I have today laid before Parliament the Government Car and Despatch Agency annual report and accounts 2004–05, copies of which are available in both Libraries of the House.

The Government propose to bring forward legislation in the next available Finance Bill to exempt from tax certain payments made in relation to bank accounts of holocaust victims, as described below.

The HM Revenue and Customs extra-statutory concession, A100, introduced on 8 May 2000, provides a tax exemption for compensation payments made by UK banks under their scheme called "Restore UK". The scheme is designed to identify and compensate claimants to dormant accounts opened by holocaust victims and frozen during World War II under the Trading with the Enemy Act.

Since the introduction of the extra-statutory concession it has come to light that comparable payments may be made to holocaust victims or their heirs in respect of moneys held by the banks of other countries. For example, claims may be made by victims or targets of Nazi persecution or their heirs through the Claims Resolution Tribunal (CRT) for Dormant Accounts in Switzerland in respect of moneys deposited in Swiss banks in the period before and during the Second World War. The CRT was established as a consequence of the Holocaust Victims Assets Litigation in America.

The CRT awards made to the holocaust victims or their heirs and any comparable payments made by the banks of other countries are outside the scope of ESC A100, because it is available only for payments made under the "Restore UK" scheme run by UK banks.

Following discussions between the Association of Jewish Refugees and HMRC, the Government propose to bring forward legislation in the next available Finance Bill. The legislation will exempt from income tax and capital gains tax payments made to holocaust victims or their heirs when they are broadly comparable to the awards made under the "Restore UK" scheme run by UK banks. This will include any amount designed to cover interest and inflation by increasing the account balance to make it a fairer reflection of the amount originally deposited. The exemption will be available whenever the award or payment was made, so long as the criteria set out in the legislation are met.

The proposal is that there will be a provision in the legislation so that anyone who has included a qualifying payment in their self assessment tax return and paid tax will be able to reclaim the tax, even if the normal time limit for amending the assessment has passed.

The proposed legislation will also clarify the effect of the exemption for inheritance tax (IHT) purposes. Present-day recipients of these payments often derive their claim through intervening potential claimants who are now dead. The existing extra-statutory concession aims to ensure that the IHT affairs of these predecessors need not be re-opened because an account has been rediscovered. The Government propose that, when the accounts of holocaust victims or their heirs are rediscovered and compensation payments are made in respect of them, legislation in the Finance Bill will include an exemption from death duties for intervening potential claimants who died before the respective award scheme was opened for claims.

At the same time as bringing forward legislation to provide a tax exemption for compensation payments that are broadly comparable to the "Restore UK" scheme, the Government propose to take the opportunity to put on a statutory footing the exemption currently available under ESC A100 for payments made by UK banks. So that too will be included in the proposed legislation.

UK building societies may participate in the "Restore UK" scheme and ESC A100 applies to any compensation payments made by them to holocaust victims or their heirs. The proposed exemption will include payments by the building societies of other countries.

More information about the proposed tax exemption and guidance for anyone who thinks they may be able to claim back tax already paid on an exempt award is in the news release published by HM Revenue and Customs today at www.hmrc.gov.uk/individuals/holocaust.htm/

In June 1997, the incoming Government launched a comprehensive spending review (CSR). The CSR was the most fundamental and in-depth examination of Government spending and priorities ever attempted. Moving beyond the short-termism engendered by the old annual planning cycle and building on the platform of stability provided by the new fiscal code, the CSR set long-term aims and objectives for each Department and put in place a public expenditure and performance management framework within which these long-term ambitions could be achieved.

The CSR set the Government's priorities for the long-term: sustainable growth and employment; fairness and opportunity; efficient and modern public services. To support this longer-term approach to public spending, the CSR introduced a series of key reforms to modernise the public expenditure framework including firm three-year departmental spending plans, separate current and capital budgets, and outcome-focused public service agreements to support delivery and improve departmental accountability.

The CSR allocated significant additional resources, backed by reform, to the Government's key priority areas, with over 50 per cent. of the increase in departmental expenditure limits and local authority spending being allocated to education and health. In the ten years to 2007–08, subsequent Reviews in 2000, 2002 and 2004 have built on the objectives, reforms and priorities first established in the CSR.

The framework for managing public expenditure established by the CSR has also proved robust. Three year spending plans have been set and delivered in successive spending reviews. The separate management of current and capital spending has allowed public sector net investment to rise from 0.8 per cent. of GDP in 1996–97 to 2.2 per cent. by 2007–08.

Over the last decade the Government have shown how one can deliver a strong economy and sound public finances at the same time as sustained and substantial growth in investment in public services. Looking forward, there are new challenges Britain will need to address in order to lock in these benefits for the decade to come, including:

a rapid increase in the old age dependency ratio as the "baby boom" generation reaches retirement age;

the intensification of cross-border economic competition as the balance of international economic activity shifts toward rapidly growing emerging markets such as China and India;

an acceleration in the pace of innovation and technological diffusion and a continued increase in the knowledge-intensity of goods and services;

continued global uncertainty with ongoing threats of international terrorism and global conflict; and

increasing pressures on our natural resources and global climate from rapid economic and population growth in the developing world and sustained demand for fossil fuels in advanced economies.

These changes will have fundamental and far-reaching implications for public services and will require innovative policy responses, coordination of activity across departmental boundaries and sustained investment in key areas. While reaffirming the Government's commitment to their key objectives and building on the long-term framework the Government have put in place, it is right that the Government should periodically re-examine their public spending allocations in fundamental ways.

With the start of the next spending review period coming a decade after the first, the Government propose to launch a second comprehensive spending examining what the investments and reforms initiated to date have delivered and what further steps must be taken to ensure that Britain is fully equipped to meet the challenges of the decade ahead. This review will:

take a zero based approach to assessing the effectiveness of Departments' existing spending in delivering the outputs to which they are committed;

examine the key long-term trends and challenges that will shape the next decade and assess how public services will need to respond; and

look at how the public expenditure framework can best embed and extend ongoing efficiency improvements and support the long-term investments needed to meet these challenges.

The review will complement the work of the long-term reviews already underway into the future of transport, skills, pensions and local services.

A report will be made on these public spending challenges in 2006. The Government will report on the next three-year spending review covering 2008–09, 2009–10 and 2010–11 in 2007 and will hold departmental allocations to the agreed figure already announced for 2007–08.

Last week's attack on London was an affront to all democracies. Just as there should be no safe haven for those who perpetrate terrorism, so there should no hiding place for those who finance terrorism. To deliver this requires action in the UK, across Europe and globally.

