The Treasury has today published a discussion paper entitled "Business Tax Reforms - capital allowances changes". Copies of the document are available in the Vote Office and the Libraries of both Houses.

Finance Bill 2008 will contain provisions amending the definition of ultra-low sulphur diesel (ULSD) in the Hydrocarbon Oil Duties Act 1979, to take retrospective effect from 4 September 2007.

The Motor Fuel (Composition and Content) (Amendment) Regulations (SI 2007/1608) issued by the Department for Transport require oil suppliers to supply sulphur-free diesel (SFD) to garage forecourts from 4 December 2007. While the current duty rate on both ULSD and SFD is 48.35p per litre, mixtures of the two fuels meet neither definition, and are liable to the heavy oil duty rate (currently 54.68 ppl).

In the transitional period before and after the DFT regulations come into force, there may be occasions when ULSD and SFD need to be mixed, and the high rate of duty may act as a disincentive for the industry to supply SFD. The provisions will remove the density and distillation requirements from the ULSD definition, so that mixtures of ULSD and SFD will meet the ULSD definition. Bringing forward the deregulatory changes to the definition of ULSD will ensure the smooth changeover from ULSD to SFD.

The Government acknowledge the judgement given by the House of Lords in the Jones v Garnett (Arctic Systems) case.

The Government are committed to maintaining fairness in the tax system. The case has brought to light the need for the Government to ensure that there is greater clarity in the law regarding its position on the tax treatment of ‘income-splitting'.

Some individuals use non-commercial arrangements (arrangements that they would not reasonably enter into with an arms-length third party) to divert income (which would, in the absence of those arrangements, have flowed to them) to others. That minimises their tax liability, and results in an unfair outcome, increasing the tax burden on other tax-payers and putting businesses that compete with these individuals at a competitive disadvantage.

It is the Government's view that individuals involved in these arrangements should pay tax on what is, in substance, their own income and that the legislation should clearly provide for this. The Government will therefore bring forward proposals for changes to legislation to ensure this is the case. In the meantime, HMRC will apply the law as elucidated by the House of Lords and will be providing guidance in due course.

The Government would not want commercial arrangements to be caught by any change to legislation. Consultation should help to ensure this.

The Government have taken a series of steps to support individuals and communities affected by the recent flooding.

In addition to this, I want to ensure that people affected by flooding do not have to worry about tax and related issues at this difficult time and to make it easy for them to receive their tax credits. Individuals or businesses affected by the flooding should get in touch with HM Revenue and Customs (HMRC) who will be able to provide practical support and advice. For example, HMRC will consider:

suspending collection of taxes and duties, or agreeing instalment arrangements where customers are unable to pay as a result of severe hardship;

practical arrangements where individuals and businesses have lost records in the flooding;

suspending debt collection proceedings; and

deferring and suspending compliance checks and investigations.

HMRC will not charge penalties where they are satisfied that customers have missed deadlines as a result of the flooding. In addition the Government will bring forward legislation in next year's Finance Bill which will allow the Commissioners of HM Revenue and Customs to waive interest and surcharges on tax paid late due to the floods. The Government propose to make this legislation retrospective from the date of this announcement. The Commissioners will exercise their discretionary powers not to collect such interest and surcharges in the interim.

HMRC will also support those who have difficulty sending in their tax credit renewals on time or notifying HMRC of any change in circumstances. Individuals affected by the floods should contact HMRC who will take steps to ensure that tax credits continue to be paid at the right level.

We welcome the announcement that the Organisation for Economic Co-operation and Development (OECD) is to carry out an Innovation Review of the North of England.

The OECD launched the series "Reviews of Regional Innovation" to address a demand by national and regional governments for greater clarity on how to strengthen the innovation capacity of regions. These reviews are part of a wider project on competitiveness at the regional level. The North of England is one study in this series. The work builds on the OECD's existing areas of expertise including territorial reviews of regions (such as the recent territorial review of Newcastle) and reviews of national level policies.

To be successful, the UK has to continue to build a knowledge-based economy. Encouraging better innovation performance within our regions is pivotal to this end. The Government are committed to improving the economic performance of all UK regions. This regional review of innovation will help develop effective, realistic strategies to raise the rate of sustainable economic growth in the North of England. Greater insight into innovation in the North will directly aid the Northern Way's contribution to regional economic performance.

The review is co-funded by the Department for Business, Enterprise and Regulatory Reform and the Northern Way. The Department of Innovation, Universities and Skills is also heavily involved, due to its interest in regional innovation systems. In addition to the project sponsors, the OECD will work collaboratively with core partners across the North, including the three Regional Development Agencies (RDAs) and the N8, which is a powerful alliance of Northern England's eight research-intensive universities.

Objectives of the Study

The review will examine how innovation can be more effectively harnessed to benefit the Northern economy. Through clear recommendations and benchmarking, the review will provide guidance as to how the North can optimally develop its innovation capacity.

The specific aim is to help the North better understand the barriers and opportunities for innovation in the region. The report will look to:

benchmark the North's performance in innovation against other OECD regions;

take forward the debate on key aspects of innovation policy and governance;

establish a framework on which subsequent monitoring and evaluation of policies can be based; and

develop recommendations for national and regional level actors to improve the regional innovation system.

The review will look at the innovation strategies of each of the three regions individually, and include site visits from international experts. However, it will also look at how common approaches and collaborations across the whole of the North may better capitalise on existing assets for the benefit of the Northern economy as a whole. The study will also specifically address whether the North has specific needs vis-à-vis the rest of the UK.

The report will provide recommendations to national, regional and local institutions (in both the public and private sectors) on how to improve the efficacy of the regional innovation system.

Timescales

A final report on Innovation in the North of England is expected to be submitted to the OECD's Territorial Development Policy Committee in June 2008. It is due for publication in autumn 2008.

