Written Ministerial Statements
Wednesday 2 December 2009
Business, Innovation and Skills
Post Office Banking (Government Consultation)
The Minister for Business, Innovation and Skills (Mr. Pat McFadden): My right hon. and noble Friend the Secretary of State for Business Innovation and Skills has made the following statement:
The Post Office is one of the most trusted institutions in the country. It stands at the heart of communities up and down the country, offering face to face access to essential services through its network of 11,500 branches. The Government are committed to a secure and sustainable future for the Post Office network, and have committed up to £1.7 billion of funding to support the Post Office network to 2011.
The Post Office is already a successful provider of financial services. It provides a wide range of savings, loans (including mortgages), and insurance products. It is also the UK's leading foreign exchange provider. But we want it to do more and to build on this successful platform. It is for this reason that the Prime Minister announced on 29 September that he wanted "the Post Office to play a much bigger role, bringing banking services back to the heart of people's communities."
To take this forward, the Government are today launching a 12-week national consultation on Post Office banking. The consultation will set out clearly what the Post Office already offers in terms of financial services; it will draw comparisons with Post Banks around the world; and it will set out the Government's vision for Post Office banking and the values that should underpin it. These values are that Post Office banking should be universal, trusted, accessible and sustainable.
In addition, the consultation invites views on a number of proposals for new financial products that the Post Office could offer. These include: a Post Office current account, a children's savings account to encourage saving at the Post Office from an early age, new services for small businesses including a Post Office business account, and a weekly budgeting account to allow those on low incomes to take advantage of direct debits and reduced bills.
We will be asking people whether they agree that these are the right areas to focus on and which banking services they would like to see at their local post office. This consultation sets the scene for an expansion in banking in Post Offices. It could result in important new business for our Post Offices and important new services for the public.
Treasury
ECOFIN
The Chancellor of the Exchequer (Mr. Alistair Darling): The Economic and Financial Affairs Council will be held in Brussels on 2 December 2009. The following items are on the agenda:
Regulations establishing three European Supervisory Authorities
Ministers will discuss regulations establishing three European Supervisory Authorities (ESAs): a European Banking Authority, a European Insurance
and Occupational Pensions Authority and a European Securities and Markets Authority. At June European Council the UK supported the establishment of a European Systemic Risk Board (ESRB) and the three new ESAs. The Government will now be looking to ensure those agreements are upheld.
a) VAT: Draft directive on reverse charge on emission allowances and certain goods
The Council will seek a general approach on a draft VAT directive regarding an optional and temporary application of the reverse charge mechanism in relation to supplies of certain goods and services susceptible to fraud. The presidency has tabled a compromise proposal which includes emissions allowances, mobile phones and computer chips and extends the application until June 2015. The Government support the draft proposal.
b) VAT treatment of postal services
Following its removal from the November ECOFIN agenda, the Council will be asked to provide political guidelines on the possible way forward for VAT on postal services.
ECOFIN will be asked to reach political agreement on proposed amendments to the Savings Tax Directive, which is the main EU instrument for tackling cross-border tax evasion on savings income, by automatic exchange of information. The proposal closes loopholes in the directive and extends its scope to cover income substantially equivalent to savings interest, such as income from life insurance products and low risk securities. This and the following items have strong links to the international transparency agenda, including work by the G20 on tax havens and non-co-operative jurisdictions, which has been led by the UK under its G20 presidency in 2009.
The recovery directive is aimed at improving existing procedures for recovery of direct and indirect tax debts, including on income tax, VAT, excise duties and EU agricultural levies. The Government support the extended provisions, which will reduce the opportunities for businesses and individuals to escape paying tax which is legally due in one member state, by moving to another member state.
e) Administrative Co-operation Directive
After discussions in November, ECOFIN will try to agree a general approach on this directive. The directive improves exchange of information and brings the EU into line with OECD standards by removing the right to refuse information on grounds of bank secrecy. The Government support these goals.
Anti-fraud agreements with third countries
The Council will reopen ECOFIN discussions on the draft anti-fraud agreement with Liechtenstein, and a negotiating mandate for anti-fraud agreements with Andorra, Monaco, Switzerland and San Marino. The proposed agreements provide for exchange of information to international standards in administrative and criminal matters in the tax field and related areas.
