26 Mar 2013 : Column 75WS

26 Mar 2013 : Column 75WS

Written Ministerial Statements

Tuesday 26 March 2013


Double Taxation Agreement (UK/Albania)

The Exchequer Secretary to the Treasury (Mr David Gauke): A first time double taxation agreement with the Republic of Albania was signed on 26 March 2013. The text of the agreement has been deposited in the Libraries of both Houses and made available on HM Revenue and Customs website. The text will be scheduled to draft Orders in Council and laid before the House of Commons in due course.

Environmental Taxation

The Economic Secretary to the Treasury (Sajid Javid): This Government are reforming the tax system to make it more competitive, simpler, fairer, and greener. As part

26 Mar 2013 : Column 76WS

of this, in May 2010 Government committed to increasing the proportion of tax revenue accounted for by environmental taxes.

Last summer, the Government published their definition of environmental taxes which set the baseline for achieving that commitment. This statement provides an update of the Government’s progress against that commitment, using the independent OBR forecasts published alongside the Budget. To provide greater clarity the Government will also publish similar summaries of progress each year until the end of this Parliament.

The Government classify environmental taxes as those that meet all of the following three principles:

The tax is explicitly linked to the Government’s environmental objectives;

The primary objective of the tax is to encourage environmentally positive behaviour change; and

The tax is structured in relation to environmental objectives (for example: the more polluting the behaviour, the greater the tax levied).

The Government have defined the following as environmental taxes based on these principles:

Climate Change Levy

Aggregates Levy

Landfill Tax

EU Emissions Trading System (EU ETS)

Carbon Reduction Commitment Energy Efficiency Scheme

Carbon Price Floor

The OBR forecasts demonstrate that the coalition remains on track to achieve its commitment to increase the proportion of revenue accounted for by environmental taxes.

TaxActual Revenue Raise 2010/11Actual Revenue Raise 2011/12Revenue forecast 2012/13Revenue forecast 2013/14Revenue forecast 2014/15Revenue forecast 2015/16Revenue forecast 2016/17Revenue forecast 2017/18

Climate Change Levy and Carbon Price Floor

£0.7 bn

£0.7 bn

£0.6 bn

£0.3 bn

£1.9 bn

£2.4 bn

£2.5 bn

£2.5 bn

Aggregate Levy

£0.3 bn

£0.3 bn

£0.3 bn

£0.3 bn

£0.3 bn

£0.3 bn

£0.3 bn

£0.3 bn

Landfill Tax

£1.1 bn

£1.1 bn

£1.1 bn

£1.0 bn

£1.1 bn

£1.2 bn

£1.1 bn

£1.2 bn


£0.5 bn

£0.2 bn

£0.3 bn

£0.7 bn

£0.7 bn

£0.8 bn

£0.8 bn

£0.9 bn

Carbon Reduction Commitment

£0.0 bn

£0.7 bn

£0.7 bn

£0.7 bn

£0.9 bn

£0.9 bn

£1.0 bn

£1.0 bn


£2.5 bn

£3.0 bn

£3.1 bn

£4.0 bn

£4.9 bn

£5.6 bn

£5.7 bn

£5.9 bn


Total Revenue from Environmental Taxes

£2.5 bn

£3.0 bn

£3.1 bn

£4.0 bn

£4.9 bn

£5.6 bn

£5.7 bn

£5.9 bn

Total Tax Forecast Receipts

£551.4 bn

£572.6 bn

£586.8 bn

£612.4 bn

£633.1 bn

£657.6 bn

£694.1 bn

£723.0 bn

Proportion of Total Tax Receipts

£0.5 bn

£0.5 bn

£0.5 bn

£0.7 bn

£0.8 bn

£0.8 bn

£0.8 bn

£0.8 bn

Revenue Raising Taxes & Fiscal Instruments with Environmental Benefits

These are taxes and fiscal instruments which are primarily designed to raise revenue or to achieve other objectives, and therefore do not qualify as environmental taxes on the basis of the Government’s three principles.

Differentiating environmental taxes from taxes which are designed to achieve other objectives provides greater clarity and transparency to the Government’s overall tax strategy. However, non-environmental instruments may have an environmental impact due to behavioural change. On that basis, the Government believe that it is

26 Mar 2013 : Column 77WS

important to make reference to transport taxes, levies and exemptions/reliefs in its overall assessment of environmental taxation.

Budget 2013 made several announcements that will act to sharpen the environmental signals of non-environmental taxes, including:

Ultra Low Emissions VehiclesBudget 2013 announced a £100 million package to support the purchase and manufacture of Ultra Low Emission Vehicles (ULEVs) in the UK through company car tax (CCT) and the capital allowances regime. Government are guaranteeing reduced rates of CCT for ULEVs until 2020; and extending the 100% first year allowance for ULEVs until 2018.

Enhanced capital allowances: energy-saving and water-efficient technologiesThe list of designated energy-saving and water-efficient technologies qualifying for enhanced capital allowances will be updated during summer 2013, ensuring the most efficient technologies continue to be targeted.

Capital allowances: railway assets and shipsBudget 2013 announced the extension of first year allowances (including enhanced capital allowances for energy-saving and water-efficient technologies) to expenditure on railway assets and ships from April 2013.

VED: Reduced Pollution Certificates (RPCs)Budget 2013 announced that the Government will end RPC Vehicle Excise Duty discounts for Euro I-III vehicles within the HGV Road User Levy scheme from 1 April 2014, and for all other Euro I-III vehicles from 1 April 2016.

Business, Innovation and Skills

Companies House Public Targets 2013-14

The Minister of State, Department for Business, Innovation and Skills (Michael Fallon): I have set Companies House the following targets for the year 2013-14:

Public TargetProposed2013-14 Target

Achieve a score of more than 86% in our customer satisfaction survey


To achieve an average compliance level for accounts of 99%


To achieve an average compliance level for annual returns of 98%


Resolve complaints within five days


WebFiling services are available 99.7% of the time


Software filing services are available 99.7% of the time


Companies House Direct Service is available 99.7% of the time


WebCHeck service is available 99.7% of the time


Document images ordered by search customers are available in the Companies House Direct download area within 35 seconds (new target)


CEO to respond to all letters from MPs delegated to him to reply within 10 working days of receipt



Electronic transactions received are available to view on the public record (image format) within 48 hours (new target)


26 Mar 2013 : Column 78WS

Images placed on Companies House image system are legible and complete


To achieve an average electronic filing target for accounts


To achieve an average electronic filing target for all other transactions


Reduce carbon emissions by 2%, based on the previous financial year



Ensure that the average work days lost per person is no more than <8.5 days



To achieve taking one year with another, a 3.5% average rate of return based on the operating surplus expressed as a percentage of average net assets


Achieve by 2013-14 a reduction, in real terms, of 15% compared to 2010-11 in the operational monetary cost of the organisations operational costs (2nd year of a 3-year target)


Payment of invoices within 5 days of receipt


Contingencies Fund Advance 2013-14

The Secretary of State for Business, Innovation and Skills (Vince Cable): The Department for Business, Innovation and Skills wishes to recruit five non-executive directors and three executive directors to the proposed Competition and Markets Authority (CMA) before Royal Assent has been received for the Enterprise and Regulatory Reform Bill which will create the CMA, a new non-ministerial department later this year.

