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Written Ministerial Statements

Tuesday 28 February 2012

Business, Innovation and Skills

Third Statement of New Regulation

The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk): The Government are today publishing the One-in, One-out: Third Statement of New Regulation. This statement reports on regulations within the scope of the one-in, one-out rule which are expected to come into force between 1 January and 30 June 2012. In parallel, Departments are each publishing a summary of the regulations they intend to introduce.

I am laying copies of the statement in the House Libraries.

EU Competitiveness Council

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb): The EU Competitiveness Council took place in Brussels on 20 and 21 February 2012. I represented the UK on internal market and industry issues on 20 February, and Andy Lebrecht, Deputy Permanent Representative to the EU, represented the UK on research issues on 21 February. A summary of those discussions follows.

The main internal market and industry issues discussed on 20 February were; Europe 2020; public procurement; the accounting directive, which was also the subject of the lunchtime discussion; social entrepreneurship and venture capital funds; and smart regulation.

An orientation debate was held on the Europe 2020 strategy, linked to the 2012 annual growth survey. Discussions from this Competitiveness Council, and other sectoral Councils, are due to feed into the March 2012 European Council conclusions. All member states intervened positively. I intervened to press for completion of those growth measures that were already in the pipeline, that is: concluding free trade agreements, fully implementing the services directive, continuing to deregulate our professions, reducing regulatory burdens and creating a fully functioning digital single market. Some member states also called for greater reciprocity with respect to the external dimension of the single market. I intervened to counter these calls.

A second orientation debate was held on the proposal to update the public procurement package. I intervened to press for greater flexibility in the procurement rules, and was supported by several other member states in this regard. I also called for the retention of the current distinction between so called “A-Services” and “B-Services”, which are currently subject to different regimes. Specific to the UK, I also called for the Commission to consider whether fledgling mutuals should be subject to full EU rules from the outset, and whether it might be appropriate to introduce a time-limited exemption.

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Over lunch, and subsequently in formal session, there was a discussion on the accounting directive. This focused on the proposed requirement for increased transparency in the payments from mining and extractive companies to Governments, on a per-country and per-project basis. I led the discussions by supporting the ambition of increasing transparency in the sector by developing a meaningful reporting regime, while also stressing the importance of our extractive industries remaining competitive. I also called for the materiality threshold, the monetary level at which reporting occurs, be set out in the directive.

The final orientation debate focused on venture capital and social entrepreneurship funds, and there was broad support for the proposals. Some member states called for a heavier regulatory regime to include the need for depositaries, though this received little support and the UK intervened to call for a light regime.

The Council agreed conclusions on smart regulation. Poland intervened to support the conclusions.

There was one AOB point on day one regarding the patents package. Several member states intervened to call for the swift conclusion of the outstanding issues.

The main research and space items discussed on 21 February were: the global monitoring for the environment and security (GMES) programme; the annual growth survey in the context of the Europe 2020 strategy; and scene-setting discussions on the Horizon 2020 package with a focus on international collaboration, SME support and the social sciences and humanities.

In the orientation debate on GMES, the UK and several other member states intervened to state that it should be funded from within the EU budget.

On the annual growth survey, member states noted in particular the need to develop complementarities between national and EU-level research programmes through simplified public/private partnerships; and to improve the focus on demand-side measures that could stimulate innovation, including strengthened support for pre-commercial public sector procurement as a means of driving investment in new products. The UK intervention referred to measures adopted at national level.

On the European Institute of Innovation and Technology (EIT), Commissioner Vassiliou introduced the Commission’s proposals, noting that it was a crucial feature within Europe’s wider package of support for innovation, and that the EIT was now delivering results through the knowledge and innovation communities (KICs).

On the bioeconomy. Commissioner Geoghegan-Quinn introduced the Commission’s communication “Innovating for Sustainable Growth: a Bioeconomy for Europe”, stating that the smart and sustainable use of biological resources and waste was now a necessity given the dual pressures of diminishing fossil resources and global population growth. By making smart investments the EU could maintain global leadership in and secure new sources of business growth. This was followed by an exchange of views over lunch, during which member states expressed support for a more coherent approach to policy-making in this area, noting that the issue was too diverse to be handled by a single directorate-general.