The following statement provides information on the Informal Competitiveness Council in Lisbon on 20 and 21 July 2007, at which I represented the UK. The meeting was chaired by Manuel Pinho, Portuguese Minister for Economy and Innovation.

Friday 20 July

SME Policy

The mid-term review of the EU's SME Policy was discussed. The Presidency presented a discussion paper on four main topics:

Innovation on Financing;

Better Regulation;

Internationalisation; and

Energy Efficiency.

Ministers agreed on the urgent need to tackle challenges identified in the Presidency's paper. There was strong support for ongoing work towards reducing EU admin burdens by 25 per cent. Several Ministers called for more to be done to encourage cross border investment and for more information to be provided to SMEs on third country markets. A few Ministers wanted more benchmarking, though I cautioned against duplication. I called for a re-focus on encouraging SMEs to grow and for more action on better regulation, access to finance and ensuring that SMEs could exploit opportunities provided by moves towards a low carbon economy.

There was good support for the role of the Competitiveness Council in monitoring developments in SME policy. Günter Verheugen, Commission Vice-President urged the Competitiveness Council to evaluate effects of other policies on SME competitiveness.

Dinner—The State of the EU economy

Dinner was devoted to a discussion on “EU Growth: Cyclical or Structural?”, with guest speaker Professor Francesco Giavazzi of Bocconi University, Milan and Massachusetts Institute of Technology. I noted the impact of recent economic growth performance by the EU.

Saturday 21 July

Sustainable Industry Policy

Ministers debated sustainable industry policy, based on the Commission's recent Communication on the mid-term review of Industry policy. Discussion was focused on three key pillars of a sustainable industrial policy: 1) Acceleration of innovation and creation of lead markets; 2) Full exploitation of the European internal market for the development in sustainable goods, services and technologies markets; and 3) “first mover” advantage, exporting EU know-how in the low carbon economy to external markets.

Ministers agreed that a more efficient product policy could be a major contribution for competitiveness and sustainability of European enterprises. They also agreed that the promotion of lead market initiatives for low carbon and efficient products and services was an important way of speeding up transition towards a low carbon economy and to put Europe as a frontrunner in global markets. I stressed the need to identify market failures and supported wide ranging action on product policy, such as standards and labelling. There was general support from the Ministers.

I have today laid before Parliament the Annual Reports and Accounts for 2006-07 for the eight Regional Development Agencies (RDAs) outside London. Copies have been placed in the House Library.

The Annual Report and Accounts for the London Development Agency are presented to the Mayor of London rather than to Parliament. I shall provide a copy to the House Library when these are available.

Also published today are the RDAs' reported outputs for 2006-07. These results are evidence that the RDAs continue to play a valuable role in improving the economic performance of the English regions and, through working with their partners, the RDAs are making a real difference to the individual regional economies concerned. The figures cover the number of jobs created and safeguarded, the number of people assisted to get a job, the amount of brownfield land brought back into use, the number of businesses created, the number of businesses assisted to improve their performance, the number of people assisted in their skills development and the amount of public and private sector regeneration infrastructure investment levered, all as a result of RDA activity.

Press releases on the outputs have been issued in each region. Copies of the output results have been placed in the House Library, and are also available on the website of the Department for Business, Enterprise and Regulatory Reform at http://www.berr.gov.uk/regional/regional-dev-agencies/rda-performance/page24205.html.

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During the summer recess, the Government will issue consultation papers on proposals to reduce the Secretary of State's involvement in casework, streamline the arrangements for tree preservation orders and transfer a wider range of appeals from the Secretary of State to the Planning Inspectorate. These proposals will take forward commitments made in the White Paper “Planning for a Sustainable Future” (Cm 7120). In addition, the Government will issue a consultation paper on a possible amendment to Section 237 of the Town and Country Planning Act, to improve the implementation of regeneration projects by removing an impediment to the use of land once construction has finished. Copies of these papers will be made available in the Libraries of both Houses.

In conjunction with my colleague the Minister for Culture, Creative Industries and Tourism, Department for Culture, Media and Sport, I would like to bring to the attention of the House the guidance note on tall buildings prepared jointly by English Heritage and the Commission for Architecture and the Built Environment (CABE), which is published today. This updates and supersedes previous guidance published in 2003 and reflects changes to the planning system since that time.

The Government's aim is to ensure local planning authorities are getting the right developments in the right places, which we consider to be a fundamental part of creating places where people will want to live and work, now and in the future. Recent reforms to the planning system have helped to reinforce this message, making clear that all new development should be of good quality and designed in full appreciation of its surroundings and context. Tall buildings, in the right places and appropriately designed, can make positive contributions to our cities.

The Government therefore welcome this updated guidance, which will assist local planning authorities when evaluating planning applications for tall buildings, including, importantly, the need for effective engagement with local communities. It also places a greater emphasis on the contribution that design can make to improving the character and quality of an area. It offers good practice guidance to a range of stakeholders in relation to tall buildings in the planning process, provides practical advice on achieving well-designed solutions in the right places, and is capable of being material to the determination of planning applications. Copies of the documents are being placed in the Libraries of both Houses.

I have now approved, effective from 1 August 2007, the early closure of the non-explosive (NE) elements of the Defence Storage and Distribution Agency (DSDA) site at Longtown.

Under the Future Defence Supply Chain Initiative (FDSCi) the MOD assessed a range of options for managing and operating the defence supply chain to reduce costs of ownership, while maintaining or improving service levels and enhancing operational capability. The selected option included plans for the withdrawal of all non-explosive storage from DSDA Longtown by mid-2009.

Since the announcement, work has been undertaken to design a stock relocation plan that will reposition Longtown non-explosive (NE) stocks to other retained DSDA sites. The stock relocation plan has matured and, as a consequence, it is now clear that DSDA has the opportunity to bring forward the planned Longtown NE closure date to the end of July 2007.