Within the UK

Blocking terrorists' access to the financial system is a critical preventive measure; and freezing funds already in the system prevents those funds being used to perpetrate atrocities. In the UK, our financial institutions have to date frozen over £370,000 in forty five accounts. In order better to integrate efforts within the UK to disrupt terrorist finance, I can announce that the Treasury has established an inter-departmental asset freezing working group to identify and vet appropriate targets for asset freezing action under Treasury powers.

While four years ago just 30,000 reports of suspicious transactions relating to terrorist financing and money laundering were sent to the National Criminal Intelligence Service, last year 150,000 suspicious transaction reports were made. Of those relating to terrorist finance, between 20 to 30 per cent. subsequently either led to a longer-term investigation, or contributed substantially to an existing investigation. It is essential that the suspicious transactions regime be both proportionate and effective. The Home Secretary and I have asked Sir Stephen Lander to report by March 2006 on how these investigations of suspicious transactions can be best pursued under the new Serious and Organised Crime Agency.

I am today making £20 million available from the Reserve to the Home Office for the exceptional costs of support to victims and of policing and other activities arising from the attacks in London on 7 July. The help for victims will include money for compensation through the criminal injuries compensation scheme and funds to cover the donation to the London Bombings Relief Charitable Fund which the Home Secretary announced yesterday.

European agenda

Last week, European Finance Ministers reaffirmed that there will no hiding place for those who finance terrorism. Europe has found common cause in our shared battle against terrorism.

As EU president, we will work closely with all member states, the Commission, European Parliament and the EU counter-terrorism co-ordinator to implement the action plan against terrorism we agreed after the Madrid bombings.

Our first priority will be to deny terrorists access to financial resources—ensuring that terrorist assets are identified and isolated quickly and effectively;

We will also seek to conclude work on the money laundering and payments systems in order to safeguard the integrity of the financial system from abuse;

The European Union has made an undertaking to offer other countries who need it advice and technical assistance to build up anti-terrorist finance capacity; and

We will also work with the Commission to undertake an assessment of the EU's own performance in implementing the financial action task force's special recommendations to combat terrorist financing.

Globally

In order to make our fight against terrorist finance as global as the threat of terrorism itself, I have asked that international cooperation be redoubled:

Britain will support improved technical assistance to those countries that need to enhance their counter terrorist capacity, so that no country will offer a hiding place for terrorist finance;

Under the UK G8 presidency, a group of financial experts has developed a programme of reforms to ensure that we identify and isolate terrorist funds on a global basis. I will ask this group to report on its progress to Finance Ministers in September;

As EU president, the UK will host an EU-US conference of terrorist finance experts in October to identify key recommendations for future action; and

We are currently working with our security council partners to establish a new resolution to succeed UNSCR 1267 against al-Qaeda, to update and reassert the international response against the threat of international terrorism.

We will report back to the House on our efforts to safeguard the financial system from abuse by terrorists and other criminals at the time of the pre-Budget report.

I am today publishing the sixth annual report to Parliament on UK operations at the IMF, "A Stronger Global Economy—The UK and the IMF 2004–05". Copies are available in the Library of the House.

My noble Friend the Baroness Ashton of Upholland, Parliamentary Under- Secretary of State, has made the following written ministerial statement in the other place today:

"With the agreement of my right hon. and learned Friend the Secretary of State for Constitutional Affairs, I am pleased to inform the House that I have today placed in the Libraries of both Houses a copy of the response to the public consultation on disclosure of information in family proceedings cases involving children. Statutory instruments have also been laid today specifying the circumstances in which information can be disclosed from family proceeding cases involving children.

Members will recall that there have been a number of difficulties about what information can be received from individuals and constituents and what members of both Houses may then do with that information to advise or assist. Accordingly I would like to make a statement about the effect of these rules; particularly, in terms of how they allow Members to fulfil their vital role in helping and advising those involved in family proceedings.

Further to my right hon. and learned Friend Harriet Harman QC, MP's statement to the House on 14 October 2004, the proposed legislative amendments have now been made by section 62 of the Children Act 2004, which came into force on 12 April 2005. This means that:

Section 97 (2) Children Act 1989 has been amended so that it is no longer a criminal offence to publish information which identifies or is likely to identify a child as being involved in family proceedings, or the address or school of such a child; so long as publication is not made to the general public or a section of it (including the media).

Section 12 (4) of the Administration of Justice Act 1960 has been amended so that disclosure of certain information is no longer a contempt of court where rules of court specify that such disclosures can be made.

A series of amendments have been made to current rule making powers to clarify that rules can be made specifying the circumstances in which disclosure may be made.

The Government consulted on the proposed content of the rules of court. The consultation period closed on 23 March 2005. The responses have helped to shape the final content of the rules. The rules will come into force on 31 October 2005. Guidance will be published ahead of that date so that the various providers and recipients of information from family proceedings involving children heard in private will know what they are entitled to do with that information.

The implications for Members of both Houses are that:

A party to family proceedings involving children heard in private will be able to communicate to a Member the text or a summary of the whole or part of a judgment given in those proceedings. Members can also receive court orders, as that had been permitted since legislative amendments came into force on 12 April 2005. Members may use the information received for the purposes stated in the rules only. For Members, this means that once the text or summary of a judgment has been received, the Member may use that information for the purposes of giving advice, investigating any complaint or raising any question of policy or procedure. Members may of course refer the information to other appropriate bodies or agencies to fulfil the purpose. If it appears that further information is required, an application to the court will need to be made."

As part of the Government's continuing commitment to investigate Gulf veterans' illnesses openly and honestly, data on the mortality of veterans of the 1990–91 Gulf conflict are regularly published. The most recent figures for the period 1 April 1991 to 30 June 2005, were published on 14 July 2005 as a National Statistic on the Defence Analytical Services Agency website.

The data for Gulf veterans are compared to that of a control group known as the "Era cohort" which is made up of armed forces personnel of a similar profile in terms of gender, service, regular/reservists status and rank, who were not deployed to the Gulf. The "Era" group has been adjusted for a small difference in the age-profile of those aged 40 years and over, to ensure appropriate comparisons.

Key points to note in the data are:

There were 720 deaths among the Gulf veterans and 735 in the age-adjusted Era comparison group.

The 720 deaths among Gulf veterans compare with approximately 1,150 deaths which would have been expected in a similar sized cohort taken from the general population of the UK with the same age and gender profile. This reflects the strong emphasis on fitness when recruiting and retaining service personnel.

These statistics continue to confirm that UK veterans of the 1990–91 Gulf conflict do not suffer an excess of overall mortality compared with service personnel that did not deploy.

