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Written Ministerial Statements

Wednesday 18 May 2011

Business, Innovation and Skills

Local Enterprise Partnerships (Gloucestershire)

The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk): I, together with the Minister of State with responsibility for decentralisation, Department for Communities and Local Government, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), would like to inform the House that today we have written to the proposed Gloucestershire local enterprise partnership inviting it to put in place governance arrangements.

Local enterprise partnerships see a real power shift away from central Government and quangos and towards local communities and the local businesses who really understand the barriers to growth in their areas. This announcement brings the total number of partnerships so far invited to put their governance arrangements in place to 34. Taken together these represent 1.9 million or 94% of all businesses (active enterprises) in England, 22 million employees (employee jobs figures) or 94% of all employees in England and a population of 49 million or 94% of England’s population. We will continue to work with other areas with a view to establishing further local enterprise partnerships across England.

Review of Intellectual Property and Growth

The Secretary of State for Business, Innovation and Skills (Vince Cable): I together with my right hon. Friend the Chancellor of the Exchequer would like to inform the House that Professor Ian Hargreaves has today presented the Government with findings of their independent review of intellectual property and growth.

We welcome this timely report and its identification of the IP system as a high-stakes issue and of innovation as the key element in economic growth from intellectual property.

Intellectual property has an enormous impact on individuals, businesses and industries and on the UK as a whole. It affects what we can and cannot do in business, in education and in our daily lives. The Government want to see a future where technological innovation, successful creative businesses and strong international brands go hand in hand.

The Prime Minister asked Professor Hargreaves to focus on the Government’s top priority, growth. The Hargreaves recommendations have the potential to add between 0.3 to 0.6% to annual GDP and to cut the costs of doing business with IP by £750 million a year by 2020.

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The review presents us with opportunities to support dynamic UK businesses that will deliver innovation, growth and jobs in the years to come, it offers us the chance of a future where there is a thriving market for Britain’s creative talent, where the value of innovation and research outweighs the fear of piracy and counterfeiting and where we as customers are surprised and delighted by what digital technology offers us, not worried or confused.

This report is the culmination of six months of diligent inquiry by Professor Hargreaves and his panel of experts, and we thank him and his colleagues for their hard work.

The Government will aim to publish their substantive response before the parliamentary recess.

Copies of the “Hargreaves Review” have been placed in the Libraries of both Houses.

Review of Offender Learning

The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes): I am publishing today “Making Prisons Work: Skills for Rehabilitation”, the report on the review of offender learning that I commissioned last summer. The document sets out our reform programme for offender learning. Our plans mark a departure from existing practice. The means of managing the system and measurement of outcomes will change dramatically and, consequently, so will the allocation of resources.

“Making Prisons Work: Skills for Rehabilitation”, which has been developed jointly with the Ministry of Justice, takes careful account of the Government’s plans for reform of adult learning and skills over the remainder of this Parliament, plans for reform in the criminal justice system and the 98 responses to our call for evidence. I thank all those who took the time to submit their views.

The plans also reinforce our public service reforms, shifting power away from the centre of Government into the hands of front-line staff and the partnerships that operate at a local level to deliver services.

The link between recidivism and the failure of ex-offenders to find work is clear. If those in prison acquire the skills needed to gain employment on release from prison there is a good chance that they will turn their lives around.

We are determined to make prisons places where people learn skills to build lives beyond crime. And the authenticity of what is taught and tested will be assured by its relationship with further learning and employment. Plainly, skills acquired through prison education must make ex-offenders more employable. In these terms prison must be made to work. Those closest to the effects of their decisions on the funding and management of learning provision should be responsible and accountable.

Some of the previous reforms to the skills system inside prisons have brought about improvements: certainly, we have increased prisoner participation in learning and skills. However, we are still failing to ensure prisoners continue their progress on release in terms of further learning or employment. To address this, we will place a much greater focus on developing the vocational skills demanded by employers in the areas to which prisoners are to be released, making offender learning an authentic part of the wider skills system. That sharpened focus

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will also enable us to support the drive towards prisons increasingly becoming places of meaningful work. As responsibility is devolved to those closest to the effects of their decisions, accountability will be assured through measurement of outcomes.

