaths as they remember fallen comrades of the Great War. A short service will be led by the Bishop of the Armed Forces, the Right Reverend David Conner, and military musicians and a choir will provide music.The service will start at 10.45 and will last for around 25 minutes.
This unique service will take place two days after our annual national act of remembrance for the fallen of the two world wars and conflicts since on Remembrance Sunday when Her Majesty the Queen, other members of the Royal Family, senior politicians, military Chiefs and Heads of Missions in London will lay wreaths and pay their respects. No additional wreaths will therefore be laid by dignitaries on 11 November, but many will be in attendance to watch this historic event.
The MOD is currently in discussions about broadcasting the event live so it can be seen by a wider audience. Whilst members of the public will be welcome to watch, this will not be a ticketed event. The Royal British Legion are organising ‘Silence in the Square’ on Trafalgar Square. This event is aimed at promoting public participation in a collective act of commemoration at 11.00. It is hoped that a large screen on Trafalgar Square will show the events taking place at the Cenotaph to ensure that those there can share in the commemoration and any members of the public who cannot be accommodated in Whitehall will be directed there.
Data Security
The Minister for the Armed Forces (Mr. Bob Ainsworth): The House will be aware that the Ministry of Defence is investigating the disappearance of a computer hard drive from the premises of a contractor, EDS, at Hook. This incident has happened in part as a result of the work that the MOD has been doing in partnership with EDS to implement the requirements of the Cabinet Office’s data handling review (DHR) and our own action plan following Sir Edmund Burton’s review into data handling in MOD. This process of departmental improvement will continue to root out and expose areas where shortcomings need to be tackled.
In this most recent case, whilst conducting an audit of storage media, EDS found that it could not find a removable hard disk drive. Under the terms of its contract EDS is required to protect all personal information in its care. The hard drive had been used with the TAFMIS recruitment system and may, in the worst case, contain details relating to 1.7 million individuals who have enquired about joining the Armed Forces.
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