On Horizon 2020, the presidency hosted a further orientation debate, inviting Ministers to explore the support that will be required to ensure that the social

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sciences and humanities (SSH) are fully integrated within the programme. Ministers were also invited to explore the support necessary for SMEs, and the measures needed to fully embed international co-operation in the programme. Member states, including the UK, expressed strong support for the principle of embedding support for SSH throughout Horizon 2020, with many arguing that technological advances that were not accompanied by a firm understanding of the potential socio-economic and behavioural impacts were less likely to be adopted by citizens. Several member states supported enhancing international co-operation, notably in the context of addressing global societal challenges. Many member states, including the UK, underlined the need to foster participation by SMEs, including through the proposed debt and equity facilities and specific measures for SMEs. Some member states highlighted the need for member states to provide direct networking and mentoring support to SMEs and universities to improve synergies between the two. The UK noted we would be reviewing support available to SMEs. The presidency reaffirmed its ambition to work towards political agreement (“partial general approach”) at the May 2012 Competitiveness Council.

Under AOB, Commissioner Geoghegan-Quinn provided an update on Commission preparations for a European research area framework and noted that a recent public consultation had highlighted obstacles to researcher mobility and careers as key obstacles to the development of a genuine single market in research within the EU. On international thermonuclear experimental reactor programme (ITER), UK and several other member states called on the Commission to include funding within the next multi-annual financial framework (MFF) as placing the programme outside the MFF risked sending damaging signals about political support for the project, which the EU is leading on. The presidency provided information on the informal Council it hosted in Copenhagen on 2 February 2012.


Office of Tax Simplification (Small Business Tax Review)

The Exchequer Secretary to the Treasury (Mr David Gauke): The Government launched the Office of Tax Simplification (OTS) in July 2010 to provide independent advice on simplifying the tax system.

The OTS has been working on three reviews and today has published its final recommendations on its small business tax review. The OTS will be presenting its interim reports on pensioner taxation and employee share schemes next week.

On 9 May 2011, the Government asked the OTS to carry out a review of tax administration for small businesses as part of the next stage of the OTS’s small business tax review. The OTS was asked to identify areas of the tax system that cause the most day-to-day complexity for small businesses, recommend priority areas for simplification and consider the impact of these recommendations on different business sectors.

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The Government will respond to the OTS recommendations at the Budget, on 21 March 2012. Copies of the final report on small business have been deposited in the Libraries of both Houses.

Asset Protection Agency (Interim Report)

The Financial Secretary to the Treasury (Mr Mark Hoban): The interim report for the Asset Protection Agency (APA) has today been made electronically available in the Libraries of both Houses.

The report contains commentary on key developments in relation to the APA and the asset protection scheme (APS) over the period from 31 March 2011 to 31 December 2011.

I am pleased to note the statements in the report that the likelihood of the Royal Bank of Scotland (RBS) being able to make a claim under the APS has reduced significantly and that the British taxpayer is expected to make an overall profit of at least £5 billion from the APS.

Sale of Northern Rock Plc to Virgin Money

The Financial Secretary to the Treasury (Mr Mark Hoban): On 17 November 2011, the Chancellor announced the sale of Northern Rock plc to Virgin Money. The transaction completed on 1 January 2012, following approval from the Financial Services Authority and receipt of European Commission merger clearance.

Today, UK Financial Investments Ltd (UKFI) has published a document setting out the background to and rationale for the decision to return Northern Rock plc to the private sector through its sale to Virgin Money.

The publication includes information regarding UKFI’s assessment of the Virgin Money bid against a full range of options to return Northern Rock plc to the private sector, including remutualisation. UKFI and Northern Rock plc received independent corporate finance advice from Deutsche Bank. Other information includes background on the sale process and the timing of the sale.

