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Written Ministerial Statements

Thursday 12 July 2007


National Statistics (Annual Report)

The Exchequer Secretary to the Treasury (Angela Eagle): The National Statistics Annual Report for 2006-07 is being published and laid before Parliament today. Copies are available in the Libraries of the House and is also accessible on the National Statistics web site.

UK Asset Freezing Regime

The Economic Secretary to the Treasury (Kitty Ussher): In a written ministerial statement of 10 October 2006, the previous Economic Secretary undertook to report to Parliament on a quarterly basis on the operation of the UK's asset freezing regime. This is the third of these reports and covers the period April-June 2007.(1)

Asset-freezing designations


Licensing policy

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Tax Credits

The Financial Secretary to the Treasury (Jane Kennedy): Tax credits today provide support to 20 million people including 6 million families and 10 million children. Take-up of tax credits is a significant success. In 2004-05 take-up of the Child Tax Credit rose from 79 per cent. to 82 per cent., with over 90 per cent. of the money available being claimed. Take-up among those on incomes below £10,000 is 97 per cent. and take-up among lone parents is 93 per cent. This is higher than for any previous system of income-related financial support for working families.

Tax credits play a major role in moving people into work and helping people move up the employment ladder, ensuring that work pays over welfare. Tax credits, economic stability, and the Government's welfare to work programmes have helped to increase the number of people in work by over 2.6 million since spring 1997.

As a result of the Government's reforms to the tax and benefit system since 1997, from April 2007, in real terms:

The tax credit system has also played a key role in tackling child poverty. Since 1998-99, 600,000 children have been lifted out of relative poverty, compared to a doubling of child poverty in the previous 20 years.

Her Majesty's Revenue and Customs are today publishing their estimates of error and fraud in the tax credits system in 2004-05. This analysis shows that the rate of error and fraud has declined by a sixth between 2003-04 and 2004-05. This is below the error and fraud rate under the predecessor system; and comparable with error and fraud rates for Income Support and Job Seekers Allowance when the Government first started collecting data in a systematic way in 1997-98.

Looking to the future, HMRC are seeking to accelerate the production of error and fraud figures, which will enable them to set clear targets for a further reduction. HMRC are also looking carefully at whether an estimate can be made of the split between customer error and official error for the 2005-06 and subsequent enquiries.

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The largest component of the figures published today is error (£1.13 billion) as opposed to fraud (£40 million). These figures are from a period when the Inland Revenue was starting to recover from the early operational difficulties and new rules and processes were starting to become established.

Since the introduction of tax credits, HMRC has had a detailed programme of action in place to ensure that individuals receive the tax credits to which they are entitled, at the right time. To tackle error, HMRC have continued to improve their communications with members of the public—simplifying the claim form and award notices. Access to contact centres has also been improved, with 99 per cent. of callers in 2006-07 answered on the day they called. Advertising and increased contact has been used to make individuals aware of their entitlements and reduce error.

HMRC is also committed to tackling official error. Accuracy in processing and calculating awards rose from 78.6 per cent. in 2003-04 to 97.7 per cent in 2005-06.

To tackle fraud, HMRC has further refined its risk assessment processes and increased pre-payment checks on claims where fraud or non-compliance is suspected. In addition, compliance specialists are now in place in tax credit contact centres. By providing support and advice to contact centre staff, they have successfully prevented a significant number of attempts to defraud the tax credit system.

Information on organised fraud shows that HMRC is successfully stopping the majority of claims identified as being submitted by organised fraudsters. In 2006-07 HMRC identified attempts to defraud the tax credit system of around £252 million. Of this, the vast majority—some £212 million, was detected by HMRC before any money was paid out.

Tax credits and economic stability have helped to increase the number of people in work by more than 2.6 million since spring 1997, and since 1997 long-term unemployment has reduced by 460,000. Tax credits have improved work incentives, reduced the tax burden on low-to-middle-income families and helped dramatically to reduce child poverty.

United Kingdom Coins 2009

The Chancellor of the Exchequer (Mr. Alistair Darling): Her Majesty The Queen has been graciously pleased to approve my recommendation that the following coins should be issued in 2009:

Collector versions of these coins will be released at a premium above face value and, during the course of 2009, the coins will also become available at face value from banks and post offices.

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Business, Enterprise and Regulatory Reform

Energy Demand Reduction Project

The Secretary of State for Business, Enterprise and Regulatory Reform (Mr. John Hutton): Contracts have been signed with EOF Energy, E.ON UK, Scottish and Southern Energy, and Scottish Power to conduct the trials of smart meters and associated feedback devices. They are being funded by £10 million from Government matched by a similar amount from the companies involved. The funding was announced as part of Budget 2006.

