Written Statement of 7 September 2004

INTERNATIONAL DEVELOPMENT

  Piteairn Island
  The Parliamentary Under-Secretary of State for International Development (Mr. Gareth Thomas)
  Following detailed engineering assessment and design work over the past 12 months or so, I have set aside a total of £1.9 million from DFID funds to repair and refurbish the Hill of Difficulty road and the jetty/slipway in Pitcairn Island. Preparations are now in hand, with a view to expected commencement of the work in November of this year. In addition to this assistance, we will continue to provide medical and social welfare support for the island community.

  Reducing Maternal Deaths
  The Secretary of State for International Development (Hilary Benn)
  Last week I published a strategy paper, "Reducing Maternal Deaths", setting out the evidence on what is needed to reduce maternal deaths in developing countries. The paper complements our recent position paper on sexual and reproductive health and rights, and DFID's target strategy papers on "Better Health for Poor People" and "Realising Human Rights for Poor People".

  There is an urgent need to make faster progress towards the fifth millennium development goal of improving maternal health. Every year worldwide, more than 529,000 women die from complications in pregnancy and childbirth, all but 2,500 of them in developing countries. The UK is firmly committed to the target of reducing the maternal mortality ratio (the number of deaths per 100,000 live births) by three quarters by 2015, from a 1990 baseline. The health of the mother is inextricably linked to the health of her newborn child.

  The paper sets out four priorities for DFID: increasing awareness and commitment to action, supporting partner countries to improve access to services, addressing wider barriers to maternal health, especially improving the status and rights of women, and generating and using new knowledge.

  DFID is already supporting work in all these areas but will increase those efforts and encourage partners to do likewise. The strategy includes a commitment to increase year-on-year investment in maternal health.

  I am placing a copy of the paper in the Library of the House. It is also available on DFID's website at www.dfid.gov. uk.

TREASURY

  United Kingdom Coins
  The Chancellor of the Exchequer (Mr. Gordon Brown)
  Her Majesty the Queen has been graciously pleased to approve my recommendation that the following coins should be issued in 2005 and 2006:a gold half-sovereign, sovereign, double-sovereign and five pounds in 2005 bearing a new reverse design;
  a crown piece to celebrate the eightieth birthday of Her Majesty the Queen in 2006;
  a pair of two-pound coins to mark the 200th anniversary in 2006 of the birth of Isambard Kingdom Brunel; and
  a series of three fifty-pence pieces to commemorate the 150th anniversary in 2006 of the institution of the Victoria Cross.

  Collector versions of all these coins will he released at a premium above face value. In the case of the crown, the two-pound coins and the fifty pence pieces, during the course of 2006, versions will also become available at face value from banks and post offices.

HEALTH

  Pharmacy Services (Control of Entry Regulations)
  The Minister of State, Department of Health (Ms Rosie Winterton)
  On 17 January 2003, the Office of Fair Trading (OFT) published its report "The Control of Entry Regulations and Retail Pharmacy Services in the UK". It recommended abolition of the current restrictions on National Health Service pharmacy applications known as "control of entry".

  On 17 July 2003 the Government published their response to the report for England, in which they announced their intention to move cautiously in the direction recommended by the OFT.

  In summary, the package of measures proposed first the introduction of new criteria of competition and choice to the current regulatory test. Secondly they would exempt completely four types of pharmacy applications from that test. These four exemptions would apply to applications in respect of large shopping developments over 15,000 square metres (though we will not now include town centre developments); to pharmacies intending to open more than 100 hours per week; to pharmacies which are part of consortia developing new one-stop primary care centres; and to pharmacies which would be wholly internet or mail-order based. Finally, we would further reform and modernise the current regulatory system.

  We issued a consultation document on 29 August 2003, "Proposals to Reform and Modernise the NHS (Pharmaceutical Services) Regulations 1992", which explained these proposals in more detail and sought views on how best to implement the package of measures; 270 responses were received. A summary of those responses is available on the Department's website at www.dh.gov.uk/mpi.

  We also set up an expert advisory group, the advisory group on the reform of the NHS (Pharmaceutical Services) Regulations 1992, under the chairmanship of Mrs. Anne Galbraith, chair of the Prescription Pricing Authority. Its role was to advise how best to implement the proposals, taking account of the OFT report and

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  responses subsequently received, and to offer further advice. We received the group's report in January this year. We published the executive summary of their report in March. This is available on the Department's website at http://www.advisorybodies. doh.gov.uk/pharmacyregulationconsultation/execsum.htm.
  We will publish the group's full report later this year when we bring forward the necessary regulatory changes.

  We took careful account of the advisory group's report and recommendations and the responses to the consultation in drawing up our plans for implementation. Stakeholders from a wide range of key interests were represented on the group. These included patients and consumers, the NHS, pharmacists and health professions as well as those with experience of competition and regulatory reform. The group provided constructive and valuable advice. In order to end any uncertainty for patients, for the NHS and for community pharmacies, I announced on 18 August that the Government had accepted the great majority of their recommendations in relation to the proposals set out in the consultation document and would now proceed to implement them, but with some amendments.

  We will work to introduce the new criteria of competition and choice to the current regulatory test through secondary rather than primary legislation. We also intend to develop criteria for primary care trusts (PCTs) to reject administratively any application which does not undertake to provide the required essential pharmaceutical services under the proposed new contractual framework for community pharmacy. Similar arrangements will be made for appliance contractors. We intend these criteria to be rolled out to all PCTs later this year subject to our ongoing discussions with the Pharmaceutical Services Negotiating Committee (PSNC) and NHS Confederation to finalise the details of that framework.

  We will proceed with our plans to exempt four types of pharmacy application from the control of entry test.

  However, we will not exempt pharmacy applications for town centre shopping developments over 15,000 square metres. The exemption would still apply to out-of-centre and out-of-town developments as we originally proposed. Such exempted developments will be included in a published list and a provisional list is now available on the Department's website at www.dh.gov.uk/mpi. We are considering further how the list is to be updated and will provide more information when we bring forward the draft changes to the regulations. Pharmacies, which have hitherto found difficulty in gaining a NHS pharmacy contract in shopping developments in town centres, will nonetheless be able to apply to their local PCT for admission to the pharmaceutical list under the reformed regulatory test, when it is introduced, or to make use of the exemption to open more than 100 hours per week.

  For pharmacies which intend to open for more than 100 hours per week, we will include a requirement for PCTs to remove from their pharmaceutical list any pharmacy that consistently fails to meet the terms of the exemption unless there is good cause—for example, a fire causing temporary closure.
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  Applications from members of a consortium establishing a new one-stop primary care centre will also be exempted, provided the centre provides a regular, comprehensive range of services and serves a substantial population of 18,000 to 20,000 patients. The exemption will only apply to centres which are part of the local PCT's strategic service development plan or equivalent written service development strategy. Such centres will, in addition to usual general practitioner services, offer a wide range of primary and community based services, such as dentistry, optometry, podiatry, or other social or community services. The Regulations will define a consortium and specify governance arrangements. Guidance for PCTs will cover situations where a service provider withdraws from a centre so that this does not require the closure of the exempted pharmacy.

  Applications for wholly mail order or internet-based pharmacy services will similarly be exempted and we will apply a number of measures to ensure such pharmacies provide a fully professional service within the provisions of the new contractual framework. Internet pharmacies, as with all retail pharmacies in England, Wales and Scotland, must be registered with the Royal Pharmaceutical Society of Great Britain (RPSGB). All pharmacies, whether or not they provide online services, are subject to the same statutory requirements; and to the RPSGB's requirements including standards; inspection arrangements; and code of professional ethics.

  We will also introduce regulatory safeguards to protect against manipulation or abuse of the new freedoms. For example, the four exemptions will require applicants to provide a full and prescribed range of services. These would be for local determination by the PCT in relation to the first three exemptions, or nationally determined by the Department in discussion with the NHS in relation to the exemption for wholly internet or mail order based pharmacies. Apart from dispensing prescriptions, such services might include managing a patient's repeat medication, helping patients get the best from the medicines they are taking and promoting healthier lifestyles. For example, pharmacies are well placed to provide support for people at risk of coronary heart disease, giving advice on stopping smoking, or how to improve nutrition or physical activity.

  Key elements of our proposals, including the four exemptions, are either implicitly or explicitly linked to the delivery of pharmaceutical services under the new contractual framework. Our plan is to implement these reforms in tandem with that framework. The Department has held tripartite negotiations on the framework with the PSNC and the NHS Confederation for the last 18 months. On 24 August, the PSNC accepted our offer of funding subject to final agreement on a number of detailed issues which we are discussing with them and the NHS Confederation. We aim to conclude these as soon as possible. We will prepare and consult on the necessary regulatory changes and aim to implement the reformed regime as soon as is practicable thereafter.

  Guidance for the NHS on how to implement the regulations was last drawn up in 1992. An overhaul is long overdue. So we will amend this information to bring it fully up to date to assist PCTs in implementation. This would include developing supplementary questions to inform PCT assessments of

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  pharmacy applications. We will also propose enhanced data collection from PCTs, subject to approval by the body overseeing NHS data requirements, to inform assessment of progress on our package of reforms and evaluate the impact of these exemptions in 2006.

  We will also take additional steps as proposed to further modernise and reform the current system through a combination of regulatory and administrative changes.

  PCTs will be able to invite applications from contractors. We will revise the application forms to reflect the criteria that PCTs use in assessing applications. We will require PCTs to reach a decision on an application within four months of the due date for receipt, unless there is good cause. We will also require them to consult widely with patient, consumer and local community groups that have a direct interest in local pharmaceutical provision, and set an administrative minimum consultation period of 45 days.

  We will introduce an automatic exemption for all minor relocations under 500 metres, but retain the discretion for PCTs to override this where there is good cause. An example of this would be where geographical obstacles or transport difficulties would affect continued access to pharmaceutical services. Similarly there will be a minimum 12-month trading period requirement before a further application for a minor relocation can be accepted, unless, again, the applicant shows there is good cause.

  We will remove the current restriction, which prevents cross-PCT boundary minor relocations, but ensure there are means to remove the contractor from the list of the PCT he is leaving and the receiving PCT agrees to the relocation.

  We will retain the concept of preliminary consent for a pharmacy application, but will limit the maximum period for grant of such consent to six months.