The proposal to withdraw NE stocks from Longtown early will affect 62 staff. Approximately 350 staff will be left at the site. Additional staff will be required for the ammunition box task (refurbishing ammo boxes), which transfers from the NE to the explosives business at the site on 31 July 2007. As a consequence there will be no early release scheme or compulsory redundancies.

I recognise that the early withdrawal of NE stocks from DSDA Longtown will not be a welcome prospect for those staff who stand to be affected. DSDA is, however, confident that it can manage the changes without recourse to compulsory redundancies through a combination of the transfer of staff to vacancies on the Longtown explosive site and by releasing staff on fixed term appointments.

Consultation with the trade unions has been completed and there were no substantive matters raised that preclude implementation. On this basis I have decided to fully implement the change.

I am today announcing a number of initiatives which will enhance our operational effectiveness.

The 1998 strategic defence review identified the need to have robust strategic lift capability to ensure success on operations and we subsequently leased four Boeing C-17 Globemaster aircraft. Our experience of operations in Iraq and Afghanistan has reinforced this judgment and last year we announced our intention to procure these aircraft at the end of their lease in 2008 and also to procure a fifth C-17 aircraft, which will enter service in May 2008. We now intend to purchase a sixth C-17. The aircraft, which can be delivered in 2008, will be a significant boost to the UK's strategic airlift capability and will provide greater robustness in our ability to transport troops and equipment quickly to wherever they are needed.

As part of the NATO-led international security assistance force mission in Afghanistan, we are deploying on a rotational basis with our Canadian and Dutch allies, a 2 Star (Divisional level) Headquarters in command of Regional Command (South) (RC(S)) based in Kandahar. We are also responsible for providing HQ Multi National Division (South East) in Basra, Iraq. In order to meet these temporary demands we have decided to augment the forces’ command structure, and will temporarily establish an additional 2-Star deployable HQ. It will be based in York and will be known as HQ 6 Division, with a core of 55 Service personnel, drawn from existing structures. We will keep our planning assumption under review but currently we assess this HQ will be established until 2011.

The following Annual Report and Accounts 2006-07 were laid before Parliament yesterday.

Rural Payments Agency

Marine Fisheries Agency

Animal Health (formerly State Veterinary Service)

Copies of each report are available in the Libraries of the House.

On 22 February 2007 the Government announced that existing private sewers and lateral drains, connected to the public sewer in England, should be transferred into the ownership of the nine statutory Water and Sewerage Companies. The announcement followed an extensive review of current ownership arrangements.

The Government undertook to consult on a range of ways transfer could be implemented and to examine how the proliferation of new private sewers could be prevented.

I am pleased to report that a Consultation Paper “Consultation on Private Sewers Transfer - Implementation Options” was published yesterday. Copies have been placed in the Libraries of the House and can be accessed on the DEFRA website.

I am pleased to announce today the publication of the report of the third target period report for the Climate Change Agreements (CCAs). Copies of the report have been placed in the House Libraries.

Climate Change Agreements are working—securing a saving of 16.4 million tonnes of CO₂ in 2006, 7.3 MtCO₂ more than the minimum signed up to in their agreements.

We have seen continued improvement across all sectors in Climate Change Agreements, with nearly all facilities having their Climate Change Levy discounts renewed. Businesses have found more opportunities to improve energy efficiency, and they should be congratulated on their commitment and innovation to meet and go beyond a challenging set of targets.

However, there is no room for complacency. Although almost all sectors have improved their energy efficiency performance, and most have saved energy overall, it will be increasingly tough for many businesses to keep meeting their targets unless they find new and additional opportunities to save energy.

Overall, 32 out of the 49 sectors covered met their targets outright, and in a further 10 sectors all the facilities had their Climate Change Levy discounts renewed.

In total, 99 per cent of facilities (9830) were recertified through meeting their own targets or because their sector met its target. 461 facilities left the agreements or did not report, probably due to closure. Another 23 were decertified because they failed to meet their targets.

Even before this month is over, we know that England will have experienced the three wettest months to the end of July on record, with at least twice the average rainfall. Many people from the south-west to the north-east of the country are still suffering from the effects of the extreme weather of the past six weeks, and I wanted to continue to update the House before recess.

Earlier this week, the most pressing issue was the potential flooding of the Walham Switching Station in Gloucester. I am pleased to say that due to the magnificent efforts of the armed forces, Environment Agency, Fire Service, Transco and others who worked so hard to maintain the temporary defences, power continued to flow. I can also report that a stronger, although a temporary, protective structure will be put in place as soon as possible.

Nearly all the properties that were without power have had power restored, and everything possible is being done to connect the power to remaining properties as quickly as possible.

The key issue in Gloucestershire is now the supply of water. Mains water for sanitation purposes should be restored today to the Tewkesbury area. However, this will not be drinkable and residents will be advised of this. Drinking water will still be available from bottled supplies and bowsers. Every effort is being made to restore the water treatment works at Mythe as soon as possible, and I pay tribute to the work of all those on the site. As of 9am today 140,000 households are still without piped water and this will remain the case for some days to come. Through established collaboration arrangements with other water companies, Severn Trent Water now have over 900 bowsers and tanks in place. The refilling operation is now the priority, and at Severn Trent's request the army is now helping with this. Tankers from the army and from the brewing and dairy industries have been brought in to add to the tankers which the company itself has provided, and offers of tanker help are still being received. I am extremely grateful for the co-operation that we have had from the dairy, food and drinks industries in making vehicles available. The military and supermarket groups helped to deliver 2.5 million litres of bottled drinking water yesterday and 3 million litres are planned for today.

We take for granted a plentiful supply of clean water and Members will know how difficult it is when this is not available, particularly for vulnerable people. Whilst local authorities and other agencies have done an excellent job to date identifying and providing assistance to vulnerable people, I would ask everyone to continue to help those less able to help themselves. There have been some outstanding examples of community co-operation and we must not let isolated instances of more selfish behaviour detract from this.

