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Written Statements

Thursday 18 July 2013


Business Premises Renovation Allowances

The Exchequer Secretary to the Treasury (Mr David Gauke): The business premises renovation allowances (BPRA) scheme provides 100% capital allowances for the capital costs of converting or renovating empty business property in certain disadvantaged areas of the UK, where the property has lain empty for at least a year, in order to bring the premises back into business use.

The Government remain committed to the objectives of BPRA, which is to foster the regeneration of deprived areas, by helping to increase private investment, enterprise and employment in deprived communities.

HM Revenue and Customs (HMRC) has, however, brought to the Government’s attention a recent increase in DOTAS (disclosure of tax avoidance schemes) disclosures, involving BPRA, which appear to contain features aimed at exploiting the relief in ways that Parliament had not intended.

The Government are fully committed to tackling tax avoidance to ensure the Exchequer is protected and fairness is maintained for the taxpayer.

The Government have, therefore, authorised HMRC to conduct a technical review of the BPRA legislation, with a view to making its policy purpose even clearer, so that the scheme may be made simpler and more certain in its application, at the same time reducing the risks of exploitation.

HMRC will shortly be publishing this technical review, along with an associated “Spotlight” article to alert people to the fact that almost all of the disclosed BPRA schemes appear to be seriously flawed and that HMRC will investigate anyone using them.

The technical review will invite comments on new legislative proposals, with a view to introducing new legislation in 2014.


Targeted Capital Funding for New School Places

The Minister for Schools (Mr David Laws): Today I am announcing the outcome of the applications to the targeted basic need programme. The programme was launched in March this year to provide additional funding for school places in areas where they are most needed. Local authorities were invited to bid for funding for new schools, or to expand existing outstanding and good schools.

The targeted basic need funding brings the total amount of funding allocated to local authorities for new school places over the current spending review period to over £5 billion—more than double the £1.9 billion spent by the previous Government over an equivalent

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period. That funding is sufficient to provide the 417,000 places we need by 2015. By September this year, we expect 190,000 extra places will have been created during this Parliament, with more still in the pipeline.

Our main basic need allocations—which go directly to local authorities, and are based on projections of their need—were issued in March, and gave authorities funding for the next two years, enabling them to plan provision. Those allocations totalled some £1.6 billion and will support local authorities to keep pace with projections of demand.

On top of this, we invited applications from local authorities for additional new places, particularly focused on places in outstanding or good schools, and on creating new academies sponsored by organisations with a good track record in educational success. We are determined that every pupil should not just have a place, but that the growth in the system is, as far as possible, concentrated in schools that parents and pupils really want to go to. So I am delighted to announce that the targeted basic need programme will provide £820 million to fund an additional 74,000 high-quality school places on top of those already created and funded—all in areas that face the greatest pressure on places. These new places will be in 45 new schools and in 333 expanding schools that are rated as outstanding or good.

The number of pupils in England will continue to rise and ensuring that every child is able to attend an outstanding or good school in their local area is at the heart of the Government’s comprehensive programme of reform of the school system.

We will continue to set up free schools where there is both demand from parents and where they can make the biggest difference to local provision through addressing basic need and improving the quality of local schools.

Over the longer term, we will also fund a further 500,000 places up to 2020-21, as announced in the recent spending round—again, we judge that this will be sufficient to meet the projected demand for school places.

I will write today to all those MPs with successful projects in their constituencies, and I will place a list of successful projects in the Libraries of both Houses.

Energy and Climate Change

Electricity Market Reform

The Secretary of State for Energy and Climate Change (Mr Edward Davey): The Government yesterday published for consultation the draft electricity market reform (EMR) delivery plan.

As laid out in my 27 June statement, Official Report, column 12WS,EMR is a central component of the Energy Bill currently being considered by Parliament, and will address the need to attract unprecedented levels of investment in the UK electricity sector over the coming decades as we replace our ageing energy infrastructure with a diverse mix of low-carbon generation, and meet the expected increases in electricity demand as sectors such as transport and heat are electrified. The Energy Bill includes clauses to introduce contracts for

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difference (CfD) to support investment in low-carbon generation, and a capacity market, to ensure security of supply.

