I am today laying before Parliament, the annual European Community Finances White Paper “Statement on the 2007 EC Budget and measures to combat fraud and financial mismanagement” (Cm 7090). This White Paper is the 27th in the series. It gives details of revenue and expenditure in the 2007 EC Budget and covers recent developments in EC financial management and measures to counter fraud against the EC Budget. It also includes information on the upcoming review of the EC Budget and recent measures taken to improve the management and control of the EC Budget, including the initiative the Government announced in November 2006.

The tax credit system has delivered three key achievements: it has improved incentives to work, reduced the tax burden on low to middle income families and helped to dramatically reduce child poverty. The National Statistics published on 22 May show that the total number of families benefiting from tax credits rose to 5.94 million in 2005-06. These statistics contain a wide range of other information about tax credits, and show that:

339,000 families benefited from the childcare element of Working Tax Credit (an 11 per cent. increase in the number benefiting in 2004-05).

89,000 families benefited from the disabled worker element (a 13 per cent. increase compared to 2004-05).

As a proportion of gross spending, end year adjustments leading to an overpayment have halved since the introduction of new tax credits to just ten per cent.

In line with expectations, end of year adjustments leading to an overpayment have fallen by a further £100 million since 2004-05, building on the significant progress made between 2003-04 and 2004-05 when overpayments fell by a fifth.

Tax credits today provide support to 20 million people including 6 million families and 10 million children. Take-up of tax credits is a significant success. In 2004-05 take-up of the Child Tax Credit rose from 79 per cent. to 82 per cent., with over 90 per cent of the money available being claimed. Take-up among those on incomes below £10,000 is 97 per cent; and take-up among lone parents is 93 per cent. This is higher than for any previous system of income-related financial support for in-work families.

Tax credits play a major role in moving people into work and helping people move up the employment ladder, ensuring that work pays over welfare. Tax credits and economic stability have helped to increase the number of people in work by over 2.5 million since spring 1997.

As a result of the Government's reforms to the tax and benefit system since 1997, from April 2007, in real terms:

families with children are, on average, £1,550 a year better off, while those in the poorest fifth will be, on average, £3,450 per year better off; and

a single-earner family on half average male earnings with two children is £3,900 a year better off.

The tax credit system has also played a key role in tackling child poverty. Since 1998-99, 600,000 children have been lifted out of relative poverty, compared to a doubling of child poverty in the previous 20 years.

Tax credits are designed to tailor support to families' specific circumstances, and to respond to their changing needs. Household incomes and circumstances that can, of course, change during the course of the year. Payments are therefore subject to adjustment during the course of the year and, if necessary, at the end of the year once these changes are known. The only way to avoid these end-year adjustments would be to have a system where payments were fixed, based on past information. This would mean that families could not benefit from this flexibility to give extra support when they need it most. Statistics published today show that between 2004-05 and 2005-06 720,000 families experienced a fall in their income, and benefited from extra support through tax credits.

Building on the significant progress made in 2004-05 when overpayments fell by a fifth, National Statistics show that end-year adjustments leading to an overpayment fell by a further £100 million in 2005-06. The figures for end-year adjustments do not show the impact of measures announced at the time of the 2005 Pre-Budget Report. Once these come fully into effect the level of end-year adjustments are expected to fall by a further third in future years.

HMRC is making good progress in implementing this package of measures, and this is already making a significant improvement to the way in which the tax credit system operates and to the outcomes for families:

the amount by which ongoing tax credit payments can be reduced in order to recover an in-year overpayment has been restricted. This gives greater certainty of award for claimants, and reduces the effect of reported changes on continuing payments.

the income disregard has been successfully increased to £25,000. This has ensured that almost all families with increasing incomes will not have their tax credit entitlement reduced in the first year of the increase, further boosting work incentives and reducing overpayments. Analysis based on data from the first two years of the system's operation indicates that about 600,000 families per year will benefit from the increase in the disregard, and two-thirds of those beneficiaries will be in the bottom 30 per cent of the income distribution.

