The Financial Services Secretary to the Treasury (Lord Myners): My honourable friend the Exchequer Secretary to the Treasury (Sarah McCarthy-Fry) has today made the following Written Ministerial Statement.
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Following the successful legal and capital restructuring of Northern Rock, which took effect on 1 January 2010, the Government, in conjunction with the Financial Services Authority (FSA), have reviewed the guarantee arrangements applying to retail deposits held with Northern Rock.
The restructuring has resulted in the formation of a strong, well capitalised, highly liquid bank that remains in government ownership. The bank is authorised and regulated by the FSA and customers' deposits are secure. The Government, in consultation with the FSA, have therefore assessed that it is now appropriate to give notice to remove the guarantee covering retail deposits in Northern Rock plc.
Accordingly, HM Treasury has today given three months' notice that the Government's retail savings guarantee for Northern Rock plc will no longer apply from 5 pm on 24 May 2010. This excludes guarantee arrangements for fixed-term deposits in existing accounts, which will terminate on maturity on the relevant fixed term. For fixed-term products renewed or extended after today's announcement, the guarantee arrangements in respect of that deposit will terminate on the date of maturity existing prior to its renewal or extension. The guarantee for wholesale borrowings of Northern Rock plc, to the extent it relates to sums which are attributable to retail deposits made with Northern Rock (Guernsey) Limited, will also be lifted at the same time.
Following lifting of the guarantee, every Northern Rock retail customer will continue to have the first £50,000 of their total deposit protected by the Financial Services Compensation Scheme (FSCS), whether their deposit is fixed-term, non-fixed term or a combination of both. This is the same level of protection that is provided for retail customers of all banks and building societies in the UK. Customers of Northern Rock (Guernsey) will continue to benefit from the Guernsey Banking Deposit Compensation Scheme.
The guarantee applying to Northern Rock's retail deposits was put in place as a temporary measure during a period of unprecedented instability in the financial markets. It was never intended to be permanent. Today's announcement affirms the strength of the new Northern Rock plc, and is a positive step in the bank's progression towards independence. Removal of the specific Northern Rock plc retail guarantee more closely aligns Northern Rock's retail depositor protection arrangements with those of all other UK banks, an important step in the normalisation of the UK retail banking market.
Counter-Terrorism Act 2008
The Financial Services Secretary to the Treasury (Lord Myners): My honourable friend the Exchequer Secretary to the Treasury (Sarah McCarthy-Fry) has made the following Written Ministerial Statement.
As outlined in Schedule 7 to the Counter-Terrorism Act 2008, the Treasury has undertaken to report to Parliament following the end of each calendar year in
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which a direction under the powers has been issued. This is the first of these reports, and covers the 2009 calendar year.
The Schedule 7 powers
Schedule 7 provides the Treasury with powers to implement a graduated range of financial restrictions in response to certain risks to the UK's national interests. The risks it addresses are those posed by money laundering, terrorist financing, and the proliferation of chemical, biological, radiological and nuclear (CBRN) weapons.
Direction issued under the powers in Schedule 7
The Treasury issued a direction under Schedule 7 powers on 12 October 2009, designating two Iranian companies: Bank Mellat and the Islamic Republic of Iran Shipping Lines (IRISL). The direction was issued on the basis that activity in Iran that facilitates the development or production of nuclear weapons poses a significant risk to the national interests of the UK. Vessels of IRISL have transported goods for both Iran's ballistic missile and nuclear programmes. Bank Mellat has provided banking services to a UN-listed organisation connected to Iran's proliferation sensitive activities, and been involved in transactions related to financing Iran's nuclear and ballistic missile programmes.
The direction requires all UK financial and credit institutions to cease business relationships and transactions with Bank Mellat and IRISL.
The direction was approved by the House of Commons on 28 October 2009 and by the House of Lords on 2 November 2009.
Bank Mellat challenged the direction in 2009, and the judicial review will be heard in 2010. IRISL also challenged the direction in early 2010.
Licensing is the means by which the Treasury can exempt business relationships or transactions between
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designated entities and UK financial and credit institutions from the requirements of the direction. The licensing regime in place for the direction against Bank Mellat and IRISL allows the Treasury to minimise the impact of the restrictions upon innocent third parties without compromising the objective of the direction. Licences are considered on a case-by-case basis.
Between 12 October and 31 December 2009, 120 licence applications were received. Of these, 90 had been processed by 31 December 2009, 87 licences had been issued, and three licences rejected.
Department for Children, Schools and Families: DEL
The Parliamentary Under-Secretary of State, Department for Children, Schools and Families (Baroness Morgan of Drefelin): My right honourable friend the Secretary of State for Children, Schools and Families (Ed Balls) has made the following Written Ministerial Statement.
Subject to parliamentary approval of any necessary Supplementary Estimate, the Department for Children, Schools and Families Departmental Expenditure Limit (DEL) will be increased by £696,511,000 from £56,415,027,000 to £57,111,538,000; the administration cost budget will be increased by £10,520,000 from £182,352,000 to £192,872,000. The Office for Standards in Education, Children's Services and Skills (OFSTED) which has a separate Estimate and DEL, will increase by £10,718,000 from £192,881,000 to £203,599,000 with the administration cost budget remaining at £28,020,000.
