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Written Statements

Volume 501: debated on Wednesday 25 November 2009

Written Ministerial Statements

Wednesday 25 November 2009


Indemnity to Bank of England

On 23 November 2009 the Governor of the Bank of England informed the Chair of the Treasury Committee of how, in exceptional circumstances, the Bank of England extended emergency liquidity assistance (ELA) to RBS and HBOS in the autumn of 2008.

The Treasury granted the Bank an indemnity in October 2008. This indemnified the Bank on a net basis against losses that it might suffer or incur in connection with the Bank’s commitment to ensure that the banking system had sufficient access to liquidity, including this ELA. The indemnity was granted given the size of the operations the Bank had entered into, and considered in the context of the existing demands on the Bank’s balance sheet at that time. It was not related to any perception of the increased risks associated with lending to the banks, for instance because of any concerns regarding the quality of the collateral posted by the banks.

The indemnity was provided for actions taken by the Bank from 14 October 2008 for a period of two months. The Bank paid an indemnity fee of 170bps to the Treasury on borrowings it guaranteed. The total use of ELA across both banks was £61.6 billion on 17 October. The peak of the indemnity was £18.1 billion on 27 October. Treasury received fees totalling £18.9 million for this indemnity. This was recognised as “other dividends and interest” income which is payable to the consolidated fund in the 2008-09 resource accounts. The amount was not separately identified, but included within the total other dividends and interest income balance of £866.7 million disclosed in note 9, page 201 of the resource accounts.

The Bank’s assessment at that time was that it was vital that its ELA operations remained confidential, and that any disclosure or leak of the operations would seriously jeopardise the financial stability of the system as a whole. I shared this assessment. I also judged that the risk to public resources was low given the quality of the collateral received by the Bank. Having carefully considered the case for disclosure of the of the prevailing circumstances, would not be in the public interest.

The Bank no longer considers it necessary for the assistance to remain confidential. I also share that judgment. Market conditions have improved considerably, and the disclosure by Lloyds Banking Group in their recent prospectus of the current aggregate amount of support it has received from the authorities has not destabilised to the markets. In the light of those developments, I now consider that the balance of the public interest is in disclosure.

I remain of the view that the Bank of England must be allowed to provide assistance to financial institutions on a confidential basis as financial stability may require.

I have written to the Chairs of the Treasury Committee and the Public Accounts Committee on this matter and a copy of these letters has been placed in the Libraries of both Houses.

Cabinet Office

Charity Commission DEL (2009-10)

Plans to change the Charity Commission’s departmental expenditure limit (DEL) and administration budget for 2009-10.

Subject to parliamentary approval of any necessary supplementary estimate, the Charity Commission DEL will be increased by £1,615,000 from £30,149,000 to £31,764,000 and the administration budget will be increased by £1,000,000 from £30,219,000 to £31,219,000. Within the DEL change, the impact on resources is as set out in the following table:

New DEL£’000





Resource DEL

of which:

Administration budget*

Near cash in DEL



























*The total of ‘Administration budget’ and ‘Near cash in Resource DEL’ may be greater than total resource DEL due to the definition overlapping.

**Depreciation, which forms part of resource DEL, is excluded from total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.

The change in Resource DEL arises from:

changes in operating Appropriations in Aid of £1,000,000 funded by the Foreign and Commonwealth Office for the continuation of the International Outreach project. This increase is fully offset by changes in spending and does not impact on the Commission's Departmental Expenditure Limit; and

the utilisation of £1,000,000 of the Commission's Resource EYF.

The change in the Capital DEL reflects the utilisation of £615,000 of the Commission’s Capital EYF.

The funds from Resource EYF and Capital EYF will be used to rationalise our estate (the London, Liverpool and Taunton offices) and to implement a file storage system. These investment programmes will generate future cost savings.

Children, Schools and Families

Dr. David Southall (Special Case Files)

During investigations by the General Medical Council into the conduct of paediatrician David Southall, it emerged that, during periods of employment at the Royal Brompton and Harefield Hospital and the University Hospital of North Staffordshire (“Hospital Trusts”) between 1980 and 2000, he kept “Special Case” files (SC files) on some of his patients separate from the hospital record system. In February 2007 the Attorney-General announced that the Crown Prosecution Service (CPS) was to review 4434 SC files, and examine whether there had been any non-disclosure of information in relation to criminal court proceedings. In July 2008 the Attorney-General announced that the review had concluded that there were no grounds to suggest such non-disclosure of information. The Attorney-General also announced that DCSF had agreed with a recommendation that it should conduct a similar review, focusing on 82 SC files that the CPS identified as being linked to court proceedings of some kind, to ascertain if there had been any non-disclosure of information in relation to family court proceedings.

DCSF commenced the review in August 2009. It involved a total of 78 SC files, which represented all the SC file material that could be located by the Hospital Trusts. Four SC files were unable to be traced.

DCSF arranged for the NSPCC to review the SC Files as an independent expert reviewer, and agreed to accept their findings in their entirety. The review team comprised three NSPCC consultants with expertise in child protection investigations.

The NSPPC examined each case file to identify whether there was material that raised child protection concerns, and subsequently whether that material could potentially have influenced the outcome of a child protection case had it been shared with local authority children’s social care services at the time. These considerations enabled the review team to report back to DCSF whether any case file needed to be referred on to the relevant local authority for further review, on the basis that the file contained material that may not have been previously known to the local authority.

The NSPCC review team have concluded the review and provided DCSF with a report of their findings. The conclusions are:

of the 78 SC files reviewed, information was found raising child protection concerns in 76 cases. Two of the SC files were found to relate to instances where Dr. Southall was asked to prepare reports where abuse was not suspected

in each of these 76 cases there was evidence of this information being known to the local authority children’s social care and/or the police.

