Under the cash ratio deposit (CRD) scheme, banks and building societies place non-interest bearing deposits at the Bank of England. The Bank invests these deposits and uses the income earned to fund the costs of the Bank's sterling liquidity, monetary policy and financial stability operations, which benefit sterling deposit-takers. The Bank of England Act 1998 placed the scheme on a statutory footing with effect from 1 June 1998.

As a result of significant changes the Bank of England will make to its operations in sterling money markets from next year, in particular the introduction of remunerated voluntary deposits which banks and building societies will be able to place with the Bank, the Treasury proposes to amend the definition of eligible liabilities for CRDs.

These proposed amendments principally seek to ensure that voluntary deposits would not count as an offset within the calculation of eligible liabilities on which CRDs are based thereby avoiding an unnecessary reduction in the Bank's CRD income.

The proposal requires a change to secondary legislation under the Bank of England Act 1998 and also requires the Treasury to consult those who are likely to be materially affected by the change and other persons it sees fit. This consultation has begun as of today and will conclude at the end of September.

My right hon. and noble Friend, the Secretary of State and Lord Chancellor, Lord Falconer of Thoroton, has made the following written ministerial statement in the other place today, 13 July 2005:

"I am announcing today a number of steps I am taking, as part of my judicial diversity programme, to increase the diversity of the judiciary in England and Wales.

It is critical that the judiciary is reflective of the society it serves, in order that the public can have full confidence in the justice system. Judicial diversity is a priority because it makes a real and positive difference to the administration of justice. It means harnessing the talent and ability of all those who would make good judges if they were able or willing to apply, enabling us to be sure that the best are being appointed. It will enable every person with the right qualifications and qualities

to be certain that they have an equal opportunity to be appointed on merit, whatever their background. It will also assure the public that the judges have a real understanding of the problems facing people from all sectors of society with whom they come into contact.

I have therefore decided to legislate as soon as parliamentary time allows to broaden the pool of those eligible for judicial appointment. The legislation will amend the eligibility requirements so that fellows of the Institute of Legal Executives and registered Patent Agents and Trade Mark Attorneys, as well as barristers and solicitors, will in future be able apply for appointment for appropriate judicial posts (i.e. those district bench and tribunal-level posts for which their skills and experience particularly fit them; or specialist intellectual property appointments in the Patents Court, Patents County Court and specialist tribunals, in the case of the intellectual property practitioners). There will also be a power for the Lord Chancellor, after consultation with the Lord Chief Justice and the Judicial Appointments Commission, to amend by secondary legislation the qualifications needed for particular judicial offices in order to widen eligibility.

After considering a range of views on this subject, I have reached the conclusion that the current statutory eligibility entitlement has the disadvantages of being both too restrictive (because it is unnecessarily long) and insufficiently precise (because time elapsed since qualification is not a meaningful measure of an individual's experience or skills). Indeed, under the law as it stands, it is unnecessary ever to have exercised rights of audience in order to become eligible for judicial appointments. The current statutory requirement will be replaced with a requirement for a specified number of years' post-qualification legal experience. The specified number of years will be reduced from seven or ten (according to the judicial post concerned) to five or seven.

Magistrates are vital to the operation of the justice system. The Government value the work which magistrates do, and we will be bringing forward proposals later this year on supporting magistrates more fully. In line with that approach, I want to make a particular change in terms of improving judicial diversity. In recognition of the significant court experience gained by magistrates when sitting, I am also making a limited exception to the established policy that no-one is appointed to salaried judicial office without first having served in a fee-paid post. In future, those barristers and solicitors who are also justices of the peace will be able to count their magistrates sittings in lieu of fee-paid service when they apply for a salaried judicial appointment. This change will not require legislation. We will be consulting further on its detailed implementation.

The eligibility changes will enable a wider range of people, with the appropriate skills and experience, to apply for judicial appointment. These proposals are about eligibility to apply for judicial office, which is of course separate from the question of appointment. Those who do apply will face a rigorous, competitive, competence-based selection process. Appointments are made, and will continue to be made, solely on merit.

I am also taking other action to encourage greater diversity in the judiciary. My Department is working to raise awareness of the possibility of judicial appointment and the range of posts available by, for example, extending the judicial work-shadowing scheme to include district judges (magistrates courts) as well as circuit judges and district judges; advertising widely in the press and on websites; sending out regular e-newsletters; organising events aimed at specific under-represented groups (the first of which, a highly successful event aimed at women, took place in Manchester on 28 and 29 June); and piloting a scheme to encourage individuals to apply for appointment.

My Department is continuing to work on the other components of the judicial diversity programme, and I expect to make a further announcement in the autumn. I believe that these are important initiatives which, together, will make a real contribution to greater diversity in the judiciary, and will set a new and more flexible framework which will help the Judicial Appointments Commission from next year in widening the range of people who apply for judicial appointments".