I will place copies of the full Notice in the Library of the House and it can also be viewed at www.dasa.mod.uk

The Government made clear last year on 21 July 2004, Official Report, column 348 their commitment to maintaining the effectiveness and safety of the nuclear deterrent including making the necessary investment in the facilities at the Atomic Weapons Establishment at Aldermaston and Burghfield. To that end agreement has been reached with AWE Management Ltd. (AWE ML) to take forward a programme of investment in sustaining key skills and facilities at the Atomic Weapons Establishment. This will include the provision of necessary extra supporting infrastructure. Local planning authorities will be consulted on this work in the normal way, under the provisions of the Planning and Compulsory Purchase Act 2005.

The purpose of this investment of some £350 million over each of the next three years is to ensure that we can maintain the existing Trident warhead stockpile throughout its intended in-service life. In the absence of the ability to undertake live nuclear testing given that the UK has signed and ratified the Comprehensive Test Ban Treaty, it is necessary to invest in the facilities at AWE which will provide assurance that the existing Trident warhead stockpile is reliable and safe.

I am delighted to announce that today we have launched a four-month consultation on potential changes to the fire safety aspects of the building regulations (part B) which set the design standards for new and altered buildings. Research reports that underpin the consultation have also been published.

The consultation covers a wide range of issues, including the use of sprinklers and door-closing devices, changes to the guidance on domestic loft conversions and increased measures to assist firefighters dealing with fires in tall buildings.

The consultation document sets out proposed changes to both the building regulations and the supporting guidance in approved document B. The potential changes would affect future building work in England and Wales—typically the erection, extension or material alteration of a building. Separate legislation applies in Scotland and Northern Ireland. The review has drawn upon recent experience and takes into account the findings of relevant research and the results of comprehensive stakeholder engagement. It has considered fire safety in all types of premises including dwellings, residential care homes and warehouses. It has also considered the important role that sprinklers and other types of fire protection measures may have, particularly if the provision is targeted at buildings where the occupants are most vulnerable to fire. The proposed changes would help to ensure an even higher level of fire safety for both building occupants and firefighters.

However, any changes must be fully justified and taken forward in a robust and efficient manner. To this end we are also seeking further evidence to support a number of the proposals, particularly in terms of the costs and benefits that they may have. A partial regulatory impact assessment detailing the impacts of the proposals has been published as part of the consultation package.

Copies of the consultation paper will be placed in the Libraries of both Houses and the research reports can be accessed via www.bre.co.uk/adb/.

I am pleased to announce the broad outline of how the Government intend to implement three-year finance settlements for local government.

The move to three-year settlements will provide greater financial certainty and stability for local government, council tax payers, businesses and other local partners. Three-year settlements will provide local government with the same certainty and planning horizons that departments already benefit from through our reformed public spending system. They will be a vehicle for greater long term coordination across central government towards local government services. The benefits for local people should be improved service delivery and greater stability in future council tax.

In December, ODPM published a consultation paper, "Three-year Revenue and Capital Settlements", which sought views on the Government's proposals for the implementation of three-year settlements for local government in England. The consultation fulfilled a commitment in the 2004 building regulations to consult on these proposals with local government and other stakeholders with a view to agreeing settlements for 2006–07 and 2007–08 during 2005. The consultation ended on 11 March 2005. Some 186 responses were received and they broadly welcomed the principle of introducing three-year allocations for revenue and capital funding. A summary of responses was published on 30 June and copies have been placed in the Libraries of both Houses.

The consultation paper stated the Government's intention to move to three-year settlements for local government by the end of the current Parliament. The first settlement, to be announced in autumn 2005, will cover the two remaining years of building regulations 04 (2006–07 and 2007–08). From 2008–09, three-year settlements will be fully aligned with the spending review cycle.

Following consideration of the consultation responses, implementation will proceed along the following broad principles:

A move to greater certainty in forward indications of local authority council tax levels. This will be based on further discussions with local government to ensure maximum forward looking information for council tax payers.

Specific revenue grants will generally be allocated on a three-year forward basis.

For formula and revenue grant, we will align all aspects of three-year settlements with the existing spending review round, with firm three-year allocations being announced for the first full spending review cycle after three-year settlements are introduced. To make these settlements more forward looking, stable and predictable we will use projections of changes in population and council tax base; and will not, except in entirely exceptional cases, retrospectively amend any year's settlement.

Capital funding, whether in the form of grant or supported borrowing, will generally be allocated on a three-year forward basis with exceptions for some small bid-based programmes, funding for emergencies and funding for large one-off projects.

The formulae proposed for the 2006–07 housing revenue account subsidy (HRAS) Determination will remain unchanged for the 2007–08 HRAS determination. Stock and other data about individual authorities will as usual be updated for 2007–08 by means of the base data return to be issued in 2006.

To ensure local authorities and council tax payers gain the maximum benefits of three-year settlements, Government Departments will work to ensure that their funding is either moved to a firm three-year basis or designed to offer authorities as much forward certainty as possible. The principles outlined above will be applied by government departments, in conjunction with local government, as they finalise the details of the settlement in the run up to its announcement in the autumn.

The priority goal for Government policy on local government finance is stability and certainty so that Local Authorities, their partners and the public have reasonable expectations of income and expenditure levels and trends.

To that end I am today moving that policy forward with the introduction of three year settlements for local government. It is an opportune time to review the basis on which we distribute formula grant to local authorities in England. Formula grant underpins the provision of a wide range of local services and is not hypothecated, so that decisions on local priorities can be made by local authorities. We have already introduced a degree of stability in the formulae for grant distribution; these were last changed for 2003–04, and we made clear then that we would not change the underlying methodology for a period of three years. From 2006–07, we therefore have the opportunity to change the distribution system.

We want to take this opportunity to consider four main issues. First, the formulae that we use to distribute grant are designed to reflect the relative circumstances of local authorities, as well as the policy or operational context for local authority services. There have been developments over the years which mean that some formulae are simply out of date in that, for example, they still use old data such as that from the 1991 census.

Secondly, we need to establish a firm basis for the introduction of three year settlements for local government. As part of that agenda, we need to find ways of making the finance settlements more forward looking to reflect growth in population.

Thirdly, we are examining ways of distributing grant that do not involve—or appear to involve—second-guessing councils' spending and taxation decisions, to clarify accountability and responsibility for local choices.

Finally, the system needs to reflect the change that is taking place in Government funding for schools.

Following the last review of grant distribution formulae, the Government have run a number of research projects and have been working with local government and other interested parties to consider possible changes to the formulae which could be introduced once the freeze had ended. The official level Settlement Working Group, consisting of representatives from all types of local authority in England along with interested parties from central Government, has considered some 75 technical papers together with research reports over that period. Separate technical groups have examined the formulae for the Police, Fire and Rescue services. I am grateful to all those who assisted the Government whether by contributing to these discussions or helping with the research and survey work.

Following on from that work, the Government are now launching public consultation on options for change to the formula grant system. I am today publishing the consultation document on the ODPM website at:

http://www.local.odpm.gov.uk/finance/0607/consult/index.htm.