The publication also includes an assessment of the expected overall taxpayer returns from the Government’s intervention in the former Northern Rock which amounts to a positive net cash return. The Government provided £37 billion of funding into the two companies(1) that comprise the former Northern Rock and the return of cash from these companies to Government (excluding tax proceeds) is expected to total between £46 billion and £48 billion.

Copies of this publication have been deposited in the Libraries of both Houses.

(1)The former Northern Rock was split into two entities on 1 January 2010: Northern Rock plc, a mortgage and savings bank; and Northern Rock (Asset Management) plc, the remaining closed mortgage book.

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Culture, Media and Sport

Government Olympic Executive (Annual Report)

The Minister for Sport and the Olympics (Hugh Robertson): I am publishing today the Government Olympic Executive’s Quarterly Report—“London 2012 Olympic and Paralympic Games Quarterly Report February 2012”. This report explains the latest budget position as at 31 December 2011, and outlines some of the investments which are being made to capitalise on the London 2012 Olympic and Paralympic games.

Across the whole games project, preparations are reaching their final stages. Ownership of the Olympic park has been transferred from the Olympic Delivery Authority (ODA) to the London Organising Committee. The Olympic and Paralympic travel planning website “Get Ahead of the Games” has been launched to help people plan their games-time journeys. The security and emergency services have taken part in some very visible testing exercises, and sports test events continue, most recently the track cycling world cup at the velodrome and the diving world cup at the aquatics centre.

At just 150 days to go until the games, the overall funding package remains at £9.298 billion with £527 million of uncommitted contingency available, a reduction of £1 million on the previous quarter. The ODA’s construction programme is now 96% complete. The anticipated final cost of the ODA’s construction, infrastructure and transport programme is £6.777 billion—a decrease of £79 million on the previous quarter. This includes £26 million that the ODA has returned to the DCMS, which is being transferred to LOCOG and the OPLC for work on park venues and security. On a like-for-like basis, the ODA’s anticipated final cost has reduced by £211 million since the 2010 spending review.

The ODA has achieved £38 million of new savings in the quarter October to December 2011, taking the total achieved since the November 2007 baseline to more than £950 million. Construction of the venues and infrastructure for the games is 96% complete, with the Olympic park and village handed over from the ODA to LOCOG in January 2012 so they can prepare the venues for staging the games.

A number of items of work have been transferred to LOCOG following the handover, as they are now best placed to deliver them. Accordingly, £24 million has been released to LOCOG for operational security and for the conversion of venues for the Paralympic games. Up to £12m has also been released to LOCOG for capital works which will have legacy benefits, including the fit out of the media centres, the installation of electric vehicle charging points and the relocation of the hockey pitches to Eton Manor following the games.

As planned, funds have also been released for pedestrian management outside games venues (£57.7 million) and additional utilities resilience measures across games venues (£12.5 million). These costs were previously forecast so do not constitute an increase, but rather a confirmation of previous budget assumptions.

The remaining balance of contingency within the public sector funding package now stands at £425 million, with an additional £102 million available to the ODA in

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programme contingency to cover assessed risk. In total, this leaves £527 million of uncommitted contingency remaining.

The change to the ODA anticipated final cost is due to a number of factors, including:

A decrease of £72 million in the programme contingency required to meet remaining assessed risks;

A net £29 million increase in transport operating expenditure reflecting a reallocation of £34 million to venue transport operations offset by £5 million savings;

A decrease of £15 million largely due to LOCOG taking responsibility for operational security from January 2012;

A reduction of £6 million in the forecast construction costs of the village due to close out of commercial contracts; and

An increase of £3 million in the international broadcast centre and the main press centre costs due to commissioning of the building and improved drainage systems.

With 150 days to go to the games, we remain on time and within budget with more than £500 million of uncommitted contingency remaining. This puts us in a strong position and gives me increasing confidence that we can deliver the games under budget.

I would like to commend this report to the Members of both Houses and thank them for their continued interest in and support for the London 2012 games.

Copies of the quarterly report February 2012 are available online at: www.culture.gov.uk and will be deposited in the Libraries of both Houses.