We will reflect the Government’s focus on payment by results by introducing outcome incentive payments: providers’ payments will be based, in part, on their success in helping get people into jobs. Our new emphasis on decentralised control and accountability means we will change the distribution of resources between prisons, supporting our determination to put in place the right skills offer for the offender while they are within the justice system. That will be framed by a significant change from the current system, introducing a focus on clusters of prisons between which prisoners tend to move and with wide implications for the way people work together.

To put these changes in place, we shall re-procure the offender learning contracts for delivery in adult prisons in England.

For offenders in the community, supervised by the probation service, we will place a new collaborative emphasis on the skills system in helping offenders gain the competences that will help them into work.

My Department will not be able to do all of this alone. The interaction between the Department for Work and Pensions, especially the Work programme and Jobcentre Plus’s other employment support, and the skills system will be critical to our success in making sure that offenders use their newly acquired skills to secure work. Just as important is the need to engage sectors, social enterprises, charities and voluntary organisations whose dedication and expertise makes such a positive difference to so many lives.

“Making Prisons Work: Skills for Rehabilitation” is available on the BIS website at http://www.bis.gov.uk/ and copies will be deposited in the Libraries of both Houses.

Treasury

ECOFIN (17 May 2011)

The Chancellor of the Exchequer (Mr George Osborne): The Economic and Financial Affairs Council was held in Brussels on 17 May 2011. The following items were discussed:

Economic governance

The Council took note of a report from the presidency on progress in negotiations with the European Parliament on a package of legislative proposals on economic governance. The presidency took on board the views of member states and agreed to take these forward during further negotiations with the European Parliament, which are ongoing, with a view to finalising legislation by the end of June.

Short selling regulation

The Council agreed a general approach on the draft regulation on short selling and credit default swaps. The intention of the regulation is to harmonise short selling requirements across the European Union and harmonise the powers that regulators may use in exceptional situations

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where there is a serious threat to financial stability or market confidence. I ensured that the Commission and the Council, thanks to a written statement, would work during the trialogues to find a solution taking into account the concerns expressed by member states in the ECOFIN Council regarding the powers of ESMA in article 24.

Savings taxation directive

The Council held an orientation debate on how to proceed with a proposal aimed at strengthening the provisions of the EU’s directive on the taxation of savings interest. The Council agreed to continue working on reaching agreement.

Financial sector taxation

The Commission updated the Council with an interim report of financial sector tax and regulation. The Council also received a report from the Economic and Financial Committee, providing a factual overview of financial levies and taxes. Ministers took note of the reports. The Commission was asked to produce an impact assessment on various options of financial sector taxation. The high-level working party on tax will continue work on this subject and report back as appropriate.

Nomination of the President of the European Central Bank

The euro area member states, in Council, adopted a recommendation on the nomination of Mario Draghi (Italy) as President of the European Central Bank, to succeed Jean-Claude Trichet, whose term of office expires on 31 October 2011. The Council’s recommendation will be submitted to the European Council, which will consult the European Parliament and the ECB, with a view to adopting a final decision at its meeting on 23-24 June 2011.

Financial back-stops

The Council approved a draft statement on guiding principles on financial backstops, for financial institutions which are shown to be vulnerable by this year’s EU-wide stress tests. The presidency confirmed that bank stress test results will be published later this year.

Review of economic adjustment programme for Ireland

Finance Ministers adopted a decision to modify the conditions underpinning financial assistance to Ireland under the European Financial Stability Mechanism (EFSM), in order to prepare the disbursement of a second loan instalment. This follows a review by the IMF and the Commission, liaising with the European Central Bank, of progress made by Ireland in implementing its economic adjustment programme, which was approved last November.

Financial support to Portugal

The Council adopted a decision allowing for €26 billion of financial assistance to Portugal under the European Financial Stability Mechanism (EFSM), part of an overall €78 billion package of assistance. This will also comprise €26 billion of loans under the euro area-only European Financial Stability Facility and €26 billion from the IMF under its Extended Fund Facility. The EFSM loan will have a maximum average maturity of 7.5 years and a margin of 215 basis points on top of the EU’s cost of funding. The aid will be provided on the basis of a three-year policy programme for the period up to mid-2014, which was negotiated with the Portuguese authorities by the Commission and the IMF, in liaison with the European Central Bank.

