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Written Ministerial Statements

Wednesday 14 March 2012

Business, Innovation and Skills

Executive Pay (Consultation on Enhanced Shareholder Voting Rights)

The Secretary of State for Business, Innovation and Skills (Vince Cable): On 23 January, I announced a package of measures to address failings in the corporate governance framework for executive remuneration. This includes:

Greater transparency in directors’ remuneration reports;

Empowering shareholders and promoting shareholder engagement through enhanced voting rights;

Increasing the diversity of boards and remuneration committees;

Encouraging employees to be more engaged by exercising their right to information and consultation arrangements;

Working with investors and business to promote best practice on pay-setting.

These measures will be taken forward through a combination of primary and secondary legislation, and business-led good practice. My objective is to enable shareholders to promote a stronger, clearer link between pay and performance in order to prevent rewards for mediocrity or failure, while still allowing for exceptional performance to be rewarded.

Enhanced voting rights for shareholders will require primary legislation and, subject to parliamentary time, we aim to include this in the next legislative Session. Today I am publishing a consultation document that provides more detail on a model which will give shareholders greater influence on the issue of executive remuneration. The main components of this are:

An annual binding vote on future remuneration policy;

Increasing the level of support required on votes on future remuneration policy;

An annual advisory vote on how remuneration policy has been implemented in the previous year;

A binding vote on exit payments over one year’s salary.

The purpose of the consultation is to seek evidence on the impact, costs, benefits and likely behavioural effects of the proposals. I want to ensure that these measures promote effective dialogue between companies and their shareholders.

In developing this consultation document, we have engaged with investors, non-executive directors, company secretaries, HR directors, lawyers and other experts. We will continue to do this during the consultation period and to build our evidence base. Today I have also published the Regulatory Policy Committee’s verdict on our consultation stage impact assessment.

Following this consultation I hope to confirm the precise measures we will take forward in primary legislation early this summer. At the same time, I plan to publish draft regulations which will determine the content of

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directors’ remuneration reports so that the proposals can be scrutinised as a whole. Together, these measures will create a more robust framework within which executive pay is set, agreed and reported on.

I am placing a copy of the consultation document in the Libraries of both Houses.


Tax and Customs Co-operation Programme

The Economic Secretary to the Treasury (Miss Chloe Smith): I wish to inform the House that the Government have opted in to the proposal for a regulation of the European Parliament and of the Council establishing an action programme for customs and taxation in the European Union for the period 2014-2020 (known as FISCUS).

This proposal establishes a tax and customs co-operation programme to support the effective functioning of the internal market and operation of customs procedures, and to improve the functioning of taxation systems within the EU by increasing co-operation between member states. The programme aims to contribute to the Europe 2020 strategy for smart, sustainable and inclusive growth, by strengthening the functioning of the single market and EU customs union. It also has the objective of driving technical progress and innovation in national tax administrations with the aim of developing e-tax administrations and contributing to the establishment of a digital single market.

The UK has benefited from participation in predecessor programmes, in particular, through involvement in multilateral controls which can assist with the detection of tax fraud and through using customs 2013 activities to reduce administrative burdens for compliant businesses. The programmes also fund the maintenance and development of EU communication and information exchange systems. This is an area where spend on research and development can represent good EU added-value by providing economies of scale in the development of cross-EU networks.

Deputy Prime Minister

Diamond Jubilee Civic Honours Competition

The Deputy Prime Minister (Mr Nick Clegg): I am pleased to announce that Her Majesty the Queen has commanded that city status be granted to Chelmsford, Perth and St Asaph; and lord mayoralty to Armagh to mark her diamond jubilee.

Although the granting of these honours remains a rare mark of distinction, the Queen accepted the Government’s recommendation to grant these honours to more than one place to commemorate her diamond jubilee and in recognition of the high quality of applications received. City status and lord mayoralty, which confer no additional powers or functions on the successful applicants, will be granted by Letters Patent, which will now be prepared for presentation to Armagh, Chelmsford, Perth and St Asaph in due course.

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The unsuccessful applicants will, of course, be disappointed not to have been honoured on this occasion. The standard of application was very high, and those who missed out should not be downhearted. I hope the competition has given the residents of all of the places which applied a sense of civic pride, of collective ownership and of community spirit. Across the United Kingdom, I have been impressed by the pride and passion which people have shown in putting their nominations forward.