Following the discovery by the Big Lottery Fund of irregularities in certain grant applications in September 2004, the investigations team of the fund, the police and the Charity Commission have conducted extensive investigations into suspected multiple application fraud. Lottery funds were safeguarded by immediately suspending payments on suspect grants.

A number of arrests have been made and both criminal and civil proceedings are likely to follow. It would not be appropriate, therefore, for me to describe in detail the nature of the alleged fraud. However, I can say that what is suspected is a systematic fraud targeting a number of charitable and public grant makers, including the Awards for All programme operated by the former community fund on behalf of six lottery distributors.

Although the scale of the suspected fraud is uncertain and will not be clear until the end of the investigation, I have now been provided with sufficient financial information to make a statement to Parliament.

The current best estimate of the amount of grants at risk awarded through the Awards for All programme on behalf of each distributor is as follows:

The Big Lottery fund has reviewed its systems and put in place additional controls which will significantly reduce the risk of similar fraud in future. The fund will strike an appropriate balance between preventing abuse of lottery funds and running an application process which minimises delays and bureaucracy for small community organisations seeking funding.

The knowledge gained in this investigation is being shared with other funders and the Charity Commission.

The key targets have been set for the chief executive of the Met Office for the financial year 2005–06. The targets are designed to drive change to create an environment for growth, whilst delivering value for money. Further information can be found in the Met Office's annual report and accounts which will be published by September 2005.

Key Performance Target 1. Return on Capital Employed.

To achieve a Return on Capital Employed of at least 3.5 per cent.

Key Performance Target 2. Forecast Accuracy.

To demonstrate an improvement of 1 per cent. in the underpinning numerical weather prediction capability. And to achieve minimum levels of accuracy on next-day forecasts for a representative selection of UK cities as follows: maximum temperature (83 per cent.), minimum temperature (78 per cent.), and precipitation (85.5 per cent.).

Key Performance Target 3. Support to Wider Government Goals.

As a basis for delivering future efficiencies, to define in costed-output terms the services to be provided to key central Government Departments; and to agree formal customer-supplier agreements with each such Department. In addition, to pilot with MOD a new incentive pricing mechanism which allows the benefits of cost-reductions to be shared between both organisations.

Key Performance Target 4. Profitability.

To achieve a profit contribution of £2.8 million from the Met Office's work for commercial customers.

Key Performance Target 5. Our people.

As a baseline improving the management of people, to establish a benchmark for staff perception of the Met Office leadership, and the level of satisfaction with the implementation of the corporate plan.

On 12 July, the Parliamentary Commissioner for Administration laid before Parliament her special report on the complaint of Professor Hayward in respect of the far east prisoner of war and civilian internee ex-gratia payment scheme. The report makes a number of criticisms of the Government's handling of the scheme, a number of which are accepted but some of which we reject.

The Commissioner's report is critical of the way the scheme was introduced and announced. This criticism is accepted. A considerable amount of work had been undertaken on scoping the scheme before its inception but, because all parties involved wished the payments to be made as quickly as possible due to the age of potential claimants, the scheme was announced before all the criteria governing eligibility had been fully developed.

The wording used in this House on 7 November 2000 in announcing which former civilian internees would be covered by the scheme was "British civilians who were interned". This was clarified in March 2001 to allow decisions to be made on claims where the applicability of the original criteria was unclear. However, no clear announcement was made at this time of the birthlink eligibility criterion for civilian internees. The words used in November 2000 led Professor Hayward to think that, as a former British civilian internee, he was covered by the scheme. This expectation was ended when his claim was subsequently rejected as he did not meet the birthlink criterion.

We accept that the way the scheme was introduced and announced led to distress for Professor Hayward himself and for some other people in a similar position. There was no intention to cause such distress but we accept that it is real. The fact that this occurred is profoundly regretted and I would like to take this opportunity to apologise for it.

The people to whom this apology is made are those who:

were held by the Japanese during the second world war in the far east as British civilian internees; and

submitted their applications between the announcement of the Scheme on 7 November 2000 and the public announcement of the clarified criteria on 11 July 2001; and

whose claim was rejected because they (or their deceased spouse who was interned) was not born in the UK and did not have a parent or grandparent born here; and

whose claim met all the other relevant criteria.

I sincerely apologise to these people and will now be examining whether I should express this apology in a tangible form and how most quickly to identify and contact those affected.

