Written Statement of 9 July 2003

HOME DEPARTMENT

  Assets Recovery Agency
  The Parliamentary Under-Secretary of State for the Home Department (Caroline Flint)
  I am pleased to announce that copies of the first annual business plan for the Assets Recovery Agency have been placed in the Libraries of both Houses. The plan has been prepared by the Director of the Agency and has been approved by my right hon. Friends the Home Secretary and the Secretary of State for Northern Ireland.

  The plan is the first by the new Agency and covers the financial year 2003–04, its first full year of operation. In accordance with the Proceeds of Crime Act 2002, the plan includes a statement of the Director's objectives for the financial year, performance targets, priorities, financial resources, and the proposed allocation of those resources.

  I particularly welcome the emphasis on reducing crime through recovering criminal assets by working in partnership with other organisations. The plan also recognises the Agency's important role in Northern Ireland and the need to work with partner agencies there.

  The Agency has a major role to play in recovering criminal assets and making sure that crime does not pay. The plan sets out how it will achieve this in 2003–04.

NORTHERN IRELAND

  Regional Development Strategy
  The Minister of State, Northern Ireland Office (Mr. John Spellar)
  Earlier today I placed in the Library the first annual report on the implementation of the regional development strategy for Northern Ireland 2025.

  Significant progress has been made in the implementation of the strategy since its formulation in September 2001 by the devolved government in Northern Ireland. The strategy sets a regional brownfield target of at least 60 per cent. up to 2010. I am pleased that in Northern Ireland we are on target with 62 per cent. achieved in 2001–02. It is encouraging that we in Northern Ireland are playing our part to achieve the Government's brownfield targets.

  The Department is building on the inclusive and participative consultation that led to the agreement of the strategy and is working closely with local groups of key stakeholders who are playing a positive and active part in its implementation. Over the coming months a series of seminars will be held throughout Northern Ireland to consider how best to develop existing
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  arrangements affecting local growth and development and to produce agreed frameworks on the way forward. A first successful seminar was held on 20 June in the north-west, which addressed the sub-regional implementation of the RDS and also the impact of the National Spatial Strategy for Ireland (NSS) on development within the north-west.

  Implementation, however, is not just about monitoring, important though that is. As we strive for the successful implementation of the regional development strategy, we need to learn from the experiences of regional and inter-regional developments elsewhere. The challenge is to turn the potential of the regional development strategy into positive actions that will bring about the improvements in Northern Ireland's environment, economy and society generally.

  I will continue to oversee the implementation of the strategy and to report on progress on an annual basis.

  A first successful seminar was held on 20 June in the north-west. This seminar addressed not only the sub-regional implementation of the RDS, but also the impact of the National Spatial Strategy for Ireland (NSS) on development within the north-west.

EDUCATION AND SKILLS

  Children Act Report
  The Secretary of State for Education and Skills (Mr. Charles Clarke)
  I have today published a report on the operation of the Children Act 1989, pursuant to my duties under section 83 of the Act. Copies are available in the Library and Vote Office. A copy of the document can also be found at the following website addresses:www.dfes.gov.uk/childrenactreport/. and http://www.doh.gov.uk/qualityprotects/index.htm.

TRADE AND INDUSTRY

  Veterinary Medicines
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe)
  The Competition Commission's (CC) monopoly report on the supply in the UK of prescription-only veterinary medicines (POMs) was published on 11 April 2003. The CC found that greater competition should be brought to bear at the retail level, first, by encouraging entry by pharmacies and, secondly, by increasing the level of competition between vets and veterinary practices. In support of these findings, the report contained eleven recommendations for regulatory change, all but one of which were addressed to Government. The report also contained a number of proposed remedies under the Fair Trading Act 1973, which are being taken forward separately. I am today announcing the Government's response to the recommendations for regulatory change that were addressed to it.
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  RECOMMENDATION 1: DISPENSING OF VETERINARY MEDICINES

  "The Secretary of State to consider changing the law to allow veterinary surgeons to dispense a veterinary prescription, whether or not the animal concerned is under their care".

  The Government accepts this recommendation. It follows from the CC's proposed remedy, and is in line with the Marsh Report recommendation that the client should be offered a written prescription by the veterinary surgeon. It will allow the consumer greater freedom of choice where there are no pharmacies in a neighbourhood and should encourage more competition between vets, without adding any new risks to the animal under treatment. To implement this recommendation, national legislation will need to be amended. However, the Government recognises concerns that have been expressed that such a change could blur the lines of responsibility and conflict with the current understanding of clinical responsibility. It will, therefore, consult with interested parties to clarify these issues before amending the legislation.

