Written Ministerial Statements
Monday 12 October 2009
Treasury
Delegated Legislation (Counter-terrorism)
The Exchequer Secretary to the Treasury (Sarah McCarthy-Fry): The Government have today laid before the House a statutory instrument under the Counter-terrorism Act 2008 containing a direction requiring the UK financial services sector to cease all business with the Iranian Bank Mellat and the Islamic Republic of Iran Shipping Lines. This means that from today, financial and credit institutions will no longer be able to enter into new transactions or business relationships with these entities nor to continue with existing transactions or business relationships unless they are licensed by HM Treasury. Consistent with the commitment provided to the House during the passage of the Act, I would like to set out the reasons behind our decision.
The Treasury is satisfied, as required by the Act, that activity in Iran that facilitates the development or production of nuclear weapons poses a significant risk to the national interests of the UK. Iran continues to fail to meet its international obligations. Most notably, its nuclear programme presents an immediate challenge to the global non-proliferation regime. The International Atomic Energy Agency (IAEA-the UN body charged with monitoring Iran's activities and ensuring that no nuclear material is being diverted to non-civilian applications) is being refused the access it seeks by Iran, which also declines to answer questions put to it by the agency's staff about alleged studies suggesting a military aspect to Iran's programme. As a result, the IAEA director general has stated that he is unable to verify Iran's nuclear programme is for exclusively peaceful purposes.
Iran's ongoing improvement of its ballistic missile capabilities also continues to cause international concern. Its failure to answer questions from the IAEA about possible military dimensions to its nuclear programme increase concerns that its ballistic missile programme represents a potential nuclear delivery system.
The UK has for many years been clear that we would prefer a more productive relationship with Iran, and for Iran to take its place as a responsible member of the international community. We continue to work through the E3+3 and urge Iran to accept our, and US, offers of engagement in order to achieve a diplomatic resolution of the nuclear issue. The Government welcome the talks recently held between the E3+3 and Iran.
However, Iran continues to pursue its proliferation sensitive nuclear and ballistic missile activities in defiance of five UN Security Council Resolutions.
We cannot and will not ignore specific activities undertaken by Iranian companies which we know to be facilitating activity identified by the UN as being of concern, particularly where such activities have the potential to affect the UK's interests.
On the particular entities in question, vessels of the Islamic Republic of Iran Shipping Lines (IRISL) have transported goods for both Iran's ballistic missile and nuclear programmes.
Similarly, Bank Mellat has provided banking services to a UN listed organisation connected to Iran's proliferation sensitive activities, and been involved in transactions related to financing Iran's nuclear and ballistic missile programme.
The direction to cease business will therefore reduce the risk of the UK financial sector being used, unknowingly or otherwise, to facilitate Iran's proliferation sensitive activities.
Double Taxation Convention (United Kingdom and Austria)
The Financial Secretary to the Treasury (Mr. Stephen Timms): A new protocol to the double taxation convention with Austria was signed on 11 September 2009. The text of the protocol has been deposited in the Libraries of both Houses and made available on HM Revenue and Customs' website. The text will be scheduled to a draft order in Council and laid before the House of Commons in due course.
Double Taxation Agreement (United Kingdom and Malaysia)
The Financial Secretary to the Treasury (Mr. Stephen Timms): A new protocol to the double taxation agreement with Malaysia was signed on 22 September 2009. The text of the protocol has been deposited in the Libraries of both Houses and made available on HM Revenue and Customs' website. The text will be scheduled to a draft order in Council and laid before the House of Commons in due course.
Equitable Life
The Chief Secretary to the Treasury (Mr. Liam Byrne): On 18 August Sir John Chadwick issued an interim report that set out an approach for assessing relative loss, the definitive questions he believes need to be addressed in taking forward that approach; and the principles he proposes to adopt to determine the appropriate proportion of losses to apportion to the public bodies.
He has extended his original response deadline, to 16 October, with a view to allowing time for interested parties to make responses following the outcome of the judgment of the divisional court in the judicial review proceedings brought against HM Treasury in relation to its response to the parliamentary ombudsman's report into the prudential regulation of Equitable Life. The timing of the judgment is a matter for the court, but is expected to be handed down soon. The Treasury will consider the judgment carefully and respond to Sir John's interim report as soon as it is in a position to do so, recognising that speed continues to be of the essence in this matter.
I will update the House as soon as it is possible to do, after the court's judgment is promulgated.
National Reform Programme 2009
The Economic Secretary to the Treasury (Ian Pearson): I wish to inform the House of the publication on 8 October 2009 of the "UK's National Reform Programme (NRP) 2009", copies of which have been placed in the Libraries of both Houses.