The new board together with Lord Currie CMA chair designate and Alex Chisholm CEO designate will play a critical role in driving forward the creation of the CMA. To ensure a smooth transition process the board will need to take early decisions on key areas such as operation structure and governance. When making these decisions, they will need to consider how the CMA will achieve greater coherence in competition practice, deliver a more streamlined approach to case handling and decision making, and creating an effective, high-impact competition regime, in order that the CMA fully delivers the benefits envisaged by Government.

Parliamentary approval for resource cover of £58,000 for this new service will be sought in an estimate for the Department for Business, Innovation and Skills. Pending that approval, urgent expenditure estimated at £58,000 will be met by repayable cash advances from the contingencies fund.

Land Registry

The Minister of State, Department for Business, Innovation and Skills (Michael Fallon): The Land Registry vision is:

“To be recognised as a world leader in the digital delivery of land registration services and in the management and re use of land and property data”.

26 Mar 2013 : Column 79WS

To meet this vision, the following four strategic objectives have been adopted with associated key performance indicators and objectives, plus two equality objectives:


We will unlock efficiency in the public sector and land and property market

Strategic Milestones

(E1) Run the operational budget with real term efficiency and business strategy reduction of 3.2%

(E2) Increase the number of substantive dealing applications lodged electronically by 11% to achieve 44% electronic dealing delivery by March 2014

(E3) Develop a prototype Local Land Charges register, evaluate it and complete a report to Ministers by March 2014, with recommendations for the next steps towards a new Local Land Charges Service

Key Performance Indicator

(E4) Substantive registrations completed within an average of seven working days

(E5) 5% reduction in carbon emissions on 2012-13


We will maximise the reuse of our data for the benefit of the wider economy

Strategic milestones

(D1) release additional licensable data sets by 31 March 2014

(D2) Develop an online facility able to provide easy access for customers to licensable data by 31 March 2014

(D3) Release two additional data sets to W3 standard level 4 by 31 March 2014.

Key Performance Indicators

(d4) Average external e-service availability at 99.6% or higher during published service hours


We will increase and extend the assurance and compliance provided to the market

Strategic Milestones

(A1) The percentage of customers who rate our overall service as good, very good or excellent to achieve 96%.

(A2) To achieve a Net Promoter Score (NPS) of 50

(A3) Introduce a free property alert service launched by 30 September 2013

Key Performance Indicators

(a4) Substantive registrations to pass at least 98% of defined quality checks


We will grow and maximise the benefit of our organisational capability

Strategic Milestones

(C1) We will be in the third quartile of Whitehall departments for staff engagement by the end of 2013-14

Key Performance Indicator

(C2) Introduce Performance and Innovation (LEAN) techniques to the management teams in each directorate and local office by 31 March 2014

Equality Objectives

a) Internal equality objective

To drive a culture of inclusion and respect within our organisation and positively seek to improve engagement of staff who share protected characteristics.

b) External equality objective

To equip our staff to identify, anticipate and satisfy our customers’ diverse needs by delivering products, services and channels at a cost we can both afford.

26 Mar 2013 : Column 80WS

Note: we will assess our achievement against these two equality objectives by monitoring how well we progress in implementing the supporting action plans.

Student Loan Book Sale

The Secretary of State for Business, Innovation and Skills (Vince Cable): I am today announcing that the remaining publicly owned mortgage-style student loan book will be offered for sale by the Government under the Education (Student Loans) Act 1990 as amended by the Education (Student Loans) Act 1998. The sale will take place in conjunction with the Scottish Government, the Department for Employment and Learning in Northern Ireland and the Student Loans Company.

Mortgage-style loans were available to eligible higher education students who were enrolled between 1990 and 1998. Borrowers are required to repay in fixed monthly instalments over a defined period, typically five or seven years. Interest is charged at a rate equivalent to the retail prices index. Repayments can be deferred for a year at a time if a borrower’s income is below the threshold, which is 85% of the national average earnings. Currently the threshold is £27,813. There will be no change to borrowers’ terms and conditions as a result of the sale.

The Scottish Government and the Northern Ireland Executive are responsible for loans issued by those respective Administrations and both have agreed the sale. English and Welsh loans are the responsibility of the Department for Business, Innovation and Skills.

There were two previous sales of mortgage-style loans in 1998 and 1999. The remaining loans owned by the Government are mostly either in deferment or in arrears, so total annual repayments are low.

The loans to be offered for sale have a face value of around £900 million but, due to the low level of repayments in relation to the loan book, the market value will likely be significantly lower. The Government recognise that the private sector may improve the collection of repayments using their expertise. Additionally, they will provide operational benefits to the Student Loans Company (SLC) as the significant majority of the administration is transferred to the buyer. This sale will reduce public sector net debt and forms part of a wider effort to maximise the value of Government assets.

We will be assessing all potential buyers against a strict set of criteria and a sale will only proceed if value for money for the taxpayer and borrower protections consistent with the law are assured. The sale will not include any income contingent repayment (ICR) loans, therefore no current students or borrowers who solely took out an ICR loan after September 1998 will be affected.

More details of the sale will be published by BIS in due course.

“Nuclear Industry Strategy”

The Secretary of State for Business, Innovation and Skills (Vince Cable): The Government have today published “Nuclear Industrial Strategy”, which has been produced in consultation with industry and other interested stakeholders.

26 Mar 2013 : Column 81WS

I set out last September the Government’s new industrial strategy. This is a long-term, whole-government approach, with partnership with industry at its heart. Its purpose is to establish a clear and consistent approach to the challenges and opportunities that lie ahead, with a view to stimulating economic growth and creating jobs.

Part of the industrial strategy is about supporting successful sectors. Today’s nuclear strategy is one of several sector strategies we will be developing between now and the summer in partnership with industry; and this is one of three that focuses on energy industries, the others being offshore wind and oil and gas.

The nuclear market provides significant opportunities for economic growth, with industry indicating that the UK new build programme (around 16GW) equates to investment of circa £60 billion, which could support an estimated 30,000 jobs(1). Globally, investment in new nuclear power stations is projected to be £930 billion by 2030(2). And the global decommissioning market is estimated to grow to a value of £50 billion per annum by 2020.

Nuclear power has the potential to play an increasing role in meeting the UK’s future energy needs. It is a source of low-carbon energy and can contribute to the UK’s energy mix and security of supply longer term. This strategy—like those for offshore wind and oil and gas—will achieve a more effective alignment and integration of energy and industrial policy to enable the UK to deliver competitive energy technologies in future, with significant input from UK-based industry.

The strategy builds on much of the work that was undertaken last year in preparing a response to the House of Lords’ Science and Technology Select Committee inquiry into the UK’s nuclear R and D capabilities. That response is also published today with the nuclear industrial strategy, and consists of:

A “Long Term Nuclear Energy Strategy”, which sets out the Government’s vision for nuclear energy, and its potential role in contributing to the UK’s future energy mix from the near term and up to 2050.