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The economic and financial adjustment programme includes;

structural reforms to boost potential growth, create jobs, and improve competitiveness;

a fiscal consolidation strategy, supported by structural fiscal measures and better fiscal control over public-private-partnerships and state-owned enterprises, aimed at putting the gross public debt-to-GDP ratio on a firm downward path in the medium-term and reducing the deficit below 3% of GDP by 2013;

a financial sector strategy based on recapitalisation and deleveraging, with efforts to safeguard the financial sector against disorderly deleveraging through market-based mechanisms supported by backstop facilities.

Financing climate change

The Council adopted conclusions on climate finance. These conclusions outline the key issues and next steps in international climate finance. The Government welcome these conclusions.

Information on the Informal ECOFIN meeting

Ministers received a summary from the presidency on the issues that were discussed at the Informal ECOFIN which took place in Budapest on 7-8 April 2011.

Draft general budget for 2012

The Commission presented its proposed general budget for 2012 to the Council, which included a 4.9% increase in payments. I made it clear that this proposal was completely unacceptable. In line with the agreement made between the UK, France, Germany, the Netherlands and Finland in December 2010, the Government’s opinion is that growth in the EU’s annual budget must be curbed, in order to reflect difficult economic conditions and tough measures taken by national Governments to cut spending.

Dialogue with EU candidate countries

Ministers held an informal meeting with their counterparts from the EU candidate countries: Turkey, Croatia, the Former Yugoslav Republic of Macedonia, Montenegro and Iceland. The meeting focused on the candidate countries’ economic policies.

AOB: Purple File

This item was added to the agenda at the request of Poland. They raised their concerns with the Purple File, which sets out procedures to follow when a member state seeks a flexible credit line from the IMF. The UK believes that the procedure needs to be identical for both euro and non-euro area countries, whereby the Economic and Financial Committee is informed of, and given the opportunity to discuss, any request for financial assistance by any EU member state.

European Stability Mechanism

In an inter-governmental meeting preceding ECOFIN, it was agreed that member states could forward a draft of the inter-governmental treaty (between euro area member states only) creating the new, permanent European stability mechanism to national parliaments. I will write to the chairs of the European Scrutiny Committees with the draft text.

Cabinet Office

Identity Assurance

The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude): The Government agreed on 14 March 2011 to the development of a consistent,

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customer-centric approach to digital identity assurance across all public services. This will allow service users to log on safely to digital public services in a way that ensures personal privacy, reduces fraud and facilitates the move to online public services.

Today I am setting out the context and vision for this delivery programme and will explain how my Department will draw on expertise from organisations in the public and private sector to agree the design for this new approach. NO2ID and other privacy advocates are being kept closely informed of developments and given the opportunity to contribute and comment. This is a cross-departmental initiative and the approach will be introduced in the near term through major Government initiatives such as DWP’s universal credits, NHS HealthSpace, HMRC’s one click programmes and the Skills Funding Agency.

Online services have the potential to make life more convenient for service users as well as delivering cost savings. However, currently customers have to enter multiple log-in details and passwords to access different public services, sometimes on the same website. This involves significant duplication, is expensive to operate and is highly inconvenient for users. It acts as a deterrent to people switching to digital channels, hampers the vision of digital being the primary channel for accessing Government information and transactions, and provides an opportunity for fraudsters.

Our intention is to create a market of accredited identity assurance services delivered by a range of private sector and mutualised suppliers. A key improvement will be that people will be able to use the service of their choice to prove identity when accessing any public service. Identity assurance services will focus on the key imperative to ensure privacy. My Department is leading the project to develop the design and the creation of the market within the private sector. By October 2011 we expect to have the first prototype of the identity assurance model to test with transactional Departments and public sector identity assurance services, with a date for implementation from August 2012.

Communities and Local Government

Employment, Social Policy, Health and Consumer Affairs Council Agenda (19 May 2011)

The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell): The Employment, Social Policy, Health and Consumer Affairs Council will be held on 19 May in Brussels. Andy Lebrecht, UK Deputy Permanent Representative to the EU will represent the United Kingdom.

