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Written Ministerial Statements

Tuesday 18 November 2008


Bank Recapitalisation Scheme

The Chancellor of the Exchequer (Mr. Alistair Darling): I set out in my statements to Parliament on 8 October, Official Report, columns 277-280 and 13 October, Official Report, column 539, the details of the Government’s recapitalisation scheme. All UK incorporated banks—including UK subsidiaries of foreign institutions—with substantial business in the UK, and building societies, are eligible to apply for the scheme. To date, RBS Group plc and—subject to their merger proceeding—Lloyds TSB plc and HBOS Group plc have announced the terms on which they are participating. Those terms are set out in detail in the placing and open offer agreements, and in the preference share subscription agreements. I have today arranged for final, signed versions of the agreements to be placed in the Libraries of both Houses of Parliament.

I now set out the detail of dealing with future applications to the scheme from those banks which are currently raising capital—either by an agreement with HM Treasury or otherwise—and which, for whatever reason, may seek to negotiate a substantively new proposal or new agreement with HM Treasury about the terms of any recapitalisation. Detailed terms of participation would remain a matter for discussion with the board of the institution concerned, taking proper account of prevailing market conditions, but HM Treasury would expect to apply the following general principles:

The objective of the recapitalisation scheme is to ensure that each eligible institution has sufficient capital to sustain confidence in the institution. Institutions should therefore have a sufficient buffer of capital above the minimum requirement both to absorb losses that might ensue from a downturn and to continue lending on normal commercial criteria. In assessing any proposals in relation to eligible institutions, HM Treasury will continue to focus on three key objectives:

In providing capital to any eligible institution, HM Treasury, on the advice of the Bank of England and Financial Services Authority, would need to be satisfied that these three objectives were met.

There is no automatic right of access to the recapitalisation scheme. At minimum HM Treasury would expect the following high-level conditions to be met before capital could be offered to any eligible institution:

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If the Government are to provide capital, the issue will carry terms and conditions that appropriately reflect the financial commitment made by the taxpayer, including in relation to dividend policy, remuneration, lending policy and wider public policy issues.

To the extent that HM Treasury is asked to subscribe for, or underwrite, an offering for ordinary equity shares, the price would be at a discount to either the market price prevailing at the time of the transaction or, if applicable, the placing price agreed on 13 October, whichever is lower. The percentage discount would not be less than the percentage discounts applied in transactions already announced.

To the extent that HM Treasury is asked to subscribe for preference shares or other tier 1 instruments, the appropriate coupon will be based on prevailing market conditions, with due regard given to the rate at which eligible institutions have announced the issue of such instruments most recently.

With respect to fees, HM Treasury would charge an appropriate level of fees for any underwriting commitments, again paying due regard to the fees paid in recent transactions involving eligible institutions.

Any transaction would, of course, be subject to the necessary regulatory and legal clearances, and would need to comply with the European Commission’s decision of 13 October 2008 authorising the recapitalisation scheme under EU state aid rules.

Any securities acquired by HM Treasury under the recapitalisation scheme will be managed on a commercial basis by UK Financial Investments Ltd (UKFI). Details about UKFI are set out in my letter to the Chairman of the Treasury Select Committee of 3 November, which is available in the Libraries of both Houses of Parliament.

Children, Schools and Families

Children's Trusts

The Secretary of State for Children, Schools and Families (Ed Balls): In the “Children’s Plan”, which I presented to Parliament in December 2007, the Government set out their ambition to make this country the best place in the world for young people to grow up. As part of this we committed to strengthening the links between schools, health and other children’s services in every area through children’s trusts, so that together they can tackle all the barriers to the learning, health and happiness of every child.

Today I am publishing statutory guidance which:

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The guidance also confirms the Government’s intention to legislate to:

The children’s plan set out a vision in which local authorities, schools, the health service and other local providers work together and support each other, both in setting the direction and in driving delivery. The proposals announced today, taken together, give us a framework that will help make this vision a reality.

CAMHS Review

The Secretary of State for Children, Schools and Families (Ed Balls): The Secretary of State for Health and I today welcome the publication of the final report of the independent review of child and adolescent mental health services. We would like to thank the CAMHS external review group for their report and recommendations. In particular, we would like to thank Jo Davidson, the chair and group director of children and young people's services at Gloucestershire county council and Dr. Bob Jezzard, the vice-chair.

