---

11 Feb 2003 : Column 648W—continued

TREASURY

Independent Financial Advisers

Mr. Gordon Marsden: To ask the Chancellor of the Exchequer what estimate his Department has made of the number of independent financial advisers unable to secure professional indemnity insurance. [96629]

11 Feb 2003 : Column 649W

Ruth Kelly: The FSA tell me that as at 27 January 2003, 76 per cent. of Independent Financial Advisers (IFAs) (whose Professional Indemnity Insurance (PII) expired between 1 September and 30 November 2002) have told the FSA that they have obtained cover.

An analysis of the information they provided shows that 88 per cent. of IFAs due to renew their cover in September have done so. The figure for October is 85 per cent. and November 66 per cent.

This does not necessarily mean that the other IFAs have not got cover. The FSA tell me that IFAs are reluctant to confirm that they have cover until they have received a cover note even though they may have agreed terms with their broker. This means that there is usually a gap between the expiry of an IFA's PII policy and the receipt of confirmation that the policy has been renewed by the IFA. The FSA are contacting the remaining firms to establish their position.

Mr. Gordon Marsden: To ask the Chancellor of the Exchequer what assessment his Department has made of the adequacy of capacity within the professional indemnity insurance market for independent financial advisers. [96773]

Ruth Kelly: The Financial Services Authority (FSA) tell me that they speak to Professional Indemnity Insurance (PII) providers and brokers regularly, and are keeping in close touch with the market.

The FSA have found that 21 insurers have provided cover between September and December 2002. 87 per cent. of policies have been through three main providers.

The FSA are monitoring the market and expect that that more capacity will be introduced soon. This should increase competition and drive down the price of cover. We are also hopeful that some of the proposals and explanations in the FSA's consultation paper 169 ("Professional Indemnity Insurance for Personal Investment Firms: Consultation on Rule Changes; and Discussion of Other Policy Options") will encourage providers to write more cover.

Mr. Gordon Marsden: To ask the Chancellor of the Exchequer what assessment his Department has made of the proportion of independent financial advisers unable to secure professional indemnity insurance who have been refused because they have recommended split capital trusts. [96774]

Ruth Kelly: Underwriters will take a range of factors into account when deciding whether to provide insurance cover. It is not possible to attribute individual underwriting decisions to a single cause.

Money Laundering

Mr. Tyler: To ask the Chancellor of the Exchequer what recent representations he has received from professional bodies relating to the use of solicitors' offices as centres for money laundering. [97000]

Ruth Kelly: We are currently consulting on the new money laundering regulations.

We have had discussions with the Law Society about the basis on which the UK will implement the EU 2nd money laundering directive which extends money

11 Feb 2003 : Column 650W

laundering obligations to lawyers. The UK already has a robust system and requires lawyers to file suspicious transaction reports covering money laundering unless excepted by legal professional privilege. The new directive will, through the proposed money laundering regulations 2003, extend various other obligations such as appointment of a Money Laundering Reporting Officer, customer identification and reporting, to lawyers that will further strengthen the UK system.

Barnett Formula

Adam Price: To ask the Chancellor of the Exchequer what plans he has to (a) review, (b) revise and (c) replace the Barnett Formula for the allocation of public expenditure to (i) Wales, (ii) Scotland and (iii) Northern Ireland. [97247]

Mr. Boateng: I refer the hon. Member to the reply I gave to the hon. Member for St. Helens, North (Mr. Watts) on 3 February 2003, Official Report, column 27W.

Child Care Tax Credit

Mrs. Spelman: To ask the Chancellor of the Exchequer what plans he has to extend the child care tax credit to informal carers of children. [96533]

Dawn Primarolo: The child care tax credit in the working families' tax credit supports families who pay for approved child care regulated by the appropriate authorities who provide assurance of quality and safety. The eligibility criteria for the child care tax credit are kept under constant review. With the introduction of the working tax credit in April, support will also be available for approved child care provided in the child's own home.

