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HM Customs and Excise: Changes to DEL and Administration Costs Limits

Lord McIntosh of Haringey: My right honourable friend the Paymaster General (Dawn Primarolo) has made the following Written Ministerial Statement.

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:
New DEL
ChangeVotedNon-votedTotal
Resource51,4181,378,450-1,378,450
Capital84,280163,8561,000164,856
Depreciation*-53,168-97,948--97,948
Total82,5301,444,3581,0001,445,358




* Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.





The change in the resource element of the DEL arises from:

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.

National Savings and Investments: Changes to DEL and Administration Costs Limits

Lord McIntosh of Haringey: My honourable friend the Financial Secretary (Mr Stephen Timms) has made the following Written Ministerial Statement.

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:
New DEL
ChangeVotedNon-VotedTotal
Resource5,500177,526177,526
Capital500500
Depreciation*-2,860-2,860
Total5,500175,166175,166




* Depreciation which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.





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.

There is no change in the capital element of DEL.

Office for National Statistics: Changes to DEL and Administration Costs Limits

Lord McIntosh of Haringey: My honourable friend the Financial Secretary (Mr Stephen Timms) has made the following Written Ministerial Statement.

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:
£'000


New DEL
ChangeVotedNon-votedTotal
Resource4,472157,811-157,811
Capital8,15932,824-32,824
Depreciation*--13,837--13,837
Total12,631176,798-176,798




* Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.





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 administration costs limit will be increased by £4,472,000 from £152,990,000 to £157,462,000.

Pensions: Financial Assistance Scheme

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 liquidations—where 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.

We are minded to judge the insolvency position for multi-employer schemes on the principal employer of 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.

But those scheme members who have already retired or expect to retire within the next few years need to know where they stand now.

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.

The assistance will be paid as a monthly pension.

FAS payments will be treated by the tax and benefit system in broadly the same way as payments from an occupational pension scheme.

We have already committed ourselves to review the Financial Assistance Scheme after three years.
 
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Government funding is already fixed for the current spending review period up to and including 2007–08. But as with all our spending plans, we will review the funding for the FAS in the next spending review alongside other spending priorities.

A dedicated team of DWP officials, based in York, will administer the scheme and aim to get payments to recipients as soon as possible once the regulations are in place.


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