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Written Ministerial Statements

Tuesday 9 June 2009

Business, Innovation and Skills

Trade Credit Insurance Top-up Scheme

The Minister for Business (Mr. Pat McFadden): My noble Friend the First Secretary of State, Secretary of State for the Department for Business, Innovation and Skills and Lord President of the Council has made the following statement on the Trade Credit Insurance Top-up Scheme.

“From today eligibility for the scheme will be backdated for those firms who have had their credit limits reduced since 1 October 2008. These businesses are now eligible for six months’ cover providing they meet the other eligibility criteria set out previously.

Secondly, from today customers of HCC International Insurance Company plc will be eligible for policies under the Government scheme. Brokers and clients should contact HCC International Insurance Company plc in the first instance in order to apply for the scheme.

Further information can be found at the Business Link website, www.businesslink.gov.uk/creditinsurance .”

Culture, Media and Sport

Problem Gambling

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. Gerry Sutcliffe): I have had a number of discussions with the gambling industry in which they have now assured me that they will provide £5 million each year as a minimum commitment over the next three years to fund gambling research, education and treatment. The Chair and trustees of the industry fundraising body (the Responsibility in Gambling Trust—RIGT) working with Business in Sport and Leisure (BISL) and the other trade bodies are publicly committed to over-achieving the minimum sum of £15 million over three years and have set out credible plans to do so. They have secured significant corporate backing already.

The trustees of the new commissioning body—the Responsible Gambling Fund (RGF)—are satisfied that the assurances given to them by the Trustees of RIGT are sufficiently robust to allow them to develop three- year funding programmes. This will enable RGF and service providers in the field to plan sensibly. I also saw a successful transition to the new structures for underpinning the strengthened voluntary arrangements as critical. I am pleased that there has been an appropriate transfer of undertakings to the new commissioning body and agreement by the fund’s trustees to a shared executive to support both the Strategy Board and the RGF.

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It is my and the Strategy Board’s firm expectation that the new shared chief executive role will be advertised shortly and the post filled by the autumn.

This is not a decision that we have come to lightly. However, on the basis of the assurances provided by the industry and on the funding agreement that has been reached between RIGT and RGF, I have decided to announce that we will not need to introduce a statutory levy.

With all three elements in place, the Strategy Board, under the expert chairmanship of Baroness Julia Neuberger, will have the industry commitment and resources to be able to do the job that it was set up to do. I look forward to the board’s initial report in the autumn on what the strategy and priorities should be.

We recently completed a consultation on how a statutory levy would be implemented. That consultation made it clear that any levy would take full account of any voluntary payments made up to the point of introduction. I make that point to reassure those who have committed themselves to making the voluntary system work that, if they are let down by less public spirited competitors and I am forced to resurrect the idea of a levy, those who have contributed will benefit from their contributions—not the reverse.

Environment, Food and Rural Affairs

Dairy Farmers of Britain

The Secretary of State for Environment, Food and Rural Affairs (Hilary Benn): I wish to inform the house about the problems affecting Dairy Farmers of Britain. PricewaterhouseCoopers were appointed as receivers and managers of Dairy Farmers of Britain Limited (DFOB), the agricultural milk co-operative, on Wednesday 3 June 2009. This followed an invitation by its directors to DFOB’s Bank, HSBC, following a prolonged period of operational and financial restructuring during which they closed down several plants and members’ debts were converted into shares. Their major contract to supply fresh milk to the Co-operative Group was not renewed and was due to end on 1 August.

For customers, employees, dairy farmer members and ex-members, hauliers and other supplying businesses, this has been very unwelcome news, and many of them will have lost significant sums of money.

I would like to pay tribute to the way in which all parties affected by the collapse of DFOB have worked together to try to minimise the immediate impact. The employees of DFOB have worked hard over the last few days, including the weekend, to ensure that arrangements have proceeded smoothly. The Receiver has, with the chair of DFOB’s Member Council, held three meetings around the country to inform farmer members of the situation and their plans. He is, with the support of DFOB’s bankers, HSBC, continuing to trade: farmers who remain with the business will receive a payment for their milk in the middle of this month and again at the end. The level of payment will depend on the price the Receiver can realise for the milk produced. He has not held farmer members to their contracts and I understand approximately half of DFOB’s milk volume has moved
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to other buyers already, representing about a third of their members. He has also, through the hauliers, continued to collect milk from those remaining with the business.

I would also like to thank the industry as a whole for the constructive way they have worked together to try to ensure that the complex supply arrangements between DFOB and other businesses continue to operate smoothly. DFOB and NFU have set up helplines; farmers should not feel pressurised into signing up to contracts with alternative buyers that they might regret.

At the time of the Receiver’s appointment DFOB employed around 1500 people, and had about 1800 farmer members. It supplied over 1 billion litres of milk a year, representing slightly under 10 per cent. of UK production. Its business was in Wales and England, with no farmer members or businesses in Scotland or Northern Ireland. Since 3 June the Receiver has sold Lubborn creamery in Somerset and negotiations are in place for other plants including Llandyrnog creamery in north Wales.

I have been in contact with the chairmen of the North West Development Agency and One North East to discuss how they can provide support and advice, in particular in relation to the Blaydon dairy and DFOB farmers in Cumbria and Northumberland. I have also written to the British Bankers’ Association, and the Agricultural Industries Confederation, to ask their members to consider any short term cash flow problems faced by members sympathetically. Farmers facing credit difficulties can also discuss with Business Link their eligibility for the Enterprise Finance Guarantee Scheme and can contact HMRC’s Business Payment Support Service—which may enable them to defer any payments due to HMRC such as taxes (PAYE, VAT, income or corporation tax) and national insurance.

