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Written Statements

Volume 461: debated on Thursday 21 June 2007

Written Ministerial Statements

Thursday 21 June 2007


Financial Services Authority

The annual report 2006-07 of the Financial Services Authority (FSA) has today been laid before Parliament. Copies are available in the Libraries of both Houses.

The report forms a key part of the accountability mechanism for the Financial Services Authority under the Financial Services and Markets Act 2000 (FSMA), and assesses the performance of the Financial Services Authority over the year ended 31 March 2007 against its statutory objectives.

London Insurance Market Reform

Following Budget 2006, the Chancellor established a High Level Group to consider issues related to the international competitiveness of the UK financial sector, recognising the opportunities presented by emerging markets and the strength of international competition from other financial centres. As part of this work, the Chancellor asked Lord Levene, Graham Millwater and Andrew Kendrick to review the business processes of the London market. The Treasury too has been working closely with the Financial Services Authority and the wholesale general insurance market to identify market led reform and modernisation that can enable the industry to remain competitive in a global market. The Treasury has also been developing its understanding of the business environment for this sector. The Treasury, Financial Services Authority and wholesale general insurance market will take stock again and assess progress in the autumn.

As part of this wider work on reforms of the London insurance market, Lloyd’s of London has been working with the Treasury to identify areas where its corporate governance arrangements are out of step with modern practices. Following these discussions, the Treasury has decided to develop legislative proposals to modernise the governance arrangement for Lloyd’s. These proposals will take the form of a Legislative Reform Order to amend Lloyd’s Act 1982. The aim of the proposals will be to update the governance arrangements of the market to reduce costs and unnecessary bureaucracy. The Treasury will have extensive consultation with interested parties and intends to publish proposals in the New Year. Any proposals will meet the preconditions and restrictions of the Legislative and Regulatory Reform Act 2006.

Companies' Foreign Profits

The Treasury has today published a discussion paper entitled “The Taxation of the Foreign Profits of Companies: A Discussion Document”. Copies of the document are available in the Vote Office and the Libraries of both Houses.

Credit Unions

There are currently over 2.6 million Child Trust Fund accounts open of which around three-quarters have been actively opened by parents. The Government are committed to ensuring that all families, including lower income families, get the most from the scheme.

The Government believe that credit unions have an important role to play in delivering the Child Trust Fund. Credit unions offer a community-based alternative for people who may lack financial confidence, and be initially wary of large, commercial banks and building societies.

Where credit unions serve communities in low-income areas, they can be vital in targeting those encountering exclusion from mainstream financial services, helping clients obtain money advice in the course of providing a loan, and connecting people to other mainstream opportunities. The Government hope that credit unions will take full advantage of the opportunities offered by the Child Trust Fund to build on this success.

Child Trust Fund rules allow credit unions to offer both cash and Stakeholder accounts. The Government are encouraged that several credit unions have already chosen to provide these accounts: Leeds City Credit Union, Clwyd Coast Credit Union, Leicester Credit Union, Dragonsavers, Loans and Savings Abertawe and Bristol Credit Union, and are keen to see more do so in the future.

All MPs with credit unions in their Constituencies have a role to play in encouraging their participation in the Child Trust Fund scheme so that we can achieve our goal of giving every child the best start in life. Credit unions interested in becoming a provider can find more information at

Credit Unions

Following my announcement in November 2006 of a review of co-operatives legislation—principally the Industrial and Provident Society Acts and Credit Unions Act—the Treasury has been carrying out research and holding informal discussions with representatives of the sector and other stakeholders.

I am now able to announce the publication of the first stage of a two-stage consultation to be undertaken by the Treasury, which will seek to identify the legislative needs of cooperatives and credit unions and put forward the most effective solutions. The aim of the review is not to give mutuality a privileged position but to allow the whole mutual sector—including building societies and friendly societies—to compete on a level playing field and to remove artificial restrictions that do not provide any benefit to members.

The focus of the review is on cooperatives and credit unions because their legislation is the oldest and most disparate. Important changes to the legislation have been made in recent years, particularly, through the Industrial and Provident Societies Act 2002, and the Co-operatives and Community Benefit Societies Act 2003

This review will build on that earlier work, clarify the needs of the sector and identify the right outcomes. The review will impact on over 8,000 industrial and provident societies and over 500 credit unions.