On 27 June, Government made a range of key announcements in relation to reform of the electricity market, and I laid before Parliament two policy documents: “Electricity Market Reform—Delivering UK Investment” and “Electricity Market Reform: Capacity Market—Detailed Design Proposals”. The document published yesterday for consultation provides further detail on the key components of EMR and seeks views from consultees.

Contracts for Difference (CfDs)

CfDs form a core component of the Government’s strategy to bring forward investment in affordable low-carbon electricity generation—including renewables, carbon capture and storage and new nuclear. CfDs provide efficient and long-term support for low-carbon generation, reducing risks faced by generators by increasing revenue certainty and through the backing of a long-term contract. Generators are paid the difference between the market price and a “strike price”, but when the market price is high the generator must pay back the difference, which reduces costs to consumers when electricity prices are high.

Our June publication included draft CfD strike prices for renewables technologies, decisions on key CfD terms, and the levy control framework (LCF) profile to 2020-21.

The draft EMR delivery plan published yesterday provides details of the assumptions which underpin the draft CfD strike prices and seeks views and additional evidence from consultees. The Government will use the evidence gathered through this consultation to inform final CfD strike prices, which we intend to publish in the final EMR delivery plan later this year, subject to Royal Assent of the Energy Bill.

Capacity Market

A key part of the challenge our market faces is in ensuring secure electricity supplies. The capacity market will give investors the certainty they need to put adequate reliable capacity in place, protecting consumers against the risk of supply shortages. It does this by providing a predictable revenue stream to providers of reliable capacity, including both generation and non-generation measures such as demand-side response and storage. In return, they must commit to provide capacity when needed or face financial penalties.

I confirmed on 27 June that Government intend to run the first capacity market auction in late 2014, for delivery in 2018-19—subject to state aid clearance and laid out more detail on design proposals.

I have now published Government’s intended reliability standard for the capacity market—which captures the trade-off between the cost of providing additional back-up capacity, and the level of reliability achieved. The proposed standard is expressed as a loss of load expectation (LOLE), i.e. the number of hours per annum in which, over the long term, it is statistically expected that supply will not meet demand, and which reflects the economically efficient level of capacity. This does not mean that we would have this level of blackouts in a particular year; in the vast majority of cases, loss of load would be managed without significant impacts on consumers. But no electricity system can be 100% reliable. Based on our assessment of the value consumers place on security of supply, and the costs of providing capacity, we are

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proposing that a reliability standard of three hours LOLE per year most efficiently makes this trade-off between cost and reliability. We are seeking consultees’ views on this proposal and will finalise the reliability standard in the final delivery plan in December.

Analysis and scrutiny

Alongside the draft EMR delivery plan, I have published a report from the system operator—National Grid—which lays out analysis conducted to support the decisions contained in the delivery plan.

I have also published the report of the independent panel of technical experts, which was appointed to oversee the analysis. Information on the members of the panel and their terms of reference can be found at:


The consultation document is be available at:


I will deposit copies of the delivery plan and associated documents in the Libraries of both Houses.

Foreign and Commonwealth Office

Safeguarding British Businesses Overseas

The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague): Since the launch of the FCO’s Charter for Business in May 2010, the FCO has made supporting British business abroad one of its core activities to help build Britain’s prosperity. This priority sits alongside the FCO’s work to safeguard Britain’s national security and support British nationals around the world.

One of the commitments we made was to use the FCO’s knowledge to help businesses manage risks. The FCO created a new Commercial and Economic Diplomacy Department to help deliver this, to work more closely with UK business and liaise with the rest of the FCO to ensure we balance HMG’s commercial and security objectives. We do this by FCO staff sharing their political, economic and security analysis in written and oral briefings for UK business, and through the joint FCO UK Trade and Investment website Overseas Business website.

