Skip to main content

Written Statements

Volume 476: debated on Tuesday 20 May 2008

Written Ministerial Statements

Tuesday 20 May 2008

Treasury

Asset Freezing Regime

In a written ministerial statement of 10 October 2006, Official Report, column 11WS, the previous Economic Secretary undertook to report to Parliament on a quarterly basis on the operation of the UK’s counter-terrorism asset freezing regime. This is the sixth of these reports and covers the period January to March 2008.1

Asset-freezing designations

In the quarter January to March 2008, the Treasury made two domestic designations under the Terrorism (United Nations Measures) Order 2006.

One of these was a person already designated under earlier orders.

The Terrorism Order and the Al-Qaida and Taliban Order provide, where appropriate, for designations to be made confidentially and with restricted circulation of notice.

No persons were designated on this basis in this quarter.

The two persons were designated on the basis of closed source material provided by law enforcement and intelligence agencies.

There were no financial sanctions listings at the EU or the UN in relation to terrorism or al-Qaeda and the Taliban of persons with links to the UK.

A total of 263 separate accounts containing over £650,0002 of suspected terrorist funds are currently frozen in the UK.

Reviews

The Treasury keeps domestic asset-freezing cases under review. A number of formal reviews have been initiated in this quarter and the review of four cases was completed. In all cases a decision was taken to delist the designated person.

Licensing

In accordance with UN Security Council Resolution 1452 (2002), the Treasury operates a licensing system whereby designated persons and others are able to apply to make or receive payments under specific and, if necessary, monitored conditions. In this quarter, the following licences were issued:

6 listed persons were granted legal expenses licences.

12 listed persons were granted basic expenses licences;

(1 of which was for benefits payments); and

no listed persons were granted extraordinary expenses licences.

In addition, the households of three listed persons were granted benefits licences in accordance with the policy set out in the previous Economic Secretary’s statement of 3 July 2006 to Parliament.

Litigation

At the close of the reporting period there were eight active challenges against the UK’s asset-freezing regime pending in the High Court.

On 24 April the judgment in the High Court case of A, K, M, Q & G - v - HM Treasury was handed down, with the court ordering that the relevant legislation be quashed, but staying the effect of this to allow an appeal to be made. HM Treasury was granted leave to appeal. In the meantime, the asset-freezing regimes, and individual asset-freezes, remain in place.

1 The detail that can be provided to the House on a quarterly basis is subject to the need to avoid the identification, directly or indirectly, of personal or operationally sensitive information.

2 This figure represents the balance of the accounts at the time they were frozen and includes approximately $58,000 of suspected terrorist funds frozen in the UK. This has been converted using current exchange rates. Future fluctuations in the exchange rate may impact on the contribution this sum makes to future totals of suspected terrorist funds frozen.

Tax Credits

National statistics published today demonstrate the substantial contribution tax credits are making to deliver guaranteed minimum incomes for working families and families with children, reducing child poverty, and helping more people into employment.

The statistics published by HM Revenue and Customs (HMRC) show that in 2006-07 the child and working tax credits were benefiting around 6 million families and 10 million children.

The statistics also show that in 2006-07:

more working people on low incomes without children received tax credits than ever before, with 305,000 receiving support through the working tax credit, up by 12 per cent. on 2005-06;

384,000 families benefited from the childcare element of the working tax credit, a 13 per cent. increase compared with 2005-06, thereby making childcare more affordable and giving parents more choice in how they balance work and family life; and

10 per cent. more families benefited from extra help for workers with a disability compared to 2005-06, helping these individuals overcome the labour market disadvantage they face.

Significantly, the figures show that efforts to reduce overpayments of tax credits have resulted in a £700 million reduction in overpayments since 2005-06. The level of overpayments is now less than half the level in 2003-04.

There has also been a corresponding decline in the numbers of overpaid awards, from 1,879 thousand in 2003-04 to 1,291 thousand in 2006-07.

The Government remain committed to the current responsive system of tax credits, which in 2006-07 provided additional support to the 720,000 families experiencing an income fall. While this progress is welcome, I recognise that there is more to do, building on the success of the measures put in place since 2005. That is why the Government are today publishing a number of proposals to continue improvements to the tax credits system, drawing on lessons learnt from the first five years of tax credits in the UK, and the experience of similar systems in Australia and New Zealand.

These proposals are set out in “Tax Credits—Improving Delivery and Choice: A Discussion Document” published today. They focus on three key areas.

First, HMRC is introducing further operational improvements aimed at tailoring support more closely to individuals’ needs and making it easier for customers to claim, receive and renew tax credits, to reduce the scope for error.