A nuclear “Industry Vision Statement”, which expresses the nuclear industry’s own ambitions for the future in the key areas of the nuclear new build programme, fuel cycle service, waste management and decommissioning, and operations and maintenance.

A nuclear R and D landscape review, which provides an assessment of current civil nuclear R and D capability.

A nuclear R and D road map, which provides an analysis of different scenarios for nuclear power up to 2050, and the R and D activities associated with those scenarios.

These different work streams were guided by an ad hoc nuclear R and D advisory board, chaired by the Government’s chief scientific adviser, Sir John Beddington. The ad hoc advisory board made its own recommendations based on those work streams, which the nuclear industrial strategy seeks to address.

The strategy is also linked to the separate nuclear supply chain action plan that was published in December 2012. The implementation of the action plan will be co-ordinated with the work taken forward under the strategy.

The nuclear industrial strategy has been prepared at a time when important decisions are in prospect about building new nuclear power stations in the UK—the first new build for nearly 20 years. The scale and timing of the nuclear new build programme will depend on a number of factors, such as the competitiveness of nuclear

26 Mar 2013 : Column 82WS

energy compared to other technologies and attracting significant levels of investment.

The strategy also covers the many other parts of the nuclear industry that offer considerable opportunities for effective long-term collaboration between Government, industry and the research community. That includes handling waste management and decommissioning—already a significant area of industrial activity, which is managed by the Nuclear Decommissioning Authority.

It also includes fuel cycle services, waste management and decommissioning, operations and maintenance as well as establishing effective links between the research community and industry, which can help inform research priorities and identify opportunities for commercial spin-offs.

A new Nuclear Industry Council has been established to provide strategic oversight of the implementation of the strategy, and consists of a membership that reflects the diversity of the industry. The Government will work closely with the new council and ensure the strategy provides the basis for making a real impact of benefit to the UK.

A copy of the “Nuclear Industry Strategy”, and the other documents mentioned above, have been placed in the Library of the House.

(1) Nuclear Industry Association Capability Report 2012

(2) The World Nuclear Supply Chain: Outlook 2030, September 2012

National Measurement Office

The Minister for Universities and Science (Mr David Willetts): I have tasked the National Measurement Office to provide policy support to Ministers on measurement issues and a measurement infrastructure which enables innovation and growth, promotes trade and facilitates fair competition and the protection of consumers, health and the environment.

I have agreed with the NMO that its objectives for 2013-2016 will be to:

Increase economic growth, innovation and social impact through a world-class scientific measurement infrastructure.

Promote competition and fair trading both in the UK and at the global level through a modern weights and measures and hallmarking regime.

Provide good value-for-money metrology services.

Protect the interests of the public, business and the environment by enforcing relevant legislation.

The agency will also be expected to provide professional, value-for-money corporate services that contribute to agency objectives, align with cross-Government initiatives, promote good and informed decision making, ensure accountable governance and provide effective channels of communication.

In support of these objectives I have set as specific ministerial targets the following for 2013-14:

Improve performance of the NMS programmes over the corporate plan period 2011-12 to 2014-15 as measured by the value scorecard developed for this purpose.

Support business by ensuring a minimum of 95% of meter examiner appointments, manufacturer authorisations/consents and modifications to meter approval and decisions are made within five business days of receipt of all necessary documentation.

26 Mar 2013 : Column 83WS

Achieve a satisfaction rating among certification service customers of at least 95% for customers scoring satisfied or above, with at least 60% scoring “very satisfied”.

Achieve an increase in income of at least 5% for certification services from the 2012-13 financial year.

Generate at least a positive 3:1 net contribution to consumers and the environment as well as the low-carbon economy through the activities of the enforcement authority.

Reduce non-ring-fenced administration costs by at least 14% in cash terms over the corporate plan period 2011-12 to 2014-15.

Ensure that reduced contributions from BIS towards overheads are absorbed without any increase in per capita overhead rate.

Reduce NPL energy consumption in 2013 calendar year by 5% from 2012 calendar year.

Agree by 31 March 2014 the partners who will work with Government on NPL and the model under which the partnership will operate post-March 2014.

Low Pay Commission

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson): On 10 July 2012 the Minister of State, Department of Health, my hon. Friend the Member for North Norfolk (Norman Lamb), former Minister for Employment Relations, Consumer and Postal Affairs announced the commencement of the triennial review of the Low Pay Commission (LPC). I am now pleased to announce the completion of the review.

The Low Pay Commission is a statutory body which plays an important role providing independent advice to Government about the national minimum wage.

The review concludes that the functions performed by the Low Pay Commission are still required and that it should be retained as an advisory non-departmental public body (NDPB). The review also looked at the governance arrangements for LPC in line with guidance on good corporate governance set out by the Cabinet Office. The report makes some recommendations in this respect; these will be implemented shortly.

The full report of the review of the LPC can be found on the Gov.uk website and copies have been placed in the Libraries of both Houses.

Cabinet Office

Ministerial Pensions

The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude): In the spending review 2010, the Government announced their intention to increase employee contributions in public service pension schemes. This followed on from Lord Hutton’s interim report on public service pensions(1) which concluded that there was a clear rationale for public servants to make a greater contribution if their pensions were to remain fair to taxpayers and employees and affordable for the country.

26 Mar 2013 : Column 84WS

The ministerial pension scheme was not covered by Lord Hutton’s recommendations, but I consider it appropriate that its members face similar changes.

In 2012-13 pension contributions were increased in a similar way as applied to other public service pension schemes, and further increases for 2013-14 will apply from 1 April 2013. This will mean that:

Secretaries of State, the Leader of the Opposition in the Commons and Mr Speaker in the House of Lords will pay an additional 2.4 percentage points of pay, and a total of 4.8% higher than 2011-12;

Ministers of State, the Government Chief Whip, the Leader of the Opposition in the Lords, the Chairman of Committees of the House of Lords and the Deputy Chairman of Committees of the House of Lords will pay an additional 1.6 percentage points of pay and a total of 3.2% higher than 2011-12; and

Parliamentary-Under Secretaries, the Government Whips and Opposition Whips will pay an additional 1 percentage point of pay and a total of 2% higher than 2011-12.

In line with other public service schemes, a further consultation will take place on the contribution increases for members of the ministerial pension scheme in 2014-15. Before these increases are implemented, I will consider any evidence of opt-outs from the scheme in line with the Government’s commitment given by the Chief Secretary to the Treasury.

Ministers in the House of Commons make separate contributions towards their pensions as Members of Parliament. Responsibility for the setting of pension provision for MPs is the responsibility of the Independent Parliamentary Standards Authority.

The details of the new scheme have been laid before the House, along with a copy of the response to the consultation from the Chairman of the Parliamentary Contributory Pension Fund Trustees.

(1)Independent Public Service Pensions Commission: Interim Report 7 October 2010. http://www.hm-treasury.gov.uk/d/hutton_pensions.htm chapter 8.

