Written Statement of 27 November 2002

  DEFENCE
  £1000s

  Resources

  Capital

  Change

  New DEL

  Of which: voted

  Non voted

  Change

  New DEL

  Of which: voted

  Non voted

  277,224

  19,142,668

  18,752,958

  389,710

  110,620

  5,842,145

  5,765,717

  76,428

  The change in the resource element of the DEL arises from:
  The take up of the Resource end year flexibility of £68,668,000.
  An increase in RfR2 of £208,556,000 for military operations.
  The change in the capital element of the DEL arises from:
  The take up of the Capital DEL end year flexibility of £100,000,000.
  An increase in RfR2 of £10,620,000 for military operations.
  The increases will be funded from the DEL Reserve and will not therefore add to the planned total of public expenditure.

DEPARTMENT FOR EDUCATION AND SKILLS

  Departmental Expenditure Limits
  The Secretary of State for Education and Skills (Mr. Charles Clarke)
  This Written Statement explains the

  Resources

  Capital

  Change£000

  New DEL £000

  Of which: voted £000

  Non-Voted £000

  Change £000

  New DEL £000

  Of which: voted £000

  Non-voted £000

  RfR 1

  73,808

  19,622,493

  7,212,908

  12,409,585

  84,875

  3,082,462

  1,764,003

  1,318,459

  RfR 2

  -759

  284,633

  284,633

  0

  0

  164,008

  164,008

  0

  RfR 3

  -430

  149,570

  149,570

  0

  0

  0

  0

  0

  Total change

  72,619

  20,056,696

  7,647,111

  12,409,585

  84,875

  3,246,470

  1,928,011

  1,318,459

  The £6,911,000 increase in the voted element of the resource DEL for RfR l arises from the take up of £66,000,000 of End Year Flexibility provision; the transfer from the Department of Health of £8,120,000 for Healthy Schools Partnerships and Drugs Education; the net transfer to the Department for Work and Pensions of £7,658,000 for the Disability Rights Commission, Adult Basic Skills training arranged through Jobcentre Plus, Administration Costs and the transfer of responsibility for Ranmoor Hall, Sheffield; the net transfer from the Home Office of £2,775,000 for Community Champions, Community Finance and Learning Initiative, shared premises, prison education services, the Mentor Point Initiative, the Black Training and Enterprise Group and Foyer Federation; the

  Departmental Expenditure Limits
  The Secretary of State for Defence (Mr. Geoffrey Hoon)
  Subject to Parliamentary approval of the necessary Supplementary Estimates, the Ministry of Defence Departmental Expenditure Limits will be increased by £387,844,000 from £24,596,969,000 to £24,984,813,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  changes being proposed to the Department for Education and Skills' Departmental Expenditure Limit (DEL) (including the Office for Her Majesty's Chief Inspector of Schools (OFSTED) which has a separate Estimate), which subject to Parliamentary approval of the necessary supplementary Estimate, will be increased by £157,494,000 form £23,342,872,000 to £23,500,366,000 and to the Administration Costs limits which will be changed as follows.

  Original £000

  Change £000

  Revised £000

  DfES (RfRl)

  208,726

  -1,185

  207,541

  Sure Start (RfR2)

  4,099

  +1,351

  5,450

  Children's Fund (RfR3)

  4,435

  -430

  4,005

  Within the DEL change, the impact on the resources element and the capital element are as set out in the following table:

  increase in the Appropriation in Aid by £1,800,000 to recycle rent receipts from the National College for School Leadership; the net transfer to the Office of the Deputy Prime Minister of £1,250,000 for Community Champions, Government Offices, Youth Work Activity and regional co-ordinators of Adult Basic Skills training; the transfer to the National Assembly for Wales of £557,000 for Higher Education Hardship (Access) Funds; the net transfer from the Department of Trade and Industry of £434,000 for Inward Investments, Community Finance and Learning Initiative and Engineering and Marine Training Authority Marine Skills; the transfer from the Office for National Statistics of £97,000 for the Neighbourhood Statistics programme; the virement of £59,247,000 to non-voted
  15WS
  DEL for the Learning and Skills Council; and the correction of an over allocation of funds through a return to the Invest Save Budget of £3,000.

  The £1,185,000 reduction in the Administration Costs limit for RfR 1 arises from the transfer of £871,000 to the Department for Work and Pensions for the transfer of responsibility for Ranmoor Hall, Sheffield and support for International Relations; the transfer of £411,000 to the Office of the Deputy Prime Minister for Government Offices and for regional co-ordinators for Adult Basic Skills training; and the transfer of £97,000 from the Office for National Statistics for the Neighbourhood Statistics programme.

  The reduction in the voted element of resource DEL for RfR2 arises from the transfer of £759,000 to the Office of the Deputy Prime Minister to contribute to the accommodation and the provision of central services in the Government Offices.

  The £1,351,000 increase in the Administration Costs limit for RfR2 arises from the virement from current grants.

  The reduction in the voted element of resource DEL for RfR3 arises from the transfer of £430,000 from administration costs to the Office of the Deputy Prime Minister to contribute to the accommodation and the provision of central services in the Government Offices.

  The £73,375,000 increase in the voted element of the capital DEL for RfRl arises from the draw down of £77,500,000 from the Capital Modernisation Fund for direct grants to schools; the virement of £4,000,000 to non voted DEL to the Learning and Skills Council; the transfer of £100,000 to the Department for Work and Pension for the transfer of responsibility for Ranmoor Hall, Sheffield; and the correction of an over allocation of funds through a return to the Invest Save Budget of £25,000.

  The £66,897,000 increase in the non-voted element of the resource DEL for RfRl arises from the virement of £59,247,000 from voted DEL to the Learning and Skills Council; the transfer from the Department for Work and Pensions of £3,600,000 to the Adult Learning Inspectorate for inspections of New Deal training providers; the transfer from the Home Office to the Higher Education Funding Council for England of £3,250,000 for the Active Community Fund; and the transfer from the Department for Transport of £800,000 for a project to address the training and skills in the Road Haulage Industry.

  The £11,500,000 increase in the non-voted element of the capital DEL for RfRl arises from the draw down of £7,500,000 from the Capital Modernisation Fund to the Learning and Skills Council for further education and the virement of £4,000,000 from voted DEL to the Learning and Skills Council.

  The increases will be offset by transfers or charges to the DEL Reserve and will not therefore add to the planned total of Public expenditure'.

OFFICE OF THE DEPUTY PRIME MINISTER

  Departmental Expenditure Limits
  Deputy Prime Minister and First Secretary of State (Mr. John Prescott)
  I have today announced that subject to Parliamentary approval necessary Supplementary Estimate, the Office of the Deputy Prime Minister's Departmental Expenditure Limits for 2002–03 will change as follows.

