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Written Ministerial Statements

Tuesday 7 June 2011

Business, Innovation and Skills

EU Formal Competitiveness Council (30-31 May 2011)

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey): The EU Competitive Council took place in Brussels on 30-31 May 2011. I represented the UK on EU internal market and industry issues on 30 May and the Minister for Universities and Science represented the UK on research and space issues.

On the first day, the Council discussed several issues directly relevant to the Prime Minister’s EU growth initiative. It discussed the Commission’s Single Market Act and issued a set of conclusions. There was a robust debate, in which a number of member states, including the UK, made the case for the conclusions to better reflect spring European Council language on open trade, services and reducing regulatory burden. Agreement was reached after the presidency tabled a number of compromise texts.

The Council also agreed a position on a proposal to revise the EU’s main accounting directive. The UK welcomed the fact that this will lighten administrative burdens on small firms (those with less than 10 employees). I believe this is a significant agreement, and perhaps the first example of ex-post exemption from existing EU regulation for very small companies.

An attempt to agree a proposal for a Council regulation on a European private company was made but none was reached. The Council also discussed the unitary patent (formerly known as the Community patent). An extra Council is now scheduled for 27 June to agree a general approach on the regulations for establishing a European unitary patent.

Member states agreed the Council’s conclusions tabled on smart regulation. While the UK continues to believe there is scope for much greater ambition in this area, we welcomed developments to lighten smaller company burdens and the Council commitment to conduct impact assessments on its own amendments. At the ministerial lunchtime discussion of administrative burdens, all member states supported the idea of exemptions for micro-entities and special treatment for small to medium enterprises (SMEs) in upcoming regulations.

The Commission welcomed the fact that member states have appointed so-called SME envoys to take forward national implementation of the to the EU’s Small Business Act. Points of any other business were a report held by Malta on the Euro-Med conference on 11 May and an outline by Poland on its presidency priorities.

On the second day of the Council, Ministers received updated progress on negotiations for the Euratom (European Atomic Energy Framework Community) framework programme 2012-13 legislation. The UK supported the presidency’s work to date to reach agreement on the legislation, and noted agreement would be needed

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shortly to ensure financial security for the ITER (International Thermonuclear Experimental Reactor) and JET (Joint European Torus) programmes in 2012.

Some delegations, including the UK, suggested that the presidency could aim for political agreement on the Euratom decision at the extraordinary Competitiveness Council on 27 June. The Commissioner provided an update at the UK’s request on a separate proposal to find an additional €1.3 billion from the EU budget for ITER in 2012-13. Negotiations continue in the Council and European Parliament.

Over lunch Ministers discussed links between the future structural and cohesion funds and the EU’s common strategic framework for research and innovation. All agreed that research and development funding under the current structural and cohesion funds had a key role to play in building scientific capacity in Europe and it was generally acknowledged the successor to this programme should have distinct but complementary policy objectives to the successor to the excellence-focused research framework programme. Ideally, management processes between the two would be more closely aligned.

The Council adopted conclusions on the Eurostars and ambient assisted living programmes which combine EU and national funding to support R and D carried out by SMEs and R and D into technology for elderly people respectively, and on European research area governance. Under any other business the Commission supplied information on the European Research Council, Artemis and Eniac joint technology initiatives, the European Institute of Innovation and Technology plus a follow up to the Green Paper on the future of EU R and D funding. The presidency also reported on the recent informal Competitiveness Council in Godollo, Hungary.

On EU space policy the Council adopted conclusions and agreed that Galileo satellite navigation and global monitoring for environment and security programmes (GMES) should remain priorities. The UK supported the need to prioritise these programmes and welcomed Commission efforts at containing costs on Galileo, calling for cost effectiveness of new EU space situational awareness programmes and saying the Ariane programmes should remain projects developed by the European Space Agency and not be funded by the EU. The UK also noted the potential of EU involvement in a Mars sample return mission for European science and industry.

Council conclusions were adopted with minor changes to the presidency’s draft, such as amendments on GMES data policy calling for “free of charge access to certain public data and services” and removal of the Commission acknowledgement of the need for independent access to space for Europe.


Money Laundering Regulations

The Financial Secretary to the Treasury (Mr Mark Hoban): Today the Government are publishing their response to the review of the money laundering regulations, copies of which have been placed in the Libraries of both Houses. This includes proposals for consultation and a request for information on the costs and benefits of these proposals to inform robust analysis and ensure they will make the regulations more effective

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and proportionate. This follows a review by the Regulatory Policy Committee and approval from the Cabinet Reducing Regulation sub-Committee.

There has been an extensive period of engagement with industry, supervisors, law enforcement, business customers, private individuals and across Government. While I have concluded that the regulations and their implementation are broadly effective and proportionate in practice, more needs to be done.

Businesses are overly focused on process and I want to strengthen the risk-based approach provided for in the regulations, in order to ensure they are as effective as they can be in helping to prevent and detect money laundering and terrorist finance.

Through this response and the proposals for consultation it includes, I want to give businesses the confidence to adopt policies and procedures that reflect their own assessment of risk. To help achieve this, I am consulting on removing the criminal penalties in the regulations. Those responsible within businesses should not be applying the same requirements to all customers regardless of the level of risk they present because of a fear of prison if they get it wrong.

In addition to proposing changes to the regulations, my officials will be working to strengthen the risk-based approach in a number of other ways from the development of global standards by the financial action taskforce to working with the supervisors and providing further support for industry guidance in the UK.

The consultation closes on 30 August, after which changes to the regulations will be finalised and proposed with a view to them taking effect during 2012.

Schedule 7 to Counter-Terrorism Act 2008 (Annual Report to Parliament)

The Financial Secretary to the Treasury (Mr Mark Hoban): This report sets out details of the Treasury’s exercise during the calendar year 2010 of their functions under schedule 7 to the Counter-Terrorism Act 2008. Paragraph 38 of schedule 7 requires the Treasury to report to Parliament after each calendar year in which a direction under the powers is at any time in force.