  RECOMMENDATION 2: PUBLICATICN OF PRICES OF VETERINARY MEDICINES

  "The Royal College of Veterinary Surgeons (RCVS) to modify its Guide to Professional Conduct to remove restrictions on veterinary surgeons' publishing the prices they charge for veterinary medicines".

  This recommendation is directed at the RICVS. However, the Government supports the recommendation in principle, as it favours price transparency.

  RECOMMENDATION 3: MANDATORY CENTRALISED ROUTE FOR AUTHORISATION

  "The Secretary of State to consider negotiating changes to the draft Council Regulation (proposed in COM (2001) 404 final) so as to allow all categories of veterinary medicine access to the centralised procedure, without making this mandatory for any further categories of medicine".

  The Government accepts this recommendatioit-although it will be difficult to achieve it fully. The CC's proposal follows the UK's line in the Review 2001 negotiations on the European Commission's proposals to amend EC medicines legislation. This has been to allow applicants a choice of assessment procedure without making the centralised route mandatory for more products (products developed using biotechnological processes and products intended primarily for use as performance enhancers already have to use the centralised route). The present state of negotiations in Brussels is not to increase the range of products obliged to use the centralised route but to introduce optional access for all medicines which contain new active substances or are novel in some way. The possibility for generic products based on centralised authorisations will also be available. These changes, if agreed, will extend the availability of the centralised route, although not to the extent recommended by the CC.
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  RECOMMENDATION 4: ADAPTATION OF MARKETING AUTHORISATION PARALLEL IMPORTS (MAPIS) FOR MUTUALLY-RECOGNISED VETERINARY PRODUCTS

  "The Secretary of State to consider establishing arrangements to allow any veterinary medicine authorised through the decentralised procedure in the UK to be imported into the UK from any other EC member state in which it is also authorised, without further individual marketing authorisation (MA) but subject to:

  (i) prior notification to the Veterinary Medicines Directorate (VMD); and

  (ii) the conformity of all labelling and inserts with the UK authorisation;

  and to consider negotiating any changes to the Directive necessary to achieve this and to remove barriers to relabelling for this purpose".

  The Government accepts this recommendation. There is already a system in place under EC legislation which controls parallel imports of medicinal products. This system requires the importer to apply for a MAPI. The CC thinks MAPIs are unnecessary for the parallel import of a mutually-recognised product already authorised in the UK. It feels the importer should simply be required to tell the VMD of their plans. The Government agrees that the MAPI system could be simplified for mutual recognition products. However, it recognises the importance of the unique marketing authorisation number for tracking trends from suspected adverse reaction reports and is concerned that this important control system would be undermined without an MA. The Government agrees that it is necessary to label the product in English for safety reasons—as is required now under the MAPI arrangements.

  RECOMMENDATION 5: CLASSIFICATION OF VETERINARY MEDICINES

  "The Secretary of State to consider amending the remits of the Veterinary Products Committee and the VMD to require them to recommend the lowest distribution classification consistent with their assessment of a product's safety, efficacy and quality".

  This recommendation addresses a CC concern that companies seek a higher legal classification for their product because it requires the sale of the product by a vet or pharmacist and the company can charge a higher unit cost. The Government accepts this recommendation, which is in line with the normal assumption that legal classification should be based on the perceived risk of a product. National legislation is likely to require amendment.

  RECOMMENDATION 6: AUTOMATIC REVIEWS OF DISTRIBUTION CLASSIFICATION

  "The Secretary of State and VMD to consider instituting automatic review of distribution classification whenever a product's MA is renewed (or at similar intervals if the European Commission's proposal to make MAs permanent is adopted) and, unless there is good scientific reason to require additional information, to base such reviews on the product's existing dossier and accumulated field experience. An early benefit could result from an immediate review of the distribution classifications of ectoparasiticides (for the treatment of fleas) for companion animals, which could provide a

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  particularly effective stimulus to competition from pharmacies in the supply of one of the most widely-used veterinary products".

  The Government accepts this recommendation. The CC hopes this will reduce some of the current legal distribution categories, make more products more freely available and therefore increase competition and reduce prices. Such reviews are rarely carried out now, and only at the request of the MA-holder. We may be able to implement the recommendation administratively to some extent but, as with recommendation 5, amendment to national legislation may be required.