This has been a challenging review. Children’s mental health is an area where there are strong views and perspectives. The external review group should, therefore, take great credit for having produced such a coherent and evidence-based report, which sets out a clear vision for how we can all take responsibility for promoting children’s mental health and psychological well-being, alongside clear recommendations for how we can best achieve the step change in the quality and consistency of services at all levels.

We asked the chair and vice-chair to investigate:

We welcome the fact that the review carried out its task in such a comprehensive manner, undertaking an intensive programme of investigation, including a national call for evidence and extensive consultation with children, young people and their families throughout the process. The fact that the review’s recommendations respond to the concerns of users of these vital services gives its report added weight and importance.

We agree with the review’s analysis that whilst considerable improvements have been made to the support and services delivered in this area, there is still a great deal of change that needs to take place at all levels of the system to support the delivery of integrated, child and family-focused mental health and psychological well-being services that are organised around children and young people’s needs.

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The review’s report identifies the important changes that are required if we are to see real improvements in children’s mental health and psychological well-being. The review sets out a clear and ambitious vision of what this change would look like for children, young people and their families accessing universal, targeted and specialist services, highlighting the importance of:

The review makes 20 challenging recommendations to Government across all aspects of children’s mental health and psychological well-being services. The Secretary of State for Health and I are delighted to be able to demonstrate our commitment to the immediate implementation of a number of these recommendations. In particular:

We are committed to: taking forward key recommendations within the report on improving access for children, young people and their families to mental health support through universal services; improving the access, quality and impact of mental health services for vulnerable children and young people; and ensuring that parents and carers have access to high quality advice and support when they are concerned about their children’s mental health.

For example, legislation to strengthen Children’s Trusts is already in train. Revised statutory guidance will highlight that Children’s Trusts should consider the mental health and psychological well-being needs of children and young people in their area as part of their wider joint strategic needs assessment and respond to this through effective joint-working between primary care trusts, local authorities and other strategic partners.

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Today we want to further demonstrate our commitment by announcing:

We are pleased to accept most of the review’s recommendations in principle, with a view to implementing these as soon as is practical. Overall, we share the review’s conclusions on the need to promote greater consistency in access, quality and impact of children’s mental health services. In order to deliver these improvements, we identify four priority areas to be addressed by the National Support Programme and National Advisory Council. These are:

We will give further consideration to the remaining six recommendations from the review in conjunction with the National Advisory Council in order to develop an appropriate response and effective solutions that reflect local and national priorities.

The Secretary of State for Health and I have set out our initial response to each of the review’s 20 recommendations in a summary document that has been made available on the DH and DCSF websites and in the Libraries of both Houses of Parliament.

Communities and Local Government

Rough Sleeping Strategy

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): The Government are today publishing a new rough sleeping strategy “No one left out—communities ending rough sleeping”. Copies have been placed in the Library of the House.

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Ten years ago, the Government set out an ambitious plan to cut rough sleeping by two thirds. Thanks to the determination of our partners in local authorities, the voluntary sector and other agencies dealing with the homeless, we achieved that goal several years ago. There have been significant and sustained reductions in the number of people who sleep rough on the streets.

Our success in tackling rough sleeping so far is something in which we lead the world and of which this country can be proud, but we are not complacent. Ten years on from our first strategy, we are determined to make further progress. Our vision is to end rough sleeping once and for all. And we know that many of our partners share this determination and we will work across Government to make progress.

This new strategy signals our intent to work with our partners to end rough sleeping once and for all by 2012. To make this happen we want to make sure that in every part of the country people get the help they need, so no one has to sleep rough. Services will act promptly to prevent rough sleeping from occurring in the first place, or to bring people in from the streets as quickly as possible. People who have slept rough will be supported to improve their health, consider employment options and rebuild their lives.

After a decade of progress we have learnt from our experiences, and are more confident and determined than ever that we can make progress towards this goal, building on the commitment, innovation and energy of our partners across Government, in local authorities, the third sector and communities. The strategy sets out a fifteen point action plan for the next four years. The tougher economic climate may bring new pressures and challenges, but I am confident that the strategy prepares us well for the future. The Government is investing £200 million to prevent homelessness and tackle rough sleeping.

This new strategy will help us make the final push, ending rough sleeping once and for all.

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