  Similarly, we will provide for a maximum period of grant of full consent of nine months. We will also enable PCTs to have the discretion to require an applicant to commence pharmaceutical services within a given period not exceeding three months unless there is good cause.

  In addition, we will introduce two measures proposed to us by the advisory group. We will allow PCTs to set a fixed date every month for the receipt of applications and we will require PCTs to deal with applications that do not require local consultation within a maximum of 30 days.

  However, we will retain in guidance the long-stop discretion which enables PCTs to decide competing applications of equal merit on the basis of the first past the post.

  We will also reform the appeals system. We will allow appeals for change of ownership to be combined with appeals concerning minor relocations.

  Certain of our proposals would require primary legislation. When parliamentary time permits, we will consider introducing new legislation to enable reasonable charges, but not full cost recovery, for pharmacy applications to be introduced. We will also consider enabling PCTs to take into account, when assessing applications, the improvements they would bring to the provision of, or access to, over-the-counter
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  medicines and other healthcare products. We do not intend, however, to introduce legislation to enable charges to be levied for appeals. We would consult further on such legislation.

  We also plan to introduce, subject to further discussions, measures developed by the Pharmaceutical Services Negotiating Committee and the General Practitioner's Committee of the British Medical Association and the Dispensing Doctors' Association to reform the rules governing NHS rural dispensing. These bodies reviewed their proposals in the light of the Government response to the OFT report, presented their findings to the advisory group which in turn recommended they should proceed. Officials from the Department have met these organisations recently to hold further discussions on how best the reforms should be introduced to the current legislation. We aim to implement these in tandem with the other reforms I am announcing today.

  The measures I have announced represent an important step forward for community pharmacy services and our ambition to deliver a balanced package of reform measures. They will raise standards for patients, encourage innovation and excellence in service provision whilst at the same time supporting community pharmacies, many of which are small businesses. Community pharmacies provide a highly valued service and we are committed to their ongoing development and integration in the NHS. We also want to ensure that our reforms do not mean that services to more vulnerable groups of patients or those in deprived or rural areas suffer.

  We are determined to improve access to, and the choice of, pharmacy services so that community pharmacy is recognised as a key player in the provision of NHS services. These reforms will provide an environment in which community pharmacy services can thrive.

  NHS Foundation Trusts
  The Secretary of State for Health (Dr. John Reid)
  I announced on 26 July that I would support 20 National Health Service trusts in their bids to become NHS foundation trusts as part of wave 1A.

  These trusts have made an application to Monitor (whose statutory name is the independent regulator of NHS foundation trusts) for authorisation as NHS foundation trusts, and are setting up their new governance arrangements including recruiting members to hold elections to the board of governors. On 2 August, Monitor announced that wave 1 A applicants would be handled as two groups, with target dates for authorisation being 1 November 2004 and 1 February 2005. Details of the two groups are as follows:

  1 November 2004

  Barnsley District General Hospital NHS Trust

  Burton Hospitals NHS Trust

  Chesterfield and North Derbyshire Royal Hospitals NHS Trust

  Gateshead Health NHS Trust

  Harrogate Healthcare NHS Trust

  Nottingham City Hospital NHS Trust

  Southend Hospital NHS Trust

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  South Tyneside Healthcare NHS Trust

  West Suffolk Hospitals NHS Trust

  1 February 2005

  Aintree Hospitals NHS Trust

  Birmingham Heartlands and Solihull NHS Trust

  Birmingham Women's Healthcare NHS Trust

  East Somerset NHS Trust

  Frimley Park Hospitals NHS Trust

  Lancaster Teaching Hospitals NHS Trust

  Liverpool Women's Hospital NHS Trust

  Newcastle Upon Tyne Hospitals NHS Trust

  Royal Bournemouth and Christchurch NHS Trust

  Royal National Hospital for Rheumatic Diseases NHS Trust

  Wrightington, Wigan and Leigh NHS Trust

  On 26 July, I indicated that in addition to three-star rated acute and specialist trusts, mental health trusts would for the first time be invited to apply for NHS foundation trust status. We will formally invite applications for wave 2 later this autumn and outline the timetable for authorisation, which will be subject to the outcome of the review into NHS foundation trusts being undertaken by the Healthcare Commission (whose statutory name is the Commission for Healthcare Audit and Inspection).

EDUCATION AND SKILLS

  Summer Examinations Results
  The Secretary of State for Education and Skills (Mr. Charles Clarke)
  I would like to report on this summer's results for Key Stages 1, 2 and 3, GCSE and A level, which show that we are making steady progress in raising standards at every level.

  At age 7—Key Stage 1

  Some 1.85 per cent. of pupils achieved the expected level in reading (an increase of 1 percentage point over 2003) and 90 per cent. of pupils did so in maths (unchanged from 2003).1

  At age 11—Key Stage 2

  A record 77 per cent. of pupils achieved the expected level in English, an increase of 2 percentage points from last year (up 12 percentage points compared to 1998), and 74 per cent. of pupils achieved the expected level in Maths, a 1 percentage point increase from last year (up 15 percentage points from 6 years ago). These are good results and show that standards achieved by pupils in our primary schools are continuing to improve. Pupils and parents can be confident that their primary schools are still getting better and better.

  Standards at Key Stage 2 are improving in all areas but some of the biggest strides are in some of the poorest areas, such as Hackney where English improved by 7 percentage points and Maths by 6 percentage points compared to 2003 and Sunderland, where there was a 5 percentage point improvement in English and a 4 percentage point improvement in Maths. Among other LEAs Hartlepool and Southampton recorded the highest improvements in both English and Maths results. It shows that poverty is not a barrier to success.
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  It is a tribute to the hard work of teachers who have made this possible. We will continue to offer them targeted help and support.

  At age 14

  I am pleased to see progress made in maths. At Key Stage 3, there has been a 2 percentage point increase in the number of pupils achieving level 5 in Maths and over 50 per cent. of 14 year olds are now reaching level 6 in maths, a tremendous achievement. There has been a 2 percentage point fall in the number of pupils achieving level 5 in Science compared to last year, although there has been a 10 percentage points increase since 1998.

  Publication of Key Stage 3 English results has been deferred until the outcome, in terms of scale and nature, of the extended marking process for schools is known. Under the National Statistics Code of Practice, it is the statistics Head of Profession in the Department who decides on the content and timing of the release of National Statistics, and provides advice to ministers.

  At GCSE

  I welcome the rise in the number of entries achieving top grades for all candidates in England and Wales—the biggest rise in A* to C grades since 1999. The provisional results show that:
  Grades at A*—C for all candidates in England and Wales have increased by 1.1 percentage points to 59.2% (compared to a 0.2 percentage point rise last summer)
  Some 97.6 per cent. of GCSE entrants achieved a grade A*—G—the same rate as last year
  Grades A*—C at maths have increased by 1.6 percentage points to 51.7 per cent. English is up by 0.2 percentage point to 59.9 per cent.
  An increase of entries in chemistry of 5 per cent., in physics of 5.1 per cent. and in biology of 4.4 per cent.
  Boys' improvement at grades A*—C has increased by 1.3 percentage points compared with 0.9 for girls

  These results are excellent and reflect the hard work of pupils and teachers. I am encouraged that more pupils are taking maths and gaining good grades, mirroring the rise for 14 year olds. It is also good to see more pupils taking science.

  As with the primary schools, some of the biggest improvements this year have been in schools in some of our poorer and lowest attaining areas. In North Tyneside early indications are that the GCSE results have increased from 48 per cent. of pupils gaining five or more good GCSEs to 54 per cent. this year. At school level the International School in Birmingham increased from 9 per cent. of its pupils gaining 5 A* to C grades last year to 32 per cent. this year — still a long way to go but huge improvement and a tribute to the leadership of these schools.

  A further example of this improvement can be seen in London. For the first time all London boroughs are now achieving above 40 per cent. of pupils gaining 5 A* to C grades at GCSE. The provisional results also indicate that some of the fastest improving areas are among the most deprived boroughs: Islington is up by 7 percentage points; Tower Hamlets is up 5.3 percentage points; Haringey is up by 5.6 percentage points; Hackney is up by 5.8 percentage points; Lewisham is up by 6.3 percentage points and Newham is up by 3.9 percentage points.
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  These results build on very fast improvement from last year's results when Hackney was up by 8 percentage points and Islington up by 5 points. So the trend is clearly upwards.

  At A level

  The overall pass rate rose to 96 per cent. from 95.4 per cent. last year. A grades at A level increased by 0.8 percentage points to 22.4 per cent. and the overall AS pass rate has increased by 0.2 percentage points to 86.9 per cent. Excluding General Studies, English and Mathematics attracted the highest number of entries at A level and are two of the three most popular subjects at AS.

  These results are built on the hard work of students, schools and colleges and will open up more opportunities for our young people to achieve success. I congratulate the students and thank our teachers for their commitment.

  At a time when Ofsted says the standard of teaching has never been higher, we should expect to have rising levels of achievement in our schools and colleges. We are getting better as a country at getting the best out of our young people. We should applaud them and applaud their teachers, schools and colleges.

  I am determined that we should move forward to improve performance further.We will continue to progress with some important developments from the start of the new school term.

  Specialist schools

  Some 506 specialist schools will begin operating as specialist for the first time this September. This means that 2.1 million pupils will be educated in one of the 1,954 specialist schools—62 per cent. of all English secondary schools, up from just 257 in 1997. The evidence shows that specialist schools help pupils to gain better grades.

  Academies

  Five new Academies open in Barnet, Hackney, Hillingdon, Lambeth and Northampton. They will build on the success of the existing 12 where I was pleased to see some excellent GCSE results this summer. For example The King's Academy in Middlesbrough where 34 per cent. of pupils achieved five or more A*—C GCSEs, an increase of around 12 percentage points on the joint results of the predecessor schools in 2003.

  Workforce Reform

  Workforce reform is in the next phase and the radical enhancement of the role of teachers continues. There are not just more teachers than at any time since the early 1980s but teachers are being given professional support in class with more assistants. Teachers will increasingly have more time to prepare better lessons.

  Education Maintenance Allowance

  This will be available nationally to help young people stay on in education, at school or college.