The review team recommended that none of the 78 files should be referred back to the local authority for further investigation. I accept these findings in their entirety, and have written informing the Attorney-General of the conclusion of the review. The NSPCC’s report on its findings has today been placed in the Libraries of both Houses.


Al-Sweady Inquiry

Over 120,000 British troops have served in Iraq and the conduct of the vast majority has been of the highest order. Although there have been instances of misconduct, only a tiny number of individuals have been shown to have fallen short of our high standards. Allegations of abuse are however taken very seriously.

Judicial review proceedings were issued in late 2007 relating to allegations that Iraqi nationals were detained after a firefight with British soldiers in Iraq in 2004 and unlawfully killed at a British camp, and that others had been mistreated at that camp and later at a detention facility. The Ministry of Defence found no credible evidence to support these allegations, but failings in the disclosure process meant that the Department could not reassure the court that it was in possession of all the material it needed to make rulings on these matters. As a result, the Ministry of Defence proposed that there should be a fresh investigation of the allegations, either by the Metropolitan Police Service (MPS) or in the form of a public inquiry. Following a scoping exercise the MPS informed the court that it would not undertake an investigation.

A public inquiry into the allegations will therefore be held under the Inquiries Act 2005. It will be chaired by Sir Thayne Forbes, who retired from the High Court Bench last year. Sir Thayne’s wide experience will be invaluable and I am grateful to him for taking on this important task. He has decided to chair the inquiry alone, that is without other panel members. Whether he appoints assessors who can assist him with expert knowledge and advice is a matter for him.

The inquiry’s terms of reference are:

To investigate and report on the allegations made by the claimants in the Al- Sweady judicial review proceedings against British soldiers of (l) unlawful killing at Camp Abu Naji on 14 and 15 May 2004, and (2) the ill-treatment of five Iraqi nationals detained at Camp Abu Naji and subsequently at the divisional temporary detention facility at Shaibah Logistics Base between 14 May and 23 September 2004, taking account of the investigations which have already taken place, and to make recommendations.

The inquiry will, of course, have the full support of the Ministry of Defence. Arrangements are being made to ensure that personnel who will be required to assist the inquiry are provided with the necessary legal support. Much work is in hand to ensure that the difficulties over disclosure which arose in the judicial review proceedings are resolved and that the inquiry has all the material it needs.


Personal Care at Home

The Department has today published the consultation document—“Personal Care at Home: a consultation on proposals for regulations and guidance”.

The Personal Care at Home Bill, published today, contains new proposals costing £670 million, which are the Government’s first step towards setting up a new National Care Service—a simple, fair and affordable care system for everyone.

Subject to parliamentary approval, from next October, older people and younger disabled people will be better helped to live independently for longer in their own homes—something they tell us they really want.

The Bill guarantees free personal care for the 280,000 people—including those with serious dementia or Parkinson’s disease—with the highest needs. Some of those already get free care—this Bill will protect their savings from future charges. Others will get free care for the first time. We will also help around 130,000 people who need home care for the first time to regain their independence.

This intensive help or “re-ablement” will help people to regain their independence and prevent ill health. This means people will maintain their dignity and rebuild their confidence so that they can live at home for longer. Helping people to stay in their own homes could involve adapting their homes.

New equipment installed in people’s homes to help them stay there could include electronic pill dispensers or movement activated alarms using the voice of a grandchild to remind an elderly person to close the door, for example. Helping people to stay in their own homes and adjust their living conditions so they can stay safely, puts prevention at the heart of the system.

The consultation covers three main areas:

what should be contained in the regulations made under the Bill;

what should be contained in the guidance accompanying the regulations; and

suggests three ways of allocating funding to councils.

The consultation document has been placed in the Library and copies are available for hon. Members from the Vote Office.


High Court Judges

Following discussions with the current Lord Chief Justice and an evaluation of the current workload pressures on the High Court Bench I have agreed that it is now appropriate to accede to the Lord Chief Justice’s recent request for the 108th High Court Judge post to be filled.

On 9 and 12 June 2008 the House of Commons and the House of Lords respectively debated an Order in Council relating to an increase in the number of Lords Justice of Appeal. The purpose of that order was to allow for an increase of one Lord Justice to enable the Chair of the Law Commission to be of that rank rather than a High Court Judge as had been the case. To offset the additional costs I had agreed with the then Lord Chief Justice that we would leave vacant the 108th statutorily available High Court Judge post. Assurances were given to both Houses that the cost of this decision was simply the difference between the annual salary cost of a High Court Judge and that of a Lord Justice. Additionally, in response to a specific question raised in the House of Lords, an assurance was given that the decision to leave the 108th High Court Judge post vacant would not cause uncontainable work pressures on the remainder of the High Court Bench.

Workload across all three divisions of the High Court has since increased significantly. Family division work has increased by 10 per cent., Chancery by 30 per cent. and Queen’s Bench by just under 8.5 per cent. In addition there has been an increase in the number of long cases which has an additional impact on lengthening waiting times. I am satisfied that now is the time to increase the size of the High Court Bench to help contain this increased workload.

The annual cost of this additional High Court Judge will be £249,000 (including National Insurance and pension contributions) and will be contained within existing budgets, mainly through the reduction of deputy sitting days.


Scotland's Future in the United Kingdom

I have today published a White Paper on the Government’s plans about devolution in Scotland. The White Paper that we are publishing today takes forward recommendations from the final report of the Commission on Scottish Devolution. I would like to thank Sir Kenneth Calman and his commissioners for their work on this report. I will today make an oral statement to the House.