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Written Statements

Thursday 3 March 2016

Business, Innovation and Skills

Business Impact Target

The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid): I am today publishing the Government’s target in respect of the economic impact of new regulation on business for this Parliament, along with related matters as required under section 21 of the Small Business, Enterprise and Employment Act 2015 (“the Act”). The current Enterprise Bill will extend the scope of the target to include statutory regulators, as well as Ministers. This statement takes account of that proposed extension.

Business impact target[1]

The Government’s target is for a saving of £10 billion to business and voluntary or community bodies from qualifying measures that come into force or cease to be in force during this Parliament.

Interim target[2]

The interim target covers the savings to be achieved from qualifying measures that come into force or cease to be in force in the first three years of this Parliament. The Government’s interim target is a saving of £5 billion.

Qualifying regulatory provisions[3]

Under the Act, the measures that are in scope for the business impact target are described as “regulatory provisions”. That includes both legislation, and the activities of regulators—meaning Ministers, and in due course statutory regulators.

As with the one-in, two-out system that operated in the last Parliament, the Government must designate the categories of regulatory provision that are to be scored against the target (“qualifying regulatory provisions”). Qualifying regulatory provisions are those that do not fall within any of the exclusions set out below.

(a) Exclusions carried over from last Parliament

A number of the categories of regulatory provision that were excluded from the one-in, two-out system in the last Parliament will also be excluded from the business impact target. The exclusions are:

Regulatory provisions that implement new or changed obligations arising from European Union regulations, decisions and directives, and other changes to international commitments and obligations, except in cases of gold-plating.

Regulatory provisions specifically relating to civil emergencies.

Regulatory provisions concerning fines and penalties, and redress and restitution.

Regulatory provisions that promote competition (where these result in an increase in a direct net burden on business).

Regulatory provisions that enable delivery of large infrastructure projects.

Regulatory provisions that implement changes to the classification and scheduling of drugs under the Misuse of Drugs Act 1971, or to national minimum wage hourly rates, where these follow the recommendations of the relevant independent advisory body.

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Regulatory provisions relating to systemic financial risk.

(b) New exclusions applied in this Parliament

The remaining exclusions arise from the extension of the target to include regulator activity, and one legislative measure (the national living wage) where the offsetting measures—changes to national insurance and tax—are also excluded from the target under the Act.

In order to capture all relevant regulator actions the statutory definition of a regulatory provision is drafted in such a way that every action of a regulator in the discharge of its statutory duties potentially falls within scope. The exclusions are intended to ensure that the qualifying provisions scored under target are focused on regulator policies and practices rather than day-to-day activities. Certain activities related to economic regulation are also excluded. The exclusions are:

Regulator casework including specific investigation and enforcement activity, individual licence decisions, and individual advice.

Education, communications activities, and promotional campaigns by regulators, including media campaigns, posters, factsheets, bulletins, letters, websites, and information/advice helplines.

Policy development by regulators, including formal and informal consultations, policy reviews, and ad hoc information requests.

Changes to the organisation and management of regulators, except for those resulting from legislative changes or another policy change that is a qualifying regulatory provision.

Regulatory provisions applying to certain business activities of operator(s) of a network or system where the operator(s) are deemed to be a monopoly or to have significant market power, specifically:

regulatory provisions that concern the terms upon which access is provided to those networks and systems; and

regulatory provisions that concern effective network and systems operation and co-ordination.

Regulatory provisions that are price controls, except for the introduction of price controls to previously unregulated activities, or removal of pre-existing price controls.

Changes to industry codes, except those arising from regulator action or new legislation.

Regulatory provisions that introduce the national living wage[4],

Methodology for the assessment of the business impact target[5]

The impact of each qualifying measure will be assessed on the basis of its equivalent annual net direct cost to business (EANDCB) measured in 2014 prices and with a 2015 present value base year. The contribution to the business impact target will be the sum of the EANDCB over the first five years for which the measure will be in force, or the sum of the EANDCB over the full lifetime of the measure for measures that are in force for less than five years.

