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Written Ministerial Statements

Monday 12 November 2012


ECOFIN (Budget)

The Financial Secretary to the Treasury (Greg Clark): The Economic and Financial Affairs Council—(Budget), was held in Brussels on 9 November 2012.

In the Council, the UK and a number of other member states were very clear that the Commission and the European Parliament should not be asking taxpayers for extra funds when spending in member states is being reduced.

The discussion covered Draft Amending Budget No. 6 for 2012 and Draft Amending Budget No. 5 for 2012, which would amend the 2012 EU budget to cover additional funding needs for structural and cohesion funds, rural development, research programmes and an application to the EU solidarity fund. The UK made clear that the Commission’s request for an extra €9.7 billion of spending to cover bills for 2012 should be met by redeployments of existing funds.

The Conciliation Committee with the European Parliament was suspended on Friday 9 November, after nine hours of discussions between the Council, Parliament and the Commission. It is anticipated that the Conciliation Committee will reconvene on 13 November at 19:00.

The UK will continue to work with like-minded countries to press for budget discipline and fairness for taxpayers in the UK and Europe.


The Chancellor of the Exchequer (Mr George Osborne): A meeting of the Economic and Financial Affairs Council will be held in Brussels on 13 November 2012. The following items are on the agenda to be discussed.

Economic governance—“Two pack”

The presidency will update Ministers on the current state of play of trialogue negotiations with the European Parliament which will strengthen fiscal discipline and financial stability in the euro area.

Revised capital requirements directive (CRD IV)

Council will be updated on the progress of negotiations on these proposals in trilaogues. The general approach agreed at 15 May ECOFIN represents a well balanced compromise.

Banking Supervision Mechanism

The presidency will brief Ministers on the current state of play on the Commission’s proposal for a single supervisory mechanism (SSM).

Financial Transaction Tax (FTT)

Ministers will be updated on the state of play as regards the introduction of a FTT by some member states using enhanced co-operation procedures. Council will have an opportunity to discuss the European

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Commission’s proposal of 23 October for a Council decision authorising enhanced co-operation. The UK will not participate in an enhanced co-operation FTT.

Mandate for negotiations of amendments to the Savings Taxation agreements with thirdcountries

ECOFIN will hold a discussion on the mandate for negotiations where Council will be asked to express its views on the way forward.

Implementation of the Stability and Growth PactGreece

ECOFIN (euro area vote only) will seek to adopt two recommendations: one amending Decision 2011/734/EU on reinforcing and deepening fiscal surveillance,

and one giving notice to take measures for deficit reduction to remedy excessive deficit.

Follow-up to the European Council on 18-19 October 2012

Ministers will hold an exchange of views on the October European Council which discussed a range of economic and financial issues, including the interim Four President’s report: “Towards a Genuine Economic and Monetary Union”.

Follow-up to the Annual meeting of the IMF and World Bank Group in Tokyo and the G20 Finance Ministers and Governors meeting

Council will hold an exchange of views on the outcomes of the annual meeting of the IMF and World Bank Group in Tokyo on 12-14 October 2012 and on the G20 Finance Ministers and Governors meeting in Mexico on 4-5 November 2012.

Preparation of the United Nations Framework Convention on Climate Change (UNFCCC)

Ministers will consider draft Council conclusions which endorse the Fast Start Finance Report and recognise the importance of continuing to provide support for adaptation and mitigation activities in developing countries after 2012.

EU statistics

ECOFIN will consider draft Council conclusions which set out a framework for required improvements in: EU statistical governance; quality assurance; the provision of information requirements for EU policy-making priorities; and, limiting future resource demands on the European Statistical System (ESS).

EU state aid modernisation

Ministers will consider draft presidency conclusions, which outline the Commission’s modernisation programme and in particular its emphasis on growth; focusing enforcement on cases with biggest impact on the internal market; and streamlined rules and faster decisions.

Ministerial dialogue with European Free Trade Association (EFTA) countries

This regular meeting with the Finance Ministers of EFTA countries will take place before the formal ECOFIN meeting on 13 November. Discussion is likely to focus on the wider economic backdrop.

Communities and Local Government

Business Rates

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): On 18 October, the Government announced our intention to postpone the next business rates revaluation in England from

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2015 to 2017. Clause 22 of the Growth and Infrastructure Bill currently before the House of Commons will deliver upon this commitment.

During the recent Westminster Hall debate on business rates and during the Second Reading debate on the Bill, Ministers committed to provide more information on the analysis which has informed the Government’s position to assist parliamentary scrutiny.

A full assessment would require a revaluation, which in itself would cost £43 million and take a significant amount of time. However, the Valuation Office Agency have today published their high level estimates of non-domestic rental and rating assessment movements for England as at January 2012; they provide an illustration of the potential impact those rateable values would have had on business rate bills. The agency’s analysis is based on professional judgments informed by limited rental market evidence up to January 2012. The analysis has been prepared independently of Ministers and published in full.

The last revaluation was based on April 2008 valuations and rents set at the height of an unsustainable property boom. Since then, the economy and property market have faced exceptional changes. Rents have fallen since that property boom. Some groups have assumed that falling business rents would entail falling business rates. However, this is not the case. While aggregate rateable values have fallen, this would automatically be offset at the revaluation by a higher rating multiplier. Firms would just be required to pay a higher proportion of their rateable value.