  (a) the ODPM Main Programmes DEL (previously the DTLR Main Programmes DEL) will be decreased by £8,110,064,000 from £13,542,710,000 to £5,432,646,000 and the ODPM administration costs limit (previously the DTLR administration costs limit) will be decreased by £356,671,000 from £698,802,000 to £342,131,000 and the DTLR HSE administration costs limit will be transferred to the Department for Work and Pensions. Within the DEL change, the impact on resources and capital are as set out in the following table:

  £'000

  Resources Change

  New DEL

  Capital Change

  New DEL

  Total DEL

  -3,163,065

  1,921,595

  -4,946,999

  3,511,051

  Of which Voted

  -1,876,058

  1,487,401

  -2,540,456

  1,436,553

  Non Voted

  -1,287,007

  434,194

  -2,406,543

  2,074,498

  The change in the resource element of the DEL arises from:
  (i) The changes for Request for Resources 1 are as follows:

  Take up of End Year Flexibility of £8,516,000 comprising £2,000,000 for Safer Communities Supported Housing Fund, £1, 806,000 for the Rent Service and £4,710,000 for the Planning Inspectorate administration. An increase of £43,658,000 from non-voted provision for Homelessness Strategies (£9,000,000), Bed and Breakfast (16,100,000), Priority Needs Orders (£10,000,000), Housing research and publicity (£150,000), Regeneration publicity (£350,000) and Rough Sleepers (£8,058,000). Take up from the Capital Modernisation Fund of £15,000 for the New Ventures Fund. A technical adjustment of £1,000,000 to correct the treatment of an Ordnance Survey interest payment. A net decrease of £15,919,000 arising from the following inter-departmental transfers: a reduction of £13,683,000 due to the reclassification of pneumoconiosis compensation payments to a provision and which has subsequently transferred to the Department for Work and Pensions, £2,066,000 to the Home Office for grants to the voluntary sector, £2,000,000 to the Home Office for Crime Reduction, £100,000 to the Department for Education and Skills for Community Champions, £300,000 from the Home Office for New Ventures Fund, £130,000 from the Home Office for Special Grants Programme and £1,500,000 from the Home Office for neighbourhood wardens. Take up from Invest To Save Budget of £597,000 for Ordnance Survey (£165,000) and Fire Service Projects (£432,000).
  (ii) The changes for Request for Resources 2 are as follows:

  Machinery of Government change of £1,726,236,000 to the Department for Transport.
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  (iii) The changes for Request for Resources 4 are as follows:

  A net decrease of £295,618,000 arising from machinery of government transfers to Department for Transport (£108,842,000), to the Department for Work and Pensions (£193,174,000), from the Home Office (£2,162,000), and from the Cabinet Office (£4,236,000). An increase of £107,925,000 arising from other interdepartmental transfers from the Cabinet office (£98,630,000), the Home Office (£6,104,000), the Department for Education and Skills (£2,539,000) and from the Department for Culture, Media and Sport (£652,000). A transfer of £4,000 from Requests for Resource 3 to meet costs of providing administration services.

  (iv) Provision within the non-Voted resource element of the DTLR Main Programmes Departmental Expenditure Limit will be decreased by £1,287,007,000 to reflect machinery of government transfer to Department for Transport (£1,243,279,000), a machinery of government transfer to the Department for Work and Pensions (£70,000) and a transfer to voted provision on Request for Resources 1 (£43,658,000).
  (v) As a result of the changes to Requests for Resources 1,2 and 4 the ODPM administration provision has been decreased by £364,510,000 from £707,882,000 to £343,372,000.

  The change in the capital element of the DEL arises from:
  (vi) The changes for Request for Resources 1 are as follows:

  Take up of End Year Flexibility of £25,926,000 comprising £11,809,000 for Safer Communities supported Housing Fund, £14,000,000 for Starter Homes Initiative and £117,000 for The Rent Service Invest to Save Budget. A technical adjustment of £1,121,000 for Ordnance Survey loan repayment. An increase following a transfer from Department for Transport of £30,000,000 arising from the repayment of a loan. Take up from the Capital Modernisation Fund of £74, 055,000 for The Rent Service (£1,500,000), New Dimension (£43,000,000), Choice Based lettings (£3,355,000 including take up of End Year Flexibility of £2,355,000), Housing Market Renewal Fund (£25,000,000) and Public Space Improvement (£1,200,000). Take up from Invest to Save Budget of £65,000 for Ordnance Survey (£15,000) and Fire Service Projects (£50,000). A transfer of £14,629,000 from non-voted resources for Private Sector Housing Renewal (£8,000,000), Housing Defect grants (£1,629,000) and Coalfields Regeneration Trust (£5,000,000).

  (vii) The changes for Request for Resources 2 are as follows:
  Machinery of Government change of £2,653,199,000 to the Department for Transport.

  (viii) The changes for Request for Resources 4 are as follows:

  A decrease of £33,666,000 arising from machinery of government transfers to the Department for Transport (£23,101,000), and to the Department of Work and Pensions (£10,565,000). An increase of £613,000 arising from a further interdepartmental transfer from the Cabinet Office.

  (ix) Provision within the non-Voted capital element of the DTLR Main Programmes Departmental Expenditure Limit will be decreased by £2,406,543,000 in respect of a Machinery of Government transfer to Department for Transport (£2,391,914,000) and a transfer to voted provision on Request for Resources 1 (£14,629,000).
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  (b) the DTLR Local Government DEL will be increased by £35, 136,000 from £37,649,827,000 to £37, 684,963,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  Resources Change

  New DEL

  Capital Change

  New DEL

  Total DEL

  +27,967

  37,403,935

  +7,169

  281,028

  Of which Voted

  +25,767

  37,311,082

  +7169

  273,028

  Non Voted

  +2,200

  92,853

  0

  8,000

  The change in the resource element of the DEL arises from:
  (i) The changes for Request for Resources 3 are as follows:

  Take up of End Year Flexibility of £23,792,000: VOA rating services (£1,200,000), Best Value Inspectorate (£2,958,000), Local Government research (£600,000), PFI Special Grants (£5,400,000), support for local authorities (Bellwin) (£1,500,000), Local Government On-Line Resource (1,732,000), and take up from the Invest to Save Budget (£10,402,000). £2,000,000 from the DEL Reserve for Special Grants for Foot and Mouth Disease NNDR concessions. A decrease of £21,000 arising from machinery of government changes transfer to the Lord Chancellor's Department and £4,000 transfer to the Office of the Deputy Prime Minister's Request for Resources 4 in respect of costs of providing administration services.

  (ii) Provision within the non-Voted resource element of the Local Government DEL will increase by £2,200,000 to reflect the take up of End Year Flexibility for the Standards Board for England.

  The change in the capital element of the DEL arises from:
  (iii) The changes for Request for Resources 3 are as follows:

  Take up of End Year Flexibility of £4,240,000 for Local Government On-Line. Take up from the Invest to Save Budget End Year Flexibility of £2,929,000.

