In my written ministerial statement of 10 October 2006, I undertook to report to Parliament on a quarterly basis on the operation of the UK's asset freezing regime. This is the first of these reports and covers the period October-December 2006¹.

Asset-freezing framework

The following changes have been made to asset-freezing legislation:

Terrorism (United Nations Measures) Order 2006, made in October; and

al-Qaeda and Taliban (United Nations Measures) Order 2006, made in November

These two Orders updated the previous Orders, as I explained in statements to the House on 10 October and 7 November 2006.

The Treasury has also strengthened the asset-freezing regime by agreeing, on the advice of law enforcement and intelligence agencies, to use closed source evidence in cases where there are strong operational reasons to impose a freeze but insufficient open source evidence available. I notified Parliament of this decision in October.

Asset-freezing Designations

In the quarter October-December 2006, the Treasury made seven domestic designations under the Terrorism Order and the Al-Qaeda and Taliban Order.

Of these, two persons already listed were re-designated under the new Orders.

The Terrorism Order and the Al-Qaeda and Taliban Order provide, where appropriate, for designations to be made confidentially and with restricted circulation of notice. Four persons were listed on this basis.

Two persons were listed on the basis of closed source evidence provided by law enforcement and intelligence agencies.

In addition, the following financial sanctions listings of persons with links to the UK took place:

none at the EU; and

one person at the UN.

No designated persons have been delisted in this quarter.

Designations this quarter make a total of 195 separate accounts and approximately £525,000 of suspected terrorist funds frozen in the UK since 2001.

Litigation

There has been one case of domestic litigation regarding financial sanctions.

The recent High Court judgement of 22 September 2006 in the case of M.A. and MM v Her Majesty's Treasury [2006] EWCH 2328 (Admin) upheld the Treasury's actions regarding benefits payments to the households of designated individuals. The case was heard by the Court of Appeal on 18 December 2006 and we are awaiting the judgement.

Reviews

The Treasury keeps domestic asset-freezing cases under review. A number of formal reviews have been initiated in this quarter and the reviews of two cases have been completed. In both cases decisions were taken following the review to maintain the asset freeze.

Licensing policy

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

two listed persons were granted basic expenses licences, one of which was for benefits payments

there were no extraordinary expenses licences granted; and

eleven listed persons were granted legal expenses licences.

In addition, the household of one listed person was granted a benefits licence in accordance with the policy I set out in my statement of 3 July 2006 to Parliament.

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

On 1 March the Legal Services Commission (LSC) published the following papers which take forward the Government's legal aid reform programme set out last November in “Legal Aid Reform: the Way Ahead”. The papers reflect comments and concerns raised during consultation on “Legal Aid: A Sustainable Future” published in July alongside Lord Carter's Report

The LSC's strategy for family legal aid: “Making Legal Rights a Reality for Children and Families”. This sets out the LSC's priorities for the delivery of family legal aid for the next five years.

A paper re-consulting for 6 weeks until 16 April 2007 on revised fee schemes for care proceedings and family help—private which will apply from October 2007. Changes include: retention of the uplift for panel membership for exceptional cases; lowering of the threshold for exceptional cases; and increasing the graduation of the fees in private law family cases.

A paper consulting for 12 weeks until 24 May 2007 on changes to the Funding Code in relation to public law children cases. This proposes to introduce a ’reasonableness' test for Special Children Act proceedings, and the removal of residential assessments from the scope legal aid. As this is a new measure rather than a re-consultation, LSC is consulting for the full period.

The revised immigration and asylum legal aid fee scheme to apply from October 2007. Changes include: the proposal to introduce the early resolution payment has been dropped; reduction of the exceptional case limit; and all disbursements will now be claimed separately, including interpreter fees. This is the final scheme and we are not consulting on this further.

A six-week consultation until 16 April 2007 on the category-specific sections of the unified contract, and on a separate specification for contracting for services within Immigration Removal Centres, to come into effect with the new fee schemes in October 2007.

The revised mental health fee scheme will be published in the next few weeks. Advocacy arrangements in family cases from April 2008 will be the subject of a separate consultation later this year. The Government value the input of practitioners and interested parties on the ongoing reform of civil and family legal aid. We encourage all those with an interest to contribute fully to the current consultations. Copies of the papers published on 1 March are available on the Legal Services Commission's website at www.legalservices.gov.uk and copies have been placed in the Libraries of both Houses.

