Written Ministerial Statements
Tuesday 10 October 2006
The Government are strongly committed to tackling terrorist financing. Just as there should be no hiding place for those who perpetrate terrorism, so there should be no hiding place for those who finance terrorism.
This statement updates Parliament on counter-terrorist finance actions taken over the summer recess to strengthen further our framework for rooting out the financial networks underpinning terrorism.
On 10 August 2006, the police arrested a number of suspected terrorists in connection with an alleged plot to blow up airplanes leaving the UK in mid-flight. Acting on the advice of the police and the Security Service, the Treasury froze the assets of 19 of these individuals on 11 August. The asset freeze was imposed within 24 hours of the police arrests and was in place before banks opened in the morning. This was the quickest and most comprehensive asset freeze that the Treasury has undertaken and it has yielded valuable operational benefits. The Executive Secretary of the international Financial Action Task Force (FATF) has said in relation to the 11 August freeze that:
“The measures taken (by the Treasury) were exemplary, this is a concrete application and implementation of FATF standards.”
This latest action means that a total of 188 accounts and around half a million pounds of suspected terrorist funds have now been frozen in the UK.
The measures set out here are designed to help to detect, deter and disrupt money laundering and terrorist finance, while safeguarding the UK’s position as the world’s most secure and dynamic financial sector. The Treasury plans to produce a detailed strategy document around the end of the year.
Terrorism (United Nations Measures) Order
Today, the Treasury is asking the Privy Council to adopt a new Terrorism (United Nations Measures) Order updating the existing order. This makes a number of changes to the UK’s domestic asset freezing regime, allowing us to prevent funds, economic resources and financial services being made available to anyone who is designated under the order on suspicion of involvement with terrorism, while introducing a confidentiality provision to protect, where necessary, information that may be disclosed on a confidential basis
Closed Source Evidence
The Treasury has agreed, on the advice of law enforcement agencies, to use closed source evidence in asset freezing cases where there are strong operational reasons to impose a freeze, but insufficient open source evidence available. The use of closed source material will be subject to proper judicial safeguards. The Government intend to put in place a special advocate procedure to ensure that appeals and reviews in these cases can be heard on a fair and consistent basis. In order to ensure appropriate accountability to Parliament, we will report to Parliament quarterly on the operation of the UK’s asset freezing regime.
Money Service Businesses
On 29 September, the Treasury published a review into the regulation and performance of money service businesses in preventing money laundering and terrorist financing. The vast majority of bureaux de change, cheque cashers and money remitters are honest and important partners in the fight against financial crime. But the scale of the challenge we now face demands we strengthen our current financial controls so that we can root out money laundering and terrorist financing. Our proposals to replace the registration system with a licensing system, take tougher action against non-compliance and demand firms keep better records, build on the controls we introduced five years ago and give us the powers we need. I also want to give firms in the sector better support and guidance and recognise the important contribution they make to our financial system at home and abroad.
On 3 July, I made a statement to Parliament announcing that the Government would be restricting the payment of state benefits to the households of UN listed terror suspects. This policy has now been applied to six households. Following a legal challenge, the High Court ruled on 22 September that the Government's approach was lawful and was consistent with its obligations under the relevant UN Security Council Resolutions.
In February, the Government launched a review into the regulation and performance of the charitable sector in preventing terrorist financing and will make recommendations later this year for protecting the charitable sector from terrorist infiltration. It is essential that charities are protected from abuse by terrorists seeking to exploit the goodwill of donors. On 24 August, the Charity Commission, having consulted Treasury and Home Office Ministers, launched an enquiry into the charity Crescent Relief and froze its bank accounts.
Third Money Laundering Directive
On 31 July, the Treasury published a consultation document on implementing the EC Third Money Laundering Directive. This will ensure our systems for tackling money laundering and terrorist financing continue to be in line with international best practice and will implement a risk-based approach, allowing businesses to target their resources in the most effective and proportionate manner. The consultation closes on 20 October and we will report the results when we publish draft Regulations around the turn of the year.
Because terrorist financing operates globally, so the response must be global. Last year, the UK used its presidencies of the G7 and the EU to step up international action against terrorist financing. The Chancellor will, today, write to EU finance ministers about taking this agenda forward. The UK has recently been appointed to serve as president of the Financial Action Task Force (FATF) from summer 2007. We will use our presidency to drive forward a reform agenda urging the FATF to be more outward looking and more clearly focused on tackling abuses and risks in the international financial system.
