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Written Statements

Volume 501: debated on Thursday 26 November 2009

Written Ministerial Statements

Thursday 26 November 2009

Business, Innovation and Skills

UK Composite Strategy

My noble Friend the Secretary of State for Business, Innovation and Skills, Lord Mandelson, has today made the following statement.

I am today announcing the publication of the UK Composite Strategy.

Fulfilling a commitment made in our policy document “New Industry, New Jobs”, this strategy sets out the role Government have to play to help build a globally competitive composites industry here in the UK.

Advanced composites, such as carbon fibre, are light-weight, higher performance materials. Their use to reduce weight in automotive, aerospace and other transport applications can deliver savings in running costs and more significantly, carbon emissions—helping increase resource efficiency and drive our shift to low carbon vehicles. The strength and stiffness of advanced composites also make them an ideal material for the production of the new generation of larger wind turbines.

The UK already has a developed expertise in using composites in aerospace and high-performance cars, but future significant growth in the composite industry will be driven by more mass market, high volume cost effective production. Government’s new composite strategy comprises a package of measures to strengthen Britain’s composites capability, to build its composites capacity and to improve the sector’s sustainability. Our aim is to enable more UK manufacturers to secure an increased share of this growing market.

The strategy includes proposals to:

Strengthen leadership in the fragmented composites sector through the establishment of a composite leadership forum. A BIS Minister will chair this forum, which will involve key companies and industry stakeholders;

Develop future technical and manufacturing capabilities in composites through a more coordinated approach to skills development;

Raise awareness of the cross-sector commercial opportunities composites present through a supply chain initiative. This will be led by the regional development authorities alongside the composite centres of excellence;

Develop rapid manufacturing capability, with Government investment of £16 million to create a cross-sectoral national composite centre in the Bristol region. The centre will deliver world-class innovation in the design and cost-effective rapid production of composites across all sectors. A £6 million Technology Strategy Board challenge will also be set to spark innovation solutions in this area;

Increase sustainability and recycling of composites, with a new consortium of Government, business and other key stakeholders to prioritise work on issues such as improving recycling processes and applications for recyclate.

As the market evolves, so will our approach. We will continue to work with businesses, industry bodies, trade unions, academics, regional development agencies and devolved Administrations to deliver these proposals.

Further details of the strategy will be available to the House later today.


Walker Review (Bank Governance)

The Government welcome the publication today of the final report of Sir David Walker’s independent review of the corporate governance of UK banks and other financial institutions.

The corporate governance failures identified by the review contributed significantly to the financial crisis. Improvements in board practice, risk management, control and disclosure of remuneration, and the exercise of investors’ ownership rights are required to address these fully.

Sir David’s comprehensive recommendations are a world-leading response to the governance failures identified and will ensure that the UK remains at the forefront of improving corporate governance in the banking sector.

The Government will move quickly to implement the review recommendations, working closely with other bodies to which the review has directed recommendations for implementation.

The Secretary of State for Business Innovation and Skills has today written to Sir Christopher Hogg, the chairman of the Financial Reporting Council, asking the FRC to take responsibility for a new stewardship code for institutional investors, which was recommended by Sir David.

The FRC, which is currently reviewing the combined code, will consider how it intends to address the recommendations directed to it. Similarly, the FSA will be considering how to take forward the recommendations applying principally to financial institutions. The Government are seeking powers in the Financial Services Bill to permit it to make regulations implementing the review’s remuneration disclosure recommendations.

The detail of the recommendations and the specific means of implementation may be subject to further development or consultation as appropriate.

The Government will continue to work with their international partners to ensure an appropriate and consistent global response to bank corporate governance failures.

Copies of the final report have been deposited in the Libraries of both Houses.

Communities and Local Government

Rural Economy and Affordable Housing

The Secretary of State for Environment, Food and Rural Affairs and I are today publishing a prospectus for a £1 million Rural Masterplanning Fund. I am also publishing a consultation on guidance to incentivise landowners to bring forward additional land for affordable housing in rural areas and the Matthew Taylor Review Implementation Plan. These documents are being published following commitments made in the Government’s response to the Matthew Taylor review published on 25 March 2009.

In September 2007, the Prime Minister asked the hon. Member to undertake a review on how land use and planning can better support rural businesses and deliver affordable housing and to report to the Secretary of State for Environment, Food and Rural Affairs and the Minister of State for Housing and Planning. The final report of the review, with detailed recommendations, was published in July 2008.

Our response welcomed the review and set out our proposals to take forward most of the review’s 48 recommendations to continue to encourage a prosperous rural economy and improve the delivery of affordable rural homes.