My right hon. and noble Friend the Secretary of State and Lord Chancellor, Lord Falconer of Thoroton, has made the following written ministerial statement:

“I wish to update you on the implementation of the UK Supreme Court. As you know, on 7 September 2006 the Westminster City Council Planning and City Development Committee resolved unanimously to grant planning and listed building consent to the proposed renovation of Middlesex Guildhall in preparation for use as the UK Supreme Court. English Heritage fully supported the renovation plans.

Consent was granted subject to the completion of a Section 106 agreement, which was then signed by both parties on 21 November 2006. Both the planning and the listed building consents were also issued on 21 November 2006.

On 26 January 2007 an application was made for the Judicial Review of the decision to grant listed building and planning consent for the renovation of Middlesex Guildhall. The application was made by SAVE Britain's Heritage against Westminster City Council.

The Judicial Review is about the way in which the issues were presented by Westminster planning officers to the Committee and as a result whether there was an error in law in the way that Westminster City Council reached its decision. It is about the process, it is not about the content of the application. I am named as an Interested Party in the case, and my Department and I are fully supportive of Westminster City Council. Westminster City Council lodged their defence on 16 February, which we supported, in which they defend the decision. The courts are now deciding whether or not there is a case to be heard.

In the interim, I have decided to re-submit the application for listed building and planning consent for the Middlesex Guildhall to Westminster City Council. This demonstrates our confidence in the original case and gives us a better control over timescales.

I believe that this step is the best way to meet the needs of all parties involved and gives the best chance to deliver the Supreme Court in October 2009. Our second application will be lodged on 9 March 2007. This will be followed by the usual statutory consultation.

The Crown Courts at Middlesex Guildhall will still close on 30 March 2007. as planned. New courtrooms are being built at Isleworth Crown Court and will be available in Autumn 2008. In the meantime, transition plans are in place to maintain the number of sitting days across London Crown Courts.

As announced in my statement of 17 October 2006, I will update you on costs once we have reached financial close with our preferred bidders Kier Group Plc for the Guildhall renovation and Osborne's for the Isleworth development”.

In the Defence Industrial Strategy (DIS) Fixed Wing Sector the Ministry of Defence committed to negotiating with BAE Systems the terms of a long-term partnering agreement (LTPA) to help sustain the key industrial skills and capabilities needed to support and upgrade the current and future aircraft fleet. The Ministry of Defence has today signed a foundation contract with BAE Systems as the first step towards delivering a full and legally binding LTPA by the end of 2007, subject to negotiations.

The foundation contract is intended to help establish the key elements of the LTPA and inform the detailed negotiations ahead. It also incentivises BAE Systems to further transform its air sector business to ensure the efficient delivery of the key through life defence industrial capabilities the armed forces require.

I and my hon. Friend the Minister for Climate Change and the Environment represented the UK at the Environment Council in Brussels on 20 February. Sarah Boyack, Scottish Deputy Minister for the Environment and Rural Development also attended.

The Council agreed a set of conclusions on climate change, aimed at further developing the medium and long-term EU strategy to combat global climate change. The Council conclusions affirmed an EU commitment to an independent greenhouse gas emissions reduction target of at least 20 per cent. by 2020 and a conditional 30 per cent. reduction target in the context of an international framework, all using 1990 as the base year. The UK welcomes this agreement as it sends a strong signal to business thereby encouraging the investment necessary to put the EU on track to a low carbon energy future. It also sends a strong message to our international partners that the EU is willing to take the lead on the development of a post-2012 framework to combat climate change.

The Environment Council also finalised its contribution to spring Council, drawing on the agreed climate change conclusions and linking the Commission Communication to the strategic energy review, eco-innovation and better regulation. The UK very much welcomes the Council conclusions’ recognition that the EU needs mutually supportive climate change and energy strategies. On targets for biofuels and renewable energies, the conclusions confirmed the view taken earlier by EU Energy Ministers. The UK supports the importance of promoting eco-innovations if we are to move towards a low-carbon economy and the application of better regulation principles in order to ensure that we achieve our environmental goals in the most cost-efficient, transparent way.

