Sept 25, 2003

Prime Minister's speech at Columbia University
"India's economic outlook & perspective on international development "

Following is the full text of the speech delivered by the Prime Minister Shri Atal Bihari Vajpayee, at the Columbia University, at New York, yesterday:

"I am honoured to be here in the oldest institution of higher learning of the State of New York, as it enters its 250th year. I thank Professor Jeffrey Sachs for his invitation to me. When he wrote to me, I was particularly struck by his reference to the Global Development Dialogue, which I have been advocating for the last few years. The Earth Institute, which he heads, has done valuable work on issues of the greatest concern to developing countries. It is now pioneering a major programme of policy research on the Indian economy.

Much has been written and said about the Indian economy in recent years. We have seen positive appraisals of our progress, as well as impatience at the pace of our reforms. Investment Fund managers and credit rating agencies have shown a cyclical pattern of "thumbs up" or "thumbs down" to sectors of our economy over the last decade. Our reforms have often been compared with those of others, with both flattering and critical conclusions.

I would like to focus today on this theme of where the Indian economy is, and where we would like to take it in the foreseeable future.
Since our economic reforms were launched just over a decade ago, the Indian economy has sustained an annual average growth of over 6%. This average actually masks much faster progress in the west and south of India, where the growth in the nineties was comparable to that of the Southeast and East Asian Tigers in their prime. Even though last year was a drought year, GDP growth exceeded 4%. This year we expect to touch nearly 7%.
Our foreign exchange reserves are nearly US$ 90 billion and fast moving towards the 100 billion mark. The current account deficit turned into a surplus over the last three years. This was achieved through non-debt creating flows, so that our external debt has remained virtually static in nominal terms. The debt servicing and debt GDP ratios have fallen sharply. We are now repaying foreign debt ahead of schedule. This year alone we have prepaid about US$ 3 billion.

From a food deficient country, India has moved to a self-sufficient one. During the current year, close to 7 billion dollars of agricultural produce was exported. India is the world's largest producer of milk and among the largest producers of sugar, eggs and fish.

Though impressive, these aggregate figures do not fully capture the quiet transformation that is taking place at the level of enterprises and individuals. Indian enterprises are reaching global scales in quality and output. Corporations from all over the world are coming to India for manufacturing or services.

India is becoming a production base and an export hub for diverse goods, from agricultural products to automobile components to high-end services. Indian firms are now part of global production chains - importing sub-assemblies, adding value to them and re-exporting them. Taking advantage of its pool of high-quality scientific talent, international corporations have established large R & D centres in India.
All these strengths have resulted in a greater integration with world trade and our trade has risen from 21 per cent to 33 per cent of our GDP in a decade.

Information technology is transforming rural lives. In a quiet revolution that has linked rural credit with modern technology, 30 million farmer credit cards have been issued in the past five years. Our strong economic growth is succeeding in bringing people out of poverty. 60 million people emerged from the ranks of the poor in a six year period. We have still a long way to go before we can eradicate poverty in our country. However, it increasingly appears that the ingredients of rapid poverty eradication are falling into place.

From roads to telecommunication, we are seeing the beginning of a qualitative change and growth in infrastructure. In the last three or four months, India has been adding nearly 2 million mobile connections every month. The enormous successes of our IT professionals and the new successes of IT enabled services have been made possible by the fact that the data and voice carrying capacity in India today is 75 thousand times what it was just 4 years ago. We have launched an ambitious project for a highways network, which would link our major metropolitan centres and provide improved connectivity to our rural areas. These roads are already transforming our economy, as your freeways did to your economy many decades ago. Upgradation of facilities has sharply reduced the turn-around time in Indian ports.

We have taken many steps towards energy security. There have been 7 major finds in 4 areas in India. We have invested in oil fields abroad - in Sakhalin in Russia with an investment of $ 2 billion; in Sudan with an investment of about $ 1 billion; in Vietnam, Libya, Syria and other countries.
In the field of science, India is one of only three countries which have indigenously built super computers and one of the six countries in the world that builds and launches satellites. Two years ago, we launched a satellite into geo-stationary orbit. We plan to send a spacecraft to the moon in the next five years.

Today, India has the confidence that the basic fundamentals of the Indian economy are sounder than they have been for several decades. A young, better-educated, more confident, and increasingly impatient Indian population is driving India's progress and demanding from government the conditions to fulfil its aspirations.

