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Written Statements

Wednesday 25 June 2014

Business, Innovation and Skills

Regional Growth Fund (Correction)

The Minister of State, Department for Business, Innovation and Skills (Michael Fallon): I regret that there was an administrative error in my written ministerial statement on 19 June 2014, Official Report, column 88WS. The Regional Growth Fund (RGF) round 6 dedicated expression of interest day will not be taking place in Sheffield on 28 July but will instead be held at:

Alexandra House

Lawnswood Business Park


LS16 6QY

The Leeds event will start at 10 am on 28 July.

In addition, due to demand, we have added an extra dedicated expression of interest day in Yorkshire and Humber. This will be held in Kingston-upon-Hull on 18 July.

More details on how to register for these two sessions or any of the events we are running across England in July and August are available at: www.bis.gov.uk/rgf.

Zero-hours Contracts

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott): Last summer, the coalition Government conducted an informal information-gathering exercise on zero-hours contracts in response to concerns about abuse of these contracts by a small number of employers.

Following that review, on 19 December 2013 the Government launched a public consultation on zero-hours contracts. The consultation closed on 19 March and received a record number of responses—over 36,000. Responses came from businesses of all sizes, charities and social enterprises, unions, union representatives and individuals.

We sought views on a number of issues including banning exclusivity clauses in zero-hours contracts, whether a code of practice should be introduced covering the fair use of exclusivity clauses in zero-hours contracts and these contracts generally, and how useful respondents found existing information, advice and guidance on these contracts. The consultation found:

The overwhelming majority of respondents, 83% of responses, supported a ban on exclusivity clauses in zero-hours contracts.

Many respondents felt that a code of practice focusing solely on the fair use of exclusivity clauses would not go far enough to tackle potential abuses. They wanted Government to develop a code of practice covering all aspects of the fair use of zero-hours contracts.

In relation to the quality of existing information, advice and guidance on these contracts, 42% of respondents said the current guidance was “not helpful”. Only 14% said they found existing guidance “very helpful”. This clearly demonstrates that more should be done in this area.

As a result, today, through the Small Business, Enterprise and Employment Bill, we will be introducing legislation which stops abuses of vulnerable workers who work under zero-hours contracts:

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We will be banning the use of exclusivity clauses in contracts which do not guarantee any hours. This will ensure that individuals will be free to look for work elsewhere to help boost their income if they so wish.

We will also be introducing provisions via the Bill which provide a power which will allow avoidance of this ban to be dealt with. We will be consulting further on the best mechanism to tackle avoidance of the ban and the issue of redress should this law be broken.

Government will now work with business representatives and unions to develop a code of practice on the fair use of zero-hours contracts; and

Government will also work with interested parties to review existing guidance and improve information available to individuals and employers on using these contracts.

These measures will allow individuals on zero-hours contracts to seek additional work, if they choose to, and ensure that no employer can tie down an individual when they make no reciprocal commitment to provide that individual with any guaranteed work.


Cheque Imaging/SME Credit Data

The Economic Secretary to the Treasury (Andrea Leadsom): In March 2014 the Government published a consultation, “Speeding up cheque payments: legislating for cheque imaging”, which set out proposed legislation for the introduction of cheque imaging in the United Kingdom. Cheque imaging is an innovation that speeds up cheque clearing times through the sending of a digital image of the cheque for clearing, rather than the original paper instrument itself. Cheque imaging enables a wide range of benefits to be delivered to consumers, businesses and the banking industry. It will speed up clearing times, increase customer convenience, deliver operational efficiencies and help challenger banks to compete with incumbents.

Separately in December 2013 the Government published a consultation, “Competition in banking: improving access to SME credit data” which set out its proposal to require banks to share information on their SME customers with other lenders through credit reference agencies. The proposals will help small businesses access the finance they need to grow by opening up access to the credit data that the major banks hold on their SME customers to other banks and finance providers. The proposals are intended to make it easier for SMEs to seek loans from a lender other than their bank by improving the ability of challenger banks and alternative finance providers to make accurate SME risk assessments and lending decisions.

The Government are publishing responses to both consultations today, alongside introducing legislation in the Small Business, Enterprise and Employment Bill to allow for the introduction of cheque imaging in the UK and to improve access to SME credit data.

I am placing copies of these documents in the Libraries of both Houses.

Recovery of Public Sector Exit Payments

The Chief Secretary to the Treasury (Danny Alexander): Last month, the Government announced that the Small Business, Enterprise and Employment Bill will include legislative provisions to ensure exit payments are recovered

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when high earners return to the same part of the public sector within 12 months of leaving. These provisions will mean individuals are not over-compensated and will ensure value for money for the taxpayer. The intention is to underpin consistency and fairness across the whole of the public sector.

HM Treasury is today launching a consultation on the “Recovery of Public Sector Exit Payments”, seeking views on the proposed changes. The consultation has been published online: https://www.gov.uk/government/consultations/recovery-of-public-sector-exit-payments. It closes on 17 September 2014.

The Government welcome responses and will give careful consideration to these before taking a final decision.


Early Years Pupil Premium

The Minister for Schools (Mr David Laws): Today, we are publishing a consultation document setting out our proposals for the implementation of two key changes to early years funding in 2015-16: the introduction of the early years pupil premium for disadvantaged three and four-year-olds and moving to “participation funding” for disadvantaged two-year-olds.