Ministers agreed Council conclusions on the thematic strategy on the sustainable use of pesticides. The UK supports the conclusions, which should pave the way for negotiation of a proportionate and balanced package of measures which strengthens protection of human health and the environment across the EU as a whole.

Ministers gave their initial views on the Commission’s proposal to include aviation emissions into the EU ETS. The UK supported the inclusion of all flights arriving at and departing from the EU from the beginning of the scheme (and not according to the phased approach proposed by the Commission), calling for aviation to be included in the scheme promptly—even before 2011 if practicable. The UK highlighted that, in a global industry a global solution must be the ultimate goal, but that the EU could not allow a situation where a failure to make progress globally prevented us from taking the positive action we know to be necessary. Given the international nature of aviation, the UK believes that a proportionate and workable scheme is not possible based on member state cap setting and we therefore supported a central EU-wide cap for aviation.

Ministers gave their initial views on the Commission’s communication on a community strategy to reduce CO₂ emissions from cars. The UK supported the Commission’s intention to bring forward mandatory proposals, although we highlighted the need for these to be based on thorough impact assessment and in full consultation with stakeholders. The UK noted that binding legislation did not need to be more costly or less flexible than voluntary targets. What is important is how the targets are implemented. The UK welcomed the complementary measures to reduce emissions proposed by the Commission, as these are consistent with the integrated approach, but stressed that these must not distract from the need for substantial further progress on new car fuel efficiency.

Ministers also gave their initial views on the soils thematic strategy and proposed directive. The UK supported the objectives of the thematic strategy as it sends a powerful message about the critical importance of soil to all aspects of human activity and to the sustainability of the plant’s ecosystems, but stressed that the proposed directive should take account of existing legislation in the field and contribute to regulatory simplification. The UK also highlighted the possibility of significant compliance costs and urged member states and the Commission to learn from the lessons of implementing legislation in other areas.

The Council found a qualified majority opposing the proposed decision concerning the provisional prohibition of the use and sale of a genetically modified maize in Hungary. The safeguard action will, therefore, stay in place. The UK voted in favour of the proposed Council decision based on the opinions of various scientific bodies (including the European Food Safety Authority and the UK’s Advisory Committee on Releases to the Environment) which have concluded that there is no new relevant scientific evidence in support of the safeguard action.

The Council could not find a qualified majority in favour or against a proposed decision concerning the placing on the market of a carnation that is genetically modified for flower colour. The UK voted in favour based on the available scientific evidence.

Under “Any Other Business”, the Commission presented a mandate to represent the Community at the International Whaling Commission, in order to safeguard the moratorium on commercial whaling. The UK supported the Commission’s call for member states who had not done so to join the IWC but we doubted a formal mandate would help. The UK highlighted that the Commission was only an observer to the IWC and did not enjoy the same full speaking rights as individual member states.

Today the chairman of Monitor (the statutory name of which is the independent regulator of NHS foundation trusts) announced that, in accordance with section 6 of the Health and Social Care (Community Health and Standards) Act 2003, Monitor has decided to authorise South Devon Healthcare NHS trust as an NHS foundation trust from 1 March.

Monitor’s announcement brings the total number of NHS foundation trusts to 59. A copy of Monitor’s press notice has been placed in the Library.

The Government remain committed to offering all NHS acute and mental health trusts the opportunity to apply for foundation status as soon as practicable. Further waves of NHS foundation trusts are set to follow, with numbers expected to rise noticeably over the next financial year.

Last July the Home Secretary announced the biggest shake-up of the immigration system in its history. To drive through this programme of reform, the Home Secretary made it clear that the IND—which will become the Border and Immigration Agency BIA on 1 April—required more transparency and stronger oversight and accountability arrangements.

Today there are a number of bodies that monitor, inspect or advise on specific parts of the immigration system. What is lacking is a clear and consistent overall view. There is also no external oversight of key areas such as enforcement.

In December 2006 we carried out a public consultation on proposals for an independent inspectorate that would deliver an effective inspection of IND.

We are extremely grateful to everyone who contributed. The responses received revealed very wide support for the idea for an independent inspectorate and how it should be taken forward. This paper sets out the Government’s formal response to the consultation exercise.

