Written Statement of 18 September 2003

TRANSPORT

  London Underground
  The Parliamentary Under-Secretary of State for Transport(Mr. Tony McNulty)
  London Transport's (LT) expenditure on external consultancy in relation to the Public Private Partnership (PPP) for the modernisation of London Underground (LU) has been regularly reported to the House at six-monthly intervals since 13 January 1999.

  LT's liabilities transferred to Transport for London (TfL) on 15 July 2003, so some residual final costs are being met by London Underground (LU) in TfL's ownership. The total consultancy costs concerned, from 20 March 1998 (the date of the Government's announcement of the PPP) up to the end of August 2003, is £103.16 million. The potential final cost is £103.5 million. Once all related expenditure has been paid I will report the final costs to the House.

FOREIGN AND COMMONWEALTH AFFAIRS

  Sanctions
  The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs(Mr. Bill Rammell)
  As of today's date, the United Kingdom implements mandatory UN sanctions, imposed by the UN Security Council acting under Chapter VII of the Charter of the United Nations, in relation to Al Qa'ida and the Taliban, Democratic Republic of Congo, Haiti, Iraq, Liberia, Rwanda, Sierra Leone and Somalia. UN sanctions in relation to Angola (UNITA) and Libya were lifted on 9 December 2002 and 12 September 2003 respectively. The full trade embargo and all-encompassing asset freeze in relation to Iraq have been lifted. But an arms embargo remains and UNSCR 1483(2003) placed a ban on trade in stolen cultural property and requests Member States to freeze and transfer certain Iraqi assets to the Development Fund for Iraq. The United Kingdom implements, in addition, sanctions imposed by the European Union in relation to Bosnia and Herzegovina, Burma, China, Democratic Republic of Congo, Federal Republic of Yugoslavia (former President Milosevic and the persons associated with him continue to represent a threat to the consolidation of democracy in the area of the former Republic of Yugoslavia), Libya, Sudan and Zimbabwe. In accordance with a decision of the OSCE, the United Kingdom implements arms embargoes on Armenia and Azerbaijan. The UK has imposed a unilateral arms embargo adopted by national legislation on Iran and a ban in relation to the sale of certain equipment to the armed forces of either side on the island of Cyprus. A list of sanctions regimes 58WS
  implemented by the UK is in the Library of the House. Annexed to this is a summary of additional UK restrictions on the export of strategic goods. These documents are also available on the FCO website at http://www.fco.gov.uk/sanctions and are updated each time there are changes to sanctions regimes implemented by the UK, or to UK restrictions on the export of strategic goods.

  British Terrorist Victims
  The Secretary of State for Foreign and Commonwealth Affairs(Mr. Jack Straw)
  Last week we remembered the victims of the 11 September terrorist attacks, two years ago. In a few weeks, we shall be marking the first anniversary of the Bali bombings. The Government responded to these tragic events with practical support for the families of the victims beyond the consular assistance we would normally provide following the death or injury of British nationals abroad. We did so because of the exceptional nature of terrorism, in which individuals are random victims of attacks directed at society as a whole. I am announcing today a package of measures designed to support the families of victims of future terrorist attacks abroad, which is based closely on what was provided for the families of victims of 11 September and Bali.

  Those measures are:
  Return economy airfares to the airport nearest the site of the incident for two members of the victim's family.
  Accommodation for three to five nights.
  Travel insurance as appropriate and where available.
  Local Travel including transfers from airport to local hotel.
  Repatriation of bodies or remains.
  Immediate medical expenses of those killed or injured.
  Medical evacuation of those killed or injured to the nearest hospital.
  Return luggage costs of those killed or injured.

  The provision of the exact package, and the details of the assistance offered to the families will, of course, depend on the particular circumstances, including whether any of the costs are already covered by existing insurance policies. As a matter of course, we provide consular advice and support, both in London and at the site of the incident. We also endeavour to arrange insurance cover for family members where it would not otherwise be available.

  None of these measures can ever take away the pain and suffering which families will experience in these most horrendous of circumstances, but we sincerely hope they will at least remove some of the practical and administrative burdens from them when trying to cope with the trauma of the incident.

