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6 Nov 2008 : Column WS23
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Thursday 6 November 2008
Banking: Iceland
The Financial Services Secretary to the Treasury (Lord Myners): My right honourable friend the Chancellor of the Exchequer (Alistair Darling) has made the following Written Ministerial Statement.
On 8 October 2008, I announced to Parliament that the Government would ensure that no depositor in Icesave, the internet product made available by the UK branch of the Icelandic bank, Landsbanki, would lose any money as a result of the closure of Icesave. I have today laid a Treasury Minute to explain several contingent liabilities into which the Government have entered in order to give effect to part of this commitment.
The Government are also making an advance of approximately £800 million to the Financial Services Compensation Scheme (FSCS) in order to enable the FSCS to pay out that part of a depositor's rights arising from deposits of over the FSCS depositor compensation limit of £50,000. The Bank of England is initially providing loan facilities to enable the FSCS to pay out that part of a depositor's rights arising from deposits of under the FSCS depositor compensation limit. The Treasury will refinance these facilities.
Authority for this advance and for refinancing is sought in the winter supplementary estimate, which will be presented to the House later this month. Statutory authority for the expenditure will be provided on a retrospective basis by the Banking Bill.
Companies Act 2006
The Parliamentary Under-Secretary of State, Department for Business, Enterprise and Regulatory Reform (Baroness Vadera): My honourable friend the Parliamentary Under-Secretary of State, Ian Pearson, has made the following Written Ministerial Statement.
As my predecessor announced by Written Statement on 13 December 2007, the Companies Act 2006 is being commenced in tranches between Royal Assent on 8 November 2006 and 1 October 2009. I have today laid before Parliament the eighth commencement order, which commences the final provisions with effect from 1 October 2009. There are two minor sets of provisions in the Act that we are not proposing to commence. When a suitable opportunity arises, the Government will propose to Parliament the repeal of these provisions.
The first set is Sections 327(2)(c) and 330(6)(c). Sections 324 to 331 deal with the use of proxies, whereby shareholders who do not attend company meetings can delegate their vote to someone who will attend. This can be a vote on a show of hands, or on a poll, where the number of shares of each person voting is taken into account. The 2006 Act restated the rules on proxies contained in the Companies Act 1985 and its Northern Ireland equivalent, the Companies (Northern Ireland) Order 1986, with a number of changes, including making it easier for a member to appoint more than one proxy.
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Companies’ articles generally provide a deadline by which documents appointing proxies need to be received before a meeting. Section 327 prevents this deadline being set at more than 48 hours before the meeting. If a poll is called for at a meeting and if it is to be taken more than 48 hours later, then Clause 327(2)(b) provides that the deadline for appointing proxies will be not more than 24 hours before the poll. The intention behind Clause 327(2)(c) was to provide that where a poll was taken within 48 hours of its being called at a meeting, the deadline would be 48 hours before the meeting, as for proxy voting at the meeting. As drafted, however, Clause 327(c) would have the unintended effect that the deadline would be the time at which the poll was called for. That is why the subsection has not been commenced so far, and why the Government believe that it should not be commenced, and that Clause 330(6)(c), which makes similar provision for withdrawing authority from a proxy, should not be commenced.
The second set of provisions not being commenced is Section 1175 so far as it relates to Northern Ireland and the associated Part 2 of Schedule 9. Part 16 of the Act replaces the rules on audit requirements from the Companies Act 1985 with a number of changes, including that there are no longer special rules for the audit of companies that are charities. This is because in future special rules for charities, whether companies or not, are to be included in charities legislation. As it seemed likely that charity law in England and Wales would be amended to replace these rules before the commencement of Part 16 of the Companies Act 2006, Schedule 9 included provisions to amend the Companies Act 1985 to remove the special rules for audit of charitable companies. In the event, the Charities Act 2006 (Charitable Companies Audit and Group Accounts Provisions) Order 2008 (SI 2008/527) came into force on 1 April 2008, and so Part 1 of Schedule 9 was commenced on that date by the Sixth Companies Act 2006 Commencement Order. Part 1 of the schedule covers England and Wales, and also Scotland where its charities legislation was also ready to take over.
Similar provisions to amend the Companies (Northern Ireland) Order 1986 were included in Part 2 of Schedule 9 to the Companies Act 2006, but at the time Part 16 was commenced there were no provisions in Northern Ireland charity law to apply audit requirements to smaller charitable companies. The sixth commencement order therefore saved the existing rules on the audit of smaller charitable companies in the 1986 order. And there will never be any need to commence Section 1175 in relation to Northern Ireland, or Part 2 of Schedule 9.