We propose to create a single inspectorate that will focus on overall efficiency and effectiveness across IND’s and its partners’ operations, quality of decision-making, enforcement powers, access to information and the treatment of individuals, including a sense of comparative performance in different regions of the country.

Effective assessment of these key themes will provide confidence to Parliament and the public and to those who use and receive services from IND.

I very much hope that everyone who is concerned with the immigration and nationality system will continue to work with us as we seek to develop the improvements and assurance that this new, stronger and more effective inspection will bring.

On behalf of the Home Secretary and the Minister for the Department of Health, Social Services and Public Safety for Northern Ireland, I am very pleased to announce the appointment of Dr. Penny Hawkins, Dr. Simon Glendinning and Dr. Kenneth Simpson as members of the Animal Procedures Committee from 1 November 2006, each for a four-year term.

Dr. Hawkins is an animal welfarist working for the RSPCA. She has expertise and knowledge of the welfare and ethics of research animals and the practical application of refinements in husbandry and scientific procedures.

Dr. Simpson is a medical practitioner and liver specialist, involved with the Edinburgh liver transplantation programme, with an established research interest in the development and use of genetic modification technologies to produce more relevant animal models of liver function.

Dr. Glendinning is the fellow in European philosophy in the European Institute at the London School of Economics and Political Science. He has an established interest in the philosophy of animal life and ethics.

I welcome the contribution that each new member will bring to this important advisory Committee.

Four years after the invasion, progress on reconstruction and development in Iraq remains mixed. Prime Minister Maliki’s Government is less than a year old and faces immense security, political and economic challenges. The escalating sectarian violence, which is for many Iraqis a daily reality, has displaced large numbers of people both within Iraq and the wider region. We are therefore responding to help meet urgent humanitarian needs across the country. But the critical priority now is for the Iraqi Government to end the violence, so that Iraq’s rich resources can be invested in creating better services and opportunities for all Iraqi people. Only a political solution will break the destructive cycle of violence and Prime Minister Maliki has made tackling the violence his highest priority. It is vital therefore that we give this new and democratically elected Government every assistance.

But there are gains worth noting, and more importantly protecting. The most important achievement of recent years has been the establishment of a democratically elected Government, the first in Iraq for decades, replacing Saddam’s brutal regime. Prime Minister Maliki’s coalition Government was established following elections in which 76 per cent. of the population voted. The constitution was agreed in a referendum and will be reviewed later this year. The Council of Representatives has agreed a budget law, and will soon consider a hydrocarbons law to determine how Iraq’s oil revenues will be managed. International support was crucial in helping run and monitor the elections, as well as funding outreach programmes to encourage participation.

Once a relatively wealthy country with high levels of education and healthcare, by 2003 Iraq had suffered more than 20 years of conflict, mismanagement and chronic under-investment. The 2003 conflict, the continued violence, including sabotage of key infrastructure, as well as low (but growing) levels of management capacity in Iraq’s national and local government have slowed progress. However, reconstruction has continued and much has been achieved by the Government of Iraq, with support from the UK, US and a range of other donors.

With international community support Iraq has made some improvements to basic services. Over 5 million children have received life-saving vaccinations and Iraq is now spending 30 times more on healthcare compared to pre-war levels. Over 5,168 schools have been rehabilitated and a further 450 are in progress. More than 100,000 primary and 40,000 secondary teachers have been trained. Unfortunately the violence is seriously affecting Iraq’s health and education systems, as talented professionals are targeted or choose to leave the country.

There has also been progress on the economic front. The Iraqi economy rebounded quickly in 2004, and dollar income has continued to grow, almost doubling by 2006. Income growth has mainly been driven by rising oil prices, so the challenge now is to convert more of the windfall earnings from oil to productive investments in public services and infrastructure.

The UK is one of the first major donors to Iraq to fully disburse our Madrid pledge of £544 million since 2003. The further pledge of £100 million announced by the Chancellor is on top of this, bringing the total UK commitment to £644 million. From our own resources, we have funded major electricity and water projects in southern Iraq. For example, DFID has repaired the Al Hartha power station chimney and ensured the equivalent of 24 hours electricity to 85,000 households (enough to supply a city the size of Cardiff with 24-hour power). By the time these projects are complete, we will have added or secured 470MW to the national electricity grid, and improved access to water for about a million people. These projects will have employed around 450 people, generated almost 100,000 workdays and secured around 17,000 workdays per year for operation and maintenance.