The agency’s estimates are based on an increase in the multiplier of 16%. My Department has actually forecast an increase of 20%, as a consequence of inflation and the adjustment required to the multiplier for appeals; in this context, in practice, the losers would be likely to be even greater than those presented in the agency’s paper.

Overall, the agency’s analysis suggests that 800,000 premises would have seen a real-terms increase in their rates at a 2015 revaluation. This compares to 300,000 seeing reductions.

Some sectors would have faced big hikes including petrol stations (+28% tax paid), the self-catering industry such as caravan parks (+29% tax paid), hotels (+6% tax paid), theatres (+25% tax paid), and pubs (+11% tax paid). The retail sector overall would have seen a tax rise of 1% above inflation, and food retail and convenience stores in particular would have faced significant tax increases. Given business rates are the third biggest outgoing for local firms after staff and rent, such changes would invariably feed through to more expensive prices for the family’s weekly shop, more expensive pints in pubs and a significant hit on British’s tourism trade. Indeed, as Minister with responsibility for community pubs, I am very aware of the concern expressed by hon. Members on the pressures being faced by local pubs.

Revaluations should be revenue-neutral, and equally, postponing the revaluation will be revenue-neutral. Overall the revaluation would not change the total business rates paid in England, so some sectors and locations would have seen reductions at 2015. During recent parliamentary exchanges, it was unfairly suggested that this change was being made to assist southern parts of England at the expense of other parts of the country. However, our analysis shows that offices in central

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London would have seen by far the greatest reductions in tax paid if the 2015 revaluation had gone ahead (a fall in aggregate rateable value is one of the reasons why the multiplier has to be increased by so much to make up for the lost revenue). There are complex variations by both locality and by sector in different parts of the country, but what is clear is that there would be far more losers than winners across the country as a whole. In making this decision, Ministers are seeking to support the national interest and the economy as a whole.

I appreciate that as a very direct form of taxation, business rates are not popular. Local government finance is too often opaque and confusing. However, we are acting in an open and transparent manner. This independent evidence shows that by postponing the 2015 revaluation, we will protect local firms and local shops from sharp changes in business rates bills at a time when we want to ensure the economy is growing. It will provide business with a stable economic environment in which to invest and support jobs for the next five years.

A copy of the document will be placed in the Library together with a copy of the Impact Assessment for the Growth and Infrastructure Bill.

Energy and Climate Change

Energy Efficiency Strategy

The Minister of State, Department of Energy and Climate Change (Gregory Barker): The UK has a huge opportunity to lead the world on energy efficiency. This coalition Government are determined to grasp it and I am proud to announce today that we are publishing Britain’s first comprehensive national energy efficiency strategy.

The UK could be saving 196TWh of energy in 2020 through cost-effective investment in energy efficiency. This is equivalent to 22 full-time 1GW power stations. Energy efficiency can also cut bills for households and businesses money, it can boost growth, competitiveness and create jobs. It can play a major part in helping the UK deliver our climate change goals.

This energy efficiency strategy sets the direction for energy efficiency policy for the coming decades. It makes clear our ambition, the barriers that we need to address and the additional steps we are taking now to stimulate the energy efficiency market. It shows that there is a clear role for ambitious Government leadership and spells out how we will act to connect finance with demand, encourage innovation, and make energy efficiency information more accessible to the consumer.

Energy efficiency is about progress and achieving more with less. It is an essential element of a resource efficient, resilient economy. UK commerce and industrial sectors have made significant strides but through this strategy we signal renewed efforts to help all businesses increase energy efficiency and cut their costs

The strategy is a significant step to achieving the coalition’s mission to achieve the cost-effective energy efficiency potential in the UK economy, but there is much more to do. We need to excite people with the opportunities for energy efficiency and this strategy sets the path to achieving that.

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The energy efficiency strategy can be found on the website of DECC’s Energy Efficiency Deployment Office (EEDO): http://www.decc.gov.uk/eedo and I have placed a copy of the strategy in the Libraries of both Houses.


Birth Environment (Improvements)

The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter): I am announcing a £25 million capital funding in 2012-13 for the NHS to improve the birthing environment in the maternity units that need it most, so both mothers and fathers, and the staff who work in the units, can benefit from a more pleasant and appropriate environment.

Women should receive excellent maternity services that focus on the best outcomes both for them and their babies, based on women’s experience of care. It is important for all women to be able to give birth in a safe, high quality environment that is best suited for them. Birthing environments should be designed so to provide for the safe care of mothers, fathers and baby in a comfortable, relaxing environment that facilitates what is a normal physiological process, enabling one-to-one midwife care

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during labour and birth in privacy whenever possible, while enhancing the family’s enjoyment of an important life event.

This builds on the Government’s pledge to improve maternity care by making sure:

women will have one named midwife who will oversee their care during pregnancy and after they have had their baby;

every woman has one-to-one midwife care during labour and birth; and

parents-to-be will get the best choice about where and how they give birth.

Providers will be able to bid for central funding in the current financial year to support the refurbishment of wards, for example, by adding ensuite facilities, providing new facilities to allow fathers to stay overnight at the birth and new equipment such as birthing pools. Bids will need to meet the criteria set out in “Maternity care facilities: Planning and design manual, Version:0.8:England (2011)”.

The criteria for applying for funding and the deadline for receipt of applications will be announced shortly. It is important that the views and experiences of women and their families locally inform the development and design of birthing environments. The successful projects will have demonstrated involvement and support from service users and the ability to deliver the project in the current financial year.