  RECOMMENDATION 7: ANIMAL WELFARE AND COST CONSIDERATIONS

  "In discharging its responsibilities for the licensing and distribution classification of veterinary medicines against the criteria of safety, efficacy and quality, the VMD should take account, where relevant, of the impact on animal welfare of the availability and accessibility to animal owners of veterinary medicines, including considerations of cost".

  The CC believes that making veterinary medicinal products more freely available will lead to more pets being treated, and therefore better welfare. Government policy on the distribution of veterinary medicinal products can take the cost of a product into account, but cost and welfare will not override safety considerations. However, the UK does not have the powers under EU legislation to consider cost under the licensing assessment process which requires product applications to be judged on the grounds of safety, quality and efficacy. Provided these standards are met, it would be wrong for the Government to prevent a product being marketed because there was a cheaper alternative already available. Not all animals react in the same way to a medicine and it may be that the more expensive product will have a better result. This choice should be made together by the owner of the animal and the veterinary surgeon.

  RECOMMENDATION 8: CHANNEL OF DISTRIBUTION OF VETERINARY MEDICINES

  "The Secretary of State, in negotiating the Draft Directive and Regulation, to keep in mind the importance of retaining member states' existing right to control the channels of distribution and supply of veterinary medicines, including those authorised through the centralised procedure".

  The Government accepts this recommendation, which reflects the UK line in negotiations on Review 2001 changes to veterinary medicines legislation. However, implementation for centrally authorised products will be difficult, as such products are classified POM because their novelty means there is an increased risk. The only other distribution category which applies in all Member States is general sale, and it is a big step to move a product from prescription to general sale.

  RECOMMENDATION 9: ESTABLISHING NEW DISTRIBUTION CATEGORIES

  "The Secretary of State to consider establishing one or more new distribution classifications of veterinary medicines to allow specific categories of persons (such as agricultural merchants and saddlers as well as veterinary
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  surgeons and pharmacists) to dispense veterinary prescriptions for medicines so classified and to make corresponding changes to the law".

  The UK's existing distribution system is designed to provide adequate controls on the distribution of veterinary medicinal products depending on the risks involved with the use of that product. The Government believes that the system currently strikes the right balance, and that rather than create additional distribution categories, it is preferable to concentrate on ensuring that veterinary medicines are classified according to the perceived risk of a product (hence its acceptance of recommendations 5 and 6). But the Government is concerned that, if adopted, the EC proposal to make POM all veterinary medicines for food-producing animals (including types at present sold by for example agricultural merchants and saddlers) would increase the risk of making such medicines more expensive and difficult to obtain, and could lead to animal welfare problems and increase the likely use of black market medicines with increased food safety risks. The Government therefore intends to review this recommendation in the light of agreed changes to EU legislation following the current review in Brussels.

  RECOMMENDATION 10: MAs FOR VETERINARY MEDICINES TO BE PERMANENT

  "The Secretary of State to support the European Commission's proposal to make MAs permanent (in the absence of adverse field experience or other comparable grounds for review)".

  The Government notes this recommendation, which has now been overtaken by developments in Brussels. The European Commission has accepted a European Parliament proposal to require one 5-year renewal for each product.

  RECOMMENDATION 11: IMPROVEMENT OF VMD PRACTICES

  "The VMD should improve its procedures so as to minimise delays to product commercialisation, including examination of the ways in which it interacts with manufacturers prior to receipt of complete dossiers".

  The Government accepts this recommendation, which is in line with the VMD's aim and practice. In recent years, the VMD has introduced streamlined procedures for dealing with applications and a new variation system. The VMD is currently reviewing its procedures for dealing with Animal Test Certificate applications and its fee system. Changes will be introduced in full consultation with customers.

  Invest.UK Annual Review
  The Secretary of State for Trade and Industry (Ms Patricia Hewitt)
  With my right hon. Friend, the Secretary of State for Foreign and Commonwealth Affairs, I am pleased to inform the House that the UK remains a world-class business location.

  Invest.UK has announced today, in its Annual Review of Operations, that there were 709 direct investments in the UK by foreign owned companies between 1 April 2002 and 31 March 2003, as reported by Invest.UK's partner agencies in Scotland, Wales, Northern Ireland and the English Regional

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  Development Agencies. This is a fall of 7 per cent. on the year before but is a commendable performance against a background of geopolitical uncertainty and difficult economic conditions in much of the world. Moreover, there was a small increase in the number of new jobs—34,396—that these investments will create.