  The increases will be offset by inter-departmental transfers or charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

TRANSPORT

  Departmental Expenditure Limits
  The Secretary of State for Transport (Mr. Alistair Darling)
  By convention Suplementary Estimates are published after an announcement on associated changes to the Departmental Expenditure Limit (DEL) and administration cost limit. Subject to parliamentary approval of the necessary estimate, the Department for Transport departmental expenditure limit for 2002-03 will be £8,928,473,000 and the administration costs limit will be £479,446,000.

  The departmental expenditure limit comprises £8,146,571,000 transferred from the Office of the Deputy Prime Minister, following Machinery of

  19WS
  Government changes, and a subsequent increase of £781,902,000. within the DEL change, the impact on resources and capital are as set out in the table:

  £'000

  Resources

  Capital

  Transferred from ODPM

  3,078,357

  5,068,214

  Change

  174,878

  607,024

  New DEL

  3,253,235

  5,675,238,

  Of which:

  Voted

  1,862,956

  3,362,095

  Non voted

  1,390,279

  2,313,143

  The change in the resource element of the DEL arises from:
  (i) take up of £150,800,000 of resource end year flexibility, comprising:

  (a) £139,627,000 for the Strategic Rail Authority (non-voted) to meet extra costs that have arisen on some passenger rail franchises;

  (b) £11,173,000 to increase the Road Haulage Modernisation Fund (including £800,000 that has been transferred to the Department for Education and Skills for the Learning and Skills Council's training scheme for the road haulage industry);
  (ii) take up of £13,020,000 capital end year flexibility for the Highways Agency to support resource expenditure in line with the Agency's business plan;
  (iii) a transfer of £200,000 to the Department for Environment, Food and Rural Affairs in respect of fishermen's' safety training;
  (iv) a transfer of £782,000 from the Home Office for research on dedicated vehicle identity checks;
  (v) a transfer of £3,800,000 (administration costs) to the Department for Work and Pensions in respect of contributions to the Health and Safety Commission's work on implementation of the recommendations in Lord Cullen's report on the rail accident at Ladbroke Grove;
  (vi) the transfer of £15,141,000 from the capital element of the DEL to the resource element, comprising:

  (a) £7,230,000 for aviation services;

  (b) £538,000 for London Underground PPP Advisors;

  (c) £7,373,000 for the Strategic Rail Authority (non-voted);

  (vii) an increase in receipts of £65,000 to offset capital expenditure on maintenance of the International Maritime Organization building. The change in the capital element of the DEL arises from:

  (i) a call on the DEL reserve of £643,000,000 and a transfer of £100,000,000 from departmental unallocated provision to ensure continued funding of, and increased investment in, London Underground Limited;

  (ii) a draw down of £9,100,000 from the Capital Modernisation Fund comprising:

  (a) £8,600,000 for Electronic Service Delivery of Abnormal Loads; and

  (b) £500,000 for the Vehicle Certification Agency's WIMS project;
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  (iii) a transfer of £30,000,000 to the Office of the Deputy Prime Minister to re-imburse a transfer from housing capital programmes made in 2001–02;
  (iv) a transfer of £15,141,000 from Trans European networks payments for rail and other transport industries projects to the resource element of the DEL;
  (v) a transfer from non-voted credit approvals of £28,078,000 to voted programmes in support of the Maritime and Coastguard Agency (£9,517,000), road user charging (£1,941,000), Transport Direct (£1,000,000), water freight grants (£8,247,000), local authorities requesting support for "accepted" road schemes (£6,229,000) and Promoting Sustainable Travel Initiatives1 Cycle Fund (£1,144,000);
  (vi) a transfer of £11,307,000 from voted provision for the Highways Agency to non-voted credit approvals for de-trunking programmes;
  (vii) a transfer of £38,000,000 from voted provision for the Highways Agency to the Strategic Rail Authority (non-voted) to meet additional project development costs;
  (vii) an increase of £65,000 in respect of maintenance of the International Maritime Organization building, offset by resource appropriations in aid.

  The administration costs limit comprises £483,246,000 transferred from the Office of the Deputy Prime Minister, following Machinery of Government changes, and a subsequent reduction of £3,800,000.

  All of these changes will be offset by inter-departmental transfers or charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

CULTURE, MEDIA AND SPORT

  Contingent Liabilities
  The Secretary of State for Culture, Media and Sport (Tessa Jowell)
  The provision for the Government Indemnity Scheme is made by the National Heritage Act 1980. The scheme facilitates public access to loans of works of art and other objects for public display made to museums, galleries and other such institutions by private owners and non-national institutions. It does this by indemnifying lenders against loss or damage to their loan. Loans covered by the scheme must be for public benefit. The scheme also covers loans of such objects for study purposes within borrowing institutions, where this would contribute materially to the public's understanding or appreciation of the loan. Examples of this are: enhancing interpretation or explanation to the public of objects, or bringing into the public domain the conclusions of any study.

  In the six month period ended 30 September, the following undertakings to indemnify were given under section 16 by the relevant Departments for objects on loan to national and non-national institutions:

  Numbers

  Department for Culture, Media and Sport

  608

  Scottish Executive Education Department

  253

  The National Assembly for Wales

  184

  The value of contingent liabilities in respect of undertakings given at any time under section 16 and which remained outstanding as at 30 September is:

  21WS

  Department for Culture, Media and Sport

  £2,571,225,058

  Scottish Executive Education Department

  £493,725,877

  The National Assembly for Wales

  £57,572,660

  The value of non-statutory Government indemnities to cover loans handled by the Government Art Collection and which remained outstanding as at 30 September is:

  Value: £5,000,000

  Resource

  Capital

  Change

  New DEL

  Of which: Voted

  Non-voted

  Change

  New DEL

  Of which: voted

  Non-voted

  £'000

  £'000

  £'000

  £'000

  £'000

  £'000

  £'000

  £'000

  7,240

  1,167,397

  163,929

  1,003,468

  59,627

  163,376

  116,495

  46,881

  The £7,240,000 increase in the voted element of the resource DEL for RfRl arises from the transfer of £1,000,000 from the Home Office for the Spend for Sport initiative and £134,000 match funding of the Public Library Volunteer Scheme; the take up of £3,622,000 of discretionary end year flexibility provision for administrative costs; the transfer of £652,000 administration costs expenditure to the Office of the Deputy Prime Minister toward the expenses of running the regional Government Offices; and the take up of £3,136,000 of discretionary end year flexibility provision for the further development of Culture Online.

  The £4,000,000 reduction in the non-voted element of the resource DEL for RfRl arises from a transfer £4,000,000 from the Department's unallocated provision into administration costs.