This will be a single-issue Council on the subject of Roma integration. On 5 April, the European Commission published a communication on an EU framework for national Roma integration strategies up to 2020. Based on this, the presidency has invited the Council to hold an exchange of views and adopt a set of Council conclusions and an opinion from the Social Protection Committee.

The UK will agree that Roma in many parts of Europe experience extreme poverty, discrimination and exclusion and that the primary responsibility for tackling

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this lies with the member states. We will therefore welcome the fact that the conclusions represent a clear political commitment by EU member states to take concrete steps to improve the situation of their Roma nationals, while recognising that the situation in each member state is different.

We will outline the fact that in the UK we have a strong and well-established legal framework to combat discrimination and hate crime and that this protects all individuals, including Roma, Gypsies and Travellers, from racial and other forms of discrimination and racially motivated crime. We will also acknowledge that the UK’s Gypsies and Travellers none the less experience inequalities and we will summarise the action being undertaken in the different parts of the UK to deal with this.

We also acknowledge the importance of co-ordination between member states to tackle organised crime, particularly trafficking, which can affect Roma, especially Roma children.

We will note the opportunity that EU funds provide to member states to add value to their policies to improve the situation of Roma and other disadvantaged people.

And finally, we will underline the importance of sharing good practice between member states and of ensuring that any EU activity complements, rather than duplicates, that of other international organisations.

Defence

UK/Iraq Bilateral Agreement

The Secretary of State for Defence (Dr Liam Fox): I wish to inform the House that the UK/Iraq training and maritime support agreement that has provided naval training and maritime support to Iraq will conclude on 22 May 2011.

British Forces have been involved in this important task since 2003 and, under the agreement signed in 2009, Royal Navy trainers have developed the capacity of the Iraqi maritime security forces to protect their territorial waters and offshore oil platforms, which are vital to Iraq’s economic revival.

Having successfully completed their mission UK personnel deployed to Iraq under this agreement will now leave the country.

This will mark the formal conclusion of Operation Telic but it is not the end of our bilateral defence relationship with Iraq. We will: continue to train members of the Iraqi security forces at UK training establishments; continue to contribute to the NATO training mission in Iraq; and continue to engage with the Government of Iraq at the highest levels on defence and security issues. Finally, we will maintain defence capabilities in the wider Gulf region as part of our enduring contribution to Gulf security.

I pay tribute to all UK service personnel who have served in Iraq over the last eight years and to the sacrifices made by so many for the benefit of the people of Iraq and our national security.

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Energy and Climate Change

Fukushima (Interim Report)

The Secretary of State for Energy and Climate Change (Chris Huhne): Today I have laid before the House the chief nuclear inspector’s interim report on the events at Japan’s Fukushima Dai-ichi nuclear site in March.

Dr Mike Weightman, supported by his colleagues in the Office for Nuclear Regulation, produced this independent report which examines the immediate lessons learned for the UK nuclear industry. The final report is due in September.

Safety is and will continue to be our number one priority. We take the incident at Fukushima very seriously. Although the plant is stabilising, the situation remains critical. However, progress in securing the site is being made; and the operator, Tepco, has outlined a roadmap to recover the plant during the next year.

Dr Weightman believes that there is sufficient information available for his interim report to reach a number of conclusions and recommendations, which have concentrated on potential lessons for the nuclear power reactor sector. However some of his recommendations are relevant to all sectors. His final report will cover all of the nuclear industry in more detail.

Dr Weightman has drawn a number of conclusions. He states that the direct causes of the nuclear accident—a magnitude nine earthquake and associated 14-metre high tsunami—are far beyond the most extreme events the UK could expect to experience. In this respect he concludes there is no reason for curtailing the operation of nuclear power plants or other nuclear facilities in the UK. Nevertheless Dr Weightman notes severe events can occur from other causes, and that learning from such events is fundamental to the robustness of our nuclear safety arrangements. I can therefore confirm that once further work on the recommendations is completed any proposed improvements to safety arrangements will be considered and implemented in line with our normal nuclear safety regulatory approach.

The interim report also identifies various matters that should be reviewed to improve the safety of the UK nuclear industry. I consider it an absolute priority that the regulators, industry and Government act responsibly to learn from the 26 recommendations in the report; and to respond to them within one month of today’s publication.