The first stage of the review will close for responses on 12 September 2007. We hope to begin the second stage as soon as possible thereafter. Copies of the review are available in the Vote Office and Libraries of both Houses and will be published on the Treasury website.

Communities and Local Government

Hot Water Safety

The Parliamentary Under-Secretary of State for Communities and Local Government
(Angela E. Smith)

The Government are committed to ensuring that Building Regulations support the safety of hot water systems in the home. We have been working closely with the industry to develop guidelines and training notes to help ensure that those who install and maintain these systems are aware of the problems and dangers posed. I am very grateful to the industry for the work that has already been done.

However, it's clear we should do more as in the last six months there have been a number of tragic incidents as a result of defective hot water systems. I am therefore announcing today that I will undertake a new review of Part G of the Building Regulations to determine whether changes are needed, and can be made, that would improve the safety of these systems in the future. This review will cover the whole of Part G dealing with sanitary installations and the hot water systems that serve them as one package. The Department is now considering the scope of the review with the intention of beginning informal consultations shortly.

It is clear that a balance must be struck between ensuring health and safety risks are tackled without placing undue regulatory burdens on industry. The proposals for any amendments will be subject to full consultation and regulatory appraisal.

Social Housing

My hon. Friend the Under Secretary of State for Defence and Minister for Veterans and I have recently reviewed the way in which current housing legislation impacts on those leaving the Armed Forces. This follows representations from Service personnel and others that the local connection provisions in housing legislation put Service personnel and those leaving the Armed Forces at a disadvantage when trying to access social housing.

Local authorities in England are responsible for framing their own policies and procedures for allocating social housing. In deciding who gets priority for social housing, housing legislation allows local authorities to take into account whether someone has a local connection with their district. Not all local authorities take local connection into account. Where they do, the legislation can put Service personnel at a disadvantage since an individual cannot establish a local connection with an area through residence or employment there when serving in the Armed Forces.

The Government are committed to aiding the effective transition of Service personnel to civilian life, and access to suitable housing is a vital part of this. Many will have bought their own home during their time in Service—and the Ministry of Defence has several schemes in place to encourage this—or will do so on leaving. However, for some Service leavers home ownership may not be an option and they may wish to apply for social housing. We believe it is important that the service they have given to their country does not place them at any disadvantage in this respect. The Government have therefore decided to make the necessary changes to housing legislation, at the earliest opportunity, to ensure that Service personnel are treated fairly and put on an equal footing with other people applying for social housing.

The detail of how the change will be effected will need to await the outcome of the current review of housing policy which the Secretary of State for Communities and Local Government announced, following publication of Professor Hills' wide ranging report on social housing on 20 February 2007. We will bring forward our proposals in due course.

Education and Skills

Care Matters: Time for Change

A year ago, when I was appointed as Education Secretary, I said that children in care would be my top priority so I am genuinely delighted to be able to announce that the White Paper “Care Matters: Time for Change”, is available on the DFES website. There is no more deserving or vulnerable group than the nation's 60,000 children in care. This White Paper aims to ensure that the State's expectations for them match the aspirations that loving parents would have for their own children. The measures focus on improving stability and outcomes for children in care, backed by a £305 million financial package over the next four years.

The paper includes measures on promoting family and friends care:

requiring local authorities to consider family and friends as carers at each stage of the decision making about the child's future—as a first resort not a last;

legislating to enable relatives who are carers to more easily apply for residence orders;

providing better intensive support for families with young people on the edge of care—'Multi-systemic therapy'.

There are also measures to promote stable, successful placements and education:

increased funding for parenting support for foster carers (£6 million), with clear national skills and standards, and increased access to specialist training and support;

improved recruitment and retention: support for new social workers and improved training across the board;

piloting European models of social work (social pedagogy) to improve the quality of residential care; and

protection against unnecessary school moves—particularly in the GCSE years.

