In line with the recommendations of the O'Donnell review and the Chancellor's Budget statement in March, the new arrangements for the development and maintenance of tax policy are now in operation. HM Treasury has assumed responsibility for policy development, working very closely with Inland Revenue and Customs and Excise. Copies of the O'Donnell report are available in the House Libraries.

The Financial Services Authority, acting in its role as the competent authority for listing, is referred to as the United Kingdom Listing Authority. Every year, the operational objectives of the UKLA are discussed with the Treasury. The annual objectives for 2004–05, which the Treasury has endorsed, will be placed in the Library, and also put on the Treasury website.

I have signed a further call-out order for reserve forces for operations in Afghanistan. The new order will enable reservists to continue to be called out into service to support the stabilisation and reconstruction operations. It is effective until 30 September 2005. Over 70 reservists were called out under the order made last year. Reservists currently provide about 12 per cent. of the total UK force in Afghanistan. We continue to be most grateful for their continuing commitment and the invaluable contribution they make to the work that UK forces are undertaking in Afghanistan.

I can announce that Command Paper Cm 6338, which sets out the Government's response to the House of Commons Defence Select Committee report on Defence Procurement, will be published today.

It is the Government's opinion that the House of Commons Defence Select Committee report on Defence Procurement, published in July, was a flawed document. Our response rejects many of the report's findings. It is unusual for the MOD to reject major elements of a report written by the Defence Select Committee. Regrettably, however, we have taken this action because the report made claims that were not and could not be substantiated and was selective in the way it used evidence.

I am publishing today the "War Pensioners Report" for 2003–04.

Publication of the "War Pensioners Report" is an annual event dating back to before the second world war. It is a joint document presented to Parliament by my right hon. Friends the Secretaries of State for Defence, Health, Scotland and Wales.

The 2003–04 report provides an account of the administration of the War Pensions Scheme and the various services provided for war pensioners during that period. The report provides a variety of data on degrees of disability, pensioner age profiles, rates of pensions etc. and details of what the war pensions committees and the Central Advisory Committee on War Pensions were involved in during the course of the year.

I am placing copies of the report in the Library of the House.

We are publishing today the Government response to the ODPM Select Committee report on local government revenue. We welcome the Committee's report as another very helpful contribution to the important debate about local government finance.

There is significant common ground between this report and that of the balance of funding review that was published on 20 July. We now look to the Lyons inquiry to consider the detailed case for changes to the present system of local government funding, and to make recommendations on any changes that are necessary and how to implement them.

On 26 August the Council of the European Union adopted Common Position 2004/622/CFSP. This amended Common Position 2004/179/CFSP (24 February 2004) that imposed travel restrictions on the leadership of the Transnistrian region of Moldova responsible for preventing progress in arriving at a political settlement of the conflict. In light of the widespread intimidation campaign being conducted against teachers, parents and students of Latin-script Moldovan schools in the Transnistrian region, the list of individuals subject to a travel ban by Common Position 2004/179/CFSP was expanded to include those persons responsible for the campaign against Latin-script schools.

On 8 June the United Nations Security Council adopted Resolution 1546 reaffirming the arms embargo on Iraq and introducing new exemptions for supplies of arms and related materiel required by the Government of Iraq or the multinational force (MNF) to serve the purposes of the resolution.

Upon receipt of an application to export arms or related materiel to an end user not explicitly exempt from the embargo, Her Majesty's Government will seek certification on a case-by-case basis from the Government of Iraq or the MNF. The certification is to ensure that the proposed export is required to serve the purposes of Resolution 1546 and is therefore exempted from the embargo. A certification process has been established with the Government of Iraq.

In my written statement on 25 February 2004, Official Report, columns 46–49WS, on countering the proliferation of weapons of mass destruction (WMD), I expressed the hope that the UN Security Council would adopt a tough resolution against WMD proliferation, and establish an appropriate follow-up mechanism to oversee its implementation.

Both of these aims have now been achieved. UN Security Council Resolution 1540 (UNSCR1540) was adopted on 28 April this year. The resolution called on states to adopt robust national legislation to criminalise the possession, manufacture or trafficking of WMD, and their means of delivery, in particular for terrorist purposes; to develop appropriate, effective export controls on WMD related materials where these do not exist; and to maintain effective physical protection of such materials.

UNSCR1540 also established a committee (the 1540 Committee) to oversee its implementation, and called on all states to report on their implementation of the resolution by 28 October.