Dr Weightman’s recommendations require the review of a wide range of nuclear safety matters, including international and national emergency response arrangements, public contingency planning, communications and the review of flooding studies, site and plant layouts, electricity and cooling supplies, multi-reactor site considerations, spent fuel strategies and dealing with prolonged accidents. I very much welcome this approach, and I believe it is vitally important that the regulators and industry continue to adhere to the principle of continuous improvement for all existing and future nuclear sites and facilities. The interim report does not identify any implications for the strategic siting assessment of new reactors and I do not believe the final report will either.

In taking this important work forward Dr Weightman deserves our thanks. The International Atomic Energy Agency (IAEA) has recently noted that the UK has a

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mature, transparent and independent regulatory system, an advanced review process, and highly trained and experienced nuclear inspectors. The reputation of the UK’s regulatory regime is further endorsed by the appointment of Dr Weightman to head up the IAEA’s review of events in Japan. I would like to congratulate him on his appointment, which reinforces our belief that he is the right person to consider the lessons learned for the UK’s own nuclear industry.

In the light of the events at Fukushima, we have agreed with our European colleagues that the safety of existing nuclear sites and equipment in the EU should be subject to “stress testing”. We believe these stress tests will supplement the UK’s already robust regulatory regime. The scope of the stress test is currently being developed by the European nuclear safety regulators group and the European Commission.

My officials will review carefully the interim report, but from my discussions with Dr Weightman I see no reason why we should not proceed with our current policy: namely that nuclear should be part of the future energy mix in the future as it is today, providing that there is no public subsidy.

This policy has recently been supported by the Committee on Climate Change in its “Renewable Energy Review” which states that

“nuclear should play a key role in taking Britain towards a clean prosperous future as it is a safe power and the lowest-cost, large-scale, low-carbon electricity source”.

Subject to careful consideration of the detail of Dr Weightman’s interim report, I intend to bring forward for ratification as soon as possible the energy national policy statements, which are principally about the planning guidance on energy infrastructure for the IPC but will also include a list of potential sites for nuclear power stations.

Any further implications from the final report can be taken on board subsequently. Regulators and industry will continue to work together to take forward the generic design assessment process. They will need to factor into this work the recommendations outlined in the interim report. We encourage them to work together in setting out their timeline for conclusion of the process.

I strongly welcome Dr Weightman’s interim report. I encourage the regulators to work closely with industry and other partners to take the recommendations forward, and I look forward to receiving the final report in the autumn.

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Environment, Food and Rural Affairs

Annual Report of the Veterinary Products Committee and its Sub-Committees 2010

The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice): I have received the annual report of the Veterinary Products Committee and its sub-committees 2010, which has been published today.

Copies of the report have been placed in the Libraries of both Houses.

I am pleased to acknowledge the valuable work done by the distinguished members of the Veterinary Products Committee and its sub-committees and thank them for the time and effort dedicated in the public interest to this important work.

Single Payment Scheme

The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice): In my statement of 31 March, Official Report, columns 35-36WS, I outlined the measures the Rural Payments Agency (RPA) was taking to speed the flow of the remaining payments to farmers under the 2010 single payment scheme (SPS).

The introduction of those measures, including making manually validated payments in some circumstances, ensured that RPA exceeded its revised payment profile in April. Some claimants who the agency had estimated could be paid in that month were not, often because they were linked to others through a complex web of entitlements transfers. Apart from a few exceptional cases, RPA has either telephoned or written to all those affected to explain the position and will look to prioritise their payments where possible over the coming month. The agency kept above profile overall by managing to resolve issues preventing payments on some claims that had been estimated to be paid in May or June.

As of Friday 13 May, the total value of payments made to some 101,176 farmers had reached £1.63 billion (94.54%). The number of eligible claimants left to pay at that point was estimated to be 3,177. The agency remains on course, therefore, to meet the EU benchmark to avoid late payment penalties; that is, making 95.238% of the total value of payments, by the end of this month. The RPA oversight board, which I chair, will continue to monitor progress to ensure that, wherever it is legally possible to do so, these remaining payments reach farmers by the end of the regulatory payment window on 30 June.