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The 2005 Annual Report on Strategic Export Controls

The Minister for the Middle East (Dr. Kim Howells): The 2005 Annual Report on Strategic Export Controls will be published at 1100 today as a Command Paper. Copies will be placed in the Library of the House. The report describes UK policy and international developments in export control regimes, as well as information on export licensing decisions taken during 2005.

The Annual Report on Strategic Export Controls is an innovation of this Government. This report, the ninth Annual Report (the first report was published in 1997) is a step away from the traditional reports of the past. Our export licensing system is one of the most rigorous and transparent regimes in the world and the Annual Report—in this new format—symbolises our continued commitment to accountability and transparency by presenting detailed information in a more modern and user friendly format. This year, due to the increasing volume of information on strategic exports that is being published by the Government, all the statistical data that were historically published only in hardcopy are now made available on a CD ROM which accompanies the report. Since 2004 the Government have also produced detailed Quarterly Reports available on the Internet—ensuring that the UK provides some of the most open and timely export licensing information available anywhere. The new CD ROM includes the Quarterly Reports for 2005, as well as more consolidated data, information on licence refusals and fuller information on trade control (trafficking and brokering) licences issued during 2005. The complete report will be available on the Foreign and Commonwealth Office web site and also published through The Stationery Office.

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International Development

East Africa - Humanitarian Update

The Secretary of State for International Development (Hilary Benn): At the beginning of this year the UN judged that 8.2 million people in East Africa and the Horn were in need of urgent humanitarian assistance, mainly food aid, following the worst drought for a decade. Since then approximately 490,000mt of food aid has been delivered to respond to these needs. Additional assistance has been provided in the form of emergency medical and nutritional relief, water and sanitation, shelter and other forms of relief. The UK has provided approximately £55 million or $103.9 million towards this. Overall the international donor community have provided over $660 million towards the relief effort.

The long rains in the early and mid part of 2006 have led to improvements in most areas. Unfortunately, most notably in Ethiopia, flooding has brought its own tragedy as over 600 people have died and more than 150,000 have lost their homes or been affected in one way or another. Most recently DFID has made available a further £6 million for humanitarian assistance in Kenya, where malnutrition rates remain high and current season harvest assessments present a very mixed picture. In Ethiopia we have provided £l million for urgent relief to flood-affected people.

Humanitarian assistance is still needed to address the urgent medical and nutritional needs of the most seriously sick and malnourished, and to meet other basic needs, including clean water, to the reduce risks of death and disease. Basic humanitarian indicators remain worrying, but we expect that the steps taken by relief agencies have mitigated what might have been more serious consequences, such as widespread mortality and displacement. We are closely monitoring the situation.

Assistance is also being provided in an effort to improve productive capacity by investing in livestock or other farming inputs such as seeds, tools and livestock vaccinations. However, it remains a challenge to achieve sustained benefits for the poorest and most vulnerable communities. In Ethiopia we are leading supporters of a productive safety nets programme to tackle chronic hunger; we are working on the development of a similar programme in Kenya. It is also important to note that substantial risks remain from conflict in the region, and we are working closely with the international community to promote peace and stability as a prerequisite to finding long term solutions to persistent humanitarian crises.

India - Reproductive and Child Health

The Secretary of State for International Development (Hilary Benn): I have approved support of £252 million over five years for the second phase of the Government of India’s nationwide Reproductive and Child Health Programme. DFID will disburse £10 million in financial assistance plus a further £700,000 in technical assistance in 2006-07. Thereafter, annual disbursements will be subject to satisfactory reports on progress.

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This programme will support the Government of India in tackling India’s huge burden of maternal and infant mortality. One fifth (136,000) of all maternal deaths in the world, and one quarter (1.8 million) of all infant deaths occur in India. Globally we will not reach the Millennium Development Goals to reduce these deaths unless we succeed in India. The Reproductive and Child Health Programme is the Indian Government’s single biggest response to meet this challenge. The programme aims to reduce the Maternal Mortality Ratio from 407/100,000 live births in 1998 to 100/100,000 in 2015, and the Infant Mortality Rate from 70/1000 live births in 1998 to 30/1000 in 2015. If the programme achieves all its targets, over one million lives will be saved each year.

The programme will introduce new measures to tackle concerns about procurement irregularities in the first phase of the Reproductive and Child Health Programme, which was not funded by DFID. An action plan will help strengthen competitive tendering procedures and increase transparency for the purchasing of drugs and equipment, and new standards will be introduced to improve the quality of products. Until these measures take effect, all procurement contracts over $200,000 will be handled by international agents.