The Rural Masterplanning Fund prospectus invites rural local planning authorities to bid for expert technical support to assist them in masterplanning to achieve the sustainable expansion of small or medium-sized settlements, and sets out the terms of the competition.

The consultation paper seeks views on our draft guidance to local authorities on how to encourage landowners to bring forward land for affordable housing in rural areas. The guidance proposes: either allowing landowners the ability to refer family members or employees for tenancies to a percentage of the homes provided on their land, as long as they meet housing need and local connection criteria; or allowing them to keep the freehold of the land while leasing it to a housing association.

The Matthew Taylor Review Implementation Plan provides an update on progress in implementing each of the recommendations of the Matthew Taylor review.

I have placed a copy of these documents in the Libraries of both Houses.

Finance Settlement (England) 2010-11

I am today publishing the Government’s formal proposals on distribution of formula grant to English local authorities for 2010-11, together with information on the allocations of all specific and special grants that can be announced in advance.

The proposed figures for formula grant allocations that I am publishing today are unchanged from those that were first proposed in January 2008. That is in line with the Government’s policy on three year settlements, which is that we will not change the proposals for formula grant first published in January 2008, except in entirely exceptional circumstances.

The importance of maintaining that commitment is twofold. First, central and local government work together, with other local partners, in service delivery. It is vital to give local government a settled financial platform on which to build those relations and those services. Secondly, this is continued recognition of the importance of the services delivered by local authorities and the pressures on those services, such as social care and waste management.

Total formula grant for 2010-11 will be £29 billion, of which redistributed business rates will be £21.5 billion, RSG £3.1 billion and police grant, £4.4 billion. Formula grant will be £747 million or 2.6 per cent. higher than in 2009-10 on a like for like basis.

In addition, specific grants, which include the dedicated schools grant, will total £47.2 billion and will bring the overall Government grant increase to 4 per cent. in 2010-11.

In the 10 years up to 2007-08 we increased total Government grant to English local authorities by 39 per cent. in real terms, with an above inflation increase for local government in each year. There will be a further total increase over this three-year settlement of £8.6 billion.

I am pleased that the average band D council tax increase this year was 3.0 per cent.—the Government expect to see it fall further next year while authorities protect and improve front line services.

We expect the average band D council tax increase in England to fall to a 16-year low in 2010-11. We remain prepared to take capping action against excessive increases set by individual authorities and requiring them to rebill for a lower council tax if necessary. We are already capping the police authorities of Cheshire, Leicestershire and Warwickshire in advance of 2010-11 because of previous excessive increases set by these authorities. My officials are today writing to the three police authorities setting out their proposed maximum budget requirements for 2010-11.

Today’s announcement on the final year of the first ever three-year settlement delivers on the Government’s promise to provide financial stability to local government and recognises the important role of councils in providing real help now to communities in the current economic climate.

Today also marks the start of a period of statutory consultation with local government on formula grant distribution and I welcome their responses. Consultation closes on 6 January 2010.

I will be making available full supporting information on the Communities and Local Government website at:

I have placed copies of the consultation paper, tables of formula grant allocation by local authority and other supporting material in the Vote Office and the Library of the House.

Culture, Media and Sport

Education, Youth and Culture Council

The Education, Youth and Culture Council will be held on 26-27 November in Brussels. I will be representing the UK on 27 November when culture and audiovisual issues will be taken. Michael Russell MSP, Minister for Culture, External Affairs and the Constitution for Scotland, will also attend the Council.

The first item on the agenda concerns the Council conclusions on promoting a creative generation. These conclusions are part of a range of initiatives, suggested in 2007 by the Commission Communication on a European agenda for culture in a globalising world, which call for culture to be considered in broader aspects of the Council’s work—in this instance education and digitisation. The UK has been broadly supportive of this approach and I intend to endorse the adoption of these conclusions.

The presidency will then seek to reach a general approach on the proposal for the European year of voluntary activities promoting active European citizenship (2011). The year would promote volunteering and encourage and support the efforts of member states to develop favourable conditions for volunteering in Europe. The proposal for the year will fit well with the UK Government’s aims of increasing the proportion of the population that volunteer.

The year falls helpfully just before the 2012 Olympic Games in London. I intend to support the adoption of this proposal.

The Council will be invited to adopt conclusions on media literacy in the digital environment. These conclusions encourage the promotion of media literacy through formal and informal education, while recognising member state competency on educational policy. They demonstrate our commitment to policies which will support ways of containing the risks of the internet without excessive regulation and which will help realise the creative, educational and economic potential of the internet. The UK welcomes these conclusions and I intend to support their adoption.