the renewal period has been successfully reduced to five months. As a result, 1.4 million more claimants had their 2005-06 awards finalised and were off provisional payments by 31 August 2006 than by this point in the previous year. As a result of this success, in the 2006 Pre-Budget Report the Government announced that in 2007 the renewal period will be further shortened to four months. This will further reduce the time over which claimants are paid on the basis of information rolled forward from the previous tax year, which is often out of date.

new reporting arrangements have been introduced to increase the number of changes in circumstances that are reported to HMRC and reduce the time taken to report these changes. This has shortened the time when people are potentially paid too much (or too little), and was supported by an advertising campaign “when life changes”. HMRC have also sent a mailshot to claimants to remind them of the new reporting requirements and initial feedback suggests that tax credit claimants are aware of the need to report changes of circumstances promptly to HMRC.

HMRC has started to adjust future payments when an estimate of lower current year income is reported but not make a one-off payment for the earlier part of the year. When the award is finalised after the year end, any necessary adjustments to payments will be made. This will tackle the problems associated with families overestimating falls in income.

ahead of the renewals exercise, earlier this year HMRC also wrote to around 2 million low-income claimants to encourage them to provide an up-to-date estimate of income so that their provisional payments for 2007-08 can be more accurately set.

In addition to these measures, Budget 2007 announced a four-week run-on in entitlement to Working Tax Credit from the day a claimant ceases to work over 16 hours. This will reduce the number and value of overpayments occurring when people are late in reporting that they are no longer entitled to Working Tax Credit.

Accuracy in processing and calculating awards rose from 78.6 per cent. in 2003-04 to 97.7 per cent. in 2005-06. This improved performance of the tax credits system has meant that fewer overpayments are being caused by IT or administrative error.

The service received by tax credit customers has also been improved. Award notices and guidance have been improved and the "reasonable belief” test HMRC uses to decide whether to write off an overpayment has been clarified. HMRC has also improved its processes for dealing with disputed overpayments, and claimants can now expect disputed overpayments to be dealt with within four weeks.

Since the introduction of tax credits HMRC has had processes in place to deal with hardship and where appropriate can provide additional payments or collect money owed over a longer time or, in exceptional circumstances, write-off an overpayment.

End-year adjustments would be a feature of any flexible system that could respond across the year to families' circumstances as they change. Eliminating the need for adjustments would require a move to a fixed and less responsive system.

I am announcing today, subject to trades union consultation and appropriate Parliamentary consent, the creation of a new defence support group by merging together ABRO, retained DARA business units and certain other defence support facilities. This new group, operating as a trading fund, will begin formal trading by April 2008 and will focus solely on the delivery of the Defence Industrial and Technology Strategies by being a flexible, responsive, operationally excellent organisation that provides a cost competitive in-house maintenance, repair, overhaul and upgrade capability in support of the Armed Forces, operating where appropriate in partnership with industry.

DARA is undergoing a major transformation programme: the Fast Jet and Engines businesses closed in March 2007; the Rotary Wing and Components businesses are currently going through a sale process; and we have already announced the retention of the electronics business at Sealand. The VC10 business unit at St Athan has also been subject to a market testing exercise. However, as it is now apparent that sale is unlikely to offer best value for defence, the sale of the VC10 business unit will not now proceed. By retaining ownership, MOD will better manage the interface between the VC10 business and the Defence Training Review, both of which are based at St Athan in South Wales. A decision will be taken shortly on whether the best value for defence can be secured by transferring; the Rotary and Components businesses outside the MOD. If not, these business units will also form part of the new defence support organisation.

Commitment from the MOD to sustain essential levels of capability and capacity will provide the new defence support group with greater clarity and allow it to implement a programme of continuous improvement. At the same time, the new organisation will look to consolidate and build on ABRO's and DARA's existing defence industry relationships and partnerships, by entering into agreements on future equipment programmes. These will ensure MOD retains the Intellectual Property and design skills required to maintain operational sovereignty in key areas as set out in the Defence Industrial and Technology Strategies.

