Written Statement of 24 February 2003

DEPUTY PRIME MINISTER

  Business Tenancies Regulatory Reform Order
  The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Tony McNulty)
  On 22 July 2002, we laid before Parliament a draft Regulatory Reform Order to reform the workings of Part 2 of the Landlord and Tenant Act 1954. The Act provides a framework for the renewal and termination of business tenancies, and the aim of our reforms was to make the process quicker, easier, fairer and cheaper.

  The Order has undergone its first stage of Parliamentary scrutiny, and the House of Lords Delegated Powers and Regulatory Reform Committee and the House of Commons Regulatory Reform Committee published reports shortly before Christmas. I am grateful to the Committees for their thorough examination of our proposed amendments. I welcome their support for the bulk of our proposals to reform this complex and highly technical legislation.

  The Committees had some reservations on our proposals to change the way in which landlords and tenants may agree to contract a business lease without the normal statutory rights of security of tenure. The Regulatory Reform Committee made specific recommendations to enhance the protection for tenants. However, the Committee on Delegated Powers and Regulatory Reform had more fundamental concerns at the lack of evidence about the degree of protection that the courts provide, and hence whether our proposals to abolish the requirement for a joint application to the courts would remove necessary protection from business tenants.

  We acknowledge that while there is considerable anecdotal evidence, there is a lack of definitive statistical evidence about the outcome of applications to the court for approval of agreements to exclude security of tenure. We therefore propose to carry out research to indicate the outcome of recent applications to the court for approval to exclude security of tenure. The research will study the proportion of applications rejected and the reasons for rejection. We will also undertake some further consultation of organisations representing small businesses.

  We propose to present the research findings and the outcome of the further consultation to the Committees. Subject to the outcome of the research and consultation and the views of the Committees, we would then lay for second stage scrutiny an amended draft Order incorporating the amendments suggested by the Regulatory Reform Committee and slightly modified in certain other detailed respects.

  Supporting People Budget
  The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Tony McNulty)
  The Supporting People Programme aims to improve the quality of life of vulnerable people by supporting them to live independently in the community. It begins on 1 April. I am pleased to tell the House today that total provisional annual amounts of Supporting People Grant for England, based on estimates submitted by Authorities on 13, 16, and 17 December and other relevant information, for 2003–4, is 1.4 billion. I shall be writing further to Local Authorities to set out in detail their guidance.

  The programme is now providing supported housing in the form of at least five hundred and thirty thousand household units for older people, mainly in sheltered services, forty five thousand household units for people with learning difficulties or mental health problems, four thousand household units to support the rehabilitation of ex-offenders, three thousand household units for women fleeing domestic violence and seventy five thousand household units for people who were homeless or from other vulnerable client groups, as well as a considerable and growing amount of non-accommodation based "floating" support (including community alarms and Home Improvement Agency (HIA) service) (around 410 thousand households in all). This is a major investment in some of the most vulnerable and disadvantaged members of society, with the clear objective of helping them to become, or remain, full participants in their local communities. The programme's aim is to prevent crises such as hospitalisation, institutional care or homelessness, by providing early support when it is most effective.

  For the last three years the Government has been working with local authorities, providers, and other partners to prepare for this programme. Our overriding priority has been to make sure that people receiving services see no interruption to their services on 1 April. Equally those people receiving transitional housing benefit at the point of transfer must see their services continued during the transitional period on the same basis and cost to themselves as before. This has been done by work to accurately capture the current cost and nature of services in order to transfer these to new interim contracts on 1 April

  The new Supporting People programme will be delivered under the Local Government Act 2000 section 93. The Office of the Deputy Prime Minister will therefore administer the programme under the normal arrangement of a cash limited budget using, in the future, an allocation formula on which there has been recent consultation.

  Initial grant allocations are for six months since there remains work to be done to ensure that the estimates provided in December are accurate and fully evidenced. Final, fully verified, figures as at 31 March are required from local authorities by 30 September to confirm grant amounts. At that point any over or underestimates will be adjusted for.

  We are also conscious that there are services in the pipeline, which are currently incurring capital spend, and which will require revenue finding once the

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  buildings are completed. We have therefore made a provisional allocation for some of these, subject to confirmation of progress. We have made an allowance for expected savings due to declining obligations in respect of transitionally protected clients and the impact of early reviews. We are aware that authorities are entering into interim contracts in order to manage the process of transition, and are about to conduct reviews with a view to longer-term contracts. We will ensure that the allocations meet the validated contractual commitments authorities are obliged to put in place to meet their legal requirements and to manage the Supporting People programme on a stable basis up to Spending Review 2004 (covers 2005–6 onwards). We intend, by 1 April at the latest, to publish both further guidance on this and ground rules on how authorities can commit to longer term contracts, and how this fits with the Spending Review timetable at a national level. At this point, however, in the absence of the detailed figures from the final reconciliation, it would be inappropriate to set out definite figures for years two and three. Grant conditions are also for six months, allowing us to monitor progress of the new programme and make any small adjustment in year should these be necessary to allow the proper management of the programme.