The absence of piped mains water, and the continued presence of flood waters, pose potential risks to public health. The Health Protection Agency has issued advice which covers both the dangers associated with entering flood waters, and how best to deal with sanitation without mains water. I urge people in the affected areas to listen to this advice.

Although priority is being given to the public, the welfare of animals is of course also important. The interruption to water supplies is posing difficulties for some livestock farmers in getting water for their animals. While many farmers have access to alternative sources of water, some do not. Officials are working closely with the RSPCA, NFU, and other farming organisations in assisting farmers to source water. I chaired a further meeting of COBR on Tuesday evening and official level COBR meetings are taking place regularly, reporting to me.

This morning the Environment Agency still had six severe flood warnings in place, three on the Severn from Gloucester upstream to Tewkesbury, one on the River Ock (a tributary of the River Thames at Abingdon) and two on the River Thames between Oxford and Wallingford. Elsewhere things are improving, including on the Great Ouse in Bedfordshire and in Hull where severe warnings had been in place since June.

River levels on tributaries in and around Oxford rose yesterday and further properties flooded in the Osney area of the city. The Environment Agency advises that the levels on the River Severn continue to fall and should not reach the levels of earlier in the week over the next few days.

On the River Thames the first peak flow is still making its way down the lower reaches of the river with a second peak following around two days later. This is currently going through Reading. The Environment Agency advises today that further flooding to properties is probably still unavoidable from Caversham down river to Shepperton—including parts of Henley, Marlow and other areas. The Environment Agency continues to monitor the situation closely, and, where possible measures are being put in place to protect people and property. Key installations are being protected on a precautionary basis.

The Government are still collecting information on the overall numbers of properties flooded from rivers and surface waters and sewers. I advised the House that up to 10,000 properties may have been flooded. This is still our best estimate but as better information comes in the number may be revised upwards but is unlikely to exceed 15,000.

The Prime Minister visited Gloucester and Tewkesbury yesterday and I have seen the situation in Oxford today. Ministerial colleagues have visited Reading, Purley-on-Thames in West Berkshire, Pangbourne, Tewkesbury and Gloucester in the last two days. There will be further visits to affected areas in the days ahead.

On funding, as I have announced previously, the revised Bellwin Rules to assist local authorities with 100 per cent. of their eligible emergency costs over the standard 0.2 per cent. threshold and the £20 million flood recovery grant fund will apply in all areas flooded since the middle of June.

The Department of Children, Schools and Families will increase its support to schools and children's services which have been disrupted by the flooding by up to a further £4 million. This funding will be made available to those local authorities affected by the floods in recent days to help them ensure that schools and early years services are, as far as possible, able to re-open in September; and to support wider children's services, including the provision of additional summer activities and family support.

Many businesses have been badly affected by the flooding. In total almost £8 million of RDA support has been announced, both in response to the initial flooding in Yorkshire and Humberside and the current flooding. The five RDAs with affected businesses all have in place a Flood Recovery Scheme offering small business up to £2,500 to aid their recovery effort.

The RDAs are also considering whether to increase the amount available to small businesses and other means of support are available for business. Yorkshire Forward has launched a scheme offering between £10,000 and £100,000 per company for larger businesses.

In total, £46 million of help is available. In addition, the Financial Secretary to the Treasury has today issued a statement on the assistance that HM Revenue and Customs can provide for those affected by flooding.

Current estimates from the ABI show that 7,000 businesses were affected by the June flooding and around 1500 more will have been affected by the July flooding although many businesses are still underwater. The Minister for Floods Recovery has discussed the latest flooding with the head of the ABI and the Government will continue to work with the Insurance industry and others to ensure that the needs of householders and businesses are dealt with rapidly.

The Department for Transport will continue to work very closely with affected local authorities on capital funding support needed to repair local roads, bridges and other transport infrastructure damaged by the floods. At this stage, when much of the infrastructure is still flooded, it is not possible to make good estimates of the total damage, but all reasonable claims will be considered by the Department.

Department for Transport are appointing consultants who will work with authorities and advise on the remedial work which is needed and the claims they are putting forward. The Department is also taking steps to ensure that emergency work can take place as soon as possible without waiting for claims to be settled.

For farmers, the restrictions on using machinery on waterlogged soil have been lifted and the Rural Payments Agency have been authorised to allow farmers to use set-aside land for grazing of animals and harvesting of hay and silage. The lifting of these restrictions will now be extended until the end of August 2007.

These floods have had a significant and distressing effect on families and individuals. The Department for Work and Pensions is helping people on income related benefits or the lowest of incomes affected by the flooding with essential costs through Community Care Grants and repayable interest-free Crisis Loans. A contingency reserve of £1 millions can be drawn on as needed to meet the extra call on grants to help with the replacement of essential household items.

As at 20 July, the Department for Work and Pensions had already paid Community Care Grants totalling £396,000 to people on qualifying benefits to meet the cost of replacing essential household items. In addition, Jobcentre Plus has put in place special measures locally to ensure that this assistance is easily accessible to people in need who have been affected by the flooding. Total payment is of course, rising every day.

As these latest floods recede, the recovery co-ordination, led by the Floods Recovery Minister, the Member for Wentworth (John Healey), will add to the existing remit of Yorkshire and the Midlands, the areas affected by the most recent flooding.

I am determined that we will learn the lessons from what has happened and our conclusions must be robust and followed through. As I have already announced, we will ask an independent person to oversee this exercise.

I know that Members have requested that arrangements be put in place during the recess to enable them to raise points and be briefed on issues affecting their constituents. This is particularly important given that the emergency is still far from over both for those still facing the risk of flooding and for those who are still out of their houses or businesses.

I will therefore write to all Members by the end of the week setting out the arrangements we will put in place.