As part of the EU's Lisbon Strategy for jobs and growth, the UK must present to the European Commission by 15 October 2009 its National Reform Programme (NRP) 2009, setting out UK progress on economic reform.
The NRP responds to the recommendations the European Council agreed in March 2009 for the UK on fiscal sustainability and skills and employment, and the Council's points to watch for the UK on housing supply and R and D. The NRP 2009 also reports on UK progress in the areas of the business environment and climate change, energy policy, and sustainable development, which were re-emphasised by the European Council in March 2008 as priority areas over the 2008-10 cycle of the Lisbon Strategy. Reporting is in the context of the current downturn and medium-term reform measures, in line with the European economic recovery plan (EERP). The NRP 2009 does not make any new policy announcements: rather, it reports on the implementation of existing reforms, and looks forward to announced future policies.
Business, Innovation and Skllls
National Minimum Wage
The Minister for Business, Innovation and Skills (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 policy issues including apprenticeships, homeworkers and young workers.
The Government will be submitting their economic evidence to the Commission later this year.
A copy of the non-economic evidence will be placed in the Libraries of both Houses and will be available from the BIS website at: www.bis.gov.uk.
Communities and Local Government
Home Loss Payments (2009)
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Ian Austin): The Government have decided not to amend the thresholds for Home Loss payments in 2009. In previous years, since 2003, new thresholds have come into force on 1 September.
Home Loss payments are part of the land compensation system and are paid to owner-occupiers and tenants following compulsory purchase or displacement by housing orders or estate redevelopment. Owner-occupiers receive 10 per cent. of the value of their property-subject to maximum and minimum thresholds-and tenants receive a flat-rate equal to the minimum payment for owner-occupiers.
The thresholds have risen steadily until 2008, when the maximum payment was £47,000 and the minimum and flat-rate were £4,700. The 2009 review indicated that the thresholds could be reduced to £41,000 and £4,100-slightly above the 2006 levels.
The thresholds and flat-rate mainly bite at the minimum level, as very few high-value properties are taken in the normal run of compulsory purchase orders. The people most affected would be those owner-occupiers with properties worth less than £47,000 and tenants receiving the flat-rate, typically those in clearance areas or estate redevelopment schemes by registered social landlords.
The people caught up in these schemes are quite vulnerable, and the Government believe that reducing their home loss payments by £600 (from £4,700 to £4,100) would make life more difficult for those who are already in a very difficult situation. We have therefore decided not to reduce the thresholds this year.
Defence
Apache AH Mk1 Future Support Arrangements
The Parliamentary Under-Secretary of State for Defence (Mr. Quentin Davies): Apache is currently providing vital battle-winning capability in support of UK and coalition forces on operations in Afghanistan. Building on the existing support arrangements in place, on 6 October I announced the award of a through-life integrated operational support (IOS) contract to AgustaWestland for implementation of the Apache Helicopter Future Support Arrangements (FSA). This IOS contract is an output-based contract where specific levels of support are required to be achieved by industry while allowing industry to decide the optimum way to provide that support. Under the contract, one of the key areas will see AgustaWestland increasing the availability of the Apache helicopters from the current level to over 70 per cent. which will be of significant benefit to front-line users. In addition the contract will reduce through-life costs through AgustaWestland implementing continuous improvements in the service provided.
This contract will build on the existing effective and efficient engineering and logistical support for the Apache AH Mkl helicopter to the frontline. The contract is valued at £439 million for the period to March 2014, with a price review thereafter, and transfers to industry further responsibility for Apache AH Mkl maintenance and support and associated risk of delivering the required output. The contract is forecast to deliver savings in the region of £50 million over the first contract period as compared to the projected costs of current support arrangements, with the potential to deliver further savings through life. This will be achieved whilst also increasing aircraft availability.
The contract represents another step forward in the helicopter plans set out in the MOD-AgustaWestland strategic partnering arrangement, strengthens our relationship with the industry, and will increase aircraft availability levels despite reducing through-life costs. Progress with this IOS contract builds on the similar support contracts already in place for the Sea King and Merlin helicopters that have also been previously awarded to AgustaWestland.
Overall the Apache IOS contract provides excellent value for money for the taxpayer and delivers improved and efficient support to the frontline.