I offer my congratulations to Armagh, Chelmsford, Perth and St Asaph, who have been granted these rare honours from a field of exceptional entrants.


Adoption Action Plan

The Secretary of State for Education (Michael Gove): I am publishing today “An Action Plan for Adoption: Tackling Delay”. It explains the changes the Government will be making to speed up the adoption system in England. This is the first part of a radical wider programme of reform to improve the lives of all children who enter local authority care.

Adoption gives vulnerable children the greatest possible stability and security, in a permanent loving family and it can bring great joy and reward to adoptive parents. But the number of children adopted from care has been decreasing in recent years. Just 3,050 children found new homes through adoption last year, the lowest number since 2001. Many of the children who are adopted are forced to wait far too long. The average time between a child entering care and moving in with their adoptive family is one year and nine months. If a child enters care at the age of two and a half, on average they will be nearly five by the time they move in with their family.

Delay can cause lasting harm to the ability of babies and children to make secure attachments to their caregivers and increases the likelihood that they will develop emotional and behavioural difficulties. And as children grow older in care, waiting for an adoptive family, it is less likely they will be adopted at all.

The action plan sets out a range of proposals to speed up the process for children; to overhaul the service for prospective adopters; and to strengthen local accountability for the timeliness of adoption services. Last week the Prime Minister announced measures to speed up the process for children. We will seek an early opportunity to introduce new legislation that will prevent local authorities from delaying an adoption by searching for a perfect match for a child, particularly one based on the child’s ethnicity. We will also change the regulatory framework to make it easier for children to be fostered by approved prospective adopters, while courts consider the case for adoption. Finally, if a match has not been found locally within three months of a child being recommended for adoption, local authorities will have to refer them to the national adoption register.

One of the reasons for delay in the adoption system is a mismatch between children in need of adoption and the families approved to adopt them. We need to recruit a greater number and wider range of prospective adopters, for the children who are waiting, many of whom have

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high levels of complex needs because of their earlier experiences of abuse and neglect. We believe that there are many more people willing to give a child a stable, loving home through adoption than those who complete the assessment journey at present. So we want to reform an assessment process which many prospective adopters find unresponsive, intrusive and lengthy—it can take as long as two years to complete.

With the help of an expert working group of local authorities, voluntary adoption agencies and adoptive parents we have developed a set of proposals for the reform of the recruitment, training and assessment process. The action plan gives strong support to a new six-month approval process and assessment agreement and sets out our intention to consult on the necessary regulatory changes. And it welcomes the concept of a national gateway to adoption—a national first point of contact for the adoption system.

We will hold local authorities more sharply to account for the speed of their adoption processes through an adoption scorecard linked to a performance threshold and statutory intervention regime. Delay in the adoption system is not universal. Some local authorities already ensure that all their children who need adoption are placed with families in a timely fashion. Some adopters speak of receiving an efficient, professional and supportive service. Building on the other changes we are making to the system, the new scorecard and intervention regime will make good practice more widespread.

The action plan contains the most urgent changes we need to make to the adoption system, as part of our broader work to transform outcomes for children in care. My Department will bring forward a further set of proposals on other changes to the adoption system and wider reform to services for children in care in the summer.

Copies of “An Action Plan for Adoption: Tacking Delay” have been placed in the Libraries of both Houses.

Foreign and Commonwealth Office

Westminster Foundation for Democracy

The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague): I wish to inform the House of the Foreign and Commonwealth Office’s plans for continuing support to the Westminster Foundation for Democracy (WFD). I am also able to inform the House that my right hon. Friend the Secretary of State for International Development has also agreed to provide additional funding to WFD.

The FCO will provide WFD with funding of £3.5 million for 2012-13 and plans to provide them with similar sums for 2013-14 and 2014-15, dependent on future performance across all aspects of their work. The Department for International Development (DFID) will provide WFD with an accountable grant of £6 million over the next three years (2012-13 and 2014-15), which is the first time DFID has provided funding to WFD in this way.

WFD delivers an important service in its work to strengthen Parliaments and provide assistance to political parties to support democracy across, the world. The

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promotion of multi-party democracy, good governance, transparency and accountability helps to support the UK Government’s priorities and the UK national interest.

The joint support of our two Departments will help WFD to become a more efficient, effective, and evidence-based organisation and to achieve greater impact with its important work.