Finally, I would like to extend my profound thanks to all those who are working so hard to deal with this situation and to offer our sympathy and understanding to all those whose lives continue to be severely disrupted.

Travel Advice is one of the most important public services which the Foreign and Commonwealth Office delivers. We provide Travel Advice notices for 218 countries and territories based on the most accurate and up-to-date information available to us. With the constant growth in international travel, more people are using FCO Travel Advice. In 2006, the FCO Travel Advice website received, on average, 150,000 visitors a week and our call centre handled 62,700 telephone enquiries over the course of the year.

Travel Advice is designed to help British travellers to make informed decisions about travelling abroad and it is therefore kept under regular review to ensure that the information it provides remains of the highest quality.

Following feedback from British travellers and tour operators about Travel Advice, we have identified areas where we could improve the language we use to explain the nature of the terrorist threat. The principles of FCO Travel Advice, as agreed in the 2004 Review (Command Paper 6158), in relation to the threat from terrorism, remain unchanged. It will continue to draw on intelligence assessments, open source and media reporting, the local knowledge of our overseas posts and their diplomatic reporting. We are now introducing four generic threat descriptors, intended to clarify the scale of the terrorist threat to the travelling public. Drawing from our experience of what our customers need from Travel Advice, we consider that these descriptions are the most helpful to the travelling public given the innate difficulty of describing the threat from terrorism. The descriptors, as agreed with the travel industry and other stakeholders, are:

“A high threat from terrorism” means a high level of known terrorist activity.

“A general threat from terrorism” means some level of known terrorist activity.

“An underlying threat from terrorism” means a low level of known terrorist activity.

“A low threat from terrorism” means no or very limited known terrorist activity.

Our Travel Advice will continue to reflect the best judgements we can make at the time, though, as we have seen in the UK, it is possible for attacks to take place without prior warning. I believe that these changes will improve our Travel Advice to give effective information to help British travellers make informed decisions about their travel plans and personal security overseas.

The report of the independent investigation into the breach of data security in the VFS online UK visa application facility, operated through VFS websites in India, Nigeria and Russia has been laid before Parliament today, together with the Government's response. It is also available on UKvisas' website at www.ukvisas.gov.uk.

I record my appreciation for the independent investigator's prompt, full and thorough investigation. I am satisfied that the facts have been correctly established and that the conclusions are sound. Our priority has been to understand what happened in this case so that UKvisas and their partners can learn important lessons. The report enables them to do so. I can accept all the recommendations.

I note the independent investigator's finding that, despite vulnerabilities in the commercial partner's online application facilities from their launch in 2005 until they were closed in May 2007, there is no evidence that data from VFS websites in India, Nigeria and Russia has been misused or visas wrongly issued. The websites in question will remain closed.

I am publishing with the report my response to the investigator's recommendations. The investigator has found that since May 2007 VFS and UKvisas have taken the issue seriously and applied significant resources to identifying weaknesses and putting into place improved skills and oversight. I shall ensure a continuation of this joint effort in line with the investigator's findings.

I welcome the investigator's finding that the global contracts recently concluded with two commercial partners have improved consistency in the partnership programme and are more detailed in their scope. They provide a sound basis for full implementation of the Investigator's recommendations. UKvisas will take all necessary steps to ensure the new contracts are implemented rigorously in partnership with VFS and CSC, to the benefit of the effectiveness and efficiency of the visa process.

I am today laying before Parliament, with the Comptroller and Auditor General, the annual report and accounts for 2006-07 for the Criminal Injuries Compensation Authority. It is being laid before the Scottish Parliament by the Scottish Ministers simultaneously.

The annual report and accounts describes the activities of the authority in paying financial compensation to victims of violent crime, under the terms of the Criminal Injuries Compensation Act 1995.

The accounts estimate the final settlement value of cases in progress and the predicted value of applications which have not yet been received in respect of crimes that have already occurred. As a result, the balance sheet at 31 March 2007 shows net liabilities of £1,187 million.

In 2006-07 the authority received 60,861 applications for compensation and resolved 59,096. The number of cases outstanding at 31 March 2007 was 87,543. The proportion of cases decided within 12 months was 62.9 per cent.

I wish to inform the House that I am publishing today a consultation document on the implementation of measures in the Police and Justice Act 2006 extending the Independent Police Complaints Commission’s jurisdiction to cover the Border and Immigration Agency’s enforcement functions. Copies of this consultation document have been placed in the House Library.

We have embarked upon an ambitious programme of reform of the Border and Immigration Agency to improve the effectiveness of our immigration controls. Change in three key areas will make a substantial difference to the organisation’s performance. Establishing the Border and Immigration Agency as an executive agency will provide greater autonomy to deliver effective immigration controls within a policy framework agreed by Ministers. The new regional structure, more responsive to local communities, will keep the public in touch with how the agency is performing in their particular region. The introduction of tougher, independent oversight and accountability to Parliament and the public will ensure we build confidence in the new system moving forward. All are of equal importance in helping us secure the objectives of the immigration enforcement strategy published in March.

The IPCC will support these reforms by providing independent oversight of the most serious incidents and complaints and an assurance that agency staff will be held accountable to an independent organisation. This oversight will be in line with that which the IPCC provides for the police and other law enforcement bodies. While the new chief inspector created by the UK Borders Bill will monitor the effectiveness of the agency as a whole, the IPCC will provide expert, independent oversight on the actions of enforcement staff in individual cases. The consultation paper sets out the proposed content of the regulations detailing the exact remit of the IPCC and invites comments which will inform the final version.

The consultation period ends on 17 October 2007. We will then report on the results of the consultation and our proposed course of action.

The UKvisas annual report for 2006-207 will be published on 8 August and I will place copies in the Libraries of both Houses. The report will also be made available on the UKvisas website.