The EANDCB is an estimate of the average annual net direct costs to business in each year that the measure is in force. It is calculated as the present value of the net direct cost to business divided by the sum of the discount factors appropriate for the length of time the measure is in force. The discount rate used is determined by the Green Book.

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Direct impacts are those that can be identified as resulting directly from the implementation or removal/simplification of the measure.

[1] As required under section 21(1)(a) of the Act.

[2] As required under section 21 (2) of the Act.

[3] As required under section 21(3)(a) of the Act.

[4] Future annual changes to the national living wage that do not follow the recommendations of the Low Pay Commission will be in scope for the target.

[5] As required under section 21(3)(b) of the Act.

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Green Investment Bank

The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid): In June 2015, I announced plans to move UK Green Investment Bank plc (GIB) into the private sector. The company’s success means there is strong market interest in GIB from private sector investors and 100% Government funding is no longer needed.

The company fully supports this move which will give GIB the freedom it needs to grow and increase its impact with access to much more capital than if it stayed in Government hands. And it will further demonstrate that green investment can be profitable for mainstream investors and is not just the preserve of Government.

Today, I am formally launching a sale of GIB by inviting expressions of interest from bidders. Any parties interested in acquiring GIB are now invited to come forward. Interested parties will need to respond to a bidder information form which is being published today on the gov.uk website.

I am today laying a report to Parliament on the proposed disposal of shares in GIB with information on the kind of disposal intended, the expected timescale for the disposal, and our objectives for the disposal. This report is provided in fulfilment of provisions in the Enterprise Bill and is also being provided to Ministers in the devolved Administrations.

The report includes details of our plans to create a special share in GIB as part of the sale process. This will provide protection of the company’s green purposes following a sale by granting the independent holder of the share the right to approve or reject any proposal to change the green purposes of GIB. I first announced these plans in Parliament on 2 February, when opening Second Reading of the Enterprise Bill. Details were also set out in the Government’s response to the Environmental Audit Committee’s December 2015 report on the future of GIB which was published the same day and further details are provided in letters from GIB chairman, Lord Smith of Kelvin and from Baroness Neville Rolfe, Parliamentary Under-Secretary of State for Business, Innovation and Skills—copies of which will be laid in the Libraries of both Houses.

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Defence

Successor Submarine Assessment Phase

The Minister for Defence Procurement (Mr Philip Dunne): The Government were elected with a manifesto commitment to build a new fleet of four successor

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ballistic missile submarines. On 23 November 2015, the Government announced in the strategic defence and security review (SDSR) that the Successor submarine programme would cost £31 billion, and that the first boat was expected to enter service in the early 2030s. We will also set a contingency of £10 billion.

As part of his statement on the SDSR, the Prime Minister announced that we needed to implement a number of changes to the Successor submarine programme, which included plans to invest more than £600 million in the design phase.

I am today confirming our plans to invest £642 million to supplement the current Successor assessment phase of £3.3 billion. This will bring the total assessment phase commitment to £3.9 billion as announced in the SDSR, and will provide a sound foundation for the next phase where we will be taking a staged investment approach.

The assessment phase has identified the need to invest now to prepare for an efficient and effective submarine build. The £642 million will be spent on facilities at BAE systems in Barrow, essential long lead items for the four submarines and the nuclear propulsion programme.

In the UK, a number of key suppliers directly support the delivery of the Successor submarine programme who, in turn, depend heavily on a network of hundreds of sub-contractors. The Government’s further investment in preparation for a four boat Successor fleet should be welcomed by all suppliers as helping to secure vital skills for the UK in the long term.

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Environment, Food and Rural Affairs

EU Environment Council

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rory Stewart): I will attend the EU Environment Council in Brussels on 4 March, along with the Parliamentary Under-Secretary of State for Climate Change, Lord Bourne,

The Scottish Minister for Environment, Climate Change and Land Reform, Dr Aileen McLeod MSP, will also be attending Council.

Following adoption of the agenda, the list of “A” items will be approved.

Under non-legislative activities, the Council will debate the EU action plan for the circular economy and the follow-up to COP21 (climate change). There will be an exchange of views on the European semester/annual growth survey 2016 and the contribution of the environment and climate to growth and jobs. The Council will adopt a draft statement on endocrine disruptors.