  ICT

  Current activity focuses on supporting the personalised learning and transforming school workforce agendas. Over 99 per cent. of schools in England are now connected to the Internet of which, at June 2004, 61 per cent. of primary and 98 per cent. of secondary had a connection at broadband speeds appropriate to their needs.
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  Schools continue to invest in the new technologies that support enhanced teaching and learning. By March 2004 63 per cent. of primary schools had an electronic interactive whiteboard (average 1.9 a school) and 92 per cent. of secondary schools (average 7.5 a school).

  In the longer term I am looking forward to receiving later in the autumn the final report from Mike Tomlinson's Working Group on 14-19 Reform. He will be coming forward with proposals looking at how we stretch the most able, boost participation, improve the vocational offer and reduce the burden of assessment.
  1Figures for 2004 and 2003 are not strictly comparable because of the trial involving 34 LEAs and a quarter of 7 year olds that reported only teacher assessment. The independent assessment of the trial is expected later this month and we shall comment further on these results then.

HOME DEPARTMENT

  Animal Procedures Committee
  The Parliamentary Under-Secretary of State for the Home Department (Caroline Flint)
  In accordance with Section 20(5) of the Animals (Scientific Procedures) Act 1986, I have placed the Committee's annual report for 2003 in the Library today. Among other things the report includes advice given by the Committee to Ministers about applications for licences to perform particular experiments on animals; results of research projects funded by the Home Office on the Committee's advice; and advice presented to Ministers on how to assess more accurately the costs and benefits of animal experimentation.

  Scientific Procedures on Living Animals
  The Parliamentary Under-Secretary of State for the Home Department (Caroline Flint)
  I wish to announce that the publication entitled "Statistics of Scientific Procedures on Living Animals in Great Britain-2003" is being presented as a Command Paper, Cm 6291, today. Copies will be placed in the House Library.

  This annual report meets the requirement in the Animals (Scientific Procedures) Act 1986 to keep Parliament informed about the use of animals for experimental or other purposes. It also forms the basis for meeting periodic reporting requirements at EU level. The format and content of future reports is currently being reviewed by the Animals Procedures Committee.

  The report shows an overall increase over last year of 2.2 per cent. in the number of procedures undertaken. The total number of procedures was 2.79 million, an increase of 59,000 over the previous year. This is within typical year-on-year variability.

  Non-toxicological procedures accounted for about 84 per cent. of the procedures carried out in 2003. These included studies for fundamental biological or applied research in human and veterinary medicine, with the main areas of use being for immunological studies, pharmaceutical research and development, and cancer research.
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  Procedures for toxicological purposes accounted for the remaining 16 per cent. of all procedures. About 63 per cent. of these were for testing the safety and efficacy of new drugs and medicines.

  In keeping with previous years, those procedures which used mice or rats (or other rodents) were the great majority at 85 per cent. Those using fish amounted to 6 per cent. and those using birds, 4 per cent. The total of all procedures using dogs, cats, horses and non-human primates, that is those species offered special protection by the Act, was less than 1 per cent. of the total.

  Genetically normal animals were used in 1,749,000 regulated procedures, representing 63 per cent. of all procedures for 2003 (compared with 65 per cent. in 2002 and 84 per cent. in 1995). Genetically modified animals (nearly all rodents) were used in 764,000 regulated procedures, representing 27 per cent. of all procedures for 2003 (compared with 26 per cent. in 2002 and 8 per cent. in 1995).

  These trends have been evident over recent years, reflecting the changing balance in use between genetically normal and modified animals, and are set to continue as advances in genetic science open up new and promising avenues of research.

  I should point out in relation to the statistics that the Home Office, as regulatory authority under the 1986 Act, does not control the overall amount of animal research and testing which takes place, the imperative being to minimise the numbers of animals used for justifiable purposes. We ensure, in carrying out our licensing function, that the provisions of the Act are rigorously applied in each programme of work. All animal use must be justified, and for each particular programme of work the number of animals used and the suffering caused must be minimised.

TRADE AND INDUSTRY

  Director and Auditor Liability
  The Secretary of State for Trade and Industry (Ms Patricia Hewitt)
  The House will be aware that, between December 2003 and March 2004, the Government consulted widely on the case for reform of the law on director and auditor liability. Over 120 responses to the consultation were received from investors; companies, both large and small; auditors; legal advisers; industry bodies; academia; and the general public. I am grateful to all those who took the time and trouble to contribute. In the light of the consultation responses the Office of Fair Trading was asked to undertake a study of the potential impact on competition in the audit market of a cap on auditor liability. I am grateful to them for completing and publishing this so quickly.

  Directors

  It is essential for British competitiveness that we have a diverse pool of high-quality individuals willing to become directors, and that directors are willing to take informed and rational risks. But it is also important that directors act in accordance with their duties, and that negligent directors can be held to account by their companies. The courts have in recent years imposed a much more demanding standard of care, skill and diligence on directors. This has been a very welcome development.
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  The consultation built on the recommendations both of the Company Law Review and of Sir Derek Higgs' study on non-executive directors. It identified two particular concerns:
  exposure to liabilities arising from legal action against directors by third parties. The sharp rise in the number of class actions by groups of shareholders in the US has made this a particular concern for directors of British companies with a US listing;
  the cost of lengthy court proceedings. Companies are currently permitted to indemnify a director against the cost of defending legal proceedings, but only when judgment has been given in the director's favour or he has been acquitted. For many directors, such indemnification comes too late and the prospect provides cold comfort.

  The consultation indicated these issues are affecting the recruitment and behaviour of directors. I therefore intend to introduce a balanced and proportionate package of reforms, by tabling amendments to the Companies House (Audit, Investigations and Community Enterprise) Bill at its Commons Committee stage. The proposals will in particular introduce two important relaxations of the current prohibition on companies exempting their directors from, or indemnifying them against, liability:
  they will permit, but not require, companies to indemnify directors in respect of proceedings brought by third parties (covering both legal costs and the financial costs of any adverse judgement, except for the legal costs of unsuccessful defence of criminal proceedings, fines imposed in criminal proceedings and penalties imposed by regulatory bodies such as the financial services authority);
  they will permit, but not require, companies to pay directors' defence costs as they are incurred, even if the action is brought by the company itself. The director would still be liable to pay any damages awarded to the company and to repay his defence costs to the company if his defence were unsuccessful (except where the company chooses to indemnify the director in respect of his legal costs in civil proceedings brought by third parties).

  The Government amendments will also remove an arguable loophole under which a company in the same group may currently provide an indemnity to a director that would be unlawful if it was provided directly by the company of which the individual was a director.

  The amendments will also require disclosure in the directors' report by companies that indemnify directors. Shareholders will also have the right to inspect any indemnification agreement. Companies that do not indemnify directors will not have to make any disclosure.

  Auditors

  The consultation also covered the position of auditors.

  The Government wish to see a competitive and high-quality market for audit services, shareholders using high quality and reliable information, and an adequate system of redress for when things go wrong. There must also be an appropriate degree of transparency and accountability for the audit process.

  The Government are actively pursuing this agenda. The Bill already extends the powers of auditors to obtain information, and contains new provisions for each director to confirm there is no relevant audit information of which he is aware but the company's auditors are unaware.
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  There are also a number of initiatives to improve the quality of the audit and other information provided to shareholders. For example:
  the recommendations of the Review chaired by Sir Robert Smith mean that in listed companies there will shortly be enhanced audit committee reporting to shareholders, including better information on key audit judgements;
  the auditing practices board, a subsidiary of the financial reporting council, has published for comment draft new ethical standards relating to the independence of auditors which are expected to be finalised this autumn;
  the financial reporting council has established an audit inspection unit which has begun independent reviews of the effectiveness of the audit procedures of the four largest audit firms;
  the audit regulatory activities of the professional accountancy bodies are now subject to independent oversight by the professional oversight board for accountancy, a subsidiary of the financial reporting council;
  a new accountancy investigation and discipline board has been established, as a subsidiary of the financial reporting council, in order to investigate public interest cases of alleged breaches of professional standards by auditors and it has commenced its first investigation;
  the financial reporting council has recently set up a group under Douglas Flint to review the current guidance on internal risk control;
  we are also considering carefully the responses to our recent consultation on the operating and financial review.

  In line with the company law review's recommendations, and as supported in the consultation, I have decided not to bring forward amendments to the current Bill to extend an auditor's duty of care.

  The consultation showed a wide variety of views both as to whether reform of the law on liability of auditors was needed, and if so what form it should take. Some investors also had concerns about whether the audit process was serving them sufficiently well. It was also a matter of concern that the leaders of some of our largest companies were worried their choice of auditor was limited.

  I have considered carefully whether there is a case for a change in the law on auditor liability. I am grateful to the Office of Fair Trading for looking at the competition implications of enabling shareholders to agree in advance a maximum amount for which the auditor would be liable. In the light of the consultation responses, and the OFT's advice that introducing a cap would not significantly enhance competition, I have concluded against proposing changes to the law on this.

  The Government remain committed to improving the operation of the audit market and will continue to consider any proposals, including the possibility of limiting liability on a proportionate basis by contract, which can be demonstrated significantly to enhance competition, and to improve quality, in the audit market. The Government intend to look closely at this option and actively call upon auditors, business and investors to work together to examine whether proposals for a system of proportionate liability via contract are practical and/or desirable.

  However no change to the law on financial liability could protect one of an auditor's greatest assets—its reputation. That responsibility rests with the professionalism of auditors themselves.

  National Grid Company
  The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms)
  On 17 December 2002,Official Report, column 45WS, the then Minister for Energy and Construction, my right hon. Friend the Member for Cunninghame, North made a statement to Parliament saying that Ministers were minded to accept the recommendation of the GB system operator selection panel that National Grid Company's application for the role of GB system operator should be accepted. Licensing of the GB system operator could not take place until the Energy Bill had received Royal Assent. The necessary legislation is now in place and I have confirmed the appointment of the National Grid Company as the GB system operator under the British Electricity Trading and Transmission Arrangements (BETTA), with effect from 1 September 2004.

  World Trade Organisation
  The Secretary of State for Trade and Industry (Ms Patricia Hewitt)
  On 1 August the General Council of the World Trade Organisation agreed a framework text for further negotiations on the Doha development agenda. Commissioners Lamy and Fischler negotiated on behalf of the European Union. I warmly welcome this framework agreement, which is a crucial step on the road to delivering a trade round that will benefit developed and developing countries alike.

