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Written Statements

Volume 691: debated on Tuesday 8 May 2007

Written Statements

Tuesday 8 May 2007

Armed Forces: Insurance Scheme

My right honourable friend the Minister of State for the Armed Forces (Adam Ingram) has made the following Written Ministerial Statement.

Today, I am announcing that the MoD, in association with Sterling Life, has launched a new voluntary life insurance scheme, Service Life Insurance (SLI). In the run-up to Operation TELIC, life insurance companies reacted to what they saw as the increased risk to service personnel by closing schemes to new applicants, increasing premiums or excluding benefits for chemical, biological, radiological or nuclear weapons. The department has been actively pursuing an enduring solution.

The MoD selected Sterling Life through an EU-wide competitive tender process to provide appropriate life insurance for which applications will be accepted from today. SLI guarantees worldwide war and terrorism life cover to all service personnel, by means of a unique partnering agreement between the MoD and Sterling Life. The SLI scheme is designed to be self-funding and the department has accepted a potential liability, which received parliamentary approval in May 2005, for excessive operational deaths.

The SLI scheme complements the excellent death-in-service arrangements already available to service personnel and offers an attractive addition for long-term life insurance requirements for members of our Armed Forces.

SLI premiums are extremely competitive, particularly for those individuals whose military trade usually results in an additional premium being applied. SLI has no extra premiums for any military trade, even such as being a member of a bomb disposal or Special Forces unit. It will accept all regulars and reservists—even if they are on operations or under orders to deploy. Applicants will be accepted without any medical underwriting and SLI will cover all service-recognised hazardous sports. Premium rates are guaranteed not to increase for the life of the policy. These are significant new SLI benefits from Sterling Life.

I am delighted to announce the launch today of this Service Life Insurance scheme, which provides a ground-breaking new choice for all regulars and reservists. I am confident that through our agreement with Sterling Life we have today provided a world-class solution to a worldwide problem. I will arrange for copies of the SLI brochure, which gives further details of the scheme, to be placed in the Library of the House.

EU: Economic and Financial Affairs Council

My right honourable friend the Chancellor of the Exchequer (Gordon Brown) has made the following Written Ministerial Statement.

The Economic and Financial Affairs Council will be held on 8 May in Brussels. The items on the agenda are as follows:

Preliminary draft of the 2008 general budget

The Commission will give a presentation on its Preliminary Draft 2008 EC Budget, marking the formal beginning of a process that will see the 2008 budget debated and amended by the council and European Parliament during the course of the year until the budget is finally adopted in December.

Financial markets

Hedge funds

Ministers will be invited to adopt conclusions on hedge funds, as part of a consideration of their role in financial markets. The UK shares the consensus on the positive role that hedge funds play in fostering the efficiency of the financial system.

White Paper on asset management

Ministers will be invited to adopt conclusions on the Commission's White Paper on enhancing the single market framework for investment funds. The UK supports efforts to create an efficient and competitive single market in investment funds which will deliver value for investors and help the EU in meeting the challenges of an ageing population.

Ageing and financial markets

Ministers will be invited to adopt conclusions on a Financial Services Committee report on the implications of ageing populations for financial markets. The UK supports efforts to boost the efficiency of pan-European markets for long-term savings products and work to examine the policy issues related to ageing and financial markets.

Inter-institutional Monitoring Group (IIMG): Second interim report monitoring the Lamfalussy process

Ministers will hear reports updating them on the state of play of the Inter-institutional Monitoring Group's work from the IIMG and the Commission. The UK supports the work of the IIMG to improve practical arrangements for the supervision of the European financial services industry.

EU: Informal Competitiveness Council

My right honourable friend the Minister for Trade, Investment and Foreign Affairs (Ian McCartney) has made the following Written Ministerial Statement.

An informal meeting of the EU Competitiveness Council took place in Wuerzburg in Germany from 26 to 28 April. The council was split into two halves. Part I dealt with science and research. Part II dealt with economic issues.

Part I: Science and research

Malcolm Wicks represented the UK at Part I of the council. The council was chaired by Annette Schavan, German Federal Minister for Education and Research.

Under the first item, Research Ministers debated the recent Commission Green Paper on the European Research Area. Along with other Ministers, Malcolm Wicks emphasised the importance of this debate on fostering the free movement of knowledge and overcoming fragmentation in Europe, and stressed the need to include consideration of subsidiarity and European added value.

Under the second item there was a discussion of the proposed European Institute of Technology, where Malcolm Wicks and other Ministers welcomed progress made in negotiations under the German presidency while noting outstanding financial and governance issues to be addressed.

