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I am pleased to be able to announce that new regulations governing the payment of financial assistance to reservists and their employers during mobilisation were laid before Parliament today and that subject to parliamentary scrutiny are due to come into effect on 14 April 2005.
These changes represent a significant improvement in the assistance available to reservists and employers. They reaffirm our continuing commitment to the Reserve Forces and reflect the value we place on them and their contribution to the United Kingdom's defence commitments.
These regulations have been prepared following a comprehensive consultation process, which I announced on 22 July 2004 (Official Report, col. 62 WS). They replace the previous complex and intrusive scheme which only matched individuals' earnings up to a rank-related threshold or band, with a separate hardship award
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scheme for those whose earnings exceeded the band for their rank. Payments to employers under that scheme were limited and complex.
The full detail of the scheme of both reservists and employers are available in the documents laid before the House. I also propose that the financial limit shall be subject to annual review commencing in April 2006.
In my previous Statement on 16 September 2004 (Official Report, col. 162 WS) I gave an undertaking to keep the House informed of the progress with regard to the creation of the Ministry of Defence Medal Office.
I am pleased to report that on 22 March I officially opened the MoD Medal Office which is now established at a single location within the Armed Forces Personnel Administration Agency (AFPAA) at Innsworth, Gloucester.
The change from separate offices for each service to the new office is affording the opportunity to adopt common procedures based upon best practice. The significant investment in personnel, laser engraving and computer technology has already led to a substantial reduction in the backlog of medals assessment and engraving and underlines the priority and commitment the MoD attaches to the prompt delivery of medals to veterans, their relatives and serving personnel. Indeed, since the introduction of a new laser engraving facility at Innsworth, around 40,000 extra medals have been handed out to recipients.
AFPAA assumed full responsibility for the management of medal output, target setting and performance monitoring with effect from 1 October 2004 and has successfully filled all of the 61 medal-related posts. While the introduction of the Suez Canal zone and Iraq medals has resulted in unprecedented numbers of medal applications (117,425 since 10 April 2004), the backlog for the Canal zone medal today is 13,275 compared with 21,371 as at 24 September 2004 and for the Iraq medal is 13,382 compared with 25,178.
The formation of the MoD Medal Office is already producing significant benefits and I should like to pay tribute to the staff of the single service medal offices and the MoD Medal Office for their part in bringing about this improvement.
With effect from 1 April 2005, the Defence Geographic and Imagery Intelligence Agency and the Defence Intelligence and Security Centre will both cease to have agency status. This change will facilitate improved management across current agency boundaries, enable simpler management and budgeting processes, reduce overheads, and enable a more effective response to customers' strategic and operational requirements.
My right honourable friend the Chancellor of the Exchequer announced last week in his Budget Statement that there would be a change to the tax regime for the new compensation scheme which will commence on 6 April 2005.
I am pleased to confirm that because of the special demands of service in our Armed Forces, the Government have now decided that lump sums awarded to those who are able to remain in service after their injury or illness will be paid tax-free.
I am pleased to announce that the Ministry of Defence has agreed a heads of agreement with Agusta Westland which commits us to working together towards a long-term partnering and business transformation arrangement. Although the details are subject to further negotiation with the company over the coming months, we expect this to provide significant efficiency and effectiveness improvements in how we support our helicopter fleet.
Competition remains the cornerstone of our procurement policy. This applies to our future rotorcraft capability requirements, as elsewhere, in particular for the land lift (medium) element. As the defence industrial policy makes clear, however, value for money judgments can sometimes suggest different approaches. Since the Agusta Westland future Lynx project has already benefited from extensive assessment work and de-risking, it would be our preferred procurement option for meeting the land find and maritime (surface) attack element. This is, however, subject to continuing negotiations with the company to agree acceptable contract conditions and prices, which must meet clearly defined parameters.
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This approach is excellent news for Agusta Westland, for the highly skilled staff at its Yeovil plant, and for the British defence industry. Other key partners include Smiths Industries in Cheltenham and Thales(UK) in Raynes Park and Taunton, GD(UK) in St Leonards-on-Sea and South Dorset Engineering Ltd in Weymouth.
We believe that, subject to negotiating the precise commercial details, the future Lynx represents a highly capable, value for money, solution to our requirement. We expect to make a final "main gate" procurement decision later this year. The contract is potentially worth over £1 billion.
This is a key first milestone for the future rotorcraft capability programme, and is part of the commitment we made in last year's supplement to the defence White Paper to invest some £3 billion in our helicopter fleet.
The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Baroness Ashton of Upholland): With the agreement of the Secretary of State for Constitutional Affairs, I am pleased to inform the House that I have today placed in the Libraries of both Houses a copy of the Government's response to the Constitutional Affairs Select Committee's report of their inquiry into the operation of the family justice system.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My right honourable friend the Paymaster General (Dawn Primarolo) has made the following Written Ministerial Statement.
On 29 September 2004 the Economic Secretary informed the Treasury Select Committee that "In parallel with the operation Gestalt investigation the Metropolitan Police have also provided advice on a number of other Customs and Excise investigations concerning money service bureaux (MSB). David Varney, chairman, has asked the police to extend their investigation to cover these additional issues."
The police are examining the preliminary material and will soon be ready to start the investigation. In order to progress the investigation most efficiently, the police have proposed using a joint team. This would mean a team of Customs' investigators working with the police. Departmental accommodation will also be made available.
Parliamentary approval for additional resources of £5,000 for this new service has been sought in the Spring Supplementary Estimate for HM Customs and Excise. Pending that approval, urgent expenditure of this £5,000 has been met by repayable cash advances from the Contingencies Fund.
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