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Written Ministerial Statements

Thursday 31 January 2013


Finance Bill 2013 (Draft Legislation)

The Exchequer Secretary to the Treasury (Mr David Gauke): The Government are today publishing draft legislation for inclusion in Finance Bill 2013, in addition to that published on 11 December. The draft legislation will be open for technical consultation as detailed below.

Details of the clauses and explanatory notes published today are available on both the HM Treasury and HM Revenue and Customs website.

Annual Residential Property Tax

At Budget 2012, the Government announced changes to stamp duty land tax (SDLT) and the introduction of an annual residential property tax (ARPT) to ensure the fair taxation of residential property transactions. Changes to the scope of the ARPT and higher rate of SDLT were announced at autumn statement 2012.

The draft legislation published today provides further detail about the ARPT. This legislation includes some additional clauses promised in December and clarification of the reliefs intended to exempt genuine commercial activities from the charge. Revised draft legislation to provide equivalent reliefs from the higher rate of SDLT is also published today. The Government continue to consider the responses to the current consultation on the draft legislation already published.

The technical consultation on this draft legislation will be open for comments until Friday 22 February.

Capital Gains Tax

Related to the measures above, Budget 2012 introduced a capital gains tax charge on non-resident non-natural persons which dispose of UK residential property that is worth more than £2 million. The charge will apply to gains on disposals on or after 6 April 2013. Increases in the value of property before 6 April 2013 will not be subject to capital gains tax under this measure. Liability to capital gains tax will be closely aligned with liability to the ARPT on the property disposed of.

Following consultation, the Government have decided that, for consistency, capital gains tax will also apply to non-natural persons that are resident in the UK in respect of gains built up on or after 6 April 2013.

The draft legislation published today therefore contains provisions that include UK resident companies within the scope of the charge. The draft legislation provides that corporation tax will apply to the part of any gain built up before 6 April 2013, with the new capital gains tax charge applying only to the gain built up on or after 6 April 2013.

The technical consultation on this draft legislation will be open for comments until Friday 22 February.

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Oil and gas

Draft legislation is published today on the restriction of allowances for certain decommissioning expenditure in the oil and gas industry.

The drafting of one clause published on 11 December has been found to be defective and a revised draft clause addresses this; and

Most of the relevant legislation was published on 11 December but a small amount was omitted and is now published.

The technical consultation for these clauses will be open for comment until Monday 18 February.

Business, Innovation and Skills

National Minimum Wage

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson): I am pleased to announce that I have published the final evidence that the Government have provided to the Low Pay Commission on the national minimum wage.

This report updates the evidence that the Government provided in October 2012. The report reflects the latest information on earnings, the labour market and economic forecasts.

A copy of the final evidence will be placed in the Libraries of both Houses and will be available at: www.gov.uk.

Contingencies Fund Advance

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson): The Department for Business, Innovation and Skills wishes to report that a cash advance from the contingencies fund has been sought for the Office of Fair Trading (OFT).

The advance is required to meet an urgent cash requirement on existing services pending parliamentary approval of the 2012-13 supplementary estimate. The supplementary estimate seeks an increase in net cash requirement in order to settle material liabilities recognised in the prior year. Parliamentary approval for additional cash of £8.8 million will be sought in a supplementary estimate for the Office of Fair Trading. Pending that approval, urgent expenditure estimated at £8.8 million will be met by repayable cash advances from the contingencies fund.

The advance will be repaid upon Royal Assent of the Supply and Appropriation Bill.

A copy of the final evidence will be placed in the Libraries of both Houses and will be available at www.gov.uk.

Communities and Local Government

Reviewing and Simplifying Regulation

The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles): I would like to inform the House that the Government are today announcing the outcome of the red tape challenge spotlight on housing and construction.

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Housing and Construction

In January 2012, my Department launched the housing and construction theme on the red tape challenge website. We received an excellent response of over 200 comments on the website and through private submissions. Of the 206 regulations on which we consulted, and following a rigorous challenge process, we propose to scrap 68 and amend or improve 32. These figures, which represent a 49% reduction or improvement in the regulatory landscape, come alongside a package of other measures proposed in response to public feedback and discussion with external partners. Details have been placed in the Library of the House.