  The £6,970,000 increase in the Department's Administration Costs Limit arises from a transfer of £4,000,000 from the Department's unallocated provision into administration costs; the take up of £3,622,000 of discretionary end year flexibility provision for administrative costs; and the transfer of £652,000 administration costs expenditure to the Office of the Deputy Prime Minister toward the expenses of running the regional Government Offices.

  The £59,627,000 increase in the voted element of the capital DEL for RfRl arises from the take up of £50,460,000 of discretionary capital DEL end year flexibility provision under the Space for Sport and Art initiative; the draw down of £5,000,000 from the Capital Modernisation Fund for the further development of Culture Online; the take up of £3,534,000 of discretionary capital DEL end year flexibility for the Royal Parks; and the take up £633,000 of discretionary capital DEL end year flexibility for Administration and Research.

  The increases will be offset by inter-departmental transfers or charged to the DEL Reserve and will not therefore add to the Planned total of Public Expenditure.
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  The value of non-statutory Undertakings given to Her Majesty in respect of loans from the Royal Collection and which remained outstanding as at 30 September is: Value: £216,852,270

  Winter Supplementary Estimate
  The Secretary of State for Culture, Media and Sport (Tessa Jowell)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, the Department for Culture, Media and Sport DEL will be increased by £66,867,000 from £1,263,906,000 to £1,330,773,000 and the Administration Costs limits will be increased by £6,970,000 from £35,196,000 to £42,166,000.

  Within the DEL change, the impact on resources and capital are as set out in the following table:

HOME DEPARTMENT

  Seasonal Agricultural Workers' Scheme
  The Secretary of State for the Home Department (Mr. David Blunkett)
  A review of the Seasonal Agricultural Workers' Scheme (SAWS) was announced on 7 February 2002 in the White Paper on Immigration and Asylum entitled "Secure Borders, Safe Haven: Integration with Diversity in Modern Britain". Officials within the Home Office have since completed a formal consultation in which the views of a wide range of organisations with an interest in the scheme have been sought.

  The Government would like to thank all those who responded to this review. The response of those contributing, many of whom were farmers and growers or their representatives, is that the SAWS plays an important role in providing an additional source of seasonal workers. We have listened to the views expressed and concluded that the scheme should be retained and developed where appropriate with the primary purpose of providing farmers and growers access to seasonal labour.

  The use of operators in administering the scheme is felt by the industry to be one of the key strengths of the current arrangements. They play a crucial role in recruiting and allocating participants to farms, overseeing their welfare, and monitoring and evaluating the scheme. Operators will therefore continue to be a feature of the revised SAWS. They will be appointed following a tendering exercise and will be in place in preparation for the revised SAWS which will operate from 2004 onwards.

  I am aware that many farmers and growers who have an unmet need for seasonal labour are not within the scope of the existing arrangements. Consequently, the period during which the SAWS operates will be extended beyond the current months of May to November to allow participation in the scheme at any time throughout the year so as to meet the demand for

  23WS
  seasonal workers. Additionally the work that SAWS participants are permitted to undertake will be extended, provided it is agricultural work and seasonal in nature. These changes will be fully implemented from January 2004. However, in recognition of the difficulties farmers and growers who are outside the scope of the current arrangements might experience in recruiting seasonal labour next year, I will bring forward these changes for the 2003 SAWS season. This is provided it is within the capacity of the existing operators to handle the additional work, and the employers wishing to benefit are able to meet the welfare needs of participants, in particular the provision of accommodation.

  In response to these changes the Government will increase the already agreed quota for SAWS 2003 from 20,200 to 25,000. Future quota levels will be determined annually on the basis of an appraisal of the scheme's performance and estimates of future demand by key stakeholders, in particular through scheme operators on behalf of the employers they represent. Although the review found no evidence to support an immediate increase in the quota to 50,000 as recommended by a recent Policy Commission report into the future of food and farming, the Government accept that subject to economic growth demand for seasonal workers will rise steadily in the coming years. It will continue to be a requirement of a revised SAWS that participants must be full-time students in their home country as the review indicated students have an incentive to return home at

  Resources

  Capital

  Change

  New DEL

  Of which: voted

  Non voted

  Change

  New DEL

  Of which: voted

  Non voted

  -3,746

  199,725

  137,401

  62,324

  33

  5,789

  5489

  300

  The change in the resource element of the DEL arises from:
  the merger, on 1 July 2002, of the National Investment and Loans Office with HM Treasury and the Debt Management Office (£192,000 net, of which administration costs is £1,975,000). NILO's DEL will be reduced from £191,000 to £0 and the administration cost limit will decrease from £2,018,000 to £0 as a result of the merger;
  draw down of £485,000 Invest to Save Budget funding;
  a transfer of £67,000 administrative costs to HM Customs and Excise for costs incurred by the Penrose Inquiry team;
  a transfer of £4,400,000 programme expenditure from the Office of Government Commerce to the Lord Chancellor's Department and the Court Service for properties transferred from the OGC's residual estate portfolio.

  The change in the capital element of the DEL arises from the merger of NILO with HM Treasury and the DMO (£33,000). NILO's capital DEL will reduce from £33,000 to £0.

  There is also an increase to non-voted DEL of £44,000 as a consequence of the NILO/HMT merger. This is for provision programme expenditure. NILO's non-voted DEL will decrease from £44,000 to £0.

  The increases will be offset by inter-departmental transfers and will not therefore add to the planned total of public expenditure.
  24WS
  the end of their time on the scheme. However, the upper age limit of 25 will be removed altogether to enable mature students to benefit from the scheme and to earn money that they can use to fund their education.

  I hope these changes will ensure the scheme can continue to make an important contribution to meeting the seasonal labour needs of the agriculture industry and in doing so provide participants with a valuable experience of working in the UK.

TREASURY

  Departmental Expenditure Limits
  The Financial Secretary to the Treasury (Ruth Kelly)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, HM Treasury's DEL will decrease by £3,713,000 from £209,227,000 to £205,514,000 and the administration costs limits will be increased by £1,908,000 from £108,296,000 to £110,204,000. The administration cost limit of £108,296 includes a correction to the figure published in the Main Estimate (£106,508). In order to prevent a negative RFR in the Main Estimate, A in A of £1,788 was switched to CFERs. This switch appeared in part II of the Main Estimate but was not reflected in the notes to the Estimate.

  Within the DEL change, the impact on resources and capital are as set out in the following table:

PRIVY COUNCIL OFFICE

  Winter supplementary Estimate
  The Leader of the House of Commons (Mr. Robin Cook)
  I am today announcing some changes to the Privy Council Office DEL and Administration Cost Limits for 2002–03. The Privy Council Office DEL will be increased by £270,000 from £2,798,000 to £3,068,000 and the Administration Costs Limits will be increased by £270,000 from £2,838,000 to £3,108,000. Within the DEL changes there is no impact on capital; the impact on resources is set out in the following table:

  Resources

  Change

  New DEL

  Of which: Voted

  Non- Voted

  + £270,000

  £3,068,000

  £3,068,000

  nil

  The changes in the resource element of the DEL arise from unexpected Privy Council Office costs attributed to accommodation and related matters and incurred in modernising the Department.