This announcement draws both organisations more closely into delivering key MOD strategies and supporting the Armed Forces. As the plans for the new organisation develop during the course of 2007, we are committed to consulting closely with staff and trades unions.

I represented the United Kingdom at this month's Agriculture and Fisheries Council in Brussels.

The Council once again failed to reach agreement on measures to establish a recovery plan for the European eel, due to inconclusive discussions and intransigence by some Member States. It is expected that decisions will be taken at the next meeting of the Council in June.

The Council was not able to reach agreement on implementation of a recovery plan and new quota allocation for bluefin tuna in the eastern Atlantic and the Mediterranean. This is despite significant pressure from myself, other member states and the Commission. In the end the Presidency responded to calls from France and Italy, who are the main stakeholders in the fishery, to delay. Although the result was disappointing, the Commission did declare that it would close the fishery once provisional quotas were exhausted. It is expected that decisions will be taken at the next meeting of the Council in June.

The Council held a policy debate base on a Presidency questionnaire on the Commission's Report on cross compliance. Member States expressed support for a number of measures proposed by the Commission to simplify and improve the system of cross-compliance in the Common Agricultural Policy.

The Presidency updated Council on the state of the negotiations on a proposal amending the common organisation of the market in cereals, by the abolition of maize intervention.

The Council took note of a presentation by Agriculture Commissioner on new proposals to amend the sugar restructuring fund introduced as part of the 2005 sugar reforms.

The Council reached political agreement by qualified majority on a Presidency compromise proposal, laying down for the first time rules governing the conditions under which meat chickens are kept. I voted in favour of the compromise text which puts in place a package of new measures including detailed requirements for holdings where meat chickens are kept, the introduction of a maximum stocking density limit, data collection and scientific monitoring of impacts on chicken welfare, training for the industry and a possible new welfare labelling regime following a report from the European Commission. The Directive will come into force in 2010.

The Council unanimously adopted conclusions on the outcome of a recent conference on “Animal welfare -Improving by labelling”. The Council also unanimously adopted conclusions on better regulation in the plant varieties and seeds sectors.

A number of issues, as follows, were raised under any other business:

Spain supported by some Member States expressed concern about the exclusion of banana as a sensitive product in the draft Council conclusions concerning the market access to the EU market for the African Caribbean Pacific countries (ACP) products.

The Council took note of an update by the Commission on Avian Influenza and agreed that the item should be withdrawn from the agenda of future Council sessions, unless there were significant issues to report.

The Commissioner for Health and Consumer Protection gave an update on the EC-Russian Federation veterinary and phytosanitary agreement negotiations. He also reported that Russia had also banned meat from various EU establishments due to evidence of salmonella and appealed to Member States to ensure they are fully applying the Memorandum of Understanding with Russia, so as to avoid any further problems.

The Agriculture Commissioner updated Council on the state of play in the WTO negotiations.

The Government have today sent a copy of the Department's review of all officially held papers for the period 1970-1985, including those returned to the Department from a firm of private solicitors, on blood products contaminated with Hepatitis C to Lord Archer of Sandwell's non-governmental independent inquiry and to other interested parties.

Copies have been placed in the Library.

The Government have today laid before Parliament their response to the Health Select Committee Report on Workforce Planning (Cm 7085).

The Government are responding to the conclusions and recommendations raised by the Committee covering issues such as ensuring workforce planning is a priority, the importance of strategic health authorities leading the process locally, the need for a national perspective from the Department and the Committee's concerns about the effects of the recent growth in National Health Service workforce capacity on the NHS financial position.

Copies of the response have been placed in the Library.

Copies of the Government's fourth progress report on implementing the recommendations of Sir Michael Bichard's Inquiry into events surrounding the murders of Holly Wells and Jessica Chapman have been placed in the Libraries of both Houses today. Our last report was made in May 2006 and there have been many positive developments since that date. Some 21 of Sir Michael's 31 recommendations have now been substantially delivered and we continue to press ahead with the more technically complex issues which remain outstanding.