As a result of the red tape challenge, we have already launched a fundamental review of the building regulations framework and voluntary housing standards. This aims to significantly rationalise the large number of codes, standards, rules, regulations and guidance that add unnecessary cost and complexity to the house-building process.

In addition to this, we will be:

Working with industry on developing simple guides to help builders understand what they have to do to meet building regulations requirements.

Reviewing and improving guidance for tenants and landlords.

Looking into enabling local authorities to provide building control services across local authority boundaries.

Planning administration

Today we are also launching the planning administration theme of the red tape challenge. This is intended to make the mechanics of the planning system more efficient and accessible.

This review is not making any changes to planning policy. The Government are committed to ensuring that countryside and environmental protections continue to be safeguarded, and is committed to decentralising power over planning to local councils, neighbourhoods and local residents.

We have already taken a series of steps to cut unnecessary red tape, such as the streamlined national planning policy framework reducing 1,000 pages of planning guidance to less than 50, revoking the last Administration’s bureaucratic regional strategies (subject to the outcome of the ongoing environmental assessment process) and increasing permitted development rights to make it easier to get empty and underused buildings back into public use.

Alongside the current review of planning practice guidance following Lord Taylor’s report, the red tape challenge on planning administration will give everyone the opportunity to highlight areas where the system can be made simpler, clearer and easier for people to use and also let us know where regulation is essential.


Defence Equipment Plan

The Secretary of State for Defence (Mr Philip Hammond): I am today placing in the Library of the House a summary of the Ministry of Defence’s core equipment plan as promised in my statement of 14 May 2012, Official Report, column 261, together with an update on the current analysis of risk in the programme by the Department’s independent Cost Assessment and Assurance Service (CAAS). The equipment plan represents the

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position as at the conclusion of planning round 2012, and shows the budget for equipment procurement and equipment support for the next 10 years. It also provides details of how the core equipment plan breaks down between different capability areas.

This report covers a budget for new equipment, data systems and equipment support totalling around £160 billion over the next decade. It is, for the first time in recent memory, a plan which is affordable over the whole of that decade.

We have a central contingency provision of £4.8 billion over and above the provisions for risk within individual project budgets, something we have never had before. The report also shows that, in addition to the core equipment plan, we have around £8 billion of additional headroom in the later years of the decade. This will allow us to fund, incrementally and flexibly, a number of additional programmes that are a high priority for defence, as soon as we can be sure that they are affordable. We will do so only at the point when commitment is required to meet the operational requirement and only in accordance with the military assessment of priority at the time, an order defined by operational need, rather than short-term financial pressure.

Today, the National Audit Office (NAO) is also publishing its assessment of the affordability of the MOD’s equipment plan. This independent assessment is something that has never been done before. The report recognises the difficult decisions we have had to take to bring the defence budget into balance and the positive steps we have taken to lay the foundations for continuing stability in the equipment plan. From a culture of endemic over-programming, the NAO report makes it clear that we are now managing our equipment on a more prudent basis.

This first assessment is a foundation on which we intend to build. The assessment of the equipment plan will take place annually so that Parliament will gain ever greater levels of confidence that the MOD equipment plan is affordable and will fulfil our capability requirements.

Energy and Climate Change

Radioactive Waste

The Secretary of State for Energy and Climate Change (Mr Edward Davey): Yesterday, the three local authorities that have engaged in detail in the Government’s managing radioactive waste safely (MRWS) programme to date, Cumbria county council, Allerdale borough council and Copeland borough council, all voted on whether to progress to stage 4 of the process, which would include work to identify and assess potential sites for a geological disposal facility (GDF).

This was not a decision on whether to host a GDF; merely whether to progress to the next stage of the process, which would produce more information and begin to answer technical questions regarding potential sites for further investigation. In stage 4, the local authorities would retain the same right to withdraw from the programme that they have had throughout stages 1 to 3.

Copeland and Allerdale borough councils voted in favour of participating in the next stage, which I very much welcome, but Cumbria county council voted against proceeding to stage 4.

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Cumbria county council’s vote against further participation does not come as a surprise, and indeed this decision point was built deliberately into the process in order to enable local authorities to consider their future role and halt their involvement if they chose to do so. Of course, I respect the council’s decision.