Within the DEL change, the impact on resources and capital are as set out in the following table:
Of which: Voted
Of which: Non-voted
Of which: Voted
Of which: Non-voted
**Of which Admin Budget
Near-cash in RDEL
49, 777, 524
48, 310, 590
* Depreciation, which forms part of resource DEL, is excluded from the total DEL, in the table above, since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.
** The total of 'Administration budget' and 'Near-cash in resource DEL' figures may well be greater than total resource DEL, due to the definitions overlapping.
*** Capital DEL includes items treated as resource in Estimates and accounts but which are treated as Capital DEL in budgets.
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Department for Children, Schools and Families
The increase in the resource element of the DEL of £496,825,000 arises from an increase in the voted element of the resource DEL of £368,992,000 and an increase of £127,833,000 in the non-voted element of resource DEL.
Voted Resource DEL
The £368,992,000 increase in the voted element of the resource DEL arises from:
a take up of End Year Flexibility of £8,800,000 for Administration costs;a take up of End Year Flexibility of £363,221,000 for Programme costs;transfers from the Department for Work and Pensions of £14,803,000 for Apprentices, Child Poverty, School Gates Project and for the Joint Birth Registration;a transfer from the Cabinet Office of £529,000 for Parliamentary Counsel;a draw down from central funds of £819,000 for implementing International Financial Reporting Standards;a movement of £4,750,000 from RfR2 to support National Training;a take up of Departmental Reserves of £64,105,000 for Youth programmes;a movement of £144,667,000 to Non-voted resource DEL to support Non-Departmental Public Bodies;a transfer to the Office for Standards in Education, Children's Services and Skills of £8,100,000 for Early Years Foundation Stage inspections;a movement of £11,028,000 to non-voted resource DEL for Partnerships for Schools;a transfer to the Scottish Office of £642,000 for the Family Fund Trust;a transfer to the Welsh Assembly of £372,000 for the Family Fund Trust;a transfer to the Northern Ireland Executive of £220,000 for the Family Fund Trust; andan increase in receipts of £47,000 for Interest on 105 Loans.
a take up of End Year Flexibility of £82,241,000 for Programme Costs;a movement of £50,000 from non-voted resource DEL for Sure Start programmes;a movement of £4,750,000 to RfR1 to support National Training; anda movement of £500,000 to non-voted resource DEL for the Children's Workforce Development Council;
Non-voted resource DEL
The £127,833,000 increase in Non-voted resource DEL arises from:
a take up of End Year Flexibility of £2,017,000 to support the British Educational Communications and Technology Agency;
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a take up of End Year Flexibility of £21,584,000 to support the Qualifications and Curriculum Authority;a take up of End Year Flexibility of £5,511,000 to support the Training and Development Agency for Schools;a take up of End Year Flexibility of £12,111,000 to support the Children's Workforce Development Council;a movement of £144,667,000 from voted resource DEL to support Non-Departmental Public Bodies;a movement of £11,028,000 from voted resource DEL for Partnerships for Schools;a transfer of £2,854,000 from the Home Office for the Migration Impact Fund;a take up of £64,105,000 from Departmental Reserves for Youth programmes;an increase of £550,000 for Consolidated Fund extra Receipts collected by the Department;a transfer of £7,734,000 to the Department for Business, Innovation and Skills for the UKCES Levy; anda movement of £50,000 from non-voted resource DEL for Sure Start programmes.
a movement of £500,000 from voted resource DEL for the Children's Workforce Development Council.
the increase in the capital element of the DEL of £199,686,000 arises from a £2,316,354,000 decrease in the voted element of capital DEL and an increase of £2,516,040,000 in the non-voted element of capital DEL.
Voted Capital DEL
The £2,316,354,000 decrease in the voted element of the capital DEL arises from:
a take up of End Year Flexibility of £16,108,000 for the purchase of the Sheffield Head Office replacement;a take up of End Year Flexibility of £55,185,000 for Children's Services through Local Authorities;a take up of End Year Flexibility of £2,900,000 for 14-19 year olds through the Learning and Skills Council;a take up of End Year Flexibility of £5,981,000 for Devolved Grants;a take up of End Year Flexibility of £25,419,000 for Building Schools for the Future;a take up of End Year Flexibility of £20,763,000 for Targeted Grants through Local Authorities;a take up of £33,792,000 from Departmental Reserves for Children's programmes not through Local Authorities;a take up of £15,000,000 from Departmental Reserves for Children's programmes through Local Authorities;
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a take up of £6,700,000 from Departmental Reserves for the purchase of the Sheffield Head Office replacement;a movement of £2,567,288,000 to non-voted resource DEL;a transfer of £161,000 to the Scottish Office for the National Society for the Prevention of Cruelty to Children;a transfer of £93,000 to the Welsh Assembly for the National Society for the Prevention of Cruelty to Children;a transfer of £55,000 to the Northern Ireland Executive for the National Society for the Prevention of Cruelty to Children; andan increase in receipts of £5,000 for the disposal of vehicles.