Since we initiated work to implement the Recommendations from the Inquiry, the ambitious and far reaching programme of work has already delivered major improvements to the sharing of information to protect children and vulnerable adults. And it is increasingly apparent that our agenda is now just one part of a much bigger framework covering the use of information to support public protection. So the Government are determined, as they were from day one, to implement the necessary improvements from this crucial work, which demands continuing focus and priority. This latest update clearly reinforces the Government's ongoing commitment to full delivery.

A key objective from the outset has been the delivery of the Impact Programme and we remain committed to delivering the significant improvements which will meet Recommendations 1 and 4. We have achieved much already, as previously reported, and since the delivery of the first, incremental achievements, the ongoing practical benefits to the Police Service have become clear to see. Impact Nominal Index (INI) continues to prove itself to be an invaluable tool in the Police's armoury against those who would seek to do harm to the vulnerable, for example, with over 140,000 searches conducted on the system by the end of March and decisions in some 670 child protection cases referred to the police being changed as a result. But there is still some way to go to realise the ultimate goals of the Programme. After a review of options in consultation with the main stakeholders, we have decided not to deploy the CRISP application as an interim solution. Our primary focus and efforts are now delivery of the new Police National Database, which will meet our pledge of a national police intelligence sharing capability. This work is now being led and managed by the Police Service itself, through the new National Policing Improvement Agency with its clear focus on policing needs, and is forming the central strand of its comprehensive and practical strategy for matching information systems and technology to policing priorities. The Agency is also overseeing the ongoing implementation by Police Forces of the statutory Code of Practice on police information management, which came into force in 2005. This, together with the accompanying operational guidance, will ensure improved national standards are properly embedded in day to day policing.

The other major focus of our work has been the implementation of the new Vetting and Barring Scheme, which will cover those seeking to work with children and replace the existing arrangements. Following Royal Assent for the Safeguarding Vulnerable Groups Act 2006, under which the Scheme is established, work has been stepped up to deliver what represents a world-leading and highly innovative system for controlling access to children and vulnerable adults.

Cabinet colleagues at DfES and DH continue to work closely on this important initiative and we look forward to the launch of the Independent Barring Board in 2008, which will work alongside the Criminal Records Bureau and lead the discretionary decision-making process for the more difficult cases.

Elsewhere, progress is being made although in some areas technical issues have meant that timetables have had to be revised. The Home Secretary reported last May that we hoped to have achieved direct updating of Courts' resulting to the Police National Computer by the end of 2008. Whilst my determination—and that of Ministerial colleagues at the Ministry of Justice—to achieve this remains undiminished, it has been necessary to drive forward this complex change in step with the wider IT-enabled reforms to the criminal justice system the Ministry of Justice is delivering and so we plan to achieve delivery of Recommendation 7 by the end of the 2008-09 financial year. In the meantime, Police Forces' performance in updating PNC under the current arrangements remains a broadly sound and improving picture, under the close scrutiny of Her Majesty's Inspectorate of Constabulary.

We continue to see increasing take-up of the voluntary training for head teachers and school governors, which focuses on the critical importance of being aware of safeguarding issues when recruiting staff. And we have now developed and rolled out new initiatives to extend the training more widely, in schools and other local authority sectors.

While we continue to make progress in implementing the Recommendations, it is important to note this work is about more than simply delivering new frameworks and arrangements, such as best practice guidance. We are seeking to address cultural or organisational obstacles through IT-enabled business change, such as new information sharing capabilities. We have already achieved real improvements but must be ever vigilant about the risks to the vulnerable members of society.

Furthermore, we must join up systems effectively between the various jurisdictions within the UK and internationally. The difficulties around the notifications of UK citizens convicted in Europe, which came to light earlier this year and which we have been addressing, were a strong reminder that we must be constantly vigilant to ensure systems, both local and national/ international, are all working as they should. Within government and in the key agencies delivering public services, work to safeguard the vulnerable members of the community must be a core priority.