The schedule 7 powers

Schedule 7 provides HM Treasury with powers to implement a graduated range of financial restrictions in response to certain risks to the UK’s national interests. The risks it addresses are those posed by money laundering, terrorist financing, and the proliferation of chemical, biological, radiological and nuclear weapons.

Direction given under the powers in schedule 7

The Iran (Financial Restrictions) Order 2009 (“the Order”) came into force on 12 October 2009. The order contained a direction by HM Treasury requiring persons operating in the financial sector to cease business relationships and transactions with Bank Mellat and Islamic Republic of Iran Shipping Lines (“IRISL”).

The direction was given on the basis that activity in Iran that facilitates the development or production of nuclear weapons poses a significant risk to the national interests of the UK. Bank Mellat had provided banking services to a UN proscribed organisation connected to Iran’s proliferation sensitive activities, and been involved in transactions related to financing Iran’s nuclear and

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ballistic missile programmes. Vessels of IRISL have transported goods for both Iran’s ballistic missile and nuclear programmes.

The order was approved by the House of Commons on 28 October 2009 and by the House of Lords on 2 November 2009.

The direction was in force for a period of 12 months from the day on which the order was made, and expired on 9 October 2010, in accordance with paragraph 16 of schedule 7. A further direction was not given on its expiry because the European Council, in Decision 2010/413/CFSP of 26 July 2010 (“the Council Decision”) had imposed restrictive measures against Iran, including designating both Bank Mellat and IRISL (among other entities) for an asset-freeze.

The asset-freezing provisions of the Council decision were implemented by Council Implementing Regulation (EU) No 668/2010 on 26 July 2010. The effect of the designation is that all funds and economic resources owned or controlled by Bank Mellat or IRISL in the EU were frozen with immediate effect, and it is prohibited to make funds or economic resources available to either entity. On 27 October 2010 Council Regulation (EU) 961/2010 came into force, implementing the additional financial restrictions contained in the Council decision, including a ban on providing insurance to Iranian persons.

Bank Mellat challenged the order in November 2009. The order was upheld by the High Court on 11 June 2010. Bank Mellat appealed to the Court of Appeal, which dismissed the appeal on 13 January 2011. Bank Mellat have been granted permission to appeal to the Supreme Court.

IRISL also challenged the order in early 2010. In March 2011 IRISL withdrew their challenge (which had been stayed pending the outcome of proceedings in the Commercial Court).


Under paragraph 17 of schedule 7, the Treasury can exempt acts specified in a licence from the requirements of a direction requiring the cessation or limiting of transactions or business relations.

In operating the licensing regime in respect of the order, the Treasury’s aim was to minimise the impact of the restrictions upon innocent third parties, without compromising the objective of the direction. Licences were considered on a case-by-case basis.

The Treasury issued three general licences:

General licence 1 concerned the holding of accounts and funds of designated persons;

General licence 2 concerned payments to designated persons due under prior contracts; and

General licence 3 provided a seven-day grace period for the provision of insurance to designated persons, after which the prohibitions would apply.

Applications were made to the Treasury on a case-by-case basis for Acts not covered by any of the general licences. Between 12 October 2009 and 9 October 2010, 135 licence applications were received. Of these, 101 licences were granted and five applications were refused. The other 29 applications were either duplicate applications or for acts that did not require a licence.

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Communities and Local Government

Department's Work (Whitsun Recess 2011)

The Secretary of State for Communities and Local Government (Mr Eric Pickles): I would like to update hon. Members on the main items of business undertaken by my Department since the House rose on 24 May 2011.


In August 2010, I announced plans to disband the Audit Commission and refocus audit on helping local people hold their council to account. Since then we have been examining the most cost-effective option for disbanding the Audit Commission, transferring audit into the private sector and allowing local authorities to appoint their own auditors.

On 2 June 2011, we provided an update on plans to secure a value-for-money transfer of the Audit Commission in-house practice into the private sector. In a letter from the Department’s permanent secretary to councils, we set out our initial view that outsourcing all the audits currently undertaken by the in-house practice to the private sector provides the best value-for-money option. We have asked the Audit Commission to begin substantive preparatory work for outsourcing the 2012-13 audits and to design a procurement process that allows a range of firms to bid, including allowing for the possibility of an employee-owned mutual. These measures set in train our goal to radically scale back centrally driven bureaucratic targets and costly inspection, saving the taxpayers money.


The Department is continuing its commitment to deliver transparent and open Government, using transparency to help reduce unnecessary spending and help get more for less. On 1 June, we published historic details of the Department’s Government procurement card from 2008 to date, including all spending on the corporate charge cards—not just over £500. A copy of the dataset is in the Library of the House.

Promoting Growth

This Government want to create a new generation of enterprise zones across England that will encourage new business and stimulate growth. Following the announcement of the first 11 vanguard enterprise zones, on 27 May, I opened up the competition for the second wave of applications. Criteria and application forms have been issued to the 29 existing or prospective local enterprise partnerships that have expressed interest in establishing one of the next 10 enterprise zones. Applications will be assessed against their ability to deliver growth, the value for money they deliver and the robustness of implementation plans to ensure that the best possible sites are selected.

House building is a top priority for this Government and we believe that bureaucratic regional strategies slowed down the planning system and acted as an unnecessary impediment to growth. On 27 May, CALA Homes lost its second challenge against the Government’s intention to revoke regional strategies, first announced in July 2010. The Court of Appeal confirmed that planning authorities and inspectors can take our intention to abolish regional strategies into consideration in deciding planning applications and appeals.

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The public sector owns 16,000 hectares of previously developed land. In the Chancellor’s “Plan for Growth” published alongside Budget 2011, we committed to accelerate the release of this land to encourage development. Work undertaken since March shows that by pushing harder we can unlock land to deliver up to 100,000 homes—and as many as 25,000 jobs by 2015. We are publishing the Homes and Communities Agency’s land disposal strategy, and this will deliver over 11,000 housing starts over the spending review period—an increase of nearly 40% over what was previously planned.