In the final item, the German presidency presented a proposal for an IPR charter following a recent Commission communication on knowledge transfer.

Part II: Economics issues

I represented the UK at Part II of the council. The council was chaired by Michael Glos, German Federal Minister for Economics and Technology.

Under the first item, Ministers discussed Europe's single market and global competition. In particular they focused on factors affecting the attractiveness of the EU as an investment location, noting that the Ernst and Young European attractiveness survey confirms that the EU remains the most attractive region in the world for more than 50 per cent of the companies surveyed. In my intervention I emphasised the economic factors which had made the UK a highly attractive investment location.

As a second item, Ministers discussed the role of EU state aid in influencing foreign direct investment in the EU. Ministers noted that the Ernst and Young survey recorded that only a relatively small proportion of companies considered state aid was a significant factor in their investment decisions. Commissioner Kroes, myself and a majority of other Ministers who spoke intervened to oppose a presidency suggestion that consideration be given to relaxing EU state aid rules in order to match aid offered by third countries, arguing that this would distort competition and risk WTO litigation.

EU: Informal Economic and Financial Affairs Council

My right honourable friend the Chancellor of the Exchequer (Gordon Brown) has made the following Written Ministerial Statement.

The Informal Economic and Financial Affairs Council (ECOFIN) took place in Berlin on 20 and 21 April 2007. The informal council discussed various aspects of sustainable public finances, efforts to combat VAT fraud and issues relating to financial markets.

The main discussion focused on approaches to optimising public finances to enable member states to meet the challenges posed by globalisation and demographic change, including building social bridges and human capital to improve employability and strengthen social inclusion, increasing the efficiency and effectiveness of public expenditure, and securing stable public revenues. Ministers shared national experiences and ideas for addressing these issues.

The informal council also discussed measures for combating VAT fraud, the spring meetings of the Bretton Woods institutions, hedge funds and the current state of financial markets. Following up on the previous informal council meeting in Helsinki, the informal council was informed about ongoing work on precautionary arrangements to secure the stability of financial markets.

The UK was represented by the Economic Secretary to the Treasury, Ed Balls.

Insider Trading: Richard Steele

My honourable friend the Parliamentary Under-Secretary of State for Employment Relations and Minister for London (Jim Fitzpatrick) has made the following Written Ministerial Statement.

On 13 February 2006, the Department of Trade and Industry issued a Written Answer to House of Commons Parliamentary Question No. 2005/3120 from Austin Mitchell MP (Hansard, vol. 442, col. 1635W), which sought information regarding the (a) prosecutions and (b) successful prosecutions for insider trading since 1997. Richard Steele was named as a person who had been convicted of such an offence. The record should show that while criminal proceedings were brought against Richard Steele for insider trading, namely an offence contrary to Section 52 of the Criminal Justice Act 1993, he was not convicted of that (or any other) offence. The record should also therefore show that from 1997 to 13 February 2006 proceedings were brought against 15 individuals, of which eight were successful.

Local Government: Code of Conduct

My honourable friend the Minister for Local Government (Phil Woolas) has made the following Written Ministerial Statement.

In April, the Government issued the Local Authorities (Model Code of Conduct) Order 2007, promulgating a simpler, clearer and more proportionate model code of conduct for local councillors. The order came into effect on 3 May.

The revised code delivers the promise we gave in the local government White Paper, Strong and Prosperous Communities, last October, that the Government would provide a simpler, clearer and more proportionate code of conduct for local authority members and amend the rules on personal and prejudicial interest to support members’ advocacy role.

These changes to the code remove the barriers, which have prevented councillors speaking up for their constituents. In particular, for example, members of a council’s planning or licensing committee will have more opportunities to represent their constituents on planning and licensing issues that affect their wards. The changes also ensure that the remit of the code in respect of conduct in a member’s private capacity is restricted to conduct for which a criminal conviction has been received.

We have also, in particular, had regard to the over 900 responses we received to our recent consultation on the proposed changes to the code, and amended the text of the code to improve its accessibility and user-friendliness. We believe that overall the new revised code will help to maintain public confidence and trust in local government, which is necessary if councils are to fulfil their leadership role.

Copies of the order have been placed in the Libraries of the House, and circulated to local authorities and other stakeholders.

Northern Ireland: Finance

My right honourable friend the Chancellor of the Exchequer (Gordon Brown) has made the following Written Ministerial Statement.

Following the St Andrews agreement in October 2006 and the historic agreement by the political parties on 26 March 2007 to the return of devolution, I am today setting out how the Government are meeting their commitment under the St Andrews agreement to provide the incoming Northern Ireland Executive with a package to create long-term economic and financial stability for Northern Ireland.