Secondly, the document sets out a number of proposals that retain the ability for tax credits to provide additional, timely support to customers whose income falls or whose circumstances change, while giving customers greater certainty and more control over how they manage their tax credits affairs.

Thirdly, it sets out a range of possible options to reform the delivery of financial support for childcare through tax credits, simplifying the system as far as possible for customers.

Some of these reforms are already being introduced and are delivering improvements for tax credit customers. Others will be brought forward in the next few years; while some of the proposed reforms, particularly to the system of childcare support, are much longer term. The Government are therefore keen to seek views, in order to inform longer-term policy development.

“Tax Credits—Improving Delivery and Choice: A Discussion Document” is being deposited in the Libraries of both Houses.

Children, Schools and Families

Young People

I would like to bring the House up to date about measures that are intended to improve the outcomes for some of our most vulnerable young people and to help children at risk of falling behind with their education.

Around 135,000 children and young people each year are in some kind of alternative provision because they are excluded from, or for some other reason are unable to attend, mainstream school. These children and young people are currently provided for either in local authority-run pupil referral units or in other alternative provision commissioned by local authorities and schools. Only 1 per cent. of 15-year-olds in pupil referral units gain five or more good GCSE examination results.

The Government are publishing a White Paper that will transform alternative provision into a vibrant and successful part of the whole education system, working in close partnership with mainstream schools, special schools, with children’s services and other agencies, to meet the needs of young people more effectively.

Some of the most vulnerable children and young people are in some kind of alternative provision, and they have as much right as any other pupil to a good education that allows them to realise their potential and sets them on the path to success. The White Paper emphasises the key role for schools in identifying children with challenging behaviour early on, and being able to access the right support before they reach the point of permanent exclusion.

We recognise that there is much good practice in pupil referral units and other forms of alternative provision. However, we are determined to bring all providers of alternative provision and other support for children and young people up to the standard of the best so that we achieve a step change improvement in standards overall. Our proposals include:

intervening when pupil referral units fail, by requiring local authorities to replace them with a specified alternative, as announced in the draft legislative programme;

requiring a local authority, when necessary, to hold a competition to find the best provider of the specific alternative model that has been identified to replace a failing pupil referral unit;

collecting and publishing data annually on attendance at pupil referral units;

collecting and publishing educational outcomes data (GCSEs and equivalents) for pupils at the end of key stage 4 in alternative provision;

ensuring that all young people in alternative provision have a personalised education plan, so that their needs can be identified and assessed much earlier;

securing an appropriate curriculum entitlement for young people in alternative provision and work towards developing a national minimum standard of provision;

improving support for the workforce in pupil referral units and alternative provision and improving accommodation and facilities;

running up to 10 pilots to test a range of innovative and good practice models to deliver alternative provision.

We are confident that the proposals in this White Paper will address the weaknesses in the system and help young people get successfully back on track by creating a culture of early intervention, quality of provision, and strengthened accountability.

Communities and Local Government

Local Government

We want to see a modern, efficient and secure electoral system, so that voting for all electors is as convenient and as straightforward as possible. In 2009 many electors are due to vote on two separate occasions within a space of four weeks, firstly in local council elections on 7 May, and secondly for the European Parliament on 4 June.

Accordingly, I am today publishing a consultation document inviting views on whether or not we should, subject to parliamentary approval, move the date of the English local elections from Thursday 7 May 2009 to Thursday 4 June 2009, the same day as the European parliamentary election. This consultation meets the statutory requirement set out in section 60 of the Local Government and Public Involvement in Health Act 2007, which makes provision for the Secretary of State by Order to make such a change in the local election date.

In launching this consultation we have had regard to the experience in 2004 when local and European parliamentary elections were held on the same date. The turnout at those European elections was significantly higher than in previous years, up from 24 per cent. in 1999 to 38.5 per cent. We have also had regard to the Electoral Commission’s conclusions in 2004 that the combination of the elections was an important factor in the improved turnout. It commented that before the next European parliamentary elections in 2009 further consideration would need to be given to the potential impact of the combination of elections.

In particular we are seeking views on:

whether the local elections in 2009 should be moved from 7 May to 4 June, so that they are held on the same day as the European parliamentary elections;

whether, if we move the elections to principal authorities, we should also move the date of parish council elections where they are scheduled to take place on 7 May 2009;

what practical issues may arise as a result of combining local (and where applicable, parish) elections with the European parliamentary elections; and

what action could be taken to address these practical issues - whether by local authorities, Government or the Electoral Commission.

I have placed copies of the consultation document in the Library of the House and it is also available on the departmental website. The consultation period ends on 11 August 2008. Under the 2007 Act, any Order to move the local elections in 2009 must be approved by parliament and made by 7 November 2008.