The Minister for Housing and Local Government has set out how we can get this asset working harder for us—supporting local growth and the construction industry and building more badly needed homes. And this autumn, Government Departments will publish plans to release thousands of acres of land to house builders, so they can get on and build the homes the country needs and raise revenue for the Exchequer.

Power to communities

My Department believes that communities should have the power to shape their neighbourhoods.

On 1 June, my colleague, the Minister with responsibility for decentralisation and planning, my right hon. Friend the Member for Tunbridge Wells (Greg Clark) announced a further 40 communities to join the 50 already taking part in trialling the neighbourhood planning rights being introduced in the Localism Bill. Each of the 40 neighbourhood planning front-runners will receive £20,000 towards developing their plans and will be led by local authorities, working with community groups and parish councils to prepare draft plans and neighbourhood development orders.

On 2 June, my colleague, the Minister for Housing and Local Government, launched new guidelines on the community right to build. The guidelines offer information to communities considering taking forward a community-led scheme using the new power being introduced in the Localism Bill and encourage people to think about the development they would like to see in their area.

Auschwitz-Birkenau Foundation fund

Auschwitz-Birkenau is an important place of remembrance; it is our collective responsibility to ensure that it stands as a perpetual reminder of the pain and destructive force of hate. On 26 May, together with the Foreign Secretary, we announced a £2.1 million Government contribution to the Auschwitz-Birkenau Foundation fund to help ensure the lessons of Auschwitz live on for generations to come. The money will be used to ensure the long-term preservation and restoration of the Auschwitz-Birkenau concentration camp and its important place in educating people of the horrors of the Holocaust.

Culture, Media and Sport

Horserace Totalisator Board (The Tote)

The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose): In my written ministerial statement of 31 January 2011, Official Report, column 28WS I said that the Government expected to

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be in a position to provide the House with a further update in the spring on the process for resolving the future of the Tote.

I am now able to inform the House that, after a thorough, fair and open process, the Government entered into a legally binding agreement to dispose of their interest in the Tote’s successor company to Betfred on 3 June 2011 for a total consideration of £265 million. This is an excellent price, and fulfils commitments made in Budgets 2010 and 2011 to resolve the future of the Tote by June 2011. The Government strongly believe that the terms of the sale, which include important commitments by Betfred both to racing and to staff, provide an excellent outcome for the key stakeholders, and also for the taxpayer.

As I said in my statement of 31 January the Government will also honour the commitment of the previous Government to share 50% of the net cash proceeds of the sale with racing. This amounts to over £90 million and will be made available over a number of years, reflecting the broader fiscal position and the need to spend the funds in a manner consistent with EU state aid rules. The Government will pay interest on the outstanding balance, as appropriate, in the normal way.

The Government now look forward to working closely with racing to discuss the detail and to design appropriate arrangements.

The Government expect to complete the sale after the conclusion of a four to eight-week TUPE consultation and wider information sharing process with employees of the Tote. The final consideration will be subject to a technical, market standard adjustment (upwards or downwards) after completion to reflect the actual level of net debt and working capital on the Tote’s balance sheet on the day the transaction completed.


Arm's Length Body Reform

The Secretary of State for Education (Michael Gove): I am committed to improving the transparency, accountability and efficiency of the education system, including slimming down the number of arm’s length bodies. This will allow more resource to be directed to the front line, where it matters most, and enable people to see more clearly who is accountable for what and to speak more directly to Government.

Partnerships for Schools (PfS) will be wound up and its functions transferred to the Department for Education policy directorates and the new Education Funding Agency (EFA), an executive agency of the Department. My intention is that this will happen in April 2012.

Following Sebastian James’s proposals for a new system for managing capital expenditure and the wider reform of arm’s length bodies, I have decided the time is right to bring together, in a single agency, the allocation and management of revenue and capital funding, including the delivery of capital programmes.

I would like to take this opportunity to thank Partnerships for Schools for its excellent work over the years. In particular, I am grateful for its support and

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advice on academies and free schools, contributing to the success of these priority reforms for the coalition Government.

I can also confirm that the post of chief executive of the Education Funding Agency will be filled by Peter Lauener, transferring from his current role as chief executive of the Young People’s Learning Agency subject to the passage of the legislation necessary to dissolve that organisation. The Education Funding Agency will take over responsibility from the Young People’s Learning Agency for the funding of young people’s education and training—including the increasing number of academies. Peter’s leadership of the Young People’s Learning Agency, since its inception, has made an invaluable contribution to the success of that organisation and I expect that he will make a similar contribution to the work of the Education Funding Agency.

Commercialisation and Sexualisation of Childhood (Independent Review)

The Minister of State, Department for Education (Sarah Teather): It is natural for parents to want the best for their children. It is just as natural for them to want to do what they can to protect their children from the potential risks to their health, happiness and safety. Among the concerns that parents have is that their children are under the twin pressures to grow up too quickly and to become consumers or sexualised adults earlier than is appropriate. These pressures on children today are greater than they were for previous generations. They reach children through all forms of popular culture, including television, film, magazines, newspapers, music and the internet. Children and young people encounter them in their homes, when they go shopping or out with friends and family, and on their mobile phones and games consoles.

This Government share the concerns of parents about these pressures. On 6 December 2010 the Government asked Mr Reg Bailey, chief executive of the Mothers’ Union, to carry out an independent review of the commercialisation and sexualisation of childhood. His review is the first step in fulfilling the commitment we made to take action to protect children from excessive commercialisation and premature sexualisation.

I am now pleased to announce that Mr Bailey’s review, “Letting Children Be Children”, was published yesterday. Copies will be placed in the Libraries of both Houses.

Mr Bailey has made a full and comprehensive report and fulfilled the remit he was given. He has built on the important work of other reviewers in this area, notably those of Professor David Buckingham and colleagues, and others by Professor Tanya Byron and Dr Linda Papadopoulos, and drawn on a review of more recent literature on the topic carried out by Dr Ann Phoenix of the Childhood Wellbeing Research Centre.