The biggest challenge that our economy faces is our fiscal deficit. To remedy this, we have embarked on a transformation of the tax regime, improving the tax collection machinery and introducing a simple and rational tax code. We are moving towards implementation of a value added tax. We are working towards more accurately targeted subsidies and full recovery of user charges for infrastructure. To underline our commitment to this endeavour, we recently passed fiscal responsibility legislation, whereby we are required to bring down our revenue deficit to zero within the next five years. This is a daunting task, but we are hopeful of achieving it.

I have dwelt on India's economic achievements in some detail because many of these do not capture news headlines. These achievements also show that there is no weakening in India's resolve to continue with the reform process. Expanding the role of market forces is an imperative of globalization and will remain the central theme of our reforms.
Of course, there has been a keen debate in our country on the pace and sequence of reforms. This is both inevitable and desirable. Our effort has consistently been to cushion the impact of reforms on the poorer sections of our society. We have tried to reconcile competing interests and to avoid sudden disruptions in our economy. We believe that reforms following a democratic consensus are enduring, as all constituencies are carried along with us.

It is also my conviction that the new experience of successful coalition governments in India has been ideal for democratic governance, balancing divergent views and accommodating regional and sectoral interests more effectively. India is a rare multi-cultural, multi-religious, multi-ethnic and multi-lingual democracy in the world. We have an open and vibrant press, free and fair elections and an independent judiciary. This imparts stability and consistency to economic policy-making.

Where will the Indian economy go in the future? Looking at opportunities and challenges, I see an ever-brightening horizon.
Our software industry has been growing from strength to strength. The competitive edge of our IT industry will be enhanced by value-addition in software and by our rapid advances in our hardware industry. The balance between volumes and value will add strength to the IT industry.
Opportunities are also multi-fold in biotechnology. Research & Development has opened a wide avenue of growth in health support systems. Clinical research is breaching new frontiers in medicine. Advances in biogenetics reach out into agriculture and food-processing chains, which will provide livelihood security for our masses.

The architecture of our financial institutions is now comparable to the best in the world. The securities markets are a major success story. On-screen trading has brought security and speed to share market transactions. Other products like interest rate derivatives, equity and commodities futures provide a range of trade opportunities, not available in many countries. Since India is well positioned in the time zone between New York and Tokyo, I see India emerging as a centre of financial transaction and intermediation. We are developing strategies and strengthening structures to enable this. The sound regulatory framework and availability of skilled manpower make this goal achievable.

I have already mentioned that Indian industry is today globally competitive. We will expand the areas of its manufacturing excellence and widen their reach. Finally, it is my dream that the capabilities of knowledge that India possesses should be converted into products of universal use. To secure positions of excellence through a service-oriented economy and to provide products and solutions for human need would be the growth vision for India.

While documenting India's economic achievements and articulating its goals and aspirations, I am conscious that we do not function in a vacuum. As a developing country, India is profoundly affected by trends in international trading and investment regimes, developments in the agenda of globalisation and realisation of the goals of sustainable development.
We were therefore deeply disappointed by the lack of positive outcome on the Doha development agenda at Cancun recently. India has over a half billion people dependent on agriculture for their food security, livelihood security and rural development. Along with other developing countries, we had hoped that the distortions caused by domestic support and export subsidy in developed countries could be corrected. The developing countries are also severely affected by the asymmetries and imbalances of the Uruguay Round which have not been addressed. The headlong march towards market access by the industrialised countries denies the necessary policy space for developing countries seeking to industrialise. At the same time, the developing countries have been denied free access for their trained manpower to the developed economies.

The uneven spread of the benefits of globalisation continues to accentuate disparities. The resources for development available to developing countries remain far short of the needs. The Convention on Biodiversity has failed to transfer technologies to developing countries in return for their biodiversity resources.

As the Indian economy motors on towards further growth and versatility, India will also work along with developing countries to remedy the inequities of the international economic system. We firmly believe that in the inter-dependent world of today, it is no longer possible to sustain islands of development surrounded by underdevelopment and deprivation. The world needs to recognize this and take corresponding measures.
Thank you."

INSAT-3E now all set for launch on Sunday

INSAT-3E is all set for launch on Sunday (September 28, 2003) between 4.32 a.m. and 4.50 a.m. IST. The fourth in the INSAT-3 series, its launch was delayed by more than a month due to problem in some components. The INSAT-3E will be put into orbit by "Ariane", the European Space Agency vehicle from Kourou, in French Guyana. INSAT-3A, 3B, 3C are already operational. 3D, the last in the series, is an exclusive met-satellite slated for launch during 2004.

