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WORK AND PENSIONS

Opportunity for All

The Secretary of State for Work and Pensions (Mr. Andrew Smith): Today I am publishing Opportunity for all—Fifth Annual Report 2003 (CM 5956). The report sets out our strategy for tackling poverty and social exclusion, and reports on the indicators used to monitor progress. Copies have been placed in the Library, and are available to hon. Members from the Vote Office. A copy of the summary is being sent to all hon. Members.

Older Workers

The Secretary of State for Work and Pensions (Mr. Andrew Smith): In the Government's consultation report "Simplicity, Security and Choice: Working and Saving for Retirement", December 2002, (CM 5677) I announced plans to introduce progressively a new package of more intensive back-to-work help for people aged 50 and over. Today I am pleased to announce further details about two elements of this work.

The sites for the pilot study to trial mandating the participation of people aged 50 to 59 who have been claiming JSA for 18 months in the New Deal 25 plus Intensive Activity Period, on the same basis as

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currently exists for claimants aged 25–49, have been agreed and are listed below. 11 of the pilots will commence in April 2004, and three will commence in October 2004. The areas represent a mix of geographical and labour market areas and all will have fully integrated Jobcentre Plus offices. In addition, seven of the sites are also taking part in the Pathways to Work pilots for people on Incapacity Benefits.

The pilots will be evaluated comprehensively by independent qualitative and quantitative research and this will include the use of random assignment.

Pilot sites for a mandatory New Deal 25 plus Intensive Activity Period for people aged 50 to 59—Launch April 2004:


Pilot sites for a mandatory New Deal 25 plus Intensive Activity Period for people aged 50 to 59—Launch October 2004:


Note:

1 Also participating in the Pathways to Work pilots.

A national tendering exercise will be launched today on the Jobcentre Plus website http://www.jobcentreplus.gov.uk/, inviting bids from private and voluntary sector organisations to extend information about back-to-work help and local job and volunteering opportunities to help improve the employment prospects of jobless people aged 50 and over.

The bids will be invited in areas with higher numbers of people aged over 50 claiming benefits, listed below. Successful bidders will begin work from April 2004, and contracts will be let for up to two years. The pilots will gather good practice information on the most effective ways of raising awareness about the availability of back to work help to people not currently in contact with Jobcentre Plus.

Proposed Jobcentre Plus districts for private and voluntary sector bids to raise awareness about the back to work help available through:


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DEFENCE

Military Low-Flying System

The Parliamentary Under-Secretary of State for Defence (Mr. Ivor Caplin): The existing Night Low Flying System (NLFS) will remain unchanged in principle, but some adjustments are being made to its structure and management to improve the efficiency of the system and reflect an increasing requirement for helicopters to be able to train at night.

The NLFS is divided into two by a line from Swansea in the west to Colchester in the east. The southern area is allocated to rotary wing aircraft and the northern area to fixed wing aircraft, with small exceptions to account for locations where rotary wing aircraft are based in the fixed wing region and vice-versa. This basis remains unchanged but the area available to rotary-wing aircraft will be increased and the system made more flexible by the introduction of sectors that may now be allocated to either fixed wing or rotary aircraft. In addition, we are introducing some management changes to make the procedures that units use to book in to the system more efficient.

The Government understand that military low flying training is disturbing, and can reassure the House that there is not expected to be a significant impact for those on the ground as a result of these changes. The existing basis of the NLFS will remain, and for most of the country there will be no change to the structure of the system. Where change is being introduced, the impact is generally expected to be limited to the possibility that those on the ground may witness different aircraft types than may currently be the case, and will be small in scale. We have considered the requirement for a sustainability review and recognise that some parts of the changes may lead to such a requirement, although, as stated, the overall impact is likely to be small. Where necessary I can confirm that more detailed work may be carried out. Detailed environmental impact and sustainability studies are being carried out in respect of AH 64, which is likely to be one of the major users of the revised NLFS.

Finally, night flying is essential if our aircrews are going to meet the demands that are placed upon them. These changes will assist with these demands.