  On 17 September last year I made an oral statement to the House, Official Report, columns 861–863, about the WTO ministerial conference in Cancun, where WTO Members had been unable to reach an agreement. In that statement I said that in order to get the Doha development agenda back on track, the WTO community would need to lift its sights to the prize on offer. I believe that WTO members have done just that. The period since Cancun has been marked by a much more positive and business-like atmosphere and the framework agreement has now cemented the progress made.

  For the most part the purpose of the framework agreement is to set out guiding principles for future negotiations rather than to provide specific proposals. However, it contains sufficient detail to allow technical discussions to continue during the rest of this year, when the US presidential elections and the appointment of a new College of Commissioners are likely to limit political engagement in the round.

  The framework agreement gives greater detail on the direction of the negotiations on agriculture, industrial tariffs, commits WTO members to negotiate on a trade facilitation agreement and sets a revised target date for more requests in the ongoing services negotiations. Agriculture is generally acknowledged to be the key to progress in the round and the agriculture section contains a welcome level of detail. The agreement provides for extensive special and differential treatment for developing countries across all the sectors covered. Three of the four so-called Singapore issues (competition, investment and transparency in government procurement), divergent views on which did much to derail talks at Cancun, have been dropped from the Doha development agenda. The fourth—trade facilitation—will now be the subject of negotiations.
  111WS
  The text of the agreement reflects the increasing influence of developing countries within the WTO. This is a development that I have previously welcomed. India and Brazil in particular played an influential role in the lead up to the agreement. Both the G20 group (larger developing country agricultural exporters) and G90 (some 62 smaller developing countries) engaged in the negotiations in a flexible and constructive manner. My right hon. Friend the Secretary of State for International Development, my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Minister for Trade, Investment and Foreign Affairs and I were in regular contact with a number of influential members of both of these groupings, as well as our EU colleagues, to underline the importance of reaching an agreement. My hon. Friend the Minister for Trade, Investment and Foreign Affairs and I between us attended the two General Affairs and External Relations Council meetings held in the last week of July to agree the EU's position for this stage of the negotiations.

  The Government have been strongly supportive of the Commission's approach to negotiations in the period since Cancun. We consider that the Commission have shown leadership and flexibility to move talks forward, capitalising on the stronger negotiating position that the EU enjoys after the CAP reforms of June 2003 and March 2004, which will cut significantly the level both of trade-distorting domestic support and export subsidies. In particular, the conditional offer to eliminate of export subsidies in the letter of 9 May from Commissioners Lamy and Fischler to WTO trade Ministers helped to breathe new life into the talks and encouraged other developed countries to match the EU's level of ambition. My hon. Friend the Minister for Trade, Investment and Foreign Affairs and I attended meetings of the General Affairs and External Relations Council in the week leading up to the Framework Agreement where we strongly supported the European Commission.

  There is much still to be done. The challenge now for the whole WTO membership of 148 countries is to build on this success and to ensure that the momentum that has been built up is maintained in the detailed negotiations that will now follow. Success in the round has the potential to deliver huge benefits, including for developing countries as their opportunities for trade increase, so adding to their prosperity, aiding development and contributing towards the achievement of the millennium development goals.

  The Government will continue to do all we can, both inside the EU and within the broader WTO community, to help deliver an ambitious development-focussed round. In particular, we will press hard for substantial progress before the sixth WTO ministerial meeting in Hong Kong scheduled for December 2005.

WORK AND PENSIONS

  Remploy
  The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle)
  I have, on behalf of my right hon. Friend the Secretary of State for Work and Pensions, written to the Chairman of Remploy 112WS
  approving the 2004–05 and 2005–06 performance and resources agreement targets between the Department and the company. The targets have been negotiated by the chief executive of Jobcentre Plus on behalf of my right hon. Friend the Secretary of State for Work and Pensions. The targets for 2004-05 are:
  a total of 1,400 progressions from Remploy factories or Interwork to mainstream unsupported employment;
  Remploy Ltd will keep within an average cost per supported employee of £10,500;
  the company will achieve a gross margin (sales less cost of materials) figure of £60.5 million;
  the company's employee development time will be at least 5 per cent.

  The full agreement for 2004–05 has been placed in the Library.

  Pension Credit
  The Minister for Pensions (Malcolm Wicks)
  I can now provide the latest monthly progress report on the take-up of pension credit, which became payable on 6 October 2003.

  At the end of July, there were 2.58 million pensioner households (3.13 million individuals) being paid pension credit, an increase of 33,000 households (40,000 individuals) during July. As at 31 July, there were 1.92 million households (2.33 million individuals) receiving more money as a result of the introduction of pension credit, gaining by an average £16.02 a week. The average pension credit award at the end of July was £41.80 per week.

  Customers whose applications are successful in the period up to October this year will have their entitlement backdated to 6 October 2003 (or to the date of entitlement if this is later). The 2004 Budget statement confirmed that backdating arrangements will continue beyond October 2004. This means that anyone eligible applying after October 2004 will see their entitlement backdated by up to 12 months. A report showing progress to the end of July is available in the Library. The report includes regional breakdowns of the number of pension credit households and is accompanied by tables showing numbers of pension credit awards in parliamentary constituencies in Great Britain. Copies of the report are also available for hon. Members in the Vote Office.

FOREIGN AND COMMONWEALTH AFFAIRS

  Middle East Peace Process (Civilian Deaths)
  The Minister for Europe (Mr. Denis MacShane)
  I answered PQs 180074 and 180090 on 28 June 2004,Official Report, columns 129W and 131W respectively. Both PQs related to the Middle East Peace Process. The questions and answers given were as follows:

  PQ 180074
  To ask the Secretary of State for Foreign and Commonwealth Affairs what estimate his Department has made of the number of Israeli civilians killed since the beginning of the intifada in September 2000; and how many were under the age of 18.
  113WS
  Mr. MacShane
  We estimate that 944 Israeli civilians have been killed since the beginning of the intifada in September 2000. This estimate is based on a variety of sources, including the UN, NGOs and the media. We do not hold figures for those killed under the age of 18 years.

  PQ 180090
  To ask the Secretary of State for Foreign and Commonwealth Affairs what estimate his Department has made of the number of Palestinian civilians killed since September 2000; and how many were under 18.

  Mr. MacShane
  We estimate that 3,242 Palestinian civilians have been killed since the beginning of the intifada in September 2000. This estimate is based on a variety of sources, including the UN, NGOs and the media. We do not hold figures for those killed under the age of 18 years.

  Since answering PQs 180074 and 180090 however, it has been brought to our attention by the British Embassy in Tel Aviv that the figures provided in these answers on 28 June were inaccurate. The figures given were for total deaths on each side rather than civilian deaths, so these figures would also include Israeli Defence Force soldiers, militants and suicide bombers as well as civilians.

  I apologise for this error and would like to clarify that the figures initially given in the answer of 28 June were for the total numbers of Israeli and Palestinian deaths rather than just civilian deaths. Figures for civilian deaths are not held centrally and could be provided only at disproportionate costs.

  Sanctions
  The Parliamentary Under—Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell)
  Currently 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 Quaeda and the Taliban, the Democratic Republic of Congo, Iraq, Liberia, Rwanda, Sierra Leone, Sudan and Somalia. In addition, the UK implements sanctions imposed by the European Union in relation to Bosnia and Herzegovina, Burma, China, the DRC, the former Federal Republic of Yugoslavia, Libya, Moldova, Sudan and Zimbabwe. In accordance with a decision of the OSCE, the United Kingdom implements arms embargoes on Armenia and Azerbaijan. A full list of sanctions regimes and restrictive measures implemented by the UK has been placed 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. Restrictive measures implemented in the UK are also implemented in the Overseas Territories and Crown dependencies.

  European Union
  The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw)
  I will today lay before Parliament the latest White Paper on Prospects for the EU (Cm 6310). Copies will be placed in the Library of 114WS
  the House and will be available from the Vote Office in the House of Commons and the Printed Paper Office in the House of Lords. A copy will also be available on the Foreign and Commonwealth Office website www. fco.gov. uk.

  This White Paper is a supplement to the one published in April on Prospects for the EU in 2004 (Cm 6174). As well as setting out the issues we expect the Union to address in the rest of the year, it updates readers on developments since April and provides a short breakdown of the achievements of Ireland's EU Presidency, which ran from January to June. It covers the full gamut of EU business, from enlargement—and whether we should start negotiations with Turkey on membership of the Union—to the Lisbon Agenda for economic and social reform which includes developing the single market, simplifying new and outdated regulation, and increasing employment.

  The purpose of this White Paper, and April's, is to keep Parliament and the public informed about developments in the EU, the Government's approach to them and the benefits they will bring to the UK and its citizens.

  The next White Paper on Prospects for the EU will be published in January 2005, to be followed by a shorter update—along the lines of the one published today—in July 2005.

  These White Papers are part of the Government's commitment to make EU business more accessible and interesting for Parliament, the media and members of the public alike—by providing an appropriate amount of detail and depth on significant progress that might have an impact on our daily lives. I hope they will play a vital role in involving Parliament more closely in EU affairs, and trust that Members of both Houses will read them. I commend this White Paper to the House.

  Sanctions (Recent Changes)
  The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell)
  On 11 June the Council of the European Union adopted common position 2004/510/CFSP. The Council adopted EC regulation 1353/2004 on 27 July. These amend common position 2004/31/CFSP of 10 January and EC regulation 131/2004 of 28 January, which renewed the arms embargo against Sudan and added an exemption for the supply of de-mining equipment. The new measures broaden the exemptions to the prohibition on the supply of arms, technical assistance and financial assistance to include crisis management operations of the African Union. This allows EU member states to offer full practical and financial support to the deployment of the African Union's ceasefire commission to Darfur. With the support of her Majesty's Government, the United Nations Security Council on 30 July unanimously adopted resolution 1556 (2004), which, inter alia, imposes an arms embargo against non-governmental entities and individuals, including the Janjaweed, operating in the states of North Darfur, South Darfur and West Darfur in Sudan.

  With the support of Her Majesty's Government, the United Nations Security Council on 27 July 2004 unanimously adopted resolution 1552 (2004) on the

  115WS
  situation concerning the Democratic Republic of the Congo. This renewed the arms embargo imposed by UNSCR 1493 (2003) for one year and extended the mandate of the UN expert group established by UNSCR 1533 (2004) to monitor the embargo for a furter six months.