INSAT-3E, an exclusive communication satellite will replace INSAT-2DT as well as transponders taken on lease, besides augmenting the present INSAT capacity for Tele-communication services. Thirty minutes after lift-off, the satellite will be injected into a geo-synchronous transfer orbit. The Master Control Facility at Hassan in Karnataka will take command of the spacecraft after receiving the first signals from it.
The INSAT-3E payloads comprise, 24 C-band transponders, and 12 extended C-Band transponders. The payloads on board will be the last to be checked before the satellite is commissioned sometime next month.

Comprehensive National Media Policy on the anvil

The Government of India would soon formulate a Comprehensive Media Policy after having wide ranging consultations with the media stakeholders like the editors, media houses, broadcasters, working journalists, media critics, small and medium newspaper representatives, non-government organizations and State Governments. This was stated, here today, by the Minister of Information and Broadcasting, Shri Ravi Shankar Prasad while inaugurating a two-day seminar on the subject at the Indian Institute of Mass Communication.

Shri Prasad said that the fast changing technology has completely changed the media environment today. He said, no Government can stop the march of technology, it can only delay and even the delay would be disastrous. He said, during the past four years the Ministry of Information & Broadcasting has taken a number of initiatives like the revision of policies on FDI in Print (both News and Non-News), syndication arrangements, uplinking guidelines, DTH, CAS, Community Radio, FM privatization etc. But, he said, all these initiatives have been reactive, rather than prospective. He said the reach of technology is overpowering, altering all boundaries of relationships but we must juxtapose our policies with these technological changes. The Government wants to come out with a National Media Policy looking at the Media Scene 10 or 20 years ahead, he said.

Shri Prasad said the fast emerging situation has posed certain very important questions like creation of monopolies, cross-media restrictions and survival of small and medium newspapers. The globalisation no doubt is important and we cannot but be a part of it but the face of globalisation have to be humanized, he said.

Referring to the content, the Minister said that the multiplication of media and proliferation of channels has necessitated the need of an independent regulator for broadcasting sector. But, he made it clear that the Government has no role in this and has no intention to control the media. He said, the best course would be self-regulation but regretted that all his pleas for self-regulation, regarding the objectionable ads on liquor and tobacco etc., on TV channels, have fallen flat, thereby further strengthening the view to have a regulator. He said, it has to be seen whether the regulator would be under the Convergence Commission or a separate broadcasting regulator. In this regard, he said that though he is all for the freedom of press and creativity but what about the rights of the recipient, the viewer or the reader, he asked. He said, the question is how to juxtapose the self-regulation with the over-powering commercialization. The Minister also referred to the great divide among the stakeholders in the broadcasting sector. Only an independent regulator can help bridge this divide.
The Minister also appealed to the media to lend their support to the economic reforms. He said, there is no escape but to carry out internal economic reforms. The need is to educate the people about the benefits of reforms and enlist their support.
The Secretary, Ministry of Information & Broadcasting, Shri Pawan Chopra gave an overview of the three sectors - Information, Broadcasting and film - and explained the recent polices initiatives of the Government. The two-day seminar would have five sessions and would review the existing elements of Media Policy - available framework, need for having a Comprehensive Media Policy, elicit the opinion of stakeholders across the spectrum - Government, industry, interested groups and political parties and formulate policy recommendations and broad strategies for the future deliberations.
The Seminar is the first in the series of Seminars proposed to be held in all parts of the country to generate a nationwide debate and evolve a consensus before drafting the National Media Policy. Those invited to participate include the CEOs of Media Houses, senior editors and journalists, media critics, press institutions and organizations, NGOs, political representatives, Members of Parliament, advertising experts, economists and broadcasters.

Participating in the discussion, the Principal Information Officer, Shri Sahab Singh said that new ideas must be developed and more positive measures must be taken to shake up the ad-hocism in policies and the prevailing inertia. The responsibility of evolving a media policy, which is workable and progressive, also rest as much with the media as with the Government. He felt that the mature Indian press will shoulder this responsibility in having a document to guide in the media domain in the form of a national Media Policy.

Workshop on Municipal Accounting Reforms switchover from cash based to accrual based accounting by the yearend

A one day National Workshop on Municipal Accounting Reforms is being organized here tomorrow jointly by the Ministry of Urban Development and Poverty Alleviation, National Institute of Urban Affairs and USAID to discuss the progress on implementation of accounting & budget formats suggested by the Task Force constituted by Comptroller & Auditor General of India. The Task Force report submitted in December, 2002 had recommended that Urban Local Bodies should follow uniform formats for presentation of annual financial statement and if needed the relevant Act/rules governing municipal accounts have to be amended to facilitate switchover from the cash based accounting to accrual based accounting system.