Energy and Climate Change
Carbon Reduction Commitment Energy Efficiency Scheme
The Minister of State, Department of Energy and Climate Change (Joan Ruddock): The UK Climate Change Act makes the UK the first country to set a long-term legal framework for reducing emissions over the next four decades. The Act has demonstrated decisive international leadership, showing the UK is committed to taking up its responsibility for reducing global emissions. As part of this commitment, Government will introduce the carbon reduction commitment, an energy efficiency instrument, next April. The CRC will help large public and business sector organisations reduce their emissions through improved energy efficiency and thereby save £1 billion each year by 2020. I also intend that CRC will deliver emissions reductions of more than 4 million tonnes of CO2 per year by that time. Given the primary focus of the scheme on energy efficiency, CRC will now be known as the CRC Energy Efficiency scheme (CRC). Last Wednesday, the UK's Administrations published the Government response to the third consultation on the scheme which was held between March and June 2009. That consultation related to the scheme's regulatory basis. The response finalises the policy for the scheme before its launch in April 2010.
Without new policies, emissions from public and business sectors will not achieve the carbon reductions we require over coming years. This group of organisations in particular has significant potential to achieve cost-effective energy efficiency savings. There are clear benefits from positive, immediate action to tackle climate change and investment that takes place in the next 10-20 years will have a profound effect on the climate in the second half of this century. Government are committed to ambitious targets to reduce the UK's CO2 emissions, and this will require contributions from all sectors of the economy and from across all parts of the UK.
The basic trajectory of CRC remains. The first introductory phase of the scheme until 2013 will have an unlimited number of allowances. Thereafter Government will set the number of allowances, which will decrease year on year to ensure that the potential for efficiency savings are realised. I will be taking the advice of the Committee on climate change before setting this cap in 2012, but anticipate that the scheme will ensure that large organisations play their full role in contributing to our emissions reductions of at least 34 per cent. by 2020.
The UK Government have worked together with devolved Administrations and stakeholders in Scotland, Wales and Northern Ireland to ensure that the CRC is
in keeping with our shared long term vision for a "light touch" yet robust scheme, which provides both financial and reputational incentives for these sectors to increase energy efficiency and deliver emissions reductions.
In light of feedback from the consultation, I am pleased to announce that I have adjusted the scheme to ensure that the financial impact from the purchase of allowances will be similar in all years. I have decided that the retrospective purchase of allowances for 2010-11 will no longer be required. Participants will be required only to correctly report their emissions in the first year. I have therefore halved the financial impact in the first year, compared to a double sale of allowances.
Other changes include the possibility for subsidiary organisations that would qualify in their own right to be able to participate in the scheme independently from their parent or fellow subsidiary organisations. This will give organisations greater flexibility to choose the approach that best works for them, without losing emissions coverage of the scheme. I have also given extra weighting in the second year to the measurement of early action, which will feature in the league table. This change responds to stakeholder feedback and better reflects the expected life of the contribution made by such early action to an organisation's energy efficiency.
The CRC is the only UK scheme focused on energy efficiency measures, and therefore the main league table on which revenue recycling is based will remain an energy efficiency league table. I have carefully considered stakeholders' views on the role of renewables in the scheme and in particular that many participants are also looking to invest in onsite renewable electricity generation to help play their part in a transition to a low carbon economy. I therefore want to recognise these efforts, alongside energy efficiency achievements, and will publish a second table which sets out the contribution made from both energy efficiency measures and the onsite generation of electricity from renewable resources, where this is also consumed onsite.
In achieving our climate change ambitions, it is critical that senior management throughout the economy are engaged in achieving these objectives. The CRC provides the policy framework to ensure that the existing best practice of our leading organisations will be more widely taken up, and that carbon becomes correctly considered, reported and valued. The scheme sits alongside the "Guidance on how to measure and report your greenhouse gas emissions", published by Government on 30 September, explaining how all organisations should measure and report their greenhouse gas emissions, including those organisations captured by the CRC. Investors and the public will increasingly make judgments about organisations' achievements on both saving energy and tackling climate change. I believe that the scheme will be an effective tool in helping the public and private sector play their part in avoiding catastrophic climate change.
Environment, Food and Rural Affairs
Fly-tipping
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Norris):
Copies of the annual report on the number of incidents of fly-tipping recorded by local authorities on the Government's Flycapture database in 2008-09 will be
placed in the Libraries of both Houses today. This report gives information on the number and type of incidents, the type of land where the incident occurred and the estimated cost to authorities of dealing with it.
I am pleased to announce that there was a reduction of 9.3 per cent. in the number of fly-tipping incidents recorded by local authorities on the Flycapture database from 2007-08. I am also pleased to highlight the good work carried out by local authorities in carrying out 2,000 prosecutions alongside over 520,000 other enforcement actions to prevent or in response to fly-tipping incidents in 2008-09.
DEFRA will continue to work with the Environment Agency and local authorities to prevent illegal waste activity through a combination of prevention, education and enforcement.
This report is also available from the DEFRA website at:
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