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Written Ministerial Statements

Tuesday 27 July 2010

Business, Innovation and Skills

Sheffield Forgemasters International Ltd

The Secretary of State for Business, Innovation and Skills (Vince Cable): The Government's decision to cancel the £80 million loan for a new 15,000 tonne press that had been conditionally offered to Sheffield Forgemasters by the last Government was taken on the grounds of affordability. Sheffield Forgemasters is a great British company with a dedicated, highly skilled workforce and a strong senior management team. The Government's decision is no reflection on the company's staff, directors or this particular project.

It is a worthwhile project, but when the coalition Government came into office they discovered that the previous Administration had allocated too much money across Government. In total, the previous Government approved £34 billion of new spending commitments between 1 January 2010 and the general election. It was therefore necessary to seek additional savings of £6 billion in this financial year. This meant that Ministers across the whole of Government had to take a number of very difficult decisions-cancelling the loan for a new 15,000 tonne press that had been offered to Sheffield Forgemasters was one such decision. The cancellation of the loan has not led to redundancies. In fact, the company continues to prosper.

Although the question of equity dilution had no bearing on the decision not to proceed with the loan to Forgemasters, comments made by the Prime Minister and the Deputy Prime Minister have been queried and I therefore wish to explain the position.

When giving oral evidence to the Business, Innovation and Skills Select Committee on 20 July 2010, I explained that there is an inherent problem with a relatively small company taking on a very big project. If the company finances the project with a large amount of debt it is likely to become so highly geared that its long-term viability is put at risk. If it funds the project with third-party equity, existing shareholders have to dilute their shareholding. This is not a criticism of the company, its shareholders or the project; it is simply a statement of the problem and it is something that the chief executive of Sheffield Forgemasters, Graham Honeyman, raised in an interview with the Yorkshire Post on 17 June 2010 when he made the following points:

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It is this dilution that the Prime Minister and the Deputy Prime Minister were referring to when they spoke in the House. The chief executive of Sheffield Forgemasters has confirmed that he is prepared to dilute his shareholding in the company in order to facilitate the project. However, it has also been clear that the shareholders would seek a fair price for any equity sale, and at this time their view is that their returns from growing the business organically are likely to exceed those from undertaking the 15,000 tonne press project if the purchase of the press was financed by substantial equity dilution.

On 20 July, Sheffield Forgemasters issued a statement in which the company said:

The Government understand this decision and the company's desire to focus on other projects. We have made clear that we stand ready to work closely with the company as it pursues its ambitions and we are willing to look carefully at all proposals, as we would for any project, when the future availability of public funds becomes clearer after the completion of the spending review.


Tax Policy Documents

The Exchequer Secretary to the Treasury (Mr David Gauke): The Government are today publishing nine documents relating to tax, following commitments made at the Budget. The Government set out their new approach to tax policy making at the Budget, designed to support their ambition for a more predictable, stable and simple tax system.


The publication of these documents together is consistent with the principles set out in that document; it provides businesses, tax professionals and other interested parties with comprehensive information of the Government's proposed reforms to these elements of the tax system.

Further detail on these documents is provided below. Copies of these documents are available on the tax policy discussion page of the HM Treasury website and the current consultations page of the HMRC website and have been deposited in the Libraries of both Houses.

PAYE reform

The Government today are publishing a consultation on improving the operation of "Pay As You Earn" (PAYE), which seeks views on the collection of real time information to simplify taxation and reduce burdens
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on business. It also invites views on an option for longer-term reform to improve accuracy and further reduce administrative burdens, or alternative proposals to the same end. The Government seek interested parties' views on these proposals. This document is available on the HMRC website.

Furnished holiday lettings

The Government today are publishing a consultation document on a proposal to ensure the tax rules for furnished holiday lettings meet EU legal requirements in a fiscally responsible way, by changing the eligibility thresholds and restricting the use of loss relief. The Government seek interested parties' views on the proposal set out in the document. This document is available on the HM Treasury website.

Pensions tax relief

The Government announced in the June Budget that they are considering the issue of pensions tax relief. The Government today are publishing a discussion paper setting out the range of policy issues that would need to be decided in any new regime. The Government seek interested parties' views on these issues. This document is available on the HM Treasury website.