Among other things the workshop will discuss the adoption of accrual based accounting system and constitution of state level steering committees before 31st December, 2003. It will also examine the necessity for developing a model accounting manual and model training module by the Department of Urban Development, Government of India in consultation with C&AG. Computerization of budget and accounts by 1.4.2006 will also be considered. Majority of states are yet to computerize the offices of municipal bodies except Tamil Nadu, Karnataka, Andhra Pradesh and Madhya Pradesh, which have already computerized it or are in advance stages of computerization.

Government has accorded high priority to the municipal accounting reform so that municipal bodies are able to manage their financial matters in an efficient and effective manner and also enter into public-private partnership and have access to the domestic capital market.

It may be noted that in pursuance of the recommendations of the Eleventh Finance Commission (200-01), Department of Expenditure had issued Guidelines for the utilization of Local Bodies Grants in June, 2001. In terms of these guidelines, the Comptroller and Auditor General of India was to prescribe the format for preparation of budgets and for keeping of accounts of Urban Local Bodies (ULBs).

Secretaries incharge of Local Self Government and Directors of Local Fund Audit of all states, representatives of C&AG, USAID, Research and Training Institutions will participate in the workshop.
Statement on HSE investigation of Brent Bravo Incident,
11 September 2003

On 11 September 2003, Sean McCue and Keith Moncrieff died whilst
working in the utility leg of the Brent Bravo offshore production
platform. The installation, which is located some 180 miles east of
the Shetland Isles, is operated by Shell UK Exploration and
Production (Shell Expro).

The Health and Safety Executive (HSE) launched an immediate
investigation, with full co- operation from Shell Expro. On 12
September, two Inspectors from HSE's Offshore Division went to the
platform where they started to gather evidence. Two Specialist
Inspectors joined them on 13 September. This team remained onboard
until 16 September. Grampian Police also attended the scene.

This investigation has been given the highest priority by HSE and is
being given all the Inspector, specialist and laboratory resources
necessary to establish the root causes of this incident as quickly as
possible. HSE has already taken possession of certain items of plant
and equipment for further tests. The bereaved families are being kept
informed of progress.

An enforcement notice was served on Shell Expro on 15 September,
before the Inspectors left the platform, prohibiting the use of
specific parts of the process plant. An additional notice was served
on 19 September prohibiting all production and processing of
hydrocarbons on the Brent Bravo platform until certain pre-start up
conditions are met.

The cause of death of the two men was suffocation. Initial lines of
enquiry include examination of pipework; temporary repairs to
pipework; control valves and their operation and aspects of the
permit-to-work system.

HSE acknowledges the prompt and comprehensive actions which Shell has
initiated on all their offshore and downstream installations across
their European operations as a result of this incident and the high
level of co-operation between HSE, the Police and Shell.

The investigation is continuing and it is HSE's intention that a
report will be submitted to the Procurator Fiscal within three
months.
Foreign Office Minister welcomes Colombia drug operation

Foreign Office Minister Bill Rammell today welcomed the conclusion of
the joint anti-drug operation with the Colombian Police.

Mr Rammell said: "The arrests today are a tribute to the close
cooperation that the UK and Colombia have forged in the war against
drugs. It will mean less drugs on our streets and less money in the
hands of those who try to deal in drugs. I pay tribute to the work of
the police here and in Colombia. This is a culmination of a eighteen
month joint operation between London and Bogota that has meant that a
substantial amount of drugs have been taken out of circulation."
Lloyds TSB fined £1.9 million for unsuitable sales of high income bond

The Financial Services Authority (FSA) has today fined Lloyds TSB
Bank plc (LTSB) £1.9 million for a number of unsuitable sales of a
high income equity-linked bond through the LTSB branch network. LTSB
will pay compensation of approximately £98 million in respect of
22,500 sales.

The fine relates to some sales of the Extra Income and Growth Plan
(EIGP) in four tranches between October 2000 and July 2001. The EIGP
was a new product with a medium/high risk rating designed by Scottish
Widows Group. LTSB acquired Scottish Widows in March 2000 and the
EIGP was distributed through the LTSB branch network. In total, some
51,00 policies were sold.