The trials will include 15,000 households receiving state of the art smart meters and 8,000 more receiving clip on real time display units for their existing meters. The other households in the trial will be testing new ways of receiving information to help them cut their energy use. Altogether around 40,000 households will be involved.

Clip on real time display units can tell people how much energy they are using, and how much it is costing when individual appliances are turned on. Smart meters allow energy suppliers to communicate directly with their customers, removing the need for meter-readings and ensuring entirely accurate bills with no estimates. Smart meters tell people about their energy use either through linked display units or in other ways, such as through the internet or the television.

The trials will test out consumers' response to better information on their energy use through a variety of methods, including:

Consumers to be able to access information about their consumption and energy costs through visual display units that can be displayed round the house, over the internet and even through digital TV;

The potential for energy suppliers to provide enhanced billing information with advice to consumers on how they can cut down their energy bills; and,

Providing a breakdown of energy use to the customer and exploring a range of tariffs for consumption at different times of the day.

The trials will be conducted throughout the country and will look at the responses from a range of customers, including those in fuel poverty.

The trials will also look at:

Increasing the frequency of billing as well as the impact of more accurate bills; and

Encouragement to become even more energy efficient through more information and community engagement.

Smart meters are expected to be rolled out to most households within the next 10 years, and all but the smallest businesses in the next five years.

In the meantime, Government have proposed that real time display units be provided with any new meters fitted from 2008, and to all households that request them between 2008 and 2010. It is estimated that these short-term measures will deliver savings of 0.3 million tones of carbon per year by 2020. Government will be consulting further on the implementation of these proposals.

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Greenhouse Gas Emissions

The Parliamentary Under-Secretary of State for Defence (Derek Twigg): I have placed in the Library of the House today a table detailing for 2005 the cost to the Ministry of Defence (MOD) of participating in the first year of phase 1 of the EU European Trading Scheme (2005).

The table details MOD sites registered in the scheme, the number of free allowances, actual carbon dioxide emissions, scheme administration costs, and additional allowance costs.

Environment, Food and Rural Affairs

Home Energy Conservation Act

The Secretary of State for Environment, Food and Rural Affairs (Hilary Benn): Data reported by Energy Conservation Authorities in England under the Home Energy Conservation Act 1995 in the period 1 April 1996 to 31 March 2006 have been placed in the Libraries of the House. This data have also been published on the Department for Environment, Food and Rural Affairs website. Authorities have reported an overall improvement in domestic energy efficiency of 19.26 per cent. as measured against a 1996 baseline.


The Secretary of State for Environment, Food and Rural Affairs (Hilary Benn): The month of June was the wettest June on record; in excess of 150mm of rain fell over most of the Midlands and northern England with between 200 and 300mm in parts of the North East. These extreme conditions led to large scale urban flooding, a lot of which was from surface water run-off rather than from rivers. The flooding affected places across the Midlands and Yorkshire and Humberside, and tragically four people lost their lives as a direct result of the flooding. The circumstances of three other reported deaths are still being investigated. Over 37,000 properties including some 7,000 businesses are reported to have been affected, with nearly 18,000 properties affected in the Hull area alone and over 5,000 in the Doncaster area. It is estimated that thousands of people are still out of their homes with around 300 in emergency accommodation in Sheffield and Doncaster, and Hull. The response of the emergency services, local authorities, operating authorities, voluntary sector and the affected communities has been very impressive.

However, as the affected communities, businesses and individuals move to the long and difficult task of recovery, they are understandably asking questions about the flooding—its causes and subsequent management. My ministerial colleagues and I have said that it is vital that we learn lessons now about how to manage and respond to this type of disaster in the
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future. As part of the usual process following an emergency we are establishing a review to identify these lessons, and the Prime Minister stated on 8 July that the conclusions of such an exercise would be made public. I am, therefore, announcing today how the Government intend to go about this and our aim to publish initial findings by the end of the year and subsequently a formal Government report. The review will be led by officials from the Cabinet Office with my officials’ support. They will report to me, the Minister for the Cabinet Office, and the Secretary of State for Communities and Local Government.

The review will look at flood risk management, the emergency response and the initial moves towards recovery. The longer-term recovery effort will require sustained commitment over a considerable period of time, and a further review will be undertaken separately once these tasks are well in hand and we are better able to assess the lessons to be drawn from it.

The review will consider all available evidence on the flooding and its impacts and what this means for the future. Its specific objectives will be;

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