  With the support of Her Majesty's Government, the United Nations Security Council on 8 June unanimously adopted UN Security Council resolution 1546 (2004). Among other measures, the resolution leaves the arms embargo in place, with new exemptions for arms and related material required by the Government of Iraq or the multinational force to serve the purposes of the resolution. The resolution passes all outstanding rights, responsibilities and obligations relating to the oil for food programme to the Government of Iraq, including ensuring independently authenticated confirmation that goods have been
  116WS
  delivered, and it leaves in place the financial sanctions upon former Government of Iraq funds and any funds belonging to Saddam Hussein, senior members of his regime and their immediate family members.

  On 26 April, the Council of the European Union adopted common position 2004/423/CFSP and EC Regulation 798/2004, concerning Burma. These renewed the restrictive measures imposed by common position 2003/297/CFSP from 30 April 2004 for a further 12 months, in view of the current political situation in Burma, notably the failure of the regime to pursue the process of national reconciliation, respect for human rights and democracy. The restrictive measures comprise an assets freeze and travel ban against members of the regime and others, an arms embargo, a prohibition on the attachment and hosting of military personnel to diplomatic missions, restrictions on development programmes and a suspension of high-level bilateral governmental visits to Burma.

  Pitcairn Island: Infrastructure
  The Lord President of the Council (Baroness Amos)
  My honourable friend the Parliamentary Under-Secretary of State for International Development (Mr Gareth Thomas) has made the following Written Ministerial Statement.

  Following detailed engineering assessment and design work over the past 12 months or so, I have set aside a total of £1.9 million from DfID funds to repair and refurbish the Hill of Difficulty Road and the jetty/slipway in Pitcairn Island. Preparations are now in hand, with a view to expected commencement of the work in November of this year. In addition to this assistance, we will continue to provide medical and social welfare support for the island community.

  DfID: Reducing Maternal Deaths Strategy
  Baroness Amos
  My right honourable friend the Secretary of State for International Development has made the following statement:

  Last week I published a strategy paper, Reducing Maternal Deaths, setting out the evidence on what is needed to reduce maternal deaths in developing countries. The paper complements our recent position paper on Sexual and Reproductive Health and Rights, and DfID's target strategy papers on Better Health for Poor People and Realising Human Rights for Poor People.

  There is an urgent need to make faster progress towards the fifth Millennium Development Goal of improving maternal health. Every year worldwide, more than 529,000 women die from complications in pregnancy and childbirth, all but 2,500 of them in developing countries. The UK is firmly committed to the target of reducing the maternal mortality ratio (the number of deaths per 100,000 live births) by three-quarters by 2015, from a 1990 baseline. The health of the mother is inextricably linked to the health of her newborn child.

  The paper sets out four priorities for DfID: increasing awareness and commitment to action, supporting partner countries to improve access to services, addressing wider barriers to maternal health, especially improving the status and rights of women, and generating and using new knowledge.

  DfID is already supporting work in all these areas but will increase those efforts and encourage partners to do likewise. The strategy includes a commitment to increase year-on-year investment in maternal health.

  I am placing a copy of the paper in the Library of the House. It is also available on DfID's website at www.dfid.gov.uk.

  Peers' Subsistence and Office Cost Allowances
  The Chairman of Committees (Lord Brabazon of Tara)
  The resolution of the House of 20 July 1994 provided for the limits of the subsistence and office cost allowances to be uprated annually on 1 August in line with the increase in the retail prices index over the previous 12 months to July.

  Accordingly, the limits within which Lords may be reimbursed expenses incurred were increased with effect from 1 August 2004. The new limits are now as follows (the limits previously applicable are shown in brackets):

  Overnight subsistence

  £132 (£128)

  Day subsistence

  £66 (£64)

  Office costs

  £55 (£53.50)

  Office costs for non-sitting periods

  £2,200 per year (£2,140 per year)

  Iraq: Prosecution of Trooper Williams
  The Attorney-General (Lord Goldsmith)
  As I indicated in my Written Statement to the House on 14 June(Official Report: cols. WS 22–24) this case, which involves an alleged unlawful killing by shooting of an Iraqi citizen during the course of an arrest, was brought to my attention after charges were dismissed by the soldier's commanding officer. This meant the case could not be tried by court martial. I referred it to the CPS who asked the Metropolitan Police for assistance in collecting further evidence.

  I can confirm that today the Metropolitan Police, on the advice of the CPS, charged Trooper Williams with the murder of Hassan Said on 3 August 2003 in Ad Dayr Iraq. Trooper Williams has been kept in custody to appear at Bow Street magistrates' court this afternoon.

  Trooper Williams is a member of 2nd Royal Tank Regiment.

  Middle East Peace Process: Civilian Deaths
  The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean)
  My honourable friend the Minister for Europe (Mr Denis MacShane) answered PQs 180074 and 180090 on 28 June (Official Report, Commons, cols. 129 W and 131 W respectively). Both PQs related to the Middle East peace process. The Questions and Answers given were as follows:

  PQ 180074:
  To ask the Secretary of State for Foreign and Commonwealth Affairs what estimate his department has made of the number of Israeli civilians killed since the beginning of the intifada in September 2000; and how many were under the age of 18.
  Mr. MacShane: We estimate that 944 Israeli civilians have been killed since the beginning of the intifada in September 2000. This estimate is based on a variety of sources, including the UN, NGOs and the media. We do not hold figures for those killed under the age of 18 years.
  WS 71
  PQ 180090:
  To ask the Secretary of State for Foreign and Commonwealth Affairs what estimate his department has made of the number of Palestinian civilians killed since September 2000; and how many were under 18.
  Mr. MacShane: We estimate that 3,242 Palestinian civilians have been killed since the beginning of the intifada in September 2000. This estimate is based on a variety of sources, including the UN, NGOs and the media. We do not hold figures for those killed under the age of 18 years.

  Since answering PQs 180074 and 180090 however, it has been brought to our attention by the British Embassy in Tel Aviv that the figures provided in these answers on 28 June were inaccurate. The figures given were for total deaths on each side rather than civilian deaths, so these figures would also include Israeli Defence Force soldiers, militants and suicide bombers as well as civilians.

  I apologise for this error and would like to clarify that the figures initially given in the Answer of 28 June were for the total numbers of Israeli and Palestinian deaths rather than just civilian deaths. Figures for civilian deaths are not held centrally and could only be provided at disproportionate cost.

  Sanctions: Current UK Implementation
  Baroness Symons of Vernham Dean
  Currently 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'Qaeda and the Taliban, the Democratic Republic of the Congo, Iraq, Liberia, Rwanda, Sierra Leone, Sudan and Somalia. In addition, the UK implements sanctions imposed by the European Union in relation to Bosnia and Herzegovina, Burma, China, the DRC, the former Federal Republic of Yugoslavia, Libya, Moldova, Sudan and Zimbabwe. In accordance with a decision of the OSCE, the United Kingdom implements arms embargoes on Armenia and Azerbaijan. A full list of sanctions regimes and restrictive measures implemented by the UK has been placed 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 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. Restrictive measures implemented in the UK are also implemented in the Overseas Territories and Crown Dependencies.

  Sanctions: Recent Changes
  Baroness Symons of Vernham Dean
  On 11 June the Council of the European Union adopted Common Position 2004/510/CFSP. The Council adopted EC Regulation 1353/2004 on 27 July. These amend Common Position 2004/31/CFSP of 10 January and EC Regulation 131/2004 of 28 January, which renewed the arms embargo against Sudan and added an exemption for the supply of de-mining equipment. The new measures broaden the exemptions to the prohibition on the supply of arms, technical assistance WS 72
  and financial assistance to include crisis management operations of the African Union. This allows EU member states to offer full practical and financial support to the deployment of the African Union's Ceasefire Commission to Darfur. With the support of her Majesty's Government, the United Nations Security Council on 30 July unanimously adopted Resolution 1556 (2004), which, inter alia imposes an arms embargo against non-governmental entities and individuals, including the Janjaweed, operating in the states of North Darfur, South Darfur and West Darfur in Sudan.

  With the support of Her Majesty's Government, the United Nations Security Council on 27 July 2004 unanimously adopted Resolution 1552 (2004) on the situation concerning the Democratic Republic of the Congo. This renewed the arms embargo imposed by UNSCR 1493 (2003) for one year and extended the mandate of the UN Expert Group established by UNSCR 1533 (2004) to monitor the embargo for a further six months.

  With the support of Her Majesty's Government, the United Nations Security Council on 8 June unanimously adopted UN Security Council Resolution 1546 (2004). Among other measures, the resolution leaves the arms embargo in place, with new exemptions for arms and related materiel required by the Government of Iraq or the multinational force to serve the purposes of the resolution. The resolution passes all outstanding rights, responsibilities and obligations relating to the Oil for Food Programme to the Government of Iraq, including ensuring independently authenticated confirmation that goods have been delivered, and it leaves in place the financial sanctions upon former Government of Iraq funds and any funds belonging to Saddam Hussein, senior members of his regime and their immediate family members.

  On 26 April, the Council of the European Union adopted Common Position 2004/423/CFSP and EC Regulation 798/2004, concerning Burma. These renewed the restrictive measures imposed by Common Position 2003/297/CFSP from 30 April 2004 for a further 12 months, in view of the current political situation in Burma, notably the failure of the regime to pursue the process of national reconciliation, respect for human rights and democracy. The restrictive measures comprise an assets freeze and travel ban against members of the regime and others, an arms embargo, a prohibition on the attachment and hosting of military personnel to diplomatic missions, restrictions on development programmes and a suspension of high-level bilateral governmental visits to Burma.

  European Union: Update on Prospects for 2004
  Baroness Symons of Vernham Dean
  My right honourable friend the Foreign Secretary (Mr Jack Straw) will today lay before Parliament the latest White Paper on Prospects for the EU (Cm 6310). Copies will be placed in the Library of the House and will be available from the Vote Office in the House of
  WS 73
  Commons and the Printed Paper Office in the House of Lords. A copy will also be available on the Foreign and Commonwealth Office website (www.fco.gov.uk).