Andrew Procter, FSA Director of Enforcement, said:

"Firms must ensure that the products they recommend are suitable for
an investor's individual circumstances and that any potentially
unsuitable sales are identified. The procedure and controls to
achieve this need to be especially rigorous where medium or high risk
products are being offered to inexperienced investors."

LTSB did not have in place sufficiently rigorous procedures and
controls for considering all of the issues surrounding the selling of
the EIGP. It did not emphasise sufficiently to the LTSB branch
network's financial consultants the need for investors, when buying
the EIGP, to have appropriately balanced portfolios and the need for
investors to retain sufficient liquid resources. (Together, these two
factors are described as "concentration levels".)

In particular:

- there was not sufficiently bespoke guidance on acceptable
concentration levels in LTSB's suitability rules in relation to the
EIGP;

- there was not sufficiently specific training of LTSB branch network
financial consultants in terms of the suitability of the EIGP for
investors on grounds of concentration levels; and

- in the absence of such guidance, LTSB's sales verification process
did not identify potential unsuitable sales through the LTSB branch
network on grounds of concentration levels.

Additionally, LTSB did not ensure an adequate balance between the
general pressures of its sales targets and the suitability of EIGP
for investors and failed to analyse the reasons for the high level of
sales through the LTSB branch network of Tranche 1 of the EIGP

As a result, some 22,500 EIGP sales - 44% of the total number of
policies sold - were made through the LTSB branch network to
investors when it was an unsuitable product for them. In the light of
these failings specifically, LTSB has agreed to pay compensation in
respect of:

- approximately 16,500 sales to investors who had not, before their
purchase of the EIGP, purchased an equity related investment
product and who purchased the EIGP with more than 20% of their
financial assets; and

- approximately 6,000 sales to other investors who had, before their
purchase of the EIGP, purchased one or more other equity related
investment products and who purchased the EIGP with more than 35%
of their financial assets.

In relation to the EIGP, LTSB failed in the above respects to act
with due skill, care and diligence and to have adequate arrangements
to ensure that its financial consultants were adequately trained with
regard to concentration levels and that it had sufficiently well
defined compliance procedures. In so doing, LTSB demonstrated
failings that are viewed by the FSA as particularly serious in the
light of the following factors:

- The failure to ensure that adequate procedures and controls were
put in place to sell the EIGP throughout the LTSB branch network
occurred even though LTSB had clearly identified, in advance, the
potential risks of mis-selling the EIGP and had put in place a
number of measures intended to mitigate those risks;

- LTSB's failure resulted in the EIGP being mis-sold to a large
number of inexperienced investors, exposing them to the risk of
substantial loss;

- Specifically, the failings in respect of certain EIGP sales meant
that approximately 84% of the total sales to customers who had no
previous experience of equity related investment products resulted
in their having more than 20% of their total financial assets
invested in the EIGP. Approximately 18% of the total sales to
customers who did have previous experience of equity related
investment products resulted in their having more than 35% of their
total financial assets in the EIGP.

In deciding the level of penalty to be imposed, the FSA has taken
into account that, while the bank's failings in this case were
serious, LTSB has co-operated fully since the identification of these
issues by the FSA in October 2001. It has conducted a comprehensive
investigation into its sales of the EIGP and has agreed to pay the
compensation as set out above. LTSB's conduct was not deliberate or
reckless and the bank has put in place remedial steps to address the
issues in relation to the EIGP referred to above. Were it not for the
remedial action taken and for the co- operation demonstrated,
resulting in the early settlement of the matter, the financial
penalty would have been significantly higher.

LTSB will be contacting customers to advise them of how today's
announcement will affect them. The bank has also established a
consumer information line to answer any immediate questions that its
investors have. The number is: 0800 328 4761.

Rogue employers caught with £13m of unpaid wages

New figures published today show that over £3.5million in unpaid
wages from employers flouting the minimum wage was uncovered last
year. It brings the total to almost £13million since the minimum wage
was introduced in 1999.

The Inland Revenue carried out more than 6,000 investigations last
year - an increase of more than 500 on the previous year. This
followed the introduction of three new teams in Leicester, Wigan and
Shipley.

The DTI has started a five week publicity campaign to publicise the
rise in the adult rate to £4.50 an hour and £3.80 for the youth rate.
These new rises come into force on October 1st. For the first time
the campaign will include targeted advertising through recruitment
websites.

Employment Minister, Gerry Sutcliffe, said:

"There is no room for complacency when it comes to enforcing the
minimum wage but these latest figures show that we are winning the
war against rogue employers.

