Written Ministerial Statements
Wednesday 1 April 2009
Treasury
Finance Bill Measures
The Financial Secretary to the Treasury (Mr. Stephen Timms): I can today announce the implementation of a measure following consultation and two measures to protect revenues.
Modernising tax relief for business expenditure on cars
Following consultation, the Government published draft legislation on 8 December 2008 setting out proposals for new rules for tax relief for business expenditure on cars. With effect from April, the rate of relief will be determined by the car’s CO2 emissions, rather than its cost. Associated rules governing the proportion of lease rental payments that may be deducted for tax, where businesses hire or lease their cars rather than buying them, are being similarly amended. I can confirm that this measure will be going ahead with effect from today for businesses in the charge to corporation tax and from 6 April for businesses within the charge to income tax. However, following comments received on the published draft legislation a number of changes to it are proposed. These, together with anti-avoidance provisions, are set out in revised legislation published on the HMRC website today.
Avoidance using life insurance policies
Schemes designed to avoid income tax have been identified by HMRC. The schemes purport to create income tax loss relief from offshore life insurance policies that can be set against other taxable income. The Government do not accept that the schemes have the effect sought or that there are any circumstances in which income tax loss relief can arise on life policies. However, to put the position beyond any doubt, legislation will be introduced in the forthcoming Finance Bill that will prevent income tax loss relief from being available from transactions on offshore life policies.
This change, effective from 6 April 2009, will ensure that claims cannot be made for income tax loss relief from offshore life insurance policies relating to the years 2009-10 onwards. Furthermore, it will ensure that tax deductions will not be allowed for the years 2009-10 onwards even if the loss related to a previous year.
The change will also have effect from today to all new offshore life insurance policies. It will also apply to existing offshore policies which on or after today are wholly or partly assigned to the person claiming a deduction, become used as security for a debt, or are varied so as to increase the benefits secured.
A copy of the draft legislation together with a draft explanatory statement will be published shortly on HMRC’s website.
Avoidance using artificially created employment losses
The Government have become aware of a further artificial and aggressive avoidance scheme that seeks to abuse tax reliefs available for employment-related losses incurred by employees and former employees.
This scheme relies on deliberate default during the course of a contrived employment. During the course of the employment, the employer will deliberately default in relation to one or more aspects of certain financial arrangements undertaken by the employer. Under the terms of the employment, this will trigger compensation payable by the employer. The employee will be contractually obliged to suffer all or part of the compensation payable by the employer in respect of the default and will then claim relief for this as a loss against other income.
These arrangements are similar to the highly abusive avoidance scheme that the Government acted against with effect from 12 January 2009. The Government do not accept that any of these highly contrived arrangements have the effect that is sought, but will remove any doubt by introducing appropriate legislation in the Finance Bill 2009 to prevent loss relief being allowed where liabilities relating to an employment are incurred by employees and former employees with a main purpose of the avoidance of tax. This legislation will have effect from 12 January 2009.
The legislation will not affect genuine cases where tax avoidance arrangements are not involved.
Details are contained in a technical note; the note, the draft legislation relating to this announcement and the draft legislation relating to the earlier statement of 13 January 2009 are published on HMRC’s website.
Communities and Local Government
Empowerment Fund
The Secretary of State for Communities and Local Government (Hazel Blears): Last July, through the Empowerment White Paper, I outlined my proposals to support 20 to 25 third sector organisations through the Empowerment Fund. Today, I am pleased to announce to the House the twenty one third sector organisations that will receive grants under the Empowerment Fund. The aim of the Empowerment Fund is to provide stable and strategic funding to third sector organisations with national reach and help deliver on key themes within the White Paper.
The third sector organisations are:
Community Voices and Leadership Theme
Royal Association for Disability and Rehabilitation (RADAR)
The Young Foundation
Operation Black Vote
YWCA
Community and Social Media Theme
Tenant Participation Advisory Service (TPAS)
Media Trust
Community Matters
Novas Scarman
Workers Education Association
Sheila McKechnie Foundation
Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA)
School for Social Entrepreneurs
Social Firms UK
Community Involvement in Planning
Centre for Sustainable Energy
Environmental Law Foundation
Carnegie
Action for Market Towns
Helping small organisations to work together
Housing Associations’ Charitable Trust (HACT)
Oxfam
Improving communication between citizens and councillors
British Association of Settlements and Social Action Centres (Bassac)
Urban Forum
The Empowerment Fund will provide £9.25 million over three years paying grants of either £250,000 or £500,000. The security of a three year fund will help these organisations plan ahead with confidence and they will be expected to show how they make effective use of the financial assistance to expand their work.
This approach was developed in consultation with the relevant policy holders within the Department of Communities and Local Government, other Government Departments, and the third sector.
Defence
Porton Down Volunteers
The Parliamentary Under-Secretary of State for Defence (Mr. Kevan Jones): In 2003 the Government commissioned, via the Medical Research Council, a large-scale and independent epidemiological study of the more than 19,000 UK service personnel who had taken part in human experiments at the Porton Down research establishment between 1939 and 1989. The study was completed in 2007, and the main findings on mortality and cancer incidence were published on 25 March by the British Medical Journal.