The attack in January this year on a gas production facility in the Algerian desert by a terrorist group linked to al-Qaeda underlined the threat British businesses and nationals can face overseas. Five out of the 38 people killed were British nationals and one was a British resident. Al-Qaeda, and groups inspired by al-Qaeda, continue to present a threat to British nationals and businesses around the world. We are determined to help British business thrive and operate safely overseas.

Since the attack we have consulted many British extractive industries that operate in high-risk environments and spoken to families of those affected by this tragedy. Many have said they would like to gain a

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better understanding from Government of the terrorism fuelling the threats we describe in the FCO’s travel advice. Companies have said the additional information could allow them to make better decisions on securing their employees, and also to make longer-term decisions on what can be significant investments. And we have stressed to industry how important it is to ensure the availability of information to all those employed at any site, including subcontractors.

I have therefore instructed officials to take the following steps:

To include more contextual information about terrorism threats in the FCO’s travel advice pages for countries where there is a high threat from terrorism. This is available to all members of the public on GOV.UK at: https://www.gov.uk/foreign-travel-advice.

For the FCO, through its network of posts in high-risk locations, and through the Counter Terrorism Department in London, to engage British businesses and organisations who employ British nationals in high-risk locations.

To offer British businesses and organisations the opportunity to apply to take part in crisis table top exercises in the FCO, and for officials to attend their crisis exercises.

To make available information on overseas terrorism threats to owners and operators of national infrastructure, through the Centre for the Protection of National Infrastructure.

The advice for companies operating in high-risk environments on the overseas business risk website has been updated. I have placed a copy of this new advice in the Libraries of both Houses. The advice can be found at:

http://www.ukti.gov.uk/pt_pt/edport/howwehelp/overseasbusinessrisk.html?null, with links to FCO travel advice.


NHS Modernisation (Costs and Benefits)

The Secretary of State for Health (Mr Jeremy Hunt): The Government’s estimates of the costs and benefits of implementing policies in the Health and Social Care Act were contained in the “Coordinating document for the Impact Assessments and Equality Analysis” published in September 2011. These estimates reflected the changes that the Government made to their proposals following the listening exercise and the report of the NHS Future Forum.

Officials have continued to track closely the actual costs and benefits of the changes. Last September I reported to the House that the current estimate of costs was in the range £1.5 billion to £1.6 billion, which is equivalent to £1.6 billion to £1.7 billion in today’s prices. I can confirm today that I expect the costs—including spending on redundancy—to be no higher than announced last year. Indeed, the costs are likely to be nearer the estimate in the business case for the programme (£1.5 billion in today’s prices).

I can also announce that, up to 31 March 2013, costs of £1,096 million had been incurred across the health and care system on developing and establishing the new arrangements, comprising:

£435 million on staff redundancies;

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£54 million on IT for the new organisations;

£42 million on estates costs of closing bodies and setting up new organisations;

£22 million on internal departmental costs (e.g. programme management);

£299 million on setting up clinical commissioning groups (excluding items above); and

£244 million on other costs of closing bodies (e.g. primary care trusts (PCTs)) and setting up new organisations.

In the impact assessment, long-term annual savings arising from the changes were estimated at £1.5 billion per year from 2014-15 onwards. Gross savings over the transition period (2010-11 to 2014-15) were estimated at £4.5 billion.

Annual savings are still expected to be £1.5 billion from 2014-15. Over the period 2010-11 to 2014-15, on a comparable basis with the impact assessment, the cumulative savings in administration costs arising from the reforms are still expected to be at least £5.5 billion. This sets aside administration costs of around £1.5 billion that are expected to be incurred on implementing the changes across this period.