  This White Paper is a supplement to the one published in April on Prospects for the EU in 2004 (Cm 6174). As well as setting out the issues we expect the Union to address in the rest of the year, it updates readers on developments since April and provides a short breakdown of the achievements of Ireland's EU Presidency, which ran from January to June. It covers the full gamut of EU business, from enlargement—and whether we should start negotiations with Turkey on membership of the Union—to the Lisbon Agenda for economic and social reform—which includes developing the single market, simplifying new and outdated regulation, and increasing employment.

  The purpose of this White Paper, and April's, is to keep Parliament and the public informed about developments in the EU, the Government's approach to them and the benefits they will bring to the UK and its citizens.

  The next White Paper on prospects for the EU will be published in January 2005, to be followed by a shorter update—along the lines of the one published today—in July 2005.

  These White Papers are part of the Government's commitment to make EU business more accessible and interesting for Parliament, the media and members of the public alike by providing an appropriate amount of detail and depth on significant progress that might have an impact on our daily lives. I hope they will play a vital role in involving Parliament more closely in EU affairs, and trust that Members of both Houses will read them. I commend this White Paper to the House.

  National Grid Company: Confirmation of Appointment as GB System Operator
  The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)
  My honourable friend the Minister for Energy, E-commerce and Postal Services (Stephen Timms) has made the following Written Ministerial Statement.

  On 17 December 2002, the then Minister for Energy and Construction, my right honourable friend the Member for Cunninghame North made a Statement to Parliament (Official Report, Commons, col. 45 WS) saying that Ministers were minded to accept the recommendation of the GB System Operator Selection Panel that National Grid Company's application for the role of GB system operator should be accepted. Licensing of the GB system operator could not take place until the Energy Bill had received Royal Assent. The necessary legislation is now in place and I have confirmed the appointment of the National Grid Company as the GB system operator under the British Electricity Trading and Transmission Arrangements (BETTA), with effect from 1 September 2004.

  WTO Framework Agreement
  Lord Sainsbury of Turville
  My right honourable friend the Secretary of State for Trade and Industry (Ms Hewitt) has made the following Written Ministerial Statement.

  On 1 August the General Council of the World Trade Organisation agreed a framework text for further negotiations on the Doha Development Agenda. Commissioners Lamy and Fischler negotiated on behalf of the European Union. I warmly welcome this Framework Agreement, which is a crucial step on the road to delivering a trade round that will benefit developed and developing countries alike.

  On 17 September last year I made an oral Statement to the House (Official Report, Commons, cols. 861–63), about the WTO ministerial conference in Cancun, where WTO members had been unable to reach an agreement. In that Statement I said that in order to get the Doha Development Agenda back on track, the WTO community would need to lift its sights to the prize on offer. I believe that WTO Members have done just that. The period since Cancun has been marked by a much more positive and business-like atmosphere and the Framework Agreement has now cemented the progress made.

  For the most part the purpose of the Framework Agreement is to set out guiding principles for future negotiations rather than to provide specific proposals. However, it contains sufficient detail to allow technical discussions to continue during the rest of this year, when the US presidential elections and the appointment of a new College of Commissioners are likely to limit political engagement in the round.

  The Framework Agreement gives greater detail on the direction of the negotiations on agriculture, industrial tariffs, commits WTO members to negotiate on a trade facilitation agreement and sets a revised target date for more requests in the ongoing services negotiations. Agriculture is generally acknowledged to be the key to progress in the round and the agriculture section contains a welcome level of detail. The agreement provides for extensive special and differential treatment for developing countries across all the sectors covered. Three of the four so-called Singapore Issues (competition, investment and transparency in government procurement), divergent views on which did much to derail talks at Cancun, have been dropped from the Doha Development Agenda. The fourth—trade facilitation—will now be the subject of negotiations.

  The text of the agreement reflects the increasing influence of developing countries within the WTO. This is a development that I have previously welcomed. India and Brazil in particular played an influential role in the lead up to the agreement. Both the G20 group (larger developing country agricultural exporters) and G90 (some 62 smaller developing countries) engaged in the negotiations in a flexible and constructive manner. My right honourable friend the Secretary of State for International Development, my

  WS 75
  right honourable friend the secretary of State for Environment, Food and Rural Affairs, my honourable friend the Minister for Trade, Investment and Foreign Affairs and I were in regular contact with a number of influential members of both of these groupings, as well as our EU colleagues, to underline the importance of reaching an agreement. My honourable friend the Minister for Trade, Investment and Foreign Affairs and I between us attended the two General Affairs and External Relations Council meetings held in the last week of July to agree the EU's position for this stage of the negotiations.

  The Government have been strongly supportive of the Commission's approach to negotiations in the period since Cancun. We consider that the Commission has shown leadership and flexibility to move talks forward, capitalising on the stronger negotiating position that the EU enjoys after the CAP reforms of June 2003 and March 2004, which will cut significantly the level both of trade-distorting domestic support and export subsidies. In particular, the conditional offer to eliminate of export subsidies in the letter of 9 May from Commissioners Lamy and Fischler to WTO trade Ministers helped to breathe new life into the talks and encouraged other developed countries to match the EU's level of ambition. My honourable friend the Minister for Trade, Investment and Foreign Affairs and I attended meetings of the General Affairs and External Relations Council in the week leading up to the Framework Agreement where we strongly supported the European Commission.

  There is much still to be done. The challenge now for the whole WTO membership of 148 countries is to build on this success and to ensure that the momentum that has been built up is maintained in the detailed negotiations that will now follow. Success in the Round has the potential to deliver huge benefits, including for developing countries as their opportunities for trade increase, so adding to their prosperity, aiding development and contributing towards the achievement of the Millennium Development Gaols.

  The Government will continue do all we can, both inside the EU and within the broader WTO community, to help to deliver an ambitious development-focused Round. In particular, we will press hard for substantial progress before the sixth WTO Ministerial meeting in Hong Kong scheduled for December 2005.

  Director and Auditor Liability
  Lord Sainsbury of Turville
  The House will be aware that, between December 2003 and March 2004, the Government consulted widely on the case for reform of the law on director and auditor liability. Over 120 responses to the consultation were received from investors; companies, both large and small; auditors; legal advisers; industry bodies; academia; and the general public. I am grateful to all those who took the time and trouble to contribute.
  WS 76
  In the light of the consultation responses the Office of Fair Trading was asked to undertake a study of the potential impact on competition in the audit market of a cap on auditor liability. I am grateful to it for completing and publishing this so quickly.

  Directors

  It is essential for British competitiveness that we have a diverse pool of high-quality individuals willing to become directors, and that directors are willing to take informed and rational risks. But it is also important that directors act in accordance with their duties, and that negligent directors can be held to account by their companies. The courts have in recent years imposed a much more demanding standard of care, skill and diligence on directors. This has been a very welcome development.

  The consultation built on the recommendations both of the Company Law Review and of Sir Derek Higgs's study on non-executive directors. It identified two particular concerns:

  exposure to liabilities arising from legal action against directors by third parties. The sharp rise in the number of class actions by groups of shareholders in the US has made this a particular concern for directors of British companies with a US listing;

  the cost of lengthy court proceedings. Companies are currently permitted to indemnify a director against the cost of defending legal proceedings, but only when judgment has been given in the director's favour or he has been acquitted. For many directors, such indemnification comes too late and the prospect provides cold comfort.

  The consultation indicated these issues are affecting the recruitment and behaviour of directors. I therefore intend to introduce a balanced and proportionate package of reforms, by tabling amendments to the Companies (Audit, Investigations and Community Enterprise) Bill at its Commons Committee stage. The proposals will in particular introduce two important relaxations of the current prohibition on companies exempting their directors from, or indemnifying them against, liability:

  they will permit, but not require, companies to indemnify directors in respect of proceedings brought by third parties (covering both legal costs and the financial costs of any adverse judgment, except for the legal costs of unsuccessful defence of criminal proceedings, fines imposed in criminal proceedings and penalties imposed by regulatory bodies such as the Financial Services Authority);

  they will permit, but not require, companies to pay directors' defence costs as they are incurred, even if the action is brought by the company itself. The director would still be liable to pay any damages awarded to the company and to repay his defence costs to the company if his defence were unsuccessful (except where the company chooses to indemnify the director in respect of his legal costs in civil proceedings brought by third parties).
  WS 77
  The government amendments will also remove an arguable loophole under which a company in the same group may currently provide an indemnity to a director that would be unlawful if it was provided directly by the company of which the individual was a director.

  The amendments will also require disclosure in the directors' report by companies that indemnify directors. Shareholders will also have the right to inspect any indemnification agreement. Companies that do not indemnify directors will not have to make any disclosure.

  Auditors

  The consultation also covered the position of auditors.

  The Government wish to see a competitive and high-quality market for audit services, shareholders using high quality and reliable information, and an adequate system of redress for when things go wrong. There must also be an appropriate degree of transparency and accountability for the audit process.

  The Government are actively pursuing this agenda. The Bill already extends the powers of auditors to obtain information, and contains new provisions for each director to confirm that there is no relevant audit information of which he is aware but the company's auditors are unaware.

  There are also a number of initiatives to improve the quality of the audit and other information provided to shareholders. For example:

  the recommendations of the review chaired by Sir Robert Smith mean that in listed companies there will shortly be enhanced audit committee reporting to shareholders, including better information on key audit judgements;

  the Auditing Practices Board, a subsidiary of the Financial Reporting Council, has published for comment draft new ethical standards relating to the independence of auditors which are expected to be finalised this autumn;

  the Financial Reporting Council has established an Audit Inspection Unit which has begun independent reviews of the effectiveness of the audit procedures of the four largest audit firms;

  the audit regulatory activities of the professional accountancy bodies are now subject to independent oversight by the Professional Oversight Board for Accountancy, a subsidiary of the Financial Reporting Council;

  a new Accountancy Investigation and Discipline Board has been established, as a subsidiary of the Financial Reporting Council, in order to investigate public interest cases of alleged breaches of professional standards by auditors and it has commenced its first investigation;

  the Financial Reporting Council has recently set up a group under Douglas Flint to review the current guidance on internal risk control;
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  we are also considering carefully the responses to our recent consultation on the Operating and Financial Review.

  In line with the Company Law Review's recommendations, and as supported in the consultation, I have decided not to bring forward amendments to the current Bill to extend an auditor's duty of care.