Communities and Local Government

2014 Local Elections

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): Elections to the European Parliament will be held in the spring of 2014 and are currently scheduled to be held on 5-8 June, unless the Council of the European Union unanimously acts to change the date. In order to accommodate the Pentecost holiday in 2014, the Council has proposed moving the date of the 2014 European parliamentary elections to 22-25 May. The European Parliament will be consulted on this amendment before the Council formally adopts a decision to change the dates, which will mean that for the United Kingdom elections to the European Parliament would be held on Thursday 22 May. Local elections are currently due to be held on Thursday 1 May. This would potentially mean two sets of elections taking place within three weeks of each other.

Given this, I am today publishing a consultation document inviting views about moving the date of the local elections from 1 May 2014. The document is

26 Mar 2013 : Column 85WS

available on the Government website, and I have also placed copies in the Library of the House. While we are specifically inviting the views of councils and political parties and certain other consultees listed in the document, comments from all are welcomed. The consultation ends on 13 May 2013.

Firebuy Ltd

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): I have today deposited in the Library of the House a copy of the annual report and accounts of Firebuy Ltd for the financial years 2010 to 2012.

Firebuy Ltd was an Executive non-departmental public body sponsored by the Department for Communities and Local Government. It was a public policy failure of the last Administration, on top of the failed FireControl programme. In October 2010 it was announced that Firebuy was closing as part of the Government’s wider review of arm’s length bodies. It went into voluntary liquidation and ceased trading on 13 July 2011.

These accounts have been produced to report to Parliament for the expenditure incurred between 1 April 2010 to 13 July 2011 when Firebuy entered into liquidation and for all subsequent transactions up to 31 March 2012. In doing so my Department is fulfilling its intention to produce the accounts on Firebuy’s behalf in order to meet our commitments within managing public money and to be open and transparent.

The directors of Firebuy were discharged prior to completion of these accounts in order to allow Firebuy to enter into liquidation and close. Retaining the directors while these accounts were being produced would have delayed closure and incurred additional costs to the public purse in respect of an organisation that had failed to deliver value for money. By closing Firebuy the Department has saved over £1 million per annum.

We will be taking forward the lessons learnt from Firebuy’s operation (and the closure process) within my Department as well as disseminating across Whitehall.

Ultimately procurement is a matter for fire and rescue authorities to lead on based on their individual requirements. They are best placed to develop relevant models that ensure best practice standards are adopted as appropriate, so that the financial and efficiency benefits of inter- operability and collaborative procurement can be realised. Like other public bodies, fire and rescue authorities are encouraged to update the publicly available “Contracts Finder” with details of upcoming procurement to allow suppliers to access these opportunities and promote joined-up procurement.

Energy and Climate Change

Electricity Market Reform (Contingencies Fund)

The Secretary of State for Energy and Climate Change (Mr Edward Davey): The Department for Energy and Climate Change requires a cash advance of £6,580,000 from the Contingencies Fund for financial year 2013-14,

26 Mar 2013 : Column 86WS

to support urgent preparatory work to set up a contracts for difference (CFD) counterparty; to fund a panel of technical experts; and to fund external advisers in relation to transitional arrangements for early investors before parliamentary approval of both the specific enabling legislation and the necessary estimate.

Contracts for difference (CFDS) are designed to ensure sufficient investment comes forward in time to replace old generating plant due to close from 2016 onwards with new low-carbon plant, thus ensuring continued security of supply for the UK and contributing significantly towards achievement of our legally binding EU renewable energy target.

The Energy Bill will, subject to Royal Assent, provide for the establishment of a CFD counterparty. Work needs to commence now in order to ensure that the CFD counterparty is ready to sign and manage contracts for difference from mid-2014.

The Energy Bill also makes provision for transitional arrangements to enable developers to take investment decisions, where required, ahead of full implementation of electricity market reform. The Department needs to engage external advisers before the Bill receives Royal Assent to support the negotiation of any such arrangements to ensure they represent value for money for consumers.

Government have committed to setting up a panel of technical experts in order to scrutinise the analysis that will inform the first electricity market reform delivery plan. The first EMR delivery plan will be published in 2013 and set out the CFD strike prices for renewable technologies and the reliability standard for a capacity market. An advance is required to pay the panel for this work.

Accordingly, parliamentary approval for additional resources of £6,580,000 for this new service will be sought in an estimate for the Department of Energy and Climate Change. Pending that approval, urgent expenditure estimated at £6,580,000 will be met by repayable cash advances from the Contingencies Fund.

Low Carbon and Renewable Heat

The Secretary of State for Energy and Climate Change (Mr Edward Davey): I am pleased to announce today the publication of DECC’s heat policy document “The Future of Heating: Meeting the Challenge”. I am also announcing the next steps for supporting renewable heating through the renewable heat incentive (RHI).

Heating is an integral and critical part of our lives and our economy, worth billions of pounds to industry and an essential element of all of our lives. The vast majority of heating is currently supplied by fossil fuels, comprising around a third of the UK’s total greenhouse gas emissions, and more than half of the UK’s natural gas usage.

We need a strategic plan if we are to change the way we heat our homes, businesses and industry in the decades ahead to meet our carbon emissions targets. That is why in March last year I published a vision for low-carbon heat. I made a commitment to produce a follow-up paper setting out policies and actions to help make the vision a reality. Today I am delivering on that commitment.

26 Mar 2013 : Column 87WS

Today’s publication deals systematically with all the different heating requirements in the UK; and commits us to clear steps forward. To meet our long-term climate change target, we are going to have to change the way we generate, distribute and use heat in buildings and industry. This needs to be delivered in a way that is fair and affordable, and maximises benefits to the economy in terms of jobs, growth and investment. My Department has been engaging with a range of organisations in the public and private sectors, from business to consumer organisations, from local authorities to research establishments to develop these new proposals.

Last year’s document contained questions to which we received over 150 responses covering the domestic, commercial and industrial sectors. I would like to thank all those who submitted a formal response.

Heat for industry

I believe that there is a great opportunity for UK industry to become more efficient, save carbon and prosper in a low-carbon future, provided it looks ahead and prepares now. Different industry sectors face very different challenges. The key to greater efficiency and lower emissions lies in the nature of the particular industrial processes employed in each sector.

So with the Department for Business, Innovation and Skills, my Department will work with industry over the next two years to develop a low-carbon “road map” for each industrial sector for the long term, focusing on the sectors that use the greatest amount of heat and represent the greatest carbon emissions. Through closer working with the companies themselves, we aim to understand more about how energy is used in each of these sectors and how it can be decarbonised.

Heat networks

Heat networks will be an important part of our low-carbon future—with the potential to provide heat to dense urban areas at a lower cost and with lower emissions. I am today announcing support to promote their deployment. To overcome the initial hurdle of heat network development, DECC will provide £6 million over the next two years. This will help authorities to carry out heat network planning and development, bringing forward projects to the stage where they are suitable for investment by the green investment bank and commercial lenders.