In agreement with the Parliamentary Under-Secretary of State at the Department for Children, Schools and Families, my hon. Friend the Member for Cardiff, West (Kevin Brennan), and the Deputy Minister for Health and Social Services in the Welsh Assembly Government (Gwenda Thomas), I am pleased to be able to inform the House of the progress we are making towards improving the child care proceedings system in England and Wales.

The Government set out the strategy for all children in England in the consultation paper “Every Child Matters: Change for Children”, published in September 2003. In this paper, we identified five key outcomes for children, which are universal ambitions for all children, whatever their background or circumstances. Our aim is for every child to be healthy; to stay safe; to enjoy and achieve; to make a positive contribution; and, to achieve economic well-being. In Wales, “Rights to Action”, published in April 2004, set out policies within the framework of seven outcome based aims founded on the United Nations Convention on the Rights of the Child. We believe that the outcomes set out in these policies are particularly important in the case of children that are the subject of care proceedings.

We know that more can and must be done to improve the child care proceedings system, and contribute to better and more positive outcomes for children. Currently, a care or supervision application takes an average of 51 weeks in Care Centres and 42 weeks in Family Proceedings Courts from the time of application to the point of disposal. Many cases take much longer. We believe that there is much that can be done to reduce this period of uncertainty in the lives of these children and their families.

Recognising this, the former Department for Constitutional Affairs and the former Department for Education and Skills, with input from the Welsh Assembly Government and a wide range of stakeholders, jointly undertook a review of child care proceedings and the findings were published in May 2006. The Review of the child care proceedings system in England and Wales set out a number of proposals to improve the child care proceedings system. Implementing the immediate recommendations of the Review is a key priority for both our Departments and I am pleased to announce a detailed timetable relating to two of the key recommendations of the Review.

The Department for Children, Schools and Families in England and the Welsh Assembly Government in Wales are consulting on proposals to issue revised statutory guidance to local authorities under section 7 of the Local Authority Social Services Act 1970. The consultation commenced in England on 29 June 2007 and will last for 13 weeks. The revised statutory guidance will be published in England in November 2007. In Wales, the guidance will be issued to all local authorities shortly for consultation to broadly similar timescales. The revision to the guidance will put greater emphasis on the work undertaken by local authorities before care proceedings can be commenced. In particular, they will be required to notify parents of their intention to make an application to the court and to set out the basis of their concerns and an outline of their future plans for the child. On receipt of this, parents will be able to have immediate access to publicly funded legal help from a solicitor, funded by the Legal Services Commission.

In conjunction with the Judicial Office for England and Wales, the Ministry of Justice is consulting stakeholders during summer 2007 on a revision of the Protocol for Judicial Case Management in Public Law Children Act Cases, to be entitled the Public Law Outline. Testing of the Outline in 10 centres from June 2007 will be followed by implementation in England and Wales from April 2008. The Outline will underpin the revised statutory guidance by promoting compliance with the pre-proceedings requirements. It will be contained in a Practice Direction from the President of the Family Division, to be issued with the concurrence of the Secretary of State for Justice and Lord Chancellor. The Practice Direction will prescribe and timetable the steps to be taken by parties, and the directions to be made by the court for the timely disposal of care applications.

I announced a review of restraint in juvenile secure settings to the House on 12 July 2007, Official Report, column 1714 - 1722. The Ministry of Justice and the Department for Children, Schools and Families (DCSF) have joint responsibility for the review. My right hon. Friend the Member for Stretford and Urmston (Beverley Hughes) will be the lead Minister for DCSF.

My right hon. Friend and I are in the process of appointing an independent Chair to lead the review and a further announcement in relation to this will be made as soon as possible.

The broad terms of reference for the review are as follows:

It will encompass policy and practice on the use of restraint across a range of juvenile secure settings including Secure Training Centres (STC), Secure Children's Homes (SCH) and Young Offender Institutions (YOIs)

It will review and make recommendations to Ministers upon:

The operational efficacy, safety, (including medical safety), and ethical validity of restraint methods, in juvenile secure settings, including Physical Control in Care (PCC)—the system of restraint used only in secure training Centres—and the circumstances in which they may be used.

The system of training provided to staff using restraint in juvenile secure settings, including how such training is monitored, reviewed and accredited.

The arrangements for cross-departmental knowledge-sharing on use of restraint and behaviour management across a range of juvenile secure settings including STCs, SCHs and YOIs.

The respective responsibilities of the Ministry of Justice, the Department for Children, Schools and Families, the Youth Justice Board, Her Majesty's Prison Service and individual providers of secure children's homes and other relevant institutions in relation to the safety and effectiveness of restraint including clarification of the approval methods for restraint techniques.

The responsibilities of Local Safeguarding Children Boards in relation to the safety of restraint in their area.

Whether the arrangements in place to record and monitor the use of restraint and the arrangements for sharing and analysis of information relating to deaths, injuries and warning signs exhibited following restraints, are adequate in all juvenile secure settings.

The review will be able to call for evidence from any interested party to assist in the compilation of recommendations to Ministers.

The review will report to Ministers within six months of the appointment of the Chair.

I am today laying before Parliament, under the provisions of the Superannuation Act 1972, two amendment schemes. The civil service unions have been involved throughout and confirm their agreement to the scheme amendments. The first of these amends the rules of the Principal Civil Service Pension Scheme (PCSPS) and introduces new provisions for those joining the pension scheme on or after 30 July 2007. The second amendment scheme makes consequential changes to the civil service compensation scheme. These amendments are the first step in implementing a major package of reform which builds on earlier changes modernising the civil service pension arrangements and announced by the then Chancellor of the Duchy of Lancaster, my right hon. Friend the Member for Paisley and Renfrewshire, South (Mr. Alexander) on 22 July 2002, Official Report, column 728W. I will bring forward further amendments in due course to complete the implementation of these reforms.