Copies have been placed in the Vote Office and the Library of the House. We look forward to receiving views on our proposals. The consultation period will close on 10 October and the Government will then decide on the shape of the formula grant system from 2006–07 onwards.

The 2004–05 annual report and accounts for the Pesticides Safety Directorate will be laid before Parliament today. Copies will be available in the Library of the House.

The General Affairs and External Relations Council (GAERC) will be held on 18–19 July in Brussels. My right hon. Friend the Foreign Secretary and I will represent the UK.

The Foreign Secretary will make a short intervention at the start of the GAERC on the London bombings.

The agenda items are as follows:

Presidency Work Programme

The Foreign Secretary will give a brief presentation on the GAERC work programme over the next six months. This is an information point only. His presentation will include a brief comment on presidency plans for the future financing negotiation and the future of Europe dossiers. Other key dossiers are: Africa/development, enlargement, UN summit, WTO ministerial and various EU summits (with India, China, Russia, Ukraine and Canada).

Enlargement

The Foreign Secretary will debrief partners on the most recent meeting of the Croatia taskforce where there was further consideration of Croatian co-operation with the international criminal tribunal for the former Yugoslavia. There was no change in the assessment. The Foreign Secretary will confirm our intention to return to this dossier in September. Commissioner Rehn will present the Commission's draft negotiating mandate for Turkey to the Council. We do not expect a substantive discussion.

UN Millennium Review Summit

Commissioner Ferrero-Waldner will present the Commission's communication on UN reform to the Council. Conclusions reiterating the EU's strong support for a successful UN Millennium review summit outcome are expected to be agreed. These will cover the full range of EU priorities at the UN on development, security and human rights.

Syria/Lebanon

Syria will be discussed over lunch and will include a briefing from Terje Roed-Larsen, the UN Secretary-General's special envoy on the implementation of UN Security Council Resolution (UNSCR) 1559. As presidency we will underline the importance on the full implementation of UNSCR 1559 and 1595; support the new Lebanese Government; and call on Syria to contribute to regional stability in Lebanon, Iraq and on the middle east peace process (MEPP).

Middle East Peace Process (MEPP)

High Representative Solana will debrief the Council on his recent (10–14 July) visit to the region. We then expect discussion to focus on disengagement (due to begin on 17 August). As presidency, our priorities remain to work to ensure that disengagement proceeds as smoothly as possible and that Gaza should be left economically viable. In this context, we will call for continued EU support to the work of Jim Wolfensohn, quartet special envoy on disengagement. As presidency, we will also highlight the importance of increased coordination between Israel and the Palestinian Authority on disengagement and continue to urge both sides to continue to implement their road map and Sharm el-Sheikh commitments.

Iran

The Council will hold a brief discussion of the results of the presidential election, EU/Iran relations and the E-3 process. As presidency, we will call for a continuation of the existing foreign policy towards Iran and continuation of E-3 dialogue.

Zimbabwe

The Council will discuss the crackdown by the authorities in Zimbabwe, which has destroyed housing and targeted informal traders. As presidency, we will be aiming for the agreement of Council conclusions, which make clear the EU's condemnation of these events and include consensus on the need to maintain EU pressure.

Preparation of the EU-China Summit

The EU-China summit will take place in Beijing on 5 September. The GAERC will discuss preparations for the summit. As presidency, we will update partners on the progress of negotiations with the Chinese. The GAERC will provide an opportunity for partners to feed in their thoughts and to discuss the EU China Joint statement which will record the summit conclusions and set out aspirations for deepening the EU's relationship with China.

Uzbekistan

There will be a brief discussion and the Council is expected to reiterate its concern over the situation in Uzbekistan and to condemn the Uzbek authorities' refusal to allow an independent international inquiry into the recent events in Andizhan. At the 13 June GAERC the Uzbek authorities were given until the end of June to allow for an international inquiry. With this deadline now passed, the EU will be considering a range of restrictive measures.

World Trade Organisation (WTO)

There will be a brief discussion by the Council. Peter Mandelson will report back to Foreign Ministers on the mini-ministerial in Dalian (12–13 July) and will give an assessment of how preparations are going in the run up to the end-July WTO General Council in Geneva. The main trade discussion will however take place during the informal trade ministers' dinner on 18 July.

AOB—Estonia/Russia Border Treaty

The Estonians have asked for the Estonia/Russia border treaty to be placed on the agenda. They will outline to partners why the ratification of this treaty has stalled and how they hope to take matters forward with the Russian Federation. We do not envisage any substantial discussion.

The latest report on the implementation of the Sino-British Joint Declaration on Hong Kong was published today and copies have been placed in the Library of the House. A copy of the report is also available on the Foreign and Commonwealth Office website at: www.fco.gov.uk. The report covers the period from 1 January to 30 June 2005 and includes a foreword by my right hon. Friend the Foreign Secretary. I commend the report to the House.

I have received the annual report of the Medicines Commission for 2004, which has been laid before Parliament today in accordance with the requirements of section 5(2) of the Medicines Act 1968.

Bound volumes have been placed in the Library containing the 2004 reports of the Medicines Commission, the Committee on Safety of Medicines, the Advisory Board on the Registration of Homoeopathic Products, the British Pharmacopoeia Commission, the Independent Review Panel on Advertising, the Independent Panel for the Borderline Products and the Veterinary Products Committee.

I am glad to acknowledge the valuable work done by the distinguished members of the Medicines Act advisory bodies and thank them for the time and effort dedicated in the public interest to this important work.

The 2004–05 annual report and accounts for the Meat Hygiene Service was laid before Parliament today.

Copies will be placed in the Library, but formal printing and publication will not take place for another six to nine weeks, pending preparation of a version in the Welsh language, as required by the Welsh Language Act.

For the health service bodies listed as follows, their annual accounts and any accompanying comptroller and auditor general reports have today been laid before the House of Commons pursuant to section 98(1C) of the National Health Service Act 1977. Copies have been placed in the Library.

Counter Fraud and Security Management Service

Dental Practice Board

Dental Vocational Training Authority

Family Health Services Appeal Authority

Health Development Agency

Health Protection Agency

Mental Health Act Commission

National Blood Authority

National Clinical Assessment Authority

National Institute for Clinical Excellence

National Patient Safety Agency

NHS Information Authority

NHS Logistics Authority

NHSU

Prescription Pricing Authority

UK Transplant

The Prison Service's latest annual report and accounts, setting out the Service's performance during 2004–2005 will be laid today and copies will be placed in the Library.

In February 2005, the Government published "Controlling our Borders: Making migration work for Britain", a five-year strategy for immigration and asylum. I would like to update the House today on progress in three key areas: the development of a points-based scheme for managed migration; the introduction of new policies on limited leave, active review, and settlement for refugees; and the commencement of citizenship tests for new UK citizens.

