I am pleased to announce that, following a competition, QinetiQ has been selected as the preferred bidder to supply and operate the subsonic target element of the combined aerial target service (CATS) programme. Contract award is expected to take place after a period of final negotiations.

This decision marks a significant step forward for the CATS project. This project will provide a rationalised supplier base for MOD and will produce savings in the order of 10 per cent. of the total cost over the 20-year life of the contract. It will also mean we have a single provider for subsonic aerial targets.

The contract we intend to place will be for a contractor owned and operated service. The preferred bidder will supply and operate subsonic aerial targets for the Armed Forces, working with the MOD aerial targets systems integrated project team (ATS IPT). Supersonic aerial targets will be procured by the ATS IPT from the US.

On 8 November 2005 I announced to the House proposals for a second phase of rationalisation of the ABRO Trading Fund to address its need to become a significantly more efficient business in a rapidly changing market for the repair, maintenance and overhaul of armoured fighting vehicles and other land based equipment. This was subject to normal trade union consultation. Consultation with the national trade unions completed on 27 January 2006. Following subsequent discussions within the MOD, and consideration of the latest view on ABRO's order book, I am now in a position to make a further announcement.

I remain convinced that rationalisation of ABRO remains necessary: the business must make continuous improvements to its competitiveness and efficiency if it is to have a viable future.

I have therefore decided that the rationalisation of the LAND/B vehicles business unit (known as ABRO's "one stop shop" for unprogrammed repair) will proceed as announced in November 2005, including the closure and re-provision of the Colchester site and the potential sale and lease-back of part of the Warminster site, with a headcount reduction of up to 339 by April 2008.

Since November 2005, however, there have been a number of developments which have a potentially material impact on the proposed rationalisation of ABRO's other four business units (armoured vehicles; major assemblies; electronics, weapons, Optronics and calibration; and head office). The principal of these is a deeper understanding of the likely threat environment on deployed operations over the coming period, which will require us to update and upgrade more armoured vehicles.

To ensure we continue to have the capability to provide appropriate protected mobility for our soldiers, we have therefore decided to extend the depth repair programme for the Fv430 fleet of armoured fighting vehicles, which is carried out at ABRO's Bovington site. Consequently, the intention to move the Warrior and CVR(T) lines from Donnington to Bovington by March 2007 will not take place as previously planned. This will result in the armoured vehicle facility being retained at the Donnington site for the medium term.

However, there remains a pressing need for improvements to the efficiency and effectiveness across all of ABRO's operations, including the remaining four business units. The recent decision on the Fv430 and the consequential impact on Donnington will mean that the rationalisation proposals will need to be re-examined. The results of this work will be announced later in the year and, if necessary, there will be further consultation with trade unions.

The Government remain committed to modernising our armed forces. To do so, we must continually look for more efficient support solutions to enable us to invest more resource to support our men and women at the front line. While this news represents a welcome development for the Donnington armoured vehicle facility; I hope to be able to confirm the final position on rationalisation later in the year.

This House, and the farming industry in England, has I know been concerned about problems with the Rural Payments Agency's delivery of the Single Payment Scheme. The Government fully share this concern and I would like to make a statement about action which I am taking today.

The Minister with responsibility for sustainable farming and food, Lord Bach, told the other House on 31 January that the RPA would establish entitlements in mid February and that all farmers would then receive an entitlement statement. This has now happened in all but around 1 per cent. of cases and payments did indeed start to be made before the end of February.

Ministers have throughout been advised that, following the validation of claims, the RPA expected to make the bulk of payments by the end of the month. Late on Tuesday afternoon the chief executive informed me that their latest reassessment of the position was that this would no longer be possible. This is an unacceptable situation.

I have concluded that urgent action is needed to strengthen the leadership of the agency. With my approval, the Permanent Secretary of my Department, Helen Ghosh, has today appointed Mark Addison as acting chief executive in place of Johnston McNeill. Mark Addison has outstanding experience and abilities which I believe fit him for this task, and I have asked him to report to me by Tuesday on the immediate steps needed to get us back on track. A new chief executive will be recruited as soon as possible to take on the task of leading the agency forward at this crucial time.

