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Northern Rock
Lord Barnett asked Her Majesty's Government:
Whether the debt securities in issue of £64,294.3 million contained in the last published balance sheet of Northern Rock at 31 December 2006 is secured against assets of the bank; if so, how much; and against which assets. [HL2173]
Lord Davies of Oldham: The figure quoted includes debt securities issued by Northern Rock as well as the other entities consolidated in the group accounts. Holders of debt securities issued by Northern Rock have a claim against the assets of Northern Rock as creditors of Northern Rock according to the terms of those securities. However, debt securities issued by the various securitisation vehicles set up by Northern Rock are secured against the assets of the relevant issuer, and those bondholders have no recourse to Northern Rock for repayment of their bonds.
Lord Barnett asked Her Majesty's Government:
Whether the securitisation issues of £40.2 billion, representing 43 per cent of total funding stock, referred to by the chief executive of Northern Rock in his last report in January, are secured against assets of the bank; if so, how much; and against which assets. [HL2174]
Lord Davies of Oldham: None of these securitisation issues is secured against the assets of Northern Rock plc.
Lord Northbrook asked Her Majesty's Government:
Whether the Dolerite Funding No 1 and Dolerite Funding No 2 commercial mortgage securitisation vehicles are still in existence, as indicated on Northern Rock's website. [HL2202]
Lord Davies of Oldham: The Dolerite bonds were fully redeemed in August 2007.
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Lord Northbrook asked Her Majesty's Government:
Whether they have guaranteed the Whinstone Capital Management Ltd securitisation and the Dolerite Commercial Mortgage Securitisation vehicles. [HL2203]
Lord Davies of Oldham: The securities issued by Whinstone are not covered by the guarantee arrangements.
Northern Rock has a commercial relationship with Whinstone and any funds deposited with Northern Rock by Whinstone would be covered by the guarantee arrangements in the same way as any other wholesale deposit. Northern Rock has entered into credit default swaps with Whinstone on a commercial basis and payments under these contracts would be covered by the guarantee arrangement.
The bonds issued by Dolerite were fully redeemed in August 2007.
Lord Barnett asked Her Majesty's Government:
Whether the views of the chief executive of Northern Rock in his last report on 20 January 2007, which referred to the quality of the bank's assets remaining strong, with arrears performance on the residential lending book reflecting this and only 0.42 per cent of accounts three months or more in arrears, remain accurate. [HL2227]
Lord Davies of Oldham: The Financial Services Authority has assessed that Northern Rock has a mortgage book of good quality and remains solvent. It is a matter for its management to release specific business updates.
Lord De Mauley asked Her Majesty's Government:
Further to the statement by the Chancellor of the Exchequer on 18 February (HC Deb, col 21) that he was taking Northern Rock into a period of temporary public ownership, how many months constitutes “temporary” and whether there is any length of time beyond which temporary public ownership would not be permitted to continue. [HL2246]
Lord Davies of Oldham: The Government have set a clear strategic aim for the board of Northern Rock plc to move the bank off all forms of public sector support at the earliest appropriate opportunity, but are not setting an arbitrary deadline for returning Northern Rock to the private sector. It is for the new board to develop a strategy that best serves the objectives of Government, as sole shareholder and guarantor, in particular to protect taxpayers and depositors and promote financial stability.
Lord De Mauley asked Her Majesty's Government:
Whether Northern Rock is gaining, or will gain, any competitive advantage over other banks and building societies from its borrowings being guaranteed. [HL2247]
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Lord Davies of Oldham: The Chancellor of the Exchequer and the executive chair of Northern Rock, Ron Sandler, have both made clear their commitment to ensuring that the company does not compete unfairly on the back of government support. Furthermore, any support to Northern Rock will be subject to scrutiny by the European Commission against the state aid rules, which prohibit unfair distortion of competition. The UK Government have made clear their commitment to adhering to these rules.
As further reassurance, HM Treasury has asked the Office of Fair Trading to prepare an annual report assessing the competitive impacts of Northern Rock's business on the markets in which it operates.
Lord De Mauley asked Her Majesty's Government:
Whether Northern Rock is contractually obliged to replace mortgages held by Granite as they mature or default. [HL2248]
Lord Davies of Oldham: Northern Rock is under no contractual obligation to sell further mortgages to Granite. Any decision by Northern Rock to sell mortgages to Granite would be taken for commercial reasons and in light of the strategic plan to be agreed with the Government.
Lord De Mauley asked Her Majesty's Government:
What is their estimate of the value of further mortgages which will be replaced before Northern Rock emerges from its temporary period of public ownership. [HL2250]
Lord Davies of Oldham: Northern Rock operates on an arm's-length basis from Government as a commercial entity in a competitive environment. It is inappropriate for the Government to comment on the details of Northern Rock's mortgage book.
Ron Sandler, Northern Rock's executive chair, is developing a strategic plan as a matter of priority and will present the plan to the Government shortly. The plan is subject to government approval. Any subsequent major decisions will need the approval of the Government—as in the case of any publicly owned company.
Lord Taylor of Warwick asked Her Majesty's Government:
When the Financial Services Authority will publish its report on issues relating to Northern Rock. [HL2485]
Lord Davies of Oldham: The Financial Services Authority has confirmed in its business plan 2008-09 that it will publish the conclusions of its review of lessons learnt from the Northern Rock situation in March 2008
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Pensions: Disregards
Baroness Hollis of Heigham asked Her Majesty's Government:
What the annual cost of a £12 disregard on pension credit would be in (a) 2015, (b) 2025, and (c) 2050. [HL2285]
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton): The information is shown in the table below.