I am today publishing “Business Case for the Health and Care Modernisation Transition Programme” which was prepared for the major programme established to take forward implementation of the reforms. A copy has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office. This publication meets a commitment made in “Health and Social Care Reforms: Transition Programme Scheme for Publication” (published in May 2012). The business case reflects the landscape that existed in December 2011, after the Government had responded to the listening exercise. Although the financial estimates in the business case are largely consistent with the impact assessment they took account of some costs (estimated at £127 million in total) that were excluded from the impact assessment either because they were out of scope (for example, because they related to measures not requiring legislation) or because they were redacted (for example, because they were commercially sensitive). The business case estimated the costs of implementing the changes at £1.5 billion at today’s prices

Francis Inquiry (Costs)

The Secretary of State for Health (Mr Jeremy Hunt): Robert Francis QC published his “Report of the Mid Staffordshire NHS Foundation Trust Public Inquiry” on 6 February 2013. The public inquiry report looked at the roles and responsibilities of the wider health system in the events at Mid Staffordshire NHS Foundation Trust between 2005 and 2009. The inquiry itself sat for a total of 139 days; its oral hearings began on 8 November 2010 in Stafford and concluded on 1 December 2011. The inquiry took 352 separate witness statements in total, with 164 witness statements heard in person.

On the day of publication, the Prime Minister made a statement to Parliament. The Department of Health published the initial Government and system-wide response. “Patients First and Foremost”, on 26 March 2013. A further response to Robert Francis’s report will be published in autumn 2013.

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Officials have compiled the costs of providing evidence to the inquiry incurred by the Department and the relevant NHS organisations, including foundation trusts.

I can now report to the House that the expenditure incurred by the Department and NHS organisations in their role as witnesses amounted to £6 million. A breakdown by type of cost is shown below.


Cost of dedicated staff


Legal costs incurred


Other staff related expenses (travel and subsistence)


Other directly related costs




The public inquiry was independent. The Department of Health acted as sponsor for the public inquiry. The costs incurred in the direct running of the public inquiry are published separately on the inquiry’s website.

Public Service and Demographic Change

The Minister of State, Department of Health (Norman Lamb): We have today laid before Parliament “Government Response to the House Of Lords Committee on Public Service and Demographic Change report “Ready for Ageing?” (Cm 8677).

This country faces major demographic and economic challenges as a result of an increasingly ageing population. We welcome the Committee’s report, which shares the Government’s ambition of making this country a great place to grow old in.

We know the challenge is significant. The quality of our later life is an issue which affects us all. Cross-Government co-ordination and focus is crucial to achieving success. We all have responsibility for ensuring we make the most of the extraordinary opportunity of increasing life expectancy. These challenges are for individuals and communities, for local and national Government, for the private sector and the third sector.

This response describes the wide reaching programme of reforms this Government have put in place, as well as the plans we have for further work, which we believe will begin to address the challenges set out in “Ready for Ageing?” The reforms range from changes to pensions, transformation of the health and care system as well as improvements to wider public provision such as housing and transport.

Public provision must continue to adapt and respond as the needs and expectations of the population change. Individuals must take personal responsibility for planning for their later life, making choices and exercising control. This report is not a one off piece of work but an important dialogue between Government and the public, which must and will continue into the next Parliament.

As part of this dialogue, Government have committed to writing to the House of Lords Liaison Committee in a year’s time. This will update on progress of the Government’s reforms as well as provide any new evidence and challenges that might have arisen since the original report was published.

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Public Health (Local Authorities)

The Parliamentary Under-Secretary of State for Health (Anna Soubry): We have today laid before Parliament “Government Response to the House of Commons Communities and Local Government Committee Eighth Report of Session 2012-13: The Role of Local Authorities in Health Issues” (Cm 8638).

The Government are grateful to the Committee for its constructive and positive report, and for the opportunity it provides to set out our position and expectations on some key issues in greater depth.

I am grateful to the Department for Communities and Local Government and the Department for Work and Pensions for their contribution to this report, and commend to the House the increasingly broad base for thinking and action on public health across Government.

Copies of the Government response are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.

Caring and Support Consultation

The Minister of State, Department of Health (Norman Lamb): Today we are publishing a significant consultation that looks at the practical detail of implementing our reforms to what and how people pay for their care and support.

We have published plans for a new fairer funding system that will help people to more easily prepare for the cost of their future care needs, and will provide financial protection for people’s homes and savings.

The proposals are based on sweeping reforms to how care is paid for to give more certainty and peace of mind over the cost of old age or living with a disability. They will end the unfairness of unlimited care costs and ensure everyone gets the care they need with most support going to those in greatest need.