We are publishing today a consultation document, "Selective Admission: making migration work for Britain", which is the next step in development of a single points-based system for all routes to work, train and study in the UK. There is no doubt that skilled migrants continue to make a substantial contribution to our prosperity. Migration helps to fill gaps in the labour market, especially in public services such as health and education, and increases investment, innovation and entrepreneurship in the UK. International students contribute significantly to our education system and account for some £5 billion in exports value a year. We have to ensure that the system is focused towards those with the skills and talent this country needs, so migration works for Britain.

The existing system is complicated and has developed over many decades. It needs to be simplified so that the general public can understand clearly the basis on which migrants are admitted, and why; so that employers, educational institutions and applicants find it swift, un-bureaucratic and value for money; and so that decision-makers find it straightforward to administer. The key tests for the system are that it should be operable, robust against abuse, objective, flexible to our changing economic circumstances, cost effective, transparent, useable and compatible with EU and international legislation.

In order to keep the system robust against abuse, a key principle is that all those who benefit from migration, not just the Government but also employers, educational institutions and migrants themselves, should play a part in helping to ensure that it is not abused. We are consulting on a system of sponsorship which should help to ensure that we only admit those who meet our criteria, that people stick to the terms of their leave to enter while they are here and leave when they are supposed to. In some high risk cases we could require financial bonds from migrants against their return home.

The proposed framework for the new system is that there should be five tiers of entry to the UK to work, train or study:

Tier 1, highly skilled and investors;

Tier 2, skilled workers with job offers, and workers meeting specific overseas requirements;

Tier 3, specific low-skill schemes to meet short term shortages;

Tier 4, students; and

Tier 5, other temporary categories, visiting workers, selected development schemes to meet shortages, and youth mobility/cultural exchange.

While ensuring that the system is robust against abuse and that our borders our strengthened, we aim to make it easier for employers to access the skills and experience they need and for educational institutions to attract genuine international students. The current two stage process for work permit employment will be replaced by a single application overseas, or in the UK, supported by a self-assessment programme on the web and in leaflets.

The consultation document has been placed in the Vote Office and the Library. The consultation period closes on 7 November 2005. During the consultation period we shall be engaging in a number of workshops and other events to encourage a widespread and constructive debate. During this period more work will be done to gather evidence and to undertake comprehensive impact assessments. We plan to publish the outcome of the consultation and firm proposals for a reformed managed migration system in spring 2006.

I am also announcing today that from 30 August onwards refugees will be granted five years limited leave in the first instance, rather than immediate settlement as at present. If there is a significant and non-temporary change in conditions in a country, we would consider whether this should, in line with the Convention's cessation clauses, trigger a case by case review of the position of all or some refugees from that country with limited leave. We would inform Parliament whenever we concluded that such a change justifying an individual review of cases had occurred.

As is currently the case, any leave granted to refugees may be subject to review if the refugee, through their own actions, brings themselves within the scope of the 1951 Geneva Refugee Convention's exclusion or cessation clauses. Refugees will continue to be entitled to use public services and to claim key mainstream benefits.

Resettled refugees are in a different position from refugees who arrive in the UK as asylum seekers. They have often been outside their country of origin for many years and have no prospect of returning there. As a result of this special position, I consider it appropriate to allow resettled refugees to retain an immediate right to settlement.

From 30 August onwards, beneficiaries of humanitarian protection will be granted five years limited leave, rather than three as a present. Similar policies on review will apply to them as to refugees with limited leave and they will also, from 30 August, benefit from immediate family reunion.

I am also now able to give further details of the introduction of tests of knowledge of life in the United Kingdom to be taken by people applying for naturalisation as British citizens. In my statement of 15 June I announced that these tests would be introduced in the autumn of this year, and would be offered by Ufl Ltd at some 90 Learn Direct centres throughout the United Kingdom. I can now confirm that the tests will be introduced on 1 November this year: every person who applies for naturalisation as a British citizen on or after that date and is not exempt by reason of age or disability will need to present a certificate showing that they have passed the life in the UK test or that they have attended an English language course which incorporates approved teaching materials on citizenship in the United Kingdom. These arrangements will supersede the provisions for testing applicants' knowledge of the English language which were introduced last year.

The fee for the test will be £40, payable direct to Ufl Ltd in addition to the fee payable for a naturalisation application. Special arrangements will be made for those seeking citizenship who are resident in the Channel Islands or the Isle of Man. Details of these, and further information on how to apply to take the life in the UK test and what it will contain, will shortly be available on the Home Office's website.

My right hon. Friend the Minister of State, Northern Ireland Office has made the following ministerial statement:

"This statement sets out how I intend to take forward a Racial Equality Strategy for Northern Ireland.

This statement is all the more timely following the appalling attacks in London of 7 July. These attacks were an attack on all of us. The bombs did not discriminate and people of all faiths and none and people of all racial groups have been victims. At this time, we should remember that communities in the United Kingdom have more that unites them than divides them.

Government are determined that the atrocities will not be allowed to create tension between our communities. The Good Relations Policy and Strategic Framework, with its vision of a shared and inclusive society, which was published on 21 March 2005 and the Racial Equality Strategy provide solid foundations for a future shared between and within the communities of Northern Ireland—both old and new. They provide a sound basis for a society where relationships are rooted in mutual recognition and trust.

The Government's vision for Northern Ireland is of a society in which racial diversity is supported, understood, valued and respected: a society where racism in any of its forms is not tolerated and where we live together as a society and enjoy equality of opportunity and equal protection.

The publication of the strategy today sets a framework for Government and all sections of civil society in Northern Ireland to contribute to achieving that vision. The framework will allow us:

to tackle racial inequalities in Northern Ireland and to open up opportunity for all;

to eradicate racism and hate crime; and

together with A Shared Future—Policy and Strategic Framework for Good Relations in Northern Ireland, to initiate actions to promote good race relations.

It sets out six shared aims that will point the strategic direction for action by Departments, agencies and wider society, working individually and together, to make a significant difference to the lives of people from minority ethnic backgrounds. The aims of the strategy are: eliminating racism, equality of protection; equality of service provision; participation; dialogue and capacity building.

The strategy will be taken forward through an action plan that will be developed by the Government in collaboration with the Racial Equality Forum.

Government will lead by example. It will set the pace to promote racial equality through a strong public policy agenda. Ultimately, however, sustained and deeper progress depends on political stability. It will require leadership at political, civic and community levels.

Copies of the Racial Equality Strategy for Northern Ireland have been placed in the Libraries of both Houses and are also available on the website www.ofmdfmni.gov.uk/raceequality."

