Written Ministerial Statements
Wednesday 26 May 2010
Treasury
Equitable Life
The Financial Secretary to the Treasury (Mr Mark Hoban): For almost a decade Equitable Life policyholders have fought for a just resolution in relation to losses suffered as a result of regulatory failure. Since 2000 there have been extensive investigations and reviews into what went wrong at Equitable Life. It has been established that maladministration on the part of the Government of the day occurred, and agreement that payment should be made in relation to losses suffered as a result, but the process has taken far too long.
Today, I am confirming this Government's pledge to making fair and transparent payment to Equitable Life policyholders, through an independently designed payment scheme, for their relative loss as a result of regulatory failure. We will set up an independent commission to determine the design of the scheme. While we appreciate the need to implement a payment scheme quickly, the impact and implications of events in relation to Equitable Life are complex, and it is important that our approach is thorough, transparent and fair. As the ombudsman accepted, we also recognise that the impact of any scheme on the public purse must be taken into account.
I would therefore like to provide an update on the steps we will be taking from here.
In yesterday's Queen's Speech, the Government announced that they will take an important step forward by introducing a Bill to enable payments to be made to Equitable Life policyholders.
The previous Government asked former Lord Justice of Appeal Sir John Chadwick to provide independent advice on losses suffered by Equitable Life policyholders due to Government maladministration. Sir John was due to present his final report to the Government in May.
We will allow Sir John to complete his work and submit his final report to HM Treasury. Sir John's work brings together over a year of extensive evidence gathering and detailed analysis, including input from a wide range of interests. This work will be useful in helping to inform the development of the payment scheme.
Sir John has requested, and the Government have agreed to, a short extension to this timetable in order to take fully into account two important developments. First, Sir John would like more time to respond to issues raised by the independent actuarial panel appointed to examine the assumptions and methodology used in this provisional advice to him. Secondly, because there has been a significant evolution in his work since his third interim report, Sir John would like to discuss his views with stakeholders before completing his report.
Sir John's final report will be provided to the Treasury by mid July. While Sir John finalises his report the Government will consult with others on the next stage of the process.
The Government will publish Sir John's report alongside a detailed update, giving next steps towards implementing an independently designed payment scheme. While we believe the design of the scheme should be developed by an independent commission, I can confirm that we are clear about two key points: that there should be no means testing; and that the dependants of deceased policyholders should be included in the scheme.
I am very aware that there is, understandably, substantial concern in relation to Equitable Life. The Government are working hard to address the situation as quickly as possible, in order to ensure the establishment of an independently designed payment scheme that is transparent and fair to both taxpayers and policyholders. The steps we have announced today are a sign of our commitment to deliver on that pledge.
Savings (2010-11)
The Chief Secretary to the Treasury (Mr David Laws): The coalition agreement set out that the Government would make modest cuts of £6 billion to non-frontline services within the financial year 2010-11 to help tackle the UK's £156 billion deficit.
The Chancellor of the Exchequer and I have set out this week details of £6.243 billion of savings from Government spending in 2010-11 in line with the coalition agreement.
Spending on health, defence, overseas aid, schools, Sure Start and education for 16 to 19 year-olds has been protected in this exercise, with in-year efficiencies recycled back into budgets.
Outside local government and the devolved Administrations, the savings are allocated across different areas as follows:
£1.15 billion in discretionary areas like consultancy and travel costs;
£95 million through savings in IT spending;
£1.7 billion from delaying and stopping contracts and projects, including immediate negotiations to achieve cost reductions from the major suppliers to Government;
£170 million from reductions in property costs;
At least £120 million from a recruitment freeze across the civil service for the rest of 2010-11;
£600 million from cutting the cost of quangos; and
£520 million by reducing other lower-value spend.
In addition, £1.165 billion of savings will be made in local government by reducing grants to local authorities. Alongside this, the Government will remove the ring fences for over £1.7 billion of grants to local authorities in 2010-11, giving them greater flexibility to find the required savings.
