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Written Ministerial Statements

Thursday 16 July 2009

Business, Innovation and Skills

Informal Meeting of Employment and Social Policy Ministers

The Minister for Pensions and the Ageing Society (Angela Eagle): My noble Friend, The Minister for Employment Relations and Postal Affairs, Lord Young of Norwood Green, at the Department for Business, Innovation and Skills has made the following statement.

"The informal meeting of Employment and Social Policy Ministers took place on 8 to 9 July 2009 in Jonkoping, Sweden. I represented the UK.

The theme of this informal meeting was labour market inclusion looking ahead to post-2010. The informal looked at maintaining employment and promoting mobility, upgrading skills and matching with labour market needs and increasing access to employment. Working time was also discussed over a Ministers-only lunch which I attended.

In the opening session, member states agreed on the importance of active social security and labour market policies. They stressed the importance of ensuring help for those moving between jobs and those already outside the labour market. While the crisis tested member states' resolve to conduct further reforms, now was the time to prepare Europe for the economy of the future.

Following on from the opening session, the meeting was split into three workshops, each devoted to a specific challenge: Workshop 1-Managing the impact of the financial crisis by increasing access to employment, Workshop 2-Facilitating access to employment by efficient reforms in the labour market and Workshop 3-Increasing employment through an active social security policy. I participated in Workshop 3 to present the UK approach to the reform of incapacity benefit and said that reform was ongoing. Others member states warned against repeating the mistakes of the past that caused long-term structural damage to economies.

The presidency concluded that it saw these discussions as feeding into its work on the post-2010 strategy. The commission concurred. While the current Lisbon strategy remained the right framework for action, its forthcoming revision would need to take better account of the social dimension. The commission would set out initial views in its forthcoming consultation document.

The meeting concluded with a private Ministers-only lunch discussion on the working time directive. Following the failure of negotiations on the directive, some member states insisted that any new proposal would need to deal with the opt-out. The UK along with Germany, Poland and others disagreed. A few member states urged caution
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and saw no point in proceeding if failure was clear from the outset. The Commission underlined the need to respect European Union law. Preliminary discussions would be needed with the European Parliament before deciding how to proceed. The presidency concluded that the majority of member states use the opt-out but that a way forward would need to be found."



The Chancellor of the Exchequer (Mr. Alistair Darling): The Economic and Financial Affairs Council was held in Brussels on 7 July 2009. The following items were discussed:

Presentation of the presidency work programme

The Council took note of the presentation by the Swedish presidency of the ECOFIN work programme for the second half of 2009.

Follow up to the 18-19 June European Council

Preparation for the G20 meetings

The UK updated the Council on the outcome of a G20 deputies meeting on 27 and 28 June. The presidency informed Ministers of its intentions of the handling of the preparation for further G20 meetings in September, including London meetings of G20 deputies on 3-4 September and G20 Finance Ministers and central bank governors on 4-5 September. There will be a lunch of EU Finance Ministers to prepare for these on 2 September. The Government will look forward to working closely with the presidency to ensure co-ordination of work taken forward at G20 and EU levels.


Following a report by the Economic and Financial Committee, ECOFIN adopted Council conclusions on pro-cyclical effects on financial markets. The conclusions assess work underway to reduce possible pro-cyclical effects of financial regulation, including on the issue of impaired assets. The UK is content with the conclusions, which represent a positive step forward on this issue, and looks forward to further discussion of the issue in the autumn.

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Implementation of the Stability and Growth Pact

Any Other Business

Medium-Term Budgetary Objectives (MTOs) and Implicit Liabilities

The Council took note of issues raised by the Slovenian Minister regarding the methodology to be used by member states from this autumn when they set medium-term objectives for their national budgets.

The Economic Secretary to the Treasury (Ian Pearson): On 10 July 2009, I represented the UK at the budget Economic and Financial Affairs Council (ECOFIN).

The Council conducted its first reading of the EC budget for 2010, and agreed a draft budget that was supported by all member states.

The Council meeting was followed by a conciliation meeting between the Council and the European Parliament to discuss the EC budget for 2010.

Provisional Outturn for Public Expenditure (2008-09)

The Chief Secretary to the Treasury (Mr. Liam Byrne): The Treasury is today publishing the "Public Expenditure 2008-09 Provisional Outturn" White Paper.

The White Paper is an annual report to Parliament on the provisional outturn for public expenditure. It focuses on spending within departmental expenditure limits (DEL) and annually managed expenditure (AME), and includes information on individual supply estimates, and administration costs and near-cash limits.

The outturn figures are described as provisional because, in some cases, they will be revised when Departments publish their final accounts.

A copy of the White Paper will be available in the Libraries of both Houses and will be accessible on the Treasury website.

Tax Law Rewrite

The Financial Secretary to the Treasury (Mr. Stephen Timms): As the tax law rewrite project will soon complete the work of rewriting mainstream direct tax legislation, it is necessary to consider whether it should rewrite other parts of the direct tax code.

Since it was set up, the project has played a key role in modernising tax legislation and making it far more accessible and easier to apply. Its work has rightly been widely praised, and has provided considerable benefits for users. However the benefits of rewriting other parts of the direct tax code are less clear and there is less support for extending the work of the project into these
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areas. I am satisfied that when the project's next two Bills are enacted, the time will be right to bring this work to an end.

