A new Double Taxation Convention with Japan was signed on 2 February 2006. After signature, the text of the Convention was deposited in the Libraries of both Houses and made available on HM Revenue and Customs' website. The text of the Convention will be scheduled to a draft Order in Council and laid before the House of Commons in due course.

Marine services embrace a wide range of waterborne and associated support activities, both in and out of port, at Portsmouth, Devonport and on the Clyde, as well as maintenance of UK and overseas moorings and navigation buoys and support to a range of military operations and training. Under the current arrangements, in port services are provided by Serco Denholm Ltd., under Government-owned contractor-operated arrangements, while out of port services are undertaken by the Royal Maritime Auxiliary Service (RMAS).

Since 2002, the Ministry of Defence has been working to find a long-term service provider, and following an industry briefing day in May 2003 and a subsequent prequalification questionnaire exercise, four bidders were short listed, although two subsequently withdrew. The two remaining bidders, Serco Denholm and the Starfish Consortium (the latter comprising Babcock Naval Services (Clyde), Devonport Management Ltd. (Plymouth), Fleet Support Ltd. (Portsmouth) and Smit International (Scotland) Ltd.), were invited to submit two proposals offering a complete service: One of these proposals reflected a partnering arrangement with the RMAS, whereby staff remain in the MOD; the second proposal entailed TUPE transfer as appropriate.

Detailed bid evaluations, using predetermined criteria, have now been completed and Serco Denholm's proposal to provide the complete service, including taking ownership of MOD marine service assets, has been selected as the preferred bidder. Subject to successful final negotiations with the company, a contract will be awarded later this year with service commencement (vesting day) some three months after. While Serco Denholm's proposal may yet be modified as a result of the final negotiations, the ensuing arrangement should be easier to manage than the current ones, be more flexible and will offer the greater potential for continuous improvements.

A key implication of Serco Denholm's proposal results in the transfer of the RMAS workforce to the company on vesting day under the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations. New pension arrangements will also be introduced that are broadly comparable to those currently enjoyed under the Principal Civil Service Pension Scheme.

A further key aspect for MOD will be the closure of Her Majesty's mooring depot at Pembroke Dock, which currently employs 38 MOD staff, within 12 months of vesting day. However, Serco Denholm has developed plans with the Milford Haven Port Authority, the Welsh Development Agency and Pembrokeshire County Council to encourage inward investment and support building and infrastructure projects. This will provide alternative opportunities outside the MOD to sustain and improve job creation, in turn underpinning future jobs.

The changes in the way the service will be provided will result in a number of post reductions, although, Pembroke Dock aside, it is too early to determine the exact numbers, or be specific on how different locations will be affected. As far as possible, reductions will be achieved through either natural wastage or voluntary means although the need for some compulsory redundancies cannot be ruled out at this stage.

Throughout the tendering process the Department has engaged with the relevant trade unions. Informal dialogue will continue during the negotiation phase and the formal TUPE consultation process will commence following award of contract.

I am pleased to announce the award of the contract for the demonstration and manufacture of the Anti-Structures Munition to Dynamit Nobel Defence. The contract is valued at £40 million and includes provision of combat weapons, training systems and contractor logistic support for the first five years.

The Anti-Structures Munition will provide our armed forces with a new capability. It will enable infantry to defeat hardened structures such as buildings or bunkers—reducing casualties to our forces while minimising collateral damage.

It is essential that we provide our armed forces with the tools they need to get the job done as safely, precisely and quickly as possible. This munition will help do just that.

My right hon. Friend the Foreign Secretary, Sir John Grant (UK Permanent Representative to the EU) and I represented the UK at the General Affairs and External Relations Council (GAERC) in Brussels on 30 January 2006.

The agenda items were covered as follows:

Work Programme for 2006

The Council held a short public debate on the Annual Operational Programme (AOP) of the Council for 2006. The debate highlighted the priority areas as the Constitutional Treaty, the Inter-Institutional Agreement on the financial perspective, growth and jobs, Western Balkans, crisis and disaster management (both internal and external), human rights, climate change, JHA, transparency, and external relations.

The Council also took note of the European Commission's Legislative and Work Programme for 2006 presented by Commissioner Wallstrom who highlighted in particular growth and jobs, research and education, worker mobility and gender equality.