  The increase will be charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

  HM Customs and Excise (Winter Supplementary Estimate)
  The Economic Secretary to the Treasury (John Healey)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, the H M Customs

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non- voted

  Change

  New DEL

  Of which: voted

  Non-voted

  50,878,000

  1,074,310,000

  1,045,571,000

  28,739,000

  –

  84,418,000

  61,418,000

  23,000,000

  The change in the resource element of the DEL arises from: the take up of end year flexibility entitlement of £21,177,000 on administration costs and £29,588,000 on programme expenditure as set out in the Public Expenditure Outturn White Paper (Cm 5574); a transfer of £67,000 in administration costs from HM Treasury for setting up the Penrose Inquiry team; and a transfer of £46,000 from the Home Office on programme expenditure in respect of Cocaine Market Sizing research.

  The total administration costs change is £61,644,000, which includes a switch from non-discretionary programme expenditure to administration costs of £40,400,000. The administration costs increase will primarily provide for additional front-line operational staff and support resources, to tackle fraud in respect of Excise duties (significantly Hydrocarbon Oils).

  The increases will be offset by inter-departmental transfers or charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

  Tax Ready Reckoner and Tax Relief Document
  The Chancellor of the Exchequer (Mr. Gordon Brown)
  The Government are today publishing a document containing the estimates of the effects of various illustrative tax changes on tax receipts in 2003–04 and 2004–05 (plus 2005–06 for indirect taxes) and estimates of the costs of the main tax reliefs in 2001–02. Copies are being placed in the Libraries of both Houses, and are available in the Vote Office.

  National Insurance contributions
  The Paymaster General (Dawn Primarolo)
  I have completed the annual review under section 141 of the Social Security Administration Act 1992.1 propose the following changes to take effect from 6 April 2003. These rates and limits will also apply to Northern Ireland National Insurance Contributions.

  Employers and Employees

  In line with the Social Security Contributions and Benefits Act 1992, the Lower Earnings Limit for primary Class 1 contributions is to be raised to £77 a week. It is set at the level of the basic Retirement Pension for a single person from April 2003 and rounded down to the nearest pound.

  The Primary and Secondary Thresholds for Class 1 contributions will continue to be aligned with the weekly amount of the income tax personal allowance, which will be frozen from April 2003. The Primary and
  26WS
  and Excise DEL will be increased by £50,878,000 from £1,107,850,000 to £1,158,728,000 and the administration costs limit will be increased by £61,644,000 from £956,323,000 to £1,017,967,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  Secondary Thresholds will therefore remain at £89 a week. This means that no tax or Class 1 contributions will actually be paid on earnings below this level.

  The Upper Earnings Limit for primary Class 1 contributions will be raised to £595.

  The self-employed

  The rate of Class 2 contributions will be frozen at £2.00 a week.

  Self-employed people with earnings below the annual Small Earnings Exception can apply to be exempted from paying Class 2 contributions. This limit will be raised by £70 to £4,095 in line with inflation.

  The annual lower profits limit for liability to Class 4 contributions will remain at £4,615 a year (in line with the income tax personal allowance). The Upper Profits Limit will increase by £520 to £30,940, to maintain the link with employees' earnings liable to Class 1 contributions.

  Class 3

  The rate of Class 3 voluntary contributions will be increased by 10 pence to £6.95 a week.

  Share fishermen

  The special rate of Class 2 contributions for share fishermen, which allows them to build entitlement to contributory Jobseekers Allowance in addition to the other contributory benefits available to the self-employed, will remain at £2.65 a week.

  Volunteer Development Workers

  The special rate of Class 2 contributions for volunteer development workers, which entitles them to the full range of contributory benefits, will be increased by 10 pence to £3.85 in line with the statutory formula of 5 per cent of the primary Class 1 Lower Earnings Limit.

  Treasury Grant

  I need to ensure that the Fund can maintain a prudent working balance throughout the coming year. In accordance with section 2 (2) of the Social Security Act 1993, I propose to do so by prescribing that the maximum Treasury Grant which may be made available to the Fund in 2003–04 shall not exceed 2 per cent of the estimated benefit expenditure for that year. Similar provision will be made in respect of the Northern Ireland National Insurance Fund.

  I shall be laying a draft re-rating order before Parliament in due course. This will accompany a report by the Government Actuary to myself and my right hon. Friend the Secretary of State for Work and Pensions which we shall jointly present to Parliament.
  27WS
  The following table sets out the rates, earnings limits and thresholds for National Insurance Contributions proposed for 2003–04.

  National Insurance Contributions, Proposed re-rating, April 2003 Item

  2003–04

  Lower Earnings Limit, primary

  £77

  Class 1

  Upper Earnings Limit, primary

  £595

  Class 1

  Primary Threshold

  £89

  Secondary Threshold

  £89

  Employees' primary Class 1 rate

  11 per cent from £89.01 to £595

  plus 1 per cent above £595

  Employees' contracted-out rebate

  1.6 per cent

  Married women's reduced rate

  4.85 per cent from £89.01 to £595

  plus 1 per cent above £595

  Employers' secondary Class 1 rate

  12.8 per cent on earnings above

  £89

  Employers' contracted-out rebate,

  3.5 per cent

  Salary-related schemes

  Employers' contracted-out rebate,

  1 per cent

  money-purchase schemes

  Class 2 rate

  £2

  Class 2 Small Earnings Exception

  £4,095

  Special Class 2 rate for share

  £2.65

  fishermen

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non- Voted

  Change

  New DEL

  Of which: Voted

  Non- Voted

  77,954

  2,601,986

  2,252,799

  349,187

  38,531

  168,086

  0

  The change in the resource element of the DEL arises from the draw down of £78,102,000 administration costs EYF, and additional income for VOA services.

  The change in the capital element of the DEL arises from the draw down of capital EYF and non-discretionary EYF, totalling £37,631,000 as set out in the Public expenditure Outturn White Paper (CM5574). It also includes the draw down of £900,000 from the Capital Modernisation Fund.

  Resources (£) Change

  New DEL

  Of which: voted

  Non-voted

  Capital (£) Change

  New DEL

  Of which: voted

  Non-voted

  771,000

  128,236,000

  123,876,000

  4,360,000

  -1,003,000

  22,063,000

  22,063,000

  0

  The net increase in the resource element of the DEL is due to two factors. Firstly, there is an increase in Resource DEL due to the draw down of £1,021,000 in respect of Resource DEL end year flexibility arrangements. This is partially offset by a transfer of £250,000 in total to other Government Departments in relation to work to develop the Neighbourhood Statistics programme. The transfers comprise £97,000 to the Department for Education and Skills, £127,000 to the Department of Health and £26,000 to the Lord Chancellor's Department.

