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Written Ministerial Statements

Thursday 18 December 2008

Treasury

Automated Teller Machines

The Economic Secretary to the Treasury (Ian Pearson): Following the March 2005 Treasury Committee report on ATM (Automatic Teller Machine) charging, the Treasury invited the Chairman of the Treasury Select Committee, the right hon. John McFall, to chair a working group on ATMs to take forward work on key issues. The working group, which included banks, independent ATM operators and consumer groups, published its report on 13 December 2006.

The Government are pleased to report that the industry has, over the 24 months following publication of the ATM Working Group’s report, made excellent progress towards its goal of placing around 600 non-charging machines across 1,707 low-income areas within the UK, which were identified as lacking convenient access. Around 2 million individuals on low incomes should stand to benefit. Since the publication of the working group report, LINK has assessed that around 10 per cent. of the identified low-income areas are unsuitable for an ATM location, as there is no centre of population.

As of 21 November 2008, sites for 560 of the 600 new ATMs required have been identified. Of these, 527 new free machines are already in use and issuing cash to the public. In March 2007, a market-based financial incentive—known as a “financial inclusion premium”—was introduced, to encourage ATM operators to place or retain free ATMs in deprived areas with a low expected volume of transactions. Some 67 per cent. of these ATMs that are based in the target deprived areas receive the “financial inclusion premium”. Encouragingly, 26 of these new cash machines have proved so popular that their level of withdrawals means that they have now graduated from the “financial inclusion premium” scheme, 17 more since July 2008 statement.

Banks, building societies and independent ATM operators have all contributed new free-to-use cash machines; independent ATM operators have provided or are in the process of supplying around 34 per cent. of the confirmed new non-charging ATMs. The UK ATM network, LINK, is continuing to work with its member banks and ATM operators to identify suitable sites in the remaining target areas, and is engaging closely in this exercise with Members of Parliament, local authorities, consumer councils and retailers.

The benefits in terms of financial inclusion are clear. Data from LINK suggest that the new ATMs currently in operation or under contract will enable over 1.4 million residents in the target low-income areas to access cash more conveniently and manage their money more effectively.

The working group further agreed to implement improved transparency rules for charging cash machines. Operators of cash machines that charge users for
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withdrawals and that can upload screens remotely, have met by the end of June 2007, deadline to improve the on-screen standards of “at a glance” signage. This means that it is clear to a consumer when a charge is applied when withdrawing cash. Good progress was also made by operators in enhancing external signage by the end of December 2007.

The ATM Working Group report of December 2006 further recommended developing a joined up policy approach to planning permissions. On 24 November 2008, the final report of the Government commissioned independent Killian Pretty review on ‘Planning applications: A faster and more responsive process’ was published. The review put forward proposals to deliver a planning system that would be more customer focused, fair, proportionate and transparent. The Government have signalled that they supports the broad thrust of the report. In the new year, the Department for Communities and Local Government intends to publish a fuller response to the recommendations, together with an implementation plan.

One of the recommendations in the report included revising and expanding the existing simpler consenting system for certain types of development—known as prior approvals. Research published alongside the Killian Pretty report proposed that the prior approval process might include ATMs.

A review of information requirements for the validation of planning applications was also published alongside the Killian Pretty report. This review included consideration of design and access statements, which accompany planning applications, including those for externally located ATMs. The review recommended that existing guidance on design and access statements should be updated, in particular to provide advice on how crime should be addressed.

The Government are encouraged by the substantial progress achieved, and would like to take this opportunity to thank all of those involved in extending free access to cash to those who need it the most.

Full details about progress made are available on the LINK Internet website: http://www.link.co.uk/atm/access_to_cash. Proposals for additional ATM sites can also continue to be made to LINK.

Finance Bill (Technical Tax Amendments)

The Financial Secretary to the Treasury (Mr. Stephen Timms): I am today announcing the Government’s intention to present to Parliament as part of Finance Bill 2009 two specific tax changes which will ensure that tax rules and in particular anti-avoidance legislation does not apply unfairly in circumstances arising out of the current turmoil in the financial markets and prevent companies suffering unintended or unforeseen tax effects as a result.