Ministers had already concluded, on advice from the permanent secretary, that there were structural issues in the RPA which needed to be addressed over a longer period of time. I am therefore announcing today our decision to set up a fundamental review of the agency, to look at its current and possible future functions, and the effectiveness of its relationship with my Department and its other key stakeholders, and to make recommendations for the future. Details of the review are being published today on my Department's website.

I know that this House and everyone in the farming community will be as disappointed as I am about the announcement I have had to make today, but a successful conclusion to the 2005 round of SPS and a smooth start to the 2006 scheme will remain one of the Department's highest priorities.

RPA staff have worked with absolute dedication throughout, often in the face of considerable difficulties. I am sure they will continue to do so.

On the afternoon of 14 March, the Medicines and Healthcare products Regulatory Agency (MHRA) suspended a phase 1 clinical trial for a new product that is being developed to treat chronic inflammatory conditions and leukaemia, having been notified that six men involved in the trial had been admitted into intensive care.

Eight men were involved in this stage of the clinical trial; six were given the product and two were given a placebo. Having received their first dose of the drug in the morning of 13 March, all six suffered adverse reactions, which by the evening of that day were serious enough to require admission to intensive care.

The top priority once the MHRA had been notified of this was to ensure that no further patients were harmed. The MHRA immediately suspended the clinical trial, and sought information as to whether any other trials were under way anywhere in the world with the same drug. The MHRA has been assured that no other trials are taking place, and no further patients are being given this product. Nevertheless, the MHRA has alerted international regulatory authorities of the events.

The next priority is to establish what has led to these adverse events. An MHRA inspection team was sent to the unit on the afternoon of 14 March, and is now carrying out an investigation. This will be taken forward as quickly as possible but may take some time to determine the cause of the adverse reactions. The MHRA is collaborating fully with the Northwick Park Hospital, North-West London Strategic Health Authority, Department of Health and the Metropolitan Police.

There are rigorous controls governing the conduct of clinical trials that apply throughout the development of a drug. Phase 1 clinical trials are the first stage in which a drug is used in humans, and they proceed only after authorisation from both the MHRA and a research ethics committee. Clinical trials in humans are undertaken after extensive laboratory and animal testing have given positive outcomes as to the safety of the drug in question.

An event such as this in a phase 1 trial is wholly unexpected extensive testing and analysis of products is undertaken before they are given to human volunteers. It is because of the exceptional nature and seriousness of this situation that the MHRA has moved quickly to protect patients and establish what happened.

This is a statement of policy, made by me pursuant to article 4 of the Strategic Planning (Northern Ireland) Order 1999, which provides that the Department for Regional Development (DRD) shall provide policy guidance and advice in relation to its Regional Development Strategy and the implementation thereof. DRD is also obliged by article 4 to co-ordinate the implementation of the Regional Development Strategy.

The statement is an expression of Government policy. I am advised that it is the duty of planning decision makers to have regard to relevant statements of planning policy, as legally material considerations. This is such a statement. I am further advised that a statement of planning policy can lawfully contain provisions regarding the weight to be attributed to a specified material consideration.

Today I am publishing draft "Policy Planning Statement (PPS) 14" that proposes a presumption against development throughout the countryside. In making the present statement I have considered the views put forward by a wide range of bodies and individuals in response to the issues paper published for public consultation in June 2004. The issues paper was sent to all Northern Ireland MPs, MLAs and councils, a wide range of other interested parties, including all on the Department's section 75 consultation list. It was also advertised in Northern Ireland's three main daily newspapers. This consultation lasted for three months. I have noted that many rural dwellers are concerned that their way of life should be protected. There is also concern that the high rate of new buildings in the countryside is unsustainable and will produce irreversible and unacceptable impacts on the environment. Having given careful consideration to all views and representations expressed during the policy making process to date, I have concluded that, in the public interest, action designed to minimise irreversible damage cannot be delayed. The present statement seeks to address substantial concerns that the policy direction of draft PPS 14 could be seriously faistrated and undermined by a large influx of planning applications, particularly for single dwellings, during the consultation period and before the final policy is published. At the same time, I am of course aware of my obligation to consider conscientiously all further views and representations expressed during the next phase of the overall consultation exercise initiated today.