Over lunch Ministers will be invited to discuss the ratification of the Paris agreement (climate change).

The following items are due to be discussed under any other business:

Energy transition—promoting environmentally friendly forms of energy in the EU.

Implementing the 7th environmental action plan.

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Minamata package (i) proposal for a regulation of the European Parliament and of the Council on mercury, and repealing regulation (EC) No 1102/2008; (ii) proposal for a Council decision on the conclusion of the Minamata convention on mercury.

Real driving emissions (RDE).

EU action plan on wildlife trafficking.

Innovation deals.

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Home Department

Justice and Home Affairs Council

The Secretary of State for the Home Department (Mrs Theresa May): A meeting of the Justice and Home Affairs (JHA) Council took place on 25 February, which I attended on behalf of the UK.

The Council began with a discussion on the European Commission’s proposal for an amendment to the Schengen border code to make systematic checks on EU citizens mandatory at external borders. In response to calls from member states, the Council agreed a six-month transitional period for implementation at air borders.

While the UK does not participate in the border elements of Schengen, I welcomed the action by the Schengen states to introduce systematic checks on EU citizens including at airports. This is something the UK already does. However, I noted two other areas where further action is needed to strengthen the external border. First, to further improve the exchange of information on the Schengen information system on entry bans and immigration data. Secondly, following the attacks in Paris, I urged the Commission to promote the phasing out of non-biometric, non-machine readable documents and to support member states to bring their identification documents into line with International Civil Aviation Organisation (ICAO) standards. The Council agreed a general approach on the Schengen border code measure.

This was followed by an update from the presidency on the proposed draft regulation on the European Border and Coast Guard Agency. Given the UK’s position in relation to Schengen we will not participate in this measure, but I highlighted the importance of the UK being able to co-operate effectively with the future European Border and Coast Guard, in line with the support the UK has provided previously to Frontex, while also ensuring that the new agency did not impact on non-Schengen states’ border controls. The presidency is now aiming for a general approach on this proposal at the April JHA Council, with political agreement with the European Parliament by June.

Finally, there was a discussion on migration, as a follow-up to the European Council. The Commission called for efforts to avert a humanitarian crisis in Greece. The Council received an update on the recent Vienna conference, and the steps some member states had taken to manage the movement through the EU of illegal migrants, and to ensure that public order and security were maintained. A number of member states highlighted the importance of implementing decisions already taken in line with February European Council conclusions, and pointed to the new NATO mission as

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a means to reducing flows at the source. Member states also discussed the importance of ensuring registration of all migrants on arrival. I welcomed the new NATO involvement in the Aegean, and noted that policies based around redistribution would exacerbate the pull factor and would not help prevent secondary movements. I highlighted that the EU also needed to consider whether the current EU and international migration frameworks were adequate for tackling abuse.

The discussion on migration continued over lunch, which was also attended by the deputy Turkish Interior Minister and the United Nations High Commissioner for Refugees. There was consensus on the need to support the action under way to reduce flows across the Greek-Turkish sea border and to implement the EU-Turkey action plan.

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Northern Ireland

Building a Prosperous and United Community: Progress Report

The Secretary of State for Northern Ireland (Mrs Theresa Villiers): Today the Government and Northern Ireland Executive have published a progress report on the Northern Ireland economic pact. The “Building a Prosperous and United Community: 2016 Progress Report”, highlights our successes since the economic pact was first signed in June 2013. I have placed a copy of this report in the Libraries of both Houses.

The Government and the Executive continue to work together to advance our shared aim to strengthen the private sector and rebalance the Northern Ireland economy. The economy is growing, there are 46,000 more people in employment today than in 2010, wages are up more than 5% over the year, and exports are up 4%.

Through the economic pact the Government and the Executive have helped deliver the Corporation Tax (Northern Ireland) Act 2015. This provides the legislation to devolve rate-setting powers to the Northern Ireland Assembly. The commencement of these powers is subject to the Executive demonstrating that their finances are on a sustainable footing for the long term. Through the Fresh Start agreement the Executive reaffirmed their commitment to take the necessary actions to demonstrate this and also set out its intention to have a Northern Ireland rate of 12.5% from April 2018.