The White Paper will ensure access to leisure activities, personalised education for all children in care and increasing educational support for those who are falling behind:

children in care have the highest priority in school admissions, with an expectation that they will get places in the best schools, even if they are full;

children in care at risk of falling behind will get a £500 allowance to support their education and we will improve support for attendance, in part by revising the minimum standards for children's homes; and

free access to after school activities, free music tuition in schools and an expectation that local authorities will make their own leisure provision free for children in care.

Lastly, there will be greater support for young people moving from care into adulthood:

piloting “Right2B Cared4”—giving young people a greater say over when they leave care, so they move when they ready;

extending the entitlement to a personal advisor up to age 25 for care leavers who are in education or want to return to education;

introducing a national bursary of a minimum of £2000 for all young people in care entering university;

expecting local authorities and their partners to offer employment opportunities and training to care leavers and young people in care; and

for every year they are in care, each child will get a £100 top up in their Child Trust Fund account.

This document builds on the Green Paper “Care Matters: Transforming the Lives of Children and Young People in Care”, published in October 2006. It also takes on the messages we heard from young people in care and others in the consultation responses, which we published earlier this year and which are also available on our website.

Environment, Food and Rural Affairs

Government Decontamination Service

The 2006-07 Annual Report and Accounts for the Government Decontamination Service will be laid before Parliament today.

Copies will be available in the Libraries of both Houses.

Home Department

Control Orders

Section 14(1) of the Prevention of Terrorism Act 2005 (the 2005 Act) requires the Secretary of State to report to Parliament as soon as reasonably practicable after the end of every relevant three-month period on the exercise of the control order powers during that period.

The level of information provided will always be subject to slight variations based on operational advice.

Control orders continue to be an essential tool to protect the public from terrorism, particularly where it is not possible to prosecute individuals for terrorist-related activity and, in the case of foreign nationals, where they cannot be removed from the UK.

During the period 11 March 2007 to 10 June 2007, one new control order was made with the permission of the court under section 3(1 )(a) of the 2005 Act and, on 30 March 2007, served on a British citizen. This replaced an order, relating to an individual referred to as AF, that was quashed by the High Court.

During this reporting period, no control orders were renewed in accordance with section 2(4)(b) of the 2005 Act.

One control order has expired since the last report.

In total, therefore, there are seventeen control orders currently in force, eight of which are in respect of British citizens. Seven of the individuals live in the Metropolitan Police Service area; the rest fall within other police force areas.

As Parliament will be aware, four of the seventeen individuals currently subject to a control order have absconded—one in January 2007 and three in May 2007. Details in relation to the three absconds that took place during this reporting period were given in my statement of 24 May. Parliament has also previously been informed of two other absconds: the individual who absconded in August 2006, after a control order was made, for example, signed against that individual, but before it had been served on him (this order has therefore never been in operation); and the individual who absconded in September 2006, who is no longer subject to a control order, as the order expired during this reporting period.

The High Court anonymity orders for the August and September 2006 absconders were lifted at a High Court hearing on 25 May. However, an extant anonymity order remained in place with regard to criminal proceedings in relation to the September 2006 absconder, so his identity was not made public at that time. For police operational and legal reasons, the Government are not currently seeking to lift the anonymity of the other (January 2007) absconder. Finding individuals who have absconded is an operational matter for the police, and investigations are ongoing.

During the period, sixteen modifications of control order obligations were made and fourteen requests to modify a control order obligation were refused. A right of appeal exists in section 10(3) of the 2005 Act against a decision by the Secretary of State in relation to an application by an individual subject to a non-derogating control order to revoke such an order or modify an obligation imposed by such an order. An appeal has been made in respect of one modification request that was refused.

Control order obligations are tailored to the individual concerned, and are based on the risk that individual poses. Each control order is kept under review to ensure their continuance and obligations remain necessary and proportionate. Specifically, as Lord Carlile recommended in his February 2006 report on the operation of the control order system, the Home Office has established a review group, with representation from law enforcement and intelligence agencies, to keep the obligations in every control order under regular (quarterly), formal and audited review.

Breaches of control orders could arise from any obligation, and could include arriving home after commencement of a curfew period or breaking geographical boundary restrictions on movement. During this period, one individual has been charged with breach of control order obligations relating to curfew. This individual is currently on bail.