Child Poverty

Mr. Webb: To ask the Chancellor of the Exchequer which definition of poverty the Government will use to assess progress in meeting its targets to reduce child poverty. [96504]

Dawn Primarolo: The Government have a PSA target to reduce the number of children in low-income households by a quarter by 2004–05 compared with 1998–99, as a contribution towards the broader target of halving child poverty by 2010 and eradicating it by 2020. The technical note for this PSA, published on DWP and HMT websites, provides details. Low-income households are defined as those with less than 60 per cent. of contemporary median income. Progress is being measured on both a before housing costs and an after housing costs basis.

Low income is of course central to poverty. But poverty is a complex, multi-dimensional issue, affecting many other aspects of children's lives, including health, housing, the quality of their environment and opportunities to learn. In April 2002 the Government launched a consultation exercise to decide the best way to measure poverty in the long term, to help target policies and enable the Government to be held to account over its long-term targets. Results will be published by spring 2003.

11 Feb 2003 : Column 651W

Compulsory Pensions

Dr. Kumar: To ask the Chancellor of the Exchequer if he will make a statement on his policy on making individual pension schemes compulsory. [94252]

Mr. McCartney: I have been asked to reply.

We believe that the current voluntarist approach for occupational and personal pensions is the right way forward considering the UK's pension system. The UK has a long tradition of voluntary partnership between individuals, employers, financial services industry and the Government. The continued success of this partnership depends on all partners playing their part. Our Green Paper, "Simplicity, Security and Choice: Working and Saving for Retirement" (Cm5677), contained proposals to allow employers to make membership of their scheme a condition of employment for all new employees. The Green Paper also announced the setting up of an independent pensions commission, which will be chaired by Adair Turner, to monitor and assess trends in occupational and private pensions and long-term saving. On the basis of this assessment we will decide whether there is a case for moving beyond the current voluntarist approach.

Computer Misuse

Mr. Flight: To ask the Chancellor of the Exchequer (1) what safeguards are in place to prevent misuse of the Inland Revenue computer database of individuals' tax records; [92772]

(2) what plans he has to investigate the misuse of the Inland Revenue computer database of individuals' tax records; [92820]

(3) what safeguards are in place to prevent breaches of the Data Protection Act 1998 by Inland Revenue staff. [92774]

Dawn Primarolo: The Inland Revenue takes the misuse of any of its computer systems, and the confidentiality of the information it holds on its customers, extremely seriously. The Department can and does track computer use by its staff and takes a very hard line with anyone who misuses its computer systems, with sanctions up to and including dismissal and prosecution. Its procedures for monitoring access to its computer systems are kept constantly under review.

Disabled Children

Mrs. Calton: To ask the Chancellor of the Exchequer what plans he has to make an economic analysis of the investment required to ensure that government programmes aimed at lifting children out of poverty reach disabled children. [96314]

Dawn Primarolo: The Government's strategy for tackling child poverty-for all children-is set out in the 2001 Pre-Budget Report document "Tackling child poverty: giving every child the best possible start in life". This includes measures to guarantee a decent family income for families with disabled children, and initiatives to ensure these families have access to high-quality public services.

11 Feb 2003 : Column 652W

In recognition of the fact that families with disabled children need extra help, in April 2002 the disabled child premium was increased by £5 a week on top of the normal uprating, to £35.50. In April 2003, it will rise again by £5 above inflation, to more than £40 a week on top of basic Income Support or tax credits, benefiting around 80,000 children. In addition, the mobility component of Disability Living Allowance was extended to three and four-year-olds in April 2002, providing an extra £39.30 a week to those families.

The Government has also introduced a number of measures to improve the level of public service support available to families with disabled children. The Schools Access Initiative programme provides a programme of funding to help mainstream schools provide help to pupils with disabilities. Quality Protects, a five year initiative to improve services and outcomes for children in need, also takes forward projects to support disabled children and their families. And on its introduction by the end of this year the Children's National Service Framework will set general principles and standards for children's services, including services for children with disabilities and special needs.

---