Through the joint ministerial taskforce on banking and access to finance the Government have worked with the Executive to help deliver approximately £60 million in finances to Northern Ireland businesses. The Green Investment Bank has now committed to invest over £70 million to projects in Northern Ireland and over 450 start-up loans have been approved in Northern Ireland.

The Executive continue to make use of the additional borrowing the Government made available through the economic pact including to improve facilities at integrated primary schools and increased provision of shared housing. Last month the Ministry of Defence announced its intention to gift 59 surplus properties to the Executive.

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These properties will be used to increase the provision of shared housing and the Ministry of Defence will continue to explore whether it might be possible to transfer further surplus properties in the future.

The progress report also sets out the British-Irish visa scheme is now operating allowing recipients to travel to both Ireland and Northern Ireland on the same visa. There has now been approval for Government funding for a space propulsion test facility in Crossgar as well as a further €5.5 million for engine design in Northern Ireland. Furthermore the report sets out that Northern Ireland will significantly benefit from the Government’s regional air connectivity fund.

The economic pact sets out a new approach for the Government and the Executive to work more closely on our joint objectives. We will continue to work hard towards rebalancing the Northern Ireland economy and building a shared future.

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Transport

Light Dues 2016-17

The Minister of State, Department for Transport (Mr Robert Goodwill): The Government are focused on delivering maritime sector growth in the United Kingdom. This includes enhancing Government leadership and creating a supportive environment that will enable the sector to thrive. The vital work of the general lighthouse authorities, which provide and maintain marine aids to navigation around these islands, forms part of this vision.

Continued real terms reductions in the three authorities’ running costs in the UK means that I am able to reduce light dues by a further penny, to 38p per net registered tonne, on 1 April 2016. This will be the third successive year in which the UK light dues rate has been cut, and means that light dues have fallen by 20% in real terms since 2010.

The Government are committed to providing long-term stability for light dues payers, so they can plan budgets effectively. To support that objective, I have set the UK general lighthouse authorities new five-year efficiency targets, succeeding those set in 2010, which require net running costs to continue falling in real terms, by on average two percentage points below the retail price index.

Ships using our busy waters depend on the effectiveness of the service provided by the general lighthouse authorities as much as their efficiency. As the authorities continue

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to work assets harder, harness new technology, and procure goods and services collaboratively, our common aim will be to reduce the risk to navigation and the cost of doing so effectively.

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Work and Pensions

Employment, Social Policy, Health and Consumer Affairs Council

The Minister for Employment (Priti Patel): The Employment, Social Policy, Health and Consumer Affairs Council will take place on 7 March 2016 in Brussels.

The Council will be invited to seek a general approach on the proposal for a Council decision on guidelines for employment policies in member states.

The Council will be invited to adopt draft Council conclusions in response to the Commission’s strategic engagement for gender equality, the Commission’s list of actions to advance LGBTI equality, and the 2016 annual growth survey. The Council will also be invited to adopt the draft joint employment report.

There will be policy debates on the European semester, for a contribution to the March European Council, and on the progress towards a new skills agenda for Europe.

Regarding the implementation of the country-specific recommendations, there will be a contribution from the Employment Committee (EMCO) on labour market segmentation and contractual arrangements.

The Council will be asked to endorse the key messages from EMCO on the way forward regarding the implementation of the youth guarantee.

The European Commission will make presentations on the 2016 country reports and the labour mobility package. The presidency and European Commission will make a joint presentation on social dialogue and the tripartite social summit.

Under any other business, the presidency will present information on legislative issues currently on their agenda. The Commission will present information on the European pillar of social rights, the state of play regarding the European social fund and youth employment initiative implementation, the employment and social dimension of the Energy Union, and the Istanbul convention on violence against women. Information on the 2016 work programmes of EMCO and Social Protection Committee will be presented by the committees’ respective Chairs.

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