The devolved Administrations will have the option of either making savings this year or deferring their share of the savings, which totals £704 million, until the next financial year.
As part of these savings, the Government will deliver £10 million from reducing first-class travel, and will limit the ministerial entitlement to a dedicated car and driver, saving at least one third from the cost of the Government car service.
The savings allocated to each department are as follows:
Department for Education-£670 million;
Department for Transport-£683 million;
Communities and Local Government-£780 million;
CLG Local Government-£405 million;
Business, Innovation and Skills-£836 million;
Home Office-£367 million;
Ministry of Justice-£325 million;
Law Officers' Departments-£18 million;
Foreign and Commonwealth Office-£55 million;
Department for Energy and Climate Change-£85 million;
Department for Environment, Food and Rural Affairs-£162 million;
Department for Culture, Media and Sport-£88 million (includes responsibility for £27 million of savings from the Olympic Delivery Authority);
Department for Work and Pensions-£535 million;
Chancellor's Departments-£451 million (includes £320 million of savings in annually managed expenditure from reducing the Child Trust Fund);
Cabinet Office-£79 million; and
Devolved Administrations-£704 million.
Reductions to departmental budgets will be made immediately, and reflected at both the Budget on 22 June, and in Main Estimates, which will go before Parliament.
The great majority of the £6.243 billion of savings will be used to reduce the deficit. However a total of £500 million will be reinvested as follows:
£50 million of Government investment in further education colleges, which colleges will be able to leverage to create a £150 million fund to provide capital investment to those colleges most in need.
£150 million to fund 50,000 new apprenticeship places, focused on small and medium enterprises.
£170 million to safeguard delivery of around 4,000 otherwise unfunded social rented homes to start on site this year.
£50 million for action to tackle backdated business rates bills, including a freeze on payments for 2010-11.
Barnett consequentials in these areas will be paid at the same time as devolved Administrations make their contribution to the £6.243 billion, making a total of £500 million reinvested savings.
The savings will be driven by the new efficiency and reform group, whose board will be chaired jointly by the Minister for the Cabinet Office and Paymaster General, the right hon. Member for Horsham (Mr Maude), and myself. The group will be formed by pulling together existing capabilities, drawing on expertise of officials from across Whitehall. As well as helping Departments to deliver savings, the group will oversee an immediate freeze on non-critical spending on consultancy, advertising, and recruitment of non-frontline civil service staff. The group will be comprised of existing civil servants, and will be located within existing premises, with no additional cost to departmental budgets.
Defence
Afghanistan
The Secretary of State for Defence (Dr Liam Fox):
The significant increase in the number of international troops in southern Afghanistan is enabling commanders to make improvements in the laydown and command arrangements of coalition forces in the region. The first of these was the handover of security responsibility for Musa Qala district in Helmand province from UK to US troops on 27 March. This transfer allowed UK troops in Musa Qala to be redeployed to the population
centres of central Helmand where they have increased ISAF's capacity to protect the Afghan civilian population from the threat posed by the insurgency, and to train and partner with the Afghan national security forces.
On 21 May, ISAF announced that Regional Command South, the ISAF command responsible for overseeing the operational activity of international forces in southern Afghanistan, will be divided into two separate commands: Regional Command South-West, headquartered in Helmand and consisting of Helmand and Nimroz provinces; and, Regional Command South, headquartered in Kandahar and consisting of Kandahar, Daikundi, Uruzgan and Zabul provinces. The division of responsibility for ISAF troops in southern Afghanistan into two regional commands will ensure that ISAF can continue to provide the optimal level of command and control over its forces as they increase in size from around 35,000 in October last year to over 50,000 troops this summer. Furthermore, the separation of the commands along regional boundaries will align the ISAF military structure in the south with the structure of the Afghan national army, enabling a greater partnering capacity between ISAF and Afghan forces.