Defence

Aircraft Carriers

I am pleased to inform the House we have completed the necessary alignment of work schedule, commercial arrangements and planned annual expenditure, in relation to the Future Aircraft Carriers. This enables us to move ahead with the companies of the Aircraft Carrier Alliance to progress the contract for the manufacture of the two carriers to be named HMS Queen Elizabeth and HMS Prince of Wales, which will enter service in 2014 and 2016 respectively. Following finalisation of legal arrangements and the formation of the planned naval shipbuilding and support Joint Venture Company, formal contract signature will take place. We have given our written assurance to the VT Group and BAE Systems of our intention to sign the contract once the company has formed.

The carriers will provide our front-line forces with the modern, world-class capabilities they will need over the coming decades. The work on the carriers will create or sustain 10,000 jobs across UK at the peak of its production.

Helicopters (Operations)

The provision of battlefield helicopter capability in Iraq and Afghanistan has attracted considerable interest among hon. Members and the British public. I therefore felt it would be helpful to set out in some detail, within the constraints of operational security, the current position, and our future intentions.

This statement does not cover our wider plans on helicopters: it is focused on our plans relating to current operations over the next two years. At the same time, I am keen that hon. Members appreciate the wider context. While we are focused on providing as much helicopter support as we can to troops on operations, we must also manage our helicopter fleet to ensure that we maintain a sustainable capability in the future. One question often asked by hon. Members is why the number of helicopters deployed is significantly less than the number in our inventory. The answer is that the number deployed is limited by the need to keep the burden on our airframes, crews and ground support staff at a sustainable level over time. We also have to make aircraft available in the UK for training, maintenance and essential modification programmes. This means that, as a rule of thumb, it takes three additional helicopters to sustain the deployment of a single helicopter on operations.

To this first principle we have added recently a second principle, which is that if possible, each helicopter type should be deployed in only one operational theatre at any time. Concurrent deployment of a single type in both theatres increases the pressure on crews and supervisory staff, with implications for our ability to train them effectively between deployments, for harmony ratios, and ultimately the risk of them leaving the service. On the positive side, focusing each helicopter type in one theatre has allowed us to rationalise our logistics and support arrangements. We have completed the process of consolidating our medium and heavy fleets across the two theatres, with Merlin and Puma in Iraq, and Chinook and Sea King in Afghanistan.

Against the background of these two principles, we are making significant progress in enhancing UK helicopter capability for operational commanders. I have approved the decision to commit the Merlin fleet (alongside Puma) to Iraq, to support our continuing efforts to train and mentor the Iraqi army, and maintaining the ability to re-intervene in extreme circumstances. We intend to deploy a further two Merlin to Iraq towards the end of this summer.

Turning to Afghanistan, the drawdown in Iraq has enabled us to remove Sea King from Iraq and, working with AgustaWestland, to fit them with new, state-of-the-art main and tail rotor blades to deliver improved performance in hot and high conditions, and deploy them to Afghanistan. They are performing extremely well, and a further two helicopters deployed last month.

Through the deployment of the Sea Kings, and improvements to support and crewing arrangements for Chinook and Apache (assisted by the consolidation of types in one theatre), we have increased the total amount of flying time—measured by the number of hours per month—available to commanders in the south of Afghanistan by over a third since last March. (We do not release the total number of helicopters or hours for reasons of operational security: it would allow others to infer too much about our overall capability.) But we are clear that commanders on the ground will always be able to use more helicopters, and we are determined to continue to make every effort to give them the options they need.

Chinook is the UK support helicopter best suited to the demanding hot and high conditions in Afghanistan. In the last six months, we have ramped-up the maintenance regime and logistics support to increase the HC2/2a Chinook flying rate on operations by 20 per cent.

In relation to Apache in Afghanistan, we are clear about the importance of ensuring that we maximise this proven battle winning capability. We deployed the Apache on operations three years ahead of schedule, and have been increasing steadily on the number of Apache flying hours available to commanders each month—most recently by a further 15 per cent. at the end of March. We aim to increase flying hours by a further 25 per cent. by early next year, by deploying additional helicopters, and we are building the logistic support required in terms of spare parts and personnel, particularly engineering manpower, to enable this.

Finally in relation to Afghanistan, it is important to recognise that we are operating there as part of a wider NATO effort, and we draw significantly on helicopter assets provided by allies. We continue to work with allies to identify opportunities for further increases in the capability of the overall NATO fleet. For example, the UK and France have undertaken to support initiatives to set up training courses for crews, and to upgrade aircraft—and recently we established, and agreed to provide seed funding for, a helicopter fund to help improve the availability of NATO and EU helicopters on operations. There were expressions of interest in this latter initiative from several countries at the recent NATO summit in Bucharest, and we are following these up.