The first proposed legislative change will better identify who are the real equity holders in a business, for group tax purposes. This change to the group tax rules will apply to all companies. In particular, when banks and other financial institutions issue certain preference shares in order to boost their Tier 1 capital base in the form approved by financial regulators this change will ensure
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that their existing group structure, for tax purposes, is not broken. These preference shares are shares that carry a right to a fixed dividend or a dividend at a fixed rate, but in order to satisfy the regulatory requirements the issuer may have the right to pay a lower dividend in certain circumstances. The change will mean that such preference shareholders are no longer treated as equity holders for group tax purposes solely because that regulatory requirement is met. The change will apply retrospectively for accounting periods beginning on or after 1 January 2008 for all existing shares, but companies will have a right to elect for the changes to apply only to new share issues to ensure that no businesses are unfairly affected.

The second proposed legislative change will allow companies that prepare their accounts in foreign currencies to carry any unused tax losses forward in the foreign currency instead of sterling. This change will apply to all companies preparing their accounts in a foreign currency. It will be of particular benefit, at this time, to foreign banks trading in the UK. It will ensure that the losses will offset the same measure of profits in future years without the companies and the Exchequer being exposed to foreign exchange risk on those losses. The change will apply to unused losses carried forward to accounting periods beginning on or after 1 January 2008 but with a right to elect for it to apply only to future losses to ensure that no businesses are unfairly affected by the change.

Communities and Local Government

Gypsy and Traveller Caravan Count

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): The Government have today published the Count of Gypsy and Traveller Caravans on 21 July 2008.

Copies have been placed in the Libraries of both Houses and can be accessed via the Communities and Local Government website at:

www.communities.gov.uk/housing/housingmanagementcare/gypsiesandtravellers/gypsyandtravellersitedataandstat/

Culture, Media and Sport

Television Food Advertising (Children)

The Secretary of State for Culture, Media and Sport (Andy Burnham): The Government are committed to tackling childhood obesity and to supporting parents’ efforts to reduce the exposure of children to advertising of foods high in fat, salt or sugar (HFSS). We have worked closely with Ofcom and the Advertising Standards Authority to significantly tighten the rules on broadcast food promotion to children.

Ofcom announced in November 2006 that it would begin to phase in restrictions on the advertising of HFSS foods to children. This began on 1 April 2007,
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and the final phase will be introduced on 1 January 2009. When making this announcement, Ofcom committed to reviewing the impact of the restrictions in late 2008. The Government subsequently asked Ofcom to bring forward that review to begin in July 2008. Ofcom has now published its review and copies have been deposited in the Libraries of both Houses.

The Government welcome Ofcom’s report and the progress made to date which has shown that the restrictions introduced have already had a significant impact on reducing children’s exposure to broadcast HFSS food advertising.

Ofcom estimates that the amount of HFSS advertising on television seen by children aged 4 to15 fell by an estimated 34 per cent. over the review period. For younger children, the estimated reduction was greater, at 39 per cent.; for older children, slightly less, at 28 per cent.

Ofcom has committed to further review the effects of the full HFSS restrictions in early 2010.

Energy and Climate Change

Energy Markets

The Secretary of State for Energy and Climate Change (Edward Miliband): I am today laying before Parliament the Government’s 2008 Energy Markets Outlook report. Copies of the report have been placed in the Libraries of both Houses.

Communities and Local Government

Uplands Entry Level Stewardship Scheme

The Secretary of State for Environment, Food and Rural Affairs (Hilary Benn): The Government are committed to continued support for upland farmers, to reward them for the landscape and other environmental benefits their efforts achieve. This directly reflects the crucial role that hill farmers play in shaping the upland landscape and its environment.

In 2006 the Government announced that uplands support in England would be integrated into Environmental Stewardship from 2010, replacing the Hill Farm Allowance (HFA). More recently I confirmed that we would do this through a specific uplands strand to Entry Level Stewardship (ELS), and that further details would be announced before the end of the year. Following discussion of our proposals with the hill farming community, and testing on 66 hill farms, I am pleased now to outline the full details of ‘Uplands ELS’.

We have made a number of changes to the technical detail of uplands ELS to make it more practical and attractive for farmers, while still making a significant contribution towards our environmental objectives. These changes respond directly to views expressed by stakeholders
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and the hill farming community. I would like to take this opportunity to thank all those who have contributed to this process.