On 3 July 2006, Official Report, columns 27-28WS my right hon. Friend the Secretary of State announced the decision in principle to approve proposals to co-locate elements of the Defence Logistics Organisation (DLO) with the Defence Procurement Agency (DPA) in the Bristol/Bath area. He also announced that he had accepted in principle the recommendations of the Enabling Acquisition Change report. These were both subject to subsequent consultation with the Trades Unions.
The Department entered into the formal consultation period immediately after the announcement. I and my ministerial colleagues met with trades unions representatives over the summer to discuss their views on the proposals during this time. The formal consultation period has now closed, although we remain committed to Trades Unions engagement throughout the next stages of both projects.
After careful consideration, and taking full account of the points raised by the trades unions, I have decided to proceed with implementing the co-location proposals. I announced this final decision on 29 September 2006 and am updating the House now at the earliest opportunity after the summer parliamentary recess.
We will now move into the implementation and assessment phase of the project that will include the moves from Andover and Telford, the tendering process for the development of the new site in Bristol and introducing flexible working arrangements at various sites. We expect to have completed the co-location process by 2011.
Co-location planning has, however, been adjusted in two respects since the 3 July announcement. There will now be no moves from Sapphire House, Telford, before March 2008, although the closure date of 2009 remains. It is also now likely that some current activity will be retained at RAF Wyton instead of moving to main operating bases. This does not alter plans to move about 500 acquisition-focused posts to the Bath/Bristol area in subsequent phases of the project that will also include the withdrawal from Caversfield in 2009-10.
I appreciate that this decision on the way forward for the co-location project will have consequences for MOD employees and their families, particularly in current DLO sites where we will be scaling down our presence or withdrawing altogether. The Department will work to mitigate this effect by providing appropriate support for those affected by the outcome of these necessary changes.
The Enabling Acquisition Change report also made a series of recommendations intended to improve the MOD's ability to undertake through-life capability management. Consultation with the trades unions on the recommendations of the report has also concluded. One of the recommendations in the report was to merge the DPA and DLO from 1 April 2007. It has now been decided that the merged organisation will be called Defence Equipment and Support and on formation it will be led by General Sir Kevin O’Donoghue as the first Chief of Defence Matériel.
These decisions will mean that in the future we will have one single, co-located organisation responsible for the procurement, maintenance and sustainment of military capability. This will provide a greater unity of purpose in acquisition, facilitate better decision making in the early stages of acquisition and effectively manage military capability through life. I am confident that this is the right way forward for defence as a whole and will improve the support we give to our Armed Forces.
Environment, Food and Rural Affairs
EU Chemicals Legislation
My noble Friend, Lord Rooker, the Minister for Sustainable Farming and Food, made the following written ministerial statement.
“I have today announced that together with my counterparts in Wales, Scotland and Northern Ireland, I have asked the Health and Safety Executive (HSE) to take on the responsibilities of UK competent authority for the proposed new EU chemicals legislation REACH (Registration, Evaluation and Authorisation of Chemicals) and that they will today be launching a helpdesk for UK business.
The competent authority will provide advice and support to UK business for dealing with the requirements of REACH, liaise with the new European Chemicals Agency in Helsinki and coordinate enforcement of the regulations in the UK.
The Health and Safety Executive will be responsible for delivering the functions of the competent authority working with the Health and Safety Executive Northern Ireland and in close partnership with the Environment Agency, the Scottish Environment Protection Agency and Northern Ireland Environment and Heritage Service who will together help ensure delivery of the environmental benefits of REACH. The full competent authority will be operational when REACH enters into force.
The legally designated competent authority will be the Secretary of State in England, and the relevant Ministers or departments in Scotland, Wales and Northern Ireland who will then together delegate the functions of the competent authority to the Health and Safety Executive while maintaining overall ministerial responsibility.
We will be working closely with the Health and Safety Executive and other organisations involved to finalise details of the competent authority role and financial arrangements and hope to reach final agreement shortly.”
Foreign and Commonwealth Office
Middle East Peace Process/Lebanon
I welcome the opportunity to update the House on developments in the Middle East since my last statement on 13 September.