The estimates refer to the annual cost of introducing a £12 weekly private pension income disregard for all income-related benefits (pension credit, housing benefit and council tax benefit), in 2008-09. The disregard has been increased by earnings in each year following 2008-09.
| £ billion, 2007-08 prices | 2015-16 | 2025-26 | 2050-51 |
| Source: WP Microsimulation Modelling | |||
- Notes 1. In the financial years up to and including 2013-14 Treasury economic assumptions have been used to model earnings uprating. After this point a long-term earnings growth assumption of 4.93 per cent has been applied. 2. Estimates have been calibrated to published medium-term forecasts of expenditure on income-related benefits. 3. Estimates refer to the United Kingdom and are in 2007-08 prices. They have been rounded to the nearest £0.1 billion. 4. Estimates account for the state pension reforms in the Pensions Act 2007, but they do not take into account private pension reforms as detailed in the current Pensions Bill. 5. Care should be taken when interpreting these estimates. Projections of the expenditure on income-related benefits are sensitive to modelling assumptions and to projected changes in the distribution of pensioner incomes.
People Trafficking
Lord Hylton asked Her Majesty's Government:
Whether they will accept the advice of the National Society for the Prevention of Cruelty to Children that all children presumed to have been trafficked be provided with a legal guardian; and whether this would reduce the number who go missing. [HL2504]
The Parliamentary Under-Secretary of State, Home Office (Lord West of Spithead): We are not convinced that the provision of legal guardians for children who are believed to have been trafficked would provide significant additional safeguards to those that already exist nor reduce the number of children who go missing.
Local authorities already have a statutory duty to ensure that their functions are discharged having regard to the need to safeguard and promote the welfare of all children under Section 11 of the Children Act 2004 regardless of their immigration status. They also have responsibilities for unaccompanied children, as well as those who arrive in the UK with their parents and for whom there are concerns regarding their safety and welfare.
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The protection and subsequent care plans for each child are based on assessments of individual needs. Such assessments are already subject to external scrutiny through a number of statutory routes.
Polygamy
Baroness Park of Monmouth asked Her Majesty's Government:
Whether there are any cases of receipt of housing or other benefits by second and subsequent wives of a polygamous marriage illegal under British law; and, if so, what is the legal authority for such payments. [HL2344]
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton): Because legislation does not provide entitlement to benefit payments to anyone in a polygamous marriage that is illegal under British law, there should be no such cases.
Prostitution
Lord Hylton asked Her Majesty's Government:
Further to the Written Answer by Lord West of Spithead on 10 March (WA 212—13), what funds they provide for the care of persons leaving prostitution; and whether they plan to increase these to provide the services mentioned in the Answer, including locally provided services. [HL2440]
The Parliamentary Under-Secretary of State, Home Office (Lord West of Spithead): No final decision has yet been made on the level of future funding for these services so we are not in a position to provide precise figures.
Railways: North Wales
Lord Roberts of Llandudno asked Her Majesty's Government:
Whether there would be any alterations to the subsidies to be paid to Virgin Trains in 2007—08 and 2008—09 for operating services under the West Coast Main Line franchise were they to extend services to and from Wrexham. [HL2330]
Lord Bassam of Brighton: If the Department for Transport (DfT) were to propose a change to extend West Coast Trains services to and from Wrexham then it is likely to generate an increase in subsidy to the train operator. There are currently no plans for DfT to initiate such a change. However, from December 2008, West Coast Trains is planning to operate an additional 0705 Wrexham General to Chester and 2020 Chester to Wrexham General service as a commercial proposition.
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Shipping: Irish Lights
Lord Berkeley asked Her Majesty's Government:
How much United Kingdom shipping has contributed to the funding of Irish Lights since the agreement with the Republic of Ireland was signed in 1985; what action they are taking to obtain a refund from the Government of the Republic of Ireland of all contributions made since 1985; what action they are taking to ensure that in future there is no contribution by United Kingdom shipping to the costs of maintaining lights in the Republic of Ireland; and when they expect negotiations on this to be completed. [HL2551]
Lord Bassam of Brighton: The estimated contribution made by UK shipping to the provision of aids to navigation in the Republic of Ireland in each year since 2002-03 is set out in the evidence study following the review of funding for the Commissioners of Irish Lights published on 3 March. Data before that date are not readily available. The estimated contribution, as the report points out, arises out of the provision of an integrated service throughout Great Britain and Ireland.
The UK contribution will be the subject of discussions between the two Governments in determining a long-term funding solution. It is too early at this stage to say when negotiations will be completed and a new agreement put in place.
Lord Berkeley asked Her Majesty's Government:
Whether they accept the conclusions of the Department for Transport's internal consultant Penny Brooke's Review of Funding for the Commissioners of Irish Lights—Evidence Report, dated February 2008; whether the conclusions are accepted by the Government of the Republic of Ireland; why the answer by Baroness Crawley on 18 April 2007 (Official Report, cols. 215—16) underestimated the annual contribution to the provision of aids to navigation in the Republic of Ireland by over £2 million; and whether they will place in the Library of the House a copy of the report. [HL2552]
Lord Bassam of Brighton: The Irish Lights Evidence Study was published with the agreement of the UK and Irish Governments. Copies of the report were placed in the House Libraries on 3 March 2008.
Two key findings of the study were that the proportion of the Commissioners of Irish Lights (CIL) expenditure falling in the Republic was 85 per cent, rather than the 70 per cent assumed in the 1985 agreement and that the General Lighthouse Fund may be contributing in total £8.5 million a year to the funding of lights in the Republic. This figure also includes CIL's portion of the costs borne directly by the General Lighthouse Fund on behalf of the three General Lighthouse Authorities which are currently excluded from the 1985 agreement.
The Answer by Baroness Crawley, which gave an estimate of £6.4 million for the annual contribution in 2005-06 to the provision of aids to navigation in the Republic of Ireland was based on the outcome
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