From 2016 the reforms will deliver a new cap of £72,000 on the costs of meeting eligible needs, additional financial help for people of modest wealth with less than £118,000 in assets including their home and, from 2015, a scheme to prevent anyone having to sell their home in their lifetime. The consultation confirms details of the plans including:

for people entering a care home, their property will not be included in the assessment of assets if a partner or dependant still lives in the home. In this case if a person has assets of less than £27,000 (excluding their home) they will qualify for financial assistance; and

the cap is based on the total cost of meeting someone’s eligible needs, not just their own contribution, an individual’s payments are added to those made by the local authority when measuring progress towards the cap. This means around two-thirds of people who reach the cap will have contributed less than £72,000 towards their care costs.

The consultation looks in detail at the various elements of the reforms seeking people’s views to help us deliver a fairer and more sustainable care and support system in local areas.

Reforming how and what people pay for their care intends to bring a number of benefits. Currently, a fear of high costs and lack of good information and advice

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can cause people to delay getting the care they need, and therefore see their needs escalate more quickly. This leads to more people (and their families) seeking and organising care in a crisis situation and risking higher care costs, due to their condition having deteriorated more rapidly.

The reforms will set some limits around how much people can expect to pay for their care, making it easier for them to plan and therefore putting them more in control. It will also protect more of what people have worked and saved up for during their lives.

The consultation launched today is about working out the practical detail of what needs to happen to make the changes to payment of care costs a reality. Reforming what and how people pay for their care will involve significant changes to how local authorities operate currently. We are therefore keen to hear people’s views on how these changes to the funding system should happen and be organised locally, to help us deliver a care and support system that is sustainable and fairer for everyone.

Consultation proposals include:

how best to provide people with information and advice, including on how to pay for

care and support, to help everyone plan for the future;

annual “care account” statements to project when someone will reach the cap or qualify for additional financial support;

the option of joining a not-for-profit “deferred payment” scheme where the local council pays people’s residential care fees and the person is able to repay from their estate, allowing them to keep their home during their lifetime;

possible new products from the financial services sector who are responding to these reforms by looking at how pensions and expanded life or health insurance could help some people plan;

principles behind the level of the cap for people aged under state pension age who have eligible needs; and

the process for providing redress and resolving complaints.

The Government have provided £335 million to local authorities in 2015-16 to cover the costs of implementation of the cap and the requirement to offer deferred payments for residential care. This includes funds that will enable local authorities to begin assessing people’s needs for care and support around six months before introduction of the cap, if they choose to do so.

The Department of Health, Local Government Association and the Association of Directors of Social Services (ADASS) have committed to work in partnership on a joint programme to ensure successful and sustainable delivery of these reforms.

The consultation will run from 18 July until 25 October.

“Caring for our future: Consultation on reforming what and how people pay for their care and support” has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.

Home Department

Europol Regulation

The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire): The Government have decided at this time not to opt in to the European Commission’s proposal for a Europol regulation which

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would establish the European Union Agency for Law Enforcement Co-operation and Training. The Government will however seek to opt in to the regulation post adoption provided that Europol is not given the power to direct national law enforcement agencies to initiate investigations or share data that conflicts with national security.

The Commission has a number of objectives in this proposal: to update the law on the European Police Office (Europol) and the European Police College (CEPOL) following the Lisbon treaty and to create cost savings by merging both the agencies; as well as to strengthen Europol’s role in the exchange and analysis of information on cross-border crime through increased obligations.

The Government value UK membership of Europol as currently established. The ability to access law enforcement intelligence directly from all other EU member states means UK law enforcement can significantly increase its intelligence yield and is effectively supported in the fight against organised crime and terrorism.

However, having analysed the draft proposal from the Commission the Government have identified two very serious concerns with the proposal which would fundamentally change the relationship between Europol and member states.

First, there is an increased obligation to provide data. In the proposal member states are not exempt from providing data, even where it would conflict with national security, endanger ongoing investigations or an individual’s safety. This conflicts with the national interest.