Mr Bailey has been particularly interested in hearing the views of the people most affected by the unwarranted pressures to grow up too quickly: parents and children. The review commissioned face-to-face surveys of the views of parents and children and qualitative research

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with parents, undertook a call for evidence from parents, and drew on the results of a survey of children and young people carried out by the Children and Young People’s Advisory Board of the office of the Children’s Commissioner.

In the course of his review Mr Bailey met representatives from retailing, advertising, marketing, broadcasting and internet service providers, their trade associations and their regulators. The call for evidence from industry and wider stakeholders drew 120 responses from businesses, trade associations and voluntary organisations. Mr Bailey also met experts in child protection, parenting champions and a range of academic and other experts in this field.

The voices of parents and children come through strongly in the four key themes identified in his report. Children and young people today are surrounded by sexualised imagery that has become an all-pervasive, ever-present backdrop to their lives, whether on television, the internet, in shops or public spaces. Parents find that goods and services for children in reputable high street shops are sometimes overly sexualised or needlessly gendered. Businesses in the children’s market too often treat children only as consumers and not as children. Parents find it hard to voice their concerns or make a complaint and fear they will not be listened to if they do.

Mr Bailey has listened to the concerns of parents and takes them seriously. He understands that they want to set the standards and values their children live by and that they want support from businesses and others in doing this. He believes that their views have a special status as they speak for children, not just for themselves.

That is why, in making his recommendations, Mr Bailey is seeking ways to make businesses and regulators more responsive to the views of parents and to give parents more direct influence on how the decisions affecting children are made. Mr Bailey’s view is that some businesses and regulators behave in exemplary fashion in their dealings with parents and children, but that those that do not need to step up and be as good as the best. Businesses of all kinds need to encourage feedback from parents and, where necessary, take heed of their complaints. Nor is it enough for businesses simply to comply with the relevant regulatory systems for their industry which were established to protect children: parents expect them to do their best for children, not simply stick to the rules. Where regulation is less prescriptive, businesses should play fair and not take advantage of children. And regulators too, need to connect with parents and take more recognition of their views on what is appropriate for their children.

The Government welcome Mr Bailey’s analysis and the thrust of all the recommendations he has made. We note that the majority of the recommendations are directed at industry and the regulators and we look to them to see that these recommendations are implemented as fully as possible, while remaining open to industry and regulators devising alternative or additional approaches to delivering the outcomes that the recommendations are aimed at achieving.

Two recommendations are directed to the Government themselves. Mr Bailey has recommended that the Government should consider strengthening the controls on music videos. The Department for Culture, Media and Sport will respond to this recommendation by consulting on the operation of the Video Recordings

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Act 1984 and 2010. The consultation will look at a range of options including consideration of whether it would be appropriate for the exemption that music videos enjoy from this legislation to be removed, and call for evidence in support of the costs and benefits of such a change.

This Government are committed to rolling back unnecessary regulation, but we will regulate where necessary, and in particular to protect children. By placing the responsibility for action on businesses themselves and, if necessary, their regulators, we believe that businesses will have the best opportunity and incentive to adopt policies and practices as proposed by Mr Bailey in ways which are efficient and indeed could provide new opportunities through connecting strongly with parents and children.

We will, as Mr Bailey recommends, take stock of progress in 18 months’ time and consider what further measures may need to be taken to achieve the recommended outcomes.

Environment, Food and Rural Affairs

Agriculture and Fisheries Council

The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman): My noble Friend Lord Henley represented the United Kingdom at the Agriculture and Fisheries Council in Brussels on 17 May

The only item on the main agenda was the participation of the EU in negotiations on a legally binding agreement (LBA) on forests in Europe at the ministerial meeting in Oslo on 14-16 June. The presidency urged the Council to reach consensus on the two decisions required:

i) the Council decision on EU areas of competence; and

ii) the member state decision on areas of national competence.

The Commission wanted the two decisions treated as a package and agreed by consensus and the Council legal service’s opinion was that this mix of EU and MS competence required a consensus agreement. Most member states supported the LBA; the UK, Sweden and the Netherlands were opposed. The UK, while supporting the voluntary aspect of Forest Europe’s work, reiterated its objections on the basis that an LBA would involve both financial and policy costs. Sweden made a robust intervention which defended its national interests in the forest sector and rejected the LBA. However, there was general support for all decisions to be agreed by consensus and that further concessions might be required. The presidency referred the draft decisions back to Coreper for further consideration before the Oslo conference.

There were nine AoB points

Welfare of animals during transport—Sweden called on the Commission to consider reducing the maximum journey time for animals going to slaughter to eight hours. The Commission explained that its report, due to be published in September, would be to provide an overview of the implementation of the existing regulation. The Commission would then consider what actions were needed to address issues identified in that report. While a few other member states supported Sweden, the UK and others emphasised that existing EU legislation should be better enforced and that sound scientific evidence would be required to justify further legislation.

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Animal Welfare in the Baltic Region—Lithuania explained that it had hosted a conference in to promote animal welfare in the Baltic region through the concept of responsible ownership. The Commission, a conference co-organiser, added that the conference had highlighted the importance of education and information campaigns to promote animal welfare standards.

Codex alimentarius negotiations—The presidency highlighted the importance of these discussions. The Commission urged member states to provide an adequate level of participation to ensure that the EU could maintain its leading role in setting international food standards.

G20 update—France updated the Council on the five pillar action plan it had drawn up, to tackle the volatility of agricultural commodity prices, for the June meeting of G20 Agriculture Ministers. The Commission would table specific proposals in reaction to the action plan which will be endorsed by the G20 Ministers in June. The importance of boosting the transparency of the agricultural commodity market and strengthening rules banning export restrictions was emphasised by the Commission.

Current drought situation and advance of direct payments —France, with the support from a number of member states called for an advance of 8% of direct payments and suckler cow premium to offset shortfalls in market receipts owing to recent droughts in northern Europe. The Commission observed that advances in direct payments were already permissible under the current rules and would work with France for a solution on suckler cow premium.