I am pleased to announce today the appointment of Bob Collins as the new chief commissioner of the Equality Commission for Northern Ireland. I am also appointing four new commissioners—Bryan Johnston, James Knox, Professor Eithne McLaughlin and Elaine Waterson.

The appointments follow an open process based on merit. The new chief commissioner will take up the post from 1 August 2005, succeeding Dame Joan Harbison, whose term of office concludes on 31 July 2005. The terms of office of three other commissioners, Alan Henry, Ann Hope and Ruth Lavery also conclude on that date. The four new commissioners will also take up post from 1 August, joining the 13 existing commissioners.

The Equality Commission for Northern Ireland is a key institution of the Belfast agreement and plays a vital role in protecting and promoting equality in Northern Ireland. I am grateful for the great commitment and expertise that Dame Joan and the other departing commissioners have brought to the Commission. I am particularly grateful to Dame Joan for her work in establishing the Commission from the four equality bodies that preceded it and for seeing the Commission through its formative years so effectively.

I am confident that the new appointees will continue their good work and ensure that the Commission continues to carry out its important duties effectively.

I have placed copies of the Northern Ireland Prison Service's annual report and accounts for 2004–05 in the Libraries of both Houses.

The annual report details that the service met nine of its 11 key targets. It also outlines that of the comprehensive programme of 28 development objectives set for the service, 15 were achieved, five were partially achieved and substantial progress made towards meeting the remaining eight.

The annual report of the Serious Fraud Office has today been published and laid before Parliament. Copies have been placed in the Libraries of both Houses.

I have laid before the House a copy of the Coal Authority report and accounts for 2004–05.

The Highways Agency annual report and accounts for 2004–05 is published today in accordance with section seven of the Government Resources and Accounts Act 2000. Copies of the report have been placed in the Libraries of both Houses. Copies are available from the Vote Office.

As prosperity and the demand for goods grow, efficient freight transport is increasingly vital to the UK economy. The Railways Act 2005 has placed responsibility for rail freight in England with the Department for Transport and, with the repeal of section 206 of the Transport Act 2000, the SRA's 2001 Rail Freight Strategy will cease to be in force. It is important, therefore, that the Government restate clearly their objectives for rail freight.

The Ten Year Plan for Transport, published in 2000, forecast potential growth in rail freight of up to 80 per cent. to 2010. This was interpreted by many as a target, though we had always made it clear that actual growth would depend on a number of factors—in particular, the success of rail freight operators in winning business in highly competitive markets.

In fact, although it is now recognised that the 80 per cent. forecast is unlikely to be met, growth in the rail freight market has been impressive. Rail freight is a thriving and competitive private sector industry, and since privatisation (1995), levels of freight moved have increased by 55 per cent. (measured in tonne km). Rail freight's market share also increased over the same period from 8.5 per cent. to 11.5 per cent.

The Government welcome this growth and wish to see it continue. Our clear policy aim is to see goods being moved in a sustainable way, which maximises benefits to the economy and to society. For instance, because they generally have less impact on society than road transport, rail and water freight can bring substantial benefits. In 2004–05, the rail freight industry moved the equivalent of over 7 million lorry journeys and saved 1.43 billion lorry kilometres, delivering significant reductions in pollution and congestion. We believe rail therefore has a crucial role to play in goods transport alongside other modes, and we wish to see freight travelling by rail instead of road wherever this makes most sense.

This aim can be delivered most effectively by a competitive and dynamic private sector rail freight industry, and this is borne out by the growth since privatisation, which has been driven by real on-rail competition throughout the industry, including several new entrants to the market. We will not dictate to the industry how it should run its business or become involved in operational issues. Where disputes occur with other parts of the railway, they should be resolved through established rail industry dispute procedures.

But the Government do have a role to play and a relationship with the rail freight industry. Rail freight companies run on the same tracks as the publicly specified passenger railway, so the Government have to be mindful of their needs. And the Government recognise and wishes to encourage the important environmental and economic benefits that rail freight can bring.

We will therefore ensure that our policies and regulations do not put unnecessary obstacles in the way of future growth; we will continue to provide financial support where it is affordable and offers the greatest environmental, congestion and safety benefits when assessed alongside support for other modes; and we will ensure that in specifying the passenger railways, we recognise and take into account the consequences of our decisions upon the rail freight industry.

To achieve this, we will:

Continue to support the principle of incremental access charges for freight operators

Rail freight's ability to compete against road and other modes is dependent upon stable and affordable charging for access to the network. The Government support this and believe it is best achieved through the principle of freight operators paying charges which reflect only the costs that they impose upon the network (in line with the charging principles set out in EU Directive 2001/14). We will therefore work with the rail industry to ensure this remains the case—for instance, providing clear-guidance if and when the level of freight charges is reviewed by the ORR.

Work with the freight industry to understand its needs when setting the strategy for the rail network, and to provide the greatest possible certainty of access

In order for rail freight companies and their customers to invest, they need certainty about where and when they can run trains on the network. The Government will work with the industry to develop robust demand forecasting and modelling tools, and to ensure that it understands the needs of the freight industry when developing its high level output specification and other key policies. We will ensure that our appraisal methodologies treat freight and passenger interests equitably, and we have also committed through the Railways Act to ensuring that appropriate compensation will be provided should the contractual interests of freight companies or others be impaired by changes in outputs. In addition, we welcome Network Rail's decision to produce a national freight utilisation strategy, which will act as a key input to the route utilisation strategies, and also the ORR's recently published policy that UK freight operators should be eligible for access contracts of up to ten years (and longer in exceptional circumstances).

Ensure grant funding is targeted to deliver the maximum benefits in terms of reducing congestion, pollution and accidents

From 2007–08, the Government's funding programmes for rail freight, including the reopened freight facilities grant, will be incorporated alongside water and road freight grant programmes into a cross-modal Sustainable Distribution Fund. This will prioritise funding across all three modes to favour those grants that offer the maximum benefits for the money being spent. In the meantime, the Department will consider in consultation with the industry the most appropriate future form for Company Neutral Revenue Support and other grant programmes (which may include opening funding to flows originating from the Channel Tunnel) within the Sustainable Distribution Fund, and seek renewed state aids clearance.

Work to ensure that regional and local planning decisions reflect Government priorities relating to the sustainable movement of goods

We wish to see private sector investment in major rail freight facilities, such as intermodal terminals, continue. It is not appropriate for the Government to promote individual schemes—it is for the private sector to develop proposals and progress them through the necessary approvals including planning consent. But the Government do want due account to be taken of our policy goals for the sustainable movement of goods. This does not imply an active role in individual cases, but if necessary we will be ready to act to ensure decision makers are better informed particularly in the application of planning guidance. We will also be ready to consider changes to planning guidance where appropriate.