Secondly, while Europol can already request a member state to initiate an investigation, this proposal goes much further and includes an obligation to provide a reason if no such operation is conducted. Any reasons provided would be subject to challenge before the European Court of Justice. This creates a risk that the European courts could dictate what national law enforcement agencies should prioritise. This interferes with operational independence which is at the heart of UK policing.

We will remain a full and active participant in negotiations on the regulation and are committed to seeking to opt in post adoption provided that the above two concerns are met in the final text.

Action Fraud

The Minister of State, Home Department (Mr Jeremy Browne): Action Fraud, run by the National Fraud Authority (an executive agency of the Home Office), now receives all reports of fraud on behalf of all police forces in England and Wales. Between November 2012 and July 2013, 2,490 reports (of which 1,738 were reports of crime) were not processed correctly due to a fault in the IT system. This represents 1.3% of all fraud reports taken by Action Fraud in this period. No data was lost or compromised at any point and the IT fault has been rectified. Action Fraud has taken immediate action to process the affected reports and will be writing to apologise to everyone who submitted a report and to make clear that their report is now being dealt with.

This issue came to light too late to notify the Office for National Statistics for inclusion in “Crime in England And Wales” for the year ending March 2013, published today. Crime continues to fall. Although the levels of

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total police recorded crime and fraud would be affected by this issue, the annual percentage change for total police recorded crime and for fraud would be unaffected. As part of routine revisions to the data, any corrections will be included by the Office for National Statistics in next quarter’s crime publications.

These figures supersede any given in previous answers to parliamentary questions and I apologise to the House for this.

Prime Minister

Commissioners (Annual Reports)

The Prime Minister (Mr David Cameron): I have today laid before both Houses copies of the latest annual reports from the Commissioners appointed by me to keep under review public authority use of covert investigatory techniques. The reports are from: the former Interception of Communications Commissioner, the right hon. Sir Paul Kennedy (HC571); the current Intelligence Services Commissioner, the right hon. Sir Mark Waller (HC578); and, the current Chief Surveillance Commissioner, the right hon. Sir Christopher Rose (HC577).

The Commissioners and their staff provide statutory oversight to check that public authorities, and where necessary the Secretaries of State where they sign-off covert activity, use correctly and lawfully the relevant provisions of the Regulation of Investigatory Powers Act 2000, the Regulation of Investigatory Powers (Scotland) Act 2000, the Police Act 1997, and, the Intelligence Services Act 1994.

The Commissioners’ functions are different but complementary and cover a broad and complex legal and technical area. Their annual reports provide information, as far as is consistent with public security, on current patterns of use, emerging developments and broad statistics.

In general they show a high degree of understanding, diligence and compliance with what the law requires from the agencies and the personnel required to observe it. They also show that regrettably there have been a small number of errors and instances where the law has not been applied correctly. The Commissioners have worked to correct the situation and assure themselves that safeguards have been adopted to minimise the risk of future error.

I want to thank Sir Paul, Sir Mark and Sir Christopher for maintaining the rigour of their scrutiny. I believe that it has never been more important that their roles are discharged effectively and efficiently. I regard the publishing of their annual reports as an important part of demonstrating that there are independent, external checks on public authority covert investigations and that public authorities may obtain private information covertly only when this is necessary and proportionate to do so.

“Foreign Involvement in the Critical National Infrastructure”

The Prime Minister (Mr David Cameron): On 6 June I laid before Parliament a report of the Intelligence and Security Committee entitled “Foreign Involvement in

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the Critical National Infrastructure” (Cm 8629). Today the Government publish their response. Copies have been placed in the Libraries of both Houses.

The Government are grateful to the Intelligence and Security Committee for its report, and for its ongoing valuable work.


Intercity Express Programme

The Secretary of State for Transport (Mr Patrick McLoughlin): I have decided to exercise an option that was contained in the Intercity Express Programme (IEP) contract, signed in July 2012 with Agility Trains, a consortium made up of Hitachi and John Laing.

