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Forestry Commission
The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): Subject to Parliamentary approval of the necessary Supplementary Estimate, the Forestry Commission's DEL will be increased by £3,605,000 from £60,848,000 to £64,453,000. Within the DEL change, the impact on resources and capital are as set out in the following table:
| Resources | Capital | ||||||
|---|---|---|---|---|---|---|---|
| Change | New DEL | Of which: Voted | Non-voted | Change | New DEL | Of which: Voted | Non-voted |
| No change | 53,598 | 50,945 | 2,653 | 3,605 | 10,855 | 850 | 10,005 |
The increase in the capital element of the DEL arises from take up of end of year flexibility on the Capital Modernisation Fund. The increase will be charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.
CABINET OFFICE
Winter Supplementary Estimate
The Minister of State, Cabinet Office (Mr. Douglas Alexander): Subject to Parliamentary approval of the Winter Supplementary Estimate, the Cabinet Office DEL (Departmental Expenditure Limit) will be decreased by £54,720,000 from £315,879,000 to £261,159,000, the gross administration costs limit will be decreased by £75,614,000 from £240,227,000 to £164,613,000 and the net administration costs limit will be decreased by £ 106,000 from £3,028,000 to £2,922,000.
Within the DEL change the impact on resources and capital are as set out in the table:
| Resources | Capital | ||||||
|---|---|---|---|---|---|---|---|
| Change | New DEL | Of which: Voted | Non-voted | Change | New DEL | Of which: voted | Non-voted |
| -77,107 | 206,444 | 206,444 | - | 22,387 | 54,715 | 54,715 | - |
The change in the resource element of the DEL arises from Machinery of Government transfers of £113,301,000 to other departments; a claim on the reserve of £36,300,000 and an increase in the negative DEL of the Government Car and Despatch Agency of £106,000.
The change in the capital element of the DEL arises from additions from the Capital Modernisation Fund of £15,000,000, transfers from the Home Office of £8,000,000 and Machinery of Government transfers to the Office of the Deputy Prime Minister of £613,000.
The increases will be offset by inter-departmental transfers and charged to the DEL reserve and will not therefore add to the planned total of public expenditure.
LORD CHANCELLOR'S DEPARTMENT
Winter Supplementary Estimate
The Parliamentary Secretary, Lord Chancellor's Department (Ms Rosie Winterton): Subject to Parliamentary approval of the necessary Supplementary Estimates, the Lord Chancellor's Departments (including Northern Ireland Court Service and Public Records Office) DEL will be increased by £67,866,000 from £2,833,287,000 to £2,901,153,000 and the administration costs limit will be increased by £20,315,000 from £695,799,000 to £716,114,000. Within the DEL change, the impact on resources and capital are as set out in the following table.
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| Resources | Capital | |||||||
|---|---|---|---|---|---|---|---|---|
| Change | New DEL | Of which: Voted | Non-voted | Change | New DEL | Of which: voted | Non-voted | |
| TOTAL | 46,971 | 2,777,230 | 2,543,516 | 233,714 | 20,895 | 123,923 | 90,431 | 33,492 |
The change in the resource element of the DEL is the net effect of: take up of £1,000,000 administration costs from the Policy Innovation Fund; take up of £243,000 resources from the Invest to Save Budget; take up of £34,931,000 in relation to the Criminal Justice System (CIS) Reserve from the Home Office, of which £14,224,000 is administration costs; take up of transfers totalling £210,000 resources from the Home Office, of which £45,000 is administration costs; a transfer of £20,000 resources to the Home Office; a transfer of £4,322,000 resources from the Office of Government Commerce; a transfer of £26,000 resources from the Office for National Statistics; take up of Invest to Save Budget end year flexibility of £268,000 resources, of which £226,000 is administration costs; to take up end year flexibility of £3,820,000 administration costs relating to the Criminal Justice System (CIS) Reserve; and a transfer of £1,171,000 resources from capital grant utilising the 2 ½ per cent. capital to resource allowance.
The change in the Public Records Office resource element of DEL arises from: the take up of £1,000,000 administration costs from end year flexibility.
The change in the capital element of the DEL is the net effect of: take up of £1,100,000 resources from the Capital Modernisation Fund for HM Land Registry; take up of £36,000 resources from the Invest to Save Budget; take up of £8,650,000 Round 1 Capital Modernisation Fund from the Home Office; take up of £8,000,000 in relation to the Criminal Justice System (CJS) Reserve from the Home Office; take up Capital Modernisation Fund end year flexibility of £4,215,000; take up of Invest to Save Budget end year flexibility of £65,000 resources; and a transfer of £1,171,000 to resource grant utilising the 2½ per cent. capital to resource allowance.
The increases will be offset by inter-departmental transfers, increases to Appropriations in Aid and take up of End Year Flexibility entitlements and will therefore not add to the planned total of public expenditure.