The package of reform that I am announcing today is in line with the agreement reached between the Government and the public sector unions in the Public Services Forum (“PSF”) in October 2005. The Government's aim is to continue to provide their staff—both existing and new—with good quality, defined benefit, index-linked pension provision delivered in a sustainable way. The Government seek to achieve this by delivering a range of measures intended to both reduce civil service pension costs by £2.1 billion over 50 years, on the basis of the assumptions made at the time of the PSF, and control unplanned cost growth.

New entrants

Pension terms for new entrants from 30 July 2007 will undergo radical change, with pensions calculated by reference to pensionable earnings throughout the career rather than “final salary”. We believe that this change will produce a fairer outcome for the workforce generally, particularly for those who have relatively short or broken civil service careers and for those who wish to move to less demanding employment as part of their transition from work to retirement. This new whole career option will be known as the nuvos scheme and, in common with the existing premium scheme, will have a member contribution rate of 3.5 per cent, of pensionable pay. Members will be able to retire and draw benefits at any age from 55 to 75, with benefits drawn before age 65 reduced for early payment and those drawn after 65 increased for late payment. Members will have access to options to help them tailor the scheme to meet their personal requirements. These include the ability for members to purchase added pension for self or for self plus dependants, to give up pension in exchange for a lump sum and to give up pension in exchange for additional benefits for dependants. The nuvos scheme will also offer a range of other benefits including ill-health retirement pensions and benefits for dependants following the member's death. To facilitate mobility among the public services the PCSPS belongs to the Public Sector Transfer Club; the future service of staff transferring in from public service schemes continuing to operate final salary pension schemes will be pensioned on the whole career basis but the service transferred will continue to provide benefits on a final salary basis. A similar approach will apply to the frozen final salary benefits of civil servants returning after resigning to broaden their careers.

New entrants who prefer a stakeholder pension with an employer contribution will continue to have the option of a partnership pension account.

Current staff

The Government recognise the importance that current staff place on retaining their existing pension scheme. Current staff (including many of those who resign and return to work after a break of no more than five years) will therefore continue to have pensions calculated on a “final salary” basis and will be able to draw an unreduced pension on retirement at or after age 60. These terms will continue broadly as now, subject to the following changes:

an option for staff leaving from 1 October 2007 to give up pension for a larger lump sum on retirement;

relaxation of service limits from 40 to 45 years (to be phased in from 1 March 2008);

replacement of the “added years” facility for topping up pension by a new “added pension” arrangement (from 1 October 2007 for staff over 60 and from 1 March 2008 generally); and

introduction, from 1 March 2008, of "flexible retirement" arrangements which will permit staff who reduce their hours or job weight to access their pension before full retirement.

Sustainability

Although unfunded, the PCSPS publishes an annual resource account, including its estimated liabilities, and undergoes regular actuarial valuations. The state of the scheme at 31 March 2007 is currently being assessed and I will place the results of the valuation in the Library when the report is agreed. The valuation is used to set the level of employer contributions to apply in future years; by convention a range of employer contribution levels apply, with higher percentage rates of contribution being paid for higher-paid staff. The average employer contribution is currently 19.4 per cent. of pensionable pay and this is taken into account in setting the overall level of civil service reward packages.

The PSF agreement recognised the importance of on-going scheme sustainability. This requires members to accept a degree of responsibility for future cost pressures, rather than seeing them as an issue for the employer (and taxpayer) alone. We will establish a Scheme Governance Group with employer and union representation to take work on this area forward. The Government will ensure that cost pressures identified at scheme valuations from 2010, that will be implemented with effect from April 2012, are shared on a 50:50 basis between employers and staff. To the extent that such cost increases or reductions arise as a consequence of changes to the Treasury-mandated financial assumptions or from some fundamental changes to the actuarial valuation methodology the consequent impact on costs should continue to be absorbed by the employer through an adjustment in Accruing Superannuation Liability (ASLC) rates. The Government will also ensure that the average employer contribution is capped at 20 per cent. of pay (assuming no changes to the valuation approach). This approach is intended to deliver long-term sustainability through the reduction of taxpayer exposure to risks, principally those associated with improvements in longevity over and above the improvements already anticipated.

As and when cost-sharing takes effect, it is by no means axiomatic that member contributions will rise. While this approach would of course be one option, we would look to the Scheme Governance Group to suggest approaches designed to secure widespread acceptance by staff, to maintain scheme membership and to have particular regard to the impact on low-paid staff. We will consult with the unions in the near future on the detail of how this process should work, before amending the scheme rules to reflect the outcome of that process.

I have today laid before Parliament the command paper “The Governance of Britain—Petitions. The Government’s Response to the Procedure Committee’s First Report, Session 2006-07, on Public Petitions and Early Day Motions.” Copies can be obtained from the Vote Office and the Printed Paper Office. It will also be available on the Office of the Leader of the House of Commons website at: www.commonsleader.gov.uk

My right hon. Friend the Prime Minister has today received the 3rd triennial report from the Senior Salaries Review Body on Parliamentary Pay and Allowances.

The Government plan to publish the report in the autumn, followed shortly thereafter by consideration by both Houses in the normal way.

The Government are grateful for the work of Sir John Baker and his Committee.

To strengthen further the Government’s ability to deliver across the entire equalities agenda, I am today announcing the establishment of a new Government Equalities Office.

The Government Equalities Office will be physically located with and supported by staff in the Department for Work and Pensions. It will have its own vote from the House of Commons. The Women and Equalities Unit, currently based in the Department for Communities and Local Government (DCLG), will transfer to the new Office.

Because of the links to the community cohesion agenda, race and faith issues remain located with the rest of the community agenda in DCLG.

