The National Statistics Annual Report for 2006-07 is being published and laid before Parliament today. Copies are available in the Libraries of the House and is also accessible on the National Statistics web site.

In a written ministerial statement of 10 October 2006, the previous Economic Secretary undertook to report to Parliament on a quarterly basis on the operation of the UK's asset freezing regime. This is the third of these reports and covers the period April-June 2007.¹

Asset-freezing designations

In the quarter April-June 2007, the Treasury made three domestic designations under the Terrorism (United Nations Measures) Order 2006.

None of these were persons already designated under earlier Orders.

The Terrorism Order and the Al-Qaida and Taliban Order provide, where appropriate, for designations to be made confidentially and with restricted circulation of notice. No persons were designated on this basis in this quarter.

One person was designated on the basis of closed source material provided by law enforcement and intelligence agencies.

There were no financial sanctions listings at the EU or the UN in relation to terrorism or Al-Qaida and the Taliban of persons with links to the UK.

No designated persons have been delisted in this quarter.

A total of 244 separate accounts and approximately £570,000² of suspected terrorist funds have been frozen in the UK since 2001.

Reviews

The Treasury keeps domestic asset-freezing cases under review. A number of formal reviews have been initiated in this quarter and the review of 1 case has been completed. In this case a decision was taken following the review to maintain the asset freeze.

Licensing policy

In accordance with UN Security Council Resolution 1452 (2002), the Treasury operates a licensing system whereby designated persons and others are able to apply to make or receive payments under specific and, if necessary, monitored conditions. In this quarter, the following licences were issued:

Seven listed persons were granted basic expenses licences (two of which were for benefits payments)

No listed persons were granted extraordinary expenses licences; and

six listed persons were granted legal expenses licences.

In addition, the households of three listed persons were granted benefits licences in accordance with the policy set out in the previous Economic Secretary's statement of 3 July 2006 to Parliament.

¹ The detail that can be provided to the House on a quarterly basis is subject to the need to avoid the identification, directly or indirectly, of personal or operationally sensitive information.

² This figure includes approximately $58,000 of suspected terrorist funds frozen in the UK. This has been converted using current exchange rates. Future fluctuations in the exchange rate may impact on the contribution this sum makes to future totals of suspected terrorist funds frozen.

Tax credits today provide support to 20 million people including 6 million families and 10 million children. Take-up of tax credits is a significant success. In 2004-05 take-up of the Child Tax Credit rose from 79 per cent. to 82 per cent., with over 90 per cent. of the money available being claimed. Take-up among those on incomes below £10,000 is 97 per cent. and take-up among lone parents is 93 per cent. This is higher than for any previous system of income-related financial support for working families.

Tax credits play a major role in moving people into work and helping people move up the employment ladder, ensuring that work pays over welfare. Tax credits, economic stability, and the Government's welfare to work programmes have helped to increase the number of people in work by over 2.6 million since spring 1997.

As a result of the Government's reforms to the tax and benefit system since 1997, from April 2007, in real terms:

families with children are, on average, £1,550 a year better off, while those in the poorest fifth will be, on average, £3,450 per year better off; and

a single-earner family on half average male earnings with two children is £3,900 a year better off.

The tax credit system has also played a key role in tackling child poverty. Since 1998-99, 600,000 children have been lifted out of relative poverty, compared to a doubling of child poverty in the previous 20 years.

Her Majesty's Revenue and Customs are today publishing their estimates of error and fraud in the tax credits system in 2004-05. This analysis shows that the rate of error and fraud has declined by a sixth between 2003-04 and 2004-05. This is below the error and fraud rate under the predecessor system; and comparable with error and fraud rates for Income Support and Job Seekers Allowance when the Government first started collecting data in a systematic way in 1997-98.

Looking to the future, HMRC are seeking to accelerate the production of error and fraud figures, which will enable them to set clear targets for a further reduction. HMRC are also looking carefully at whether an estimate can be made of the split between customer error and official error for the 2005-06 and subsequent enquiries.

The largest component of the figures published today is error (£1.13 billion) as opposed to fraud (£40 million). These figures are from a period when the Inland Revenue was starting to recover from the early operational difficulties and new rules and processes were starting to become established.

Since the introduction of tax credits, HMRC has had a detailed programme of action in place to ensure that individuals receive the tax credits to which they are entitled, at the right time. To tackle error, HMRC have continued to improve their communications with members of the public—simplifying the claim form and award notices. Access to contact centres has also been improved, with 99 per cent. of callers in 2006-07 answered on the day they called. Advertising and increased contact has been used to make individuals aware of their entitlements and reduce error.

HMRC is also committed to tackling official error. Accuracy in processing and calculating awards rose from 78.6 per cent. in 2003-04 to 97.7 per cent in 2005-06.