The return of devolution today provides a unique opportunity to create long-term peace and prosperity for all the people of Northern Ireland. The Government remain committed to ensuring that the incoming Executive have the capacity to provide quality public services, to continue the process of necessary reform, to plan for the future, and to make the long-term capital investments to underpin the economic transformation of Northern Ireland, as well as bringing long-term benefits for the island as a whole.

In advance of restoration and to this end, the Secretary of State for Northern Ireland and I have had meetings with the First Minister and Deputy First Minister designate. I look forward to continued dialogue with the restored Executive.

In advance of the final outcome of the Comprehensive Spending Review, I am today, however, confirming the following guaranteed package to boost investment, competitiveness and employment.


I am today confirming a funding package of at least £51.5 billion comprising:

£35 billion based on existing spending for 2007-08 together with uprating by at least inflation over the next three years; an £18 billion long-term investment strategy from 2005 to 2017; retention of value-for-money savings to be made over the period 2008-09 to 2010-11 expected to be at least £0.8 billion;

retention of asset sales to fund capital investment expected to be over £1 billion, with £500 million over the next four years;

additional spending over the next two years under the end-year flexibility scheme of £140 million resource DEL (£75 million in 2007-08 and £65 million in 2008-09) and £180 million capital DEL (£100 million in 2007-08 and £80 million in 2008-09);

additional spending financed by EU receipts expected to be in excess of £0.5 billion;

the provision of £400 million, additional to the £35 billion above, including an up-front £100 million in 2007-08 from the Treasury's reserve to enable an incoming Administration to delay the introduction of water charges without affecting existing spending plans in Northern Ireland and introduce an innovation fund; and

confirmation of £200 million borrowing under the reinvestment and reform initiative from 2007-08. Borrowing under the reinvestment and reform initiative will no longer be linked with the requirement to close the gap with GB council tax rates. This is in addition to the cap on rates and enhanced relief for pensioners already announced by the Secretary of State.

In addition there will be a major package of integrated investment in infrastructure, including for a substantial new roads programme. In addition to the £18 billion allocated to the revised investment strategy for Northern Ireland, the Irish Government have made £400 million available for the investment in infrastructure projects.

Within this package, I recognise the need to provide resource this financial year and therefore there will be £700 million available in 2007-08 above existing departmental expenditure limit plans.

Improving competitiveness

Following representations from all the political parties on differential tax rates, I announced on 22 March a review led by Sir David Varney to report on how current and future tax policy, and including the tax changes announced in the Budget, can support sustainable growth of businesses and long-term investment in Northern Ireland. The review will consider this in the context of the tax environment across the EU, including the Republic of Ireland. Sir David will report in the autumn.

A new Northern Ireland corporate tax office is being established to promote the competitive tax position that Northern Ireland enjoys, working closely with Invest Northern Ireland to promote indigenous and inward investment.

Provision is being made available to facilitate the new Executive to create an innovation fund focusing particularly on levering in private sector investment and promoting collaborative research. Up-front funding from within £100 million in 2007-08 is being made available along with funding of £36 million from the Irish Government targeted specifically on collaborative research and development.

I also agreed on 22 March to further discussions between an incoming Executive and officials of Her Majesty's Revenue and Customs (HMRC) with regard to excise duties and measures to tackle fraud in Northern Ireland.

To enhance Northern Ireland's competitive positioning in the global economy and, in particular, its ability to attract foreign direct investment, we will work with the Executive to organise a major conference in Northern Ireland for prospective investors in the autumn with a follow-up meeting in America next spring.

Increasing employment opportunities

In 2006 the unemployment rate in Northern Ireland was 4.2 per cent compared to 8.9 per cent in 1997. To build further on this progress, I also announced a new local employment partnership that will help create 5,000 jobs for the unemployed in Northern Ireland. It will be established between five leading employers in the retail sector—Asda, B&Q, Marks & Spencer, Sainsbury’s and Tesco—along with the British Retail Consortium and the Employment Service in Northern Ireland to support long-term benefit claimants into work, building on the successful approaches these retailers have already established.

Work will also take place in discussion with the construction industry on the development of a similar partnership, and extending this to the hospitality and hotel sector.

Future partnership

Looking ahead and building on this unique package, the Government look forward to continuing engagement between the Treasury and the incoming Administration, working in partnership to create a dynamic Northern Ireland economy and world-class public services for all in Northern Ireland and, together with the Irish Government, to create a strong all-of-Ireland economy.

RAF: Communications Hub

My right honourable friend the Minister of State for the Armed Forces (Adam Ingram) has made the following Written Ministerial Statement.