The Parliamentary Commissioner made a number of criticisms and recommendations on other aspects of the Government's handling of the scheme, notably relating to the birthlink criterion itself, which we do not accept. This criterion, on which Professor Hayward's application was rejected, is the subject of judicial review in which judgment was handed down on 7 July. This judgment is now being considered and it would not be appropriate to make further comment until the final outcome of the case is known. However, pending this outcome, the ex-gratia payment scheme has been suspended in relation to former civilian internees and their surviving spouses: claims may continue to be submitted but none will be considered meanwhile.

The chief executive of the defence science and technology laboratory (Dstl) has been set the following key targets for the financial year 2005–06:

Maintain and by the end of a three-year period show an increase in score for scientific and engineering capability in the technical benchmarking exercise from 67 per cent. in 2002–03 to 72 per cent. in 2005–06—moderated by external assessors agreed with MOD's chief scientific adviser.

Identify and agree with MOD's chief scientific adviser the top 10 Dstl capability needs, their alignment with the future programme and the required MOD funding by March 2006.

By the end of a three-year period show a linear improvement of at least 1.5 per cent. on the financial year 2004- 05 customer satisfaction score of 75.4 per cent. for service provision.

Implement a process for identifying and publicising Dstl's major achievements during the year.

Achieve health and safety executive approval of the category four microbiology containment facility by 31 October 2005.

Define the scope, structure and funding requirements of a new defence and security research and development centre and, subject to new funding being available from customers, prepare a specific proposal for its creation.

Achieve planned progress to meet the completion date of 2008 for the transfer of Dstl onto three core sites at Porton Down, Portsdown West and Fort Halstead. The key milestones for 2005–06 are: appointment of the preferred bidder (August 2005); negotiate with the preferred bidder a reduction in facilities management costs for Dstl of at least 15 per cent. from August 2006; sign contract (March 2006).

By December 2005, complete the detailed design and build phases of the new integrated corporate applications system (iCAS) that will deliver all Dstl's business information requirements from 2006–07.

Maintain the average charge rate for manpower for 2005–06 and beyond below that for 2001–02 uplifted by GDP deflator.

Achieve a ROCE of at least 3.5 per cent. averaged over the period 2004–05 to 2008–09 and a MOD dividend of £3 million in 2005–06.

In light of the statutory consultation exercise conducted between 1 April and 31 May, it has been concluded that it would be appropriate to revoke the Local Government Pension Scheme (Amendment) (No.2) Regulations 2004. The Local Government Pension Scheme (Amendment) Regulations 2005 which make the revocation will have retrospective effect from 1 April 2005 and will come into force on 3 August 2005.

As required by the statutes which govern the scheme's provisions, a statutory consultation exercise has been undertaken with interested parties in England and Wales. Careful consideration has been given to the representations submitted in response to that consultation exercise. Many of those stakeholders who opposed revocation raised the question of costs and how taking such a step might impact on the scheme, and then create fresh pressures on local authorities' budgets if no suitable mitigating measures were put in place. That point is recognised and the Government fully intend to deal with it.

Representatives of the local government employers and trades unions have been invited by the Deputy Prime Minister to develop realistic and costed measures by the autumn to fully meet any costs arising from the decision to revoke the Local Government Pension Scheme (Amendment) (No.2) Regulations 2004.

To assist in that process and, as a measure to ensure the continued stability of the Scheme, an amendment is also being made by the Local Government Pension Scheme (Amendment) Regulations 2005 to provide each LGPS administering authority the vires to request an interim valuation of their pension fund, as at 31 March 2005. In the meantime, and as part of that process, LGPS pension funds, funding strategy statements will be undergoing review, as currently required by the scheme's regulations, and appropriate changes made to their deficit recovery periods can be taken into account by their actuaries.

Taking account of these costing exercises, the Deputy Prime Minister intends to ensure that his statutory responsibilities for the on-going solvency of the scheme are fully met. New regulations will identify the way forward to ensure that the local government pension scheme funds remain solvent, without additional calls on employers' contributions, or on Government. Consultations on these necessary further regulations to address the costs of revocation will take place in time for them to take effect from 1 April 2006.

The framework now provided by the LGPS tri-partite committee will ensure effective and co-ordinated progress on the development of the scheme. It is imperative for its affordability and sustainability that the effect of revocation is managed prudently and with regard to the need to ensure on-going solvency and viability. All the stakeholders in England and Wales with an interest in the scheme will wish to work to that end.

The Government have decided upon a new approach to provide better and more timely information to both Parliament and the European Scrutiny Committees about the agendas and outcomes of EU Council of Ministers meetings.