The achievements of the project would not have been possible without the dedication of everyone involved. Many tax professionals in the private sector have given their time and expertise in reviewing and improving the new provisions during their development, in a productive partnership with HM Revenue and Customs. Their input, and the guidance of the project's steering and consultative committees, have been vital in achieving the excellent quality of the rewritten legislation.

With the completion of the project's work, legislation for the mainstream direct taxes will be much easier for users to navigate and understand.

Gaming Machines

The Exchequer Secretary to the Treasury (Sarah McCarthy-Fry): I am today publishing a consultation on the future of gaming machines tax policy, copies of which have been placed in the House Library.

Following reforms to gambling taxation over the last decade, five of the seven gambling tax regimes are now calculated on a gross profits basis. Gaming machines face a combination of amusement machine licence duty (AMLD), a licence fee paid before a gaming machine may be made available to play, and VAT at the standard rate on their takings.

Taxing on the basis of gross profits has been a success for other gambling regimes. The Government are considering whether to place the taxation of gaming machines on to the same basis, and wishes to hear from interested stakeholders.

The consultation period will run until 23 October to ensure stakeholders are given additional time to make representations. The consultation document is also available from the HM Treasury website.

Walker Review

The Exchequer Secretary to the Treasury (Sarah McCarthy-Fry): The Government strongly welcome the publication today of the consultation document of Sir David Walker's independent review of the corporate governance of UK banks and other financial institutions.

Corporate governance failures were a major contributor to the financial crisis and the weaknesses in board practice, risk management, control of remuneration and exercise of ownership rights identified must be addressed.

Sir David's proposals are detailed and comprehensive, setting a new benchmark for best practice both nationally and internationally.

The Government will carefully consider his proposals, including their wider and international implications, and in conjunction with the views arising from the consultation, make sure that robust measures are put in place.

Copies of the consultation have been deposited in the Libraries of both Houses.

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Cabinet Office

Annual Report and Accounts

The Minister for the Cabinet Office and for the Olympics, and Paymaster General (Tessa Jowell): Today, the Cabinet Office's "Annual Report and Accounts 2008-09" (HC 442) has been laid before Parliament

The annual report and accounts reports a loss and a contingent asset following the termination of phase 2 of the SCOPE programme in July 2008.

The SCOPE programme was an information technology programme working with 10 partners across Government. It aimed to extend the benefits of communication and collaborative working afforded by current information technology by improving the way sensitive information was shared between and used by the security and intelligence agencies and Government Departments.

The first phase of the programme was delivered on time and within budget in 2007. It has delivered extremely valuable benefits to the intelligence community in Government and has ensured that all its constituent members are now connected electronically.

Phase 2 was about providing additional functionality, for example, to allow for greater collaborative working between the security and intelligence agencies and Departments.

Phase 2 of the programme was cancelled following the failure of the main commercial supplier to the programme to meet key contractual milestones. As a consequence of termination, it was necessary to write off and report as a loss in the annual report and accounts that part of the value of the asset under construction which had no prospect of becoming viable.

The Treasury has approved a write-off of £24.4 million which has been managed within the Department's net resource requirement and budget and constitutes a charge against non-cash programme expenditure in the resource departmental expenditure limit.

My Department is now working with the contractor to resolve issues arising from the termination of the programme, including consideration of the legal avenues available. The aim of the work is to ensure that Her Majesty's Government and, ultimately, the taxpayer recover the appropriate value from the supplier which relates to those undelivered parts of the programme. This is noted as a contingent asset in the annual report and accounts. The details of the discussions with the supplier are commercially confidential and are likely to remain so.

Communities and Local Government

Gypsies and Travellers

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Shahid Malik): The Government have today published their first annual report on Gypsy and Traveller policies, as set out in its response to the Task Group on Site Provision and Enforcement for Gypsies and Travellers.

Copies of the report have been placed in the Library of the House.

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The Government are committed to a fairer, stronger society, in which disadvantage faced by all members of society is tackled. Fairness means ensuring that those Gypsies and Travellers who have no authorised place to stay have the same opportunities as others to a place they can call home, together with the same access to educational, health and other services. It means also that residents in local communities should not have to cope with the unauthorised developments and encampments that can be the consequence of a shortfall in authorised sites.

The report confirms that the framework put in place by the Government provides the tools to enable local authorities to tackle both the shortfall in site provision, and instances of unauthorised developments and encampments where they occur. The Government have published clear guidance to enable local authorities and other agencies to make effective use of the wide range of enforcement powers available to them. They now look to local authorities to be proactive in taking the lead in addressing the shortfall by identifying, in consultation with local communities, appropriate locations for sites which will have the twin benefits of creating homes for Gypsies and Travellers, and reducing the number of unauthorised developments which can be the cause of local community tensions.

The identification of authorised sites will also enable local authorities to reduce the costs of enforcement action related to unauthorised encampments, as well as providing access to even stronger enforcement powers when there are available pitches to which unauthorised campers can be moved. The savings from the reduction in enforcement action can then be deployed to other services to the benefit of the broader community, or reduced levels of council tax.

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