Work with the industry and Network Rail to establish how freight growth can be accommodated on the network

The ORR is currently carrying out work in conjunction with Network Rail to establish the baseline capability of the network. Once that has been completed, we will consider with the industry how we can support, fund and accommodate change. This could be through reallocations of capacity within the existing network which make sense for both passengers and freight, incorporating incremental freight benefits into planned renewals, or considering how freight-specific enhancements might be taken forward by either the private sector or, in the long-term, the Government (subject to strict affordability and value for money criteria).

Work with the devolved administrations, and with the EC to ensure a consistent UK—and Europe-wide approach to rail freight

Rail freight is a cross-border business. The Railways Act gave increased powers to support rail freight to the devolved administrations, and we will work with them (and with other partners such as TfL and the Passenger Transport Executives) to ensure that policies relating to rail freight across the UK are consistent. We will also continue to work with the EC to liberalise access to the wider European rail freight market and increase competition, including through the Channel Tunnel.

I have today placed in the Libraries of both Houses a report on modelling work commissioned by the Department for Transport to look at the impact of projected levels of development and population and economic growth on the transport networks in the wider south-east at a strategic level in 2016. The report "Wider South-East Regional Research Study" can also be obtained from the Department's website.

On the 6 July last year the Secretary of State announced a consultation on the issue of building a new expressway to run parallel with the M6 between Birmingham and Manchester as an alternative to the widening proposal announced to the House in December 2002.

The consultation, which sought views on whether the Highways Agency should carry out more detailed development work and a feasibility study, closed on 21 October 2004. Approximately 9,500 responses from a range of stakeholders were analysed. A breakdown of the responses has been placed in the Library of the House.

The M6 is an important transport artery linking the midlands and the north-west. An investment of £7.6 billion has been made to upgrade the west coast main line, part of which runs through this artery. However, the Government have accepted the need for more road capacity, as shown by the midlands to Manchester multi-modal study. The issue is how best that capacity can be provided taking full account of the impact of construction—through a widening scheme, or via an expressway running broadly parallel to the existing route.

Providing additional capacity to the M6 between Birmingham and Manchester, whether in the form of widening the existing motorway or a tolled expressway, will require a huge investment. It is vital that we examine the options carefully and choose the right way to provide the capacity needed.

The Secretary of State has considered the views expressed in the consultation. While it is clear that there is no consensus in favour of the expressway proposition, the option is no more than an outline at this stage. More evidence on the widening and expressway propositions is needed before a decision on a preferred option can be taken.

I have therefore asked the Highways Agency to carry out detailed development work on the expressway and a feasibility study to compare the impacts of the costs and benefits of the expressway with those of widening. Both expressway and widening options will be worked up in parallel. The next stage is a decision on which option to take to public inquiry, following further consultation on the options. I have asked the Highways Agency to provide further advice with a view to taking that decision next year. Whichever option is chosen, the financial, economic and environmental appraisal work to be carried out over the coming year will be required before we can publish draft orders setting out our proposals. The Highways Agency will consult and work with local stakeholders and the statutory environmental agencies during the detailed development work.

The work on widening will examine the technological and physical practicalities of locking in the benefits of that additional capacity. This will involve considering a number of measures, which could be used individually or in combination, such as access management; segregated lanes for priority traffic; speed controls; and pricing on the new capacity.

The expressway would take around a year longer to bring to public inquiry than the widening proposal, because of the need to appoint a concessionaire. However, this additional time would be made up during construction, because the expressway would be built alongside the existing motorway. In contrast, widening the existing motorway would involve extensive traffic management during construction, which would lengthen the construction timescales by about a year. Our current best estimate is that work on the widening scheme could start on the ground in 2011 with the scheme opening to traffic in 2016; and that work on the expressway could start on the ground in 2012 with the scheme opening to traffic in 2016. This is in line with the estimated delivery date of the widening as reported by the midlands to Manchester multi-modal study.

On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the BFI inspection report on Cherwell district council was published today and copies have been placed in the Library.

In 2003–04 Cherwell district council administered some £22 million in housing benefits, about 36 per cent. of its gross revenue expenditure. The council takes a strong stance against benefit fraud. The benefits investigation team is committed to delivering a professional, high-quality service and is well supported by Members and senior managers.

The good practices identified in the report include:

comprehensive guidance for investigators and administration staff, including a code of conduct for investigators;

an electronic fraud referral form and development of an on-line fraud awareness training package;

good relationships with the council's benefits staff and the Department for Work and Pensions' Counter-Fraud Investigation Service;

a high success rate in the prosecution of joint investigation cases.

However, the council did not fully comply with the Department's security against fraud and error scheme nor follow the Department's guidance in some interviews under caution. The report also notes that:

internal audit has not audited the benefits investigation team for seven years;

no formal risk assessment of fraud referrals is undertaken;

the council does not always follow its own policy criteria when deciding on the most appropriate sanction to offer or document the reasons for not following it;

management checks are not carried out consistently and comprehensively, and all action taken during an investigation is not always recorded on the file in accordance with the Department's guidance.

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

On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the BFI inspection report on Doncaster metropolitan borough council was published today and copies have been placed in the Library.

In 2003–04 Doncaster metropolitan borough council administered some £68 million in housing benefits, about 12 per cent. of its gross revenue expenditure. The council gives a high priority to combating benefit fraud and complies with all significant aspects of the security against fraud and error scheme. The council's investigations team is well supported by members and managers. BFI found a number of good practices, including:

an experienced and well trained investigation team;

a comprehensive suite of process control documents;

a comprehensive fraud management IT system with a well developed reporting facility;

promoting good quality fraud referrals from a variety of sources, particularly the visits team,the benefits team and the Department's Counter-Fraud Investigation Service;

setting and achieving demanding sanctions' targets.

The council is providing a high standard counter-fraud service which performs well. For example, from April to December 2004 eight cases were successfully prosecuted and 30 formal cautions and 48 administrative penalties were raised. BFI is concerned, however, that the council do more to gather sufficient evidence in every case leading to an interview under caution. My right hon. Friend the Secretary of State is considering the report and may ask the council for its proposals in response to BFI's findings.

On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the BFI inspection report on Wrexham county borough council was published today and copies have been placed in the Library.

In 2004–05 Wrexham county borough council administered some £27 million in housing benefits, about 11 per cent. of its gross revenue expenditure. The council's anti-fraud section was committed to detecting and preventing benefit fraud. A number of good practices were identified, including:

interviews under caution are witnessed in a high proportion of the cases that were sampled;

all the fraud investigation officers have had professionalism in security training;

appropriate and fully documented use of authorised officers' powers.

However, senior management must ensure that all staff are aware of and fully understand the policies and procedures relating to their area of work. The report notes that there is a lack of understanding as to how the council's sanctions policy should be applied, and this has resulted in some sanctions being applied that did not comply with the policy or the Department's guidance.

