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Subject to parliamentary approval of any necessary Supplementary Estimate, the HM Customs and Excise departmental expenditure limit will be increased by £135,698,000 from £1,407,608,000 to £1,543,306,000 and the administration costs limit will be increased by £34,018,000 from £1,218,491,000 to £1,252,509,000. Within the DEL change, the impact on resources and capital are as set out in the following table:
Administration costs increases of £53,168,000 from the central reserve to enable the GOGGS East building to be brought onto the department's balance sheet; a transfer of £85,000 from HM Treasury for the cost of capital charges in respect of GOGGS; and a transfer of £36,000 from the Office for National Statistics in respect of data development work. These are partially offset by a transfer of £1,271,000 to HM Treasury to meet the costs of the transfer of tax policy work for the first half of the financial year and virement from administration costs to programme expenditure of £18,000,000; and
Programme expenditure changes relating to virement from administration costs to programme expenditure of £18,000,000; and a transfer to the Home Office to meet additional costs of anti-terrorism work of £600,000.
The change in the capital element of the DEL arises from increases of £84,210,000 from the central reserve to enable the GOGGS East building to be brought onto the department's balance sheet; and £70,000 from the Office for National Statistics in respect of data development work.
Subject to parliamentary approval of any necessary Supplementary Estimate, National Savings and Investments DEL will be increased by £5,500,000 from
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£172,026,000 to £177,526,000 and the administration costs limits will be increased by £5,500,000 from £172,026,000 to £177,526,000. Within DEL change, the impact on resources and capital are set out in the following table:
The change in the resource element of the DEL arises from end-year flexibility being drawn down to support expenditure on major project commitments. Such projects include the work being carried out for compliance with evidence of identity requirements, Internet development work and also for some of the savings accounts implementation. There have also been some planned increases in the level of direct marketing expenditure that is being carried out to ensure that net financing targets are being met.
Subject to parliamentary approval of any necessary Supplementary Estimate, the Office for National Statistics DEL will increase by £12,631,000 from £178,004,000 to £190,635,000. The Office for National Statistics winter supplementary incorrectly overstated the administration costs limit. This supplementary corrects the position. The administration costs limit will increase by £4,472,000 from £152,990,000 to £157,462,000. Within the DEL change, the impact on resources and capital are as set out in the following table:
The change in the resource element of the DEL arises from the draw-down of £4,679,000 administration costs end-year flexibility as set out in the Public Expenditure Outturn White Paper (Cm 6293). This is partially offset by a transfer of £207,000 in total to other government
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departments in relation to work to develop the Neighbourhood Statistics programme. The transfers comprise £171,000 to the Home Office and £36,000 to HM Customs and Excise.
The change in the capital element of the DEL arises from the draw-down of £8,229,000 capital end-year flexibility as set out in the Public Expenditure Outturn White Paper (Cm 6293). This is partly off-set by a transfer of £70,000 to HM Customs and Excise in relation to work to develop the Neighbourhood Statistics programme.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham): My honourable friend the Minister for Pensions (Malcolm Wicks) has made the following Written Ministerial Statement:
In December 2004 we said that our priority was getting help to those facing the most urgent difficulties being closest to, or already at, retirement age and therefore less able to make provision to replace their lost pensions.
At that time we had asked independent trustees to provide data on the pension schemes that they thought might be eligible for the financial assistance scheme. We had a very good response and from the information provided it appears that there are at least 380 schemes in which members might be potentially eligible for financial assistance. The precise scale of the financial shortfalls in these schemes cannot be known until the winding-up processes are close to completion.
A list of these potentially eligible schemes has been placed in the Library. It is a provisional list which broadly confirms earlier estimates of the scale of the problem, and the number of individuals affected. The detailed eligibility criteria for both schemes and members will be set out in regulations that we expect to publish for wider consultation in the spring. Once finalised these will need parliamentary approval, which we hope to obtain by the end of July.
As solvent employers have a duty to support their schemes and provide the benefits members were expecting, it is right that the FAS focuses on insolvent employers. We expect employers to stand by their pension promise to their employees, and will take a dim view of the solvent employer who seeks to avoid their responsibilities to their employees or the employees of a company for which they have been a parent company. We have consulted widely on how we should define "employer insolvency" and concluded that for FAS purposes we should have a sufficiently general definition of insolvency to capture schemes where the sponsoring employer no longer exists and also where insolvency may have occurred some time after scheme wind-up had started. This definition will be similar to that used by the PPF but with the additional inclusion of some companies which have
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undergone members' voluntary liquidationswhere a declaration of solvency was made at the time of wind-up but where the company is now no longer solvent and so no employer exists to support the scheme.
The list contains those pension schemes on which we received information in the latest data collection exercise and which from the information provided by trustees appear potentially eligible under the criteria set out above. The list provides an early indication of scheme eligibility for members of the schemes we have been told about. But I need to make clear a number of caveats. First, it will take time to establish the final position, but as wind-up progresses we will become clearer on the size of the gap between assets and liabilities of these schemes. Secondly, presence on this list does not guarantee individuals will receive support from the FAS. Thirdly, it does not mean trustees should stop their duties of securing the best possible outcome for their scheme members.
After the FAS regulations have come into force, there will be a six-month period during which we shall accept formal notification from the independent trustees of other under-funded pension schemes, which may in due course be added to the list, so absence from this list does not preclude eligibility.
While we have sought industry contributions, it is very disappointing that no financial contribution has been forthcoming. As a result the available funding stands at £400 million over 20 years, which the Government have committed on behalf of the taxpayer.
As we have explained before, in many cases the trustees are not yet able to provide detailed information on the scale of individual losses and in practice this may not be available until they are close to completing the winding-up of each pension scheme.
I can therefore announce today that the Financial Assistance Scheme will provide help to those within three years of their scheme pension age on 14 May 2004. The assistance will top up individuals to a level broadly equivalent to 80 per cent of the core pension rights accrued in their scheme. That means that those within three years of their pension scheme age on 14 May 2004 should expect to get 80 per cent of their core promised pension. As we previously announced, payments will be subject to a de minimis level and a cap on assistance provided. Further information on these will be provided when the draft regulations are published.
Government funding is already fixed for the current spending review period up to and including 200708. But as with all our spending plans, we will review the funding for the FAS in the next spending review alongside other spending priorities.
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