As my right hon. Friend the Prime Minister has made clear, advancing the Middle East Peace Process is a key priority for this Government. This is vital above all for the Israeli and Palestinian people, but also for the stability and prosperity of the region. As events this summer demonstrated, the failure to resolve this conflict has serious consequences for the international community, including for the security of our citizens.
Since my last statement to the House, I have met my Israeli counterpart, Tzipi Livni, and Palestinian President Abbas, and, together with Security Council colleagues, I have met the Arab League and the parties to discuss how best to re-energise the Middle East peace process.
Over the coming period we will remain fully engaged in helping to drive the peace process forward, working closely with both parties and our international partners. We welcome the decision of the Quartet to meet with the parties and with the key regional players. We continue to encourage Prime Minister Olmert and President Abbas to meet as soon as possible.
In particular, we must work with our partners, particularly in the EU, to develop a new programme to build viable institutions for a future Palestinian state. As we set out at the London meeting in 2005, capacity building in the occupied territories remains central to advancing the peace process. We will continue to do all we can to support this work. We will also work closely with the US Security Co-ordinator, General Dayton, and other international partners to improve Palestinian security. Past events have repeatedly shown that without progress on this, extremists will always be able to block the political process.
We and the international community must continue to support President Abbas. I would like to pay tribute again to his courage in advancing the interests of his people and the cause of peace. We support his efforts to work for a Palestinian authority Government based on the three Quartet principles of non-violence, recognition of Israel and acceptance of past agreements. As the Prime Minister has made clear, we would work with such a Government.
We remain deeply concerned by the situation on the ground, particularly in Gaza. We call for the immediate release of Corporal Shalit, and particularly welcome efforts by the Government of Egypt and President Abbas to secure his release.
The UK is committed to helping the Palestinian people. The Department for International Development has committed £30 million to the Palestinians this year. This is in addition to the €329 million given by the European Commission this year, the largest contribution in a single year. The UK supports an extension of the "Temporary International Mechanism” to help alleviate the situation. We are working with EU and Quartet partners to deliver this. As my right hon. Friend the Secretary of State for International Development, announced yesterday, the UK is providing an extra £3 million to the mechanism.
The situation in Lebanon has improved significantly since the unanimous adoption on 11 August by the UN Security Council of Resolution 1701. The ceasefire which the resolution established continues to hold. Israeli forces have withdrawn from Lebanon except for those in the divided village of Ghajar. The Lebanese Armed Forces have deployed in large numbers across the country, including along the Blue Line and in areas in southern Lebanon in which they have not been seen for many years. The first phase of the expansion of UN Interim Force in Lebanon (UNIFIL), over 5,000 troops, has been deployed in full. A second phase of some 5,000 further troops is in preparation.
The Prime Minister, during his visit to Lebanon in September, stressed our continuing commitment to supporting the Lebanese Armed Forces, with equipment and training, as they take control throughout the territory of Lebanon. Javier Solana announced on 3 October that the EU will send a team of experts to Beirut to take the EU’s work in this area forward.
I pay tribute to the UN, its Agencies and the many NGOs involved for the manner in which, during the height of the humanitarian crisis, they delivered essential supplies in difficult circumstances. Most of the Lebanese people displaced by the conflict have now returned, but some 200,000 have been unable to re-occupy their homes because of the level of destruction in their villages or their contamination by unexploded munitions.
The reconstruction effort is now under way. On 31 August, the Secretary of State for International Development attended the Stockholm conference for Lebanon’s early recovery. The Government of Lebanon set a target of $530 million for its recovery plan, but in the event pledges from countries attending the conference reached over $940 million. He announced in Stockholm a further £4 million package of UK assistance, covering unexploded munitions clearance, shelter, water and sanitation, and bringing the UK total to over £21 million.
We continue to work with the UN Secretary-General and international partners to ensure the full implementation of UN Security Council Resolution 1701, and the earlier resolutions relating to Lebanon. Prime Minister Siniora and the Government of Lebanon have our full support in their effort to secure Lebanon’s sovereignty and prosperity. We urge all countries, including Syria and Iran, to implement the Security Council’s requirements and to provide firm support to the Government of Lebanon in meeting the challenges ahead.