For the process set out in the 2008 White Paper to move to the next stage in west Cumbria, we agreed with the local authorities that there should be consent at both borough and county level. Despite extensive efforts, such agreement has not proved possible. Accordingly, we must bring the current site selection process to a close in west Cumbria.

The Government remain firmly committed to nuclear power as a key part of our future energy mix and to geological disposal as the right policy for the long-term, safe and secure management of higher-activity radioactive waste. The Government also continue to hold the view that the best means of selecting a site for a GDF is an approach based on voluntarism and partnership working.

Evidence from abroad shows that this approach can work, with similar waste disposal programmes based on these key principles making good progress in countries like Finland, Sweden and France.

The fact that two local authorities in the UK voted in favour of entering the search for a potential site for a GDF demonstrates that communities recognise the substantial benefits associated with hosting such a facility—both in terms of job creation and the wider benefits associated with its development.

The construction of a GDF is a multi-billion pound infrastructure investment. It will directly create hundreds of jobs for many decades, even more during peak construction periods, and potentially hundreds more in the supply chain and in local service industries.

The Government are also committed to providing a community benefits package, potentially worth hundreds of millions of pounds, to support the social and economic well-being of the host community, which will have a lasting impact for generations.

The Government remain committed to the objective of the managing radioactive waste safely programme as set out in the 2008 White Paper, and I am optimistic that a site for the GDF will be found.

The invitation for communities to come forward and express an interest in the site selection process for a GDF, without commitment, as set out in the MRWS White Paper, remains open. My Department will embark on a renewed drive to ensure that the case for hosting a GDF is drawn to the attention of communities, and to encourage further local authorities to come forward over the coming years to join the process. At the same time, we will reflect on the experience of the process in west Cumbria, and will talk to the local authorities themselves and others who have been involved to see what lessons can be learned. No changes to our current approach on site selection will be introduced without further consultation.

So the managing radioactive waste safely programme continues. But this is a good opportunity for us to consider whether we can improve any details of process within that programme, and of course we always reserve the right to re-consult to make further changes if that is necessary.

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The Government’s position regarding prospective new nuclear power stations has been clear that there must be provision in the long-term for safe disposal of higher-activity waste produced by new nuclear power stations. The managing radioactive waste safely programme is a long-term one, and I am confident that it is sound and that it will be put into effect. The decisions by the councils in Cumbria do not change this. Nor do these decisions undermine the prospects for new nuclear power stations.

Until such time as a GDF is implemented, it remains the Government’s policy that higher-activity radioactive waste should continue to be held in interim storage, which domestic and international experience indicates is safe and effective and will remain so for as long as is necessary.

Environment, Food and Rural Affairs

Woodlands and Forestry Policy

The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath): The Government have today published details of their forestry and woodland policy in response to the report from the Independent Panel on Forestry.

Last July, when the panel published its report, we confirmed that England’s public forest estate will remain secured in public ownership—for the people who enjoy it, the businesses that depend on it and the wildlife that flourishes in it. Today, we reaffirm that commitment.

The Government announced the independent panel in March 2011 to advise on the future direction of forestry and woodland policy in England and on the future role of the Forestry Commission in implementing that policy.

Under the leadership of the Right Reverend James Jones, Bishop of Liverpool, the panel brought together senior experts from the land management, forestry, wildlife, charity and wood business sectors.

We thank the panel for its landmark report. We share its vision for the future of our forests. We agree with the panel that we need a new woodland culture based on a better understanding of the value and potential of our trees, woods and forests. We accept many of its recommendations in full and where we are not able to accept them in their entirety, we propose alternative means of achieving the panel’s ambitions.

Immediately following its publication in July 2012, we promised that we would provide a full response to the panel’s report in January 2013. The forestry policy statement we have published today fulfils that commitment and I have placed copies of it in the Libraries of both Houses.

We are providing sufficient funding in this spending review period to ensure that high levels of public benefit can continue to be delivered by the Forestry Commission across the full 250,000 hectares of the estate. This includes not only the £3.5 million that we have specifically included in the Forestry Commission’s budget in 2013-14 to make up for the lost sales income but also an additional £2 million to take forward the new commitments announced today. The previous policy of disposing of 15% of the estate is formally rescinded.