I announced on 17 January 2006 (Official Report, col. WS 25) that to enable the more effective use of defence resources, an RAF communications hub would be formed at RAF Leeming. I also announced that communications personnel would move from RAF Sealand to RAF Leeming by April 2006 and that communications personnel from RAF Brize Norton and RAF High Wycombe would move to RAF Leeming in 2007.

The initial move has been successfully completed on time in April 2006 and around 90 communications personnel from RAF High Wycombe are on schedule to move this year. However, there will now be a phased relocation of communications personnel from RAF Brize Norton to RAF Leeming beginning in summer 2008 as technical and domestic accommodation becomes available. The delay in provision of new-build accommodation has been occasioned by the routine adjustment of funds to ensure that our resources are allocated in line with defence priorities.

Railways: South-west Regional Planning Assessment

My honourable friend the Parliamentary Under-Secretary of State for Transport (Tom Harris) has made the following Ministerial Statement.

The Department for Transport has today published the south-west regional planning assessment for the railway (RPA), the latest in the series of 11 RPAs covering England and Wales.

Copies of the document have been placed in the Libraries of the House today and can be downloaded from the department’s website at

The south-west RPA covers the entire south-west of England region including Bristol, Plymouth, Bournemouth/Poole, Exeter and Swindon.

RPAs provide the link between regional spatial planning (including preparation of regional transport strategies) and planning for the railway by both the Government and the rail industry, and are designed to inform the development of the Government's strategy for the railway. They look at the challenges and options for development of the railway over the next 20 years, in the wider context of forecast change in population, the economy and travel behaviour.

An RPA does not commit the Government to specific proposals. Instead it sets out the Government's current thinking on how the railway might best be developed to allow wider planning objectives for a region to be met, and identifies the priorities for further development work.

It is the Government’s intention to publish the remaining RPAs covering the Thames Valley, east Midlands, Yorkshire and Humber, and Wales later this year.

Young Offenders

In November 2005, the Parliamentary Under-Secretary of State (Fiona Mactaggart) announced the National Offender Management Service Young Adult Offenders (YAOs) Project, as part of the new approach to offender management, to consider the implications of abolishing DYOI and the regime that would need to be in place to ensure sufficient safeguards for this age group both in custody and the community.

The project has reviewed the needs of YAOs, the appropriate age range, the use of the prison estate, the regimes and interventions required in prison and in the community, and considered the implications of abolishing detention in a young offender institution (DYOI).

There has been full consultation with internal and external stakeholders. Significant representatives of voluntary and community groups have been consulted—in particular, Barrow Cadbury, the Prison Reform Trust, NACRO and Rainer. Consideration has been given to HM inspectorate's recent thematic report on young adult offenders. Future implementation will include consideration of Baroness Corston's recommendations regarding women offenders in the criminal justice system.

We have concluded that, taking account of both the constraints posed by current prison capacity and the need to undertake further work to test out an approach to young adult offenders, the time is not yet right to abolish detention in a young offender institution (DYOI).

However, we are firmly committed to further work to ensure we plan for appropriate provision to address the specific needs of 18-24 year-olds. We will progress a suite of proposals to enable us to test the best approaches both in custody and in the community by:

piloting a specification for a new regime for this age group as an integral part of the new prison capacity building arrangements;

setting up a test/pilot to consider the specification and funding required to take this “through the gate” for YAOs subject to the requirement for Section 65 supervision;

establishing a demonstrator project to explore the management of this age group in the community in Wales, and particularly to take a hard look at a focused use of mentoring and wraparound services;

regional offender managers agreeing key priorities for this age group in 2008-09, and in the medium to longer term NOMS considering developing a specification for this age group to be delivered by providers;

incorporating an adolescent development package into the offender manager training at the next review;

implementing recommended actions arising from Mubarek recommendations 16 and 17 as an integral part of future YAO policy;

ensuring that projects for offenders serving under 12 months in custody specifically include the needs of this age group, especially those subject to the Section 65 requirement of the Criminal Justice Act 1991 for supervision; and with the “Reconnect” project exploring the nature, impact and cost of mentoring, needs assessments and work plans/compacts;

through our new volunteering strategy promoting the use and evaluation of mentoring as part of the package of offender management; and

implementing an improved NOMS/YJB protocol to ensure effective transition arrangements are put in place.

I am promoting this package of proposals as they represent a positive and considered way forward that can be safely introduced given current constraints on provider services and an approach which can be built upon over time. I repeat our firm commitment to find the best approaches to the needs of this age group.

There will be a further report to the House later in the year.