There will then be a discussion of a presidency paper on the digitisation of cultural content in Europe. The paper asks a series of questions on the main challenges faced by Europe in making its cultural heritage better available online. I will intervene to outline the UK view on the main issues that need to be addressed by European initiatives to encourage the digitisation of cultural works, how Governments and the EU can help facilitate private initiatives and public-private partnerships for making cultural works digitally available and what can be done by member states and national institutions to make important digitised material widely available.

Under any other business the Commission will provide information on the Google Books settlement. There will be an information point from the French delegation on the digitisation of cinemas in Europe. There will also be an information point from the Slovenian delegation on improving the position of publishers who issue books in languages with small numbers of speakers. The Austrian delegation will raise an issue concerning the protocol amending the Council of Europe convention on transfrontier television. I do not foresee a need to intervene on any of these.


Duke of Connaught Unit

As part of the announcement of normalisation made by the then Secretary of State for Northern Ireland, my right hon. Friend the Member for Neath, (Mr. Hain), on 1 August 2005, the Government undertook to reduce the number of military bases in Northern Ireland to the 14 core sites named in the updated Security Annex to the Joint Declaration. We have since reported that only eight of those 14 core sites would be required in the future.

However, a review of the requirement to retain a military hospital to provide secondary healthcare for service personnel in Northern Ireland has concluded that a commercial contract for Commissioned Care with an Independent Service Provider (ISP) for routine elective secondary healthcare represented the most effective and efficient means of providing quality secondary healthcare for regular military personnel. Therefore, I am announcing today our intention to close the Duke of Connaught Unit (DCU), the military hospital facility based at Musgrave Park Hospital, South Belfast, by 1 April 2010.

There will now be a period of consultation with the trade unions. We recognise the impact this decision will have on the civilian staff currently employed at the DCU, and we will make every effort to support them through this period of change.

Environment, Food and Rural Affairs

Climate Change Report

The meeting in Copenhagen next month is our chance to make a substantial reduction in greenhouse gas emissions and avoid dangerous climate change. But even if we secure a new global deal, some change is inescapable because of historic and projected emissions, and we need to take action to adapt to it or the consequences could be severe. The earlier we start adapting, the better equipped we will be to cope with the risks to our society, our environment and our economy. Homes and buildings, transport infrastructure and hospitals all need to be resilient to the impacts we face.

The UK climate projections that I launched earlier this year showed many of the likely impacts of climate change for the UK which include warmer, wetter winters, hotter, drier summers, sea level rise and more severe weather including storms, floods, heat waves and droughts. Climate change will affect almost every aspect of our lives and means that we will need some new infrastructure to cope. Action now will reduce costs for individuals, businesses and the public purse later.

The Government are taking the lead. Government Departments will be producing adaptation plans by spring 2010, setting out how they are assessing and managing the risks from climate change across their programmes and estates. The Government are also identifying, assessing, and where possible calculating the cost of climate change risks and opportunities at UK, national and regional level through the UK climate change risk assessment which will be produced by 2012.

In addition to this, the Climate Change Act 2008 gave the Government the power to require certain public bodies and statutory undertakers to assess and report on current risks from climate change and their plans for dealing with these risks.

The Act requires me to lay before Parliament a report on how the Government propose to exercise this power within one year of Royal Assent (by 26 November 2009), setting out the circumstances in which directions are likely to be given (the strategy for using the power) and the kinds of organisation which I consider should be directed as a matter of priority.

Following public consultation on our proposals over the summer, and in accordance with the requirements of the Act, I am today laying this report before Parliament. It focuses on those organisations that are responsible for key public services; energy, water, transport and health. It also ensures that adapting to climate change is embedded into the work of organisations such as the NHS, local authorities, police and fire services by factoring climate change into relevant public sector regulation. Other organisations with functions to protect our natural environment, or which we consider to be of critical importance but do not fit the statutory criteria for direction are being invited to report.

These organisations will have to report to me from summer until the end of 2011 outlining their assessment of the risks climate change poses and the steps they are going to take in response. This information will be used to inform the national adaptation programme which must be laid before Parliament in response to the risk assessment.

Copies of this report will be placed in the Libraries of both Houses. A copy of the report is also on the DEFRA website at:

The Government have also published their response to the consultation on the draft strategy for using the reporting power, and have today produced the statutory guidance to reporting organisations. Copies of these documents are also available.

Home Department

Police Authorities (Grant Allocations)

I have today placed in the Library our proposals for allocation of police grant for England and Wales for 2010-11. I intend to implement the proposals on police grant subject to consideration of any representations and the approval of the House. Copies are also available in the Vote Office.

In summary, this settlement intends to make available £259 million more than in 2009-10 in funding to the police service in 2010-11. Policing and reducing crime remain top priorities for this Government. We have continued to work hard to maintain the police grant at the best possible level as well as to provide secure and stable funding across policing, crime and drugs. We are committed to investing in the police so they have the tools and powers to fight crime and make communities safer.