Associated company rules

The Government today are publishing a summary of responses to the recent consultation on simplifying the associated company rules as they apply to the small profits rate of corporation tax. As announced in the June Budget, the Government will introduce the proposed legislation in Finance Bill 2011 and it will take effect from 1 April 2011. This document is available on the HM Treasury website.

Taxation of foreign branches

The Government today are publishing a discussion document on the scope of an exemption for foreign branch profits, aimed at delivering a more territorial approach to corporation tax to enhance the UK's competitiveness. The Government seek interested parties' views on the likely impacts of the proposals set out in the document and on implementation of these proposals. This document is available on the HM Treasury website.

Controlled Foreign Companies interim improvements

The Government today are publishing a short note setting out the aim and scope of CFC interim improvements together with the framework for consultation over the summer. The Government seek interested parties' views
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on the nature of these improvements, including possible options to achieve the aims set out here and potential other worthwhile improvements that should be considered. This document is available on the HM Treasury website.

Modernisation of Investment Trust Company rules

The Government today are publishing a consultation document which sets out the Government's proposals for modernising tax rules for investment trust companies, together with consequential amendments to the Companies Act by the Department for Business Innovation and Skills. The Government seek interested parties' views on the proposals for change. This document is available on the HMRC website.

Inheritance tax avoidance schemes

The Government today are publishing a consultation on legislation designed to bring inheritance tax, as it applies to the transfer of property into trust, into the disclosure regime with the objective of addressing the problem of identifying such schemes and users at an early stage. The Government seek interested parties' views on the detail of implementation. This document is available on the HMRC website.

National Minimum Wage: travel and subsistence schemes

The Government today are publishing a summary of responses to the recent consultation on travel and subsistence schemes implemented for some temporary workers paid at or near the national minimum wage (NMW). The Government have carefully considered the responses and have concluded that, on balance, action should be taken. They will amend the NMW regulations to take effect from 1 January 2011. This document is available on the HM Treasury website.

Communities and Local Government

Ministerial Hospitality

The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill): I am today publishing the details of receptions hosted by Ministers at the Department for Communities and Local Government for 2009-10.

The total cost of these receptions was £9251.19.

DateHostEventVenueNumber of Attendees


Rt Hon John Denham MP

Eid Ul-Fitr Reception (co-hosted with Foreign Secretary and Home Secretary)

Foreign and CommonwealthOffice

425 (approx)


Rt Hon John Denham MP

CLG Christmas Press Reception

House of Commons



Barbara Follett MP

A reception to recognise the work volunteers did for their communities during the severe weather in winter of 2009/10

Eland House



Shahid Malik MP

A reception to recognise the efforts of the UK International Search and Rescue Team in Haiti.

Admiralty House



Rt Hon Eric Pickles MP

External Relations Reception

Eland House



Rt Hon Grant Shapps MP

Reception with house builders

Eland House


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Zero-Carbon Homes

The Minister for Housing (Grant Shapps): The coalition programme sets out this Government's ambitions for a low-carbon and eco-friendly economy, and to be the greenest Government ever. Substantial, and cost-effective, reductions in carbon emissions from buildings will be an essential part of our effort.

Much of that reduction will come from retrofitting the existing housing stock, but new-build homes will need to play an important part. The coalition programme commits to continuous improvements in the energy efficiency of new housing. We need to make sure that our homes in future are cleaner, greener and cheaper to run from the outset. We must also meet the challenge to build more homes.

We will therefore ensure that from 2016 new homes need not add extra carbon to the atmosphere.

Our approach will balance mitigating the impact of new development in carbon terms against the viability of that development. This will involve a flexible approach which sets an ambitious level of energy efficiency and carbon compliance measures in building regulations, and enables developers and local authorities, working together, to achieve zero-carbon. The role of local authorities is central in achieving real reductions in carbon emissions, and we will ensure that they will have their say when it comes to delivering zero-carbon homes.

I am announcing today some important further steps on the route to zero-carbon.