  The question of what constitutes an act of terrorism remains a difficult one. In the case of 11 September, Bali and the compound bombings in Riyadh in May of this year, we were all in no doubt that we were dealing with acts of terrorism. Where there is doubt as to whether a violent death abroad is the result of an act of terrorism, we will consider the circumstances carefully and sympathetically. In essence, this package of measures is designed to assist the families of

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  members of the travelling and expatriate British public, who are inadvertently caught up in a terrorist incident; and where they are not covered by ordinary insurance policies.

  FCO/TUC International Advisory Council
  The Secretary of State for Foreign and Commonwealth Affairs(Mr. Jack Straw)
  The FCO has been working to strengthen co-operation with British unions on issues of mutual interest overseas As economic decisions are increasingly made in a global context, so British trade unions are more involved with international organisations and counterparts overseas. British trade unions have long played a wider international role in helping promote, among other things, democracy and human rights.

  To identify areas of concern and to facilitate discussion, the General Secretary of the TUC and I have agreed to set up an FCO/TUC international advisory council This Council will be led from the Foreign Office side by the Minister for Europe and will include participants from both the FCO and the trade union movement.

  To brief interested parties on this expanded co-operation, the FCO and TUC agreed to produce a leaflet setting down in practical terms how British unions and the FCO are working together. This leaflet was circulated to delegates at the TUC General Congress last week. Copies of the leaflet, which have been placed in the Library of the House, will also be circulated to our embassies abroad and will be available on the FCO website http://www.fco.gov.uk/.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Rural Payments Agency
  The Minister for Rural Affairs and Local Environmental Quality(Alun Michael)
  The 2002–03 Annual Report and Accounts for the Rural Payments Agency will be laid today and copies will be place in the Libraries of both Houses.

HEALTH

  Dentistry
  The Minister of State, Department of Health(Ms Rosie Winterton)
  Subject to the will of Parliament, the Health and Social Care (Community Health and Standards) Bill will give primary care trusts new duties for commissioning local national health service dental services. Primary care trusts will have a duty to secure the provision of primary dental services either through contracts with individual practices or by providing services themselves. With these new responsibilities, the £1.2 billion currently held centrally for funding dental services will pass to primary care trusts.

  Until then, we will continue to work with the NHS and the dental profession to support NHS dentistry and to reform it to meet local needs. I am today announcing additional funding of £65.2 million to support change and help improve access, quality and
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  choice for patients. The funding will be targeted at those primary care trusts where access is a real problem and will be on top of the £1.2 billion which is currently held centrally and which will in time go to primary care trusts.

  The £65.2 million will be used as follows:
  £35 million to enable primary care trusts to improve access, choice and quality for patients;
  £30 million for information technology to integrate dentistry within the national information technology programme;
  £200,000 to develop dental leadership skills within strategic health authorities and primary care trusts to support them with the dental change agenda.

  This funding comes on top of the £9 million announced last month for the NHS support team that has been set up to work with those areas where it is hardest to find an NHS dentist and a further £1 million to help primary care trusts, local dental committees and dentists to prepare for the change in the way dental services are commissioned.

  There are many examples of excellent NHS dental services and we want to reward NHS dentists and make practice in the NHS an attractive option. The programme of reform we are now embarked on will enable the NHS, dentists and patients to influence local services in the future.

  As well as the changes flowing from the Health and Social Care (Community Health and Standards) Bill, we have also asked Harry Cayton, the director for patient experience and public involvement at the Department, to undertake a review of patient charges for NHS dentistry. This review involves patient groups and other stakeholders and will be reporting to Ministers by April 2004.

WORK AND PENSIONS

  Opportunity for All
  The Secretary of State for Work and Pensions(Mr. Andrew Smith)
  Today I am publishing Opportunity for all—Fifth Annual Report 2003 (CM 5956). The report sets out our strategy for tackling poverty and social exclusion, and reports on the indicators used to monitor progress. Copies have been placed in the Library, and are available to hon. Members from the Vote Office. A copy of the summary is being sent to all hon. Members.

  Older Workers
  The Secretary of State for Work and Pensions(Mr. Andrew Smith)
  In the Government's consultation report "Simplicity, Security and Choice: Working and Saving for Retirement", December 2002, (CM 5677) I announced plans to introduce progressively a new package of more intensive back-to-work help for people aged 50 and over. Today I am pleased to announce further details about two elements of this work.