  This performance reflects the confidence, which companies around the world continue to show in the business climate in the UK. Indeed, excluding mergers and acquisitions, in which there has been a major global decline, the number of new investments and expansions reached the second highest level ever recorded by Invest.UK.

  However, the world is changing. China's membership of the World Trade Organisation and the accession to the European Union of ten new member states in 2004, for example, present both challenges and opportunities. The UK is well placed to grasp the opportunities; but we must not allow our position as market leader in Europe to make us complacent. Invest.UK will further strengthen and adapt its operations around the world and the Government will continue to ensure that the UK provides a haven of economic growth and stability where companies from any country can continue to prosper.

  There is the question of whether the UK would be an even more attractive location if it were part of the euro. The Treasury's assessment suggests that, if we joined on the right basis, membership of the single currency would, over time, increase inward investment in Britain. Whatever happens, the Government will put stability and the national economic interest first. Our five tests on euro membership are our stability guarantee.

  I am arranging for a copy of the Invest.UK annual review to be placed in the Library of the House.

  Dispute Resolution Regulations
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe)
  I have today published a consultation paper on draft Regulations to implement Part 3 of the Employment Act 2002. The consultation period will run until 29 October 2003. During this time views on the regulations will be sought from all stakeholders.

  The regulations are part of an inter-related package of secondary legislation under the Employment Act concerning the resolution of individual employment disputes. I expect to publish new employment tribunal regulations in the Autumn, and that the Advisory, Conciliation and Arbitration Service will revise their statutory Code of Practice on Disciplinary and Grievance Procedures early next year. The Government intends that all these measures will come into force together in October 2004.

  The dispute resolution regulations concern the application of statutory minimum discipline and grievance procedures in the workplace. Their introduction will be supported by a broad-reaching publicity and guidance campaign to inform small firms and their employees.

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  I have arranged for copies of the consultation paper and other related documents to be placed in the Libraries of the House.

DEFENCE

  Defence Procurement Agency
  The Minister of State, Ministry of Defence (Mr. Adam Ingram)
  Five Key Targets have been set for the Chief Executive of the Defence Procurement Agency for the Financial Year 2003–04.

  The first three key targets apply to projects covered by the Major Projects Report which have passed their Main Gate approval. Key Targets two and three are consistent with the goals set in the Department's public service agreement (PSA). The fourth key target relates to improvements in DPA Customer satisfaction and the fifth to the costs of running the Agency. The key targets are:

  KEY TARGET 1: Key requirements Compliance
  Predicted achievement of customers' core requirements1 for projects: 98 per cent.

  KEY TARGET 2: Average in-year In Service Date slippage
  Average in-year slippage of In Service Dates2 compared with approval not to exceed 0.5 months

  KEY TARGET 3: Average in-year cost growth
  Average in-year cost variation3 not to exceed 0 per cent.

  KEY TARGET 4: Customer Survey Satisfaction Rating
  Customer satisfaction rating of 74 per cent.

  KEY TARGET 5: Agency Running Cost
  No excess against DPA Resource Control Totals.

  1Around 10 core requirements per projects are agreed between the DPA and MoD headquarters, defining the essential characteristics of the equipment/capability.

  2 Variation between in service date (ISD) approved at "Main Gate" (the major investment decision point) and currently predicted ISD.

  3 Variation between cost approved at Main Gate and current predicted estimate.

  Royal Air Force Personnel Management Agency
  The Minister of State, Ministry of Defence (Mr. Adam Ingram)
  The Commander-in-Chief, Royal Air Force Personnel & Training Command has set the Chief Executive of the Personnel Management Agency the following targets for Financial Year 2003–04:

  KEY TARGET 1: Peacetime Manning
  The percentage of available trained personnel either filling established posts or on diversions for which there is an approved Manning and Training Margin: Target: ≥93.50 per cent.

  KEY TARGET 2: Operational and Non-Operational MoD Authorised Unestablished Tasks
  The percentage manning level of operational and non-operational MoD authorised unestablished tasks: Target: ≥98 per cent.
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  KEY TARGET 3: Career Management
  To ensure that 82.5 per cent. of PMA's customers are either satisfied or not dissatisfied with the service provided by the PMA. Target: ≥82.5 per cent.

