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Written Statements
Statements received between Friday 27 July and Monday 30 July 2007
Pensions: Civil Service
Lord Davies of Oldham: Today my right honourable friend the Parliamentary Secretary for the Cabinet Office is laying before Parliament, under the provisions of the Superannuation Act 1972, two amendment schemes. The Civil Service unions have been involved throughout and confirm their agreement to the scheme amendments. The first of these amends the rules of the Principal Civil Service Pension Scheme (PCSPS) and introduces new provisions for those joining the pension scheme on or after 30 July 2007. The second amendment scheme makes consequential changes to the Civil Service Compensation Scheme.
These amendments are the first step in implementing a major package of reform that builds on earlier changes modernising the Civil Service pension arrangements and announced in July 2002 by the then Chancellor of the Duchy of Lancaster, Douglas Alexander, in Hansard on22 July 2002, col. 728W. I will bring forward further amendments in due course to complete the implementation of these reforms.
The package of reform that I am announcing today is in line with the agreement reached between the Government and the public sector unions in the Public Services Forum (PSF) in October 2005. The Government’s aim is to continue to provide their staff, both existing and new, with good-quality, defined-benefit, index-linked pension provision, delivered in a sustainable way. The Government seek to achieve that by delivering a range of measures intended to reduce Civil Service pension costs by £2.1 billion over 50 years, on the basis of the assumptions made at the time of the PSF, and to control unplanned cost growth.
Pension terms for new entrants from 30 July 2007 will undergo radical change, with pensions calculated by reference to pensionable earnings throughout the career rather than “final salary”. We believe that that change will produce a fairer outcome for the workforce generally, particularly those who have relatively short or broken Civil Service careers and those who wish to move to less demanding employment as part of their transition from work to retirement. This new whole-career option will be known as the nuvos scheme, and, in common with the existing premium scheme, will have a member contribution rate of 3.5 per cent of pensionable pay.
Members will be able to retire and draw benefits at any age from 55 to 75, with benefits drawn before age 65 reduced for early payment and those drawn after 65 increased for late payment. Members will have access to options to help them to tailor the scheme to meet their personal requirements. These include the ability for members to purchase added pension for self or for self plus dependants, to give up pension in
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To facilitate mobility among the public services, the PCSPS belongs to the Public Sector Transfer Club. The future service of staff transferring in from public service schemes continuing to operate final-salary pension schemes will be pensioned on the whole-career basis, but the service transferred will continue to provide benefits on a final-salary basis. A similar approach will apply to the frozen final-salary benefits of civil servants returning after resigning to broaden their careers.
New entrants who prefer a stakeholder pension with an employer contribution will continue to have the option of a partnership pension account.
The Government recognise the importance that current staff place on retaining their existing pension scheme. Current staff, including many of those who resign and return to work after a break of no more than five years, will therefore continue to have pensions calculated on a final-salary basis and will be able to draw an unreduced pension on retirement at or after age 60. These terms will continue broadly as now, subject to the following changes:
an option for staff leaving from 1 October 2007 to give up pension for a larger lump sum on retirement;relaxation of service limits from 40 to 45 years, to be phased in from 1 March 2008;replacement of the “added years” facility for topping up pension by a new “added pension” arrangement, from 1 October 2007 for staff over 60 and from 1 March 2008 generally; andintroduction, from 1 March 2008, of “flexible retirement” arrangements, which will permit staff who reduce their hours or job weight to access their pension before full retirement.Although unfunded, the PCSPS publishes an annual resource account, including its estimated liabilities, and undergoes regular actuarial valuations. The state of the scheme at 31 March 2007 is currently being assessed, and I will place the results of the valuation in the Library when the report is agreed. The valuation is used to set the level of employer contributions to apply in future years; by convention, a range of employer contribution levels apply, with higher percentage rates of contribution being paid for higher-paid staff. The average employer contribution is currently 19.4 per cent of pensionable pay, and this is taken into account in setting the overall level of Civil Service reward packages.
The PSF agreement recognised the importance of ongoing scheme sustainability. This requires members to accept a degree of responsibility for future cost pressures, rather than seeing them as an issue for the employer—and taxpayer—alone. We will establish a scheme governance group, with employer and union representation, to take forward work on this area. The
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To the extent that such cost increases or reductions arise as a consequence of changes to the Treasury-mandated financial assumptions or from some fundamental changes to the actuarial valuation methodology, the consequent impact on costs should continue to be absorbed by the employer through an adjustment in accruing superannuation liability (ASLC) rates. The Government will also ensure that the average employer contribution is capped at 20 per cent of pay, assuming no changes to the valuation approach. This approach is intended to deliver long-term sustainability through the reduction of taxpayer exposure to risks, principally those associated with improvements in longevity over and above the improvements already anticipated.