My right hon. Friend the Leader of the House of Commons will be responsible for the Equalities Office at Cabinet level as Secretary of State for Equality. The Parliamentary Under-Secretary at the Department for Work and Pensions (DWP), my hon. Friend the Member for Stevenage (Barbara Follett), in addition to her current role, will be Parliamentary Under-Secretary in the Equalities Office, with the title Minister for Equality. The Permanent Secretary at DWP, Sir Leigh Lewis will become the Accounting Officer for the new Equalities Office.

As now, there will continue to be lead Secretaries of State and Ministers for individual policy areas:

my right hon. Friend the Leader of the House of Commons is the lead Cabinet Minister for women and is supported in this role by the Women and Equality Unit;

my right hon. Friend the Secretary of State for Work and Pensions is the lead Cabinet Minister for disability issues, supported by the Minister for disabled people, my hon. Friend the Member for Stirling (Mrs. McGuire) and the Office for Disability Issues in his Department;

my right hon. Friend the Secretary of State for Communities and Local Government is the lead Cabinet Minister for race and faith issues. My right hon. Friend the Minister for Competitiveness at the Department for Business, Enterprise and Regulatory Reform will also play an important role in advising the Government on issues of concern to faith communities.

My right hon. and noble Friend the Leader of the Lords will cover the equalities agenda in the House of Lords.

The Sub-Committee on Communities and Equalities, a Sub-Committee of the Domestic Affairs Committee, will bring together Ministers from across Government to discuss key policies on equalities. This sub-committee is chaired by my right hon. Friend the Minister for the Cabinet Office.

My right hon. Friend the Attorney-General has made the following written ministerial statement:

“I have today published a consultation paper on the role of the Attorney-General. The consultation period will run until the end of November.

When the Government published their Green Paper: “The Governance of Britain” this included a commitment to reform the role of the Attorney-General. This is a complex role which has evolved over centuries and comprises a broad and varied range of functions which are fundamental in upholding the rule of law. I am keen to have the widest possible engagement on the important issues raised, and would welcome responses from parliamentarians.

Copies of the report have been placed in the Libraries of both Houses.”

I have today issued revised and expanded guidance to BRB (Residuary) Ltd. (BRBR) on the procedures that should follow prior to disposing of its non operational estate.

Historically, the company has been required to make an assessment as to whether a property is likely to be needed for a rail, other transport or Brownfield development use in the future. Part of this assessment has involved consulting parties in the rail industry, local transport and planning authorities and other potentially interested parties. The new guidance that I have issued today makes it clear that these arrangements will continue. In addition it now sets out in clear terms what we expect to happen as and when a consultee identifies such a use for the site in question. Specifically the company is now expected to ensure that the body that has expressed an interest in the site should take on the holding costs as soon as possible and acquire the site at market value, within a reasonable timeframe. The new guidance makes it clear that in the majority of cases a period of six months represents a reasonable timeframe for interested parties to acquire a site.

This new guidance will ensure that the company continues to facilitate and encourage transport and Brownfield development projects and that the promoters of such schemes have ample opportunity to purchase sites. It will also ensure sites can be released on the open market for development in a reasonable timeframe where no realistic transport or Brownfield development opportunities can be identified.

In the case of surplus BRBR land, which is not needed for a future transport use, BRBR and English Partnerships will be working closely together with a view to that surplus land being released for housing development, which is a key Government priority. A substantial number of BRBR sites have been identified for joint assessment with English Partnerships for housing development and a similar approach is being adopted in relation to Department for Transport agencies, such as the Highways Agency.

Copies of the revised guidance have been placed in the Libraries of both Houses. A copy is also available on BRBR’s website at: www.brbr.gov.uk.

I am publishing today details of the number and cost to Departments of the provision of allocated cars and drivers by the Government Car and Despatch Agency to Ministers during 2005-06 and 2006-07.

The figures for 2005-06 are:

The Government published a draft Local Transport Bill on 22 May for public consultation and pre-legislative scrutiny (Cm 7043). The package of measures included new and enhanced responsibilities for the traffic commissioners as part of a new bus punctuality performance regime, and in relation to the approval of bus ‘quality contracts’ schemes.

The consultation paper on the draft Local Transport Bill highlighted that performing these new functions successfully is likely to require a different mix of skills and expertise from the existing core functions of the traffic commissioners and their support staff. It indicated that we were therefore considering whether the proposed new functions would be best delivered within the existing traffic commissioner structures, or whether further modifications could better deliver the desired outcomes.

The draft Local Transport Bill also includes proposals to encourage stronger transport governance in the six English metropolitan conurbations outside London, including changes to local transport planning. The consultation paper indicated there would be further consultation about local transport plans this summer.

I am today publishing two consultation documents. First “Strengthening Local Delivery—Modernising the Traffic Commissioner System” explores the functions and responsibilities of the traffic commissioners in more detail and proposes the creation of a Board of Traffic Commissioners which would be responsible for ensuring that both the goods vehicle and bus sectors get the attention and resource they deserve.

In particular, the board would champion bus passengers’ interests and complaints about the punctuality and reliability of local bus services.

The proposals seek to ensure that the traffic commissioner system is well placed to deliver the proposed new bus functions, alongside its existing responsibilities. The proposed board will also oversee the overall performance of the traffic commissioner system with an enhanced, centralised administrative support network to facilitate bus punctuality monitoring, ensuring that resources are focused on the greatest problem areas.

Secondly “Local Transport Planning: The Next Steps” considers the statutory basis of local transport planning. It also sets out non-legislative proposals for reporting progress and distributing funding, related to local transport planning during the next three years.

Copies of both consultations have been placed in the Libraries of both Houses.

I would also like to announce that from 1 August 2007, operators of heavy goods vehicles and public service vehicles who hold a licence in more than one traffic area will be allocated a Lead Traffic Commissioner who will take decisions on all applications relating to their licences. This change is an important milestone in our implementation of the operator licensing reform agenda announced in December 2006. The Government’s new proposals for reform of the traffic commissioner structure are entirely consistent with this initiative.