Democratic People's Republic of Korea (Update)
On 9 October, the DPRK Foreign Ministry announced that it had conducted an underground nuclear test. There is still some doubt about the exact nature of this test, but given North Korea’s stated intention last week, there can be very little doubt that it was a nuclear test. We await further information to confirm this, but the international community is proceeding on the basis that this was indeed what the DPRK has said.
The world has been united in its condemnation of North Korea’s action, which was carried out in direct defiance of the will of the international community. Comments made by world leaders, nuclear experts and international organisations have highlighted North Korea’s isolation. This issue has underlined the scale of the counter-proliferation threat that we face. The international community are working together to overcome this threat to peace and security.
Discussions are taking place within the UN Security Council in New York. Partners have unanimously condemned the DPRK’s actions and agreed that a robust response is needed. Negotiations will continue. The UK will be pushing for a robust response given the clear threat posed to international peace and security by North Korea’s pursuit of nuclear weapons, including legally binding sanctions. Under Security Council Resolution 1695 adopted in July there exists already a sanctions regime which requires all states to prevent missile-related items being transferred to or from North Korea. Any new sanctions will have to go further than this. They will make it clear to North Korea that it must return to the six-party talks, and stop disregarding the concerns of its neighbours and the international community. We should in particular strongly support the need for measures to prevent DPRK from exporting goods and technologies, which would help others develop nuclear and ballistic missile capabilities.
Immediately following the test, my right hon. Friend the Prime Minister and I both issued statements making it clear that North Korea’s actions were both highly irresponsible and provocative. Since then, I have discussed the situation with Foreign Ministers including Chinese Foreign Minister Li, Japanese Foreign Minister Aso and US Secretary of State, Condoleezza Rice. Those contacts will continue over the hours and days ahead. We have also called the DPRK ambassador in London to the Foreign Office to make clear our views.
Trade and Industry
UK Assisted Areas
A two-stage public consultation seeking views on the designation of future assisted areas from 2007-13 took place from February to August 2006. Approximately 420 written responses were received from a wide range of stakeholders and interested parties. There were several regional and national information events hosted across the country. Furthermore, the review team and I personally met several delegations to consider individual representations. We have responded positively to all representations and amended the proposed map where in our judgment this is possible and consistent with the principles and criteria the UK Government have determined and the constraints established by the rules set by the European Commission. Copies of the Government’s response to the consultation and the assisted areas map1 being sent to the European Commission for approval have been placed in the House Library.
The assisted areas map will be sent to the European Commission today and it has up to two months to approve it. The assisted areas map is not final until it is approved by the European Commission as complying with its guidelines on regional aid. Upon receipt of this approval, the assisted areas map will be implemented through UK legislation making it operational from January 2007.
Much has changed since the last review of assisted areas in 1998-99. The UK economy has prospered growing faster than any of the G7 industrialised nations. Further countries have joined the European Union. The combination of these two factors has meant that less of Britain is eligible for assisted areas status. The European Commission guidelines published last December specified that the proportion of the UK population covered by assisted areas for 2007-13 will be reduced from the 30.9 per cent. currently covered to 23.9 per cent.
Assisted areas status gives us flexibility to support investment, job creation and retention propositions in the more disadvantaged areas of the UK. This helps us tackle regional disparities in economic performance and to promote social cohesion across the UK. In England we will be working with the regional development agencies to recommend that those areas losing assisted areas status in 2007-13 be recommended for Tier 3 coverage. This will offer SFIE to small and medium-sized enterprises under the new European Commission SME block exemption.
The Government carried out an open and transparent review of the assisted areas in response to new European Commission guidelines on regional aid adopted last December.
1Also available on—http://www.dti.gov.uk/regional/index.html
EU Transport Council
I will attend the first Transport Council of the Finnish presidency which takes place in Luxembourg on 12 October.
The main items on the agenda are: the mid-term review of the 2001 White Paper on transport policy; the Galileo satellite navigation project; the draft regulation on aviation security; and two aspects of aviation external relations.
There will be a policy debate on the mid-term review of the Commission White Paper on European transport policy. The review, entitled “Keep Europe Moving—Sustainable Mobility for our Continent”, appeared in July. It reviews the EU’s transport objectives between 2001 and 2010, as set out in the 2001 White Paper. Evident in the review is a change of emphasis, the aim now being to get the best from each transport mode, rather than seeing present and future policy in terms of conflict between road and rail. Key themes are better regulation, competitiveness, transparency, innovation and logistics.