I will also establish a heat networks delivery unit to support local authorities in developing heat networks. This added capacity and expertise will supplement project teams in individual authorities—by sharing best practice, and identifying and tackling barriers to development to deliver a step change in heat network deployment.

Renewable heat incentive

The Government continue to make progress towards finalising all the details of the domestic RHI scheme and the expansion of the non-domestic RHI—the first scheme of its kind in the world. We intend to announce the final details of the domestic and expansions to the non-domestic RHI in summer 2013 and open the schemes for payment from spring 2014. To provide continued support to the domestic renewable heat market in the interim period we will extend the renewable heat premium payment scheme for a further year to March 2014 with the same level of support as in 2012-13. This will not affect current application deadlines, but will allow for new applications to come forwards.

26 Mar 2013 : Column 88WS

The non-domestic RHI has been available for just over one year. In response to uptake of the policy and stakeholder feedback, my Department has looked at the evidence on the cost data and heat usage assumptions used to set the level of tariffs when the scheme was launched, alongside the level of uptake so far under the scheme. I concluded that some new input assumptions should now be adopted and my Department is working to identify what impacts this will have on tariffs. Later this spring, I propose to launch a short consultation on some tariff changes and to confirm our decisions in the autumn. We are progressing this work as quickly as possible. Subject to the necessary approvals and acceptable modelling outputs, I expect the outcome of this review to come into force by spring 2014. Where tariffs increase as a result of this review, it is DECC’s intention that installations accredited from 21 January 2013—when the early tariff review was first announced—would also benefit from that increase.

Where there is compelling evidence, I expect to consult on increased tariffs for some technologies and to leave other tariffs unchanged via this review process. The degression mechanism the Government announced in February will be used to reduce tariffs if required, according to our policy for budget management. Where we consulted on introducing new technologies into the scheme in September, we will provide an update on modelled tariffs as part of the consultation. However, decisions on their inclusion in the scheme and the final tariff level will be announced in the summer in the Government’s response to the September 2012 consultation.

The tariffs and technologies affected are summarised on the DECC website.

Business, Innovation and Skills

Agriculture and Fisheries Council

The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson): I attended the Agriculture and Fisheries Council on 18 and 19 March in Brussels. Richard Lochhead MSP and Michelle O’Neil MLA also attended.

The main business of the Council was to agree Council’s position on the four regulations which set out the rules for the common agricultural policy (CAP) over the 2014-20 financial period; and agreement was reached on this late on Tuesday evening.

I am pleased to report that many of the key negotiating objectives for the UK were secured. I worked closely with all the devolved Administrations, and as a result we successfully secured key changes to address concerns for Northern Ireland, Scotland and Wales on issues such as internal convergence—the rules governing the move from historically based to area-based payments for those regions which have not already achieved that transition—and the designation of areas of natural constraint; and in particular, a change which was designed to clarify that implementation decisions on all aspects of the CAP can be taken at regional level. We will continue to represent the interests of the whole of the

26 Mar 2013 : Column 89WS

UK throughout the continuing discussions on the legislation, and in the negotiations between the Council and the European Parliament.

I made it clear that the Commission’s proposed “greening” of the CAP, which will involve part of the subsidy envelope being paid on the basis of compliance with environmental measures, should be delivered through a simple system, to achieve environmental benefits without imposing unnecessary costs on farmers, and to secure value for taxpayers. Council agreed to include an option for member states to design their own certification scheme to deliver the Commission’s “greening” outcomes, which has the potential to simplify implementation significantly, for both farm business and the paying agency.

I was disappointed that the majority of member states were content to allow farmers to be paid twice under two different budgets for delivering the same environmental benefit; but compromises were necessary, and this now forms part of the position. I made it clear that I shared the European Parliament’s opposition to this approach.

Although several member states wanted to extend sugar beet quotas to 2020, I worked with other member states to persuade the Council to agree that they will end in 2017. I am disappointed that they will continue beyond the date previously set for them to end but we have achieved a compromise and fought off calls for the end to be in 2020. The result is that sugar beet quotas will finally be scrapped benefiting consumers and our food processing industries. It is also important that we ensure availability of cane sugar supplies to allow cane refineries to compete on an equal footing; and I am determined to work with the Commission to persuade them to ensure fair treatment for cane sugar refiners.

The Council concluded that the ceiling for coupled payments in each member State—effectively, the proportion of their CAP subsidy envelope which can be linked to production—should increase from that proposed by the Commission. Under the proposals, member states, including the UK, which have made the most progress in decoupling payments, will be allowed to pay up to 7% of their direct payment budget as coupled payments. The remaining member states will be allowed up to 12%. I was disappointed that the Council proposed that coupled payments continue, and that different levels of flexibility should be allowed to different member states, but the agreement is a clear improvement on the European Parliament’s proposal for 15% or even 18%.

The presidency had mistakenly removed from its proposed compromise on the rural development regulation, wording which is relevant to the calculation of a portion of the UK’s rebate. I made it clear that it was essential for this mistake to be corrected, and the presidency ensured that it was corrected in the compromise further changes tabled on the second day. Following objections from a few member states, the presidency maintained the text with the necessary wording, but put the article in square brackets and referred it for resolution in the framework of the Council deliberation on the EU own resource decision. However, at my insistence they also made it clear that this issue needed to be resolved before the rural development regulation could be agreed.

I and other Ministers successfully argued against pressure from some member states to extend the use of market intervention. Reducing market intervention has

26 Mar 2013 : Column 90WS

helped to keep Europe on the path towards a more competitive farming sector, with less of a distorting impact of subsidy.

Under any other business, I raised the issue of the European Commission’s proposed action on neonicotinoids. A total of 11 member states supported my call for the Commission to use all the latest scientific evidence, before any final decisions were taken; in particular I asked the Commission to ensure that any decision was taken in the light of field studies into effects on bee populations. The protection of bees is vital; but action should be considered, proportionate and science-led. I promised to deliver the results of our field studies to the Commission and other member states by the week commencing 25 March 2013.

Also under any other business, the Netherlands presented a paper on trade difficulties with Russia who planned to ban the import of plants from the EU from 1 June. They were supported by other member states and called on the Commission to provide the phytosanitary information Russia requested. I echoed this call, as seed potato exports to Russia are important for Scotland. The Commission acknowledged the situation and indicated that it would raise the issue with the Russians.

Environment, Food and Rural Affairs

Veterinary Products Committee

The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath): Today I am announcing the triennial review of the Veterinary Products Committee (VPC). The VPC is an advisory non-departmental public body (NDPB) sponsored by DEFRA which advises the Veterinary Medicines Directorate (VMD), which acts on behalf of the Secretary of State on veterinary medicines.

Triennial reviews of NDPBs are part of the Government’s commitment to ensuring accountability in public life.

The work for this review will begin in April 2013 and will be conducted in accordance with Government guidance for reviewing NDPBs. I will announce the findings of the review later in the year.

Further information on the review is available on DEFRA’s website http://www.defra.gov.uk/corporate/about/with/ndpb-review/.

Horsemeat Fraud

The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson): I would like to update the House on developments since my written ministerial statement on 4 March 2013, Official Report, column 54WS, on the latest results from the testing of beef products for the presence of horsemeat.

