The Secretary of State for Defence (John Reid): I am pleased to announce to Parliament the decision to float QinetiQ, formerly part of the Defence Evaluation and Research Agency (DERA), on the London Stock Exchange. This represents the next step in the Public Private Partnership for defence research, which was first announced in 1998 as part of the Strategic Defence Review. It is a significant achievement to have reached this stage five years after QinetiQ was first vested as a Government-owned company, and three years after the Carlyle Group became, through its minority stake, our strategic partner.
The aims of the Public Private Partnership were to strengthen the linkages between defence and civil technologies, encourage the commercial exploitation of taxpayers' investment in science and technology and create a sustainable future for DERA and its staff, while retaining within Government those functions not appropriate to the private sector.
Carlyle became our strategic partner in February 2003, following a competitive process that achieved the best possible deal for the taxpayer at that time. Through the introduction of private sector investment and expertise into the company, this partnership has enabled QinetiQ to build on its remarkable heritage to produce a strong trading performance, exploit its capabilities in the civil sector and develop a significant business in the US through its successful strategy of US acquisitions, while continuing to be a key supplier of cutting edge technology and services for our Armed Forces. For example, QinetiQ's rapid development of a new system to provide fast and safe ways of clearing mines from shallow waterways through the fitting of remote control technology to unmanned combat support boats has added to the capability of UK forces operating in Iraq. Its runway hazard detection system, Tarsier, developed from advanced radar research in the wake of the Concorde tragedy, has been trialled at some of the world's busiest airports and will shortly be protecting air travellers at Vancouver International Airport. The growth and development of the company, both in the UK and on a global level since our strategic partnership
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with Carlyle, has significantly increased its value and therefore the benefit to the taxpayer as its majority shareholder.
Against this background, and informed by the advice of our joint financial advisors, the Government, Carlyle and the company itself judge that QinetiQ is now ready for the next stage in the process: an initial public offering (IPO). The Government believe that an IPO provides the best route for QinetiQ further to develop its excellence as a supplier of battle-winning technology to our armed forces while also creating new opportunities to exploit British technology in a global market. Subject to market conditions, our current intention is to complete the IPO during February.
Following the IPO, both the Government and Carlyle will continue to retain a significant stake in the company reflecting our confidence in its future. The Government will also retain a special share in QinetiQ to protect the United Kingdom's defence and security interests.
The Minister of State, Ministry of Defence (Mr. Adam Ingram): I am announcing today the award of a contract to Lockheed Martin UK for the upgrade of the Royal Navy's Merlin Mk l helicopters. This upgrade, known as the Merlin Capability Sustainment Programme, is vital in keeping the Merlin Mk l effective until its planned out-of-service date in 2029. The contract, which includes upgrading the Merlin MK1 Training System, is valued at some £750 million and the first squadron of MCSP aircraft will enter service by September 2014. This contract award will help sustain some 1,400 high technology jobs across the UK mainly at Lockheed Martin in Havant and Agusta Westlands in Yeovil as well as in Smiths Industries, Thales UK, Selex and AeI.
During the passage of the Order it was of concern to the House that business and enforcers should have adequate time to familiarise themselves with the new regime and the guidance that will accompany it and that the coming into force date should, so far as practicable, be timed to coincide as closely as possible with reform of fire safety laws in Scotland.
In the light of the commitments we have given to the House and our commitment to ensuring this reform is properly backed, we have therefore concluded that the coming into force of the substantive provisions of the Regulatory Reform (Fire Safety) Order should be put back. We will therefore bring an Order, under article 52 of the Regulatory Reform (Fire Safety) Order 2005, to amend the coming into force date of the new regime before the House as quickly as possible.
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Hon. Members will also wish to note that the Scottish Authorities have determined that more time should be allowed for reform north of the border. The reform in Scotland is now expected to come into force in October 2006 at the earliest.
The Minister for Immigration, Citizenship and Nationality (Mr. Tony McNulty): The Home Office (IND) have requested that a pilot scheme be undertaken by the International Organisation for Migration (IOM) to evaluate the effects that increased reintegration assistance may have on incentivising failed asylum seekers, and those who wish to withdraw any outstanding asylum applications or appeals, to return to their country of origin. Voluntary returns are always preferable to enforced returns. The pilot which began on 1 January will run for a period of six months.
VARRP (Voluntary Assisted Return and Reintegration Programme) is the generic programme through which those who have made an asylum application can return to their country of origin with assistance. During 200405 there were 2,678 returns under VARRP. Between 1 April and 30 November 2005 there have been 2,236 returns and we are projecting returns in the region of 3,500 for 200506. The recent NAO report on failed asylum seekers recommended that more should be done to promote voluntary returns. IND and IOM have undertaken a significant amount of work to promote voluntary returns over the last 18 months, and this exercise will look at the levels of incentive required to stimulate return. It will also assist in developing the most appropriate level of incentive in future voluntary return programmes.
Currently, VARRP provides all returnees with reintegration assistance to the value of £1,000. This assistance is provided in kind. This means that returnees are not provided with cash grants but are given help with starting up a small business, vocational training or education. All those who leave the UK under this scheme will be offered an additional £2,000 which they can choose to take as either additional re-integration assistance or cash grants. This offer will be available only to those who leave the UK between 1 January and 30 June 2006 and no-one who made an application for asylum after 31 December 2005 will be eligible for this. It is anticipated that such an offer could increase the number of predicted returns from about 1,950 to over 3,000 for the six month period.
In order to promote this exercise the Home Office has undertaken a mailshot to all those currently on National Asylum Support Service support and is publicising the scheme to those who attend reporting centres and to those who are eligible in detention. IOM will also advertise the scheme through posters and advertisements.
These additional costs represent good value for money against the cost of enforced returns which the NAO has calculated to cost £11,000 each on average. There are also significant potential savings in the provision of NASS accommodation, support costs and detention expenditure.
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