The new system should promote a greater transparency of EU business within both Houses. The principal elements of the new system, which will take immediate effect in order to capture the first Councils of our presidency, are:

Scrutiny focused material will, as before, continue to be provided to the clerks of the two Scrutiny Committees as early as possible before Council of Ministers meetings;

Written ministerial statements will be provided to Parliament no later than the day before a formal Council to provide as much information about the items on the agenda, why they are on the agenda, and what the UK as holders of the EU presidency hopes the Council will achieve. After the presidency, the statements will revert to setting out the national stance on each item. Written statements will not be produced before informal Councils. A copy of the statement will be sent to the Chairmen of both Scrutiny Committees;

Written ministerial statements will be produced within five working days of each Council. During the UK's presidency, statements on formal Councils will set out what the UK as presidency has delivered, and will replace, in the Commons and Lords respectively, the current system involving a parliamentary question and ministerial letter. Only after the presidency will the statements revert to setting out what the UK stance was in discussions. When reporting after an informal Council the statement will be of a more general nature and will not highlight member states' positions, including the UK's. A copy of each statement will be sent to the Chairmen of each Scrutiny Committee;

During parliamentary recesses, Ministers will revert to writing to the Chairmen of both Committees in place of written statements and arrange for copies of the letters to be sent to the Libraries of both Houses.

The Government response [Cm 6624] to the report of the Joint Committee on the Draft Mental Health Bill [HL paper 79–1, HC 95–1] published on 23 March 2005 has been published today. Copies are available in the Library.

Following the advice of the security service and the Metropolitan Police given in the joint review of security at the Palace of Westminster, the concrete blockers around the perimeter will shortly be replaced with more effective steel barriers. Current vehicle access arrangements will remain unchanged. These measures were approved by the Joint Committee on Security on 4 July, and are made with the agreement of Mr. Speaker.

Further related measures will be taken during the summer recess. By the time the House returns in October, entry to Peer's car park and Black Rod's Garden will be possible only from the direction of Parliamentary square. Vehicles exiting these areas will only be able to turn left towards Lambeth bridge. Pedestrian access will remain unaffected. These measures will significantly enhance Parliament's security.

The annual report of the Crown Prosecution Service has been published and was laid before Parliament yesterday. Copies have been placed in the Libraries of both Houses.

I represented the UK at the EU Telecoms Council, which is part of the Transport, Telecommunications and Energy Council, in Luxembourg on 27 June, when the Council considered two issues of interest to the UK. These were the Commission's communication on the i2010 strategy and the world summit on the information society (WSIS).

Commissioner Reding presented her i2010 communication on future policy for information and communication technologies (ICT) in the context of the re-launched Lisbon agenda. She summarised the three main themes of the i2010 strategy as the creation of an open and competitive market for the digital economy, greater investment in ICT R and D and e-inclusion policies. She also emphasised that much of the i2010 strategy is for implementation at the national level and is covered by the integrated guidelines for the national reform plans which will be put forward in October.

In a full round table, all member states endorsed the Commission's approach on the i2010 strategy, with many emphasising that ICT was fundamental to competitiveness and job creation, and others endorsing the explicit linkage to Lisbon through the mechanism of the national reform plans. One member state expressed concerns about the scope of the i2010 which includes broadcasting. A number of member states noted the dependence of the ICT R&D budget on overall budgetary discussions. Two member states also noted the need for a high-level steering mechanism to ensure proactive follow-up to the goals of the i2010 strategy. For the UK, I emphasised the importance of implementing the existing regulatory framework in order to support open and competitive markets and the need to encourage new technologies and services in order to support the re-launched Lisbon agenda.

In discussions of the world summit on the information society (WSIS), all member states emphasised the importance of the EU speaking with one voice at the summit in Tunis in November, a view which was strongly endorsed by the Commission.

There was one outstanding point of discussion on the wording of the proposed Council conclusions. These conclusions will set out the EU's approach in the final preparatory phase of the summit. One member state, with some support from others, was keen to see a reference to an international entity which would oversee the existing public-private internet governance structures in the US. Compromise wording was agreed following constructive co-operation between the UK and this member state in the margins of the Council meeting. This wording removed references to a specific entity while reflecting shared views on the relevance of existing international organisations and the need for a bottom-up public/private partnership with scope for governmental input.

The Passenger and Goods Vehicle (Recording Equipment) Regulations 2005 were laid before Parliament today and will come into force on 5 August 2005. These new regulations will amend existing arrangements for the enforcement of European drivers' hours rules in order to:

"reflect the imminent introduction of new technology for recording drivers' activities—the digital tachograph—as provided for by European Regulation 2135/98/EC, and,

tighten up existing powers in the light of experience."

To accompany the new regulations, we have also published a regulatory impact assessment. Copies have been placed in the Libraries of both Houses.

The new regulations will affect the operators and drivers of heavy commercial vehicles. They do not introduce any new drivers' hours limits and their effect on law abiding drivers and operators will be negligible. Indeed, such drivers and operators should benefit competitively from better enforcement against law-breakers.

The Government will review the new regulations and associated guidance in 12 to 18 months' time in the light of practical experience.