Cultural Education

The Secretary of State for Education (Michael Gove): Together with the Under-Secretary of State for Culture, Olympics, Media and Sport, the hon. Member for Wantage (Mr Vaizey), I am today publishing Darren Henley’s report on cultural education and the Government’s response to its recommendations.

Darren Henley, managing director of Classic FM, sets out a compelling challenge for making cultural education in English schools world class. The report sets out a vision—to enable children from all backgrounds and every part of England to have the opportunity to experience and enjoy the best that our unique cultural heritage has to offer.

Once again we would like to record our grateful thanks to Darren Henley for his ambitious approach to undertaking a review of this scale across such a divergent sector. His vision for excellence in cultural education is one that we share.

We would also like to express our gratitude to the cultural education sponsored bodies: Arts Council England, the British Film Institute, English Heritage and the Heritage Lottery Fund, who have risen to the challenges posed in the report and who have found a way to work together to address those challenges. We look forward to continuing to work closely with them, and to their increasing support for schools.

Learning about our culture and playing an active part in the cultural life of the school and wider community is as vital to developing our identity and self-esteem as understanding who we are through knowing our history and the origins of our society.

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Enjoying and participating in cultural life should be available to all students: it must not be restricted to those young people whose families already enjoy the benefits of participating in cultural activities. No matter what their background or family circumstances, school pupils should have the opportunity to develop their creativity, their relationship with society, and to contribute to the economy in ways that are beneficial to them as individuals and to society.

Cultural education is a valuable part of a rounded education that children and young people should expect to receive, not least on enhanced pupil performance across the curriculum.

The Department for Education is therefore making £15 million available over the next three years to ensure that all pupils can engage in a variety of cultural activities of the highest quality. We want the experience that young people have of their cultural heritage while at school to inspire them to participate actively in the cultural life of the nation throughout their lives.

This is not just about creating opportunities; the real and lasting impact will occur when those opportunities are enjoyable, challenging, of high quality, and when the young people are appropriately supported to achieve. We welcome the collaboration and contribution of the DCMS-sponsored bodies to work with schools and make this vision a reality.

Our intention is to make it possible for every school to introduce every pupil to high quality cultural education, achieving academic excellence, and for young people to contribute to our thriving creative industries, if that is where their talent and passion lies. We are introducing new initiatives, over the next three years, with the shared commitment of the Arts Council England, English Heritage, the British Film Institute and the Heritage Lottery Fund. We shall publish a new national plan for cultural education in which we will set out a clear route for cultural education from early years through to study at the highest level.

As evidence of this shared commitment, a new cross-ministerial group will help the Department for Culture, Media and Sport and the Department for Education work more effectively with sponsored bodies and each other.

We will invite teaching schools to draw up a programme of work, investing £300,000 to develop training and mentoring for new teachers and continuing professional development for experienced teachers. They will work with and be supported by cultural sponsored bodies to ensure all schools have access both to excellent teaching support and a variety of cultural education activities for all pupils.

Museums and galleries will receive £3.6 million to encourage and help all students to experience some of our cultural and historical treasures at first hand. English Heritage will work closely with schools, encouraging them to explore historical sites in their local area.

Our intention is that no talented young person, whatever their background, should be unable to realise their full creative potential. We are therefore investing £600,000 to establish a new National Youth Dance Company so that talented young dancers can aspire to reach the top of their profession, whether that is in contemporary or classical dance. This will match the excellent models we have in the field of music. We will expand the art and

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design Saturday clubs, based on a model pioneered by Sir James Sorrell, to give students access to high quality specialist equipment and tuition at local colleges and universities. The British Film Institute will lead the establishment of a new National Youth Film Academy, which will receive £3 million from the Department for Education, with additional support from the National Lottery, to support film education for all children and young people. Its aim will be to train the next generation of talented British film-makers.

Our Departments are determined that, together with our arm’s length bodies, our collective resources and expertise will make a real difference to the quality of cultural education experienced by all pupils in all schools.

Copies of “Cultural Education in England”, together with the Government’s response have been placed in the Libraries of both Houses.