Achievement at school is the strongest determinant of a child’s future earnings. Pupils who achieve five A* to C grades at GCSE earn on average 10% more than those who do not. However, the Sutton Trust have suggested there is a 19-month gap at the start of school between the most and least disadvantaged children. These gaps persist and widen throughout a child’s life. Research also shows that children from disadvantaged backgrounds can benefit the most from receiving a high-quality early education.

The New Early Years Pupil Premium

The aim of the early years pupil premium is to close the gap between children from disadvantaged backgrounds and their peers by providing funding to early years providers to help them raise the quality of their provision.

All children aged three and four are already entitled to 15 hours a week of funded early education, for 38 weeks of the year (570 hours/year). The early years pupil premium will complement that entitlement by providing nurseries, schools and other providers of Government-funded early education with an additional £300 a year for each eligible child accessing the full 570 hours with them. We estimate that over 170,000 children could benefit from the early years pupil premium in 2015-16.

Providers will be funded for the early years pupil premium along with their existing early education funding. We are also publishing today indicative local authority funding allocations for the premium.

The consultation document seeks views from professionals, parents and other interested parties on our proposals for the implementation of the early years pupil premium. We propose that—

(i) Those from low-income families, children in care or children adopted from care should be eligible for the early years pupil premium;

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(ii) Providers are best placed to know how support their disadvantaged pupils with the early years pupil premium and so should have the freedom to decide how it is spent;

(iii) Ofsted will hold providers to account for how they have used the early years pupil premium to support their disadvantaged children through the regular inspection process.

Participation Funding for Early Learning for Two-Year-Olds

In September 2013 the entitlement to early education was extended to the 20% least advantaged two-year-olds, and from September 2014 it will be extended further to the 40% least advantaged two-year-olds. The early years pupil premium will close the gap at ages three and four between the additional support disadvantaged children get at age two through the new free entitlement and the additional support they get in school through the school-age pupil premium.

The consultation also covers moving funding of the free entitlement for two-year-olds onto a stable, long-term footing by introducing participation-based funding from 2015-16. This will mirror the way that the three and four-year-old entitlements are funded. This means that we will fund local authorities according to the actual numbers of eligible two-year-olds taking up a place. We recognise local authorities’ concern that we use the most up-to-date data to determine funding in the first year of participation-based funding. We are therefore proposing to use two data collections rather than one in 2015-16 to help us to do this.

The early years pupil premium and the two-year-old entitlement both only apply in England.

Energy and Climate Change

EU Energy Council

The Secretary of State for Energy and Climate Change (Mr Edward Davey): I am writing to report discussions at the Energy Council in Luxembourg on 13 June, where I represented the UK.

Under the first item on the agenda the Council reached political agreement on the Greek presidency’s compromise text on the proposal to amend the renewable energy directive and the directive relating to the quality of petrol and diesel fuels. The proposal is intended to address indirect land use change (ILUC), which occurs when production of biofuels from crops grown on existing agricultural land results in the displacement of production on to previously uncultivated land.

I and several member states voted in favour while indicating disappointment with the agreement’s lack of ambition. Other member states made a statement that the cap on first generation biofuels must not be lowered from 7% during negotiations with the European Parliament. While the UK has consistently argued for a 5% cap on the contribution from food-based biofuels and the introduction of ILUC factors and considers it regrettable that the cap on food crops in the Council proposal is as high as 7%, we supported the compromise package as it represented the best compromise possible and is preferable to the status quo that would place no restriction on the expansion of food-based fuels.

This discussion was followed by a policy debate on the follow-up to the March European Council. The debate covered the three linked issues of European energy security, the internal energy market and the 2030

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climate and energy framework. The Greek presidency opened the debate by asking member states for their priorities under the three issues. Commissioner Oettinger spoke to advocate the prioritisation of a smaller number of projects of common interest to help the most vulnerable member states and a new interconnection target of 15%.

I proposed that the June European Council should focus on short-term measures to address energy security and to prepare for potential disruptions this winter. I and a number of other member states also called for decisions on energy security and the 2030 climate and energy framework to be taken in parallel by the European Council. Some member states asked for decisions on energy security to be prioritised at the June European Council. There was some support for the Commission’s proposal for a 15% interconnection target but others expressed caution, noting that it could impose additional costs on consumers.

I with a number of member states supported the proposal to prioritise a small number of key infrastructure projects to help the most vulnerable regions. Some member states noted that prioritisation of infrastructure projects

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should not be at the expense of other energy infrastructure priorities such as addressing energy isolation and the exploitation of indigenous resources in the eastern Mediterranean.

A number of member states noted the importance of energy efficiency to the 2030 and energy security strategies.

Ministers adopted conclusions on energy prices, competitiveness and vulnerable consumers without discussion.

There was a second debate on international relations, focusing on the value of multilateral energy frameworks—such as the energy charter treaty, the energy community treaty and the International Energy Agency. The Greek presidency emphasised the importance of developments in the eastern Mediterranean and the contributions that gas supplies in the region can make to energy security in the EU. The Commission focused on the energy community and the role that it can play in the energy security of the European neighbourhood.

Over lunch, Commissioner Oettinger updated Ministers on the energy situation in Ukraine.