The UK’s overall aim is to ensure continued emphasis on reducing regulatory burden, ensuring the proper working of the internal market and protection of the environment. This means that new Commission proposals should be based upon a rigorous impact assessment; that the rules of the internal market are monitored to see that they are working properly; that liberalisation of the domestic passenger rail market is treated as a priority; and that measures such as aviation emissions trading are brought forward to help mitigate environmental damage.
There will be a report from the Commission on its communication on freight transport logistics, entitled “Freight Logistics in Europe—Key to Sustainable Mobility”. The communication “examines whether and where the EU could offer added value to enhancing the development of freight transport logistics in Europe and the world”. The Commission plans to present an action plan for freight transport logistics in 2007. The Finnish presidency will take forward consultation on the communication and prepare for the action plan. Logistics is Finland’s central presidency priority in the transport field. The UK supports this initiative from the Commission and the proposal to develop an action plan. However in future discussions on the action plan we will need to ensure that any regulatory proposals that emerge are proportional and supported by industry needs.
The presidency will aim for a general approach on two draft regulations related to management of the Galileo programme. The first amends the statutes of the Galileo Joint Undertaking (Regulation 876/2002 EC) to allow for its closure at the end of 2006; the second amends the regulation (1321/2004 EC) which established the Galileo supervisory authority, allowing it to take over the joint undertaking’s responsibilities for the current development phase. The UK supports these amendments, which aim to ensure that an appropriate management structure is in place, with an efficient transition of responsibilities for managing the Galileo programme.
The Council will consider conclusions on the Commission communication of June 2006, taking stock of the Galileo programme. We believe these provide a useful reinforcement of our objectives for the programme. The Commission is also expected to report on progress in the PPP concession contract negotiations, and possibly on its delayed deliberations on the involvement of third countries in the programme.
We will examine the emerging deal very carefully for its justification in terms of value for money, affordability, and risk to the public sector. We are also pressing the Commission to bring forward proposals for the new financial mechanisms which will be needed. A successful PPP should deliver a value for money deal and ensure that all member states are in a position to participate in the potential economic benefits.
The Council will aim to reach political agreement on the regulation on civil aviation security, replacing and improving on the 2002 regulation. The new proposal would help to clarify, simplify, and further harmonise legal requirements with the aim of enhancing overall security in civil aviation. Early agreement on the proposed new regulation is highly desirable.
In addition, under AOB, there will be reports from the presidency and the Commission on recent developments in aviation security.
The Commission will give progress reports on two aspects of aviation external relations on which it has been given mandates to negotiate agreements—with the US on a comprehensive air transport treaty, and with Russia on payments for Siberian overflights. Both issues remain the subject of on-going discussions with the respective Governments.
South Western Franchise
The Department announced on 22 September, the award of the South Western rail franchise to Stagecoach South Western Trains Ltd. (Stagecoach Group plc) for a period of 10 years from 4 February 2007.
Stagecoach has undertaken to pay the Department for Transport a premium of £1,191 million NPV over the life of the franchise. The franchise has been awarded for 10 years, with the final three dependent on service performance achieving preset targets, including further performance improvements.
The South Western franchise combines two existing franchises, South West trains and the Island Line, both currently operated by Stagecoach plc. South West trains operates the busy commuter routes into London Waterloo, and serves destinations in south-west London as well as places further afield such as Bournemouth, Bristol, Exeter, Paignton, Plymouth, Portsmouth, Reading, Salisbury, Southampton and Weymouth. Island Line is a much smaller business, serving five towns between Ryde Pier Head and Shanklin over 14 km of track.
The Department has awarded the franchise in line with the requirements set out in the invitation to tender (ITT), a commercially confidential document issued to bidders in March 2006. A supporting stakeholder briefing document was published at the same time setting out the specification included in the ITT.
The current timetable operated will remain largely unchanged. However, there are a number of improvements including a second train each hour to Weymouth from Waterloo, a new Salisbury—Romsey service via Southampton and Southampton Airport Parkway and additional late evening and Sunday services on several London suburban routes.
The new operator has addressed the continuing growth in passenger demand by redeploying the existing rolling stock, initiating a refurbishment programme to increase capacity on the suburban fleet and investing in additional rolling stock.