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In the longer term, we will be establishing a new public body to hold the estate in trust for the nation. This body will have safeguards in place to operate for the long-term benefit of people, nature and the economy. It will have greater independence from Government and greater freedom to manage its resources and maximise its income through commercial activity.

Today, we set out a clear direction of travel for English forestry and woodland policy which is designed to place the forestry and woodland sector on a more secure long-term footing so that it is better equipped to identify and address its own needs. Government will play their part but will limit their role to what is really necessary and appropriate to facilitate the sector’s own progress.

This policy is based on the need to ensure resilience in our woodlands and the businesses that depend on them. It reflects a clear hierarchy of priorities, focused on protecting, improving and expanding our public and private woodland assets.

We are fully committed to protecting our woodland assets from the ever increasing range and scale of threats and we are giving greater priority than ever to tree and plant health.

We are committed to sustaining, managing and improving our forests and woodlands so that they can contribute to economic growth and benefit people and nature. This will include working with landowners and others to increase the amount of actively managed woodland in England; reducing unnecessary regulation and red tape affecting the forestry and woodland sector; and supporting the industry as it develops its new action plan to increase entrepreneurialism and improve its own economic contribution to the rural, and wider national, economy.

It will also involve promoting community involvement in the management of their local woodlands and encouraging more widespread understanding of the educational and health benefits of our trees and woodlands. We will be completing the delivery of the Big Tree Plant and working with the sector in seeking ways to improve access to woodlands, particularly in and around our towns and cities. In addition, we will be benefiting wildlife and the natural environment, through implementing the commitments contained in the Natural Environment White Paper and Biodiversity 2020 and renewing our commitment to improving and restoring our ancient woodlands and open habitats.

We agree with the panel that there is scope for expanding England’s woodland cover significantly to achieve greater economic, social and environmental benefits. To deliver this objective, we are working with partners from across the sector to find new ways of encouraging landowners to plant more trees where it best suits them and their local conditions; developing further the voluntary woodland carbon market and other sources of investment that reflect forestry’s low-carbon credentials; and piloting an initiative to reduce burdens on landowners who want to plant woodland by clarifying where a full environmental statement is unlikely to be required.

We are fully committed to valuing the many social and environmental benefits of woodlands and to developing new market opportunities to realise these. We will build on the good work of the National Ecosystem Assessment (NEA), the Natural Capital Committee (NCC) and the Ecosystem Markets Task Force (EMTF) to drive forward this potentially very important agenda.

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Finally, we want strong and resilient delivery arrangements that achieve better quality outcomes for the economy, people and nature. This includes simplifying our current structures and stepping back from any unnecessary day-to-day involvement. In addition to establishing the new, operationally independent body to hold the public forest estate in trust for the nation and manage its resources effectively, we will be reviewing the Government’s wider forestry functions alongside the triennial review of the Environment Agency and Natural England. We can, however, confirm that, whatever the outcome of that review, we are committed to retaining a core of forestry expertise within Government.

Government cannot and should not do this alone. Today’s policy statement is the result of substantial joint work between DEFRA, the Forestry Commission and wider Government. It draws on numerous positive and productive meetings we have held with forestry experts, landowners, businesses, civil society bodies and community groups since July as well as the many helpful and constructive comments we have received from members of the public. This underlines the importance of maintaining the spirit of partnership forged by the panel and the statement concludes by inviting everyone from across the forestry and woodland sector to commit to working with us to achieve the panel’s aspirations.

Today’s statement is not the final word on everything. It is, however, the first step in a longer process of working in close partnership with others to create a healthier, more resilient and sustainable forestry and woodland sector delivering long-term social, environmental and economic benefits for all.

Foreign and Commonwealth Office

Sino-British Joint Declaration on Hong Kong

The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague): The latest report on the implementation of the Sino-British Joint Declaration on Hong Kong was published today. Copies have been placed in the Library of the House. A copy of the report is also available on the Foreign and Commonwealth Office website, www.fco.gov.uk. The report covers the period from 1 July to 31 December 2012. I commend the report to the House.