The lack of a systematic checking regime means that the council can only have limited assurance on the quality of its counter-fraud activities. Improvements are also required in the quality and quantity of management information collected and analysed.

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

On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the BFI inspection report on East Staffordshire borough council was published today and copies have been placed in the Library.

In 2003–04 East Staffordshire borough council administered some £16 million in housing benefits, about 40 per cent. of its gross revenue expenditure. Although the council was not at standard for any of the seven functional areas of performance standards it was providing a fair towards good service in housing benefit and council tax benefit administration and counter-fraud activities.

The council had a clear vision and had initiated a major business transformation programme during 2003–04 to radically improve the way it delivered its benefits service. This programme had culminated in the introduction of new IT systems for its benefits and council tax administration and a document image processing system.

As well as implementing new processes and procedures, East Staffordshire Borough Council improved performance. It cut the processing of new claims from an average of 89 days in 2002–03 to an impressive 33 days. A high standard of personal service was being provided to customers by professional, knowledgeable and courteous staff. Readily accessible customer information helped to ensure customer enquiries were dealt with promptly. However, this was let down by very little activity being undertaken to encourage benefit take-up. East Staffordshire borough council had recognised this as an area for improvement and planned to increase customer consultation and take-up initiatives in the future.

However, the council had not made full use of available management information and this and inadequate management checking meant there was limited assurance about the accuracy of claims processed.

Efforts to counter fraud were also improving. The requirements of the verification framework were being met. A number of sanctions, including successful prosecutions and administrative penalties, had been applied. However, more needs to be done to sustain improvement, including the sifting of referrals and management checks on investigations and the use of a wider range of overpayment recovery methods.

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

On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the BFI inspection report on Maldon district council was published today and copies have been placed in the Library.

In 2004–05 Maldon district council administered some £11million in housing benefits, about 50 per cent of its gross revenue expenditure. The council is committed to tackling benefit fraud and its counter-fraud work was well supported by members and senior managers. Demanding targets for fraud work were set and achieved. Investigations were subjected to a thorough checking regime and there was a clear process for authorising and applying sanctions. The council had a good working relationship with the Department's counter-fraud investigation service and had successfully undertaken joint investigations leading to sanctions. The Police and Criminal Evidence Act 1984 was strictly adhered to and surveillance activity carried out in accordance with legislation. But the council was not fully complying with the security against fraud and error scheme in that a clear admission to the offence was not obtained before the offer of a caution to the customer.

Investigations resulting in administrative penalties and prosecutions were carried out to a high standard, and interviews under caution were conducted in accordance with the relevant legislation.

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

On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the BFI inspection report on Shepway district council was published today and copies have been placed in the Library.

In 2003–04 Shepway district council administered some £30 million in housing benefits, about 48 per cent. of its gross revenue expenditure. The council is keen to take a strong stance against benefit fraud. The work of the fraud team is well supported by members, the chief executive and senior officers.

Good practices include:

a code of conduct for counter-fraud investigators;

well trained and experienced fraud staff;

authorised officers are registered with the Department and are working well, within the legislation;

all surveillance is authorised and reviewed regularly;

excellent publicity for the prosecutions that the council has undertaken.

However, BFI found weaknesses in the investigation process and in the management of the fraud team, including:

interviews under caution were very brief, with poor interviewing techniques being used in some cases;

errors and omissions in both the case log notes and paperwork;

the council's sanction criteria are too vague to be applied consistently and reasons for variance are not always fully documented;

surveillance was not always proportionate or effective;

management checks are not carried out, and all action taken during an investigation is not always recorded on the file in accordance with the Department's guidance.

The council recognises the need to improve practices in those areas and has asked for support from BFI's performance development team.

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

On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the BFI inspection report on North West Leicestershire district council was published today and copies have been placed in the Library.

In 2004–05 North West Leicestershire district council administered some £13 million in housing benefits, about 28 per cent. of its gross revenue expenditure. There was commitment at all levels within the council to deter and prevent fraud. The work of the council's benefits inquiry unit was well supported by members and managers and BFI found a number of good practices.

BFI was impressed with the commitment shown by the benefits inquiry unit to combat benefit fraud. It had raised a large number of sanctions in relation to the number of staff and its caseload. However, there were delays in informing suspects of the outcome of the investigation, and no formal management checking of cases. Overall, the council was tackling fraud effectively.

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

On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the BFI inspection report on North Norfolk District Council was published today and copies have been placed in the Library.

In 2003–04, North Norfolk district council administered some £18 million in housing benefits, about 32 per cent of its gross revenue expenditure. Overall, although the council did not meet any of the seven functional areas of performance standards, it was providing a fair standard in housing benefit and council tax benefit administration and counter-fraud activities.

Surveys by the council showed high levels of customer satisfaction in terms of the physical reception facilities, the quality of advice available and improvements in the speed of the service. But the council had been striving to cope with a backlog of work since June 2004 and processing delays meant performance was below the standards required to decide new claims and changes of circumstances.

The council's counter-fraud work was under-resourced. The council operated from December 2003 until September 2004 without any investigators and had not achieved any successful prosecutions. Overpayments arose because notified changes of circumstances were not dealt with promptly and overpayment recovery was ineffective. Management information necessary to monitor the level and age of housing benefit debt was not collected.

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

On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the BFI inspection report on Berwick-upon-Tweed borough council was published today and copies have been placed in the Library.

In 2003–04, Berwick-upon-Tweed borough council administered some £5.6 million in housing benefits, about 30 per cent, of its gross revenue expenditure. The council gives high priority to combating benefit fraud and is committed to complying with all aspects of the security against fraud and error scheme. The counter-fraud investigation team works hard to deliver a professional and high quality service. The team is well supported by the leader of the council, members, the chief executive and senior managers.

The report notes a number of good practices, including:

good working relations with key stakeholders;

a high standard of recording and filing of documentation in case files;

a high percentage of referrals investigated;

accurate subsidy claims that fully comply with Departmental guidance;

vigorous recovery of fraud overpayments and administrative penalties.

However, some important weaknesses were identified:

poor interviewing techniques;

delays in investigation activity;

interviews under caution not fully complying with legislation and Departmental guidance;

no systematic management checking regime;

The council demonstrated its commitment to improve performance by revising some procedures during the on-site phase of the inspection, including the management of formal cautions, and by acknowledging that other areas need improvement.

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

The Disability Rights Commission's annual report and accounts 2004–05 have been published today and laid before Parliament. The DRC's annual report of its activities in the last accounting year amply demonstrates its continuing success in its important work to eliminate discrimination against disabled people; to promote equal opportunities; to encourage good practice and to keep the working of the Disability Discrimination Act and the DRC Act under review.