Smartcard technology will be rolled out by 2009, so that passengers will benefit from electronic ticketing across the franchise area. This will include the acceptance of existing Oyster products in London zones 1 to 6. This means that passengers on South Western services in London can use Oyster pay as you go products as well as newly available smart tickets.
Fare structures will change to incentivise travel outside the busiest periods of peak time, and in conjunction with the rolling stock initiatives, will address the key objective of accommodating future demand levels. The introduction of smartcards will facilitate the ability of the operator to offer flexibile tickets to support this goal. Regulated fares will continue to be consistent with Government fares policy, while Stagecoach will continue to have flexibility to make changes to unregulated fares.
Some £40 million investment in enhancements at stations will be delivered. Waterloo station and 13 other stations in the franchise area will be gated. Extra security measures, including more visible staff and CCTV at all stations and on all trains, will be introduced.
The Department required bidders to submit a number of priced options as part of their bids. Stagecoach has been asked to ensure that 95 per cent. of the passenger franchise footfall will travel through stations that have been granted secure station accreditation.
Stagecoach will also operate an hourly Waterloo-Exeter service once Network Rail has built the necessary infrastructure, expected to be by December 2009. Until this new service can be implemented, existing services operating west of Exeter to Plymouth and Paignton will continue to run.
The current two trains per day operation between Bristol and Waterloo will be retained throughout the new franchise.
New GSM-R radio equipment will also be fitted to all units in line with Network Rail’s programme of updating radio systems across the network.
The decision on the future of the Island Line has been deferred to allow time for more extensive discussion with key stakeholders as to the most appropriate way forward, and recognising the recent Community Rail designation of the railway.
Further work is also needed to assess the most appropriate use of the platforms at Waterloo International once Eurostar operations vacate in late 2007.
In summary, the successful bid has addressed the objectives for the South Western franchise. Performance will increase to 92.5 per cent. by 2009-10 (93.3 per cent. by the end of the franchise), demand growth will be accommodated through capacity and ticketing initiatives, and stakeholder aspirations have been reflected in the timetable. The franchise improves security on trains and at stations, and offers value for money to passengers and taxpayers.
Civil Aviation Act
My right hon. Friend the Secretary of State for Transport is responsible for determining the remuneration of board members of the Civil Aviation Authority (CAA) under paragraphs 6 and 7 of schedule 1 to the Civil Aviation Act 1982. This responsibility includes determining pension provision for current and former board members. In practice, board members’ pensions are broadly analogous with the Civil Aviation Authority Pension Scheme (CAAPS).
Under paragraph 7 (2) of schedule 1 to the 1982 Act, once the Secretary of State has made a determination he is obliged to lay a statement before each House of Parliament containing particulars of that determination.
With effect from 6 April 2006 the CAAPS rules have been amended to take account of changes in pensions legislation introduced by the Finance Act 2004.
The CAA Section of the CAAPS has been amended to reflect these legislative changes. The determination, which has been laid before Parliament today, has been made to bring the named current CAA board member’s pension into line with the CAAPS.
As a consequence of the changes the salary for pension purposes is now no longer subject to the earnings cap (established under S590C of the Income and Corporation Taxes Act 1988) which existed previously. Mr. Arscott (a pension member by analogy) will now have his benefits calculated on that basis with a commensurate increase in his pension.
The determination relates only to the pension payable to Mr. Arscott and does not affect the pension arrangements for any other member of the board.
Work and Pensions
My noble friend the Under-Secretary of State for Work and Pensions has made the following statement:
Gas is widely used in households across the country. Gas today is safer to use than 10 years ago, with the number of fatalities down by a third. Yet 20 to 30 people still needlessly die every year from preventable gas-related carbon monoxide poisoning.
New research suggests that faulty gas appliances are still being used in many homes and that public awareness of CO poisoning risks is worryingly low.
It is not right for the current situation to continue. The Health and Safety Executive (HSE) is conducting a review to improve consumer gas safety. Gas safety stakeholders need to work with the HSE in that review to produce proposals that will put in place a modern, effective gas safety regime. I am calling on the gas industry meanwhile to do all it can to increase public knowledge of the dangers of unsafe use of gas. I intend, with ministerial colleagues, to meet the industry to review its actions and progress.