The Government previously announced provisional funding totals for the three-year period 2008-09 to 2010-11 in December 2007 and November 2008. This three-year settlement was received positively by police authorities and forces, as a means of providing greater certainty and improving medium-term planning. The Government face more challenging financial circumstances than expected at the time the three-year settlement was announced. The Home Secretary has however decided to prioritise funding for the police. I will therefore be implementing the substantial increases in police revenue funding set out in the three-year settlement in line with our statement in November 2008.

The funding settlement for 2010-11 continues to build on unprecedented levels of investment in the police service in England and Wales since 1997-98. On a like for like basis Government grant for the police will have increased by over 60 per cent. or over £3.7 billion between 1997-98 and 2010-11. This is almost a 20 per cent. increase in real terms. This investment has helped to expand local policing significantly. There has been considerable achievement over the last 10 years investing in an improved mix of more officers and more police staff. The police workforce has increased by 30.9 per cent. (56,590) since 1997 to 239,607 in March 2009; a record number. This includes substantial growth in police staff (41.8 per cent.) that has freed police officers from back-office and support roles for the frontline.

Neighbourhood policing forms the bedrock of local policing in the 21st century. Through effective engagement with their local community, other community safety service providers, representatives from the private sector and community organisations, neighbourhood policing teams ensure that local concerns are dealt with efficiently. Neighbourhood policing teams play a prominent part in delivering the commitments made in the Policing Pledge and in achieving the single top-down target of public confidence in police and councils to deal with crime and antisocial behaviour issues that matter locally, both of which require effective partnership working at the neighbourhood level. It is for individual police forces and authorities to ensure the effectiveness of neighbourhood policing in their area. The Government will hold forces to account for progress through the public confidence target, which has increased from 45 per cent. in March 2008 to 50 per cent. in July 2009. The Government are working with ACPO and APA colleagues to ensure forces deliver on the Policing Pledge, drawing on the recent inspection work by Her Majesty’s Inspectorate of Constabulary (HMIC).

The police reform programme continues apace. The Policing White Paper, which will be published shortly, represents the next stage of the current police reform programme and an opportunity to highlight and review the progress that has been made in the 18 months since the publication of the Green Paper: “From the Neighbourhood to the National: Policing our Communities Together”. Focusing on delivery of the Policing Pledge, the confidence target and protective services; and addressing our wider approach to tackling crime and antisocial behaviour in the context of the current financial climate, the Policing White Paper will give fresh impetus to the Government’s vision for the future of accountable, professional and citizen focused policing, working effectively with partners nationally and locally.

We continue to make good progress on reforming police and Criminal Justice Service processes to free up officer time by making greater use of technology and investment in mobile data devices. Jan Berry in her capacity as the independent Reducing Bureaucracy Advocate is challenging the police service, its partners and the Home Office to think about wider reductions in unnecessary bureaucracy. Her report includes recommendations for a range of Government agencies, a study on the custody process, and a review of the implementation of the recommendations made in the Flanagan review. The White Paper will respond to these.

In 2009-10 some £4.8 million was made available to the 16 tackling knives action programme police forces to enable them and their partners to undertake additional activity to tackle serious youth violence, including knife crime and gang-related violence, with a further £500,000 for supporting activities such as the Be Safe programme with schools. Figures published last month for England and Wales for the April to June 2009 period showed a fall in police recorded knife and sharp instrument related violence compared to 2008, including a provisional 35 per cent. drop in knife related homicides from 71 to 46, and a fall in firearms offences of 5 per cent. We want to build on the progress achieved so far and in the new year we will announce our plans for 2010-11 to enable the police and their partners to continue bringing about a step change in the levels of serious youth violence in our communities.

The Home Office also contributes £76 million to the Safer and Stronger Communities Fund and the Young Persons Substance Misuse Partnership Grant delivered by local government. In addition, there is a capital element of the Safer and Stronger Communities Fund that is under review. This funding will help local areas to deliver national and local improvement priorities such as those set out in local area agreements.

The police grant settlement 2010-11

Total provision for policing revenue grants in 2010-11 will be £9,741 million, an overall increase of 2.7 per cent. The Government propose to distribute the settlement as set out below.

Table 1: Police Revenue Funding Three-Year Settlement 2008-09 to 2010-11







Home Office general grant




DCLG/WAG general grant




Welsh Top-Up




Total general Formula Grant*




% increase in general grant




Total Specific Grants




Total Government funding for police authorities




% increase in total Government revenue funding




*This figure includes the formula grant allocations in table 2 plus former specific grants (209 million—rounded up) that are now added to general grant but are not distributed according to the formula.