  The consultation showed a wide variety of views both as to whether reform of the law on liability of auditors was needed, and if so what form it should take. Some investors also had concerns about whether the audit process was serving them sufficiently well. It was also a matter of concern that the leaders of some of our largest companies were worried their choice of auditor was limited.

  I have considered carefully whether there is a case for a change in the law on auditor liability. I am grateful to the Office of Fair Trading for looking at the competition implications of enabling shareholders to agree in advance a maximum amount for which the auditor would be liable. In the light of the consultation responses, and the OFT's advice that introducing a cap would not significantly enhance competition, I have concluded against proposing changes to the law on this.

  The Government remain committed to improving the operation of the audit market and will continue to consider any proposals, including the possibility of limiting liability on a proportionate basis by contract, which can be demonstrated significantly to enhance competition, and to improve quality, in the audit market. The Government intends to look closely at this option and actively calls upon auditors, business, and investors to work together to examine whether proposals for a system of proportionate liability via contract are practical and/or desirable.

  However no change to the law on financial liability could protect one of an auditor's greatest assets—its reputation. That responsibility rests with the professionalism of auditors themselves.

  Retail Pharmacy Services: OFT Report
  The Parliamentary Under-Secretary of State, Department of Health (Lord Warner)
  My honourable friend the Minister of State, Department of Health has made the following Written Ministerial Statement today.

  On 17 January 2003, the Office of Fair Trading (OFT) published its report The control of entry regulations and retail pharmacy services in the UK. It recommended abolition of the current restrictions on National Health Service pharmacy applications known as "control of entry".

  On 17 July 2003 the Government published their response to the report for England, in which we announced our intention to move cautiously in the direction recommended by the OFT.

  In summary, the package of measures proposed first the introduction of new criteria of "competition and choice" to the current regulatory test. Secondly, they would exempt completely four types of pharmacy

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  applications from that test. These four exemptions would apply to applications in respect of large shopping developments over 15,000 square metres (though we will not now include town centre developments); to pharmacies intending to open more than 100 hours per week; to pharmacies which are part of consortia developing new one-stop primary care centres; and to pharmacies which would be wholly Internet or mail-order based. Finally, we would further reform and modernise the current regulatory system.

  We issued a consultation document on 29 August 2003, Proposals to reform and modernise the NHS (Pharmaceutical Services) Regulations 1992, which explained these proposals in more detail and sought views on how best to implement the package of measures. 270 responses were received. A summary of those responses is available on the department's website at www.dh.gov.uk/mpi.

  We also set up an expert advisory group (the advisory group on the reform of the NHS (Pharmaceutical Services) Regulations 1992) under the chairmanship of Mrs Anne Galbraith, Chair of the Prescription Pricing Authority. Its role was to advise how best to implement the proposals, taking account of the OFT report and responses subsequently received, and to offer further advice. We received the group's report in January this year. We published the executive summary of the report in March. This is available on the department's website at http://www.advisorybodies.doh.gov.uk/pharmacyrequlationconsultation/Execum.htm. We will publish the group's full report later this year when we bring forward the necessary regulatory changes.

  We took careful account of the advisory group's report and recommendations and the responses to the consultation in drawing up our plans for implementation. Stakeholders from a wide range of key interests were represented on the group. These included patients and consumers, the NHS, pharmacists and health professions as well as those with experience of competition and regulatory reform. The group provided constructive and valuable advice. In order to end any uncertainty for patients, for the NHS and for community pharmacies, I announced on 18 August that the Government had accepted the great majority of their recommendations in relation to the proposals set out in the consultation document and would now proceed to implement them, but with some amendments.

  We will work to introduce the new criteria of competition and choice to the current regulatory test through secondary rather than primary legislation. We also intend to develop criteria for primary care trusts (PCTs) to reject administratively any application which does not undertake to provide the required "essential" pharmaceutical services under the proposed new contractual framework for community pharmacy. Similar arrangements will be made for appliance contractors. We intend these criteria to be rolled out to all PCTs later this year subject to our ongoing discussions with the Pharmaceutical Services
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  Negotiating Committee (PSNC) and NHS Confederation to finalise the details of that framework.

  We will proceed with our plans to exempt four types of pharmacy application from the "control of entry" test.

  However, we will not exempt pharmacy applications for town centre shopping developments over 15,000 square metres. The exemption would still apply to out-of-centre and out-of-town developments as we originally proposed. Such exempted developments will be included in a published list and a provisional list is now available on the department's website at www.dh.gov.uk/mpi. We are considering further how the list is to be updated and will provide more information when we bring forward the draft changes to the regulations. Pharmacies, which have hitherto found difficulty in gaining an NHS pharmacy contract in shopping developments in town centres, will none the less be able to apply to their local PCT for admission to the pharmaceutical list under the reformed regulatory test, when it is introduced, or to make use of the exemption to open more than 100 hours per week.

  For pharmacies which intend to open for more than 100 hours per week, we will include a requirement for PCTs to remove from their pharmaceutical list any pharmacy that consistently fails to meet the terms of the exemption unless there is good cause—for example, a fire causing temporary closure.

  Applications from members of a consortium establishing a new one-stop primary care centre will also be exempted, provided the centre provides a regular, comprehensive range of services and serves a substantial population of 18,000 to 20,000 patients. The exemption will apply only to centres which are part of the local PCT's strategic service development plan or equivalent written service development strategy. Such centres will, in addition to usual general practitioner services, offer a wide range of primary and community-based services, such as dentistry, optometry, podiatry, or other social or community services. The regulations will define a "consortium" and specify governance arrangements. Guidance for PCTs will cover situations where a service provider withdraws from a centre so that this does not require the closure of the exempted pharmacy.

  Applications for wholly mail order or Internet-based pharmacy services will similarly be exempted and we will apply a number of measures to ensure such pharmacies provide a fully professional service within the provisions of the new contractual framework. Internet pharmacies, as with all retail pharmacies in England, Wales and Scotland, must be registered with the Royal Pharmaceutical Society of Great Britain (RPSGB). All pharmacies, whether or not they provide online services, are subject to the same statutory requirements and to the RPSGB's requirements, including standards, inspection arrangements and code of professional ethics.

  We will also introduce regulatory safeguards to protect against manipulation or abuse of the new

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  freedoms. For example, the four exemptions will require applicants to provide a full and prescribed range of services. These would be for local determination by the PCT in relation to the first three exemptions, or nationally determined by the department in discussion with the NHS in relation to the exemption for wholly Internet or mail order-based pharmacies. Apart from dispensing prescriptions, such services might include managing a patient's repeat medication, helping patients to get the best from the medicines they are taking and promoting healthier lifestyles. For example, pharmacies are well placed to provide support for people at risk of coronary heart disease, giving advice on stopping smoking, or how to improve nutrition or physical activity.

  Key elements of our proposals, including the four exemptions, are either implicitly or explicitly linked to the delivery of pharmaceutical services under the new contractual framework. Our plan is to implement these reforms in tandem with that framework. The department has held tripartite negotiations on the framework with the PSNC and the NHS Confederation for the past 18 months. On 24 August, the PSNC accepted our offer of funding subject to final agreement on a number of detailed issues which we are discussing with it and the NHS Confederation. We aim to conclude these as soon as possible. We will prepare and consult on the necessary regulatory changes and aim to implement the reformed regime as soon as is practicable thereafter.

  Guidance for the NHS on how to implement the regulations was last drawn up in 1992. An overhaul is long overdue. So we will amend this information to bring it fully up to date to assist PCTs in implementation. This would include developing supplementary questions to inform PCT assessments of pharmacy applications. We will also propose enhanced data collection from PCTs, subject to approval by the body overseeing NHS data requirements, to inform assessment of progress on our package of reforms and evaluate the impact of these exemptions in 2006.

  We will also take additional steps as proposed to further modernise and reform the current system through a combination of regulatory and administrative changes.

  PCTs will be able to invite applications from contractors. We will revise the application forms to reflect the criteria that PCTs use in assessing applications. We will require PCTs to reach a decision on an application within four months of the due date for receipt, unless there is good cause. We will also require them to consult widely with patient, consumer and local community groups that have a direct interest in local pharmaceutical provision, and set an administrative minimum consultation period of 45 days.

  We will introduce an automatic exemption for all minor relocations under 500 metres, but retain the discretion for PCTs, to override this where there is good cause. An example of this would be where geographical obstacles or transport difficulties would
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  affect continued access to pharmaceutical services. Similarly there will be a minimum 12-month trading period requirement before a further application for a minor relocation can be accepted, unless, again, the applicant shows there is good cause.

  We will remove the current restriction, which prevents cross-PCT boundary minor relocations, but ensure there are means to remove the contractor from the list of the PCT he is leaving and the receiving PCT agrees to the relocation.

  We will retain the concept of preliminary consent for a pharmacy application, but will limit the maximum period for grant of such consent to six months.

  Similarly, we will provide for a maximum period of grant of full consent of nine months. We will also enable PCTs to have the discretion to require an applicant to commence pharmaceutical services within a given period not exceeding three months unless there is good cause.

  In addition, we will introduce two measures proposed to us by the advisory group. We will allow PCTs to set a fixed date every month for the receipt of applications. And we will require PCTs to deal with applications that do not require local consultation within a maximum of 30 days. However, we will retain in guidance the long-stop discretion which enables PCTs to decide competing applications of equal merit on the basis of "the first past the post". We will also reform the appeals system. We will allow appeals for change of ownership to be combined with appeals concerning minor relocations.

  Certain of our proposals would require primary legislation. When parliamentary time permits, we will consider introducing new legislation to enable reasonable charges, but not full cost recovery, for pharmacy applications to be introduced. We will also consider enabling PCTs to take into account, when assessing applications, the improvements they would bring to the provision of, or access to, over the counter medicines and other healthcare products. We do not intend, however, to introduce legislation to enable charges to be levied for appeals. We would consult further on such legislation.

  We also plan to introduce, subject to further discussions, measures developed by the Pharmaceutical Services Negotiating Committee and the General Practitioners Committee of the British Medical Association and the Dispensing Doctors' Association to reform the rules governing NHS rural dispensing. These bodies reviewed their proposals in the light of the government response to the OFT report and presented their findings to the advisory group, which in turn recommended that they should proceed. Officials from the department have met these organisations recently to hold further discussions on how best the reforms should be introduced to the current legislation. We aim to implement these in tandem with the other reforms I am announcing today.