On 29 September the UK submitted to the Security Council its report on implementation of UNSCR1540. The UK's report under 1540 has been agreed interdepartmentally, and endorsed by the cross-Whitehall Counter-Proliferation Implementation Committee (CPIC).

We are one of the first states to submit its report to the 1540 Committee, underlining our commitment to UNSCR1540 and to counter-proliferation. I hope that the UK report will help set the standard for other states to follow, both in terms of structure and detail of the report itself, as well as in terms of concrete action to prevent the proliferation of WMD.

However, we will not rest on our laurels. The UK is continuing to review domestic implementation, as well as look at new initiatives to counter the proliferation of WMD and their means of delivery.

I am placing a copy of the UK's report in the Library of the House

As stated in my statement of 30 March 2004, Official Report, column 83WS, NHS foundation trusts (NHSFTs) are public benefit corporations, and, as such, are independent of the Department, and directly accountable to their local populations and to Parliament. Because of this independent status, and NHSFT's separate and local route of accountability, Ministers are no longer in a position to comment on, or provide information about, the detail of operational management within such trusts. Any such questions will be referred to the relevant NHSFT chairman.

To ensure that replies from NHSFTs are available to all Members, they will, from today, be placed in the Library.

On 17 June 2004, Official Report, column 48WS, I informed the House that I expected the European Commission to take a decision on the Government's proposed restructuring aid to British Energy in the autumn. I am pleased to say that on 22 September, the commission approved that aid.

This is a very significant milestone in the implementation of British Energy's restructuring plan. We have said from the outset that our aid complied with the commission's rules and this approval confirms that.

It is usual in restructuring aid cases for the commission to require the recipient of the aid to implement certain compensatory measures. In this case, the Commission's approval is subject to the following compensatory measures, which are stringent but workable:

The company's nuclear generation business will be ring-fenced from its fossil fuel, supply and trading businesses to ensure the aid to the nuclear business is not used to cross subsidise any other of the company's businesses. This measure will last indefinitely. It is likely that this will be enforced through an undertaking between the DTI and British Energy although we have also discussed with OfGEM, the gas and electricity markets regulator, how this could best be enforced.

No nuclear or fossil-fuelled capacity expansion (above British Energy's current capacity) by the company in the European economic area for six years, and no hydro-electric capacity expansion in the UK for the same period. This will be enforced through an undertaking between the DTI and British Energy.

A restriction on the company selling to its industrial and commercial customers at prices below the prevailing wholesale market price for six years unless there are exceptional market circumstances as determined by an independent expert. This will be monitored by that expert and enforced by the Government.

In addition, the Commission has required the UK Government to provide more detailed reporting if payments in respect of British Energy's decommissioning and uncontracted liabilities and any incremental historic spent fuel liabilities exceed £1.629 billion. This enhanced reporting is so the Commission can satisfy themselves that the aid is being kept to a minimum and is only being used for authorised purposes. £1.629 billion is the net present value of the total of these liabilities as at December 2002, calculated using the Commission's discount rate of 5.4 per cent. nominal. Owing to the very long timescale over which these liabilities will be discharged, they are the most uncertain in terms of their value. The £1.629 billion does not include the aid we are giving in respect of British Energy's historic spent fuel costs valued by the commission at £2.185 billion, which are fixed, except for inflation. The estimate of the cost to Government (£150 million—£200 million a year on average for the next 10 years falling thereafter) given in my statement of 28 November 2002, remains unchanged.

Both to minimise Government's contribution and financial exposure to the company's liabilities, a number of measures have been put in place in the restructuring agreements. In particular, British Energy will contribute 65 per cent. of its annual free cash flow towards discharging its liabilities and, if there are material increases in British Energy's liabilities, the nuclear decommissioning authority will determine if the additional cost should fall to the company or to Government. British Energy's creditors have taken similar measures to protect their own exposures. Subject to these measures, many of which only apply when the company is cash constrained, British Energy has the freedom to run its business, in terms of corporate, operational and financial policies. It continues as a public limited company managed by its board of directors and subject to the normal private sector disciplines and requirements. The agreements strike a balance between protecting taxpayers' interests and ensuring these private sector disciplines maximise the company's contributions to its liabilities.

Under the Commission's rules, rescue aid ceases once the commission has reached a decision on the restructuring aid. Therefore, no further drawings can be made on the loan facility that the Government have made available to British Energy since September 2002. All drawings on the facility have been repaid with interest by British Energy.