TRANSPORT
Airports
The Secretary of State for Transport (Mr. Alistair Darling): In October, Kent County Council and Medway Council applied for a judicial review of the Government's decision not to include any options for new runways at Gatwick airport in the consultation on airport capacity. The Government had taken that decision after careful consideration of various factors, including our conclusion that it would be wrong to seek to overturn the legal agreement entered into by West Sussex County Council and BAA (then in government ownership), preventing construction of a further runway at Gatwick before 2019.
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Yesterday, Mr Justice Maurice Kay held that the Government were wrong not to have included any options for new runways at Gatwick. However, the Court granted permission for the Government to appeal against this decision. Having considered the matter, I believe it would be wrong to extend the uncertainty that would inevitably result from a lengthy appeal process, and so I have therefore decided to accept the judgment. As a result we will include Gatwick in the consultation. This will regrettably mean that the publication of the White Paper will be delayed.
I will make a further statement setting out how we intend to proceed shortly.
INTERNATIONAL DEVELOPMENT
Winter Supplementary Estimate
The Secretary of State for International Development (Clare Short): Subject to Parliamentary approval of the necessary Supplementary Estimate the Department for International Development DEL for 2002/2003 will be increased by £37,437,000 from £3,339,521,000 to £3,376,958,000. Within the DEL change, the impact on resources and capital are as set out in the following table:
The change in the resource element of the DEL arises from:
- a transfer of £40,000,000 resource from the Unallocated Subhead (RfR1: E3) to the Bilateral Subhead;
- to give effect to the transfer of £3,700,000 resource from the Central Reserve as a contribution to the Commonwealth Education Fund;
- to give effect to the take up of DEL end year flexibility of £28,757,000 resource on programme expenditure;
- a transfer of £20,000 resource to the Home Office representing a contribution to membership of the Group of States Against Corruption (GRECO);
- a transfer of £5,000,000 resource from the Foreign and Commonwealth Office to Global Conflict Prevention .
- The increase will be met by inter-departmental transfers or from the DEL Reserve and will not therefore add to the planned total of public expenditure.
CDC
The Secretary of State for International Development (Clare Short): The purpose of the public-private partnership for CDC is to maximise the creation and long-term growth of viable businesses in poorer developing countries, by making responsible investments and mobilising private capital alongside public funds. These objectives have remained constant since the 1997 and 2000 White Papers on International Development. CDC has made good progress in implementing the Investment Policy agreed in 1999, raising private finance and co-financing for investments in poorer countries, and introducing private sector
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disciplines. This has been achieved in some of the most difficult markets and economic conditions for many years.
In order to support CDC's progress and the mobilisation of increased private investment in poorer developing countries, I have recently approved two further proposals. Firstly, CDC's business will focus more sharply on regions (South Asia and Africa) and on sectors (power, Small and Medium Enterprises, and infrastructure) that are priorities for DFID and the achievement of the Millennium Development Goals. Following a review commissioned by the Board earlier this year, CDC is already implementing a new business plan approved by its Board, focusing on these areas. Secondly, CDC will be reorganised, separating into two corporate entities and a family of Funds:-
- an Investment Company (the existing CDC, with some amendments to its Articles), which would continue to own the cash and investment assets of CDC and its subsidiaries. The Investment Company will remain wholly-owned by the Government during the reorganisation, and will be responsible for ensuring that HMG's capital adheres to CDC's Investment Policy.
- a new Management Company will be formed during 2003, subject to regulatory and other procedures being completed. The Management Company will raise and invest capital from the Investment Company, other Development Finance Institutions and private investors, following responsible business principles and providing leadership and supervision of a family of Funds.
- The initial Funds will include Funds for Africa, South Asia, the power sector and the SME sector. Each Fund will be managed by a dedicated fund management subsidiary of the Management Company. The new Funds will be run on a commercial basis that attracts capital from private investors and Development Finance Institutions, to meet the Governments objective of increasing investment in poorer developing countries.
The structure of a management company and a family of Funds is an accepted norm in the international fund management industry. The advantages of adopting this structure in CDC are as follows.
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Each Fund would have its own focus and investment strategy, target rate of return, risk profile and other characteristics. Potential private investors will be able to identify Funds that fit into their own investment strategies. The structure also enables specialised managers to be allocated to each Fund, and for incentives to be directly linked to individual Fund performance.
Under current management arrangements, there is no competition for the management of CDC's capital. In the medium term, the Investment Company will be able to procure investment management services on a competitive basis, and to invest in Funds launched by other companies as well as by the Management Company. The reorganisation will therefore lead to a more competitive market for the management of investments in poorer developing countries.
The Government have concluded that, under current market conditions, we cannot obtain value for money from a sale of shares in CDC Group pic as currently constituted. We are currently exploring with our advisers an appropriate corporate and shareholding structure for the Management Company and its subsidiaries, including the possible participation of private institutions and employees. In the long term, it is possible that equity in the Investment Company could also be offered for sale, when the right conditions obtain.
I have informed the Select Committee of these proposals, which I believe will enable CDC to mobilise increased investment in the poorer developing countries, and make a stronger contribution to our goal of eliminating poverty.