First, I can confirm that we will introduce the minimum standard for fabric energy efficiency based on that set out in the recent consultation on the Code for Sustainable Homes. We will take this forward in the future revisions of part L of the building regulations.

Secondly, we will set a national benchmark carbon compliance standard in building regulations. I will need to be realistic and take account of costs. The Government recognise the challenges posed by the 70% level previously proposed and the case for this needs to be re-examined. Therefore, I am commissioning more work from the Zero-Carbon Hub to test what would be an appropriate level. I have asked the hub to report back on this as early as they can.

There has been considerable interest in giving developers the option to meet their further obligations through payments to fund local energy projects, possibly via an existing local tariff mechanism. We intend to explore the feasibility of this option over the coming months, including how the use of such funds for carbon abatement could complement the delivery of other types of infrastructure. We intend to ensure that local authorities have a prominent role in the design and delivery of funds that may be made available through any payment mechanism. We will work with local authorities and the house building industry to establish the precise details of any potential approach.

To respond to these challenging new standards, industry will need to develop innovative and better integrated design and building methods and technologies; methods which will not only enable them to build new and better homes, but which will make our construction industries more competitive internationally in the coming years. To support these efforts, we will continue to work
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closely with industry through bodies such as the Zero-Carbon Hub and I can confirm that we have made an allocation of £600,000 for this year to support the hub's work. We will also work with house builders to assist them in complying with these standards, and those charged with ensuring there is compliance, to ensure that energy and carbon savings are obtained.

This Government are committed to ensuring that all new homes post-2016 can be zero-carbon while ensuring that the costs of new build do not prevent appropriate and sustainable development.


Ministry of Defence Resource Accounts 2009-10

The Secretary of State for Defence (Dr Liam Fox): I am pleased to announce that I have published the Ministry of Defence's (MOD) resource accounts for 2009-10. They will provide a comprehensive overview of the Department's financial performance for the year, together with data on some specific areas of non-financial performance, including factual information on the Department's contribution towards public service agreements and departmental strategic objective targets. Copies have been placed in the Library of the House, and will be available online from the MOD's website at the following link:


Energy and Climate Change

Parliamentary Written Answer (Correction)

The Minister of State, Department of Energy and Climate Change (Gregory Barker): I would like to inform the House that a written answer I gave on 6 July 2010, Official Report, column 147-8W, UIN 5720, to the hon. Member for Hartlepool (Mr Wright), was incorrect. The hon. Member's question tabled on 2 July 2010 asked what the address is of the head office of each non-departmental public body for which his Department is responsible.

In my written answer of 6 July 2010, I provided a list of NDPBs that referred to both the Office of Nuclear Development (OND) and the Gas and Electricity Markets Authority (GEMA).

The entry that read:

should have read:

The inclusion of OND was due to OND's role in providing the secretariat for the NLFAB.

The list included the Gas and Electricity Markets Authority (GEMA). GEMA is not a non-departmental public body, but rather it is a non-ministerial Government Department.

These errors were due to inaccurate transcription from an existing internal database.

The full answer should read as follows:

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Foreign and Commonwealth Office

EU Explanatory Memoranda 9 June 2010 - 9 July 2010 (Correction)

The Minister for Europe (Mr David Lidington): I regret that the written ministerial statement given on 15 July 2010, Official Report, column 41 WS, contained a factual error:

Meetings of the Lords Select Committee on the European Union commenced on Tuesday 22 June 2010 and not on Tuesday 29 June 2010 as stated.

International Court of Justice's Advisory Opinion (Kosovo)

The Minister for Europe (Mr David Lidington): I welcome the delivery of the International Court of Justice's (ICJ) Advisory Opinion on 22 July on the accordance with international law of the unilateral declaration of independence in respect of Kosovo.

The ICJ decided, by 10 votes to four, that Kosovo's declaration of independence did not violate international law. In coming to this opinion, the ICJ considered general international law, UN Security Council resolution 1244 (1999) and the Kosovo constitutional framework.

The Government are a strong supporter of Kosovo's independence. The United Kingdom submitted arguments to the ICJ in support of the conclusion which the Court eventually reached.