  It is now time for local authorities, providers, and their partners in health and probation to take ownership of this programme,. Every service must undergo a review during the first three years of the programme. This review is aimed at improving the quality of service, assessing its strategic relevance, and challenging its value for money.

  The review process at the local level must be rigorous and disciplined to ensure that the services purchased through Supporting People are necessary, give good value for money, and are on a stable and appropriate contractual basis. Local authorities who do not carry out proper reviews or who provide insubstantial evidence of the benefits and strategic relevance of services cannot expect to receive continued levels of funding in future. We will also be looking carefully at the impact of the draft allocations formula, about which we are consulting at present.

  This programme offers an exciting new opportunity to local authorities and their partners to develop local partnerships to meet effectively the needs of their local people, using innovative new models of preventive services. We look forward to the development and sharing of positive practice in achieving the targets of social inclusion of vulnerable groups in their local communities.

  Regional Assemblies
  The Deputy Prime Minister (Mr. John Prescott)
  In the White Paper Your Region, Your Choice: Revitalising the English Regions (Cm 5511)> the Government invited views by the end of August 2002 on the question of how prescriptive we should be about the involvement of stakeholders in elected regional assemblies in England. In particular, the White Paper asked whether any requirements or principles should be specified and, if so, whether this should be done through legislation, guidance, or some other means.
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  By November 2002, 207 responses had been received on the involvement of stakeholders, of which most expressed views ranging more widely than these questions. The Government has today published an analysis of the responses received on my Office's website at http://www.odpm.gov.uk/, and I am placing a copy of this document in the House Library.

  As we stated in the White Paper (paragraph 7.8), the Government is very keen that key regional stakeholders and their representatives should be involved within the structure of an elected assembly. I am therefore pleased to be able to announce today our proposed policy framework for the involvement of stakeholders in the work of elected regional assemblies. This framework will form the basis of the statutory provisions on stakeholder involvement in the legislation we intend to bring forward to establish elected regional assemblies when Parliamentary time allows and after at least one region has voted for an elected assembly in a referendum.

  The Government wants to strike a balance between safeguarding the meaningful involvement of stakeholders in all relevant aspects of an elected assembly's work and allowing for regional flexibility to reflect regional priorities and build on existing working relationships. We also want to ensure that a wide diversity of regional stakeholders can be engaged. We therefore intend to make the following requirements and restrictions clear in the legislation:

  Each elected regional assembly will be required to actively engage stakeholders in the development and implementation of both the assembly's overall strategic vision for the region and the various specific regional strategies for which it is responsible.

  Each assembly should publish and make accessible an annual 'state of the region' report in a way which facilitates scrutiny and debate in the region.

  Only those elected may be full members of an assembly and thus eligible to sit on an assembly's executive.

  In order to enable assemblies to fulfil these requirements, the Government intends to provide in the legislation for a non-prescriptive approach to additional forms of stakeholder involvement which assemblies may wish to adopt. This would give assemblies discretion to:

  involve all of the stakeholders they consider appropriate—with particular emphasis on ensuring that business, local government, the voluntary sector, and community groups are properly involved;

  co-opt stakeholders to serve on scrutiny committees, with the same rights and duties as elected members, including voting rights—although elected members should be in the majority and chair scrutiny committees;
  co-opt stakeholders to serve on policy development committees, appoint particular stakeholders to act as policy advisers in specific cases, or involve stakeholder groups in the preparation of specific strategies;

  establish a regional partnership forum to bring stakeholder organisations together; establish consultative groups with specific sectors or on specific issues to facilitate consultation and/or the provision of advice; and

  spend money to support the involvement of stakeholders in assemblies' work through these or any other reasonable means, and to develop stakeholders' capacity to participate.

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  We envisage that this legislative framework would need to be supplemented by statutory guidance in order to safeguard the effective involvement of stakeholders while avoiding over-prescription. The Government will ensure that a draft of any such guidance is provided for consultation at the appropriate stage.

  London Borough of Hackney
  The Minister for Local Government and the Regions (Mr. Nick Raynsford)
  We announced on 31 January 2002 that the Government would provide the London Borough of Hackney with £25 million of financial support in 2002–03, This was part of a package of measures including stringent conditions, requiring improvements in the authority's performance and the restoration of its financial stability.

  The £25 million support is an exceptional measure, provided to prevent unacceptable cuts in services. It is being given to enable Hackney to get their finances back in order on a long-term basis and deliver the frontline services the people of Hackney deserve. Without this support Hackney would have been unable to balance their budget this year and action to turn the authority around would have been still further delayed. I am pleased to say I am advised that, with our help, Hackney are expecting to balance the 2003–04 budget, and are making good progress in a number of other areas to build for the longer term.

  I am today laying before this House a Special Grant Report, number 113, which seeks approval for providing Hackney with the £25 million to support its 2002–03 finances.