The Bichard work has been the single largest contributor to that cultural change and I am pleased to commend the progress to this House.

Further to my right hon. Friend the Home Secretary's statement to Parliament on 16 January, I would like to provide an update to the House on the work that has been undertaken to deal with the issue of overseas convictions of UK citizens.

Members will recall that, during a Home Affairs Select Committee meeting on 9 January, it came to light that there was a backlog of files containing information about such convictions.

It was clear that that the existing systems were inadequate and the Home Secretary asked Sir David Normington to initiate an immediate inquiry to find out how the backlog arose and why it was not dealt with sooner. The inquiry was undertaken by Dusty Amroliwala and reported on 2 March. Sir David has acknowledged that there are lessons to be learned from the report in a number of key areas including working practices, risk management and leadership. The Home Office already has a comprehensive programme of reform in place and these lessons are being incorporated in that reform agenda.

In his statement to Parliament on 10 January, my right hon. Friend the Home Secretary said that we hoped to have dealt with the backlog within three months. I am pleased to be able to report that it was fully processed onto the Police National Computer (PNC) before the end of April. Copies of a report on the process and outcome have been placed in the Libraries of both Houses today.

As well as entering the offenders in the backlog onto the PNC, a range of checks and actions has been taken to help ensure the protection of the public. These include checks via the Criminal Records Bureau and with the Prison and Probation Services. This has been a UK-wide initiative and similar public protection processes have been carried out in Scotland and Northern Ireland. Full details are in the progress report.

We are very grateful to the Association of Chief Police Officers, the Criminal Records Bureau and the other organisations involved for all the support and assistance they have provided in processing the backlog and facilitating the public protection work.

Despite the positive progress we have made in this immediate area, we remain concerned about the complexity of the connected issues we face across Government and beyond. This is not helped by the differences in systems, procedures and criteria for recording information about criminality and using it for public protection purposes, both within this country and beyond the UK. The Home Secretary has therefore asked Sir Ian Magee to undertake a review, comprising two distinct parts. The first will focus on scoping the problems, assessing what deficiencies there are and where they lie. The second part will concentrate on conclusions and recommendations for improving the recording and sharing of criminality data, with a firm grounding in what is realistic and achievable.

I am announcing the membership of the reconstituted Northern Ireland Policing Board to take effect from today. The cross-community Board is one of the great successes flowing from the Belfast Agreement. I would like to pay tribute to all former Board members for the considerable contribution they have made to policing in Northern Ireland and the crucial role they have played in ensuring that the PSNI is effective, efficient and responsive to the needs of the community.

The new membership of the Board is as follows:

Tom Buchanan MLA,

The Right Hon. Jeffrey Donaldson MP, MLA,

David Simpson MP, MLA,

Peter Weir MLA,

Leslie Cree MLA,

Basil McCrea MLA,

Martina Anderson MLA,

Alex Maskey MLA,

Daithi McKay MLA,

Dolores Kelly MLA,

Professor Sir Desmond Rea,

Barry Gilligan,

Rosaleen Moore,

Suneil Sharma,

Brian Rea MBE JP,

Trevor Ringland,

David Rose,

Gearoid OhEara

Mary McKee.

My right hon. Friend the Attorney General has made the following written ministerial statement:

“Today the Crown Prosecution Service (CPS) has decided, after applying the evidential and public interest tests set out in the Code for Crown Prosecutors, to prosecute Mr Andrey Konstantinovich Lugovoy, a Russian citizen, for the murder of Alexander Valterovich Litvinenko. The CPS decision was reached after they had consulted the Attorney-General, which is the usual practice in serious and complex cases. The CPS have concluded that there is sufficient evidence to prosecute Mr Lugovoy for murder and it is in the public interest to do so.

It is alleged that in London on or about 1 November 2006, Mr Lugovoy poisoned Mr Litvinenko by administering a lethal dose of Polonium 210, a radioactive material. Mr Litvinenko died on 23 November 2006 in a London hospital of an acute radiation injury.