Conference on sustainable food consumption and production—The presidency introduced its report of the above conference, which had been based on the findings of the Standing Committee on Agricultural Research (SCAR). The presidency concluded that SCAR would adopt a declaration on research applications for agricultural sustainability in June, while the Commission noted that the future CAP would also need instruments to address challenges identified by the SCAR. To that end, it would be establishing an innovation partnership on agricultural research in due course.

Conclusions of the enlarged advisory group on pigmeat—The Commission reprised the conclusions, noting in particular that it would address the challenges faced by the pigmeat sector as part of the reform of the CAP. A large majority of member states intervened to lament the lack of immediate action. The presidency noted that delegations could continue to raise similar points at the informal Council on 30 May, when the question of sustainable animal husbandry would be discussed by Ministers.

Poland’s request for a 30% increase in intervention price for cereals—Poland justified this request on the basis of recent rises in input costs. The Commission rejected the call as cereals price were at record highs; intervention prices were being maintained at current levels during the CAP health check and it was important that intervention functioned as a genuine safety net for producers and not as a profitable alternative to market sales.

Sugar production quota—Poland, with the support of some member states, called for an increase in the sugar production quota for all beet producing countries to

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offset shortfalls and high sugar prices on the EU market. Germany, the UK and Portugal argued that balance needed to be maintained on the EU market between beet producers and cane refiners, in accordance with the 2006 sugar reforms. The Commission felt a longer-term view should be maintained, noting the structural changes that would occur.

Natural Environment White Paper (“The Natural Choice”)

The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman): This is the first Environment White Paper in years and sets out how we will deliver the coalition’s commitment to protect the environment for future generations, make our economy more environmentally sustainable, and improve our quality of life and well-being.

It follows a consultation which elicited a huge public response of 15,000 submissions and I am extremely grateful to all those who took the time to respond and share their ideas.

The White Paper also responds to two major independent studies: the National Ecosystem Assessment and the Lawton report, “Making Space for Nature”.

The White Paper offers an ambitious vision for the next 50 years: to be the generation that leaves the natural environment in a better state than we found it. Key aims of the paper are:

to protect and improve our natural environment;

to grow a greener economy;

to capture the benefits which nature has for our well-being; and

to secure a healthy natural environment overseas.

The NEWP aims to better engage and connect local communities with their natural environments, making it easier for them to get involved in protecting and enhancing nature in their area.

Alongside the White Paper we have also published a more detailed response to the “Making Space for Nature” review, which is available on the DEFRA website.

A copy of the White Paper is available at: www.defra. gov.uk/environment/natural/whitepaper/

Foreign and Commonwealth Office

Civilian Service Medal (Afghanistan)

The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague): I am pleased to be able to inform the House that Her Majesty the Queen has graciously approved a proposal for the issue of a Civilian Service Medal (Afghanistan) to recognise service by civilians employed by Her Majesty’s Government working towards a stable and secure Afghanistan. I am placing the Command Paper instituting the Civilian Service Medal (Afghanistan) in the Library of the House. It will also be published on the Foreign and Commonwealth Office website (www.fco.gov.uk) and on the Governments UK and Afghanistan website (http://afghanistan.hmg.

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gov.uk/). Further information on the criteria for eligibility, along with details on how to nominate individuals for the medal, will also be available on the Foreign and Commonwealth Office website.


Winterbourne View Private Hospital

The Minister of State, Department of Health (Paul Burstow): This Government believe that people with a learning disability have the right to lead their lives free from fear and discrimination, to receive the care and support they need, and to be treated with dignity and respect.

The abuse at Winterbourne View exposed by whistleblower Terry Bryan and documented by the BBC Panorama team, will be a cause of enormous concern not just to the families and patients affected but to all who are concerned about the care and support society provides to vulnerable people. The Department extends its deepest sympathy to those who have suffered abuse and all those who love and support them.

The responsibility for the quality and safety in care crucially depends on:

providers, who have a duty of care to each individual they are responsible for, ensuring that services meet individual needs and that there are systems and processes in place to ensure there is effective, efficient and high-quality care;

commissioners (both primary care trusts and local authorities), who are responsible for purchasing care which meets people’s needs and ensuring that they are clear about the quality and effectiveness of that care; and

the regulators (both the quality regulator and the professions’ regulators), who are responsible for assuring the quality of care.

Following an approach from “Panorama” on Friday 13 May, the national and local agencies involved have acted promptly and decisively to resolve the situation. Their first priority was ensuring the safety of patients at Winterbourne View.

A criminal investigation is also under way and the House will understand that I am limited in what I can say about particular events to avoid compromising police activities.

The steps taken since 13 May include:

South Gloucestershire council called an immediate multi-agency adult safeguarding meeting. This meeting included the local authority, the local NHS and the police, together with the Care Quality Commission (CQC) and Castlebeck Care (who are the providers of services at Winterbourne View). Immediate action has been taken to assure the safety of current patients, including the suspension of 15 staff and a decision not to accept further patients at Winterbourne View. NHS commissioners have also put in place independent clinical and managerial supervision, and commissioned independent assessments of all current patients. All people in Winterbourne View now have a personal advocate;

CQC is taking enforcement action;

all admissions to the unit have been suspended; and

CQC is working with others to vacate the unit and appropriately relocate the patients through a systematic search for suitable alternative placements, taking into account the specialist needs of the patients and the wishes of their families.

CQC has acknowledged that there were indications of problems at Winterboume View which should have led to it acting sooner. CQC has issued an unreserved apology to those it has let down. Jo Williams, chair of

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CQC, has also written to the Department expressing her regret for CQC’s failure to act in this case. She, and CQC staff, are fully committed to learning the lessons from this tragic case and to making sure that when there are signs of poor care, CQC acts quickly to protect vulnerable people. In seeking to strengthen CQC as a quality inspectorate, we will work closely with CQC to ensure it is able to carry out its functions effectively and efficiently.

In the light of incidents at Winterboume View, CQC has started an immediate responsive review of all services run by Castlebeck Care (a further 22 locations in England). Inspections will be completed within the next two to three weeks. Reports on these individual services as well as a summary report will then be publicly available on CQC’s website.