Police funding proposals within the local government finance system for England are being announced by the Parliamentary Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Stevenage (Barbara Follett), today, and those for Wales by the Welsh Assembly Government.

Provisional general policing grants (that is, Home Office Police Grant, Revenue Support Grant and National Non-domestic Rates) for English and Welsh police authorities in 2010-11 compared with 2009-10 are set out in table 2.

General grant

Within the general grant provision of a 2.7 per cent. increase, the funding floor was set at 2.5 per cent. increase for each of the CSR years. Each police authority in England and Wales is guaranteed an increase of at least this level. The grant floor provides for stability but at the same time a degree of grant scaling has enabled us to target resources to areas with greater relative need. Our promised review of the funding formula before the next CSR is already under way with active participation from the policing community.

The Government have made it clear that there is no excuse for excessive increases in precepts on council tax next year. We will not hesitate to use capping powers to deal with excessive council tax increases in 2010-11, including requiring authorities to re-bill if necessary. We took capping action against two police authorities in 2009-10 and seven police authorities in 2008-09. This included, in 2008-09, the designation of Cheshire, Leicestershire and Warwickshire police authorities for capping in advance of both 2009-10 and 2010-11. My right hon. Friend, the Member for Doncaster, Central (Ms Winterton), who is the Minister responsible for local government, is announcing today that action is being taken forward to limit these authorities’ precept increases to around 3 per cent. in 2010-11. The three authorities have 21 days in which to challenge our decision. Any challenges will be carefully considered before final decisions are made.

Welsh police authorities

In line with previous years, I have again ensured that Welsh police authorities are treated on a par with English police authorities in respect to the floor damping mechanism. I have provided additional support of £15.7 million in 2010-11 to ensure Dyfed-Powys, Gwent and North Wales police authorities receive at least a minimum grant increase of 2.5 per cent. equivalent to the level of the funding floor in England. Floor funding is also partly funded through the scaling of police grant to South Wales police authority, so as to maintain consistency with the treatment of English authorities and provide the level of grant it would receive if it were in England.

Specific grants for police authorities

Police authorities will continue to receive specific grants for particular schemes. Details are set out in table 3.

Counter-terrorism funding—We will continue to invest in counter-terrorism policing. Funding for police counter-terrorism will be increased from £552 million in 2009-10 to £579 million in 2010-11.

This announcement reinforces our CSR plans for continued growth in counter-terrorism policing.

Crime Fighting Fund£211 million will again be made available to forces in 2010-11.

Neighbourhood PolicingWe will maintain the ring fence on this funding during 2010-11 to ensure that neighbourhood policing is properly embedded. Funding for each authority has increased by 2.7 per cent. A total of £341 million will be made available in 2010-11.

Funding additional to the settlement

Mobile Information Programme In view of the enthusiastic response from frontline officers, and the success of the programme, a further £30 million capital was made available in 2009-10 as part of our campaign to free up time for officers and reduce bureaucracy.

The Safer and Stronger Communities FundThe resource element of £61million and the Young Peoples Substance Misuse Grant of £15 million will continue to be paid into the Area Based Grant for 2010-11. The Safer and Stronger Communities Fund Capital which is paid direct to local authorities by the Home Office is currently under review, and allocations will be announced at the earliest opportunity.

For the devolved Administration in Wales, where local area agreements are not applicable, the Crime Reduction and Anti-social Behaviour Grant is made available. The resource element of this grant will remain at £3 million for 2010-11, but the capital element is currently under review, and allocations will be announced at the earliest opportunity.


Police funding remains a priority for this Government. Even in very difficult financial times, we have prioritised the police. We have decided to continue to increase funding for the police by providing the £259 million increase in revenue funding set out in the three year funding settlement. However, we have more difficult decisions to make on capital. We will therefore review and announce capital allocations in January 2010. The police will get the best possible settlement within our means.


The police share the public service duty to maximise value for money, especially in the current economic climate. Locally, it is the responsibility of police authorities to set ambitious targets for the efficiency and productivity gains to be achieved by their forces and to hold chief officers to account for delivery. It is also for authorities and forces to decide locally how to recycle the benefits of increased efficiency and productivity. Senior policing leaders must help drive the organisational change required to make significant improvements in value for money, both in their forces and authorities and working with others. Value for money must be central to the strategic vision for improving policing, and chief officers and senior leaders must be visibly associated with this organisational priority within the service.