Home Department

European Union Justice and Home Affairs Measures

The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire): We believe that European Union measures that impose justice and home affairs (JHA) obligations only apply to the UK if we choose to opt in to them. Since the entry into force of the Lisbon treaty, there have been a number of JHA proposals that repeal measures that we are currently bound by, and replace them with new ones. We have not opted in to all of the replacement proposals and there has been a question as to whether the measures that we currently do take part in (the “underlying measures”) would still bind us once the replacement has entered into force.

The policy we inherited from the previous Government was that the UK was not bound by an underlying measure when we did not opt in to a measure repealing and replacing that underlying measure. Following a review of this policy, the position of the Government is that:

the UK considers itself bound by an underlying measure when we do not opt in to a

new measure that repeals and replaces it; and

article 4a of the title V opt-in protocol (protocol 21 of the treaty on the functioning of the European Union) should be interpreted as applying not only to amending measures but also to repeal and replace measures.

Our position has been reinforced by the fact that the Commission has started to introduce express wording in repeal and replace measures which makes it clear that the underlying measures will continue to bind us if we do not opt in. It is highly likely that the Commission will in future routinely insert such language into new measures.

We acknowledge that this new policy carries a small risk of the UK being bound by arrangements which no longer operate in relation to the EU as a whole but continue to apply as between the UK and Denmark (and sometimes Ireland). This would happen when only the UK and Denmark (and sometimes Ireland) remain bound by an underlying measure following a “repeal and replace” proposal. However, we already accept this position in relation to amending measures as a consequence of article 4a of the title V opt-in protocol. Article 4a of the title V opt-in protocol provides that the UK remains bound by an underlying measure where a new measure amends it unless

“the non participation of the UK and Ireland in the amended version of an existing measure makes the application of that measure inoperable for other Member States of the Union...”

In such cases, the measure would cease to apply to the UK.

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Our decision to accept that we continue to be bound by an underlying measure where it has been repealed and replaced has a direct read across to the interpretation of article 4a of the title V opt-in protocol. Our view is that a broad interpretation of article 4a is the correct one and that repeal and replace measures should be considered to be a type of amending measure for the purposes of article 4a. In practical terms, if we accept that the UK continues to be bound by the underlying measure where we do not participate in the new ‘repeal and replace’ measure, we believe that we must also accept that, in such cases, the UK would cease to be bound by the underlying measure where it was deemed to be ‘inoperable’.

Hate Crime (Government Action Plan)

The Minister for Equalities (Lynne Featherstone): Today, we are publishing “Challenge it, Report it, Stop it”—the Government’s plan for tackling hate crime.

Hate crime—crime which is motivated by hostility to the victim’s personal characteristics, such as disability, gender-identity, race, religion or sexual orientation—can have devastating consequences for victims, their families and communities. It is hugely under-reported, as many victims are reluctant to come forward for fear of attracting further abuse or because they do not believe that the authorities will take them seriously.

This is an issue the Government take very seriously, as demonstrated by our coalition commitment to improve the recording of such crimes.

We have a responsibility to reduce the incidence of hate crime and to protect victims. However, getting the response to hate crime right depends on deep local knowledge of victims, offenders and communities, so the lead must come from professionals at the front line, working with the voluntary sector and communities to respond to local issues and priorities.

The Government have a vital role to play in setting the direction at national level, and supporting those locally led efforts, with a clear, consistent message on the importance of tackling hate crime and protecting victims and communities. That role includes making more and better national-level data available, so that we have a better understanding of where hate crime is happening and why; encouraging new ideas and highlighting examples of good practice, so that local professionals can see what has worked in other areas; and, where necessary, giving victims of hate crime more protection under the law.

“Challenge it, Report it, Stop it” is our blueprint for the remainder of this Parliament. It brings together activity by a wide range of Government Departments—working with local agencies and voluntary sector organisations, as well as with our independent advisory group on hate crime—to meet three key objectives:

To prevent hate crime—by challenging the attitudes that underpin it, and intervening early to prevent it escalating;

To increase reporting and access to support—by building victim confidence and supporting local partnerships; and

To improve the operational response to hate crimes—by better identifying and managing cases, and dealing effectively with offenders.

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Hate crime is also a global issue and our responsibility to share our experience, ideas and good practice should also extend to partners overseas. We will therefore continue to push for action on hate crime at international level, through a range of organisations, including the United

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Nations, the European Union and the Organisation for Security and Co-operation in Europe.

A copy of the action plan will be placed in the Library of the House