To tackle fraud, HMRC has further refined its risk assessment processes and increased pre-payment checks on claims where fraud or non-compliance is suspected. In addition, compliance specialists are now in place in tax credit contact centres. By providing support and advice to contact centre staff, they have successfully prevented a significant number of attempts to defraud the tax credit system.

Information on organised fraud shows that HMRC is successfully stopping the majority of claims identified as being submitted by organised fraudsters. In 2006-07 HMRC identified attempts to defraud the tax credit system of around £252 million. Of this, the vast majority—some £212 million, was detected by HMRC before any money was paid out.

Tax credits and economic stability have helped to increase the number of people in work by more than 2.6 million since spring 1997, and since 1997 long-term unemployment has reduced by 460,000. Tax credits have improved work incentives, reduced the tax burden on low-to-middle-income families and helped dramatically to reduce child poverty.

Her Majesty The Queen has been graciously pleased to approve my recommendation that the following coins should be issued in 2009:

a crown piece to celebrate the 500th anniversary of the accession of Henry VIII;

a two pound coin to mark the 200th anniversary of the birth of Charles Darwin and the 150th anniversary of publication of The Origin of the Species;

a two pound coin to celebrate the 250th anniversary of the birth of Robert Burns; and

a 50 pence piece to commemorate the 250th anniversary of the foundation of the Royal Botanic Gardens at Kew.

Collector versions of these coins will be released at a premium above face value and, during the course of 2009, the coins will also become available at face value from banks and post offices.

Contracts have been signed with EOF Energy, E.ON UK, Scottish and Southern Energy, and Scottish Power to conduct the trials of smart meters and associated feedback devices. They are being funded by £10 million from Government matched by a similar amount from the companies involved. The funding was announced as part of Budget 2006.

The trials will include 15,000 households receiving state of the art smart meters and 8,000 more receiving clip on real time display units for their existing meters. The other households in the trial will be testing new ways of receiving information to help them cut their energy use. Altogether around 40,000 households will be involved.

Clip on real time display units can tell people how much energy they are using, and how much it is costing when individual appliances are turned on. Smart meters allow energy suppliers to communicate directly with their customers, removing the need for meter-readings and ensuring entirely accurate bills with no estimates. Smart meters tell people about their energy use either through linked display units or in other ways, such as through the internet or the television.

The trials will test out consumers' response to better information on their energy use through a variety of methods, including:

Consumers to be able to access information about their consumption and energy costs through visual display units that can be displayed round the house, over the internet and even through digital TV;

The potential for energy suppliers to provide enhanced billing information with advice to consumers on how they can cut down their energy bills; and,

Providing a breakdown of energy use to the customer and exploring a range of tariffs for consumption at different times of the day.

The trials will be conducted throughout the country and will look at the responses from a range of customers, including those in fuel poverty.

The trials will also look at:

Increasing the frequency of billing as well as the impact of more accurate bills; and

Encouragement to become even more energy efficient through more information and community engagement.

Smart meters are expected to be rolled out to most households within the next 10 years, and all but the smallest businesses in the next five years.

In the meantime, Government have proposed that real time display units be provided with any new meters fitted from 2008, and to all households that request them between 2008 and 2010. It is estimated that these short-term measures will deliver savings of 0.3 million tones of carbon per year by 2020. Government will be consulting further on the implementation of these proposals.

I have placed in the Library of the House today a table detailing for 2005 the cost to the Ministry of Defence (MOD) of participating in the first year of phase 1 of the EU European Trading Scheme (2005).

The table details MOD sites registered in the scheme, the number of free allowances, actual carbon dioxide emissions, scheme administration costs, and additional allowance costs.

Data reported by Energy Conservation Authorities in England under the Home Energy Conservation Act 1995 in the period 1 April 1996 to 31 March 2006 have been placed in the Libraries of the House. This data have also been published on the Department for Environment, Food and Rural Affairs website. Authorities have reported an overall improvement in domestic energy efficiency of 19.26 per cent. as measured against a 1996 baseline.

The month of June was the wettest June on record; in excess of 150mm of rain fell over most of the Midlands and northern England with between 200 and 300mm in parts of the North East. These extreme conditions led to large scale urban flooding, a lot of which was from surface water run-off rather than from rivers. The flooding affected places across the Midlands and Yorkshire and Humberside, and tragically four people lost their lives as a direct result of the flooding. The circumstances of three other reported deaths are still being investigated. Over 37,000 properties including some 7,000 businesses are reported to have been affected, with nearly 18,000 properties affected in the Hull area alone and over 5,000 in the Doncaster area. It is estimated that thousands of people are still out of their homes with around 300 in emergency accommodation in Sheffield and Doncaster, and Hull. The response of the emergency services, local authorities, operating authorities, voluntary sector and the affected communities has been very impressive.