Table 2: Police Grant Allocation by English and Welsh Police Authority 2009-10 to 2010-11

Police Authority


Formula Allocation1





Change on

2009-10 Formula



English Shire Authorities

Avon & Somerset




























Devon & Cornwall




















































North Yorkshire




























Thames Valley








West Mercia








Shires Total




English Metropolitan Authorities

Greater Manchester












South Yorkshire




West Midlands




West Yorkshire




Mets Total




London Authorities

GLA - Police




City of London2




English Total




Welsh Authorities









North Wales3




South Wales3




Welsh total








Notes to table 2

1. Rounded to the nearest £100,000. Grant as calculated under the Local Government Finance Report (England) and Local Government Finance (No.2—Provisional Settlement Police Authorities) Report (Wales). Table includes the effects of floors and scaling.

2. Figures for the City of London relate to Home Office Grant only as calculated in the Police Grant Report (England and Wales). Revenue Support Grant is allocated to the Common Council of the City of London as a whole in respect of all its functions. The City is grouped with education authorities for the purposes of grant floors.

3. Welsh figures include Home Office floor funding.

Table 3: Specific Grant Allocations 2008-09 to 2010-11







Crime Fighting Fund




Neighbourhood Policing Fund & Community Support Officers




Police Counter Terrorism




Basic Command Units




Grand Total




*This was later increased to £569 million in year (2009-10)

Identity and Passport Service (Framework Agreement)

The “Identity and Passport Service Framework Agreement” is being published today in line with HM Treasury and Cabinet Office guidance. The framework agreement sets out clear strategic objectives, responsibilities and lines of accountability for IPS. These will help to ensure that IPS is able to deliver on its key purpose of safeguarding identity. A copy is available in the Library of the House.

Justice and Home Affairs Pre-Council Statement

The Justice and Home Affairs Council is due to be held on 30 November and 1 December 2009 in Brussels. My right hon. Friend the Secretary of State for the Home Department, my right hon. Friend the Secretary of State for Justice,my noble Friend, the Parliamentary Under-Secretary of State for Justice, Lord Bach, and the Scottish Lord Advocate, Elish Angiolini, intend to attend on behalf of the United Kingdom. As the provisional agenda stands, the following items will be discussed:

The Council, beginning in Mixed Committee with non-EU Schengen states, will receive an update from the presidency on the current state of play on the implementation of the regulation establishing the Visa Information system (VIS). The UK does not participate in that regulation.

The presidency will update Ministers on arrangements for the first milestone test for the second-generation Schengen Information System (SIS II). The UK welcomes the update and will seek to ensure that the test is well-planned and managed, ideally taking place before the end of 2009.

The Council will have an orientation debate on the Commission’s proposal for establishing an EU agency for the management of large-scale IT systems. The Commission carried out an impact assessment which endorsed the need to create an agency. The UK supports the need for an agency and wishes to take part in the adoption and application of this proposal.

Finally, the Mixed Committee will be asked to adopt legislation giving Schengen visa liberalisation to Serbia, the Former Yugoslavian Republic of Macedonia and Montenegro. While the UK does not participate in the EU visa regime, we maintain an interest in all visa issues.

Following Mixed Committee, the Council will be asked to adopt a decision authorising the presidency to sign, on behalf of the EU, an agreement between EU and Japan on mutual legal assistance in criminal matters (MLA). The presidency has recently concluded negotiations on this agreement and UK objectives in relation to this were met. The UK is therefore content for such a decision to be adopted, subject to the views of the Parliamentary Scrutiny Committees.

The presidency will present the draft future JHA work programme (the Stockholm Programme) and there will be a general debate with interior items on day one and justice on day two. Ministers will be expected to agree the draft programme which will be adopted at the December European Council.

Measures contained in the programme aim to ensure that every citizen can have confidence that, wherever they are in the EU, judicial decisions made in a civil court in their favour can be enforced, criminals will face justice and all defendants are guaranteed a fair trial.

The programme will result in an EU where children are safer, where data are shared sensibly, where we facilitate legal travel but clamp down on illegal immigration, where mutual recognition is the cornerstone of judicial co-operation, where member states co-operate on counter-terrorism and combat organised crime, and where we work closely with external countries on JHA and beyond.

There will be a state of play discussion on the Common European Asylum System, which is likely to focus on the recently published asylum procedures and qualification directives. Since December 2008 the European Commission has been proposing measures to deliver the second phase of the Common European Asylum System (CEAS). The proposals on the procedures (which sets out minimum standards for deciding asylum claims, including rules on such things as interviews and appeal rights) and qualification (which sets out the circumstances in which applicants will qualify for international protection) directives were published by the Commission on the 23 October 2009. The presidency will want to gauge member states’ initial reactions to the new proposals. The UK believes these directives are not necessary at this time as they undermine the migration pact and will be seeking to ensure that language in these directives aligns with the conclusions in the migration pact.