TRADE AND INDUSTRY

  British Energy
  The Secretary of State for Trade and Industry (Ms Patricia Hewitt)
  My statement to the House of 28 November set out the basis on which the Government was prepared to support the restructuring plan put forward by British Energy (BE) to address its financial difficulties.

  The Government's main objectives, which remain the same today, were: to ensure the safety of the nuclear power stations and the security of electricity supplies to the grid and consumers. In any circumstances, BE's significant nuclear liabilities require safe and experienced management. Because the Government has a responsibility to ensure safety, we had to consider how this goal could be most effectively delivered while protecting the taxpayer's interest. The company's plan, on which the Government imposed tough conditions, was acceptable because it met these tests.

  The Government was therefore prepared to play its part in this restructuring by providing financial support for BE's nuclear liabilities—underwriting BE's enhanced arrangements for decommissioning, and contributing significantly to the historic spent nuclear fuel liabilities. We also extended a credit facility of up to £650 million until 9 March.
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  On 28 November we identified 3 key outcomes that the company would have to achieve by mid-February if the restructuring package were to be successful:
  agreement from existing creditors to a temporary freeze on payments, and a write-down in the value of what they were owed;
  agreement to sell its stake in Bruce Power in Canada; and implementation of a new trading strategy.

  The company has announced its progress in fulfilling these conditions and I am placing copies of the relevant announcements in the Library of the House:
  its creditors have agreed to a binding standstill and agreed in principle to a significant write-down in the value of what they are owed as part of this plan;
  the completion of the sale of its interests in Bruce Power in Canada; and
  progress on the implementation of its new trading strategy.

  The sale process for the company's stake in Amergen in the United States is also underway.

  The company has also announced the appointment (with effect from 1 March) of a new Chief Executive, Michael Alexander, formerly Chief Operating Officer of Centrica, who has extensive experience in the energy sector.

  On the basis of the company's announcements, I have confirmed that I intend to seek state aids approval from the European Commission for the restructuring plan. I have placed in the Library of the House a copy of the Government's announcement of 14 February to the Stock Exchange.

  As I indicated in my statement on 28 November, the Government is prepared to continue to fund BE's operations while the restructuring plan is agreed and implemented. I have therefore indicated to the company that I am willing to extend their credit facility at a reduced level for a period after 9 March. The limit and duration of the facility will be decided and reported to the House in the light of the company's future requirements, and in order to protect taxpayers' interests as well as under state aid rules, will be the minimum necessary. I should like to re-emphasise that it is a temporary loan, and not a permanent grant. The company has received proceeds of £270 million from the sale of its stake in Bruce Power and will use this money to repay the majority of the current amount of the facility outstanding.

  British Energy's announcement on 14 February is an important step forward in the implementation of its restructuring plan. But much remains to be done by the company, including effecting the sale of Amergen and securing binding agreements from its creditors to the restructuring.

  It remains open to Government to withdraw the credit facility if the company does not continue to make progress in successfully delivering its restructuring plan. We shall therefore continue to be ready with contingency plans to fund the administration of the company. The Electricity (Miscellaneous Provisions) Bill that helps with these contingency plans has been passed by the House of Commons and has now entered the House of Lords. As I said on 28 November, whatever happens, nuclear power stations will continue

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  to generate electricity and will continue to employ staff. Pension entitlements will be met. Trade suppliers will be paid. Customers' lights will stay on.

  Finally, I would like once again to express my thanks to the staff at British Energy for their vital contribution in maintaining electricity supplies and nuclear safety.

FOREIGN AND COMMONWEALTH AFFAIRS

  UK Special Representative (Nepal)
  The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw)
  I am delighted to announce the appointment of Sir Jeffrey James KBE CMG as the UK's Special Representative for Nepal from 24 February. The Government is committed to assisting Nepal and identifying ways to help resolve its problems, including putting an end to a conflict that has resulted in immense suffering for the Nepalese people. Sir Jeffrey's role will be to provide a strong focal point for UK policy towards Nepal and in particular to co-ordinate UK and international efforts in support of the recent ceasefire and the emerging peace process.

  United Nations Convention on the Rights of the Child
  The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell)
  Officials in the Foreign and Commonwealth Office and the Ministry of Defence have completed all the necessary work to enable the Government to proceed to ratify the Optional Protocol to the United Nations Convention on the Rights of the Child on the involvement of children in armed conflict.

  We intend to complete the ratification process with the United Nations as soon as possible. To begin the formal process, I have today laid before Parliament an Explanatory Memorandum which explains the steps taken to meet our commitment to the provisions of the Protocol.

  In particular, since 1 September 2002 Army personnel under 18 are no longer routinely deployed on operations outside the United Kingdom, although they may continue to participate in purely humanitarian missions where no hostile forces are involved. Furthermore, all three Services now have procedures in place to ensure that, wherever it is feasible to do so without undermining operational effectiveness or the safety of personnel, under 18s are removed from their units when there is deemed to be a greater than low risk of direct involvement in hostilities.