Written Statement of 23 April 2004

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  British Waterways
  The Minister for Rural affairs and Local Environmental Quality (Alun Michael)
  I am pleased to advise that DEFRA and the Scottish Executive have begun a joint policy review of British Waterways. It will be a strategic review and its terms of reference are to:assess how well British Waterways is operating within the framework of the policy documents "Waterways for Tomorrow and Scotland's Canals: An Asset for the Future"; and to
  advise what changes are needed to enable British Waterways to improve its ability to deliver Government policies and customer satisfaction.
  In particular, the Review will consider:
  British Waterways' performance over the past five years;
  whether the current governance, financial and legislative arrangements are conducive for getting the right performance from British Waterways;
  whether the future direction of British Waterways as set out in its Our Plan for the Future 2003–07 is right, and whether it is consistent with "Waterways for Tomorrow and Scotland's Canals: An Asset for the Future"; and
  whether DEFRA and the Scottish Executive's working relationships with BW could be improved to deliver better strategic Departmental objectives as sponsor.

  On 19 April 2004, in conjunction with the Scottish Executive, I launched a public consultation exercise that will form a key part of the review. The consultation document invites views on the performance of British Waterways over the last five years and the way in which it should carry out its business in the future. In particular it asks for comments on the extent to which British Waterways has met its objectives as set out in its Framework Document "Waterways for Tomorrow", and "Scotland's Canals: An Asset for the Future" and the extent to which the Government's objectives for British Waterways as set out in these documents meet current needs. The consultation period will last for 12 weeks and close on 14 July.

  A Steering Group, including representatives from DEFRA, The Scottish Executive, British Waterways, Treasury, ODPM and the Shareholder Executive, will oversee the review. Their terms of reference are:
  "Having regard to British Waterways' Terms of Reference, to:
  Commission Papers to examine particular aspects in detail.
  Carry out public consultations.
  Seek direction and approval from Ministers at key stages and oversee publication of the Review."
  30WS
  It will publish its recommendations in late autumn.

  Copies of the consultation document can be viewed on DEFRA's website at http://www.defra.gov.uk/

DEFENCE

  United Kingdom Hydrographic Office
  The Parliamentary Under-Secretary of State for Defence (Mr. Ivor Caplin)
  Key Targets have been set for the Chief Executive of the UK Hydrographic office for the financial year 2004–05. The targets are designed to drive further improvements to the Agency's performance and are as follows:

  Key Target 1. Safety
  While aiming for 100 per cent., to achieve a safety index exceeding 95 per cent. of all radio navigational warnings issued to timescale.

  Key Target 2. Defence
  To achieve an index rating of more than 95 for the defence programme as set out in the tasking authorisation forms.

  Key Target 3. Customer Satisfaction
  Customer and end user satisfaction to exceed a scale rating of 87 by the end of the financial year 2004–05.

  Key Target 4. Wider Markets
  To earn revenue of £2.4 million from markets other than SOLAS navigational products and services.

  Key Target 5. Finance
  To break even taking one year with another, and to achieve a return on capital employed of 9 per cent. averaged over the period 2004–05—2008–09.

  Key Target 6. Finance
  Mark-up to be reduced to 200 per cent. by the end of 2004–05.

  Air Combat Service Support Units
  The Minister of State, Ministry of Defence (Mr. Adam Ingram)
  The Ministry of Defence is continually examining ways of improving military capability and value for money for the taxpayer, including by keeping the size and location of our bases under review.

  On 14 August 2003, 1 announced a review of the future basing requirement for the RAF's Air Combat Service Support Units (ACSSUs), elements of the Air Surveillance and Control System (ASACS) and some other minor units and the potential impact on the future requirement for RAF Boulmer, RAF Neatishead, RAF Sealand and RAF Stafford, should relocation of units currently based there be recommended.

  The primary objective of this particular review was to meet the Department's basing needs in the light of the move towards expeditionary operations. A number of options were identified on which my officials have consulted widely. A number of hon. Members have made representations. The Review has now concluded.

  I am now able to inform the House that I am inclined, subject to formal consultation with the trade unions, to accept the option which creates an ACSSU communications hub and a base for ASACS units at RAF Scampton and an ACSSU logistics hub at RAF Wittering. Implementation of this option as a whole would be over an extended period, beginning later this year and not complete until about 2012.
  31WS
  This option offers the greatest operational flexibility to our Armed Forces by collocating support units on main operating bases. It is also the most cost-effective solution. It would mean that communications personnel would relocate to Scampton from RAF Sealand (from 2005) and RAF Brize Norton (from 2005), together with AS ACS units currently based at RAF Neatishead (from 2004–05) and RAF Boulmer (from 2009), bringing the total number of people at the station up to around 2,400 by 2012. In the case of RAF Wittering, logistics personnel would relocate from RAF Stafford (from 2005). This would increase the number of personnel at the Station to around 2,130 personnel by 2006.