The researchers found no significant difference in overall cancer risk between those personnel who took part in the tests and similar personnel who did not. General mortality was slightly higher among the Porton Down veterans than the controls, but was lower in both groups than in the population at large. The authors state that it is not possible to attribute the small excess mortality to chemical exposures at Porton Down.
I welcome the publication of these findings, which fulfil the commitment made by this Government to investigate whether the long-term health of Porton Down veterans was degraded by their participation in the tests.
UK Gulf Veterans (Mortality Data)
The Parliamentary Under-Secretary of State for Defence (Mr. Kevan Jones): As part of the Government’s continuing commitment to investigate Gulf veterans’ illnesses openly and honestly, data on the mortality of veterans of the 1990-91 Gulf conflict are published regularly. The most recent figures for the period 1 April 1991 to 31 December 2008 are published today as a National Statistic Notice on the Defence Analytical Services and Advice website.
The data for Gulf veterans are compared to that of a control group known as the “Era cohort” consisting of armed forces personnel of a similar profile in terms of age, gender, service, regular/reservists status and rank, who were in service on 1 January 1991 but were not deployed to the Gulf. As in the previous release, the “Era” group has been adjusted for a small difference in the age-profile of those aged 40 years and over, to ensure appropriate comparisons.
Key points to note in the data are:
There have been 997 deaths among the Gulf veterans and 1,008 in the age-adjusted Era comparison group.
The 997 deaths among Gulf veterans compare with approximately 1,609 deaths which would have been expected in a similar sized cohort taken from the general population of the UK with the same age and gender profile. This reflects the strong emphasis on fitness when recruiting and retaining service personnel.
These statistics continue to confirm that UK veterans of the 1990-91 Gulf conflict do not suffer an excess of overall mortality compared with service personnel that did not deploy.
The full notice can be viewed at: http://www.dasa.mod.uk
Health
Integrated Care
The Minister of State, Department of Health (Mr. Ben Bradshaw): Sixteen pilot sites that will test how best to bring health and social care services together in new ways to benefit patients are being announced today.
The pilots have been designed to look beyond traditional health and social care boundaries to explore how services for patients and service users can be improved. They will then assess the benefits of different models of care and identify any best practice that could be used more widely. The pilots will be supported by £4 million funding from the Department of Health,
Each site has developed a model of care to help respond to particular local health need in the community. The health issues being tackled in each pilot include dementia, care for older people, substance misuse, chronic obstructive pulmonary disease (COPD) and end of life care. The models of care involved vary widely; they include: partnerships, new systems and care pathways that span primary, community, secondary and social care.
Bournemouth and Poole Teaching Primary Care Trust
Cambridge Assura Limited Liability Partnership
Church View Medical Practice, Sunderland
NHS Cumbria
Durham Dales Integrated Care Organisation
Nene Commissioning Community Interest Company
Newcastle Hospitals NHS Foundation Trust
Cornwall and Isles of Scilly Primary Care Trust
NHS Norfolk and Norfolk County Council
Northumbria Healthcare NHS Foundation Trust
North Cornwall Practice-Based Commissioning Group
Principia—Partners in Health, Nottinghamshire
NHS Tameside and Glossop
Torbay Care Trust
Tower Hamlets Primary Care Trust
Wakefield Integrated Substance Misuse Service
The pilots start today and will run for two years. They will be evaluated over three years against a set of national and local measures, including impact on health outcomes, improved quality of care, service user satisfaction, and effective relationships and systems.
Drug Tariff
The Minister of State, Department of Health (Phil Hope): As hon. Members will be aware, the Department has been carrying out a review of the arrangements under part IX of the Drug Tariff for the provision of stoma and urology appliances, and related services, in primary care. This is to advise the House of the outcome of the review.
Throughout phase 2, the Department's key aims have been to:
maintain and, where applicable, improve patient care;
ensure equitable payment to dispensing appliance contractors and pharmacy contractors for the provision of equivalent services; and
achieve transparency between what is paid for services and what is reimbursed for items.
The last consultation regarding the arrangements for the provision of stoma and urology appliances, and related services, in primary care closed in September 2008; a summary of the responses is available on the Department’s website at: www.dh.gov.uk/en/Consultations/Responsestoconsultations/index.htm.
Our proposals have been amended, taking into account consultation responses. An overview of the new arrangements has been placed in the Library. In summary, the new arrangements look to:
define and standardise the services that both dispensing appliance contractors (DACs) and pharmacy contractors provide in the normal course of their business when dispensing Part IX A (catheter), part IX B and part IX C appliances. Essential services that must be provided include services such as a repeat prescription service, appropriate advice and a home delivery service—if the patient requests it. Advanced services, which DACs and pharmacy contractors may choose to provide, include stoma appliance customisation and appliance use reviews;
require appliance contractors to operate within a similar clinical governance framework to pharmacy contractors;
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