Our aim is to achieve an uptake of at least 80 per cent. of the uplands. At this rate we would expect to spend over £25 million per year compared with £23.7 million under the HFA. We are prepared to make available up to £31 million within the existing Rural Development Programme budget to fund a higher uptake should more farmers choose to enter Uplands ELS.

Unlike the HFA, all farms in England’s severely disadvantaged areas—including those in the dairy sector—will be eligible to receive Uplands ELS, in return for the environmental benefits they sign up to deliver. And we are also including a commons supplement within Uplands ELS, to recognise the additional costs involved for commoners to reach agreement. This will be supplemented by clear guidance from Government stressing the critical role played by the active commoner in delivering the environmental and landscape benefits we are seeking. We will also continue to support the uplands through other mechanisms: for instance, 80 per cent. of the uplands have been identified by Natural England as target areas for enhanced support under Higher Level Stewardship.

The change from the HFA to Uplands ELS will require a period of adjustment for hill farmers. To help this transition, we are putting in place the following arrangements:

These arrangements will significantly smooth the impact on farmers’ cash flow, reducing the payment gap that they would otherwise face between the annual HFA and their first Uplands ELS payment from a minimum of 16 months down to only 10 months.

The July start date for Uplands ELS agreements will also provide farmers with time to understand how it will fit on their farm. Further to this, we are significantly boosting the level of advice that will be available to upland farmers to help them enter Uplands ELS. Further details on this enhanced advice programme will be available from Natural England next year.

Providing transitional payments for farmers with land still in Countryside Stewardship or ESA agreements will ensure we do not penalise these early adopters of agri-environment schemes who will generally be ineligible for Uplands ELS—due to double funding rules—until the end of their existing agreements.

Farmers with tenancy arrangements of less than five years will be able to enter Uplands ELS, providing their landlord countersigns the application. This is necessary under EU rules to ensure we achieve the environmental benefits for the full length of the agri-environment commitment.

Uplands ELS explicitly recognises the importance of the active grazier, and we therefore see the involvement of tenant farmers as essential to delivering the benefits that we are seeking—for example, by keeping a minimum
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level of stock on moorland. It is the Government’s firm view that the role of the grazier should be fully recognised when landowners and tenants reach agreement on entering Uplands ELS. Officials will continue to work with the National Farmers Union, Tenant Farmers Association and Country Land and Business Association to maximise uptake of Uplands ELS, including by farmers with tenancy arrangements of less than five years. I have asked the Tenancy Reform Industry Group to take this forward.

We will keep the scheme under review and will monitor the longer term benefits of all agri-environment schemes in the uplands. We will review the uptake and administration of Uplands ELS before the end of the current rural development programme in 2013, looking particularly at the impact on groups such as tenant farmers and commoners.

As the HFA and Uplands ELS are funded under the Rural Development Programme for England, we shall now seek Commission approval for a modification to the programme to give effect to these proposals, once we have formally consulted the RDPE Programme Monitoring Committee.

I believe the final design of Uplands ELS achieves the right balance between being practical for farmers and beneficial to the uplands environment, and will help achieve our objective of landscape scale coverage.

Further detail about the design of Uplands ELS can be found on the DEFRA website at www.defra.gov.uk/rural/uplands

Home Department

Work Restrictions (Romanian and Bulgarian Nationals)

The Minister for Borders and Immigration (Mr. Phil Woolas): I am today announcing the Government’s decision in relation to restrictions on the labour market access of migrants coming to the UK from Romania and Bulgaria.

We have decided to maintain the closure of Tier 3 of the points based system, for unskilled migrant labour from outside the European Economic Area.

We have decided to retain the current restrictions on the employment rights applied to nationals of Bulgaria and Romania beyond the end of this year, subject to the following changes:

We will review these arrangements before the end of 2009.

We have previously made clear our intention to gradually open access to our labour market following accession of Bulgaria and Romania on 1 January 2007. This decision is in line with that policy of gradual opening of the labour market.

We sought advice from the independent Migration Advisory Committee (MAC) on the labour market impact of relaxing restrictions, and whether it would be sensible to do so. The committee has produced an impressive and comprehensive report, which it is publishing today.
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I have arranged for copies to be placed in the Libraries of both Houses. In advising against lifting restrictions the committee pointed in particular to the impact of the current economic downturn, and the possible approach of other member states. We also sought views from members of the Migration Impacts Forum, which provides information to Government on the wider impacts of migration on local areas and services.


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