The Milosevic regime's campaign of ethnic cleansing in 1999, which led to the forced exile in neighbouring countries of around half the entire Kosovo Albanian population, with thousands of deaths and other acts of brutal violence at the hands of Serbian forces, meant that Kosovo could never again be integrated back into Serbia. Kosovo has been functioning as an independent state for two and a half years and the UK holds firm in its conviction that Kosovo as a sovereign state defined by its existing borders is a positive force for stability in the Western Balkans.

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Despite differences over Kosovo's status, EU member states agree about the next steps. Kosovo's and Serbia's long term futures are in the EU. All EU member states are backing Baroness Ashton's offer to facilitate talks on matters of practical co-operation between Kosovo and Serbia. This will help both countries take steps together which will improve the lives of ordinary people of all communities and move them towards their EU future. The Government have made it absolutely clear that any attempt to encourage the partition of Kosovo or re-open status talks threatens stability in the entire Balkans region and will be strongly resisted. We believe that the Opinion's publication should mark an end to discussions on Kosovo's status.

The Government will continue to lobby for further recognitions for Kosovo. We believe that the ICJ Opinion will encourage those states who have not yet done so to recognise Kosovo.


Cancer Drugs

The Secretary of State for Health (Mr Andrew Lansley): In 2008, Professor Sir Mike Richards, National Cancer Director, was asked to lead a review of the extent and causes of international variations in drug usage and provide a report. Professor Richard' report has been in the Library of the House and copies are available to hon. Members from the Vote Office.

I would like to thank Professor Richards and his advisory group for their work on the report. They have undertaken a thorough review, which represents the most comprehensive analysis yet of the extent and potential causes of international variations in medicines usage.

The report explores the extent and causes of international variations in drug usage across 14 countries, including the United Kingdom, for a range of conditions and diseases. The report indicates that there are wide international variations in usage of most of the drugs included in the study. Although a few countries emerge as generally high or low users, there does not appear to be a uniform pattern across disease areas.

As with most of the countries studied, usage levels in the UK appear mixed when looking across the range of conditions. It does however show high levels of use in some important areas, for example of lipid-regulating drugs which are helping to prevent many deaths from cardiovascular disease.

One of the more concerning findings in the report relates to our usage of newer cancer drugs, which lags behind that of most of the countries studied. The findings in this report make it even more important that Government do everything it can to remove barriers to doctors prescribing the cancer drugs they think will help their NHS patients. In the medium term our plans to introduce value-based medicines pricing in 2014, on expiry of the current pharmaceutical price regulation scheme, will allow Government to take the initiative on access to new medicines. We will make new medicines available to NHS patients at a price that represents their
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value, rather than being restricted to recommending against the use of a new drug in the NHS due to the price its manufacturer sets.

However, we also need to act to improve access to these drugs in the meantime. As an interim measure, the coalition agreement set out our plans to establish a cancer drugs fund from April 2011, subject to the spending review outcome. The need for this fund is clearly supported by Professor Richards' findings, and we will be consulting on our plans for the fund later in the year. But the report underlines the need for action now to help NHS patients access the cancer drugs their doctors think will benefit them.

I am therefore announcing today additional funding of £50 million for this financial year to support improved access to cancer drugs. This funding, which has been found from a review of Department of Health central budgets, will be made available through clinically-led regional panels from October 2010.

This Government are committed to ensuring that cancer patients no longer have to worry about whether they will be able to get the cancer drugs their doctors recommend from the NHS.

Right to Request Social Enterprise Scheme

The Minister of State, Department of Health (Mr Paul Burstow): I will be announcing shortly the second wave of National Health Service organisations that will join the Department's "Right to Request" social enterprise scheme. Details will be placed in the Library of the House when available.

The "Right to Request" gives all primary and community care staff employed by primary care trusts (PCTs) the right to put a request to their PCT board to set up a social enterprise to deliver health and social care services. Each of these organisations has received the approval of their PCT and strategic health authority (SHA) to pursue plans to set up a social enterprise. With appropriate support, these projects should go on to become successful and financially viable social enterprises that strengthen the delivery of tailored health and social care services in the NHS.