During this reporting period, three court judgments relating to control orders were handed down. Two were in the High Court. In both Secretary of State for the Home Department v AF [2007] EWHC 651 (Admin) and Secretary of State for the Home Department v Mahmoud Abu Rideh [2007] EWHC 804 (Admin), the High Court quashed the control order in question as it found that the control order obligations cumulatively amounted to a deprivation of the individual’s liberty under article 5(1) ECHR. In both cases, the court accepted that the Secretary of State had reasonable grounds for suspecting that the individual was involved in terrorism-related activity. The Secretary of State is appealing these judgments.

Judgment was also handed down by the Court of Appeal in the case of Secretary of State for the Home Department v E and S [2007] EWCA Civ 459. The Court of Appeal concluded that the obligations in E’s control order did not cumulatively amount to a deprivation of liberty. It also judged that while there was a breach of the obligation to keep prosecution under review, the quashing of the order was not the appropriate remedy for this failure. Consequently the Court of Appeal allowed the Secretary of State’s appeal against the High Court judgment, and upheld the control order.

The Secretary of State’s appeal in relation to the AF judgment has leapfrogged the Court of Appeal, and will be heard together with the JJ and others and MB cases in the House of Lords, which are now scheduled to be heard in early July. E’s appeal against the Court of Appeal’s judgment will also be heard together with these cases. However, the Rideh case will not be heard by the Lords at that time.


I am today informing Parliament of an ongoing police operation to locate a foreign national who is believed to have absconded from his control order on the night of 18 June. This individual was placed under a control order in November 2005.

Public safety is the top priority for the Government and the police. Locating this individual is an operational matter for the police, and an active investigation is underway. An anonymity order is in place and, on the operational advice of the police, the Government is not currently seeking to overturn it. This will be kept under review.

The Government have consistently made clear its view that control orders are less than 100 per cent. effective in countering terrorism. As we have repeatedly made clear to the House, there are limitations and problems with the legal framework under which we must operate. The Government must operate under the constraints imposed by Parliament, the courts and the law. Control orders are not even our second—or third—best option for dealing with suspected terrorists. But under our existing laws they are as far as we can go.

In this case, the obligations included a tag, 14-hour curfew, a requirement to remain within a restricted area, reside at a specified address and restrictions on finance and communications. They are the most stringent obligations we could impose in this individual's case. He was previously subject to stricter controls but these had to be revised in light of last year’s Court of Appeal judgment in this and other cases.

Unfortunately, within these limits, it is very difficult to prevent determined individuals from absconding. I am already appealing to the House of Lords this and several other control order cases, concerning the interpretation of article 5 ECHR (deprivation of liberty). We will consider other options—including derogation—if we have exhausted ways of overturning previous judgments on this issue.

Criminal Injuries Compensation

I am today laying before Parliament, with the Comptroller and Auditor General, the annual report and accounts for 2005-06 for the Criminal Injuries Compensation Authority. It is being laid before the Scottish Parliament by the Scottish Ministers simultaneously. The annual report and accounts will be published by 29 June.

The annual report and accounts describe the activities of the authority in paying financial compensation to victims of violent crime, under the terms of the Criminal Injuries Compensation Act 1995.

The accounts estimate the final settlement value of cases in progress and the predicted value of applications which have not yet been received in respect of crimes that have already occurred. As a result, the balance sheet at 31 March 2006 shows net liabilities of £1,252 million and an operating surplus of £4 million.

In 2005-06 the authority received 63,078 applications for compensation and resolved 62,073. The number of cases outstanding at 31 March 2006 was 85,689. The proportion of cases decided within 12 months was 69.1 per cent.


Public Guardian Board

My right hon. and noble Friend the Parliamentary Under-Secretary of State Baroness Ashton of Upholland has made the following written ministerial statement.

“Today I have laid the Public Guardian Board Regulations 2007 before Parliament. The Mental Capacity Act 2005 provides the framework for making decisions and acting on behalf of individuals who lack capacity to make decisions for themselves. The Act aims both to protect people who lack capacity and to maximise their autonomy and ability to participate in decision-making.