DEFRA officials met yesterday with the Receiver, the chair of DFOB’s Member Council, representatives from the Government Offices, the Regional Development Agencies and the insolvency service. The Receiver and officials have agreed to keep closely in touch on developments and on his plans for the remaining businesses. Officials have also kept in close touch with Dairy UK as the trade body representing the industry, and with the NFU. Through all parties working together I hope that we can minimise the short term impacts on the industry and individuals, and maximise the chances of finding buyers for the remaining businesses, giving more certain long term prospects to farmers, employees, and other dependent businesses. But there remain difficulties in assisting all of them.

I will update the House as necessary.

Northern Ireland

Equality Commission for Northern Ireland

The Secretary of State for Northern Ireland (Mr. Shaun Woodward): I have today placed copies of the final report of the Equality Commission for Northern Ireland on the effectiveness of the section 75 equality duty in the Libraries of the House.

The duty under section 75 of the Northern Ireland Act 1998 is an important mechanism for encouraging public authorities to place equality considerations at the heart of policy-making. This report highlights the
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positive impact that section 75 has had over the past decade, and offers a helpful reflection on how effectiveness could be developed to encourage greater equality of opportunity for all in Northern Ireland.

I commend the Equality Commission for their valuable contribution to pursuing equality of opportunity and I look forward to receiving proposals from them on how best to take this work forward through guidance to public authorities.


Correction to Parliamentary Answers

The Parliamentary Under-Secretary of State for Transport (Paul Clark): I wish to provide clarification to the House with regard to the consolidated answer I gave on 18 May 2009, Official Report, column 1124W, concerning the installation of warning signs for overhead cables and the risk assessment carried out prior to their installation on the A64 York to Scarborough road.

Prior to the installation of the marker posts no assessment of risk to road users from overhead electric cables was carried out.

The reason for the installation of the marker posts was not based on ensuring road user safety per se, but to warn road maintenance operatives, and the emergency services, of the presence of overhead cables, especially during the hours of darkness or poor weather conditions.

South Central Franchise

The Minister of State, Department for Transport (Mr. Sadiq Khan): My right hon. and noble Friend the Secretary of State for Transport has made the following ministerial statement.

“I have announced today that Southern Railway Ltd (a subsidiary of GoVia Ltd) has been awarded the South Central franchise.

The new franchise will begin operation on Sunday 20 September 2009. The franchisee will last for five years and ten months, with the final year dependent on the franchise achieving agreed target performance. It will be possible for the franchise to be extended by up to two years, at the Department for Transport’s discretion.

The new South Central franchise will provide a premium of £534 million net present value over the core five years ten month franchise length.

Bids were also received from NedRailways South Central Ltd (NedRailways Ltd), NXSC Trains Ltd (National Express Group plc) and Southern Trains Ltd (Stagecoach Group Plc).

The new franchise will provide additional capacity at peak times (linked to the Network Rail programme of platform lengthening) delivering a key element of the high level output specification in relation to London. In addition the franchise will provide more services such as enhanced late evening weekday frequencies (and weekend frequencies in south London), later last trains on Friday and Saturday nights, additional late night Brighton to Worthing services and hourly Sunday Brighton to Southampton services.

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By December 2013 the new operator will provide 158 additional vehicle arrivals into London in the morning peak (a 14 per cent. increase), 172 additional vehicle departures London in the evening peak (a 16 per cent. increase) and eight additional vehicle arrivals-departures into-from Brighton in the morning-evening peaks (24 per cent. increase).

The Department will continue to limit annual rises of regulated fares in line with national policy, which is currently RPI+1 per cent. Furthermore, individual regulated fares for the 2010 fare rise are capped at RPI+1 per cent. This policy applies whether July RPI is positive or negative. As with all franchises, unregulated fares will be the responsibility of the operator.

The new franchise sets a public performance measure (PPM) target of 93.1 per cent. to be achieved by March 2014 with improvements in delay minute and capacity targets over the franchise. This compares with the current performance of 89.6 per cent. PPM as at the end of April 2009.

A key element of the franchise is the delivery of a number of major infrastructure projects including platform lengthening, east London Line and Thameslink. The franchise is drafted in such a way to facilitate the delivery of these projects.

Alongside the Department’s access for all and national stations improvement programmes, the franchise will enhance 34 stations. Seven stations (Brighton, Haywards
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Heath, Hove, Lewes, Redhill, Three Bridges and Worthing) will undergo a major refurbishment as part of the showcase station project, with further station enhancements to be carried at another 27 stations.

At least 1,000 extra car parking spaces and 1,500 additional secure bicycle spaces will be provided and every station across the network will be cleaned and refreshed.

The Government have also required the operator to set targets for passenger satisfaction and provide additional investment if these are not achieved.

All stations and trains on the South Central network will be fitted with CCTV by June 2011. Secure station accreditation will cover 95 per cent. of footfall across all stations including almost all south London stations and there will also be an increase in British Transport police presence across the franchise improving security.

New gatelines will be installed at an additional 22 stations on top of the 14 south London stations being gated prior to the franchise commencement with these staffed for longer to increase security and reduce ticketless travel.

There will be an increase in staffing at stations across south London to ensure stations are staffed from first to last service on each operational day (except four stations and on Boxing Day) and all stations across the franchise will maintain or increase customer-facing staff presence.”

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