Lisbon Strategy: Commission Annual Progress Report

European Commission President Barroso presented the Commission's annual progress report on implementation of the economic reform strategy set out at Lisbon in 2000. He highlighted the positive progress so far and close partnership between Member States and the Commission. He said the National Reform Programmes contained a wide range of ideas and delivery was now the priority. But there was also a need for further co-ordinated action in some areas and therefore the Commission's report set out four priority areas for immediate action: investment in knowledge and innovation; unlocking business potential, particularly of SMEs; responding to globalisation and demographic change; and a more efficient and integrated EU energy policy. President Barroso concluded by emphasising the need for increased visibility of national action to influence public opinion positively. The Presidency summed up the four themes for the Lisbon agenda as "partnership, complementarity, visibility, and a focus on priorities". The Council took note of the presentation.

World Trade Organisation/Doha Development Agenda

The Council was briefed by Commissioner Mandelson on the latest developments in the current round of trade negotiations under the World Trade Organisation's Doha Development Round following meetings of key WTO members in the margins of the World Economic Forum in Davos (25–29 January). There was broad support for the Commission's position both in the Council and at an informal meeting of EU trade ministers on 29 January.

Western Balkans

High Representative Solana briefed the Council on the situation in Kosovo following the death of President Rugova. He noted President Rugova's successor, both as President and head of the negotiating team to the Kosovo status process, had not yet been identified. He also briefed on the activities of his personal representative in Montenegro, where no agreement had yet been reached between Government and opposition parties on the conduct of the proposed independence referendum.

The Commission introduced their recent Communication, proposing a number of practical ways in which the region's EU perspective could be made more tangible to citizens: notably through stimulating trade and investment, and by EU visa facilitation. Member States welcomed the Communication and looked forward to discussing the region's future in more depth at the EU-Western Balkans Ministerial Meeting to be held in the margins of the Foreign Ministers' informal meeting (Gymnich) in March.

The Council adopted Conclusions, covering the Commission's Communication, Kosovo, Bosnia, Montenegro and ICTY co-operation.

Latin America

Commissioner Ferrero-Waldner gave a short presentation of the Commission Communication on Latin America. Member States welcomed the Communication and looked forward to the EU-Latin America/Caribbean Summit in Vienna in May.

Afghanistan

The Council agreed Conclusions which reaffirm the EU's long term support for Afghan-led reconstruction, welcome the 31 Jan–1 Feb London Conference and the launch of the Afghanistan Compact, and commit to increased support for economic and social development, counter narcotics, and reform of the justice and security sectors. In a brief intervention, Dutch Foreign Minister Bot welcomed the Conclusions stating his desire that the Council discuss Afghanistan at greater length some time in the future.

Belarus

In a short discussion High Representative Solana and Commissioner Ferrero-Waldner gave readouts of their separate bilateral meetings with Mr Alexander Milinkevich (united opposition candidate in the forthcoming Belarus Presidential elections who was visiting Brussels). The meetings had been warm and constructive.

Several Member States intervened emphasising the importance of support for Belarusian civil society, international election observers operating unimpeded, monitoring the plight of political prisoners in Belarus, and reducing visa fees for Belarusians as a way of promoting people to people contact. They also highlighted the role of the OSCE in monitoring the election, and the scope for further co-operation with the US.

The Council adopted short Conclusions which call on the Belarusian authorities to ensure that the elections are conducted in accordance with international standards; welcome the Belarusian authorities' invitation to OSCE/ODIHR to monitor the election and note the willingness of EU Member States to contribute to that mission; but state the EU's readiness to take restrictive measures against individuals responsible for a failure to uphold international standards.

Middle East Peace Process

The Council discussed the Hamas election victory over lunch. High Representative Solana summarised the situation stressing that he understood that it was unlikely that a new government would be in place for at least three months but the Palestinian Authority (PA) was now bankrupt. Commissioner Ferrero-Waldner agreed the PA was in financial crisis. Several Member States intervened highlighting the need to keep lines of communication open but to make clear EU demands, namely that Hamas renounce violence. The Council adopted Conclusions which make clear that the EU's readiness to continue funding is clearly dependent on a Palestinian government committed to a peaceful and negotiated solution of the conflict.

Iran

In a short discussion French Foreign Minister Mr Douste-Blazy and the Foreign Secretary briefed the Council on the E3/EU process ahead of the 2–3 February emergency International Atomic Energy Agency Board of Governors meeting.

Iraq

The Council agreed positive Conclusions welcoming the announcements of the election results, paying tribute to the impressive turnout of voters and encouraging the swift formation of an inclusive government.

Asia-Europe Meeting (ASEM)

The Council, over lunch, considered the forthcoming meetings to be held in Europe in 2006 under the ASEM process on the basis of the EU Common Position on Burma, which is due for renewal in April.