The Act establishes a new statutory office holder, the Public Guardian, with specific functions intended to ensure that attorneys and deputies appointed to make decisions on behalf of people who lack capacity do so in accordance with their powers. The Act also establishes a Public Guardian Board to oversee the functions of the Public Guardian. The board’s duty is to scrutinise and review the way in which the Public Guardian discharges his functions and to make recommendations to the Lord Chancellor as it thinks appropriate. The regulations prescribe requirements for the selection of the board’s chair, the term of office of members, the resignation, suspension or removal of members and other procedural matters.

I will today announce the appointment of the seven inaugural members of the Public Guardian Board. The board is operating in shadow form until October 2007 when it will take on its full statutory role”.

Secure Training Centres

The recent inquest into the death in 2004 of Adam Rickwood has drawn attention to a lack of clarity as to the powers of custody officers in secure training centres to restrain trainees, where it is necessary to do so. We have been asked by the coroner to rectify the position and clarify the rules.

This clarification is not designed to promote greater use of physical restraint. The Youth Justice Board’s code of practice “Managing Children and Young People’s Behaviour in the Secure Estate” states that restrictive physical interventions must only be used as a last resort, when there is no alternative available or other options have been exhausted. That continues to apply. The Youth Justice Board is working closely with all under-18 custodial establishments, including secure training centres, on all matters relating to the code of practice.

The Criminal Justice and Public Order Act 1994 provides for the setting up of secure training centres and also for the powers and duties of custody officers at contracted-out centres. Section 9(3) specifies four duties, which include ensuring good order and discipline on the part of trainees. Section 9(4) provides that the powers arising by virtue of those duties shall include power to use reasonable force where necessary.

“Good Order and Discipline” is not defined in the legislation. It is critical for the safety and wellbeing of children, young people and staff in secure settings, and for the stability of secure establishments that appropriate powers are available to manage the behaviour of the troubled and sometimes troublesome young people in their care. The Government take very seriously the wellbeing of children held in secure settings.

We would not anticipate that a refusal to comply with an instruction alone would constitute a breach of good order and discipline. However, where the circumstances of the refusal are such that the refusal to comply with an instruction has wider implications for the safe running of the centre, undermining the general authority of the staff or putting safety or security at risk in some other way, then a genuine concern about good order and discipline may arise.

When it is necessary to resolve a refusal to comply to ensure the safe running of the centre, physical restraint must only be used as a last resort. The YJB code of practice sets out the principles underpinning behaviour management. The strategies in place emphasise:

an expectation of positive behaviour within an environment of mutual respect.

a child-centred culture.

high quality relationships between young people and staff.

Physical restraint would only ever be used when there is no alternative available or other options have been exhausted.

Rule 38 of the Secure Training Centre Rules 1998 specifies the purposes for which physical restraint may be used. It did not originally refer to ensuring good order and discipline: secure training centres have relied on the Criminal Justice and Public Order Act 1994 as giving the necessary authority for that purpose. However, following the inquest into Adam’s death, the coroner recommended urgent clarification of the interrelationship between the Criminal Justice and Public Order Act 1994 and the Secure Training Centre Rules. We have acted promptly in response to his recommendation.

The Secure Training Centre (Amendment) Rules 2007 were laid before Parliament on 13 June and come into effect on 6 July. They enable a trainee to be removed from association in the interests of good order and discipline; and permit physical restraint to be used to ensure good order and discipline.

Cabinet Office

Public Sector Bureaucracy

I am today announcing the publication of “Cutting Bureaucracy for our Public Services”, a strategy for better regulation of front line public sector organisations.

The strategy acknowledges that accountability and performance management is very important and has delivered changes that benefit the public. But as we move into the next phase of public sector reform, it makes sense to look to see what unnecessary bureaucracy there might be and what more we can do to ensure our front line staff have the freedom to do their jobs.

The strategy sets out steps which the Government will be taking to cut unnecessary bureaucracy which public service workers in delivery organisations have to deal with. The strategy is part of the Government’s overall better regulation agenda, and fits with similar initiatives already introduced to reduce burdens in the private and voluntary sectors.