"Anyone who thinks they are not being paid the minimum wage should
call the minimum wage helpline on 0845 6000 678."

There were 53,000 calls to the minimum wage helpline last year -
leading to 1,996 complaints. The greatest number of complaints were
in retail, hospitality and markets. Since 1 April 1999, the helpline
has responded to more than 333,000 enquiries and handled more than
10,000 complaints.

Use of the website (www.tiger.gov.uk) increased by more than 60%
compared with last year. The interactive website helps workers assess
their own entitlements and help employers assess their obligations.
Region Arrears Cases Helpline
complaints
SOUTH WEST £113,696 472 143
SOUTH EAST £177,048 632 131
EAST £537,680 581 175
EAST MIDLANDS £22,670 150 136
WEST MIDLANDS £239,262 444 184
NORTH WEST £236, 655 663 251
YORKS & HUMBER £201,626 584 225
NORTH EAST £202,909 607 104
LONDON £383,875 612 186
WALES £134,460 470 124
N.IRELAND £307,603 344 131
SCOTLAND £1,028,457 679 189
TOTAL £3,585,941 6238 1,996

 

The Northern Ireland National Minimum Wage Helpline (0845 650 0207)
has received more than 3000 calls with over 140 worker complaints
referred to the regional compliance team for investigation. The
Helpline is operated in partnership with the Northern Ireland
Citizens Advice Bureaux.

A Scottish National Minimum Wage Helpline (0845 600 1768) was
launched in February 2003. The Scottish Low Pay Unit operates this
Helpline, in partnership with Inland Revenue, DTI and Citizens Advice
Scotland.

In the East Midlands, the partnership with Leicester City Council and
the Knitwear, Footwear and Apparels Trades Union (KFAT) has continued
to develop community outreach. Between April 2002 and March 2003, 22
referrals were generated and £8,747 in arrears identified in 15
completed cases as a result of the work of the project.

Proactive pilots were set up in Cornwall, Derby and Wales, where
fewer complaints had been received than expected. Each of the
projects has undertaken a variety of publicity events in supermarkets
and town centres to publicise and raise awareness of the minimum
wage. The increase in publicity resulted in an increased number of
complaints. Partnership working was undertaken in Wales with the
Minority Ethnic Women's Network and in Derby with Derby City Council.

Case studies

London
Following a complaint by a firm of Immigration Law Practitioners, a
lottery winner employing a domestic worker was found to be paying
below the minimum wage. The worker and the employer were both
interviewed by the compliance officer in order to assess the
situation and calculate the potential wage arrears. The employer has
since paid the worker wage arrears of £1205

London
A leading nursing agency was paying on-call staff only for the time
they actually spent taking calls. A complaint from one worker led to
a review by a compliance officer. An enforcement notice was issued
and appealed by the employer. The case was subsequently referred to
the Court of Appeal. The Court ruled in favour of on-call staff being
paid the minimum wage for all the hours they were available to take
calls rather than for the time they spent taking calls. The employer
fully accepted the decision and has since paid the worker the monies
owed to her. The complainant received £13,307 and other workers have
benefited by more than £100,000

London

The Tax Credit Office referred a case where the three female workers
had not had a pay rise for five years. An investigation discovered
that neither they nor their employer were aware of the minimum wage.
As a result of the review they were paid arrears of £9,343

London
A female housekeeper employed by a wealthy individual made a
complaint about her employer when she was asked to leave her tied
cottage. Although the worker had been given a contract of employment,
the contract did not mention remuneration. After examination of the
employer's records it appeared that the worker had not been paid the
minimum wage throughout the term of her employment. The compliance
officer identified £9,600 wage arrears.

Northern Ireland
Information from a Working Family Tax Credits referral indicated that
the applicant, working for a building contractor, was being paid less
than £2 per hour although a skilled worker. Our discussions with the
firm's accountant confirmed that the applicant was being underpaid,
as was another worker. The employer agreed to pay arrears of £14,734
of which £14,000 was due to the WFTC applicant.

Northern Ireland
A visit to a café revealed that the owner was "aware" of the minimum
wage but unsure of the rates. He believed that allowing his workers
free meals and drinks would make up for any shortfall in wages and
stated that they had agreed to this. The compliance officer explained
that the only benefit in kind that counts for the purposes of the
minimum wage is accommodation and that workers cannot agree to work
for less than the minimum wage. Nine underpaid workers were entitled
to over £11,000 arrears.