Foreign and Commonwealth Office

South Georgia and South Sandwich Islands Marine Protected Area

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham): We would like to draw the attention of the House to the announcement yesterday by the Government of the overseas territory of South Georgia and South Sandwich Islands, declaring a sustainable use marine protected area (MPA), covering over 1 million square kilometres of the territory’s maritime zone. The Government very much welcome this announcement, which means that waters around South Georgia and South Sandwich Islands are now one of the largest sustainably managed areas of ocean in the world.

The sustainable use marine protected area enshrines in legislation new and existing policies to ensure the highest standards of sustainable fisheries management. The declaration includes over 20,000 square kilometres of no-take zones, alongside a prohibition on commercial bottom trawling and depth limits on the use of commercial bottom longlining. These measures will provide protection for the sensitive biologically diverse seabed and support the protection of the fish stocks around each of the islands within the territory.

The South Georgia toothfish fishery has already been certified as sustainable and well managed by the Marine Stewardship Council. The MPA designation further underpins the sustainable management and environmental stewardship of South Georgia and South Sandwich Islands, as well as contributing to the UK’s wider commitment to the conservation of the southern ocean, through its leading role within the Commission for the conservation of Antarctic marine living resources. The Government of South Georgia and South Sandwich Islands has also indicated its intention to undertake further scientific work during 2012 to identify whether further additional protection measures should be incorporated into the MPA designation in the future.

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UK Government National Action Plan (Women, Peace and Security)

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham): I wish to inform the House that the Foreign and Commonwealth Office, together with the Ministry of Defence and the Department for International Development, is today publishing a revised British Government national action plan on UNSCR 1325 women, peace and security. This national action plan is fully integrated with the work of the Minister for Equalities, who is the ministerial champion on violence against women and girls.

I wanted to announce publication to coincide with the start of the British presidency of the UN Security Council in March, given the lead role that the UK takes on the Council, for the women, peace and security agenda.

Since the national action plan was last revised in November 2010, the Government have been active in promoting the women, peace and security agenda through multilateral bodies, including: a significant financial contribution to UN women; encouraging more states to develop national action plans; and promoting the inclusion of gender issues within doctrine and practice for peace missions.

Across Whitehall, further efforts have been made to expand awareness of women, peace and security, issues, including through revised conflict, security and human rights training programmes that include significant elements covering gender issues; the deployment of female engagement teams on UK military operations overseas; and the dissemination of a 1325 toolkit to all of our embassies and Government offices overseas.

We have also continued to deliver gender based programmes in our three priority countries. For example, DFID has invested £60 million in a security sector accountability and police reform programme in the Democratic Republic of Congo, which will include the development of sexual and gender-based violence focused police units. The FCO is funding a multi-donor project to strengthen the capacity of the National Human Rights Commission in Nepal, to help develop a responsive and accessible justice system that will promote gender equality. In addition to a wide range of gender focused programme activity in Afghanistan, we are supporting the Afghan development of a 1325 national action plan, ensuring wide ranging consultation, including with women’s groups.

In October 2011,1 published a review of the Government’s performance against the national action plan. The revised plan that I am announcing today learns from that review and outlines new commitments for action over the coming year.

It also reflects new challenges on women, peace and security, in particular following the Arab spring. The national action plan has been expanded to include, for the first time, a regional action plan for the middle east and north Africa.

We are grateful to the associate parliamentary group on women, peace and security (APG WPS) for their active engagement on this important issue, and would in particular like to thank my hon. Friend the Member

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for Oxford West and Abingdon (Nicola Blackwood), who chairs that group. I should also like to thank the civil society organisation Gender Action on Peace and Security (GAPS), for the contribution they have made to the process of revising the plan.

We will continue to consult with Parliament and civil society, including in the run up to a review of the Government’s progress against the revised national action plan in the autumn. As the national action plan expires in November 2013, a full evaluation will take place in 2013, and make recommendations on how the plan should be refreshed or replaced.

I have deposited a copy of the revised national action plan in the Libraries of both Houses. It is also available on the FCO website at: www.fco.gov.uk.