Since the publication of the Regional Development Strategy, monitoring of development: activity in the countryside shows that there has been a continuing and accelerating upwards trend in planning applications for single dwellings. The majority of these applications result in approvals and development on the ground. There is evidence that this rural development pressure is now affecting most areas of Northern Ireland. Announcement of the preparations of new development plans has usually been a trigger for significantly higher numbers of planning applications for development. Until now the main policy response has been the wider application of green belt and countryside policy area designations in emerging development plans. However, my assessment is that this approach is not sufficiently timely or effective to address this ongoing pressure, or to protect the public interest.

This is particularly the case given Government's strong commitment to achieving significantly higher standards of environmental protection to support implementation of a range of European directives and international commitments on sustainable development.

In view of this, draft "Planning Policy Statement 14: Sustainable Development in the Countryside" proposes a presumption against new development in the countryside outside designated settlement limits with a limited number of exceptions. My present intention is that strict controls on development will operate to meet the essential needs of the rural community, protect our natural resources, achieve the high standards of environmental protection demanded at national, European and international levels, and will assist in the implementation of the Regional Development Strategy. This statement expresses my assessment, as DRD Minister, of the requirements of the public interest at present.

In addition, I consider that, in the present circumstances, where there is evidence of a significant threat to the environment from new development, there is good reason to proceed with a precautionary approach pending the completion of the "Planning Policy Statement 14" policy development process. To this end the provisions of draft PPS 14 will immediately take precedence over the existing policies listed in the draft and should be accorded substantial weight in the determination of all planning applications received after today.

I make this statement with the approval of and having consulted the Minister with responsibility for the Department of the Environment's Planning Service.

Copies of the draft "Planning Policy Statement 14: Sustainable Development in the Countryside" have been placed in Libraries of both Houses and are also available on the website: http://consultations.drdni.gov.uk.

The Equality Commission for Northern Ireland has today laid before both Houses a copy of the report on its investigation of a complaint made by the Children's Law Centre under paragraph 10 of schedule 9 to the Northern Ireland Act 1998 of an alleged failure by the Northern Ireland Office to comply with its Equality Scheme. The report concluded with a recommendation that in order to comply with its approved Equality Scheme the Northern Ireland Office must undertake an Equality Impact Assessment of the anti-social behaviour order (ASBO) policy and legislation in relation to its impact on children and young people. The report made further recommendations regarding changes in the process to be adopted by the Northern Ireland Office in undertaking future equality screening exercises.

The Northern Ireland Office has a strong track record of taking its obligations under equality legislation very seriously and therefore sought to give careful consideration to the report and its recommendations which it received in May 2005.

However, in June 2005 the Equality Commission's report triggered an application for judicial review by an individual in respect of whom an ASBO had been sought. This was on the basis that the ASBO legislation should be struck down on account of the finding by the Equality Commission that the Northern Ireland Office had failed to comply with its Equality Scheme. The judicial review proceedings therefore encompassed the Equality Commission's report, in order to secure definitive guidance on whether ASBOs could operate on a sound legal footing in Northern Ireland. In light of this legal challenge, the NIO determined to defer its formal response to the Commission's report pending completion of the litigation. The High Court (Girvan J) rejected the application for judicial review in October 2005 and the Appeal Court (Kerr LCJ) upheld this decision on 8 March 2006.

Girvan J's judgment noted that

"the framework of schedule 9 [to the Northern Ireland Act 1998] is to empower the [Equality] Commission to make an investigation and produce a report with recommendations and then leave it to the Secretary of State to decide what effect, if any, should be given to the report and the recommendations. The report, as laid before Parliament, goes into the public domain, and the democratic process is the proper forum within which the outworking of the matter takes place."

The effect of the judgment of the Court of Appeal was to endorse these findings and conclusions. Fundamentally, the outcome of the litigation is that the Commission's report does not have the effect of invalidating the ASBO policy or legislation. Both remain lawful and intact. The NIO will also have regard to the comments and findings of Girvan J about the actions of the Commission in accepting the original complaint for investigation and in how it subsequently went about conducting its investigation and compiling its report.