However, as the affected communities, businesses and individuals move to the long and difficult task of recovery, they are understandably asking questions about the flooding—its causes and subsequent management. My ministerial colleagues and I have said that it is vital that we learn lessons now about how to manage and respond to this type of disaster in the future. As part of the usual process following an emergency we are establishing a review to identify these lessons, and the Prime Minister stated on 8 July that the conclusions of such an exercise would be made public. I am, therefore, announcing today how the Government intend to go about this and our aim to publish initial findings by the end of the year and subsequently a formal Government report. The review will be led by officials from the Cabinet Office with my officials’ support. They will report to me, the Minister for the Cabinet Office, and the Secretary of State for Communities and Local Government.

The review will look at flood risk management, the emergency response and the initial moves towards recovery. The longer-term recovery effort will require sustained commitment over a considerable period of time, and a further review will be undertaken separately once these tasks are well in hand and we are better able to assess the lessons to be drawn from it.

The review will consider all available evidence on the flooding and its impacts and what this means for the future. Its specific objectives will be;

i. To understand why the flooding was so extensive;

ii. To learn lessons on how in future we can best predict, prevent or mitigate the scale and impact of flooding incidents;

iii. To look at how best to co-ordinate the response to flooding in future;

iv. To establish what access to support, equipment and information is needed by those involved in the response at local, regional and national levels;

v. To ensure the public has as much access as possible to information on the risk of flooding to allow them to take appropriate precautions, be adequately informed on developments as an emergency unfolds, and be looked after properly in the immediate aftermath;

vi. To establish how the transition from response to recovery is best managed;

vii. To identify those aspects of the response that worked well and should be promoted and reinforced;

viii. To make recommendations in each of these areas to improve the UK’s preparedness for flooding events in the future.

The lessons learned exercise will be wide ranging and will hear from those involved at the local, regional and national level. It will ensure a structured approach to public engagement so that the voices of local communities are heard, including affected individuals and locally elected representatives (councillors and local MPs). At the same time I recognise that a considerable amount of work is taking place dealing with the recovery from last month’s events—the review will therefore take place in a staged approach. It will identify areas for attention as quickly as possible with fuller responses over a slightly longer timescale. We aim to summarise initial findings of the review by the end of the year and explore more fully how we propose to address them in a subsequent published report.

The unprecedented wet weather has caused significant disruption for a number of farmers. In recent days, including during my visit to the Great Yorkshire show, I have received representations from industry representatives and individual farmers about two specific measures we might take to help alleviate their difficulties. Both have now been implemented.

Given the urgency of the issue, I gave instructions yesterday that the cross compliance requirement (Good Agricultural and Environmental Condition (GAEC) 3) prohibiting the use of mechanical field operations and mechanised vehicles on waterlogged soil should be suspended until 31 July 2007. This will enable farmers to use mechanical equipment and vehicles on waterlogged soil and access their crops. Farmers should use their soil protection review as a means to identify and mitigate any soil-related issues arising as a result of the suspension.

Livestock farmers have also been experiencing problems in accessing sufficient forage for their animals. I have, therefore, authorised the rural payments agency (RPA) to allow farmers in England to graze set-aside land with their own animals or harvest hay or silage for their own use. Farmers wishing to make use of this derogation should telephone, e-mail or write to the RPA customer service centre providing the reference numbers for the fields which they wish to graze or harvest. Exceptionally, in these circumstances, farmers may consider that the derogation has been granted unless RPA subsequently makes contact to indicate otherwise.

Further details of these measures are accessible on the RPA website at:

http://www.rpa.gov.uk/rpa/index.nsf/0/839744302B8BBA1080257315005078F1

Following the end of the first round of recruitment for specialty training on 22 June, I should like to give to the House the data that shows the number of posts that have been filled in England.

The information is in the tables. These figures show that 85 per cent. of all junior doctor training posts in England have been filled by the end of round one. Of a total of 15,600 training posts available in England, 13,168 have been offered to and accepted by junior doctors.

A second round of recruitment has commenced and will run until 31 October. Deaneries have informed the Department that there are 2,320 posts available to applicants within Round Two.

As part of the package announced in the House on 24 May there will also be around 1,000 training posts made available at the end of this year’s recruitment process to appointable junior doctors who did not secure a post in Rounds One or Two.

I am today announcing the arrangements we have put in hand to establish the post of forensic science regulator whose role will be to advise Government and the Criminal Justice System on quality standards in the provision of forensic science. This will involve identifying the requirement for new or improved quality standards; leading on the development of new standards where necessary; providing advice and guidance so that providers will be able to demonstrate compliance with common standards, for example, in procurement and in courts; ensuring that satisfactory arrangements exist to provide assurance and monitoring of the standards and reporting on quality standards generally.