Nutrition Labelling

The Parliamentary Under-Secretary of State for Health (Anna Soubry): Today we have published the response to the front of pack nutrition labelling consultation held from May until August 2012. This is a joint response on behalf of the Department of Health, other Health Ministers across the UK and the Food Standards Agency.

This consultation provided us with helpful information on the views of the public, food industry, non-governmental organisations and others on the voluntary provision of

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repeat nutrition information on the front of food packages, which informed our thinking on this subject. Great progress has been made since the consultation finished towards an emerging consensus for a consistent front of pack scheme. In particular, all 10 of the major UK food retailers are now publicly committed to working with us, and each other, to help achieve our goals.

UK Health Ministers announced on 24 October 2012 our preference for a consistent front of pack system across the UK based on a “hybrid” scheme combining colours and percentage guideline daily amounts. Officials across the UK are now working with the food industry and others to agree the detail of this hybrid approach.

“Front of pack nutrition labelling: joint response to consultation” has been placed in the Library. Copies of the response are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper office. It is also available at: www.dh.gov.uk/health/ category/publications/consultations/consultation-responses/.


Inquests (Service Personnel)

The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant): My right hon. Friend the Minister for the Armed Forces and I now make the latest of our quarterly statements to the House in which we report progress with inquests into the deaths of service personnel who have died on active service overseas. As always, we wish to express the nation’s gratitude to all our service personnel who have served or are now serving in Iraq and Afghanistan. We are all deeply indebted to them for their steadfast courage and their total professionalism. We remember those who have given their lives for their country, and the families who have lost them. We particularly think of the families of the five service personnel who have fallen since our last statement in October 2012.

In this statement we provide details of inquests conducted by the Oxfordshire coroner, the Wiltshire and Swindon coroner and other coroners in England and Wales. This statement gives the position at 25 January 2013.

To supplement this statement we have placed tables in the Libraries of both Houses containing further information. The tables indicate the status of all current cases and provide information about cases where a board of inquiry or a service inquiry has been held or has been directed to be held.

Our Departments have worked together for several years to make our processes as effective and as timely as possible. As we informed the House in our last statement, the Chief Coroner for England and Wales took up post on 17 September 2012, and will have a number of specific powers and duties in relation to service personnel inquests. We have also commenced section 12 of the Coroners and Justice Act 2009, enabling deaths of service personnel killed abroad on active duty to be investigated in Scotland, where appropriate.

We will continue to support the coroners who are conducting inquests into the deaths of service personnel. Once more we offer our sincere thanks to coroners, their staff and everyone who supports bereaved families and helps them throughout the inquest process.

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Since October 2007 both Departments have provided funding for additional resources for the coroners for Wiltshire and Swindon and for Oxfordshire. This is to prevent a backlog of inquests and to help the coroners conduct the inquests of fallen service personnel who have been repatriated to airbases in their districts. RAF Lyneham in Wiltshire was the airbase for repatriations from 1 April 2007 to 31 August 2011, while from 1 September 2011 repatriations have taken place at RAF Brize Norton in Oxfordshire.

Current status of inquests

Since the last statement there have been four inquests into the deaths of service personnel on operations in Iraq or Afghanistan. In total, 558 inquests have been held relating to service personnel who have fallen in Iraq and Afghanistan or have died in the UK from injuries they received in those operations. In three cases no formal inquest has been held. In one of these, the serviceman died in Scotland from his injuries. It was decided that a fatal accident inquiry would not be held. In the two other cases, the death was taken into consideration as part of the inquests into the deaths of other service personnel who died in the incidents.

Open inquests

Deaths in Iraq and Afghanistan

As at 25 January, there are 53 open inquests into the deaths of service personnel in Iraq and Afghanistan. A total of 16 of these inquests concern deaths in the last six months.

The Wiltshire and Swindon coroner has retained 10 of the open inquests and the Oxfordshire coroner has retained 23. Coroners closer to the next-of-kin are conducting the remaining 20 inquests. Seven hearing dates have been set at present.

Deaths of service personnel who returned home injured

There are six open inquests into the deaths of service personnel who returned home injured but sadly died of their injuries. These inquests will be listed when the continuing investigations are completed.