AOB—Nepal

Dutch Foreign Minister Bot drew the Council's attention to recent developments in Nepal and in particular over human rights violations. In a statement on 27 January, the EU expressed its deep concern over the situation in the country, where political forces seem to be moving towards an ever more severe confrontation and polarisation, thus increasing the risk of deepening political crisis.

AOB—Ivory Coast

Dutch Foreign Minister Bot drew the Council's attention to the deteriorating situation in Ivory Coast and stressed the importance of the international community's engagement to encourage a return to the peace process.

AOB—Middle East: Reactions to cartoons in a Danish newspaper

Danish Foreign Minister Moller raised over lunch the issue of reactions in the Middle East following the publication in September 2005 of cartoons portraying the prophet Mohammed in an independent Danish newspaper. The Council adopted a statement strongly rejecting any threats by militant factions against EU citizens. The Presidency also underlined the importance of both freedom of expression, as a fundamental freedom, and respect for religious beliefs.

I am today setting out the principles on which the Government will base their assessment of the success of the self-regulation of voluntary sector fundraising. This follows consultation with the fundraising sector last year and the announcement from the Institute of Fundraising last week of the appointments of a chair and director for the scheme following open competition.

Self-regulation of fundraising was a recommendation of the Prime Minister's Strategy Unit. The Strategy Unit reviewed the charitable and wider not-for-profit sector and in 2002 published its report "Private Action, Public Benefit" which made a number of recommendations. We accepted this recommendation and have made provision in the Charities Bill for statutory regulation should self-regulation fail.

The main aim of the self-regulation scheme is to maintain and build on the high levels of public trust and confidence in the voluntary sector's fundraising activities. The scheme will help the sector guard against future threats to these high levels of public confidence. It will promote best practice and enable the sector to respond to criticism.

The Institute of Fundraising has led the development of the proposals for self-regulation, with significant support from the sector. However, the Regulation of Fundraising Scheme (RFS) will be run independently of the Institute. The scheme, which will be voluntary, will be open to all charities and fundraising organisations throughout the UK. It is expected to be up and running and open for membership this summer. The Government support self-regulation of fundraising, and (along with the Scottish Executive) are providing funding to enable the scheme to establish itself. In the longer term, the scheme is expected to become self-funding through membership subscriptions.

We have not set out specific long-term targets for the RFS, as these could be inflexible and restrictive. Instead we have focused on what the Government expect the scheme to deliver, and how that could be measured when the Government are considering the scheme's success. External factors would need to be taken into account, and over time we would also expect the fundraising scheme to develop its own performance monitoring and reporting. Respondents to last year's consultation were broadly supportive of this approach.

The expectations which the Government have for the RFS, and which will be considered in any assessment of its success, are as follows:

The scheme will need to attract high levels of voluntary participation across the sector, although it is appreciated that it will take time to build up levels of participation. Participation should reflect the diversity of voluntary sector fundraising;

The scheme and its participants must provide a clear public promise of what should be expected from fundraisers who are participants in the scheme, and from the scheme itself. The codes of practice underpinning the scheme should go beyond requiring compliance with the law, and should set a high standard of good practice;

The scheme and its participants should actively encourage awareness among non-members and the public of the scheme's existence, and good fundraising practice;

The scheme should promote openness, transparency and accountability in fundraising practice;

The control of the scheme must be independent and impartial. Its governing body must include consumer representatives and those with fundraising experience;

Compliance with the scheme must be monitored proportionately. But there should not be complete reliance on self-certification;

There must be fair and effective sanctions for non-compliance which are proportionate to the nature and extent of any non-compliance. The initial focus should be on improving performance;

The scheme must have a clear and effective complaints handling process which is easily accessible to the public and which provides fair redress;

The scheme must be clear about its remit and should work effectively with other regulators, particularly where issues are outside its remit;

The scheme must be accountable through the publication of an annual report which details the scheme's performance. The scheme should also develop its own meaningful performance indicators following consultation with stakeholders;

The scheme should identify emerging trends in fundraising practice, and the public's perception of it, and be sufficiently flexible to quickly adapt and evolve codes of practice where necessary;

Regulation should be proportionate and the scheme should keep to a minimum any regulatory burden to participants.

We will review the development of the scheme on an annual basis, and agree specific targets, while the scheme is supported by Government funding. However we want to give the scheme sufficient time to become established and prove its effectiveness, before we judge its success. We therefore propose that a formal review of the success of self-regulation take place as part of the review of the impact of the Charities Bill which is due within five years of enactment and will report to Parliament.