Over lunch, Interior Ministers will hold a discussion on the location of the European asylum support office.

The presidency will present the outcomes and action points of the EU-US ministerial troika and of the EU-Western Balkans ministerial forum. There will also be a presentation on the preparation of the EU-Russia ministerial Permanent Partnership Council (PPC), due to be held on 2 December in Stockholm. The UK supports the presidency’s efforts in these areas.

There will be a presentation on the six-monthly report by the counter-terrorism co-ordinator (CTC). The CTC has recently revised the counter-terrorism action plan and after receiving comments from member states will present the action plan to the Council. The UK supports efforts made by the CTC to continue to drive forward EU co-operation on CT, and is particularly appreciative of his efforts with priority third countries, such as Pakistan.

The presidency is seeking to adopt the Council decision on the Terrorist Finance Tracking Programme. The US Terrorist Finance Tracking Programme (TFTP) currently uses payment information carried through the SWIFT (Society for Worldwide Interbank Financial Telecommunications) system to identify and trace terrorist finance and facilitators. This agreement is needed because of a restructuring of SWIFT. The UK supports the Council decision subject to the views of the Parliamentary Scrutiny Committees.

The presidency is seeking to approve the proposal for an information management strategy for EU internal security. The strategy should allow enhanced project management and improved data security. The UK supports the latest draft which calls for a strategic approach across the areas of law enforcement, judicial co-operation and border management and is content for its approval at Council.

On day two of the Council, as previously stated, Justice Ministers will be asked to discuss and agree to the justice aspects of the draft future JHA work programme (the Stockholm Programme).

The presidency will provide Justice Ministers with information on the current state of play of working group negotiations on the proposed framework decision on combating the sexual abuse and exploitation of children and child pornography. The Government support this measure, but due to the changes brought about by the Lisbon Treaty, this proposal will no longer be taken forward as a framework decision. The Commission are likely to retable this proposal as a directive after the Lisbon Treaty comes into effect. The Government will update the Scrutiny Committees about this.

Justice Ministers will also have an orientation debate about the negotiations that have been taking place at official level about a proposed framework decision on transfer of proceedings in criminal cases. This proposal, too, will no longer be taken forward as a framework decision after the Lisbon Treaty comes into effect. It would need to be represented as a directive, but it is unclear in what timescale this will happen.

The Council will then have an orientation debate to clarify the way forward on the draft framework decision on combating trafficking of human beings following the entry into force of the Lisbon Treaty. The presidency will also seek to adopt the action orientated paper (AOP) on human trafficking. The UK welcomes the approach adopted in the AOP, which creates a more coherent and proactive approach to combating trafficking by EU member states in partnership with third countries.

Finally on the justice agenda, the presidency are expected to inform the Council on the state of play on e-justice.

Money Laundering and Terrorist Financing

I have placed in the Library of the House the third annual report to Home Office and HM Treasury Ministers on the Suspicious Activity Reporting (SAR) regime to combat money laundering and terrorist financing. The reporting system is a key element in the United Kingdom’s defences against money laundering and terrorist financing.

The report has been prepared by multi-agency Committee, under the chairmanship of the Serious Organised Crime Agency (SOCA), which includes the financial services sector, police, other law enforcement agencies, and the Financial Services Authority.

The Government note the continuing progress that SOCA and the other participants are making to ensure that the reporting system is operating so as to help deter, detect and disrupt those involved in these crimes and in holding them to account. The Government also welcome the Committee’s development of a long-term strategy to increase the value and impact of the SAR regime.

The overall goal is a SARs system that addresses the threats to the UK from crime and terrorism, contributes to the reduction of harm and the recovery of the proceeds of crime while minimising the costs of compliance to industry and others.

Prime Minister

Financial Support for Members of the House of Lords (SSRB Report)

The Senior Salaries Review Body was commissioned to undertake a review into the financial assistance available to Members of the House of Lords in recognition that the expenses regime was now outdated and we needed to move to a system that would be more transparent and ensure greater accountability.

I am today publishing the SSRB’s report, which I accept. In doing so, I wish to record my gratitude to Bill Cockburn and SSRB members for undertaking such a thorough and comprehensive review. Copies of the report have been placed in the Libraries of both Houses. For the Government, the Leader of the Lords will now work with other Members of the House of Lords to take forward its implementation.


Franchised Rail Services

My right hon. and noble Friend the Secretary of State for Transport, Lord Adonis, has made the following ministerial statement:

On 1 July 2009, Official Report, column 21WS I informed the House that National Express East Coast (NXEC) was expected to default on their franchise to operate rail services on the east coast main line and that in consequence I would establish a state company to ensure continuity of service from the date that the company ceased operations.