  The sites for the pilot study to trial mandating the participation of people aged 50 to 59 who have been claiming JSA for 18 months in the New Deal 25 plus Intensive Activity Period, on the same basis as

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  currently exists for claimants aged 25–49, have been agreed and are listed below. 11 of the pilots will commence in April 2004, and three will commence in October 2004. The areas represent a mix of geographical and labour market areas and all will have fully integrated Jobcentre Plus offices. In addition, seven of the sites are also taking part in the Pathways to Work pilots for people on Incapacity Benefits.

  The pilots will be evaluated comprehensively by independent qualitative and quantitative research and this will include the use of random assignment.

  Pilot sites for a mandatory New Deal 25 plus Intensive Activity Period for people aged 50 to 59—Launch April 2004:

  Bridgend (1)

  Buckingham & Oxfordshire

  Calderdale & Kirklees

  Coventry & Warwickshire

  East Lancashire (1)

  Essex (1)

  Hampshire

  Leicester

  Shropshire

  Somerset (1)

  Suffolk

  Pilot sites for a mandatory New Deal 25 plus Intensive Activity Period for people aged 50 to 59—Launch October 2004:

  Derbyshire (1)

  Gateshead & South Tyneside (1)

  Renfrewshire, Inverclyde, Argyll and Bute. (1)

  Note:

  (1) Also participating in the Pathways to Work pilots.

  A national tendering exercise will be launched today on the Jobcentre Plus website http:// www.jobcentreplus.gov.uk/, inviting bids from private and voluntary sector organisations to extend information about back-to-work help and local job and volunteering opportunities to help improve the employment prospects of jobless people aged 50 and over.

  The bids will be invited in areas with higher numbers of people aged over 50 claiming benefits, listed below. Successful bidders will begin work from April 2004, and contracts will be let for up to two years. The pilots will gather good practice information on the most effective ways of raising awareness about the availability of back to work help to people not currently in contact with Jobcentre Plus.

  Proposed Jobcentre Plus districts for private and voluntary sector bids to raise awareness about the back to work help available through:

  Jobcentre Plus

  Lanarkshire

  Liverpool

  Leeds

  Wigan

  City of Sunderland

  Bradford

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  Fife

  Staffordshire

  Dudley and Sandwell

  Newcastle and North Tyne

  Eastern Valleys

  Cardiff and Vale

DEFENCE

  Military Low-Flying System
  The Parliamentary Under-Secretary of State for Defence(Mr. Ivor Caplin)
  The existing Night Low Flying System (NLFS) will remain unchanged in principle, but some adjustments are being made to its structure and management to improve the efficiency of the system and reflect an increasing requirement for helicopters to be able to train at night.

  The NLFS is divided into two by a line from Swansea in the west to Colchester in the east. The southern area is allocated to rotary wing aircraft and the northern area to fixed wing aircraft, with small exceptions to account for locations where rotary wing aircraft are based in the fixed wing region and vice-versa. This basis remains unchanged but the area available to rotary-wing aircraft will be increased and the system made more flexible by the introduction of sectors that may now be allocated to either fixed wing or rotary aircraft. In addition, we are introducing some management changes to make the procedures that units use to book in to the system more efficient.

  The Government understand that military low flying training is disturbing, and can reassure the House that there is not expected to be a significant impact for those on the ground as a result of these changes. The existing basis of the NLFS will remain, and for most of the country there will be no change to the structure of the system. Where change is being introduced, the impact is generally expected to be limited to the possibility that those on the ground may witness different aircraft types than may currently be the case, and will be small in scale. We have considered the requirement for a sustainability review and recognise that some parts of the changes may lead to such a requirement, although, as stated, the overall impact is likely to be small. Where necessary I can confirm that more detailed work may be carried out. Detailed environmental impact and sustainability studies are being carried out in respect of AH 64, which is likely to be one of the major users of the revised NLFS.

  Finally, night flying is essential if our aircrews are going to meet the demands that are placed upon them. These changes will assist with these demands.