The Government do not consider that the High Court's judgment requires us to move from our original position that an Equality Impact Assessment was not necessary. The Government do however wish to be as responsive as possible to the Equality Commission's report bearing in mind the importance we attaches to equality issues. I have therefore brought forward the five-year review of the Northern Ireland Office's Equality Scheme, strictly not scheduled to take place until November 2006, and this will subsume the procedural points raised by the Commission in its recommendations. This review has been rescheduled for completion by June 2006.

On the specific issue of any equality consideration of ASBO policy and legislation, an evaluation of the implementation of ASBOs is planned during 2006–07. In addition the Criminal Justice Inspectorate has included within its 2007–09 programme an inspection focused on the operation and effectiveness of ASBOs. If either of these reviews points to any unforeseen equality implications I shall ensure that these will be carefully examined. I believe in this way the matter can be taken forward in a positive manner and with regard to any equality considerations which may have emerged in the light of our experience of operating the ASBO policy.

I must stress however that ASBOs will continue to be deployed with energy and confidence in Northern Ireland, where they can be just as effective as in Great Britain.

I have today published the Government's final response and accompanying regulatory impact assessment to the public consultation on changes to the Export Credits Guarantee Department's anti-bribery and corruption procedures introduced in December 2004. The consultation document, interim response and final response documents have been laid in the Library of the House. Copies of these documents and the representations made to the consultation can be found at www.ecgd.gov.uk.

I have carefully considered the representations received in the course of two rounds of public consultation. My key concern has been to ensure that ECGD's procedures are both rigorous in minimising the risk of ECGD supporting corrupt activity and also workable for ECGD's customers.

ECGD will now make a number of changes to its December 2004 procedures. The main outcomes are:

The scope has been changed in respect of those about whom representations are made concerning past/future involvement in corrupt activity, as has the extent to which representations are qualified. For example, ECGD will no longer require representations about the actions of group companies not involved in the contract for which ECGD support is being provided. These changes will provide ECGD with the precise assurances that it requires, and avoid customers having to provide information that is not necessary;

Applicants for support will now be requested to provide the identities of agents. The provision of this information enhances the transparency of applicants' representations, reduces the risks of ECGD supporting contracts involving bribery or corruption and also supports the Government's wider aim of deterring corruption. ECGD is fully confident that it can implement these requirements in ways that prevent inadvertent disclosure of sensitive information. ECGD will be seeking comments from consultees on the details of the proposed internal handling arrangements for information about agents' identities;

ECGD will have the power to audit the accuracy of those representations relating to the issue of bribery and corruption on notice at any time, rather than just when it suspects that

bribery has taken place. These powers allow ECGD to make appropriate checks at random and are sufficient to play a part in deterring corruption.

These revised procedures will take effect from 1 July 2006.

These revised procedures take account of arguments made by consultees while preserving the consultation's aim of striking an appropriate balance between rigour and practicability. ECGD's procedures remain among the strongest in use by any of the world's leading Export Credit Agencies.

I attended the Competitiveness Council in Brussels on 13 March. Martin Bartenstein, Austrian Minister for Economics and Labour, chaired the Council in the morning and Elisabeth Gehrer, Austrian Minister for Education, Research and Culture, in the afternoon.

The Council exchanged views on the state of play on the Lisbon Strategy on the basis of the Commission's annual progress report. In relation to this, we also discussed the Key Issues Paper prepared by the Austrian presidency, and agreed this as the Competitiveness Council's contribution to the Spring European Council. I supported the text of the Key Issues Paper.

For the agenda item on small and medium sized enterprises, the Commission presented their Communications on "Implementing the Community Lisbon Programme—Modern SME Policy for Growth and Employment" and "Implementing the Community Lisbon Programme—Fostering entrepreneurial mindsets through education and learning". There was a discussion based on two questions set by the presidency. These related to integrating the "Think Small First" principle into European policy, and the application of the "One Stop Shop" principle to simplify administrative procedures for businesses starting up. Council Conclusions on SME Policy for Growth and Employment were also agreed. I supported the Council Conclusions, encouraging the Commission to consider adopting mandatory small firms impact tests and extending their consultation periods from eight to 12 weeks.