The regulator will be supported and advised by a Forensic Science Advisory Council whose members will be drawn from key stakeholders, expert bodies and others with a particular interest in the provision of forensic science to the Criminal Justice System. These arrangements draw on the recommendations of the House of Commons Science and Technology Committee in its report “Forensic Science on Trial” which was published on 16 March 2005 and on the responses to a consultation exercise carried out by the Home Office last year.

A team has been established in the Home Office under the management of a senior civil servant to set up the Office of the Regulator and the Forensic Science Advisory Council. The regulator will be appointed by the Home Secretary following recruitment through the public appointments process. Pending this recruitment, the responsible official will serve as the interim regulator.

In his statement on Tuesday 19 June, Official Report, House of Lords, column 96 that the Government were to provide an additional 1,500 prison places, the then Lord Chancellor agreed to make available the information about where the first 500 of those new places would be located. That information is given in the following table.

Officials from the Ministry of Justice have made initial contact with the relevant local planning authorities, and will discuss the plans fully with those authorities over the next few months. Separate letters have been sent to the MPs for the constituencies concerned.

An announcement about decisions on the remaining 1,000 places will be made after Lord Carter has completed his review of the prison building programme, that was also referred to in the announcement on 19 June.

The Court Funds Office (CFO), an associated office of the Ministry of Justice, provides a banking and investment service for funds held in court. The work is governed by the Administration Act 1982, the civil procedure rules and the court funds rules. CFO manages some £4.5 billion in a mixture of cash and equity holdings. Investment on behalf of children is generally made into the equity index tracker fund, which is managed on behalf of the Ministry of Justice by Legal & General, who are one of the largest managers of index tracker funds in the UK.

A recent review of children’s damages awards that are held in court and administered by the CFO identified a requirement to correct a number of children’s accounts, to ensure that the award is appropriately invested as originally directed by the court. Where the award is more than £5,000 and the child is under 13 years of age, part of the award would usually be placed in an index tracker fund. In a number of cases this investment in equities did not take place.

Prompt action is now being taken to identify all affected cases and where the consequence has been a lower rate of return, to pay the balance necessary to ensure beneficiaries are not disadvantaged. The administrative failures, which led to this situation, have been addressed to ensure cases are invested in accordance with the courts’ directions without delay.

The process for calculating the correction payments has been reviewed by a city firm of accountants and also by the strategic investment board, which is a panel of appointed financial experts that provides generic investment advice to the Ministry of Justice in respect of its clients.

It is estimated that approximately 4,000 current and closed cases have been affected and that the full cost of corrective payments will be approximately £12.5 million. This is out of a total of 90,000 current children’s cases holding nearly £650 million in cash and investments, and 1.1 million closed cases.

Letters providing full details of the corrected accounts are being sent to all litigation friends who represent the children involved.

On 14 June the Ministry of Justice received the results of two unannounced inspections, by the Commission for Social Care Inspectorate (CSCI), into Oakhill secure training centre. They assessed the centre’s development as poor.

As a result I wish to inform the House that a new director has been appointed. Malcolm Stevens took up post on 9 July.

The inspections confirmed concerns raised by the Youth Justice Board regarding levels of order and control at the centre. The CSCI reports will be published in due course.

The Youth Justice Board has required Mr. Stevens to set out how he would improve performance at the centre, which is operated by G4S.

The Youth Justice Board will monitor performance closely and expects to see rapid progress. If this is not the case further action will be taken and in this event I will update the House.

My right hon. Friend the Secretary of State and Lord Chancellor has today published the seventh report by the president of appeal tribunals on the standards of decisions made on behalf of the Secretary of State for Work and Pensions in cases which came before appeal tribunals. The major reasons given for appeal tribunals overturning or amending decisions were because new evidence was produced at the hearing or the tribunal took a different view of the same evidence.

In his report, the president acknowledges improvements by some Department of Work and Pensions agencies, particularly the Disability and Carers Service. He also recognises the work done by the Department to improve the standards of medical reports.

The Tribunal’s Service has in place a number of partnership agreements with Department for Work and Pensions agencies, who deal with benefits and make decisions on behalf of the Secretary of State, covering the interface as part of the end to end process of administering appeals. In addition to the agreements, regular meetings are held to review respective performance and discuss any issues to improve customer service.

This is the first report published by the Ministry of Justice as responsibility for appeal tribunals transferred from the Department of Work and pensions from 1 April 2006.

Copies of the report have been placed in the Libraries of both Houses, the Vote Office and Printed Paper Office. Copies are also available on the internet at www.tribunals.gov.uk