TRADE AND INDUSTRY

  British Energy Credit Facility Agreement
  The Secretary of State for Trade and Industry(Ms Hewitt)
  On 7 March,Official Report,column 89WS, I informed the House that British Energy had repaid to my Department all outstanding amounts under the credit facility. On a contingency basis I decided, with the

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  company's agreement, to continue the facility, with the maximum amount available being reduced from £650 million to £200 million.

  British Energy has subsequently utilised the facility in August. As the House was in recess at the time the drawing was made, my Department wrote to the Chairs of the Committee of Public Accounts and the Trade and Industry Committee to inform them of the fact. At the beginning of September, British Energy's outstanding drawdown on the facility was £13.1 million.

  The stringent controls governing drawings on the facility by British Energy remain in place. As with the company's previous drawings, we expect further drawings to be repaid in full, including interest, as soon as the company is in a position to do so. British Energy's obligations under the credit facility agreement are secured by charges over the British Energy Group's assets. This security is in the nature of a senior charge, which would take priority over the claims of other creditors, should the company become insolvent.

  British Energy continues to work on implementing its restructuring plan. It announced on 11 September that it had agreed the sale of its stake in its US joint venture, Amergen, subject to certain regulatory and other conditions. But there remain significant milestones ahead. Successful implementation of the restructuring plan will require a number of further conditions to be met, including satisfactory formal commitments from creditors to support the plan, completion of the Amergen sale and receipt of state aids approval from the European Commission. I will also need to be satisfied that implementation of the restructuring will lead to a viable restructured entity that will not be dependent on Government support in the long term. If these conditions cannot be met, the Government remain well prepared for administration.

TREASURY

  HM Treasury Review
  The Chief Secretary to the Treasury(Mr. Paul Boateng)
  Cash Ratio Deposits are non-interest bearing assets deposited with the Bank of England by banks and building societies. They are used by the Bank to finance its unremunerated activities, in particular its sterling liquidity operations and its efforts to secure price stability and the stability of the financial system in general, from which these institutions are key beneficiaries. The Cash Ratio Deposit Scheme was placed on a statutory basis when the Bank of England Act became law in 1998. In February 2003, the Paymaster General announced by written statement a review of the operation of the statutory scheme in its first five years.
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  The review has reached the following conclusions. The cash ratio deposit scheme continues to be a suitable method of funding the Bank of England's monetary policy, financial stability and sterling liquidity operations. The definition of eligible liabilities, from which deposits are calculated, should not be brought into line with the definition of deposits used by the Financial Services Authority (FSA) as a basis for calculating the fees it collects from deposit taking institutions. This is because the Cash Ratio Deposit scheme is aimed at sterling deposit taking institutions, whereas the FSA's regulatory activity, and its definition of deposits, also covers foreign exchange deposits. The cash ratio for calculating deposits should remain at 0.15 per cent. The Government will keep the ratio under review. The minimum threshold for making deposits should be raised to £500 million, freeing 18 institutions from the scheme and benefiting all remaining contributing institutions by reducing the level of their deposits by £150,000 each. The Bank of England should consider ways in which the transparency of the scheme could be enhanced, for instance by publishing a more detailed breakdown of expenditure by function. The Government will continue to monitor the effect of the cash ratio deposit scheme under review and will conduct a further formal review at the latest in five years' time.

  The proposal to raise the minimum threshold for making deposits would require a change to secondary legislation under the Bank of England Act 1998. HM Treasury is therefore consulting publicly about this change and inviting views on the other proposals of the review.

DEPUTY PRIME MINISTER

  Local Government Finance
  The Minister for Local Government, Regional Governance and Fire(Mr. Nick Raynsford)
  The December 2001 White Paper "Strong Local Leadership, Quality Public Services" (CM 5237) included a commitment to work with local government with the aim of introducing a safety valve grant in 2004–05. The grant will be available to authorities with high levels of council tax and low unit costs, but which do not benefit from the new grant formulae.

  The concept behind the safety valve mechanism was that there might be a small number of authorities whose circumstances do not fit adequately into national funding formulae and as a result experience severe underfunding.

  We have been unable to find any authorities that qualify for a safety valve grant. After taking technical advice from local government, which pointed strongly against a mechanism we no longer intend to introduce a safety valve grant.