Courts: Means Testing
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bach): In October 2006, the Government introduced a means-testing scheme for legal aid for defendants being tried at the magistrates’ courts. As this scheme has now been successfully embedded, delivering £65 million of savings to date by ensuring that those who can afford to pay for their defence costs
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Proposals setting out the design of the Crown Court means-testing scheme are today being published for consultation by the Ministry of Justice and the Legal Services Commission. It is accompanied by a separate, but associated, consultation paper from the Ministry of Justice setting out the potential options for reforming payments from central funds to acquitted defendants. The annual budget for central funds is set at £45 million but has consistently exceeded this amount in recent years. Given the inter-relationship between central funds payments and means testing, we believe that now is the right time to look more closely at this area.
These consultation exercises are targeted at all groups and individuals who work within the criminal justice system, as well as all those who may otherwise have an interest in this subject. Both consultations will run for 12 weeks, concluding on Thursday, 29 January 2009. Copies of the consultation paper have been placed in the Libraries of both Houses, the Vote Office and the Printed Paper Office.
Identity Cards
The Parliamentary Under-Secretary of State, Home Office (Lord West of Spithead): My honourable friend the Parliamentary Under-Secretary of State for Identity (Meg Hillier) has made the following Written Ministerial Statement.
The fifth cost report of the national identity scheme is being laid before Parliament today. It sets out an estimate of the public expenditure likely to be incurred on the scheme over the next 10 years, in accordance with Section 37 of the Identity Cards Act 2006. It reports on developments over the past six months, since the fourth cost report was published on 6 May 2008.
Local Government
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Andrews): My honourable friend the Minister for Local Government (John Healey) has made the following Written Ministerial Statement.
Earlier this year, Parliament debated and approved structural change orders to create from 1 April 2009 nine new unitary councils—Bedford Borough Council, Cheshire East Council, Cheshire West and Chester Council, Central Bedfordshire Council, Cornwall Council, County Durham Council, Northumberland Council, Shropshire Council and Wiltshire Council. Working closely with those responsible locally for implementing these new unitary councils, we are completing the legislative framework needed to support the transition to these new councils.
Accordingly, I have today laid before the House the Local Government (Structural Changes) (Transitional Arrangements) (No.2) Regulations 2008, made under Part 1 of the Local Government and Public Involvement in Health Act 2007.
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This represents a significant milestone in the completion of the necessary legislative framework. These regulations make transitional provisions in relation to the following matters:
continuity and responsibility for functions;electoral matters;statutory plans, reviews, schemes, statements and strategies;membership of certain licensing and planning committees;functions relating to town and country planning;functions relating to education;miscellaneous transitional provisions; andconsequential amendment of the Local Government (Changes for England) Regulations 1994.I am confident that these regulations represent the most practical and pragmatic way forward for both predecessor councils and their successor new unitaries to implement the new arrangements and achieve a seamless transition protecting the delivery of local services.
No one underestimates the scale of the task those leading the changes in these areas face over the coming months. But we in central government will continue to play our part in supporting the transition, completing the legal framework, and helping those in the front line to set up and run successfully the new unitary councils from April.
Pensions
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton): My right honourable friend the Minister of State for Pensions Reform (Rosie Winterton) has made the following Statement.
As honourable Members are aware, the administrative resource costs of the Pensions Regulator (tPR), the Pension Protection Fund (PPF), the Pensions Advisory Service (TPAS) and the Pensions Ombudsman (PO) are funded by grant-in-aid which is then recovered through levies raised on pension schemes. The rates for these levies are set in regulations.
PPF administration levy—the administration costs of the PPF are initially met from the DWP administration vote. Section 117 of the Pensions Act 2004 provides that the Secretary of State may impose a levy on eligible pension schemes for the purpose of meeting his expenditure in establishing the PPF and repaying grant-in-aid in respect of PPF administration costs. The levy is invoiced and collected by tPR on behalf of the Secretary of State.
The general levy—the administration costs of tPR, TPAS and the PO are initially met from the DWP administration vote. Section 175 of the Pension Schemes Act 1993 (as amended in the Pensions Act 2004) allows for an annual general levy on occupational and personal pension schemes to recover this expenditure. The levy is also invoiced and collected by tPR on behalf of the Secretary of State.