Implementation of the Stability and Growth Pact
Following preparation by the Economic and Financial Committee (EFC), ECOFIN will sign off decisions and recommendations for the revised Excessive Deficit Procedures of the UK, Ireland, France, Spain, Austria, Belgium, Czech Republic, Germany, Italy, the Netherlands, Portugal, Slovakia, Slovenia and Greece. The recommendations are in line with recent agreements in ECOFIN and the European Council on the EU's framework for fiscal exit strategies.
Preparations for the 10 and 11 December European Council
The presidency will indicate how the December European Council will be informed on progress, taking into account the results of the Council deliberations on the micro-and macro-supervisory elements of the package.
b) Contribution from ECOFIN to the discussion on the post-2010 Lisbon agenda
Ministers will agree a set of conclusions on the direction of a successor to the Lisbon strategy. The Government support the conclusions, which help build momentum towards the December European Council, where EU Heads will discuss a set of principles for a new European strategy for jobs and growth.
Following on from discussions in November, Ministers will be asked to agree a set of conclusions on financial exit strategies. The UK is content with the conclusions as they stand, which recognise that it is important to start designing the strategy for a transparent and coordinated phasing out of the different support schemes, but emphasise that it would be premature to initiate an exit from the support schemes while markets are still fragile.
Financial stability arrangements
ECOFIN will discuss and agree conclusions on financial stability, focusing on improvements in cross-border crisis management in the banking sector. The Government are content with the conclusions, which recognise the value of co-ordination among member states and with external partners. They also endorse the principles of firm-specific recovery and resolution plans.
Energy and Climate Change
Smart Metering
The Parliamentary Under-Secretary of State for Energy and Climate Change (Mr. David Kidney): My noble Friend the Minister of State, Department of Energy and Climate Change today made the following statement:
I am pleased to inform the House that the Department of Energy and Climate Change is today publishing "Towards a smarter future: Government response to the consultation on electricity and gas smart metering." This document summarises responses to the consultation on smart metering published by the Government in May 2009 and sets out the Government's conclusions.
Smart meters will pave the way for a transformation in the way that energy is supplied and consumed, contributing to our goals of energy security and carbon reduction. They will provide energy consumers with real-time information about their energy use,
enabling them to monitor and reduce their energy consumption and carbon emissions. Smart meters will support improved energy efficiency advice and facilitate smoother, faster switching between suppliers. They are an important first step towards the future development of a "smarter grid" delivering improved network efficiency and responsiveness, in turn this will help facilitate the introduction and increased use of renewable energy and ultra low carbon vehicles (electric and plug-in hybrids).
In October 2008 we announced our intention to mandate a roll out of electricity and gas smart meters to all homes in Great Britain with the aim of completing the roll out by the end of 2020. The May 2009 consultation document addressed fundamental issues for the organisation of the roll out. In particular the consultation document made proposals for the delivery model for domestic smart meters, the minimum high level functional requirements for smart meters, and the approach to extending meter functionality requirements in the small and medium non-domestic sector. Our decisions on these fundamental points will provide the platform for the detailed work now required to move towards the roll out of smart meters.
The delivery model for domestic smart meters
The Government have concluded that the "Central Communications" model offers the best approach to Britain's domestic smart meter roll out. Under this model the energy supply companies will be responsible for procuring and installing meters, while communications between the meters and utility companies will be co-ordinated centrally. The Central Communications model combines strong incentives for energy suppliers to deliver a high quality service to their customers, with wide scope to simplify and improve industry processes, making it easier to switch between suppliers. We believe that this approach will minimise the time and risk involved in preparing for roll out, in particular since it avoids changing the disposition of responsibility for metering services. Metering is currently the responsibility of energy suppliers and this model avoids fundamental change to these arrangements. We also believe that the development of smart grids can be fostered effectively under this approach, in particular by ensuring the requirements of network business are reflected appropriately in the minimum meter specification and the communications solution.