The proposals in the strategy reflect good work already underway in Departments, but also recognise the need for a more comprehensive and coordinated approach. Departments will collectively, for the first time, identify all the data requirements they place on the front line and set targets for reduction. Front line staff will be given the opportunity to challenge bad regulation if they find it. Departmental progress will be set out in simplification plans, starting this autumn.

Copies of the strategy have been placed in the Library of the House for the reference of Members. The strategy will also be available for viewing on the Better Regulation Executive website (

Trade and Industry

Business Support

Tomorrow we are launching a consultation on how Government can better support business in the future. We are looking not just at the support that we provide, but much more broadly across the whole of Government.

The consultation document sets out our proposals for simplifying publicly funded business support schemes in England to no more than 100 by 2010 and ensuring these are easy to access, effective and good value for money.

It outlines and seeks views on what the Government should fund in the future; the route for businesses and entrepreneurs to access support and how to avoid business support schemes proliferating in the future.

We are consulting businesses, including social enterprises, business representatives, local authorities, organisations that support business and other interested parties. The consultation will run from 22 June to 14 September. Copies of the consultation document will be available in the Libraries of both Houses and the document will be on the DTI website at:

Low Pay Commission

We are today setting the Low Pay Commission as follows:

LPC terms of reference for their 2008 report.

The Low Pay Commission is asked to:

Monitor, evaluate and review the NMW and its impact, with particular reference to the effect on pay, employment and competitiveness in the low paying sectors and small firms; the effect on different groups of workers, including different age groups, ethnic minorities, women and people with disabilities and migrant workers; the effect on pay structures; and taking into account any forthcoming changes to the statutory annual leave entitlement; review the levels of each of the different minimum wage rates and make recommendations for October 2008.

Contribute to Government consultations and reviews on major policy issues impacting the national minimum wage.

Report to the Prime Minister and Secretary of State for Trade and Industry by the end of February 2008.

The Government consider it inappropriate for the Low Pay Commission to review apprentice and pre-apprentice exemptions at this time, as the Government are currently consulting on plans to raise the participation age in education, which includes plans to expand apprenticeships.

Royal Mail and Post Office Limited

I answered a Parliamentary Question from my hon. friend the Member for Vauxhall (Kate Hoey) on, 7 June 2007, Official Report, column 697W. I would add that Articles 22 and 27 of the Services Directive do require the United Kingdom to impose some obligations upon service providers. The definition of service providers is broad and would be likely to include Royal Mail and Post Office Limited

Article 22 obliges member states to ensure that service providers such as Royal Mail and Post Office Limited make certain information available to service recipients. The information required to be made available is set out in Article 22(1). Additional information of the type set out in Article 22(3) must be provided at the recipient's request. The information required must be made available in a clear and unambiguous manner and in good time before the conclusion of the written contract or the provision of the service. Article 27 of the Services Directive obliges the United Kingdom to take the general measures necessary to ensure that service providers, such as Royal Mail and Post Office Limited, provide contact details to which recipients can send a complaint or a request for information about the service provided. The United Kingdom is also obliged to ensure that service providers respond to complaints within the shortest possible time and make their best efforts to find a satisfactory solution. Service providers will need to demonstrate compliance with these information requirements and demonstrate that the information provided is accurate.



I have today published a consultation paper setting out the Government’s draft proposals on the detail of the environmental and sustainability reporting requirements for the proposed Renewable Transport Fuel Obligation (RTFO). Copies have been placed in the Libraries of both Houses. The consultation closes on 13 September 2007.

The consultation seeks views on matters such as:

the scope and format of monthly and annual reports;

the verification requirements; and

the default values to be used to calculate the carbon savings offered by different biofuels where specific data is not available.

Final decisions on the precise reporting requirements will be a matter for the Office of the Renewable Fuels Agency which will be established by the RTFO Order as the Administrator of the RTFO.