  The measures I have announced represent an important step forward for community pharmacy services and our ambition to deliver a balanced

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  package of reform measures. They will raise standards for patients and encourage innovation and excellence in service provision while at the same time supporting community pharmacies, many of which are small businesses. Community pharmacies provide a highly valued service and we are committed to their ongoing development and integration in the NHS. We also want to ensure that our reforms do not mean that services to more vulnerable groups of patients or those in deprived or rural areas suffer.

  We are determined to improve access to, and the choice of, pharmacy services so that community pharmacy is recognised as a key player in the provision of NHS services. These reforms will provide an environment in which community pharmacy services can thrive.

  NHS Foundation Trust Status
  Lord Warner
  My right honourable friend the Secretary of State for Health has made the following Written Ministerial Statement today.

  I announced on 26 July that I would support 20 National Health Service trusts in their bids to become NHS foundation trusts as part of wave 1A.

  These trusts have made an application to Monitor (whose statutory name is the Independent Regulator of NHS foundation trusts) for authorisation as NHS foundation trusts, and are setting up their new governance arrangements including recruiting members to hold elections to the board of governors. On 2 August, Monitor announced that wave 1A applicants would be handled as two groups, with target dates for authorisation being 1 November 2004 and 1 February 2005. Details of the two groups are as follows:

  1 November 2004

  Barnsley District General Hospital NHS Trust

  Burton Hospitals NHS Trust

  Chesterfield and North Derbyshire Royal Hospitals NHS Trust

  Gateshead Health NHS Trust

  Harrogate Healthcare NHS Trust

  Nottingham City Hospital NHS Trust

  Southend Hospital NHS Trust

  South Tyneside Healthcare NHS Trust

  West Suffolk Hospitals NHS Trust

  1 February 2005

  Aintree Hospitals NHS Trust

  Birmingham Heartlands and Solihull NHS Trust

  Birmingham Women's Healthcare NHS Trust

  East Somerset NHS Trust

  Frimley Park Hospitals NHS Trust

  Lancaster Teaching Hospitals NHS Trust

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  Liverpool Women's Hospital NHS Trust

  Newcastle Upon Tyne Hospitals NHS Trust

  Royal Bournemouth and Christchurch NHS Trust

  Royal National Hospital for Rheumatic Diseases NHS Trust

  Wrightington, Wigan and Leigh NHS Trust

  On 26 July, I indicated that in addition to three-star rated acute and specialist trusts, mental health trusts would for the first time be invited to apply for NHS foundation trust status. We will formally invite applications for wave 2 later this autumn and outline the timetable for authorisation, which will be subject to the outcome of the review into NHS foundation trusts being undertaken by the Healthcare Commission (whose statutory name is the Commission for Healthcare Audit and Inspection).

  Coins
  The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)
  My right honourable friend the Chancellor of the Exchequer (Mr Gordon Brown) has made the following Written Ministerial Statement.

  Her Majesty the Queen has been graciously pleased to approve my recommendation that the following coins should be issued in 2005 and 2006:

  A gold half-sovereign, sovereign, double-sovereign and £5 in 2005 bearing a new reverse design;

  a crown piece to celebrate the 80th birthday of Her Majesty the Queen in 2006;

  a pair of £2 coins to mark the 200th anniversary in 2006 of the birth of Isambard Kingdom Brunel; and

  a series of three 50p pieces to commemorate the 150th anniversary in 2006 of the institution of the Victoria Cross.

  Collector versions of all these coins will be released at a premium above face value. In the case of the crown, the £2 coins and the 50p pieces, during the course of 2006 versions will also become available at face value from banks and post offices.

  Examinations Results: Summer 2004
  The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland)
  My right honourable friend the Secretary of State for Education and Skills (Mr Charles Clarke) has made the following Written Ministerial Statement.

  I would like to report on this summer's results for key stages 1, 2 and 3, GCSE and A-level, which show that we are making steady progress in raising standards at every level.
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  At age 7, key stage 1, 85 per cent of pupils achieved the expected level in reading (an increase of 1 percentage point over 2003) and 90 per cent of pupils did so in maths (unchanged from 2003).1

  At age 11, key stage 2, a record 77 per cent of pupils achieved the expected level in English, an increase of 2 percentage points from last year (up 12 percentage points compared to 1998), and 74 per cent of pupils achieved the expected level in Maths, a 1 percentage point increase from last year (up 15 percentage points from six years ago). These are good results and show that standards achieved by pupils in our primary schools are continuing to improve. Pupils and parents can be confident that their primary schools are still getting better and better.

  Standards at key stage 2 are improving in all areas but some of the biggest strides are in some of the poorest areas, such as Hackney, where English improved by 7 percentage points and maths by 6 percentage points compared to 2003, and Sunderland, where there was a 5 percentage point improvement in English and a 4 percentage point improvement in maths. Among other LEAs Hartlepool and Southampton recorded the highest improvements in both English and maths results. It shows that poverty is not a barrier to success. It is a tribute to the hard work of teachers who have made this possible. We will continue to offer them targeted help and support.

  At 14, I am pleased to see progress made in maths. At key stage 3, there has been a 2 percentage point increase in the number of pupils achieving level 5 in maths and over 50 per cent of 14 year-olds are now reaching level 6 in maths, which is a tremendous achievement. There has been a 2 percentage point fall in the number of pupils achieving level 5 in science compared to last year, although there has been a 10 percentage point increase since 1998.

  Publication of key stage 3 English results has been deferred until the outcome, in terms of scale and nature, of the extended marking process for schools is known. Under the national statistics code of practice, it is the statistics head of profession in the department who decides on the content and timing of the release of national statistics, and provides advice to Ministers.

  At GCSE, I welcome the rise in the number of entries achieving top grades for all candidates in England and Wales—the biggest rise in A* to C grades since 1999. The provisional results show that:

  Grades at A*—C for all candidates in England and Wales have increased by 1.1 percentage points to 59.2 per cent (compared to a 0.2 percentage point rise last summer);

  97.6 per cent of GCSE entrants achieved a grade A*—G—the same rate as last year;

  Grades A*—C at maths have increased by 1.6 percentage points to 51.7 per cent. English is up by 0.2 percentage point to 59.9 per cent;
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  An increase of entries in chemistry of 5 per cent, in physics of 5.1 per cent and in biology of 4.4 per cent;

  Boys' improvement at grades A*—C has increased by 1.3 percentage points compared to 0.9 for girls.

  These results are excellent and reflect the hard work of pupils and teachers. I am encouraged that more pupils are taking maths and gaining good grades, mirroring the rise for 14 year-olds. It is also good to see more pupils taking science.

  As with the primary schools, some of the biggest improvements this year have been in schools in some of our poorer and lowest attaining areas. In North Tyneside early indications are that the GCSE results have increased from 48 per cent of pupils gaining five or more good GCSEs to 54 per cent this year. At school level the International School in Birmingham increased from 9 per cent of its pupils gaining five A* to C grades last year to 32 per cent this year—still a long way to go but huge improvement and a tribute to the leadership of these schools.

  A further example of this improvement can be seen in London. For the first time all London boroughs are now achieving above 40 per cent of pupils gaining five A* to C grades at GCSE. The provisional results also indicate that some of the fastest-improving areas are among the most deprived boroughs: Islington is up by 7 percentage points; Tower Hamlets is up 5.3 percentage points; Haringey is up by 5.6 percentage points; Hackney is up by 5.8 percentage points; Lewisham is up by 6.3 percentage points and Newham is up by 3.9 percentage points.

  These results build on very fast improvement from last year's results when Hackney was up by 8 percentage points and Islington up by 5 points. So the trend is clearly upwards.

  At A-level, the overall pass rate rose to 96 per cent from 95.4 per cent last year. A grades at A-level increased by 0.8 percentage points to 22.4 per cent and the overall AS pass rate has increased by 0.2 percentage points to 86.9 per cent. Excluding general studies, English and mathematics attracted he highest number of entries at A-level and are two of the three most popular subjects at AS.

  These results are built on the hard work of students, schools and colleges and will open up more opportunities for our young people to achieve success. I congratulate the students and thank our teachers for their commitment.

  At a time when Ofsted says the standard of teaching has never been higher, we should expect to have rising levels of achievement in our schools and colleges. We are getting better as a country at getting the best out of our young people. We should applaud them and applaud their teachers, schools and colleges.

  I am determined that we should move forward to improve performance further. We will continue to progress with some important developments from the start of the new school term.

  506 specialist schools will begin operating as specialist for the first time this September. This means that 2.1 million pupils will be educated in one of the

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  1,954 specialist schools—62 per cent of all English secondary schools, up from just 257 in 1997. The evidence shows that specialist schools help pupils to gain better grades.

  Five new academies open in Barnet, Hackney, Hillingdon, Lambeth and Northampton. They will build on the success of the existing 12, where I was pleased to see some excellent GCSE results this summer—for example The King's Academy in Middlesbrough where 34 per cent of pupils achieved five or more A*-C GCSEs, an increase of around 12 percentage points on the joint results of the predecessor schools in 2003.

  Workforce Reform is in the next phase and the radical enhancement of the role of teachers continues. There are not just more teachers than at any time since the early 1980s, but teachers are being given professional support in class with more assistants. Teachers will increasingly have more time to prepare better lessons.

  Education maintenance allowance will be available nationally to help young people to stay on in education, at school or college.
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  On ICT, current activity focuses on supporting the personalised learning and transforming school workforce agendas. Over 99 per cent of schools in England are now connected to the Internet, of which, at June 2004, 61 per cent of primary and 98 per cent of secondary had a connection at broadband speeds appropriate to their needs.

  Schools continue to invest in the new technologies that support enhanced teaching and learning. By March 2004, 63 per cent of primary schools had an electronic interactive whiteboard (average 1.9 a school) and 92 per cent of secondary schools (average 7.5 a school).

  In the longer term I am looking forward to receiving later in the autumn the final report from Mike Tomlinson's working group on 14–19 reform. He will be coming forward with proposals looking at how we stretch the most able, boost participation, improve the vocational offer and reduce the burden of assessment.

  1Figures for 2004 and 2003 are not strictly comparable because of the trial involving 34 LEAs and a quarter of seven year-olds which reported only teacher assessment. The independent assessment of the trial is expected later this month and we shall comment further on these results then.