As and when cost-sharing takes effect, it is by no means axiomatic that member contributions will rise. Although this approach would of course be one option, we would look to the scheme governance group to suggest approaches designed to secure widespread acceptance by staff, to maintain scheme membership and to have particular regard to the impact on low-paid staff. We will consult the unions in the near future on the detail of how this process should work, before amending the scheme rules to reflect the outcome of that process.
Statements received between Tuesday 31 July and Friday 7 September 2007
Gambling: Casinos
Lord Davies of Oldham: The Exchequer Secretary to the Treasury (Angela Eagle) has made the following Written Ministerial Statement.
On 30 April 2007, during the Committee of the Whole House debate on Clause 7 of the Finance Bill, my honourable friend, the then Financial Secretary to the Treasury, John Healey made a statement concerning the taxation of bingo. He said:
“The policy of applying VAT and duty to bingo participation fees is entirely consistent with our treatment of other player-to-player games in licensed premises, such as poker played in casinos.”
Similar statements have also been made in response to numerous letters and Parliamentary Questions from honourable Members.
I regret to inform the House that these statements were based on an incorrect understanding of the effect of the legislation relating to gaming duty as set out in the Finance Act 1997. In fact the Finance Act 1997 does not apply gaming duty to participation fees for poker played in casinos, so participation fees for poker played in casinos are liable only to VAT.
I apologise to the House for this misunderstanding.
I can, however, assure the House that HMRC has, nevertheless, been applying the law correctly and casinos have not been required to account for gaming duty on participation fees for poker.
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In the light of the effect of the current legislation relating to gaming duty, I will be looking again at the tax treatment of participation fees for player-to-player gaming in casinos.
NHS: Financial Performance
The Parliamentary Under-Secretary of State, Department of Health (Lord Darzi of Denham): My right honourable friend the Secretary of State for Health (Alan Johnson) has made the following Written Ministerial Statement.
On 30 August 2007, my department published the first NHS quarterly performance report for 2007-08, which highlights the progress made by the NHS across a range of indicators at the end of the first quarter of this financial year.
The report highlights how local NHS organisations are performing against key promises such as achieving maximum 18-week waiting times and reducing hospital-acquired infections.
The report also shows that the NHS continues to make improvements on financial performance, forecasting a net surplus of £983 million at the year end, compared with a £510 million unaudited surplus at the end of 2006-07. This overall net surplus delivers the necessary stability in the service that will help to ensure that local NHS organisations have the flexibility to continue to improve services for patients.
The report has been placed in the Library and copies are available to honourable Members in the Vote Office. It is also available on the department's website at http://www.dh.gov.uk/en/publicationsandstatistics/ publications/dh_078045
Planning: West Midlands RSS
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Andrews): My honourable friend the Parliamentary Under-Secretary of State (Parmjit Dhanda) has made the following Written Ministerial Statement.
My right honourable friend the Secretary of State for Communities and Local Government is today publishing proposed changes to the regional spatial strategy (RSS) for the West Midlands. They follow the public examination held in January 2007 and the panel report published in March.
The panel report largely welcomed the changes submitted by the West Midlands Regional Assembly (WMRA) and considered that the draft revision was broadly compatible with the previously agreed principles of the West Midlands RSS.
The Secretary of State is pleased to support most of the changes recommended by the panel. These include:
new policies to define broad areas for regeneration and growth in the Black Country,a new policy which replaces Dudley with Brierley Hill/Merry Hill as a strategic centre,1 Oct 2007 : Column WS115
In addition, an appropriate assessment of the proposed changes has been completed and the recommendations incorporated.
I have today written to the WMRA with the proposed changes indicating areas where views are particularly sought from any interested parties. There will now be a public consultation period on the proposed changes, which will end on 9 November.
Copies of the relevant document are available in the Libraries of the House and have been provided for all of the region’s MPs, MEPs and local authorities.
The more extensive phase 2 revision to the West Midlands RSS is also under way. The WMRA is considering revisions to housing and employment policies as part of this revision.
Railways: East Coast Franchise
Lord Bassam of Brighton: My honourable friend the Parliamentary Under-Secretary of State for Transport (Tom Harris) has made the following Ministerial Statement.