In addition to the results of 5,430 industry tests reported to the House on 4 March 2013, Official Report, column 54WS, the Food Standards Agency has received further results from the UK-wide authenticity survey of beef products. The survey is of beef products on sale at a range of retail and catering outlets, with samples

26 Mar 2013 : Column 91WS

being collected by local authority enforcement officers across the UK. Public analysts are testing these products for both horse and pig DNA. While the majority of testing has been completed, results of some analysis are still awaited.

A total of 364 samples have been taken in the first two phases of this survey, including beef burgers, beef meatballs, minced beef, beef ready meals and tinned beef products. Two products have been identified which did not meet the sampling and analytical criteria, giving 362 samples on which the Food Standards Agency will be reporting. Results for five samples are in dispute. Where results are disputed, a retained portion of the food sample may be sent for further, independent analysis.

Of the 357 samples for which analysis has been completed, all but five were clear of both horse and pig DNA at the 1% reporting limit. Two samples contained over 1% horse DNA and three samples contained over 1% pig DNA. All these products have been withdrawn from sale and named on the Food Standards Agency website.

There have been no positive tests to date for the presence of bute in any of the UK food samples found to contain horse DNA.

The Food Standards Agency met representatives of the food industry on 14 March to discuss future collaboration and reporting of test results. There was general agreement on four areas of future collaboration, for each of which the Food Standards Agency will now draw-up implementation plans. These areas are describing good practice for food businesses in assuring their food chains, with a particular focus on supporting small and medium-sized food businesses; an improved framework for securing and sharing intelligence; developing shared priorities for future food authenticity work; and creating a repository for sharing data and information.

Food industry representatives also agreed to continue to provide data on their ongoing tests for horse DNA in processed beef products, with identification of individual products testing positive above the 1% reporting limit. The Food Standards Agency will next publish a summary of this information in early June, and will continue to report individual products testing positive above the 1% reporting limit as soon as they are confirmed by the food industry.

Although in the short-term our priority has been to focus on the deliberate substitution of beef with horse, this does not mean that we have ignored the possibility of beef products containing undeclared pork or pig DNA. Consumers have a right to expect that all the food they are eating is correctly described.

I recognise that even trace levels of pork contamination, below the 1% threshold, are unacceptable to some faith communities. Where a product is labelled as Halal and is found to contain traces of horse or pig DNA, the relevant local authority will investigate each case and take steps to ensure that consumers are informed.

It remains the responsibility of all food businesses (including processors, catering suppliers and retailers) to ensure that the food they sell is what it says it is on the label, and Kosher and Halal certification bodies have a part to play in this. Any claims on a product certified by a certification body must be accurate. It is for the certification body to set out the standards which

26 Mar 2013 : Column 92WS

a certified product must meet, and for that body to work with food businesses to ensure those standards are adhered to.

On 14 March senior officials from DEFRA, Food Standards Agency, DCLG and the Laboratory for the Government Chemist met with certifying organisations to discuss the Government’s testing programme. The main focus was the testing programme for detecting horse and pig DNA in beef products. They also discussed research being undertaken on detection levels and cross-contamination thresholds.

Investigations continue at a number of sites across the UK. City of London police is the co-ordinating Police Authority for these investigations. At a European-level the Food Standards Agency continues to work closely with the Commission and other member states, sharing information via the rapid alert system for food and feed.

We will be reporting the UK’s contribution to the Europe-wide programme of testing to the European Commission in advance of the deadline of 15 April.

I will continue to keep the House informed.


Fair Playing Field Review

The Secretary of State for Health (Mr Jeremy Hunt): The Fair Playing Field Review has been laid in Parliament today, in line with the requirement set out in section 1G of the National Health Service Act 2006.

The aim of the review is to ensure that patients are able to access NHS services delivered by the best possible providers. In June 2012, Monitor—the independent health care regulator—was asked to look into any matters that might undermine this aim, and to report back with options for addressing such matters. The Department would like to thank Monitor for its work, the results of which have been published as part of the review.

Revised NHS Constitution

The Minister of State, Department of Health (Norman Lamb): The NHS constitution sets out the principles, values, rights and responsibilities that underpin the NHS. It sets out the enduring character of the NHS as a comprehensive and equitable health service. It is intended to empower the public, patients and staff to know and exercise their rights to help drive improvements throughout the NHS. The constitution sets out rights to which patients, public and staff are entitled, and pledges which the NHS is committed to achieve, together with responsibilities which we all owe to one another to ensure that the NHS operates fairly and effectively.

Between November 2012 and January 2013, the Department ran a full public consultation on a package of amendments to strengthen the NHS constitution. This consultation followed advice from a NHS Future Forum working group, which advised on options for strengthening the NHS constitution to support the fair and effective operation of the NHS.

26 Mar 2013 : Column 93WS

Today we are publishing a revised NHS constitution, which strengthens a number of areas, including:

patient involvement;


duty of candour;

end of life care;

integrated care;


patient information;

staff rights, responsibilities and commitments; and

dignity, respect and compassion.

In addition, the public inquiry report into the failings at Mid Staffordshire NHS Foundation Trust, chaired by Robert Francis QC and published in February 2013, emphasises the role of the NHS constitution in helping to create a positive and caring culture within the NHS. Of the 290 recommendations made in the report, nine of them relate specifically to the NHS constitution. We are carefully considering these recommendations and have already acted on two them. So, as part of our initial response to the public inquiry report into the failings at Mid Staffordshire NHS Foundation Trust, we have made changes in the revised NHS constitution to reflect that the most important value of the NHS is for everyone to work together for the benefit of patients, while also giving the values more prominence in the constitution and accompanying documents.

Alongside the NHS constitution, we are publishing the following documents today:

a Government response to the consultation, which sets out detail about the changes being made to the constitution and follows an earlier report on what we heard from the consultation that was published on 15 February 2013; and

an updated handbook to the NHS constitution.

Copies of “The NHS Constitution”, and “Consultation on strengthening the NHS Constitution: Government response”, have been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.

“The Handbook to the NHS Constitution” has also been placed in the Library.

Home Department

Retention of Biometric Data

The Secretary of State for the Home Department (Mrs Theresa May): I have today launched a public consultation inviting views on the draft guidance on the making or renewing of national security determinations as set out in the Protection of Freedoms Act 2012. A national security determination will enable the police and other law enforcement authorities to extend the length of time that they may retain an individual’s biometric data where it is necessary for the purposes of national security. These determinations are subject to independent review by the Commissioner for the Retention and Use of Biometric Material.

The use of DNA and fingerprints by our police and other law enforcement agencies is a vital tool in the fight against crime and combating threats to our national security. However, in discharging our duty to protect the public, we will not undermine the importance of our historic freedoms. The Protection of Freedoms Act 2012 changed the law to ensure the public is safeguarded while also protecting those innocent people whose DNA

26 Mar 2013 : Column 94WS

is taken and held by the police. The new framework provided by the Act for the retention, destruction and use of such material provides the necessary balance between public protection and individual freedoms.

