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Written Statements

Tuesday 22 April 2008

Airports: Economic Regulation

Lord Bassam of Brighton: My right honourable friend the Secretary of State for Transport (Ruth Kelly) has made the following Ministerial Statement.

I am today announcing a review of the economic regulation of the UK airport system, supported by a panel of experts. This recognises the points made by the Competition Commission in its interim report this morning, together with those of the aviation industry and other key stakeholders, about the potential shortcomings of the current regulatory system. If legislation is required as a result of this work, it would be taken forward in a future legislative session. Therefore we will not make changes to the basis on which the current price caps at Heathrow and Gatwick airports are set. This also applies to the cap which will take effect at Stansted from 1 April 2009.

The UK aviation industry plays a critical role in our economy contributing more than £11 billion to our national wealth and directly supporting around 200,000 jobs. The industry has seen significant change in recent years with our more global economy increasing the need for international movement of people and goods; and greater airspace liberalisation allowing passengers to benefit from more choice of flight destinations at lower prices, which has opened up opportunities that for many simply did not exist before. But this progress does not come without challenges, not least the economic constraints created by a lack of airport capacity in the UK and the global impacts of climate change.

In 2003, the Government set out a sustainable framework for the development of airport capacity over the next 30 years in the Future of Air Transport White Paper. This recognised the need for some expansion of airport capacity, which is why my department recently consulted on Adding Capacity at Heathrow Airport.

Economic regulation can play an important role in maximising the effectiveness of scarce capacity at airports in the south-east, for example by providing the right incentives to deliver necessary investment and ensure that the owners of UK airports are able to finance that investment. I welcome the Competition Commission's views, among others, that the current system needs to be reviewed to ensure it is effective for the 21st century.

It has been over 20 years since the Airports Act 1986 put in place the current regime of economic regulation and as such it is one of the oldest economic regulatory systems in the country. Much has changed since then, and there is an urgent need to consider how the framework needs to be updated to reflect today's realities. In particular, this work will look at how best to provide incentives to:

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improve the passenger experience;encourage appropriate and timely investment in additional capacity to help deliver economic growth in line with wider government policy;and address the wider environmental impacts of aviation on airport development.

In taking this work forward, I am keen that we identify and learn from best practice from the regulatory frameworks in other industries and the Government's better regulation strategy.

We have already said in the Government's response to the House of Lords Select Committee inquiry on economic regulation that, if particular issues were identified as part of the Competition Commission's inquiry, we would consult at the appropriate time on the wider economic regulatory role of the CAA including the way in which airport regulation operates.

The work I am announcing today will be taken forward to complement the independent inquiry of the Competition Commission on its market review of BAA and the independent strategic review of the CAA being undertaken by Sir Joseph Pilling. It will allow me to provide well informed evidence to the Competition Commission for their inquiry, and allow me to respond to any relevant recommendations. My department will be advised by a panel of independent experts led by Professor Martin Cave.

The Competition Commission's report also raised a number of other issues, to which the Government will respond in due course.

Child Maintenance and Other Payments Bill

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton): My honourable friend the Parliamentary Under-Secretary of State for Work and Pensions (James Plaskitt) has made the following Statement.

The Child Maintenance and Other Payments Bill currently before Parliament provides for a non-departmental public body, the Child Maintenance and Enforcement Commission, to administer the statutory scheme of child maintenance in place of the Child Support Agency.

In order to avoid delay in the establishment of the commission, expenditure is required in advance of the Bill receiving Royal Assent. The cost of this work is estimated at £2,400,000; this will be met through repayable cash advances from the contingencies fund pending parliamentary approval of the Bill and of subsequent supply estimates.

This will cover: the recruitment of key members of staff including executive board members; changes to IT systems so that customer communications are correct following the commission’s launch; and further development of the financial and human resources system necessary for the commission to take on its functions.

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Department for International Development: Research Strategy

Lord Tunnicliffe: My right honourable friend the Secretary of State for International Development (Douglas Alexander) has made the following Written Ministerial Statement.

I have placed in the Libraries of both Houses a copy of DfID’s research strategy 2008-13.