In addition, since February 2008, NATO has had in place a commercial helicopter contract designed to enable the movement of freight across the whole of Afghanistan. This contract was recently replaced in the south of Afghanistan by a new contract specifically to deliver the movement of up to 10,000 kilograms of freight per day for the Kandahar hub in Regional Command (South), freeing up a significant number of flying hours for Chinook (and the Apache which support them) for higher priority tasks. In the hotter summer months, this can enable the equivalent of an additional four Chinook sorties per day. We will continue to monitor the effectiveness of the contracts closely and assess whether there are opportunities to shift any more of our helicopter tasking on to contractors.

That completes the summary of current initiatives on operations. In relation to additional capacity for the future, in March 2007 the Prime Minister and I announced we would be investing in additional support helicopters, purchasing six Merlins from Denmark, and modifying eight Chinook HC3 helicopters to a support role. We stated at the time that this choice of projects had been based on their potential to generate additional capability for operations over the following two years. In relation to Merlin, it should be noted that this sort of timeline—under two years from procurement to fielding—is much shorter than the standard either in the UK or internationally.

Rightly, we have set ourselves challenging targets; and we are making progress towards meeting those targets.

Since the delivery of additional Danish Merlins to the UK last July, the aircraft have been undergoing a complex conversion to meet the UK standard, carried out in partnership with AgustaWestland. We have been modifying the aircraft to a standard where they are suitable for operations in Iraq, including the installation of improved communications systems and state-of-the-art main rotor blades. Three have now been delivered to the RAF for training purposes. The remaining three will be delivered this summer. The addition of these six helicopters will increase the Merlin battlefield helicopter fleet by 25 per cent. and will enable us to deploy the further two Merlin to Iraq this summer referred to above. In the longer-term it remains our intention to deploy Merlin to Afghanistan, and we are looking at what further steps we can take now to shorten the lead-in times ahead of any possible deployment.

We are also making progress with the HC3 Chinooks. This conversion programme involves a redesign of the cockpit area and avionics bays, as well as the modifications necessary to operate in Afghanistan. A contract is in place with Boeing to carry out the conversion work, and we have secured funding from the reserve for the additional theatre-specific modifications necessary for Afghanistan. The project is on schedule for the first converted Chinook to be fielded in late 2009, allowing the Chinook force to begin deploying more helicopters to theatre. The remaining seven will become available over the following months, the last one entering service during the first half of 2010. This is some two years in advance of previous options to field these aircraft. All other enabling personnel and support issues have been planned and funded to coincide with the delivery of the modified aircraft to the front line, thus ensuring that we are ready to deploy them at the earliest opportunity.

I hope that hon. Members will recognise from this short summary that despite the challenges and constraints in this area, we have made significant progress both in delivering additional capability from within our existing assets, and in procuring and adapting additional assets to give operational commanders additional options over the next two years. This is not an area where we can ever afford complacency, but I believe this summary demonstrates that we are on the right path.

Work and Pensions

International Labour Conference

The 96th session of the International Labour Conference 2007 adopted a new convention 188 and recommendation 199 on work in the fishing sector. I have today published a White Paper entitled “International Labour Conference— Proposed Action on a Convention and Recommendation Adopted at the 96th Session of the International Labour Conference 2007”, copies of which are available in the Vote Office and the Printed Paper Office.

Better Off in Work Credit

The Command Paper, “Ready for Work: Full Employment in our Generation” (published 13 December 2007) announced that the Department will pilot a Better Off in Work Credit (BWC) in October 2008. The purpose of the credit is to encourage customers to obtain and retain employment by ensuring that, on moving into full time work, they will receive an in-work income (including in-work benefits and working tax credit) of at least £25 a week more than they received from their out-of work benefits. The credit will be paid by Jobcentre Plus for up to a maximum of 26 weeks. It will be available to customers who have been receiving incapacity benefit (employment and support allowance on its introduction), income support, jobseeker’s allowance or severe disablement allowance for at least 26 weeks prior to obtaining work. We estimate that nationally this could help approximately 110,000 people, about 35,000 of whom will have children.

Today I can announce that Jobcentre Plus will pilot the new measure in all districts in the Yorkshire and Humber region, a total of 59 Jobcentre Plus offices. We estimate that there are around 12,000 individuals who would be eligible for the credit each year in the Yorkshire and Humber region.

Following evaluation of the pilot we will look to extend the credit nationally in 2009.