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This year, the Government are pleased to announce that we will freeze the rates for both the general levy and PPF administration levy at their 2008-09 levels. These levels are sufficient to recover the grant-in-aid paid to each of the organisations.
This maintains the Government’s intention, outlined to the House last year, to provide levy cost stability for pension schemes. In holding rates stable, the Government seek to avoid additional cost pressures on pension schemes at the current time. This is also in line with the consultation launched in September 2008 by the board of the PPF to hold the pension protection levy quantum stable (indexed in line with wage inflation).
The general levy rates since 2005 were set on the assumption that TPAS’s running costs were included in the amount to be raised by the levy, and since DWP took over funding responsibility from the regulatory authority it paid TPAS £8.5 million grant-in-aid for the period 1 April 2005 to 30 June 2008. The Government’s intention is that this grant-in-aid should be met by pension schemes through the general levy, reflecting longstanding practice in relation to TPAS funding. TPAS provides good value dispute resolution and information provision services that are beneficial to both pension schemes and their members. It is therefore right that its costs should be met by pension schemes.
A consequential amendment to Section 174 of the Pension Schemes Act 1993 should have been made to enable DWP to recover the grant-in-aid payments from 1 April 2005. Because the need for this amendment was overlooked, the levy-raising power in Section 175 of the Pension Schemes Act 1993 does not apply to payments made to TPAS unless they are made by the Pensions Regulator.
To regularise the funding position so that there is a statutory basis for recovering grant-in-aid payments through the general levy, arrangements were made for the Pensions Regulator to pay grant-in-aid to TPAS from 1 July 2008.
Earlier consultations on amendments to the regulations setting the levy rates have stated that the general levy should cover TPAS’s funding. Taking this into account, the Government have decided that it would be inappropriate to refund the £8.5 million of grant-in-aid paid to TPAS for the period 1 April 2005 to 30 June 2008 and recovered through the general levy.
The Government consider that holding the general and PPF administrative levy rates at 2008-09 levels presents positive news for pension schemes. The stability it offers will be welcomed by levy payers, pension scheme trustees, members and sponsoring employers.
Security Industry Authority
The Parliamentary Under-Secretary of State, Home Office (Lord West of Spithead): My honourable friend the Parliamentary Under-Secretary of State for Crime Reduction (Alan Campbell) has made the following Written Ministerial Statement.
In their recent report Regulating the Security Industry, published on 17 October 2008, the National Audit Office concluded that as a regulator the Security
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The SIA board are currently considering how to respond fully to the recommendations of the review and I have asked that they report to me with a detailed action plan within the next two weeks.
With the delivery review under way, we have become aware of some failings in the SIA’s compliance with Home Office requirements for security clearance for SIA employees. Home Office guidance issued to the SIA stipulates that no person should be employed, in a permanent or temporary capacity, without appropriate confirmed security clearance. All permanent SIA staff have confirmed security clearance. It became clear, however, that some agency workers had not received appropriate security clearance before commencing employment with the SIA. The SIA currently has 38 agency workers. As soon as the Home Office became aware of the issue, it asked the SIA to take immediate action. All those without confirmed security clearance were removed from SIA premises and had all access to SIA systems withdrawn. Security checks are now being conducted and as of 9 am this morning, 32 had confirmed clearance and the remaining six were pending.
The SIA has a commercial delivery partner, LDL—a subsidiary of British Telecom (BT). LDL is responsible, through BT, for ensuring security clearance of its staff. The Home Office’s Departmental Security Unit is satisfied that LDL recruitment and clearance procedures are robust.
There are significant safeguards in place within the SIA to ensure that decisions to award licences are taken appropriately and not open to abuse. No single individual can decide to award a licence. Two individuals must be involved in each decision—one from the SIA, who takes the ultimate decision to award a licence, and one from the LDL. These individuals are based in separate sites in different cities. Managers sample decisions taken every day to ensure that SIA procedures are followed and an external audit of decisions is also undertaken.
Nevertheless, I have asked the SIA to review urgently a targeted sample of decisions taken by any individual for whom the SIA did not have confirmed security clearance, whether or not that individual is still working for the SIA.
The Home Office’s Departmental Security Unit has advised that the SIA’s security checking procedures are now fully compliant with Home Office standards.
The Home Office will work closely with the chair and board of the SIA as they respond to the delivery review recommendations to ensure that similar problems do not arise in the future. Plans are being made for an interim chief executive to be appointed once discussions between the current chief executive and the SIA board about his imminent departure are concluded.
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