The total cost of this second phase of the Reproductive and Child Health Programme is around £5 billion, which the Indian central and state Governments will meet the bulk of. External aid will be around 15 per cent. of the overall budget, with the single largest contribution coming from DFID. Our aid is being fully coordinated with other development partners, including the World Bank.

The Reproductive and Child Health Programme is universal in coverage, and it will provide care through pregnancy, childbirth and childhood. But resources will be targeted on India’s poorest states, including Uttar Pradesh, Bihar, Orissa, and Madhya Pradesh and will especially target women and children among the poorest and most marginalised families, in Scheduled Castes and Scheduled Tribes.

DFID’s financial support will be used for upgrading maternity facilities; increasing skilled attendance at birth; the purchase of essential drugs, equipment, supplies and contraceptives; staff training; communications; the piloting of new ideas; and assessing the impact of the programme. DFID technical assistance will finance a National Health Systems Resource Centre, which will provide overall technical assistance to the Programme at central and state level, and strengthen health sector procurement.

This second phase of the programme is ambitious and will require a huge expansion in the delivery of public sector health services, to tackle some of the country’s biggest health problems. It also includes a number of additional accountability and financial management safeguards to strengthen the Government’s anti-corruption systems. The programme will be monitored closely by the Indian Government and development partners, through reviews every six months. A copy of the Project Memorandum for the DFID contribution has been deposited in the Library of the House.

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Update on Recovery in Lebanon and Humanitarian Situation in Gaza

The Secretary of State for International Development (Hilary Benn): The recent conflict in Lebanon caused great harm to the civilian populations in both Israel and Lebanon. A million people, a quarter of Lebanon’s population, were displaced by the fighting and in Israel 300,000 people were reported to have fled their homes or taken to shelters. Israel had every right to defend itself against Hezbollah, but from the beginning we expressed the need for a proportionate response. I believe that this requires all sides to respect international humanitarian law.

The ceasefire, reached after much diplomatic activity, including strenuous efforts by the British Government, is holding and has aided the relief effort but the humanitarian situation in Lebanon remains serious.

On 15 August, the day after the ceasefire came into effect, I visited Beirut to assess the situation for myself. The priorities for the humanitarian aid effort were to secure sustained access for humanitarian convoys to reach the most vulnerable; to ensure safe return for displaced citizens; to minimise the risk of injury and death from unexploded munitions for those returning and for aid workers; and to repair basic infrastructure, such as water and power supplies and bridges.

From early in the conflict, the UK responded to Lebanon’s call for help. Our total funding commitment now stands at £22.3 million, including our share of multilateral spending, making us one of the biggest bilateral contributors to the humanitarian effort. In line with our assessment of current priorities, this money is helping to provide shelter, healthcare, water and sanitation, and to clear unexploded munitions. We have agreed to provide urgently needed prefabricated bridges to open critical humanitarian supply routes. The first three bridges arrived in Lebanon on 1 September.

The Government have also urged Israel to lift all restrictions on normal shipping entering Lebanese ports, as set out in resolution 1701. This is essential in order to help restore the economy. The partial lifting of the economic blockade last week has further enhanced the chances of avoiding a much bigger humanitarian crisis and will help Lebanon begin the path to recovery. We continue to push for further progress on the issue.

The international community has responded generously to Prime Minister Siniora’s appeal for assistance at the Stockhom conference on early recovery held on 31 August. Collectively we have pledged over $900 million to aid recovery. It will be important that these pledges are acted on as soon as possible.

Lebanon needed our aid, and we are ready to do more as needed, but more than anything else what Lebanon and the region need is peace. The conflict of this summer was a symptom of a wider collective failure to resolve the conflict that has affected the
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Middle East for decades. UNSCR 1701 was a step in the right direction, and must be implemented by all parties, but we need to encourage negotiation, compromise and above all political leadership to end the long-term suffering of people on both sides of the border.

Unfortunately, what has happened in Lebanon is not the only humanitarian crisis in the region. We cannot forget the plight of the Palestinians, especially in Gaza, where violence continues and people die. Since the start of the current conflict on 28 June, over 200 Palestinians have been killed and over 700 injured. The cost of damage to agriculture and industry is now estimated at around $46 million. Many households continue to receive only six to eight hours of electricity per day. However, there are plans to rebuild the Gaza power station and to supply electricity from Egypt, which should improve the situation. Intermittent electricity supply is affecting all key services. Water supply and sanitation services remain limited, with severe health implications. The UN now estimates a 65 per cent. increase in the number of children with diarrhoea compared with this time last year. Hospitals are struggling to operate vital equipment and to store drugs and vaccines safely.