  The reduction in the capital element of the DEL arises from a transfer of capital costs of some £1,003,000 in total to other government departments in relation to
  28WS

  National Insurance Contributions, Proposed re-rating, April 2003 Item

  2003–04

  Special Class 2 rate for volunteer

  £3.85

  development workers

  Class 3 rate

  £6.95

  Class 4 rate

  8 per cent from £4,615 to £30,940

  plus 1 per cent above £30,940

  Class 4 Lower Profits Limit

  £4,615

  Class 4 Upper Profits Limit

  £30,940

  Inland Revenue (Departmental Expenditure Limits)
  The Paymaster General (Dawn Primarolo)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, the Inland Revenue Departmental Expenditure Limit will be increased by £77,954,000 from £2,524,032,000 to £2,601,986,000 and the administration costs limit will be increased by £78,102,000 from £2,566,610,000 to £2,644,712,000. The net administration costs limit is reduced by £218,000 from -£6,347,000 to -£6,565,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  Office for National Statistics (Departmental Expenditure Limits)
  The Financial Secretary to the Treasury (Ruth Kelly)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, the Office for National Statistics Resource Departmental Expenditure Limit (DEL) will be increased by £771,000 from £127,465,000 to £128,236,000 and the administration costs limit will be increased by £771,000 from £126,666,000 to £127,437,000. The Office for National Statistics Capital DEL will decrease by £1,003,000 from £23,066,000 to £22,063,000. The impact on resources and capital are as set out in the following table:

  work to develop the Neighbourhood Statistics programme. The transfers comprise £1,000,000 to the Department for Work and Pensions and £3,000 to the. Department of Health.

NORTHERN IRELAND OFFICE

  Departmental Expenditure Limit
  The Secretary of State for Northern Ireland (Mr. Paul Murphy)
  Subject to Parliamentary approval, the Northern Ireland Office (NIO) will be taking a
  29WS
  2002–2003 Winter Supplementary Estimate. The effect this will have is to increase the NIO's DEL by £60,000,000 from £1,151,862,000 to £1,211,862,000 and the administration costs limit will be increased by

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non- Voted

  Change

  New DEL

  Of which: voted

  Non-voted

  55,000

  1,147,309

  1,147,309

  0

  5,000

  64,553

  64,553

  0

  The change in the resource element of the DEL arises from the draw down of £55,000,000 End Year Flexibility. This amount includes a total of £10,000,000 for administration costs.

  The extra resource costs cover a range of areas within the Department such as policing and security, central administration, political, criminal justice and prisons.

  The change in the capital element of the DEL arises from the draw down of £5,000,000 End Year Flexibility.

  The extra capital costs cover a range of areas within the Department such as policing and security, central administration, political, criminal justice and prisons.

  The increases will be offset by transfers charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

SCOTLAND OFFICE

  Departmental Expenditure Limits
  The Secretary of State for Scotland (Mrs. Helen Liddell)
  Subject to parliamentary approval of the necessary Supplementary Estimate, the Scotland Departmental Expenditure Limit (DEL) will be increased by £514,577,000 from £17,775,734,000 to £18,290,311,000, and the administration costs limit will be increased by £200,000 from £6,502,000 to £6,702,000.

  The DEL increase takes account of the following:
  a reclassification from AME into DEL of £5,400,000 for fire service pensions;
  an increase of £3,500,000 for safety cameras;
  an increase of £3,000,000 for the Aggregates Levy Sustainability Fund;
  the take-up of EYF by the Scotland Office amounting to £200,000; and
  the take-up of EYF by the Boundary Commission for Scotland amounting to £65,000.
  The DEL increase also includes the following transfers to and from other Government departments, amounting to a net increase of £2,412,000. These are;
  transfers of £2,763,000 from the Department for Trade and Industry;
  a transfer of £34,000 from the Home Office; and
  a transfer of £385,000 to the Department of Health.

  All of the increases add to the resource budget, and the capital budget of £100,000 is unchanged.
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  £154,716,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  The increases will be offset by interdepartmental transfers as detailed above, classifications or charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

TREASURY

  Indirect Tax Revenues
  The Economic Secretary to the Treasury (John Healey)
  The Government's latest estimates of the revenue losses affecting VAT, tobacco duty and other indirect taxes, and the supporting methodologies, are set out in documents published today by HM Customs and Excise entitled 'Protecting Indirect Tax Revenues' and 'Measuring Indirect Tax Losses'. Both documents are available in the Libraries of both Houses.

DEPARTMENT OF TRADE AND INDUSTRY

  Offshore Wind Industry
  The Minister for Energy and Construction (Mr. Brian Wilson)
  I am pleased to inform hon. Members that I published on 22 November a consultation document proposing a strategic framework for the future of the offshore wind industry.

  This country is very rich in wind resources. Harnessing the wind to generate electricity means that we have a sustainable and secure long term supply of energy. An important added benefit is that generating electricity from the wind does not release carbon and other pollutants into the atmosphere. The wind energy industry is well established onshore and single turbines and larger wind farms are already generating electricity for homes and businesses.

  The wind resource out at sea is substantial and offers considerable potential for expansion of the wind energy industry. The offshore wind energy industry could make a significant contribution, perhaps as much as 50%, to meeting the Government's target that 10% of electricity supplies should be generated from renewable sources by 2010. Expansion on this scale would bring significant investment and job opportunities.

  The first step in realising this potential has already been taken when in December 2000 the Crown Estate invited the industry to apply for site leases for wind farms. The response was most encouraging. 20 wind farms are planned for various locations around the coast The first of these wind farms is expected to be constructed next year.

  Winter Supplementary Estimate
  The Secretary of State for Trade and Industry (Mrs. Patricia Hewitt)
  Subject to Parliamentary approval of

  Resources

  Capital

  Change

  New DEL

  Of Which: Voted

  Non- voted

  Change

  New DEL

  Of Which: Voted

  Non- voted

  3,707

  95,838

  95,838

  0

  0

  248

  248

  0

  The change in the resource element of the DEL arises from a transfer in resources from the Department of Trade and Industry to British Trade International of £2,000,000 in respect of the Global Partnerships programme; £156,000 in respect of the Pacific Rim Electronics Association (PREBA) and the Japan Electronics Business Association (JEBA); and take up of £1,551,000 of End Year Flexibility entitlement which is required to resource increased trade development activity in the English regions, including providing full support to new companies recruited to the Passport programme in 2002/03.

  The increase will be offset by transfers or changes to the DEL Reserves and will not therefore add to the planned total of Public expenditure.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Sustainable Development in Government
  The Minister for the Environment (Mr. Michael Meacher)
  I am delighted to announce that the "Sustainable Development in Government 1st Annual Report" has been published today. This replaces the Greening Government Annual reports of the last Parliament. The change in title reflects the Government's commitment to considering economic, environmental and social impacts of the operation of the Government Estate and in policy making processes.

