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Foot and Mouth
Dr. Cable: To ask the Chancellor of the Exchequer what estimate he has made of Government payments arising from the foot and mouth outbreak in the financial year 2001–02 expressed (a) gross and (b) net of reimbursement from the European Commission; and what the total cost is. [8015]
Mr. Andrew Smith: The costs of FMD for the full financial year are not yet known and cannot be reliably estimated. Up to 10 October, the Government had spent £1.5 billion on eradicating foot and mouth, of which just over £1 billion has been on compensation to farmers. In addition, £308 million had been spent on the Livestock Welfare Disposal Scheme, and the Government have put in place several measures to help the countryside recover from foot and mouth disease, including: deferral of tax, VAT and National Insurance contributions which has helped over 18,000 businesses; establishment of a £50 million Business Recovery Fund; establishment of rate relief scheme covering affected areas; establishment of a matched funding scheme for charitable donations; and the Government making additional lending available through the Small Firms Loan Guarantee Scheme.
The UK is eligible for reimbursement from the European Commission of 60 per cent of the costs of compensation for the slaughter and destruction of animals, cleansing and disinfecting of holdings and equipment and the transport of carcases. The EC have approved an initial payment of euro 355 million, and we anticipate a further payment being made during 2002.
Scottish Executive
Mr. Bercow: To ask the Chancellor of the Exchequer how much has been paid at current prices by HM Treasury
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to the Scottish Executive outside the block grant since 1 July 1999; and if he will place in the Library a list of all the major items included in that additional expenditure. [7781]
Mr. Andrew Smith: Nothing—all funding by the Government of the Scottish Executive since 1 July 1999 has been by means of the block grant.
Air Passenger Duty
Mr. Martyn Jones: To ask the Chancellor of the Exchequer if he will assess the benefits of using revenues from air passenger duty to assist British airlines during their current financial difficulties. [7673]
Mr. Boateng: The Government will continue to consider any appropriate means of providing support to the airlines industry during the current period. However, at this time, the Government do not think that hypothecating revenues raised from air passenger duty to the airlines industry would be an appropriate or efficient means of support. In general, the way in which Government revenues are raised should not determine where they are spent.
Equitable Life
Mr. Gardiner: To ask the Chancellor of the Exchequer what reasons the appointed actuary of Equitable Life has given to the FSA for the change in his assessment of (a) the valuation of the with-profits fund and (b) the company's financial position, that prompted the company to downgrade its terminal bonus guidelines by 16 per cent. [7058]
Ruth Kelly: The reduction in policy value was, the Equitable has publicly said,
- "vital for the long-term interests of the Society and all its policyholders. The decision was taken . . . because stock markets have fallen heavily over the last 18 months; maturity values now significantly exceed the value of the investments underlying maturing policies; as a mature fund, a large number of policyholders are currently retiring and taking their benefits."
- (2) what assessments the FSA made, on what bases and on which dates, of the adequacy of the reserves of Equitable Life to meet the liabilities it faced from its guaranteed annuity rate policies, between 1 January 1999 and 8 December 2000. [7057]
Ruth Kelly: This is an issue which Lord Penrose may wish to consider in his inquiry into the events surrounding Equitable Life.
Mr. Russell Brown: To ask the Chancellor of the Exchequer what evidence he will provide to Lord Penrose's inquiry into Equitable Life; and if he will publish it. [8280]
Ruth Kelly: The Government are submitting to Lord Penrose the report of the Financial Services Authority on the review of the regulation of Equitable Life from January 1999 to December 2000. The report has been
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presented to Parliament and is being published today (as House of Commons Paper 244). Copies are available in the Vote Office.
Insurance Company Actuaries
Mr. Gardiner: To ask the Chancellor of the Exchequer if he will change the reporting obligations of appointed actuaries of insurance companies so that all material changes in the financial position of a company must be notified to the Financial Services Authority in between annual reporting dates. [7061]
Ruth Kelly: Sections 342 and 343 of the Financial Services and Markets Act 2000 provide HM Treasury with powers to make regulations specifying the circumstances in which appointed actuaries of insurance companies must make a report to the Financial Services Authority. The Treasury intends to make such regulations, but before doing so it wants to give interested parties an opportunity to comment on its proposals. These proposals are set out in a consultation document which will be published by HM Treasury in the near future.
Insurance Companies (Negligence)
Mr. Gardiner: To ask the Chancellor of the Exchequer (1) if he will impose upon the auditors and audit committees of insurance companies a duty of care to the Financial Services Authority qua regulator, making them liable for negligence; [7059]
- (2) if he will impose upon the appointed actuaries of insurance companies a duty of care to the Financial Services Authority qua regulator, making them liable for negligence. [7060]
Ruth Kelly: This is an issue which Lord Penrose may wish to consider in his inquiry into the events surrounding Equitable Life.
Airline Insurance
Mr. Bercow: To ask the Chancellor of the Exchequer what the forecast average monthly cost of the airline insurance guarantee is. [7778]
Dr. Cable: To ask the Chancellor of the Exchequer what the limit of Government contingent liabilities is under (a) Pool Re and (b) the cover provided to the aviation industry to insure against terrorist risk; and how these commitments will be reported in Government accounts. [8017]
Mr. Brady: To ask the Chancellor of the Exchequer what arrangements have been made with the airline industry to ensure that passengers travelling out of the UK while airline insurance is underwritten by Her Majesty's Government will be able to return to the UK after the expiry of the current arrangements. [7482]
Mr. Andrew Smith [holding answer 15 October 2001]: There is no limit to the Government contingent liability under the arrangements with the re-insurer, Pool Re, or the cover provided to the airline industry. Full details of the liabilities will be submitted to the Parliamentary Accounts Committee in accordance with normal procedures.
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The cost of the airline insurance guarantee is mainly in the form of actual liabilities. Costs cannot be quantified in advance of any claim being made.
The airline insurance guarantee established by HM Treasury will run for 30 days from 11.59 GMT 24 September, and there is an option for renewal on seven days' notice for a further 30-day period if it is evident that adequate insurance is not available.
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Treasury Select Committee Report
Mr. McFall: To ask the Chancellor of the Exchequer when the Government will respond to the Treasury Committee's Tenth report for the Session 2000–01. [8749]
Ruth Kelly: The Government response has been delivered to the Committee today and a copy has been deposited in the Library of the House.