  KEY TARGET 4: Manpower Planning
  To ensure that the percentage variation between the actual trained strength and the funded trained strength, taken as an average over the financial year, is no greater than +/- 1 per cent. Target: >±1 per cent.

  KEY TARGET 5: Finance, Efficiency and Business Practice
  To maintain operating costs within the resources allocated. Target: Expenditure contained within Resource Control Total.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  OSPAR and OSPAR/HELCOM Commission
  The Minister for the Environment (Mr. Elliot Morley)
  I represented the United Kingdom at the Ministerial Meeting of the OSPAR Commission for the Protection of the Marine Environment of the North East Atlantic and the joint Ministerial Meeting between OSPAR and the Helsinki Commission (HELCOM) for the Protection of the Baltic Sea.

  The OSPAR meeting reviewed and updated the strategies that direct key areas of its work and aim to deliver a healthy and sustainable marine environment for the North East Atlantic within one generation. These strategies cover hazardous substances, eutrophication, biodiversity, radioactive substances and offshore oil and gas. The meeting also adopted a new programme for assessment and monitoring to prepare for the next overall assessment of the OSPAR maritime area in 2010 and to monitor progress made in implementing other strategies.

  Key outcomes include the approval of the results of the first application of the Common Procedure for assessing the eutrophication status of the OSPAR maritime area, the adoption of criteria for the identification of habitats and species in need of protection and the selection of 27 species and 10 types of habitat to be protected, OSPAR guidance on developing offshore wind energy and an agreement on sand and gravel extraction. Agreement was also reached on establishing a baseline from which progress in delivering the radioactive substances strategy will be measured.

  Five recommendations were adopted better to protect the marine environment. These cover (1) controlling the dispersal of mercury emissions from crematoria; (2) to promote the use and implementation of environmental management systems by the offshore oil and gas industry; (3) a network of marine protected areas: (4) a framework for reporting encounters with marine dumped conventional and chemical munitions; and (5) the strategy for the Joint Assessment and Monitoring Programme.

  The joint HELCOM/OSPAR meeting agreed a declaration and supporting statements on how OSPAR and HELCOM can work together better to protect the North East Atlantic and the Baltic Sea. The texts propose co-operation on developing the EU Marine
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  Thematic Strategy, development of the ecosystem approach to managing human activities in the marine environment, and agreement to a joint work programme to establish an ecologically coherent network of well-managed marine protected areas by 2010. The declaration also notes issues of concern on the environmental impacts of fisheries and shipping and makes suggestions for further co-operation to address these.

  Overall both meetings were very successful in developing action and promoting co-operation better to protect and manage the marine environment.

  I have placed copies of the OSPAR and HELCOM/ OSPAR Ministerial Statements in the Library of the House, together with copies of the revised OSPAR Strategies, the five OSPAR Recommendations adopted, and the three HELCOM/OSPAR supporting statements. Copies are also available at: http:// www.ospar.org/.

CULTURE, MEDIA AND SPORT

  Royal Parks Agency
  The Secretary of State for Culture, Media and Sport (Tessa Jowell)
  The Royal Parks Corporate Plan for 2003–04 to 2005–06 and Funding Agreement have been approved by the Department. The Royal Parks' key performance targets are:To increase numbers benefiting from educational activities by 10 per cent. each year.
  Each Park to sore at least 85 per cent. for quality and cleanliness as assessed by visitor satisfaction surveys.
  Each Park to score at least 85 per cent. for soft landscaping, as assessed by an independent expert.
  Maintain the International Standards Organisation's certifiable standard (ISO 14001) status for environmental management.
  To enhance summer entertainment in 2003–04 with at least four new events extending access to target groups.
  To increase self-generated income by £1.1 million to £7 million by 2005–06 (=29 per cent. of DCMS grant).

WORK AND PENSIONS

  Social Fund
  The Secretary of State for Work and Pensions (Mr. Andrew Smith)
  My annual report on the social fund for 2002–03 (Cm 5807) was published today and has been laid before Parliament.

  The report records that total gross expenditure, excluding winter fuel payments, in 2002–03 was £819.4 million. This included more than 245,000 non-payable grants and more than 2,315,000 interest free loans together worth £654.4 million, and funeral and cold weather payments totalling £54.5 million. In addition 232,000 sure start maternity grants worth £110.5 million were made, and 8 million households benefited from a winter fuel payment at a cost of around £1.7 billion.

  The Social Fund Commissioner's report has also been published today and copies placed in the Library.