In addition, CQC will begin a focused inspection programme which will review care provided by hospitals for people with learning disabilities. The three-month programme of reviews will involve unannounced inspections at a sample of the 150 hospitals that provide care for people with learning disabilities. Where CQC identifies care that is not meeting requirements, it will be able to use its full range of enforcement powers to take immediate action to require hospitals to make necessary improvements.

Each patient at Winterbourne View has been regularly reviewed by a multi-disciplinary clinical team on behalf of the primary care trust that commissioned their care. In many cases, this process has involved conversations with patients and relatives. All patients had been reviewed in the last six months, most in the past three months. Those primary care trusts who commissioned the care for the patients who were resident in Winterbourne View are carrying out an urgent review of the processes used to commission and review patients in privately provided services. The outcome will be fed into the wider multi-agency safeguarding review.

On 1 June 2011 South Gloucestershire council announced that it will lead an independently chaired serious case review (involving all agencies) which will look in detail at the specifics of this case and we will consider its findings carefully.

I asked officials on 18 May to undertake an examination of the roles of all of the agencies involved in this case drawing together the key lessons from the reviews being undertaken by the CQC, the NHS and safeguarding boards. The Department will be assisted in that task by Mark Goldring, the chief executive of Mencap, who will not only bring an independent perspective but also a depth and breadth of knowledge of the needs of people with learning disabilities. Ministers will then report further to Parliament.

The planned reforms for health and social care should also increase our ability to drive up standards in services and to deliver joined-up services and optimal care to patients with highly specialised needs. Subject to the NHS listening exercise and the passage of the Health and Social Care Bill, the NHS commissioning board will commission specified specialised services, with commissioning consortia responsible for commissioning other complex services. Through consortia, general practitioners and other clinicians will have new opportunities to shape the way that health services are designed and delivered. Taking into account the increasing range of NICE quality standards, consortia will work closely

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with secondary care and other health care and social care professionals, and with community partners.

We will ensure that there is particular emphasis within the “pathfinder” programme on testing ways of ensuring that consortia quickly develop knowledge and expertise in relation to more complex and specialist services. This will include exploring joint commissioning with local authorities, for instance in relation to care and support for people with long-term mental health conditions, and people with learning disabilities, allowing people to remain in their local communities maintaining their relationships with family and friends.

We will ensure that the NHS commissioning board has a particular focus on promoting quality improvement in relation to more complex or specialist services.

We have also announced our intention to make safeguarding adults boards a legal requirement. This will strengthen the local governance and accountability of safeguarding arrangements. It will enable local partners in local authorities, the NHS and the police to work closely with their communities to safeguard vulnerable adults. Safeguarding adults boards currently exist in every local authority but are not mandatory. By legislating we intend them to make them stronger in their efforts to prevent abuse and to respond unequivocally where it does occur.

We will also take steps to support, and respond to, whistleblowers. Our proposals for Health Watch mean that local health watch organisations could ask CQC to investigate services where they have concerns. In addition, proposals for local health watch to signpost people to information about services and help them if they want to complain about NHS services would provide additional “early warning” of problems with particular services. This could lead to Health Watch being able to “enter and view” services and make recommendations about improvements.

Every part of the system must be working to drive up standards and take collective responsibility for minimising the chances of this series of events happening again.

National Health Service Modernisation Listening Exercise

The Secretary of State for Health (Mr Andrew Lansley): On 6 April the Government announced that they would take advantage of a natural break in the legislative process to pause, listen and reflect on the national health service modernisation plans and to make any necessary improvements to the Health and Social Care Bill. The NHS Future Forum, a group of 45 professionals from across health and social care, was established to help drive the engagement process. The eight-week intensive listening period came to its conclusion on 31 May.

In order to hear from as wide a range of people as possible throughout the pause, various methods of engagement were employed. Some 250 events were held and over 8,000 people took part directly in providing their views. These meetings and events were attended by Ministers and NHS Future Forum members and involved over 250 stakeholder organisations, including patient groups, professional bodies and unions, voluntary sector groups and local authorities, as well as patients and

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members of the public. In addition, strategic health authorities across the country supported the listening exercise by encouraging staff, patients and communities to share their views both online and at their own regional events.

In addition to listening events, people were encouraged to air their comments and concerns through digital channels. The modernisation of health and care website recorded over 2,400 public posts alongside a further 970 privately submitted comments. Feedback was also received through in excess of 500 engagement questionnaires.

The NHS Future Forum is reflecting on what they have heard and will be reporting to the Government shortly. The Government will then respond, setting out the improvements they intend to make to the modernisation plans and the Health and Social Care Bill. The forum’s report will be placed in the Library.

Southern Cross Healthcare

The Minister of State, Department of Health (Paul Burstow): The House will be aware of concerns over the future financial viability of the care home company Southern Cross Healthcare.

The Government understand that recent events and media speculation will have caused concern to residents in Southern Cross care homes, their relatives and families and staff

The Government’s primary concern in this matter is for the welfare of the residents living in Southern Cross homes. That must be paramount. For that reason, it is important that this matter is resolved in a measured and orderly manner.

Officials have been in frequent contact with Southern Cross’s senior management over the last three months and continue to be so. Ministers have been monitoring the situation carefully.

Through discussions with Southern Cross, its landlords and its lenders, we have ensured that everyone involved understands their responsibilities towards the residents.

Whatever the outcome of the restructuring by Southern Cross, no one will find themselves homeless or without care. The Government will not let that happen. The Department has been working with the Local Government Association, the Association of Directors of Adult Social Services and the Care Quality Commission, to ensure that all agencies are clear on our respective roles and responsibilities.

It is for Southern Cross, its landlords and those with an interest in the business, to put in place a plan that stabilises the business and ensures continuity in the operation of the care homes. That process is in hand and we must let it continue. We believe that the commercial difficulties that Southern Cross has encountered are capable of resolution within the sector. It is not the role of Government to interfere in these commercial negotiations.