The RTFO’s carbon and sustainability reporting requirements are a necessary first step on the road to linking the issue of certificates with mandatory carbon saving and sustainability requirements. In the light of the responses we have received to our earlier consultation on the design of the RTFO and the recent G8 communiqué which reinforces the need to establish international biofuel quality standards and avoid the possible negative side effects of biofuel development, I am today announcing that the Government:

aims to reward biofuels under the RTFO in accordance with the carbon savings that they offer from April 2010, provided that this is compatible with World Trade Organisation rules and EU technical standards requirements, and is consistent with the policy framework being developed by the European Commission as part of the review of the biofuels directive, and subject to consultation on its environmental and economic impacts.

aims to reward biofuels under the RTFO only if the feedstocks from which they are produced meet appropriate sustainability standards from April 2011, subject to the same provisos and consultation as above and subject to the development of such standards for the relevant feedstocks.

will continue to work closely with out partners at a national, European and international level to develop robust standards for ensuring the sustainability of biofuels and to ensure that early consideration is given to the WTO implications of the UK’s policy intentions.

will ask the RTFO Administrator to report to the Secretary of State every three months on the effectiveness of the RTFO’s environmental reporting mechanisms, and on the carbon and sustainability effects of the RTFO. The Government will keep the RTFO under review in the light of these reports.

intends to set stretching indicative targets for the level of carbon and sustainability performance expected from all transport fuel suppliers claiming certificates for biofuels in the early years of the RTFO. These targets, which are included in the consultation paper we are publishing today, cover:

the level of greenhouse gas savings that we expect to see from the biofuels used to meet the RTFO;

the proportion of those biofuels that we expect to come from feedstocks grown to recognised sustainability standards; and

the amount of specific information that we expect to be included in sustainability reports.

has asked the Low Carbon Vehicle Partnership (LowCVP) to explore the feasibility of a voluntary labelling scheme to allow responsible retailers to show that their biofuels are genuinely sustainable. Any scheme would need to be compatible with WTO rules.

Moving to mandatory carbon saving and sustainability requirements would require changes to the RTFO Order which, under the Energy Act 2004, would be subject to consultation.

The Government will make a further announcement in due course on how they intend to respond to the other issues that stakeholders have raised in response to the February 2007 consultation on the design and future evolution of the RTFO.

Rail Franchising (West Midlands)

The Department has announced today that London and Birmingham Railway Limited (a subsidiary of Govia) has been awarded the West Midlands franchise. The new franchise will begin on 11 November 2007 and will increase capacity, improve performance and begin the introduction of smartcard technology by 2010.

The West Midlands franchise combines the current Silverlink County services between London Euston and Northampton with the West Midlands local and regional service groups of Central Trains,, The department will pay a subsidy of £1,127 million over the seven-year 10-month franchise.

From December 2008, the franchise will operate new services as a result of extra capacity created by the £8.1 billion upgrade of the West Coast Main Line, including a new hourly semi-fast service between London and Crewe and extra services from Birmingham to Liverpool and Northampton. The franchise also delivers 217 new carriages by April 2010, as part of the Government's 1,000 new carriages on the network. They will replace existing rolling stock which will be freed for use in other parts of the country. The agreement also demands improved performance of 90.7 per cent punctuality by the end of the franchise.

The Government will continue to limit annual rises for regulated fares for the franchise in line with national policy, currently RPI+1 per cent. As with all franchises, unregulated fares are the responsibility of individual operators.

On most routes in the West Midlands franchise area, London and Birmingham Railway Limited proposes to raise such fares by no more than RPI+1 per cent. per annum. However, on the London to Northampton route the operator plans to raise such fares by 3 per cent. over inflation. This change is expected to affect 13 per cent. of total passenger journeys in the franchise area.

A single compensation policy for all passengers will be introduced during replacement rail franchises, commencing with the West Midlands.

With improving Passenger's Charter performance in punctuality and reliability the current discount system means that an increasing number of passengers receive no compensation for delays.

Therefore discounts in renewal for season tickets valid between one month and one year in compensation for poor punctuality and reliability will be replaced by compensation based on delays to individual journeys, known as Delay/Repay. Under the new system, all passengers will be entitled to claim compensation for all delays, whatever their cause:

50 per cent. of the price paid for a single-leg journey delayed by between 30 and 59 minutes;

100 per cent. of the price paid for a single-leg journey delayed by between 60 and 119 minutes; and

100 per cent. of the price paid for a return journey delayed by more than 119 minutes.

The changes will also start to standardise disparate compensation arrangements for single, return and weekly season ticket holders on different train operators.