The option is to purchase a further 270 vehicles to replace the electric Intercity 225 fleet which currently runs on the east coast main line with a fleet of new, high quality, modern, higher capacity class 800 series nine-car electric trains. This is in addition to the core order to build nearly 600 vehicles to replace Britain’s fleet of Intercity 125 high speed trains along the Great Western and east coast main lines that were originally deployed by British Rail in the 1970s and 1980s.

The first class 800 series trains will enter revenue-earning service on the Great Western main line in 2017 and on the east coast main line in 2018. We expect the second batch of new class 800 series vehicles to be in service on the east coast from 2019. Passengers will see improvements to their travelling experience, including even more reliable services, improved telecommunications connectivity, increased leg space without compromising on luggage provision, and a greater chance of getting a seat. Train capacity will be 627 seats per train, 18% higher than the stock they are replacing which will mean that the class 800 series deployment in total will increase the number of seats in to King’s Cross in the morning peak by 28%. Journey times between London, Leeds and Edinburgh will also be reduced by several minutes. The new trains will be capable of running at 140 mph, which would lead to further journey time reductions, although operation at this speed will require signalling and infrastructure upgrades.

Furthermore, Hitachi, the manufacturers of the trains, has announced that it will assemble them at its dedicated manufacturing plant at Newton Aycliffe in County Durham. The order is a boost for the facility and its 730 planned jobs and many more in the local and national supply chains.

Exercising this option represents around a further £1.2 billion investment in Britain’s rolling stock, bringing the total contract value up to £5.8 billion covering the design, build, finance and maintenance of the fleet over a 27.5-year period. This highlights the Government’s commitment to infrastructure, to rail, to British manufacturing and to the strategy of growing and protecting the key Intercity rail markets in readiness for HS2.

HGV Road User Levy Bill

The Parliamentary Under-Secretary of State for Transport (Stephen Hammond): I am today correcting a figure that I quoted during the Ways and Means resolution debate

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on the HGV Road User Levy Bill, on Tuesday 23 October 2012, and during the Second Reading debate on Tuesday 20 November 2012. There will be significantly fewer vehicles paying more than £300 a year extra when the levy is introduced than I previously stated.

The reason for the additional costs once the levy is introduced is because some vehicles currently pay close to or below EU minimum rates of vehicle excise duty (VED), and so VED cannot be reduced by the same amount as the levy, or indeed in some cases VED needs to be increased.

During the Ways and Means resolution debate I stated that

“our analysis of 7,000 rigid vehicles that tow a trailer has found that 40 vehicles would probably suffer a penalty of some £300, but that is only 40 out of 7,000, which is a significantly small part of the overall haulage fleet of the United Kingdom”—[Official Report, 23 October 2012, Vol. 551, c. 884.]

I also stated on Second Reading:

“there are a small number—about 7,000 of them on the road—of rigid vehicles with a trailer. Of those we estimate—the Department has done some analysis—that fewer than 50 will face potentially more than £300 extra in costs”—[Official Report, 20 November 2012, Vol. 553, col. 497.]

However, as a result of the Government continuing to consider and refine the analysis for these vehicles, an error in the source data was corrected, and improvements were made to the methodology used to set the VED

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rates that will apply from 1 April 2014. By making this improvement, it is possible for Her Majesty’s Treasury to amend the VED rates to reduce the number of vehicles paying over £300 more to just one vehicle. Even this additional cost represents less than 0.4% of the annual cost of running an HGV, which is normally in the range of £80,000 to £100,000.

There is no change to figures quoted in Parliament of 94% of vehicles paying no more than now, and 98% paying no more than an additional £50 per year, as a result of these changes. The Department for Transport will be republishing the full updated analysis on the consultation pages for “Charging Heavy Goods Vehicles” hosted on the gov.uk website:


The updated analysis will enable vehicle operators to see the revised details of how much will be paid for each type of vehicle.

These figures will remain provisional, until Her Majesty’s Treasury confirm the new table of rates in the “Overview of Outstanding Legislation And Rates” document accompanying Budget 2014.

This once again reinforces the Government’s commitment to introduce the HGV road user levy in April 2014 at as minimal a cost to the UK haulage industry as we can realistically deliver.