We will continue to inform the House of progress.


Rail Franchising

The Secretary of State for Transport (Mr Patrick McLoughlin): When I cancelled the competition for the intercity west coast franchise last October, I also put on hold the live competitions for three other rail franchises. Having carefully considered the options for these three competitions, including the recommendations of the independent review by Richard Brown, chairman of Eurostar, I have this morning informed the stock market of my decisions about these three competitions. I am also today publishing Mr Brown’s advice about these competitions, having previously redacted it from his report in view of its potential stock market sensitivity.

In summary, Mr Brown recommended that the Government should look to continue the existing competitions for Essex Thameside and for the combined

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Thameslink, Southern and Great Northern franchise. But in the light of his wider advice about franchising policy, he also recommended that the current proposition for the Great Western franchise was not the right one. I accept those recommendations, and accordingly:

the competition for the Essex Thameside franchise will be resumed, with a revised invitation to tender being issued to the existing short-listed bidders over the summer. This will allow the Government to address important issues raised by Mr Brown, for example about capital requirements and the bid evaluation process, while avoiding unnecessary delay. The new franchise will have a contract term of 15 years, as announced at the start of the current competition;

the competition for the Thameslink, Southern and Great Northern franchise will also be resumed, with an invitation to tender being issued to the existing short-listed bidders. This will be for a seven-year contract term, again as previously announced. Consistent with Mr Brown’s recommendation, I expect this to be more of a management-style contract. This different approach will require more time to develop and test the proposition with the market, and I will set out the timetable for this competition in the spring;

having considered the options for the Great Western franchise very carefully, and taken account of Mr Brown’s advice, I have decided to terminate this competition. This is to allow for a more fundamental review of the franchise proposition, recognising that this is a large and complex franchise which will need to manage service delivery whilst the route is electrified and new rolling stock is introduced.

In keeping with the relevant invitations to tender, which made clear that bidders are responsible for their own costs, I do not believe it would be appropriate to reimburse the bidders.

The existing franchises for these services will expire before new long-term contracts can be put in place, so interim arrangements will be required to ensure continuity of rail services. My Department has exercised its contractual right to extend the current franchise agreement with First Great Western for a further period of 28 weeks, and I intend to do the same in respect of First Capital Connect.

I have also instructed my Department to commence negotiations with the existing train operators—First Great Western, First Capital Connect and c2c—with a view to entering into new interim franchise agreements with them. For Essex Thameside and Thameslink, the period of these interim agreements will be determined by the time needed to complete the competitions for the longer-term franchises, and will not exceed two years. For Great Western, I intend to negotiate an interim agreement for two years and will set out longer-term proposals in the spring.

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The Government continue with their multi-billion pound programme of investment in the rail network regardless of the delay to the franchising programme, and my Department will seek to ensure wherever possible that the benefits for passengers previously sought in new substantive franchise agreements are not delayed.

I am mindful of my statutory duty to ensure the continuity of rail services and so, in parallel with my Department entering into negotiations with the incumbent train operators, I will also be instructing Directly Operated Railways, a Government-owned company, to undertake the minimum preparatory measures necessary to operate train services in circumstances where I am unable to agree the terms of an interim agreement with the existing train operator.

I am also today publishing for consultation a proposed new statement under section 26 of the Railways Act 1993. This statement indicates when passenger rail services are likely to be procured through an open competition, and when they might be procured by other means.

As I made clear when I published Mr Brown’s report, I will set out a full timetable for the future rail franchising programme in the spring, alongside a statement of franchising policy in light of both Mr Brown’s recommendations and the Transport Select Committee’s “Rail 2020” report.

Work and Pensions

Child Maintenance

The Minister of State, Department for Work and Pensions (Steve Webb): The Government are reforming the child maintenance system. As part of these reforms, later today I am publishing a strategy for addressing arrears of child maintenance and maximising ongoing compliance: “Preparing for the future, tackling the past: Child Maintenance—Arrears and Compliance Strategy 2012-2017”.

I am grateful for the input received in earlier discussions on child maintenance arrears from various interested parties, including the Public Accounts Committee.

I will place a copy of the strategy document in the Libraries of both Houses.