The Government's main objectives in assisting British Energy remain safety and security of supply. A number of conditions of the restructuring remain to be satisfied, including that the Government must not have determined that British Energy will not be viable in all reasonably foreseeable circumstances. The condition remains in effect up to the restructuring effective date and the Government will continue to assess the company's viability until then. If the Government make such a determination at any time up to the restructuring effective date, or if there is a material adverse change in British Energy's position, the Government continue to reserve their right to withdraw their support for the restructuring. Therefore, contingency plans remain in place to secure our objectives if the restructuring plan fails for any reason and British Energy decides administration is the only option.

I am pleased to inform the House that on 27 September 2004 I announced the launch of the Women and Work Commission, an ad hoc advisory group comprising members drawn from both sides of the social partnership, plus experts in their respective fields. It has been set up to make recommendations to the Government on tackling the pay gap between men and women. The gender pay gap has narrowed considerably from around 30 per cent. when the Equal Pay Act came into effect in 1975, and more women than ever before—13 million—are in employment. But persistent differences in men and women's experience of the labour market remain. The gender pay gap currently stands at 18 per cent. for full-time workers and 40 per cent. for part-time workers. In a full employment economy it is imperative that we harness the skills and talents of every potential worker. The Women and Work Commission will bring forward recommendations to the Prime Minister within 12 months to build on this Government's proud record of action in this area.

The Women and Work Commission will look at:

how men's and women's education and skills affect which jobs they can get;

promotion and career progression—the 'glass ceiling';

women's experiences in the job market before and after having children; and

the different experiences of women working full-time and part-time.

The Women and Work Commission's Terms of Reference are as follows.

Women now make up 45 per cent. of the workforce, up from 38 per cent. in 1971. The Equal Pay Act and the Sex Discrimination Act in the 1970s were important milestones in breaking down the barriers to women's participation in the labour market. But wages are low in many occupations dominated by women and there is still a gap in mean hourly earnings between men and women: it is 18 per cent. among full-time workers and 40 per cent. for those women working part-time.

There are a number of factors influencing the gender pay gap. The DTI's review of maternity, paternity and flexible working legislation takes account of how caring responsibilities impact upon men and women's labour market attachment and their earnings. The Women and Work Commission will examine the other key factors shaping the difference in hourly earnings between men and women, including labour market experience, skills and education and discrimination. In investigating the impact of discrimination, the Commission will look at the measures necessary to strengthen equal pay legislation, including the case for equal pay reviews to be mandatory.

Making progress on the gender pay gap is a key priority because in a full employment economy we have to draw on the skills and talents of all potential workers, men and women, and remove obstacles to women's greater participation in the labour market. But it is also important because women have the right to expect a fair deal in the labour market.

The aim of the Women and Work Commission will be to look at these wide-ranging influences on the gender pay gap:

How men and women's educational experience and skills acquisition foreshadows occupational segregation.

General factors shaping women and men's labour market experience, including entry into employment, occupational segregation, full-time and part-time work experience, progression in the workplace and the tax and benefit system, as well as discrimination.

Women's experience in the labour market before and after having children As a substantial employer of women, the public sector warrants particular examination.

The Commission will make recommendations to the Prime Minister within 12 months from autumn 2004, taking account of the importance of promoting employability, the wider benefits to the economy and the impact on employers and public expenditure. The Commission will take account of the DTI review of maternity, paternity and flexible working legislation in shaping its recommendations.

I am pleased to welcome, alongside Margaret Prosser, Chair of the Women and Work Commission, the following members:

Chair: Baroness Prosser of Battersea

Members:

Sarah Anderson (Chief Executive, the Mayday Group),

Chris Banks (Chair of National Learning and Skills Council),

Kay Carberry (Assistant General Secretary, TUC),

Naaz Coker (Chair, Refugee Council & Chair, St George's Healthcare NHS Trust),

Debbie Coulter (Deputy General Secretary, GMB),

John Cridland (Deputy Director-General, Confederation of British Industry),

John Hannett (General Secretary, USD AW),

Sally Hopson (Retail and Managing Director (North Division), Asda),

Adeeba Malik (Deputy Chief Executive of Quest for Economic Development),

Stella Manzie (Chief Executive, Coventry City Council),

Julie Mellor (Chair, Equal Opportunities Commission),

Christine Ray (Group HR Director, The Rank Group),

Ruth Silver (Principal, Lewisham College),

Liz Snape (Head of Policy Development, Unison).

A call for evidence will be made later in the autumn. Any queries on the Women and Work Commission should be directed to Matilda Quiney, Secretary to the Women and Work Commission, Women and Equality Unit, DTI.