TRADE AND INDUSTRY

British Energy Credit Facility Agreement

The Secretary of State for Trade and Industry (Ms Hewitt): On 7 March, Official Report, column 89WS, I informed the House that British Energy had repaid to my Department all outstanding amounts under the credit facility. On a contingency basis I decided, with the

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company's agreement, to continue the facility, with the maximum amount available being reduced from £650 million to £200 million.

British Energy has subsequently utilised the facility in August. As the House was in recess at the time the drawing was made, my Department wrote to the Chairs of the Committee of Public Accounts and the Trade and Industry Committee to inform them of the fact. At the beginning of September, British Energy's outstanding drawdown on the facility was £13.1 million.

The stringent controls governing drawings on the facility by British Energy remain in place. As with the company's previous drawings, we expect further drawings to be repaid in full, including interest, as soon as the company is in a position to do so. British Energy's obligations under the credit facility agreement are secured by charges over the British Energy Group's assets. This security is in the nature of a senior charge, which would take priority over the claims of other creditors, should the company become insolvent.

British Energy continues to work on implementing its restructuring plan. It announced on 11 September that it had agreed the sale of its stake in its US joint venture, Amergen, subject to certain regulatory and other conditions. But there remain significant milestones ahead. Successful implementation of the restructuring plan will require a number of further conditions to be met, including satisfactory formal commitments from creditors to support the plan, completion of the Amergen sale and receipt of state aids approval from the European Commission. I will also need to be satisfied that implementation of the restructuring will lead to a viable restructured entity that will not be dependent on Government support in the long term. If these conditions cannot be met, the Government remain well prepared for administration.

TREASURY

HM Treasury Review

The Chief Secretary to the Treasury (Mr. Paul Boateng): Cash Ratio Deposits 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 sterling liquidity operations and its efforts to secure price stability and the stability of the financial system in general, from which these institutions are key beneficiaries. The Cash Ratio Deposit Scheme was placed on a statutory basis when the Bank of England Act became law in 1998. In February 2003, the Paymaster General announced by written statement a review of the operation of the statutory scheme in its first five years.

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The review has reached the following conclusions. The cash ratio deposit scheme continues to be a suitable method of funding the Bank of England's monetary policy, financial stability and sterling liquidity operations. The definition of eligible liabilities, from which deposits are calculated, should not be brought into line with the definition of deposits used by the Financial Services Authority (FSA) as a basis for calculating the fees it collects from deposit taking institutions. This is because the Cash Ratio Deposit scheme is aimed at sterling deposit taking institutions, whereas the FSA's regulatory activity, and its definition of deposits, also covers foreign exchange deposits. The cash ratio for calculating deposits should remain at 0.15 per cent. The Government will keep the ratio under review. The minimum threshold for making deposits should be raised to £500 million, freeing 18 institutions from the scheme and benefiting all remaining contributing institutions by reducing the level of their deposits by £150,000 each. The Bank of England should consider ways in which the transparency of the scheme could be enhanced, for instance by publishing a more detailed breakdown of expenditure by function. The Government will continue to monitor the effect of the cash ratio deposit scheme under review and will conduct a further formal review at the latest in five years' time.

The proposal to raise the minimum threshold for making deposits would require a change to secondary legislation under the Bank of England Act 1998. HM Treasury is therefore consulting publicly about this change and inviting views on the other proposals of the review.

DEPUTY PRIME MINISTER

Local Government Finance

The Minister for Local Government, Regional Governance and Fire (Mr. Nick Raynsford): The December 2001 White Paper "Strong Local Leadership, Quality Public Services" (CM 5237) included a commitment to


The concept behind the safety valve mechanism was that there might be a small number of authorities whose circumstances do not fit adequately into national funding formulae and as a result experience severe underfunding.

We have been unable to find any authorities that qualify for a safety valve grant. After taking technical advice from local government, which pointed strongly against a mechanism we no longer intend to introduce a safety valve grant.