The CPS will now take immediate steps to seek the extradition of Mr Lugovoy from Russia to the United Kingdom so that he can be charged and prosecuted for murder in this country.

The Attorney-General agrees with the CPS decision.”

The Department for Transport has today published the East Midlands Regional Planning Assessment for the railway (RPA), the latest in the series of 11 RPAs covering England and Wales.

Copies of the document have been placed in both Libraries of the House and can also be downloaded from the Department's website http://www.dft.gov.uk.

The East Midlands RPA covers the entire East Midlands region including Derby, Leicester and Nottingham Cities, Rutland, Derbyshire, Leicestershire, Lincolnshire, Northamptonshire and Nottinghamshire.

RPAs provide the link between regional spatial planning (including preparation of regional transport strategies) and planning for the railway by both Government and the rail industry, and are designed to inform the development of the Government's strategy for the railway. They look at the challenges and options for development of the railway over the next 20 years, in the wider context of forecast change in population, the economy and travel behaviour.

A RPA does not commit the Government to specific proposals. Instead it sets out the Government' s current thinking on how the railway might best be developed to allow wider planning objectives for a region to be met, and identifies the priorities for further development work.

It is the Government's intention to publish the remaining RPAs covering the Thames Valley, Yorkshire and Humber, and Wales, during this summer.

I am today publishing a draft Local Transport Bill, for public consultation and parliamentary pre-legislative scrutiny. The draft Bill contains legislative proposals to help tackle congestion and improve public transport. Copies of the draft Bill, a consultation paper and other accompanying documents are available in the Libraries of the House and the Vote Office.

Our transport system plays a crucial role in our economy and society, and, in an increasingly inter-connected world, efficient transport networks are now more important than ever. We also need to ensure we continue to balance the needs of the economy with those of our environment and society. We have made huge progress over the past decade, but we need to ensure that our legislative and institutional frameworks keep pace with the many changes that are going on in the world around us.

The Eddington Transport Study, published in December last year, provided a number of timely recommendations to enhance the delivery of transport in the UK's cities. These recommendations were aimed at better equipping us to address the high potential future cost of congestion and ensure transport can continue to sustain economic growth.

I am committed to ensuring that we are well equipped to meet not only today's transport challenges, but also those of 10 or 20 years' time. The draft Local Transport Bill is a demonstration of that commitment. It is a key part of our strategy to empower local authorities to take appropriate steps to meet local transport needs in the light of local circumstances.

The draft Bill sets out our legislative proposals to:

enable local authorities to improve the quality of local bus services, building on the measures set out last December in “Putting Passengers First”

reform the arrangements for local transport governance in our major conurbations, to ensure strong local leadership and a coherent approach to transport across individual local authority boundaries and across different transport modes; and

reform the existing legislation relating to local road pricing schemes to ensure that, where local authorities wish to develop local schemes, they have the freedom and flexibility to do so in a way that best meets local needs. It will also help to ensure that any schemes are consistent and interoperable from the road user's perspective.

Consistent with our longer-term strategy on road pricing, the draft Bill would not provide the legal powers that would be needed for a national system of road pricing: we have made clear that decisions on that can be taken only in the light of further practical experience of local schemes. Further, separate, legislation would be needed if in future a decision was taken to move towards a national scheme and there would need to be a full and informed public debate.

Publication of the draft Bill provides an important opportunity to ensure we get our proposals right through public consultation, and for Parliament to scrutinise the legislation in draft. We need to learn from and build on the diversity of experience of transport professionals and transport users across the country, and I encourage all interested parties to participate in the consultation process.

On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the BFI inspection reports on the following councils were published on Manchester City Council, South Lakeland District Council and Staffordshire Moorlands District Council. Copies have been placed in the Library.

The BFI reports detail a range of strengths and weaknesses in the housing benefit services provided by councils and make recommendations to improve the security and efficiency of benefit delivery.

My right hon. Friend the Secretary of State is considering the reports and may ask the councils for proposals in response to BFI's findings.