All parties involved—including other Government Departments, local authorities and the Care Quality Commission—are ready to take decisive action if these plans do not create a viable platform for the future

There are clear and effective protections in place that cover this situation. No resident—whether publicly or

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self-funded—would be left homeless or without care. In an emergency, a local authority can provide residential accommodation to anyone who has an urgent need for it. A local authority would continue to provide care for any self-funding resident who was unable to find or arrange care for themselves.

The Government will continue to monitor the situation closely and reiterate to all parties that they have a collective responsibility to resolve the situation in a way that does not put at risk the continuity or quality of care of residents.

E. coli Outbreak (Germany)

The Secretary of State for Health (Mr Andrew Lansley): I wish to inform the House of how the Government are taking all possible measures to monitor the serious E. coli 0104 outbreak that is centred in Germany and to assess and deal with any associated risks should any arise for consumers in the UK.

Over the weekend the German authorities indicated the potential source of the outbreak is thought to be a sprouted seed mix consisting of alfalfa seeds, fenugreek, lentil and azuki beans from a farm in northern Germany. This link has been identified through epidemiological studies. However, initial test results reported yesterday (6 June) were negative. The German authorities are carrying out further tests and investigations to try to confirm the source of the outbreak.

I want to reassure the House that I am advised by the UK Food Standards Agency that there is no evidence that any of these products are present in the UK food chain. Information received to date indicates that all of the potentially affected produce was distributed locally in Germany and has been withdrawn from the German market. The 11 cases of illness we have in the UK apparently linked to this outbreak are all in people with a history of recent travel from Germany, and no new cases in the UK have been identified since Friday.

As soon as they heard of the outbreak in Germany, the Department of Health made sure that clinicians in the NHS were alerted to watch out for cases of this illness and the Health Protection Agency issued advice to people travelling to Germany. The Health Protection Agency is also liaising closely with the authorities in Germany and counterparts across Europe.

In addition to the 11 people who have fallen ill in the UK there have been 2,231 reported cases in Germany and 102 elsewhere in Europe, again associated with travel from Germany. The strain of E. coli associated with this outbreak has the potential to cause life-threatening illness and, unfortunately, 21 people in Germany and one person in Sweden have died. My sympathy and condolences go to all those who have suffered in this outbreak.

The Food Standards Agency is in daily contact with the European Commission to ensure that the Government have the most up-to-date information on the ongoing investigations into the source of the outbreak. The Food Standards Agency is also working closely with the Health Protection Agency, which is reporting immediately any cases of illness in the UK associated with this outbreak. Both agencies are in regular contact with the

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Department of Health, DEFRA and other key partners to maintain an up-to-date assessment of the risk to UK consumers.

I should like to assure the House that immediate action would be taken to alert consumers, withdraw food from shops, and ban imports should the Food Standards Agency suspect that contaminated product associated with this outbreak is in the UK or may be imported into the UK. In the meantime, the clear advice to consumers is that they should follow the usual best practice in preparing and consuming fruit and vegetables, peeling and cooking where this is appropriate or otherwise thoroughly washing fruit and vegetables where these are to be eaten raw. People should also be reminded that washing hands before eating and after handling raw food is always advisable.

I will give further updates to the House on this important issue as new information becomes available.

Home Department

Prevention of Terrorism Act 2005

The Secretary of State for the Home Department (Mrs Theresa May): In accordance with section 14(3), 14(4) and 14(5) of the Prevention of Terrorism Act 2005, Lord Carlile of Berriew QC prepared a report on the operation of the Act in 2010, which I laid before the House on 3 February 2011.

I am grateful to Lord Carlile for this, his final report as independent reviewer of CT legislation, and more broadly for the valuable contribution that he has made to this important area of work. Following consultation within my Department and with other relevant agencies, I am today laying before the House my response to Lord Carlile’s recommendations.

I am also laying before the House my response to the report on the renewal of the control order legislation by the Joint Committee on Human Rights (published on 1 March 2011).

Copies of the Government responses will be available in the Vote Office and a copy of each will also be placed on the Home Office website.

International Development

CDC Group plc

The Secretary of State for International Development (Mr Andrew Mitchell): In October 2010 I informed the House of the Government’s decision to reconfigure CDC in order radically to increase its development impact.

In my previous statement I set out the objectives of this reform and announced a public consultation, as well as the commissioning of a number of independent studies. The results of that consultation and the four studies have been published on the DFID website. The International Development Committee of this House

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has since conducted an inquiry into the future of CDC. Its report was published on 3 March 2011, and the Government’s response was given on 4 May.

I can now inform the House that the Government and the CDC board have agreed a new high-level business plan, published during the Whitsun recess on 31 May, which sets out how CDC will carry through the reforms I proposed last October.

CDC will be more focused on the poor than any other development finance institution, building further on its strong concentration on the poorer countries in south Asia and sub-Saharan Africa. In future, all CDC’s new investment commitments will be for the benefit of these two regions, where over 70% of the world’s poorest people live. In India, CDC will move to a concentration on the eight poorest Indian states.

CDC will not invest in regions or sectors which are already well served by private investors, such as large-scale mining in many countries. Otherwise, it will be responsible for selecting, on the basis of the strongest anticipated development outcomes, investments from across a wide range of sectors.

CDC will aim to reduce the proportion of its portfolio held in other countries outside the new focus regions over time, to 15-20% by 2015. It will not invest in the better-off developing countries, unless for the benefit of poorer countries in the relevant region.

There will be a new performance framework for CDC, focused on development impact rather than CDC’s own profitability. It will be a development-maximising, not a profit-maximising, enterprise. CDC will measure the impact of its investments on generation of incomes and tax revenues, broader private sector development, mobilising private capital, and improving socially and environmentally responsible management in beneficiary companies. Stretching targets will be set for these indicators for CDC to meet and they will be reviewed annually.

CDC will become bolder and more pioneering in its approach to innovation and risk: being more creative and accepting higher financial risks where these are justified by greater development benefits. It will reach the parts that other emerging market investors too often do not. But it will still ensure that it remains sufficiently profitable to offset the cost of the taxpayers’ money invested in it, as defined by Her Majesty’s Treasury. While development impact will be the driver, CDC will also look to build the companies in which it invests into commercially sustainable enterprises.