Leicester
On following up a complaint from a worker within the knitwear
industry, the compliance officer found that the employer had not been
recording times worked by the employee. The employee complained that
he had been paid #3.00 per hour for the time he worked. A review of
the payroll records, together with further evidence from the worker,
revealed that he had indeed been paid below the minimum wage during
his three and a half-year employment. £5933 wage arrears were
identified for payment to the worker.

Scotland
A complaint was received by a security guard working for a golf club.
The guard was one of three who worked night shifts and were paid for
the actual job done and not the hours worked. The compliance officer
calculated the wage arrears, which went back to April 1999. The
employer agreed the calculations and the workers received their
money. Arrears identified for the three workers were £22,151

Cardiff
An employer's misunderstanding saw one of his workers inadvertently
being paid below the minimum wage. A petrol station worker had a
contract that stipulated an hourly rate of pay of less than the
minimum wage for the shifts he worked during the week and an hourly
rate of pay in excess of the minimum wage for weekend shifts. The
employer believed, incorrectly, that as long as the worker's total
pay over the week averaged out to the minimum wage he was complying
with the legislation. It was explained to him that where the same
work is being done the additional overtime payment does not count for
minimum wage purposes. The calculation assumes the lower rate for the
weekend as well as the rest of the week. £2,753 in wage arrears were
identified for payment to the worker.

Cardiff
An 18-year-old schoolgirl employed by a dry cleaning agency
complained that she was not being paid the minimum wage. After
initially denying that the schoolgirl worked for him, the employer
told the compliance officer that the timesheets he had kept were
incorrect, as he didn't think that hours worked by schoolchildren
needed to be recorded. He subsequently agreed to pay the minimum wage
and also to pay the previous pay arrears. The young worker benefited
from £162 pay arrears.

Sheffield
A residential-home worker claimed she was paid £30 per night for her
twelve hour night shifts during which she was expected to carry out
domestic duties. The employer maintained that the night shifts were
merely "sleepovers" during which staff were rarely required by the
residents. An investigation confirmed that work was regularly
performed during these shifts and that no sleeping arrangements were
provided. The compliance officer determined that this worker and
several others were being paid below the minimum wage. Total wage
arrears of £8078 were identified of which £1862 was due to the
complainant.

Sheffield
A routine enquiry into an employer's records in Sheffield showed
payment to an employee of £150 for a 40-hour week. After discussions
with the compliance officer, the employer withdrew his original claim
that he had always paid the minimum wage. This was followed up with
the employer's commitment to repay the arrears due and ensure the
minimum wage was paid in the future. The worker benefited from £1142
wage arrears.

Shipley
A graphic designer complained that he was not being paid the minimum
wage because he was classed as a trainee even though he was not
receiving formal training. The subsequent investigation revealed that
he was carrying out the full range of duties expected of him and was
referred to as a trainee mainly because he was new to the company and
initially employed for a trial period. The complainant received over
£300 in arrears.

Exeter
Examination of a cleaning company's records, following a complaint
made by an employee, showed hotel room cleaners were not receiving
the minimum wage. The workers were paid for each room cleaned at a
rate of £1.50 per room. Due to a physical and mental handicap, which
slowed her down, the employer paid the complainant less than her
colleagues. All the workers now receive an hourly rate of pay equal
to the minimum wage. In addition, the complainant also received the
arrears due to her. Arrears totalling £1,096 have now been paid to
the complainant.
New makeover to give UK Superyacht Industry bigger share

A new brand for the UK's superyacht sector was launched by Industry
Minister Jacqui Smith at the Monaco boat show today.

The 'Superyacht UK' brand will pull together and market the
fragmented British sector as a whole. This will give it a new
competitive edge when challenging in international markets.

The brand was put together by the Industry following a DTI funded
report 'Superyacht Marine Equipment Market study' published in August
2002. The report estimates that the worldwide superyacht marine
equipment market is worth over a billion dollars a year. 'Superyacht
UK' will help British companies maximise their market share by:

- co-ordinating the activities of UK companies at international boat
shows under one pavilion;

- producing a new directory with profiles of all UK companies which
can be used as a marketing tool;

- providing an overarching logo to give British products easier
recognition;

- co-ordinating training schemes, networking opportunities and
assistance with technical and regulatory matters.

- organising a half yearly forum between all major players to help
address weaknesses in the sector.

Jacqui Smith said:

"The UK superyacht industry is already a huge success story. Our
firms have gained a worldwide reputation for quality and reliability.
But in an increasingly competitive global arena the industry must
find new ways to keep up the momentum.