CPS and RCPO (Merger)

The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt): I have today laid before Parliament a public consultation document: Consultation on an order giving legal effect to the administrative merger of the Crown Prosecution Service and the Revenue and Customs Prosecutions Office.

The merger of the Crown Prosecution Service (CPS) and the Revenue and Customs Prosecutions Office (RCPO) has already been achieved administratively. The merger took place on 1 January 2010 and is safeguarding and delivering improvements to the already high quality work on serious and complex cases. It is also providing increased value for money by minimising duplication and driving economies of scale. The benefits include an enhanced international capability, a specialist tax prosecution service and a joint prosecution approach to cross-border crime.

The two organisations, however, remain legally distinct. I believe it is desirable for them to be one organisation legally as well as operationally. An order under the Public Bodies Act 2011 would achieve this objective.

The purpose of the consultation exercise is to seek views on whether we should give legal effect to the administrative merger and whether the approach we are proposing would achieve the desired effect.

The consultation closes on the 22 May 2012. I will carefully consider the consultation responses before bringing forward any order giving legal effect to the administrative merger of the CPS and RCPO.


Crossrail Train Procurement

The Secretary of State for Transport (Justine Greening): I would like to inform the House that the invitation to negotiate for the procurement of rolling stock and associated depot facilities has today been issued by Crossrail Ltd.

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Together with the Mayor of London, my co-sponsor on the Crossrail project, I welcome this major milestone in Crossrail’s journey from inception to reality.

Crossrail will create vital new transport infrastructure to support economic growth. It will deliver faster journey times and a 10% increase in the capacity of London’s rail network.

Crossrail Ltd is inviting suppliers to design, manufacture, finance and service around 60 new trains and build a depot at Old Oak Common in West London. These new trains will provide around 27,000 seats, reducing congestion and bringing an additional 1.5 million people within 45 minutes of London’s major business centres.

Hon. Members will recall that the previous Secretary of State for Transport committed to consider any relevant findings of the Government’s growth review as part of this and other large-scale procurements. Hon. Members will also be aware that my right hon. Friend the Chancellor of the Exchequer published the national infrastructure plan in November 2011 and included a package of measures to reform public procurement in the autumn statement.

My Department has been working with colleagues across Whitehall and suppliers and delivery bodies to implement these recommendations. Across the transport sector we want to improve dialogue with suppliers and increase the long-term visibility of forthcoming contracts in order to strengthen the capability of the UK supply chain.

In respect of Crossrail, reflecting its stage in the procurement process, this invitation to negotiate is a clear example of how, working in partnership with the Mayor and Crossrail Ltd, we are already adapting our approach.

First, the invitation to negotiate includes requirements for “responsible procurement”. This means that bidders are required to set out how they will engage with the

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wider supply chain and provide opportunities for training, apprenticeships, and small and medium-sized businesses within their procurement strategy. Bidders are also required to establish an appropriate local presence to manage the delivery of the contract.

The Mayor and I are also keen to understand and communicate the benefit of this contract to the UK economy; bidders are being asked, in the invitation to negotiate, to specify from where each element of the contract will be sourced. This is not an assessment criterion in the decision process, however, the successful bidder will be required to report against their proposed estimates.

Secondly, Crossrail Ltd, which has already developed a reputation for being an industry leader in this field, will ensure that, going forward, this procurement is efficient and effective and does not involve unnecessary costs for the bidders.

In addition, this contract will provide a significant element of public investment, alongside private finance, optimising the balance of public debt and transfer of risk to the private sector. This approach will help ease the costs of debt repayments to the public purse, as well as reduce bidders’ requirements to raise debt and equity, while still transferring significant risk to the private sector, ensuring that we secure value for money. First and foremost, the successful bidder must be able to deliver the right trains and depot facilities.

Above all, I want this procurement to be a fair process that provides best value for money for the UK taxpayer and future fare payers’ and high quality, reliable trains for the millions of people that will use Crossrail services every week.

Four bidders will be receiving the invitation to negotiate having performed strongly at the pre-qualification stage and I look forward to a highly competitive process. The contract will be awarded in Spring 2014.