CDC will no longer exclusively operate indirectly, through private equity funds managed by others, but will work through a wider range of intermediaries—and importantly, build up its own direct investments. It will do this gradually and initially only through co-financing with other lead investors, as it redevelops its capacity to seek out and manage direct investments. Likewise, it will offer lending as well as equity financing, with the aim of increasing the share of loan instruments in its portfolio.

CDC will continue to make new commitments to private equity fund managers, and to support and develop suitable local investment management firms, but with the aim of reducing the fund of funds share of its assets to some 60% by 2015. In running down this part of its portfolio, the realisation of full value for money for the taxpayer will remain the primary consideration.

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The remuneration framework agreed for CDC by the previous Government, which aimed to align CDC remuneration with private equity fund of funds firms in the City of London, has led to inflated remuneration. A study by independent consultants has indicated that in comparison with other publicly owned development finance institutions, and with private foundations doing similar work, CDC remuneration has risen far above the median levels elsewhere.

We must bring pay and bonuses down to a level that is fair and appropriate, but not excessive, for a publicly owned body whose very purpose is to reduce poverty. The CDC board will take immediate action to cut bonus levels by 50% for this year. Once a new CDC chief executive is in place, the Government will agree with CDC’s board how to restructure pay to attract, motivate and retain people with the attitude and skills necessary to take part in this exciting new phase of CDC’s existence. The new remuneration framework will prioritise development results rather than profitability and any performance-related pay will be largely deferred and based on long-term performance.

In response to the public consultation on CDC, CDC will publish a new disclosure policy aimed at making its work as transparent as possible. While observing the constraints of commercial confidentiality and the Data Protection Act, CDC will publish more information on the businesses using its capital, the funds investing it, and the economic impact of investments; and on CDC’s remuneration and operating costs. More of CDC’s evaluations will be conducted independently, going beyond the current 50%, and as much evaluation material as possible will be published that does not jeopardise commercial confidentiality. CDC’s investment policy, agreed with DFID, will also be published.

CDC will update its investment code to reflect the latest international standards and best practice and will continue to ensure, by means of independent external audit, that its compliance and implementation are properly monitored.

CDC has strengthened its policy on taxation: where it is within CDC’s discretion as originating or sole investor, CDC will not make new investments in or through harmful tax regimes, or regimes which do not comply with international tax transparency and exchange of information standards (as defined by the OECD and Global Forum on Transparency and Exchange of Information for Tax Purposes). Where CDC does not have such discretion, CDC will make a judgment on the merits of the proposed new investment against the nature of the tax regime—and be transparent about that judgment. CDC will also be transparent in its dealings from a tax perspective. Information will be published on taxes paid within CDC’s portfolio and, if specific information cannot be published, CDC will explain why.

DFID will work more closely with CDC, both at country level and at the centre. CDC’s business plan will be reviewed annually and CDC will report annually to the Secretary of State on achievement against its targets, which we will publish.

The board of CDC has responded willingly and constructively to the recent scrutiny of its work and to the changes that the Government have proposed. There is now the opportunity to strengthen CDC’s role as a

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leading instrument in the UK’s policy for accelerating poverty reduction in the poorer countries through enterprise and economic growth.


Disabled Persons Transport Advisory Committee (Public Bodies Bill)

The Parliamentary Under-Secretary of State for Transport (Norman Baker): The cross-Government review of non-departmental public bodies, responding to this House in October 2010, decided that the public bodies landscape needed radical reform to increase accountability, cut out duplication of activity, increase transparency and discontinue activities that were no longer needed. Among the recommendations was that the Disabled Persons Transport Advisory Committee (DPTAC) be abolished.

The Public Bodies Bill is currently before Parliament. The Bill as drafted, would allow the Government to make an order abolishing DPTAC. If the Bill is passed with this provision in it, I am minded to make such an order. But before coming to a definite decision to do so, I intend to consult on the order and will make no final decision until I have taken into account the responses to that consultation.

In advance of this formal consultation I am inviting views from all those with an interest on what successor arrangements should be put in place if DPTAC is abolished. I am seeking to ensure that any successor arrangement will continue to provide my Department with consensual, pan-disability advice in a flexible way, and that any arrangement represents value-for-money.

I propose to invite comments on the options listed below:

Option 1—Rely on existing expertise in the Department for Transport policy divisions and agencies. Where ad

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hoc specific advice is needed, it could be sought by individual policy divisions from third party stakeholder groups, the transport industry, and experts. This would have minimal cost (although commissioned, consultancy advice could be expensive) but perhaps risks disability issues being overlooked.

Option 2—Establish a stakeholder forum, which could be convened and provide advice as and when issues arose. Again this would have minimal cost, but could again result in an increased consultancy bill. It might also be difficult to decide who to appoint to the forum. There are over 50 disability groups, and their interests sometimes conflict (e.g. the interests of the visually impaired, and those using mobility scooters). Achieving consensus could therefore be difficult.

Option 3—Rely on a cross-Government body to provide transport advice—for example the existing (non statutory) Equality 2025, run by the Department of Work and Pensions. This option should ensure that disability issues do not get overlooked. Equality 2025 is likely to be able to offer general advice—for example on transport access to the Olympics by disabled people—but would not be in a position to offer more specialist advice, for example the type of mobility scooter models suitable to be carried on public transport.

Option 4—Establish a non-statutory specialist body which would be flexible and accountable to Ministers. This may cost more than the options above, but should be less expensive than the current arrangements. However, a smaller body because of its size, may not cover all disability areas, and therefore could reduce the opportunities to provide pan-disability advice.

Option 5—A wide-ranging panel of experts from which members could be drawn, on an ad hoc basis, when specific advice is needed. A once a year meeting of all specified stakeholders could be held so that they all have the opportunity of voicing wider concerns.

My initial thinking is that option 5 would be the most appropriate path to take, but I would welcome views to inform my decision making in this area.