The draft guidance on the making or renewing of national security determinations is intended to provide clear guidance to the police on the exercise of these important powers and sets out both the principles and procedures required for making a national security determination under the provisions of the Act. A copy of the draft guidance will be placed in the Library of the House and full consultation details can be found on the Home Office website.

The consultation closes in May 2013 and I would encourage all interested parties to participate.

UK Counter-Terrorism Strategy

The Secretary of State for the Home Department (Mrs Theresa May): Protecting the safety of the UK and our interests overseas is the primary duty of Government. Terrorism remains the greatest threat to the security of the United Kingdom.

I have today published the annual report for the Government’s strategy for countering terrorism, Contest (Cm 8583). It covers the progress made towards implementing the strategy that we published in July 2011. Copies of the report will be made available in the Vote Office.

The threat from terrorism is changing but remains substantial. The terrorist threats we face are now more diverse than before, dispersed across a wider geographical area, and often in countries without effective governance. Collaboration with international partners remains vital. There have been no attacks on the scale of 7/7 in Great Britain over the period covered by the report. But since December 2010, there have been at least five serious terrorist plots in this country and a very significant number of terrorism-related arrests and prosecutions.

Our counter-terrorism response continues to reflect our commitment to protect the people of this country and our interests overseas in a way that is consistent with core British values. We recognise that our response must continue to be based on partnerships at all levels—local, national and international. Communities, local authorities, Government Departments, agencies, devolved Administrations, our security industry and overseas partners all play vital roles in the successful delivery of Contest.

Staying ahead of the threat requires a dynamic and responsive counter-terrorism strategy. I am convinced that Contest will continue to provide a sound basis for our work and that we will build on our success.


Court and Tribunal Reform

The Lord Chancellor and Secretary of State for Justice (Chris Grayling): I have previously set out my plans for reform of rehabilitation services and youth custody, and will shortly be setting out proposals for further reforms to legal aid. I am today announcing that I have

26 Mar 2013 : Column 95WS

asked my Department to explore proposals for the reform of the resourcing and administration of our courts and tribunals.

The courts and tribunals are at the centre of our justice system, relied on by the public to enforce their rights and uphold the rule of law. As in other areas, we need to look at the way we deliver our services to provide a more efficient service that delivers access to justice quickly and effectively, while delivering value for money for the taxpayer. At the same time, we must preserve the independence of the judiciary which lies at the heart of our constitutional arrangements.

Our courts and judiciary command great respect around the world and we should be proud of their international reputation and the contribution they already make to our economy. This country is a major centre for legal services and dispute resolution. I want to explore how we can further enhance the position of the UK at the centre of the international legal market and the revenue it can generate.

I also want to ensure that those who litigate in our courts pay their fair share, and that it is possible to raise the revenue and investment necessary to modernise the infrastructure and deliver a better and more flexible service to court users.

I have therefore asked my Department to consider appropriate vehicles to achieve these aims, and the organisational structures that might best support this. I am clear that any new model must support the administration of justice as a core pillar of our constitution and its effective delivery will remain an important responsibility of the state.

I have discussed these ideas in outline with the Lord Chief Justice and the Senior President of Tribunals and will continue to work closely with the judiciary as to the detail of these reforms, as well as work with the relevant Parliamentary Committees.


Rail Franchising

The Secretary of State for Transport (Mr Patrick McLoughlin): This morning I have announced to the stock market our long-term plans for rail franchising.

26 Mar 2013 : Column 96WS

This plan is designed to drive improvements to rail services, deliver on major infrastructure projects, and put passengers at the heart of a revitalised rail franchising system.

In addition to publishing a detailed timetable for all rail franchises over the next eight years, I am announcing the immediate start of the competition for the east coast franchise, currently directly operated, with the expectation the new franchisee will carry its first passengers by February 2015.

The new programme will provide long-term certainty to the market and support the delivery of the Government’s £9.4 billion rail investment strategy for 2014-19. The future competitions will also place passengers in the driving seat by ensuring that their views and satisfaction levels are taken into account when deciding which companies run our railway services.

In rolling out the programme the Department for Transport will work closely with the industry to negotiate further new services and more capacity in all franchising contracts while delivering the best deal for both passengers and taxpayers.

Delivering on Brown review recommendations, the new programme will provide a more sustainable schedule for rail franchising by delivering no more than three to four competitions per year, and staggering the two principal inter-city franchises, west coast and east coast, so they will not be let at the same point in the economic cycle.

In order to roll out the programme and stagger future competitions, it will be necessary to exercise a number of contractual extensions with current operators and to negotiate a series of direct awards with current operators. During these discussions the Department will look to negotiate further passenger benefits, which will ensure the best deal for tax payers. As a result, I will later today be serving notice on First Capital Connect and Southeastern to call seven period extensions available in their contracts.

The new franchise programme is set out below:

Franchise (Operator)Owning GroupCurrent Franchise Expiry DateDuration of Franchise Extension and/or Direct AwardStart Date of New Franchise

Essex Thameside (c2c)

National Express

May 13

16 Months

September 14

Thameslink (First Capital Connect)

First Group

September 13 (FCC)

12 months (FCC)

September 14 (FCC)






Southern (Merge to become Thameslink, Southern and Great Northern)


July 15 (Southern)

n/a (Southern)

July15 (Southern)

East Coast

Directly Operated Railways



February 15



April 14

22 months

February 16

TransPennine (TransPennine Express)

First Group/Keolis

April 15

10 months

February 16

Great Western (First Great Western)


October 13

33 months

July 16

Greater Anglia


July 14

27 months

October 16

26 Mar 2013 : Column 97WS

26 Mar 2013 : Column 98WS

InterCity West Coast (Virgin Trains)


November 14

29 months

April 17

London Midland


September 15

21 months

June 17

East Midlands (East Midlands Trains)


April 15

30 months

October 17

South Eastern (Southeastern)


April 14

50 months

June 18

Wales and Borders (Arriva Trains Wales)


October 18


October 18

South West (South West Trains)


February 17

26 months

April 19

Cross Country


April 16

43 months

November 19



December 21


December 21

In my statement of 31 January I announced that the Thameslink, Southern and Great Northern would be a management style contract due to the level of investment and change on the route. For Great Western, our plan is to put to market a competed management contract in 2016. We will further develop this proposition in the light of experience with the Thameslink competition, which has similar infrastructure challenges, and will give consideration to the capacity in the market closer to the date.

In order to oversee this ambitious programme the Government are also announcing the formation of a new cross-industry Franchise Advisory Panel, headed by Richard Brown, which will provide independent advice and support to both bidders and the Department during the procurement process.

In addition, following an industry consultation, I will today, publish a revised policy statement under section 26 of the Railways Act. This has been updated to reflect current franchising policy and completes a Brown review recommendation.

All the relevant documents will be published on the Department for Transport website. Copies will be made available in the Libraries of both Houses.

