---

25 Feb 2003 : Column 9WS

Written Ministerial Statements

Tuesday 25 February 2003

HOME DEPARTMENT

Juvenile Reconviction Rates

The Parliamentary Under-Secretary of State for the Home Department (Hilary Benn): The Home Office is today publishing its second annual report on juvenile reconvictions. The report, prepared by Research, Development and Statistics Directorate, covers the reconvictions within one year of juvenile offenders dealt with between January and March 2001. The proportion reconvicted has been cut by 22.5 per cent. compared with 1997, and this exceeds the Public Service Agreement (PSA) target of a 5 per cent. reduction by 2004. I would like to congratulate the Youth Justice Board and the other services involved in youth justice for this excellent result. I am placing a copy of the report in the Library.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

Duty of Care Regulations

The Minister for the Environment (Mr. Michael Meacher): The Duty of Care Regulations 1991 have been amended to give waste collection authorities (WCAs) the power to serve notices on businesses, requiring them to furnish the WCA with their duty of care records. This will help WCA officers to check whether businesses are transferring their waste in accordance with the law. Businesses that do not have such arrangements could be prosecuted.

This measure should help to reduce the level of commercial and industrial waste that is fly tipped. It will also assist waste collection authorities in pursuing fly tipping offences as, in some circumstances, it will be possible for the fly tipped waste to be traced back to the originator of the waste.

The Environmental Protection (Duty of Care) (England) (Amendment) Regulations 2003 came into force on 20 February.

Vulnerable Groups Consultation Paper

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Elliot Morley): I have today issued a consultation paper "Reductions for vulnerable groups", which invites views from individuals and organisations on the Government's proposals for amending the protection offered to vulnerable metered water customers under the Water Industry (Charges) (Vulnerable Groups) Regulations 1999.

The current regulations offer assistance, in the form of a capped bill, to certain low-income households with water meters who need to use a great deal of water for essential household purposes. To qualify, a household

25 Feb 2003 : Column 10WS

must be in receipt of an income-related benefit, and contain either a large family, or a person who has special water needs because of a medical condition. The current definition of a large family is three or more children under the age of 16 years, while a medical condition is defined in the regulations. The cost of this tariff is borne by other customers.

The consultation paper discusses a range of options for amending the regulations to improve the protection of vulnerable households. The main recommendations are to extend assistance to include children up to the age of 18, instead of 16 as at present, and to extend the list of qualifying medical conditions.

The consultation will run for twelve weeks and will end on Friday 9 May. Following this we shall consider all the responses and will publish the Government's response to consultation along with a regulatory impact assessment. Any changes made to the regulations as a result of the consultation will come into effect on 1 April 2004.

Animal Movements

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Elliot Morley): The Government are publishing today the emerging findings from the risk assessment and cost benefit analysis of animal movement standstills. The studies were commissioned in response to the recommendations made in July 2002 by the Lessons Learned and Royal Society Inquiries and have been carried out for Defra by Risk Solutions and the Veterinary Epidemiology and Economics Research Unit (VEERU) at the University of Reading.

On 23 January 2003, Official Report, columns 20–24WS, the Government announced the intention to reduce the standstill for cattle, sheep and goats to six days with effect from 4 March. A supporting document explaining that decision, and referring to the emerging findings from the Risk Solutions and VEERU studies, has already been placed in the Library and posted on the Defra website.

TREASURY

Cash Ratio Deposits Review

The Paymaster General (Dawn Primarolo): Cash Ratio Deposits (CRDs) are non-interest bearing assets deposited with the Bank of England by banks and building societies. They are used by the Bank to finance its unremunerated activities, in particular its efforts to secure price stability and the stability of the financial system in general, from which these institutions are key beneficiaries.

The CRD scheme was extended to include building societies, and was placed on a statutory basis, when the Bank of England Act became law in 1998. At the time the Government, in the Treasury's response to consultation (published on 20 April 1998) made a commitment to review the new scheme within five years of its application. The Treasury, working closely with the Bank, will begin that review today.

25 Feb 2003 : Column 11WS

The review will include an assessment of the detailed arrangements of the scheme as well as the continuing suitability of the scheme itself compared to alternative sources of funding. It will also address the impact of the scheme on the eligible institutions. The review will conclude in May, and we will publish the broad conclusions in a statement to the House shortly afterwards.

Inheritance Tax

The Paymaster General (Dawn Primarolo): The Inland Revenue's Extra Statutory Concession F7 allows exemption from inheritance tax for works of art when they are only chargeable under strict law because they have been brought temporarily to the United Kingdom for cleaning or restoration, or for loan to an exhibition. That reflects a longstanding judgement that the public interest would not be served if foreign owners of works of art were unwilling to send them to the United Kingdom for these purposes for fear of a potential inheritance tax charge.

Similar disincentives can arise, outside the terms of the existing Concession, when foreign-owned works of art are kept in the United Kingdom for these reasons when they would otherwise have been taken elsewhere. That could occur, for example, where a work is already in the United Kingdom when it is first acquired by a foreign buyer, and the new owner allows a period of loan to a public collection here before taking it to a permanent home abroad.

I have therefore agreed that the Concession should be extended to cover such circumstances.

The revised concession (added words in bold) is as follows: "Where a work of art normally kept overseas becomes liable to inheritance tax on the owner's death solely because it is physically situated in the United Kingdom at the relevant date, the liability will—by concession—be waived if the work was brought into the United Kingdom solely for public exhibition, cleaning or restoration. The liability will similarly be waived if a work of art which would otherwise have left the United Kingdom to be kept overseas is retained in the United Kingdom solely for those purposes. If the work of art is held by a discretionary trust (or is otherwise comprised in settled property in which there is no interest in possession), the charge to tax arising under Section 64 IHTA 1984 will, similarly, be waived."

Financial System (Major Operational Disruption)

The Financial Secretary to the Treasury (Ruth Kelly): I am today publishing a Green Paper, The Financial System and Major Operational Disruption. Copies are available in the Vote Office and in the libraries of both Houses. The document is available online at the Treasury website: www.hm-treasury.gov.uk/. The 11 September attacks on the United States caused terrible loss of life and physical damage. They also showed the problems that physical disruption on such a scale brings for the financial system—as exemplified by the four-day closure of the New York Stock Exchange.

25 Feb 2003 : Column 12WS

Financial services play a vital role in the UK economy. This makes it particularly important to be sure that we have good arrangements to maintain the financial system's resilience during major operational disruption. While the main responsibility lies with the financial sector itself, HM Treasury, the Bank of England and the Financial Services Authority are working together, and with the private sector, to help strengthen resilience.

This consultation asks if new statutory powers should be sought to assist in promoting order in the financial system in extreme circumstances of operational disruption. The Government are seeking views on whether such legislation would be justified by the nature and scale of the threat. The consultation also requests comments about additional ways in which the financial authorities could usefully assist the private sector's work in making financial markets more resilient.

The consultation closes on 25 April. If the Government considers it appropriate to seek legislation, further consultation would follow.

---