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non-voted

  Change

  New DEL

  Of which: voted

  Non-voted

  1,100

  541

  541

  N/A

  600

  1,135

  1,135

  N/A

  The increase in the resource element of the DEL £1,100,000 arises from the take up of end of year flexibility of administration costs.

  The increase in the capital element of the DEL £600,000 arises from an investment in the development of a new financial model. This will be used in the next review of prices and will be shared with the industry and the website development costs.

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non-voted

  Change

  New DEL

  Of which: voted

  Non-voted

  +245,339

  1,842,196

  1,475,257

  366,939

  +77,667

  616,524

  519,141

  97,383

  32WS
  the necessary Supplementary Estimate, British Trade International's Resource DEL will be increased by £3,707,000 from £92,131,000 to £95,838,000. Within the DEL change, the impact on resources and capital are set out in the following table.

  The report is presented in two parts; Part 1 is a summary of the progress and achievements across Government against the commitments and priorities set out in the 3rd Annual Report on Greening Government last year; Part 2 of the report will be in the form of a database giving details of the performance of every department. The database will be available on the Government's Sustainable development website— www.sustainable-development.gov.uk/ar2002/ index.htm

  There is also an executive summary of the report which highlights major achievements and priorities. The information contained within Part 2 has been transferred to CD-ROM and placed alongside copies of Part 1 and the executive summary in the libraries of both Houses.

  Office of Water Services (Winter Supplementary Estimate)
  The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Elliot Morley)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, the Office of Water Services DEL will be increased by £1,700,000 from £24,000 to £1,676,000 and the administration costs limits will be increased by £1,100,000 from £11,302,000 to £12,402,000.

  Within the DEL change, the impact on resources and capital are as set out in the following table:

  Department Expenditure Limits
  The Minister for Rural Affairs (Alun Michael)
  Subject to Parliamentary approval of the Supplementary Estimate, the Department for Environment, Food and Rural Affairs' DEL will be increased by £323,006,000 from £2,135,714,000 to £2,458,720,000, and the administration costs limit will be increased by £94,091,000 from £392,599,000 to £486,690,000. Within the DEL change, the impact on resources and capital are set out in the following table:
  33WS
  The change in the resource element of the DEL arises from: i) a draw down of £136,900,000 from the DEL Reserve for various Departmental priorities including FMD, ii) a take-up of our entitlement to £69,300,000 under End-Year flexibility, iii) a take-up of £2,000,000 programme resources from the November 2000 Flood Defence Package, iv) a switch of £12,100,000 programme resources to administrative resources, as agreed with Treasury, v) a transfer from RfRl to RfR2 of £128,000,000 in respect of England Rural Development Plan (ERDP), vi) a transfer of £70,000 programme resources to LCD for Countryside Rights of Way Act, vii) a transfer of £105,000 programme resources to DTI for the Farm Business Advice Service (FBAS) and, viii) to take-up transfers from ex DTLR of £37,114,000 held over from last year, ix) to take-up £200,000 programme resources from DfT for fishermen's training.

  Our EYF resource entitlement above includes £34,522,000 budget cover (non-Estimate) for the British Waterways Board (BWB), one of our Public Corporations.

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non-voted

  Change

  New DEL

  Of which: voted

  Non-voted

  No change

  53,598

  50,945

  2,653

  3,605

  10,855

  850

  10,005

  The increase in the capital element of the DEL arises from take up of end of year flexibility on the Capital Modernisation Fund. The increase will be charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

CABINET OFFICE

  Winter Supplementary Estimate
  The Minister of State, Cabinet Office (Mr. Douglas

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non-voted

  Change

  New DEL

  Of which: voted

  Non-voted

  -77,107

  206,444

  206,444

  –

  22,387

  54,715

  54,715

  –

  The change in the resource element of the DEL arises from Machinery of Government transfers of £113,301,000 to other departments; a claim on the reserve of £36,300,000 and an increase in the negative DEL of the Government Car and Despatch Agency of £106,000.

  The change in the capital element of the DEL arises from additions from the Capital Modernisation Fund of £15,000,000, transfers from the Home Office of £8,000,000 and Machinery of Government transfers to the Office of the Deputy Prime Minister of £613,000.

  The increases will be offset by inter-departmental transfers and charged to the DEL reserve and will not therefore add to the planned total of public expenditure.
  34WS
  The change in the capital element of the DEL arises from: i) a draw-down of £3,000,000 from the DEL Reserve for Departmental priorities, ii) a take-up of our entitlement to £59,667,000 under End-Year flexibility and, (iii) a take-up of £15,000,000 from the November 2000 Flood Defence Package.

  Our EYF capital entitlement above includes £8,461,000 budget cover (non-Estimate) for the BWB.

  The increase will either be offset by transfers or charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

  Forestry Commission
  The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, the Forestry Commission's DEL will be increased by £3,605,000 from £60,848,000 to £64,453,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  Alexander)
  Subject to Parliamentary approval of the Winter Supplementary Estimate, the Cabinet Office DEL (Departmental Expenditure Limit) will be decreased by £54,720,000 from £315,879,000 to £261,159,000, the gross administration costs limit will be decreased by £75,614,000 from £240,227,000 to £164,613,000 and the net administration costs limit will be decreased by £ 106,000 from £3,028,000 to £2,922,000.

  Within the DEL change the impact on resources and capital are as set out in the table:

LORD CHANCELLOR'S DEPARTMENT

  Winter Supplementary Estimate
  The Parliamentary Secretary, Lord Chancellor's Department (Ms Rosie Winterton)
  Subject to Parliamentary approval of the necessary Supplementary Estimates, the Lord Chancellor's Departments (including Northern Ireland Court Service and Public Records Office) DEL will be increased by £67,866,000 from £2,833,287,000 to £2,901,153,000 and the administration costs limit will be increased by £20,315,000 from £695,799,000 to £716,114,000. Within the DEL change, the impact on resources and capital are as set out in the following table.
  35WS

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non-voted

  Change

  New DEL

  Of which: voted

  Non-voted

  TOTAL

  46,971

  2,777,230

  2,543,516

  233,714

  20,895

  123,923

  90,431

  33,492

  The change in the resource element of the DEL is the net effect of: take up of £1,000,000 administration costs from the Policy Innovation Fund; take up of £243,000 resources from the Invest to Save Budget; take up of £34,931,000 in relation to the Criminal Justice System (CIS) Reserve from the Home Office, of which £14,224,000 is administration costs; take up of transfers totalling £210,000 resources from the Home Office, of which £45,000 is administration costs; a transfer of £20,000 resources to the Home Office; a transfer of £4,322,000 resources from the Office of Government Commerce; a transfer of £26,000 resources from the Office for National Statistics; take up of Invest to Save Budget end year flexibility of £268,000 resources, of which £226,000 is administration costs; to take up end year flexibility of £3,820,000 administration costs relating to the Criminal Justice System (CIS) Reserve; and a transfer of £ 1,171,000 resources from capital grant utilising the 2 ½per cent, capital to resource allowance.