Search and Rescue Helicopter Services

The Secretary of State for Transport (Mr Patrick McLoughlin): On 28 November 2011 the Department for Transport started a competition to procure search and rescue helicopter services to replace the joint capability provided by the Royal Air Force, Royal Navy, and Maritime and Coastguard Agency (MCA). The procurement process has now finished, and I wish to inform the House of the results.

I am pleased to announce that a £1.6 billion contract has been signed today to provide a search and rescue helicopter service for the whole of the UK with Bristow Helicopters Ltd. I would like to recognise the very high quality and the maturity of the bids provided by the two companies who reached the final stages in this vital competition for an emergency service in the UK. In buying such an important service that protects the safety of individuals in our maritime industries and in dangerous conditions on land and around our coastline, it is vital that we had a robust competition with credible and thoroughly developed propositions from industry. I am confident that we did. I am equally confident that the contract we are entering into with Bristow Helicopters Ltd represents the best solution for the UK over the next 10 years.

This contract represents a major investment by the Government in providing a search and rescue helicopter service using the most up-to-date helicopters and meeting the highest professional standards. Operations will commence progressively from 2015 and the service will be fully operational across the United Kingdom by summer 2017.

The contract will enable the RAF and Royal Navy to withdraw from search and rescue activities in the UK and retire their fleet of Sea King SAR helicopters. It will also ensure service continuity when the current contracted MCA service expires. Services under the new contract will operate from 7 to 10 years and will be managed by the Maritime and Coastguard Agency.

Experience of front-line operations has informed the military decision that the skills required for personnel recovery on the battlefield and in the maritime environment can be sustained without the need for military personnel being engaged in UK search and rescue. I want to pay tribute to the outstanding service personnel who have displayed such enduring commitment and bravery in RAF and Royal Navy search and rescue squadrons. The service they have provided for over 70 years has been exemplary and the country owes them all an enormous debt of gratitude. The decision to cease military involvement in search and rescue in the UK was not made lightly. But with the Sea King nearing its 40th year of service, the time has come to change the way the service is provided and the aircraft used.

The Maritime and Coastguard Agency, and its predecessor bodies, has 30 years experience of operating contracted search and rescue helicopter services using civilian aircrew. The existing MCA search and rescue contracts have delivered services of the very highest standards, and highly skilled civilian crews have won numerous awards for their bravery and dedication.

Bristow Helicopters Ltd is a UK company which has 36 years experience of providing search and rescue services in the UK, including 24 years with the MCA. The company has received numerous awards for SAR missions its civilian crews have undertaken, including chief coastguard’s commendations, coastguard rescue shields, the Prince Philip helicopter award and the Queen’s commendation for a mission in which 60 seamen were rescued.

Bristow Helicopters Ltd has completed more than 44,000 search and rescue operational hours in the UK and conducted over 15,000 missions, during which more than 7,000 people have been rescued by their crews.

26 Mar 2013 : Column 99WS

The new service will operate a mixed fleet of 22 state- of-the-art helicopters from 10 locations around the UK. Sikorsky S92 helicopters will continue to be based at the existing MCA bases at Stornoway and Sumburgh, and at new bases at Newquay, Caernarfon and Humberside airports. AgustaWestland AW189 helicopters will operate from Lee on Solent, Prestwick airport, and new bases at St Athan, Inverness and Manston airports. All bases will be operational 24 hours a day. These base locations are strategically placed near areas with high SAR incident rates and will help ensure maximum operational coverage across the UK while reducing transit times to incidents.

This combination of aircraft and base locations will provide a world-class search and rescue capability. Helicopters will be able to reach a larger area of the UK search and rescue region within one hour of take off than is currently possible, and based on historic incident patterns we estimate that there will be an overall 20% improvement in flying times, with the average flight time reducing from 23 minutes to 19. Presently, approximately 70% of high and very high risk areas are reachable within 30 minutes. Under the new contract, approximately 85% of the same areas are reachable within this time frame.

The new contract will see the creation of over 350 new jobs. The AW189 will be assembled at AgustaWestland’s factory in Yeovil and Sikorsky plans to locate a supply hub in the Aberdeen region that will support not only the UK SAR programme but also Sikorsky’s large fleet of helicopters in the region serving the important offshore oil sector. The contract will have a significant impact on the UK supply chain, providing and sustaining jobs and apprenticeships.

The safety of professional mariners, aviators, all those travelling by sea or air, and all of those enjoying our seas, coasts and mountains for business or leisure is of paramount importance. This new contract, which will match or exceed our existing search and rescue capability, will ensure that this country’s search and rescue helicopter service will be the standard bearer, both in Europe and beyond.

Work and Pensions

Social Fund Loans Budget Allocation

The Minister of State, Department for Work and Pensions (Steve Webb): I am pleased to announce that the gross national loans budget for 2013-14 will be £460.7 million.

The national loans budget is funded exclusively by recoveries from existing loan debt and will continue to provide a national budgeting loan scheme until full roll out of universal credit to help those still receiving income support, income-related employment and support allowance, income-based jobseeker’s allowance, and pension credit.

26 Mar 2013 : Column 100WS

I will allocate the national loans budget in line with the provisions in the Welfare Reform Act 2007. The aim is to control and manage the national allocation while providing consistency of outcomes for budgeting loan applicants wherever they live.

In addition, the Secretary of State’s directions and guidance on the discretionary social fund have been amended with effect from 1 April 2013 to reflect the ending of community care grants and crisis loans and the continuation of budgeting loans. This includes maintaining policy arrangements under which budgeting loan decisions can be subject to a further review following an initial review by an appropriate officer in Jobcentre Plus.

I will place an explanatory note about the 2013-14 social fund loans allocation and a copy of the amended directions and guidance in the House Libraries later today.

State Pension and Benefit Payments (Cyprus)

The Minister of State, Department for Work and Pensions (Steve Webb): I would like to update the House on actions taken by my Department in response to the closure of the Cypriot banking system last week.

The Department for Work and Pensions (DWP) acted swiftly to hold on to benefit and state pension payments to our customers with bank accounts in Cyprus or accounts with Cypriot banks in Greece due to the financial uncertainty and the extended bank closures. In any event, the bank closures mean that recipients would not have received their benefits as payments have not been processed. And when the Cypriot banks do reopen, delays in payment processing are possible.

DWP then took the decision to contact all those with state pensions or benefits affected by the situation in Cyprus. To speed up this process DWP couriered letters to Cyprus to ensure this information reached individuals as soon as possible. Our staff have also been contacting individuals in Cyprus by email and phone.

We are advising customers to change the bank account into which payments are made, for example by nominating an alternative bank account or the account of a “trusted friend” which is permissible under our current rules on benefit payment. This is a practical measure to ensure that payments reach our customers promptly, and we are not advising these customers to close their Cypriot bank accounts.

Customers who do not currently have another bank account may wish to open one. HM Treasury have also worked with Barclays to put in place a process so that individuals can open a bank account quickly if they wish to do so.

The Government will continue to monitor the situation closely from London and Nicosia and attempt to minimise the disruption for those affected.

Customers who wish to change their accounts, or require more information should contact the International Pension Centre, whose details are on the Gov.uk website.