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Written Ministerial Statements

Tuesday 25 January 2005

DEPUTY PRIME MINISTER

Departmental Investment Strategy

The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Yvette Cooper): The Office of the Deputy Prime Minister is today publishing its departmental investment strategy, which sets out the proposed capital and resource investment expenditure between 2005–06 and 2007–08. It also summarises the assets the Office of the Deputy Prime Minister holds and the processes by which investment decisions are made.

Copies of the document will be placed in the Libraries of both Houses and are available on the ODPM website.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

Government Decontamination Service (GDS)

The Minister for the Environment and Agri-environment (Mr. Elliot Morley): The Government announced on 25 March 2004, Official Report, column 55WS that they were actively considering establishing a UK-wide service to provide advice and assistance in decontamination and clean up after a deliberate chemical, biological, radiological or nuclear (CBRN) incident or a major accidental release of hazardous materials. Work on the potential costs, benefits and modalities of such a service has been going on since that announcement.

As a result of their considerations, the Government now intend to set up a Government decontamination service (GDS), as an executive agency of the Department for Environment, Food and Rural Affairs (DEFRA). The decision is part of the cross-Government work to ensure that the UK is prepared for a range of emergencies and has been developed under the CBRN resilience programme led by the Home Office. The service will have three principal functions, aimed at streamlining our ability to decontaminate the built and open environment following any CBRN incident.

First, it will provide advice and guidance to responsible authorities during their contingency planning for CBRN incidents, and regularly help test the arrangements that are in place. This will build on the strategic national guidance for the built and open environment which the Office of the Deputy Prime Minister and DEFRA (respectively) issued in 2004.

Secondly, it will rigorously assess the ability of companies in the private sector to carry out decontamination operations, and ensure that responsible authorities have access to those services if the need arises. If required, the agency will also help co-ordinate decontamination operations.
 
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Finally, the service will advise central Government on the national capability for the decontamination of buildings and the environment in the event of a major release of chemical, biological or radioactive materials.

The Government have in parallel been taking forward work to build on their existing capability to decontaminate buildings and the open environment. The work has included assessment of and engagement with a range of specialist contractors and the identification of appropriate technologies. This is part of the research and foundation being developed to further enhance capability and build the permanent decontamination service over the coming years.

CBRN resilience is devolved in Scotland. Scottish Ministers decided that the GDS should be invited to provide a service in Scotland and the Scottish Executive has been actively involved in its establishment. A similar statement is therefore to be made in the Scottish Parliament.

The Welsh Assembly Government are not responsible for CBRN resilience under the terms of the devolved settlement in Wales but has been fully consulted on the development of the GDS. The central GDS arrangements now being put into place by the UK Government will also cover Wales and the Welsh Assembly Government fully support these arrangements.

PRIME MINISTER

House of Lords (Appointments)

The Prime Minister (Mr. Tony Blair): The House of Lords Appointments Commission is responsible for recommending non-party-political appointments to the House of Lords. However, I continue to nominate direct to Her Majesty the Queen a limited number of distinguished public servants on retirement. I have decided that the number of appointments covered under this arrangement will not exceed 10 in any one Parliament.

TRADE AND INDUSTRY

Directors' Remuneration Report Regulations 2002

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): As announced in my written parliamentary statement on 25 February 2004, Official Report, column 51–52WS, my Department commissioned a report on compliance with the Directors' Remuneration Report Regulations 2002 ("the Regulations") during the course of this year's AGM season, including an assessment of changes in remuneration practices. Deloitte and Touche LLP were appointed to carry out the work following a competitive tender process. Their report is today being placed on the DTI website at: http://www.dti.gov.uk/cld/Deloitte–Rep–DRRR–2004.pdf and in the Libraries of both Houses.

The report underlines the positive impact of the regulations and the effectiveness of the Government's action in subjecting directors remuneration to closer scrutiny by shareholders. It reveals high levels of company compliance with the regulations, better clarity of disclosure on remuneration, improved communication
 
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between companies and their shareholders, and changes in companies' remuneration policies and practices improving the link between pay and performance. It also suggests that further legislation in this area is neither necessary nor desirable and that further improvements to disclosure and the linkage between pay and performance are best pursued through the development and implementation of best practice guidelines.

In the circumstances, whilst I will continue to keep the position under review, I have concluded that further changes to company law requirements in this area are not needed at this stage.

The report does suggest some minor changes to the regulations in order to clarify what is required and improve transparency and the quality of the information provided. My Department will be considering the need for these changes in the light of views expressed by stakeholders and better regulation principles. If, as a result, we consider that changes are made, these should not involve additional costs or additional regulatory burdens on companies of shareholders.

In my February statement, I welcomed the action taken by the Association of British Insurers and National Association of Pension Funds, and by the Confederation of British Industry, in producing guidance on directors' contracts. The report provides a basis for the further development of this guidance. I now call on these groups to work towards providing a common set of guidelines by the end of the year.

While the report is encouraging, there is no room for complacency. The challenge for remuneration committees and their advisors remains to produce rewards packages which tie pay and performance targets to the creation of long term value for shareholders and are transparent to shareholders. Shareholders, for their part, should satisfy themselves that remuneration arrangements for directors are in the best interests of the company. They must also be vigilant and ensure that situations where directors enjoy rich rewards whilst companies perform poorly and shareholders and employees suffer are challenged.

Regional State Aid Reform

The Minister for Trade and Investment (Mr. Douglas Alexander): On 14 June 2004, Official Report, columns 19–20WS, my right hon. Friend the Minister for Industry and the Regions, announced that the European Commission had published proposals for amending the guidelines that govern regional state aid, which define assisted areas and aid intensities allowed within them, for the period 1 January 2007 to 31 December 2013, and that her Department would shortly be issuing a consultation document seeking the views of all interested parties on the Commission's proposals.

My Department today published the results of that consultation exercise and copies of the summary of responses, and the Government's latest letter to the Commission, have been placed in the Libraries of both Houses. The Commission issued a further paper on its approach before Christmas, and is to hold a first joint meeting with national officials on 1 and 2 February: it then plans to issue detailed proposals in May, for adoption in September this year. The Commission's
 
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further paper is available on its website and my Department has written to consultees drawing their attention to it.


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