This strategy sets out DfID’s priorities for spending up to £1 billion on research for development. It is DfID’s first five-year strategy for research, replacing the research funding framework 2005-07. The strategy is the product of extensive consultation with research providers and users in developing countries, in the UK and internationally, including other funders of development research.

The strategy describes why research for development is needed and DfID’s unique role in the global development research effort. It identifies four interdependent areas where DfID will ensure its research investment achieves results. In addition, it describes six thematic areas that DfID research will cover: growth; sustainable agriculture; climate change; health; governance in challenging environments and future challenges and opportunities (that is, anticipatory research). It describes in broad terms how funding for each of these areas is likely to evolve.

The document summarises the research management structures and funding mechanisms that DfID will use to implement the strategy, as well as the type of research partnerships DfID will build. Finally, it sets out 13 key areas where DfID will monitor and measure the outputs of its research and report on these publicly.

Food: Prices

Lord Tunnicliffe: My right honourable friend the Secretary of State for International Development (Douglas Alexander) has made the following Written Ministerial Statement.

Food prices have risen sharply around the world in recent months, causing serious social unrest and balance of payments problems for some countries and major funding gaps for humanitarian programmes. Most importantly, poor and vulnerable families across the world are struggling to buy enough food to meet the most basic needs.

The UK Government are calling for a co-ordinated international response to this crisis. It must deal with both immediate needs and underlying causes. Such a response has to address a range of issues including trade reform; more and better support for agricultural and rural development in poorer countries; review of the wider economic and environmental impacts of biofuel production; social protection programmes which take people out of long-term dependency on food aid; and reform of international institutions such as the UN’s Food and Agriculture Organisation of the United Nations, the World Food Programme, and the Consultative Group on International Agricultural Research (CGIAR).

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The UK is already doing much to tackle this agenda. We will advance the payment of budgetary support to countries badly affected by high food prices, where appropriate, and will consider the need for additional payments. We have made substantial new allocations of humanitarian assistance in recent months, in the Democratic Republic of Congo, Sudan, Afghanistan and Yemen. Today the UK is pledging an additional £30 million to support the World Food Programme’s work in some of the countries most affected by food price inflation, including Zimbabwe, Somalia and Kenya in response to recent appeals.

The UK is already spending some £50 million per year on social protection and safety net programmes in Africa alone. DfID is now willing to commit an additional £25 million to Ethiopia as part of our aid framework once the future structure of the programme is agreed. This will fund the national safety net programme which reaches 7.2 million of the most vulnerable people, providing a combination of cash and food transfers which provide food and livelihood security. Additionally, DfID is ring-fencing £4 million for nutritional monitoring across Africa to ensure early identification of problems, allowing prompt and effective response where need arises.

The announcement today of £1 billion of new funding for international research includes £400 million of new funds being made available over the next five years for agricultural research. This will help to make crops more climate-resilient; tackle the pests and diseases which blight tropical agriculture, forestry, fisheries and livestock production; and find ways of reducing the post-harvest losses which can destroy up to 40 per cent of a poor farmer’s produce.

Improving food security and livelihoods for the poorest people in the world is central to the achievement of the first millennium development goal. The UK calls on other donors to back a comprehensive international response to this challenge.

Poverty: Households Below Average Income

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton): My right honourable friend the Secretary of State for Work and Pensions (James Purnell) has made the following Statement.

The Households Below Average Income 1994-95 to 2006-07 series was due to be published on 2 May 2008. This date of the publication was announced on the National Statistics website, in line with the National Statistics code of practice.

In the course of validating the statistics, DWP statisticians identified a small but important inaccuracy in the 2006-07 data which impacts on some of the headline figures. As a result, the DWP Statistics Head of Profession has decided to delay publication of this series, along with the family resources survey and pensioner incomes series reports, which are traditionally published at the same time. The take-up of income-related benefits publication may also be delayed.

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The head of profession’s decision has been agreed by Karen Dunnell, the National Statistician, and with the Institute for Fiscal Studies, which provides an independent quality assurance role for the department in relation to the statistical series concerned.

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Publication is now expected to be in June. As before, the date of publication will be announced on the National Statistics website, in line with the National Statistics code of practice. Further details can be found in a technical note on the DWP website.

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