The Department for Transport announced to the London Stock Exchange on 14 August 2007 the award of the InterCity East Coast rail franchise to NXEC Trains Ltd, a subsidiary of National Express Group. The franchise will commence on 9 December 2007, and will continue until 31 March 2015 with the last 17 months conditional on set performance levels being reached. NXEC Trains Ltd has undertaken to pay the Department for Transport a premium of £1,414 million net present value over the life of the franchise that will be reinvested in the railways.
The franchise offers value for money to passengers and taxpayers, and provides for more capacity, performance improvements and investment at stations and in on-board services.
Bidders were required to reflect the emerging recommendations of the East Coast Route Utilisation Strategy, a draft consultation document published by Network Rail in June 2007. The contract with NXEC Trains Ltd makes provision from December 2010 for up to 25 extra train services - around 14,000 seats - each weekday and up to 40 more carriages to deliver increased capacity. Until then, the current timetable will continue to be operated in the new franchise, including Leeds half-hourly service improvements introduced in May 2007.
The additional capacity from 2010 would enable a new London to Lincoln service to operate at two-hourly intervals, and an additional London to York service to operate at two-hourly intervals. Faster journeys will also be possible between London and Leeds, York and Edinburgh. NXEC Trains Ltd will reduce delays for which it is responsible by 29 per cent by March 2015. It will work closely with Network
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NXEC will invest £7.4 million to upgrade station facilities. Up to 2,000 more car parking spaces will be provided by the end of the franchise with half of these expected within the first two years.
Environmental improvements have also been secured. Fuel consumption per passenger-kilometre will be reduced by 28 per cent and four stations will be designated as “green stations”. Pre-series Inter City Express Trains, which will replace the current fleet of high-speed trains, will be trialled on the East Coast Main Line from summer 2012.
On-board improvements include CCTV on all trains and free wi-fi for all passengers. A full restaurant service on 87 weekday services will be offered. A hot food at seat service will be available to standard class passengers.
The Government will continue to limit annual rises of regulated fares—which include season tickets and saver fares—in line with national policy, which is currently RPI+1 per cent. Unregulated fares will be, as with all franchises, the responsibility of the operator.
NXEC has indicated that it may wish to raise unregulated fares by an average of 2.1 per cent above inflation each year over the course of the franchise. Overall, regulated and unregulated fares together are likely to rise by RPI + 1.6 per cent each year throughout the course of the franchise. Annual rises in regulated fares will continue to be capped at RPI+1 per cent.
An improved website will be introduced that will highlight the cheapest tickets available and the expected seat availability on each train. Smartcards will be introduced by 2010.
Taxation: Dishonest Conduct
Lord Davies of Oldham: My right honourable friend the Financial Secretary to the Treasury (Jane Kennedy) has made the following Written Ministerial Statement.
This is to announce a new procedure for dealing with suspected dishonest conduct for indirect taxes, where neither criminal investigation nor the civil investigation of fraud procedure outlined in Code of Practice 9(2005) is appropriate.
Code of Practice 9(2005) covers HMRC investigations of suspected serious fraud against the Exchequer where, for policy or operational reasons, it is considered inappropriate to launch a criminal investigation. Where cases are not suitable for Code of Practice 9(2005) or criminal investigation, for direct taxes, it is already possible for income tax self-assessment and corporation tax self-assessment inquiries to lead to penalties being imposed for either negligent or fraudulent conduct. However until the new penalty provisions in Clause 96 and Schedule 24 of Finance Bill 2007 take effect, there is no equivalent procedure for dealing with lower-level fraud in
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This Statement announces a new procedure which will enable HMRC to tackle cases where dishonesty is suspected in relation to indirect taxes. It also introduces a new Public Notice 160 outlining that procedure. This will bring current practices more closely in line across direct and indirect taxes and help to enable a smoother transition to the new penalty regime put forward in Clause 96 and Schedule 24 of the Finance Bill 2007.
The procedure complements HMRC's policy of providing a level playing field for all businesses by supporting those who wish to comply but dealing more severely with those who seek an unfair advantage through non-compliance. It will be used in appropriate cases after 1 September 2007.
A copy of the new notice, PN160, is being placed in the House of Commons Library.
Statements received between Monday 10 September and Friday 14 September 2007
Armed Forces: German Bases
The Minister of State, Ministry of Defence & Department for Business, Enterprise and Regulatory Reform (Lord Drayson): My right honourable friend the Minister of State for the Armed Forces (Bob Ainsworth) has made the following Written Ministerial Statement.
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