The Council reached a unanimous agreement on the general approach text on the Competitiveness and Innovation Programme (CIP) without discussion. This is pending the opinion of the European Parliament and the final agreement on the future financial perspectives.

The Council took note of an oral summary by the presidency of the informal debate held by Ministers on the Services Directive over dinner on 12 March. The discussion was in the light of the recent vote in the European Parliament. The presidency reported that there had been a constructive debate, and that the Commission is expected to produce a revised proposal in April. The Council will then re-examine the proposal with a view to reaching an agreement on a common position.

The Council took note of the Commission's presentation on a draft Regulation aimed at modernizing the Community Customs Code.

For one of the items under Any Other Business, the Council took note of information from the German delegation on the draft Regulation on type approval of motor vehicles with respect to emissions and on access to vehicle repair information (Euro 5). There was broad support in the Council for Germany's request that the Competitiveness Council should be updated on progress on this Regulation. Ministers in the Environment Council had a policy debate on this on 9 March.

After lunch the Council had a debate on five of the seven Specific Programmes implementing the Seventh Framework Programme (FP7) on Research and Development: "Cooperation"; "Ideas"; "Euratom" and two programmes relating to the "Joint Research Council" and on the Regulation laying down rules for participation under FP7. Relating to the Specific Programmes, the presidency encouraged Member States to focus their interventions on governance of the Programme ("Programme Management") and the ethical principles that apply in respect of the eligibility of projects to be funded under FP7. I contributed to the debate by highlighting that, according to the principle of subsidiarity, the UK believes that ethical issues should be legislated for at national level given the cultural and religious diversity of Europe. Therefore, the UK opposes restrictions at Community level and will enter a joint declaration to the Council minutes to this effect along with Sweden, Belgium, Czech Republic, Spain and Portugal.

Finally, under "Any Other Business" the Council took note of a report by the presidency on the preparation of the fourth Eli and Latin America/Caribbean (LAC) Summit with regard to cooperation on science and technology. The Summit will take place in Vienna on 11–12 May 2006.

The Council adopted a Council Resolution on a customs response to latest trends in counterfeiting and piracy without discussion.

I am today advising Parliament of my intention to engage consultants to conduct a strategic review of the future business options for Remploy Ltd., in the context of the Government's strategy for supporting greater numbers of disabled people into employment.

This is a crucial next step in our response to the National Audit Office report "Gaining and Retaining a Job: The Department for Work and Pensions Support for Disabled People". This report found that we have made good progress in helping many disabled people. However, it contrasted the effectiveness of Remploy's Interwork service with the poorer value for money offered by Remploy factory provision. It recommended that we re-engineer the profile of the Remploy business to improve overall value for money.

For over 60 years Remploy has made, and continues to make, a major contribution to improving employment opportunities for disabled people. We need to look closely at ways we can build upon Remploy's strengths and address its weaknesses. Ensuring that Remploy provides a modern, inclusive service for all those it helps, now and in the future, is critical if we want to achieve our wider goal of equality for disabled people.

By bringing the costs of supporting disabled people in Remploy factories into line with those for supporting people in mainstream employment through Interwork, we will free-up resources to extend the support we offer to disabled people, both in terms of helping more disabled people into work and doing more for those who need it.

The Prime Minister's strategy unit report "Improving the Life Chances of Disabled People" and the recently published Green Paper on Welfare Reform set out the Government's intention to do more to improve opportunities for disabled people. Remploy has a key role to play in helping us achieve these goals.

To ensure that proposals meet the employment needs of disabled people, Dr. Stephen Duckworth of "Disability Matters" is to be part of the review team.

The consultants will provide independent expert advice on the options for a radical strategy to enable Remploy to help more disabled people into work at unit costs comparable with other providers of supported employment, without compromising services for people with more substantial barriers to work.

Consultants will provide the Secretary of State with advice on the options for a strategy within the existing budget funding envelope of £111 million per year and on alternative approaches compatible with the Government's overall policy direction to support greater numbers of disabled people into work that would be possible without the need for significant further investment.

I am placing a copy of the terms of reference for the review in the library. We will now move to appoint consultants to carry out the review. The consultants will be asked to report to Ministers by the end of May 2006.