  The Ministry of Defence has written to the trade unions to ask for their formal response to this option by 7 June 2004.

  I will make my decision when I have received trade unions documents and will inform the House at that time.

DEPUTY PRIME MINISTER

  Commercial Property Leases
  The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Yvette Cooper)
  The Government are today announcing a forthcoming consultation about whether to legislate to regulate terms in commercial property leases and if so what form that regulation should take.

  April 2002, the commercial property industry introduced a new voluntary Code of Practice for commercial property leases. This sought to address Government concern about the lack of choice and flexibility in commercial leasing; in particular, the lack of alternatives to upward only rent reviews in longer leases and the poor information available to small business tenants. The Government announced that they would review the impact of the Code, and the Office of the Deputy Prime Minister commissioned the University of Reading to undertake research. The Office asked the University to prepare an interim report on the first year of the Code, by the end of 2003, and a final
  32WS
  report on the whole of the first two years of the Code, by the end of this year. The Government announced they would consider whether it would be sufficient to continue relying on a voluntary Code of Practice or whether to move to regulate lease terms, in the light of the research, feedback from stakeholders and an analysis of complaints received.

  Informal feedback during the first year of the Code was that despite major efforts to disseminate it widely, it was having little effect on leasing practices. In view of this, the Chancellor of the Exchequer announced in the 2003 Budget report that if the interim report suggested that little progress I ad been made, we would consult during 2004 on legislative options. This would enable the Government to introduce legislation at an early stage if the final report then confirmed that progress had been disappointing and the Government concluded that it should proceed with legislation.

  Earlier this year the Office of the Deputy Prime Minister received Reading University's interim report, which we are public king on our website today. This paints a disappointing picture of the impact of the Code in its first year. It has found that although there has been no reversal of previous trends towards shorter leases and that more leases contain operable "break" clauses, rent review provisions are almost universally upwards only. It is particularly disappointing that there are few signs yet of landlords offering alternative leasing packages at different prices, although the report finds that a degree of negotiation does take place. The Government are also concerned about the evidence that small business occupiers have too little information to be able to negotiate 1 he best deals.

  The Office of the Deputy Prime Minister will therefore shortly issue a consultation paper in conjunction with the Welsh Assembly Government about the regulation of commercial lease terms in England and Wales. This will seek views on the whole principle of legislation in this field as well as the various options for regulating lease terms. The Government will not make a decision about whether or not to legislate until we have studied the final report from Reading University, due at the end of this year, taking account of the outcome of the consultation exercise.

  Commercial Property Leases
  The Minister of State, Office of the Deputy Prime Minister (Lord Rooker)
  My honourable friend the Parliamentary Under-Secretary of State has made the following Written Ministerial Statement.

  The Government are today announcing a forthcoming consultation about whether to legislate to regulate terms in commercial property leases and if so what form that regulation should take.

  In April 2002, the commercial property industry introduced a new voluntary code of practice for commercial property leases. This sought to address government concern about the lack of choice and flexibility in commercial leasing; in particular, the lack of alternatives to upward only rent reviews in longer leases and the poor information available to small business tenants. The Government announced that they would review the impact of the code, and the Office of the Deputy Prime Minister commissioned the University of Reading to undertake research. The office asked the university to prepare an interim report on the first year of the code, by the end of 2003, and a final report on the whole of the first two years of the code, by the end of this year. The Government announced that they would consider whether it would be sufficient to continue relying on a voluntary code of practice or whether to move to regulate lease terms, in the light of the research, feedback from stakeholders and an analysis of complaints received.
  WS 22
  Informal feedback during the first year of the code was that despite major efforts to disseminate it widely, it was having little effect on leasing practices. In view of this, the Chancellor of the Exchequer announced in the 2003 Budget Report that if the interim report suggested that little progress had been made, we would consult during 2004 on legislative options. This would enable the Government to introduce legislation at an early stage if the final report then confirmed that progress had been disappointing and the Government concluded that they should proceed with legislation.

  Earlier this year the Office of the Deputy Prime Minister received Reading University's interim report, which we are publishing on our website today. This paints a disappointing picture of the impact of t he code in its first year. It has found that although there has been no reversal of previous trends towards shorter leases and that more leases contain operable "break" clauses, rent review provisions are almost universally upwards only. It is particularly disappointing that there are few signs yet of landlords offering alternative leasing packages at different prices, although the report finds that a degree of negotiation does take place. The Government are also concerned about the evidence that small business occupiers have too little information to be able to negotiate the best deals.

  The Office of the Deputy Prime Minister will therefore shortly issue a consultation paper in conjunction with the Welsh Assembly government about the regulation of commercial lease terms in England and Wales. This will seek views on the whole principle of legislation in this field as well as the various options for regulating lease terms. The Government will not make a decision about whether or not to legislate until we have studied the final report from Reading University, due at the end of this year, taking account of the outcome of the consultation exercise.