The high-level smart functionality requirements for domestic electricity and gas meters and the provision of a real-time display and information
The Government also confirm the proposals set out in the consultation document on high-level smart meter functionality requirements, with the exception of functionality to remotely enable/disable gas supply. In respect of the latter issue, we believe further work is needed to assess issues raised in consultation responses before reaching final decisions. A range of proposals were made in relation to the requirements of smart grids, but we have concluded that smart grid functionality is a subset of the high level requirements already proposed in the consultation. The next stage is to develop these high level proposals in more detail.
Consultation responses expressed a range of views on the issue of stand-alone displays. Having considered the response, the Government's position remain that a stand-alone display should be provided with the smart meter. In our view the provision of a display is important to securing the consumer benefits of smart metering, delivering real time information to consumers on their energy consumption in a readily accessible form. The next step will be to develop the requirements in more detail. As part of this work we will consider further what specific requirements should apply in cases where it is clear that the individual consumer does not wish to have such a display. However it will be important that this does not detract from the general premise that a free standing display should be provided with the meter.
The approach on smart functionality requirements for non-domestic meters
The Government have adjusted their proposals in this area following the consultation. We are confirming our intention to mandate the installation of meters with smart functionality at non-domestic sites covered by the consultation (those in electricity profile classes three and four and non-domestic gas sites with consumption of less than 732 MWh per annum) on the same time scale as for domestic sites, with exceptions under certain circumstances.
However, under our revised proposals, the exceptions will be much more limited in respect of meters installed after April 2014. We therefore propose to require that electricity and gas meters at sites in this category must have smart functionality by the end of 2020 except:
a) where advanced meters have been installed before April 2014 and the customer wishes to retain the existing meters; or
b) where advanced meters have been installed after April 2014 under pre-existing contractual arrangements; or
c) where there are technical constraints on the achievement of smart functionality.
We consider that this approach will best balance the need to support future smart grids by maximising installation of smart functionality with the desirability of allowing energy and carbon savings from advanced installations to continue in the short- to medium-term. However, we recognise that exceptions will need to be carefully framed, taking into account the technical and commercial complexities. We will discuss these revised proposals with suppliers, purchasers, meter and energy service providers and other stakeholders to refine the details before consulting on more detailed proposals.
The proposed implementation programme
Decisions set out in the response document provide the platform for the major programme of detailed implementation work that will be needed to support the mass roll out of smart meters under a mandate. A central smart meter implementation programme is therefore being established to design and implement new cross-industry arrangements, in co-ordination with the change programmes which industry participants will need to implement themselves. The first phase of the smart metering programme will be a joint DECC/Ofgem initiative. DECC will chair an over-arching DECC/Ofgem strategic programme board. This board will provide the necessary strategic oversight and direction to the programme. Ofgem E-Serve will manage and ensure effective delivery of phase one of the programme on behalf of DECC.
We firmly agree with those consultation respondents who have emphasised that the implementation programme must effectively engage the full range of stakeholders. In particular, a focus on the needs and perspectives of consumers much be at the heart of decision making at each stage under the programme, as well as the views of industry participants who will take on responsibility for delivery. The implementation programme will therefore develop a range of mechanisms to ensure that stakeholders' views are captured and taken into account.
I have placed copies of "Towards a smarter future: Government response to the consultation on electricity and gas smart metering" in the Libraries of both Houses. I have also placed in the Libraries copies of a number of associated documents which we are also publishing today: "Impact assessment of a GB-wide smart meter roll out for the domestic sector"; "Impact assessment of smart / advanced meters roll out to small and medium businesses"; and a report from Baringa Partners "Smart meter rollout: energy network business market model and definition and evaluation project".
Home Department
Policing White Paper
The Secretary of State for the Home Department (Alan Johnson): I am publishing a White Paper on policing today, copies of which are available in the Vote Office. "Protecting the Public: Supporting the Police to Succeed" builds on the radical reform programme set out in the Green Paper published last year by my predecessor, my right hon. Member for Redditch (Jacqui Smith). The Green Paper put the public's priorities at the heart of policing, replacing top-down targets with a sharp focus on public confidence.
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