The NXEC franchise was terminated on 13 November when a state company, East Coast, took over the service with minimal disruption. I have since announced that the East Coast Company will manage the franchise for two years, until November 2011, so that the Government can review options for a new franchise and consult widely before it is re-let.

The termination of the NXEC franchise on 13 November is a default under the National Express East Anglia (NXEA) franchise. Having considered the relevant facts, I yesterday notified NXEA that their franchise will terminate on 31 March 2011, without the extension to 2014 which would otherwise have happened. The process for securing a new operator will start immediately so that after full consultation a new franchise can begin from April 2011.

In determining the future of the C2C and NXEA franchises, my overriding concern has been to minimise disruption to passengers and staff, and cost to the taxpayer, while ensuring that train companies stand by their commitments. I judge these objectives are best served by:

Terminating NXEA’s franchise in 2011, causing them to for go three years of profit; and

Beginning the re-franchising process immediately so that a new operator is in place in early 2011.

However, my judgment is that the public interest would not be served by terminating the franchises immediately, necessitating state management during the re-franchising period and three operators in two years.

National Express remains bound to comply with its obligations under its franchises. My Department will be monitoring performance closely in the coming months to safeguard the interests of the travelling public.


Future Funding

In parallel with the White Paper “Scotland’s Future in the United Kingdom: Building on ten years of Scottish devolution”, I am pleased to inform the House that the Government have agreed new arrangements in relation to future funding in Wales.

These address concerns, expressed by the House of Lords Select Committee report on the Barnett formula, the Independent Commission on Funding and Finance for Wales (chaired by Gerald Holtham), and also by the Welsh Assembly Government, about the continued application of the formula in Wales, in particular whether pressures in the Barnett formula for additional convergence towards the English average could in future disadvantage Wales.

The Government welcome many aspects of the Holtham report, which it continues to study in detail.

The new arrangements are as follows:

the Government agree that the Barnett formula could lead to convergence to an extent that would be regarded as unacceptable although further convergence is not currently expected in the coming years;

the Government will make a full assessment of the extent of convergence with consideration of Wales’ position relative to other parts of the United Kingdom as part of each spending review; and

following this assessment the Government would be prepared to take action if appropriate to ensure Wales is not disproportionately disadvantaged.

Work and Pensions

Employment, Social Policy, Health and Consumer Affairs Council

The Employment, Social Policy, Health and Consumer Affairs Council will be held on 30 November and 1 December 2009 in Brussels. I shall represent the United Kingdom on all items on 30 November, except for the intervention on “gender equality: strengthening growth and employment”, where the United Kingdom will be represented by my right hon. and learned Friend the Leader of the House of Commons, Lord Privy Seal and Minister for Women and Equality. Health business will be taken on 1 December 2009.

The first and main item of the agenda will be a policy debate on recovering from the financial crisis and preparing for the post-2010 Lisbon strategy. The presidency wants a contribution to the debate on a successor to the strategy after 2010, in the context of demographic change and economic recovery. There will also be a policy debate on gender equality, strengthening growth and employment. The United Kingdom wants to ensure that the post-2010 Lisbon strategy reflects the realities of the changing requirements of the European labour market by focusing on the need for fairness.

The presidency will seek political agreement on a revised parental leave directive. Social partners signed a new framework agreement in June 2009 and the European Commission published a proposal for a directive to implement the new agreement. The United Kingdom welcomes that agreement. The presidency will also seek political agreement on work on the fishing convention which applies to all fishers and all fishing vessels engaged in commercial fishing operations. The United Kingdom supported the development and adoption of the convention, and is committed to working towards ratification. The other item for political agreement is a directive on equal treatment between men and women engaged in a self-employed capacity. This aims to promote equal treatment between self-employed workers and their “assisting spouses”. The United Kingdom welcomes the progress the Swedish presidency has made with the text and is working with the presidency to achieve a reasonable outcome at Council.

The presidency will seek adoption of Council conclusions on healthy and dignified ageing. The United Kingdom supports the text which acknowledges the importance of active ageing in light of the demographic challenge. The Council will also seek adoption of Council conclusions on follow-up of the implementation by the member states and the European Union institutions of the Beijing platform of action to strengthen institutional mechanisms for promoting gender equality. The United Kingdom fully supports this and has submitted a report on progress in implementing the platform.

There will be a progress report on the anti-discrimination directive. The United Kingdom has taken a positive approach to the directive but emphasises the need for the directive to be clear and that any action has to be proportionate to the issue being tackled.

Under any other business, there will be information on conferences held under the Swedish presidency. The incoming Spanish presidency will also give an outline of their work programme.