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Written Ministerial Statements

Friday 9 September 2011


Anti-Avoidance (Tax Treaties)

The Exchequer Secretary to the Treasury (Mr David Gauke): On 1 August HMRC published for consultation a technical note and draft legislation outlining a proposed approach to combating tax avoidance arrangements which exploit the provisions of double taxation agreements (DTAs). The responses so far received have made it clear that the proposed legislation, as drafted, could cause significant uncertainty for compliant UK businesses and overseas investors about its intended scope and its practical effect.

The Government are committed to providing certainty to taxpayers and acknowledge the concerns raised in the responses to the consultation. They have therefore decided not to proceed further with the consultation on the proposed legislation and will not include it in the Finance Bill 2012.

The Government will continue to challenge specific arrangements that clearly seek to abuse provisions in a DTA.

This decision reaffirms the Government’s commitment to open and transparent consultation and demonstrates the value of consultation. The Government’s approach set out in their tax consultation framework has been widely welcomed by business and others as providing a much improved basis for developing new legislation. If the Government conclude in the future that alternative approaches for legislating against treaty abuse are necessary, they will consult on these alternatives in line with the tax consultation framework.

Banking Act 2009 (Reporting)

The Financial Secretary to the Treasury (Mr Mark Hoban): The Treasury has laid before the House of Commons a report required under section 231 of the Banking Act 2009 covering the period from 1 October 2010 to 31 March 2011. Copies of the document are available in the Vote Office.


Ofsted Report (Armed Forces Initial Training 2010-11)

The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan): Today Ofsted publishes its third report on welfare and duty of care in armed forces initial training, copies of which have been placed in the Library of the House. Following visits to 11 armed forces initial training establishments, Ofsted reports that recruits and trainees feel that their welfare needs are met and well supported.

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The armed forces remain committed to ensuring that the training they provide is both efficient and effective, recognising the need to continuously evaluate what works well and areas that need improvement. Ofsted inspection suggests that review processes in training establishments are improving and in one location the overall effect is judged to be “outstanding”.

We need to continue to provide effective training in the face of resource and operational pressures, while providing a supportive training environment that enables instructors to bring out the best in young recruits and trainees without lessening the tough nature of armed forces training.

Foreign and Commonwealth Office

General Affairs Council (12 September)

The Minister for Europe (Mr David Lidington): The General Affairs Council will meet in Brussels on 12 September. I will attend.

I will deposit the provisional records of the Foreign Affairs Council and General Affairs Council in the Library of the House when they are issued by the Council secretariat. I will issue a written ministerial statement in slower time, with the Government’s assessment of the debate at the Council.

General Affairs Council (gac)

Next Multiannual Financial Framework

The presidency intends to present the outcome of the discussion held by the Friends of Presidency group. This is a Committee of officials from the member states, with attendance from the Commission, to prepare and discuss aspects of the next multiannual financial framework. The Commission proposals (linked here— http://ec.europa.eu/budget/reform/ were published in June 2011 and are unacceptable to the UK. The UK Government have been clear that, at a time of ongoing economic fragility in Europe and tight constraints on domestic public spending, the Commission’s proposal for the multiannual financial framework is unrealistic. It is too large; it is not the restrained budget the Commission claims and it is incompatible with the tough decisions being taken in countries across Europe. The negotiations are at a very early stage and discussion is expected to be general.

Following the GAC, Ministers will have an orientation debate during lunch. This will be an opportunity to discuss general issues such as how the budget operates/functions, in particular the structure of the budget—this means how the budget headings are set out, for example what level of flexibility there should be to move funds between envelopes. The discussion will also touch on the macro-economic assumptions upon which the Commission’s figures are based, that is; assumptions about growth, GDP and the rate of inflation. There will also be discussion of emergency funds, such as the emergency aid reserve, and how these funds operate.

I will place particular emphasis, during my interventions, on the principle that the budget should be transparent.

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Economic G overnance

The presidency will update the Council regarding the “six pack” of legislative proposals for economic governance proposed by the Commission to implement the recommendations of President Van Rompuy’s economic taskforce (his report is linked here—

http://www.consilium.europa.eu/uedocs/cms data/docs/pressdata/en/ec/117236.pdf.

The six recommendations from the Commission called for a strengthening of both the preventive and corrective arm of the existing stability and growth pact, including new regulations to formalise sanctions for eurozone countries; provided for new regulation to improve macro-economic surveillance across the EU27; and included a new directive which sets out minimum standards for member states’ domestic fiscal frameworks.

The Government have supported the proposed economic governance legislation in broad terms. The March Finance Ministers Council (ECOFIN) agreed a general approach to the six proposals linked here—

http://www.consilium.europa.eu/uedocs/cms data/docs/pressdatayen/ecofin/119888.pdf

including a UK exemption from relevant articles of the fiscal frameworks directive. Negotiations are currently underway with the European Parliament (EP).

European Council of 17-18 October 2011

Delegations will be presented with a draft agenda, submitted by the President of the European Council, to set out the main items that the European Council is expected to address on 17-18 October 2011. The agenda for the October European Council will include economic policy, and external aspects of the EU economic policy including trade; preparations for the G20 summit on 3-4 November; and the EU position ahead of the climate change discussions in Durban (28 November-9 December). Additional agenda items may be added in the lead up to the Council.

Accession Treaty with Croatia

The presidency is likely to use the opportunity to take stock of the work done so far in drafting the accession treaty with Croatia. Discussion is likely to be limited, although the date and venue for the formal signature of the accession treaty may be raised.

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Personal Injury Cases (Referral Fees)

The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly): I am today announcing the Government’s intention to ban referral fees in personal injury cases. This complements our wider plans for civil litigation funding and costs, including fundamental reforms to “no win, no fee” conditional fee agreements.

Referral fees are usually paid by solicitors to third parties, usually claims management companies or insurers, who “refer” business to them. But current arrangements have led to the growth of an industry that actively encourages individuals to bring cases, regardless of the merits of their claim.

The Government strongly believe that it is not in the public interest for potential claimants to be sought out and encouraged to make claims by people who profit from their claims being pursued. We believe that referral fees add to the high costs and volume of personal injury litigation, one of the factors underpinning increases in insurance premiums. As my right hon. Friend Lord Young recognised in his report, “Common Sense, Common Safety” last year, referral fees also contribute to the risk of a corrosive compensation culture.

Lord Justice Jackson, in his review of civil litigation funding and costs which was published last year, recommended that referral fees should be banned or capped in personal injury cases.

Our aim is to reform the system to end the abuses that have occurred while ensuring that victims who have suffered a personal injury through someone else’s negligence remain able to make a claim for damages where they have an appropriate case. Alongside the planned reforms to conditional fee agreements, the ban on referral fees will contribute to the Government’s plans to tackle the compensation culture by discouraging unmeritorious claims and controlling the disproportionate costs of personal injury claims, without denying access to justice.