The projects include a wide range of health and social care services, including those for children, young people and adults, and end of life, mental health and disability services. They range from single service lines to whole provider arms.

This announcement is part of the ambition set out in "Equity and Excellence: liberating the NHS":

The initiative to encourage and support social enterprises to deliver public services is the first of its kind in the world. The scheme empowers staff to harness their entrepreneurial skills and exercise leadership to improve services for local communities through social enterprise.

I am committed to supporting the creation and expansion of mutuals, co-operatives, charities and social enterprises and want to enable these groups to have much greater involvement in the running of health and social care services.

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Home Department

Control Orders

The Secretary of State for the Home Department (Mrs Theresa May): Section 14(1) of the Prevention of Terrorism Act 2005 (the 2005 Act) requires the Secretary of State to report to Parliament as soon as reasonably practicable after the end of every relevant three-month period on the exercise of the control order powers during that period.

I regret to inform the House that there was an inaccuracy in the information given in the statement entitled Control Order Powers (11 March 2010-10 June 2010) and laid before Parliament on 21 June 2010.

The statement reports that 10 of the 12 individuals subject to a control order as of 10 June 2010 were British citizens. The correct figure was that nine of the 12 individuals subject to a control order were British citizens.

Criminal Records Bureau (Annual Report)

The Parliamentary Under-Secretary of State for the Home Department (Lynne Featherstone): I announce that the 2009-10 annual report and accounts for the Criminal Records Bureau has been laid before the House today and published on the CRB website. Copies will be available in the Vote Office.

Licensing Consultation

The Secretary of State for the Home Department (Mrs Theresa May): On Wednesday 28 July the Home Office will be publishing a public consultation on proposals to overhaul the Licensing Act.

In the coalition agreement, the Government set out a clear programme of reform around alcohol licensing to tackle the crime and antisocial behaviour that is too often associated with binge drinking in the night-time economy. In particular, the Government set out the following commitments which are covered in this consultation.

While we recognise the important role which pubs can play as part of the fabric of neighbourhoods and communities, the introduction of the Licensing Act in 2005 has not brought with it a vibrant "café culture". Too often on a Friday and Saturday night, the police and local A&E departments bear the brunt of some of the worst excesses of binge drinking and alcohol-fuelled crime and disorder. We are determined to change this, and will be proposing to introduce more flexibility into
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the current licensing regime to allow local authorities and the police to clamp down on alcohol-related crime and disorder hot spots within local night-time economies.

The consultation document will be available on the Home Office website and printed copies will also be available in the Vote Office.

Scientific Procedures on Living Animals

The Parliamentary Under-Secretary of State for the Home Department (Lynne Featherstone): The statistics of "Scientific Procedures on Living Animals-Great Britain-2009" (HC 317), was laid before the House today. Copies will be available in the Vote office.

This annual statistical report meets the requirement in the Animals (Scientific Procedures) Act 1986 to inform Parliament about the licensed use of animals for experimental or other scientific purposes. It also forms the basis for meeting periodic reporting requirements at EU level. Supplementary information with additional tables is also available on the Home Office website.

The statistical report shows an overall decrease of 36,540 (-1%) in the number of procedures started, from 3,656,080 in 2008 to 3,619,540 in 2009. This fall followed six previous annual increases and is the second highest total since the current method of recording was introduced in 1987. A number of factors, such as investment in research and development and strategic funding priorities, determine the overall level of scientific procedures.

The Home Office, as regulatory authority under the 1986 Act, ensures that its provisions are rigorously applied and only authorises work that is scientifically justified and minimises the numbers of animals used and the animal suffering that may be caused.

The statistical report and supplementary information can be found at:

I am also pleased to inform the House that I have today placed in the Library the annual report of the "Home Office Animals Scientific Procedures Division and Inspectorate" for the year 2009.

Publication of the report honours a commitment given in response to a recommendation of the House of Lords Select Committee on Animals in Scientific Procedures in July 2002 that more information should be made available about the implementation of the Animals (Scientific Procedures) Act 1986.

Earlier annual reports focused on the work of the Animals Scientific Procedures Inspectorate. The report for 2009 is the second in which the work of the Animals Scientific Procedures Division licensing and policy teams has also been included.