ISAF intends for Regional Command South-West to become fully operational over the course of the summer. The first commander will be Major General Richard Mills of the US Marine Corps, and the US 1 Marine Expeditionary Force, (Forward) which is already based in Helmand, will provide the framework for Regional Command South-West's headquarters component. The UK-led taskforce Helmand will come under Major General Mills's command from 1 June. Subject to final confirmation in due course, the UK and US have agreed in principle that command of Regional Command South-West will be shared on a rotational basis.
As a further element of ISAF reorganisation in Helmand, and as announced by ISAF last week, the British battlegroup based in Sangin and Kajaki, which comprises in the order of 1,100 troops, will transfer from the UK-led taskforce Helmand to the US-led that is taking on responsibility for the north of the province. Under this arrangement, the battlegroup will not be relocated but for operational purposes it will come under the command of the US. In common with the other changes to ISAF's command structures, the transfer of command in Sangin is intended to optimise the command support available to the troops on the ground in the light of the increase in the number of ISAF troops and other operational assets. The transfer will occur on 1 June.
The UK has been consulted throughout ISAF's decision-making process and we welcome the changes to the command arrangements that will enable ISAF to make optimal use of the increased forces now deploying in southern Afghanistan.
Leader of the House
Government's Legislative Programme (2010-11)
The Leader of the House of Commons (Sir George Young): Following yesterday's state opening of Parliament, and for the convenience of the House, I am listing below the 22 Bills that the Government intend to bring forward in the current Session:
Academies Bill
Local Government Bill
Identity Documents Bill
Equitable Life Payments Scheme Bill
Office for Budget Responsibility Bill
National Insurance Contributions Bill
Parliamentary Reform Bill
Pensions and Savings Bill
Welfare Reform Bill
Freedom Bill
Financial Services Regulation Bill
Energy Security and Green Economy Bill
Education and Children's Bill
Health Bill
Public Bodies Bill
Decentralisation and Localism Bill
Police Reform and Social Responsibility Bill
Scotland Bill
European Communities (Amendment) Referendum Lock Bill
Postal Services Bill
Terrorist Asset Freezing Bill
Armed Forces Bill
In addition, a draft Parliamentary Privilege Bill was mentioned in the Queen's Speech.
Detailed information about each of these Bills has been published on the No. 10 website at http://www.number10.gov.uk/news/topstorynews/2010/05/queens-speech-2010-3-50297
Northern Ireland
Bloody Sunday Inquiry Report
The Secretary of State for Northern Ireland (Mr Owen Paterson): I am pleased to inform the House that the report of the Bloody Sunday Inquiry, chaired by Lord Saville, will be published on Tuesday 15 June.
I know that publication of this report has been long-awaited by many people, and I am determined to ensure that the arrangements for publication are fair to all those involved. My right hon. Friend the Prime Minister will make a statement to this House at the time when the report is published. With the permission of the Speaker, I confirm that I will allow an opportunity for members of the families of those who died or were injured on the day, and for the soldiers most directly involved, to see the report privately and be briefed by their lawyers on it, some hours before the report is published. Some Members of this House will similarly have an opportunity to see the report in advance of publication, to enable them to respond to the statement made to this House at the time of publication. In addition, there will be a full day's debate on the report of the inquiry in the autumn.
Government's Legislative Programme (Northern Ireland)
The Secretary of State for Northern Ireland (Mr Owen Paterson): The First Session UK legislative programme unveiled in the Queen's Speech on 25 May contains measures of relevance to the people of Northern Ireland.
The following is a summary of the legislation announced in the Queen's Speech and its impact in Northern Ireland. It does not include draft Bills.
The list also identifies the lead Government Department.
The following Bills extend to Northern Ireland, in whole or in part, and deal mainly with excepted matters. Discussions will continue between the Government and the Northern Ireland Executive to ensure that where provisions that are specifically for a transferred purpose are included in any of these Bills, the consent of the Northern Ireland Assembly will be sought for them:
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