Food prices are rising and 70 per cent. of Gazans are now considered to be food insecure. The World Food Programme reports a 72 per cent. increase in numbers using their feeding programme. Gaza crossing points are open intermittently, primarily for humanitarian food supplies. Action is needed to ensure unrestricted humanitarian access, including the supply of medical equipment, fuel, food and electricity.

At the Stockholm Donor Conference on 1 September, donors pledged $500 million for the Occupied Palestinian Territories, of which $200 million was for humanitarian aid. The UK pledged £3 million to the Temporary International Mechanism (TIM) for operation, maintenance and repair work to keep water, sanitation and electricity services running. This follows an earlier contribution to the TIM of £3 million to fund essential health supplies. In addition, the UK made a contribution of £15 million to the United Nations Relief and Works Agency (UNRWA) in April. UNRWA provides healthcare and other basic services for Palestinian refugees, who comprise 70 per cent. of Gaza’s population. The UK has also deployed two experts to the United Nations Office for the Coordination of Humanitarian Affairs to improve its capacity to monitor the humanitarian situation in Gaza. These two experts will assist donors and others to make sure help gets to those who need it the most.


NHS Financial Performance

The Secretary of State for Health (Ms Patricia Hewitt): My Department published on 11 August 2006 the NHS financial performance for the first quarter of 2006-07. The report indicates that the NHS is on track to achieve our aim of a net financial balance by the end of the year. The report shows that the NHS as a whole
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is forecasting a small surplus for the year of £18 million, after application of a £350 million contingency created by the Strategic Health Authorities.

The report is available in the Library and is published on the Department’s website at:

Outsourcing of the NHS Supply Chain Services

The Minister of State, Department of Health (Andy Burnham): A 10-year contract has been awarded to DHL to manage the supply chain and procurement services currently managed by the logistics division of the NHS Business Services Authority (NHSBSA) and part of the NHS Purchasing and Supply Agency (PASA).

The effective date of the contract will be 1 October 2006 and the new service will be known as NHS Supply Chain. DHL will operate NHS Supply Chain as agent of the NHSBSA, which will be responsible for managing the contract on behalf of the Department and of the NHS.

DHL will manage the procurement and supply chain services of approximately £3.7 billion of NHS non-pay spend and forecasts savings greater than £l billion for the NHS frontline.

In addition, the partnership with DHL will:

We recognise that NHS Trusts value the NHS Logistics service and we have ensured that DHL will, at a minimum, maintain the current service. As is the case now, NHS Trusts will not be mandated to use the outsourced service. For DHL to be successful they will have to demonstrate value for money to NHS Trusts. They will also work very closely with clinicians to source the right products at the best prices from suppliers.

This is also an opportunity for suppliers with innovative products to gain better access to the NHS. DHL will purchase products on behalf of the NHSBSA in accordance with EU procurement regulations thus ensuring open and fair competition.

Review of Part IX of the Drug Tariff

The Minister of State, Department of Health (Andy Burnham): The arrangements under part IX of the drug tariff have not been reviewed for over twenty years and there were clear indications that neither the NHS nor the taxpayer were receiving value for money.

We have therefore been consulting with the market over potential price cuts since October 2005.

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In reviewing part IX, the Government’s objectives have been to:

We have consulted extensively with industry on these issues. Following consultation on dressings and chemical reagents, we have decided to implement a staged price reduction of up to 15 per cent. to the April 2006 drug tariff reimbursement prices for some blood glucose detection strips. Initially, reimbursement prices will be reduced by 12 per cent. on all affected products from 1 October 2006. This may be followed by a further reimbursement price reduction of 3 per cent. from 1 November 2006. We hope that the 3 per cent. variant will allow the market to maintain the free provision of related services, including the supply of educational material, helplines and metres. Responses to the consultation indicated that a price reduction of 15 per cent. may mean that it would be difficult to maintain these services. We have written to companies to inform them of the price changes.

A consultation on stoma and incontinence appliances has closed today and further consultation with industry will be held.

Spearhead Primary Care Trust Areas

The Minister of State, Department of Health (Caroline Flint): The Government have set Public Service Agreement targets to address geographical inequalities in life expectancy, cancer, heart disease, stroke and related diseases. The targets aim to see faster progress compared to the average in the “fifth of areas with the worst health and deprivation indicators”. Achievement of the targets will be assessed on the outcomes for this group in 2010. The local authorities and primary care trusts which make these areas are the Health Inequalities Spearhead Group.

The Spearhead group is defined on local authority data and consist of 70 local authorities that are then mapped onto primary care trust boundaries.

Revised primary care trusts boundaries were announced on 19 May. Following the reconfiguration, the spearhead group list has been refreshed to take account of the new primary care trust boundaries. The list of 70 Spearhead group local authorities (that has not changed) and the revised list of 62 primary care trusts that map to them is as follows:

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