  The change in the Public Records Office resource element of DEL arises from: the take up of £1,000,000 administration costs from end year flexibility.

  The change in the capital element of the DEL is the net effect of: take up of £1,100,000 resources from the Capital Modernisation Fund for HM Land Registry; take up of £36,000 resources from the Invest to Save Budget; take up of £8,650,000 Round 1 Capital Modernisation Fund from the Home Office; take up of £8,000,000 in relation to the Criminal Justice System (CJS) Reserve from the Home Office; take up Capital Modernisation Fund end year flexibility of £4,215,000; take up of Invest to Save Budget end year flexibility of £65,000 resources; and a transfer of £1,171,000 to resource grant utilising the 2 ½ per cent, capital to resource allowance.

  The increases will be offset by inter-departmental transfers, increases to Appropriations in Aid and take up of End Year Flexibility entitlements and will therefore not add to the planned total of public expenditure.

TRANSPORT

  Airports
  The Secretary of State for Transport (Mr. Alistair Darling)
  In October, Kent County Council and Medway Council applied for a judicial review of the Government's decision not to include any options for new runways at Gatwick airport in the consultation on airport capacity. The Government had taken that decision after careful consideration of various factors, including our conclusion that it would be wrong to seek to overturn the legal agreement entered into by West Sussex County Council and BAA (then in government ownership), preventing construction of a further runway at Gatwick before 2019.
  36WS
  Yesterday, Mr Justice Maurice Kay held that the Government were wrong not to have included any options for new runways at Gatwick. However, the Court granted permission for the Government to appeal against this decision. Having considered the matter, I believe it would be wrong to extend the uncertainty that would inevitably result from a lengthy appeal process, and so I have therefore decided to accept the judgment. As a result we will include Gatwick in the consultation. This will regrettably mean that the publication of the White Paper will be delayed.

  I will make a further statement setting out how we intend to proceed shortly.

INTERNATIONAL DEVELOPMENT

  Winter Supplementary Estimate
  The Secretary of State for International Development (Clare Short)
  Subject to Parliamentary approval of the necessary Supplementary Estimate the Department for International Development DEL for 2002/2003 will be increased by £37,437,000 from £3,339,521,000 to £3,376,958,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  The change in the resource element of the DEL arises from:
  a transfer of £40,000,000 resource from the Unallocated Subhead (RfRl: E3) to the Bilateral Subhead;
  to give effect to the transfer of £3,700,000 resource from the Central Reserve as a contribution to the Commonwealth Education Fund;
  to give effect to the take up of DEL end year flexibility of £28,757,000 resource on programme expenditure;
  a transfer of £20,000 resource to the Home Office representing a contribution to membership of the Group of States Against Corruption (GRECO);
  a transfer of £5,000,000 resource from the Foreign and Commonwealth Office to Global Conflict Prevention.

  The increase will be met by inter-departmental transfers or from the DEL Reserve and will not therefore add to the planned total of public expenditure.

  CDC
  The Secretary of State for International Development (Clare Short)
  The purpose of the public-private partnership for CDC is to maximise the creation and long-term growth of viable businesses in poorer developing countries, by making responsible investments and mobilising private capital alongside public funds. These objectives have remained constant since the 1997 and 2000 White Papers on International Development. CDC has made good progress in implementing the Investment Policy agreed in 1999, raising private finance and co-financing for investments in poorer countries, and introducing private sector
  37WS
  disciplines. This has been achieved in some of the most difficult markets and economic conditions for many years.

  In order to support CDC's progress and the mobilisation of increased private investment in poorer developing countries, I have recently approved two further proposals. Firstly, CDC's business will focus more sharply on regions (South Asia and Africa) and on sectors (power, Small and Medium Enterprises, and infrastructure) that are priorities for DFID and the achievement of the Millennium Development Goals. Following a review commissioned by the Board earlier this year, CDC is already implementing a new business plan approved by its Board, focusing on these areas. Secondly, CDC will be reorganised, separating into two corporate entities and a family of Funds:-
  an Investment Company (the existing CDC, with some amendments to its Articles), which would continue to own the cash and investment assets of CDC and its subsidiaries. The Investment Company will remain wholly-owned by the Government during the reorganisation, and will be responsible for ensuring that HMG's capital adheres to CDC's Investment Policy.
  a new Management Company will be formed during 2003, subject to regulatory and other procedures being completed. The Management Company will raise and invest capital from the Investment Company, other Development Finance Institutions and private investors, following responsible business principles and providing leadership and supervision of a family of Funds.
  The initial Funds will include Funds for Africa, South Asia, the power sector and the SME sector. Each Fund will be managed by a dedicated fund management subsidiary of the Management Company. The new Funds will be run on a commercial basis that attracts capital from private investors and Development Finance Institutions, to meet the Governments objective of increasing investment in poorer developing countries.

  The structure of a management company and a family of Funds is an accepted norm in the international fund management industry. The advantages of adopting this structure in CDC are as follows.
  38WS
  Each Fund would have its own focus and investment strategy, target rate of return, risk profile and other characteristics. Potential private investors will be able to identify Funds that fit into their own investment strategies. The structure also enables specialised managers to be allocated to each Fund, and for incentives to be directly linked to individual Fund performance.
  Under current management arrangements, there is no competition for the management of CDC's capital. In the medium term, the Investment Company will be able to procure investment management services on a competitive basis, and to invest in Funds launched by other companies as well as by the Management Company. The reorganisation will therefore lead to a more competitive market for the management of investments in poorer developing countries.
  The Government have concluded that, under current market conditions, we cannot obtain value for money from a sale of shares in CDC Group pic as currently constituted. We are currently exploring with our advisers an appropriate corporate and shareholding structure for the Management Company and its subsidiaries, including the possible participation of private institutions and employees. In the long term, it is possible that equity in the Investment Company could also be offered for sale, when the right conditions obtain.

  The Investment Policy will remain broadly unchanged. The CDC Universe will apply to both the Investment Company and the Management Company, as will the responsible business principles. The requirements that 70 per cent, of investments should be for poorer developing countries, and 50 per cent, for sub-Saharan Africa and South Asia, will apply to the Investment Company's capital but not to third party capital. The 50 per cent, target for sub-Saharan Africa and South Asia will no longer be an "aim", but will be placed on the same mandatory basis over five-year rolling periods as the 70 per cent, target.

  I have informed the Select Committee of these proposals, which I believe will enable CDC to mobilise increased investment in the poorer developing countries, and make a stronger contribution to our goal of eliminating poverty.