If self-regulation were to fail, any proposals under the reserve power for statutory regulation of fundraising would require consultation and would be subject to the affirmative resolution of Parliament. A similar reserve power exists in Scotland, in the Charities and Trustee Investment Act 2005. Charity law and regulation is a devolved matter, and in Scotland it would be for the Scottish Executive to decide whether or not to pursue statutory regulation there. However, we will work closely with the Scottish Executive in monitoring the progress of the self-regulation scheme, and reviewing its success.

A summary of responses to the consultation has been deposited in the Library and is available on the Home Office website at:

www.communities.homeoffice.gov.uk/activecomms/ charity-law-and-reg.

I am grateful to everyone who has helped to develop the proposals for self-regulation, and those who responded to the consultation on the criteria for assessing its success. Further details of the self-regulation scheme are available from the Institute of Fundraising at: www.institute-of-fundraising.org.uk.

I should like to make a statement to report progress on the review of police force structures which I announced in September 2005.

My vision is a police service which is close, responsive and accountable to the communities it serves, supported by larger forces with the capacity and specialist expertise to protect the public from wider threats such as serious and organised crime and terrorism.

My overriding concern, and that of those responsible for leading the police service across the country, is to ensure that the police service is capable of preventing and responding to crime and disorder at every level: local neighbourhood; borough or local authority; force; nationally; and internationally. Although there has been much progress at all levels, especially at the local level where we have made a clear commitment to roll out neighbourhood policing across the country by 2008, it is vital that we close the gap in policing serious crime and major incidents identified by HMIC last year.

I am grateful for the submissions received from police force areas on or before 23 December. These submissions put forward a range of options for improving police capacity to tackle serious crime and major incidents, and at the same time delivering and sustaining neighbourhood policing. It is striking that all involved are clear that the current structures are not capable of delivering effective policing to meet 21st Century challenges.

HMIC has considered each of the options put forward in those submissions against a range of criteria. Last week they gave me the first of their assessments—that is, the protective services assessments which assess options on the basis of the delivery of effective policing. I am also being provided with additional assessments based on affordability, organisational resilience and impact on the CJS partner agencies. As I have said throughout, the decisions which I make will be clearly based on those professional assessments.

I can tell the House that the protective services assessments undertaken thus far have set out clearly, for each region, which options are of greatest benefit from the policing perspective. These are the options which will go forward for further consideration.

There are four areas where the clear conclusion of the protective services assessment is that there is only one acceptable option. These are the North East, North West, West Midlands and Wales. I am therefore today meeting with representatives from forces and police authorities in those areas to invite them to engage closely with me to consider taking forward the option for policing which I believe will be of greatest benefit to their communities. Final decisions on how we proceed in these areas will of course be based on the full consideration of the implications for organisational resilience, affordability, precepting and the impact on the wider CJS.

I am also writing to the Chief Officers and Police Authorities in the other five regions to explain the process and timescales for further discussions on the position in their regions. In the next few weeks I intend to meet with those Chief Constables and Police Authority Chairs to discuss the subsequent assessments and if possible to agree a way forward. At the same time, we will address the concerns which have been raised by police authorities regarding issues of finance and governance.

The proposals involving London will be dealt with at a later date, once reviews of fraud and transport policing have reported.

I shall make further reports to the House about the detailed plans for all areas as options for each are refined.

Options proposed at this stage as suitable for progression:

West Midlands

Merger of Staffordshire, Warwickshire, West Mercia and West Midlands

North East

Merger of Cleveland, Durham and Northumbria

North West

Greater Manchester Police standalone

Merger of Cheshire and Merseyside

Merger of Cumbria and Lancashire

Wales

Merger of Dyfed-Powys, Gwent, North Wales and South Wales.

BNFL is today signing a purchase and sale agreement with Toshiba to sell its US subsidiary Westinghouse for the sum of $5.4 billion. This is an excellent outcome for the UK taxpayer who stands to benefit from a return of around four times BNFL's original investment in the business.

I am confident that as part of a global business, Westinghouse will be better placed to capitalise upon the prospects for international nuclear new build projects. The Government would have been reluctant for the taxpayer to take on the commercial risks of such international projects. Toshiba conversely is able to make the necessary investment and will be able to create synergies that are not available under the current ownership to take advantage of growing opportunities.

BNFL and Toshiba will now apply for the necessary regulatory and other clearances with a view to completing the transaction within six months.