As in previous years, the report explains what Home Office inspectors do and how they do it and the inspectorate's role in assessing and advising on applications for personal and project licences and certificates of designation under the Animals (Scientific Procedures) Act 1986 and reporting non-compliance.

The report also explains how the Animals Scientific Procedures Division and Inspectorate have continued to work towards delivering a better regulation programme to improve regulation of animal experimentation; reports
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on the successful outcome of the Hampton review of their regulatory performance conducted in 2009; and provides further information on the negotiation of a revised European Directive to replace European Union Directive 86/609/EEC on which the Animals (Scientific Procedures) Act 1986 is based.

Prime Minister

National Security Vetting

The Prime Minister (Mr David Cameron): National security vetting is a critically important control for protecting UK interests. It is important for our domestic security, for the protection of sensitive information, and for the protection of critical sites and individuals assessed to be at risk from terrorism. It facilitates information sharing with international partners, and defence and intelligence co-operation.

Vetting arrangements should be as transparent as national security considerations allow. Consequently, a copy of "HMG Personnel Security Controls" has been placed in the Library. This describes the vetting checks that may be made in order to safeguard national security. It describes a renewed emphasis upon a proportionate approach to vetting in terms of the application and decision-making process, to ensure that vulnerabilities are properly managed, subjective judgments are not made, and grievances can be heard. This statement replaces the Statement of Vetting Policy made on 15 December 1994, Official Report, columns 764-766W.

Intelligence-Gathering Techniques

The Prime Minister (Mr David Cameron): The annual reports of the Chief Surveillance Commissioner, the right hon. Sir Christopher Rose, (HC 168), the Interception of Communications Commissioner, the right hon. Sir Paul Kennedy, (HC 341), and the Intelligence Services Commissioner, the right hon. Sir Peter Gibson, (HC 342) have today been laid before both Houses of Parliament.

There is, rightly, a considerable level of public interest in the use by public authorities of covert intelligence-gathering techniques. The Government are committed to ensuring that public authorities only use these powers when it is necessary and proportionate to do so. The commissioners play an important role in monitoring the use of these powers by public authorities, and ensuring compliance.

It is regrettable that systematic failings have been noted by the Interception of Communications Commissioner in some prison establishments, and that a small number of errors have occurred elsewhere. As the commissioners themselves make clear, the details of these incidents cannot be disclosed publicly for security reasons. Following the practice of many years, my right hon. Friends the Secretaries of State for the Home Department, Foreign and Commonwealth Affairs, Northern Ireland and Defence have been provided by the commissioners with a detailed description of and explanation for these errors. The Government are satisfied that appropriate action has been taken to address these failings.

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I extend my thanks to Sir Christopher, Sir Paul and Sir Peter, and to their staff, for their work on these reports.

Work and Pensions

Employment Support (Disabled People)

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): Today the Government are reaffirming their clear commitment to disabled people by launching a new programme to provide support for severely disabled people. The new programme, currently called Work Choice, will be introduced from 25 October 2010. It will sit alongside the Work Programme and will help into work disabled people who face the most complex and long-term barriers to employment and who may require high intensity support in the workplace.

Nearly half of all disabled people work and many more want to work but have not had the right support. Work Choice will provide that support for more severely disabled people who want to move into employment. It
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will replace the existing confusing array of DWP specialist disability employment provision (WORKSTEP, Work Preparation and the Job Introduction Scheme) across England, Scotland and Wales.

Work Choice will greatly improve upon the effectiveness of current provision by tailoring support to the needs of each severely disabled individual to help move them into and stay in long-term sustainable jobs.

Reform in this sector is long overdue. In the past, provision has been patchy with a fragmented network of providers. Work Choice will simplify the current overlapping set of programmes and will reduce the number of provider contracts from more than 200 to just 28.

Work Choice has been developed in close consultation with providers, disability groups and disabled people and has widespread support.

Work has been ongoing since the coalition Government took office to ensure continuity of support. We are making this announcement now to ensure that all providers are able to prepare fully to deliver the programme from October.

We will now proceed to contract with the successful bidders for the Work Choice programme.

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