"This new brand will give all key players; from designers and
builders to equipment manufacturers and service providers a greater
edge to help boost exports.

"The success of the UK leisure marine industry demonstrates that the
future of British manufacturing can be strong. Being a high tech,
highly skilled, value added industry means it can compete with the
best in the world. It is clear that we cannot compete on low wage and
nor should we want to."

Congratulating everyone for following up the study so quickly Jacqui
Smith added:

"Superyacht UK is an excellent example of Industry and Government
working together to ensure a hugely successful sector continues to
innovate and expand. I look forward to building on this relationship
to help the sector overcome future challenges.

Howard Pridding, Executive Director of the British Marine Federation,
said:

"There are major opportunities for British businesses in export
markets across the world in the superyacht sector. The UK industry is
a success story and our leading businesses are world leaders. But the
competition is growing internationally. The British Marine Federation
is delighted to have been able to work with the DTI and the
superyacht sector to launch the Superyacht UK initiative, which will
help to market UK businesses in key global markets under one common
brand. Leading on from this launch at the Monaco Yacht Show and our
export promotion at other international boatshows, 'Superyacht UK'
will address broader issues such as technical standards,
representation and training, to ensure that this important sector of
UK industry remains competitive"

The worldwide superyacht sector is currently growing at six per cent
a year and over the past decade, the global superyacht fleet has
almost doubled.
Literature Review of risk factors for job loss following
sickness absence

A research report published today as part of the Department for Work
and Pensions In-House report series provides evidence on the factors
that place employed/self-employed people who have been off work
because of illness, injury or disability for between 6 and 26 weeks
at risk of losing their job. The report's findings have been used to
inform the development of a screening tool for the Job Retention and
Rehabilitation Pilot which was launched on 1 April 2003.

Key findings from the literature review

The review finds that there are currently no published screening
tools that are suitable to use for identifying those at risk of
losing their job amongst employed or self-employed people who have
been off work because of sickness, illness or a disability for
between 6 and 26 weeks. It also shows that many different factors
interact to influence the duration of sickness absence and that it is
not solely dependent on health condition but also on age, sickness
benefits, and access time to medical specialists and hospitals.

There is conflicting evidence on the influence of personal
characteristics such as age, race, gender, and socio-economic status
on return to work. Much of the research on musculo-skeletal
conditions provides evidence that early intervention is effective in
helping those off sick return to work. In addition, people who are
able to cope better with their pain experience less stress,
depression, and anxiety and stand a better chance of returning to
work.

The evidence also shows that long-term sickness absence is more
likely to lead to job loss. Those without qualifications and those
with low levels of qualifications are also more at risk of job loss
than those who are more highly qualified, and that those in manual
jobs are more at risk of job loss than those in non-manual positions.
The review finds that self-employment is a protective factor against
job loss.
ACAS launches new help for small firms with people problems

A pilot mediation scheme to help small companies deal with employment
law related problems was launched today by Rita Donaghy, Acas Chair.
The scheme, for companies employing fewer than 50 people, will be
piloted in the Yorkshire and Humber region and East London, starting
on 1 October 2003.

The free scheme will provide simple, practical and confidential
advice to help small companies and the people that work in them to
resolve employment law related problems. The help available from Acas
advisers includes:

- Visiting an employer to advise on the range of action available to
deal with a particular problem and the possible legal consequences

- Mediating between employees with a dispute by getting them to talk
to each other on ways they can work together

- Investigating a problem and, with the agreement of an employer and
their employees, making recommendations on how to deal with the
problem

- Providing an independent person to hear an employee's appeal
against dismissal or disciplinary action where there is no other
suitable person in the organization to do so

Speaking at the Acas Yorkshire and Humber office in Leeds, Rita
Donaghy said:

Many small businesses are worried that they may fall foul of
employment regulations but don't have the time to keep up with what
they should be doing. Every year thousands of people put in
applications to take their employer to an employment tribunal. Yet
often with a little help and discussion at an earlier stage, this
could have been avoided.

"Acas has many years' practical experience of sorting out conflict in
the workplace. What we have learnt from mediating in both large-scale
group and individual disputes means we can help stop them happening
in the first place. The Department of Trade and Industry asked Acas
to follow up a recommendation from the Better Regulation Task Force -
set up to look at how life could be made easier for small businesses
to try out this new service. We will be running the pilot until early
next year, using the results and feedback to decide the next stage."