But there is still a long way to go. The major focus of our effort now is in helping the Iraqi Government to take the lead in investing in critical services and infrastructure. The Iraqi Government needs to do more to provide basic services for its people and protect those at risk. And it needs to make a start on some of the economic reforms that will unlock more money to invest in better public services and infrastructure in the longer term. We and other donors are providing support to help them to do so.

Much of the work done to get development in Iraq back on track goes unnoticed; the backroom, unglamorous slog of getting the right policy advice on tough issues such as drafting and redrafting budgets, setting up systems to manage central Government business, and dealing with milestones such as regular IMF reviews. But it is paying off. With help from donors, including DFID, the Iraqi Government has stayed on track with its stand-by arrangement, therefore meeting the conditions of the Paris club debt reduction deal.

This work is hugely important because it puts Iraqis in the lead. With oil revenues of $30 billion (93 per cent. of the national budget) in 2007, there is no shortage of resources in Iraq. Iraq has the resources to finance its own development. The challenge is spending it effectively. What has been lacking is the capacity of Iraqi institutions to deliver. Thanks in large part to our work in Basra and Baghdad, this is beginning to change.

Iraq’s Deputy Prime Minister recently held a meeting with the Basra Governor and Provincial Council and a range of relevant national Ministers to set out Iraqi plans for the development of the province. For the first time, Basrawis heard from their own Government how much money was to be invested in their area, when and on what. This sort of transparency is vital to building a culture of trust and accountability between Government and people.

Large numbers of civil society initiatives are springing up throughout Iraq. There are over 250 newspapers and magazines launched since the fall of the regime and more than 2,500 registered Iraqi NGOs. These range from groups focused on reconciliation, to groups promoting women’s rights and organisations trying to enhance political participation. DFID’s support for Iraqi NGOs has encouraged poor and marginalised sections of Iraqi society to engage in the political process by fostering partnerships between international NGOs to provide advice and support to other Iraqi grassroots organisations.

While these achievements are important, and a credit to the Iraqis and their partners who work so hard in the face of enormous risks and challenges, there is much still to do. Our objective remains to develop the capacity of the democratically elected Government of Iraq, and to increase their ability to provide security and basic services to the Iraqi people.

I have decided to appoint the new board member listed at annex A for a period of two years and nine months.

The appointment will begin on 5 March 2007 and will expire on 13 December 2009. This appointment was made in accordance with the code of practice of the Commissioner for Public Appointments.

I attach biographical details of the new appointee.

New Appointment

Appointment will commence on 5 March 2007

Annexe B

Biography for Councillor Peter Jackson

Peter was born in Northumberland and has lived and worked in Northumberland since qualifying in Economics at Bristol niversity.

In local government Peter is a conservative councillor representing Heddon-on-the Wall on Castle Morpeth borough council. He has been a member of the council for 11 years and currently he has the position of leader of the council. He is vice-chairman of the local strategic partnership, a board member of the Northumberland strategic partnership and an executive member of the association of north-east councils. He is also a Northumberland county councillor.

In business he has built up an arable farming enterprise covering 1,200 hectares in South Northumberland and Durham. He is the vice-chairman of the Tynegrain farmer co-operative based at the Port of Tyne. He is a director of GrainCo, a grain marketing company covering the north of England and Scotland, and a director of Tees Valley Biofuels, a company formed to build a large rapeseed crushing facility to feed the emerging biofuel and biomass market.

Peter Jackson’s political activities are detailed above. He holds no other ministerial appointments.

The Prime Minister has appointed three new members to the Council for Science and Technology (CST). They are:

Professor Peter Davies

Professor Alan Gilbert

Dr. Philip Ruffles CBE

The Prime Minister also re-appointed the following 13 members to the CST. They are:

Professor Sir John Beringer CBE

Professor Geoffrey Boulton QBE FRS FRSE

Professor Janet Finch CBE DL AcSS

Professor Wendy Hall CBE FREng

Dr. Hermann Hauser FREng

Professor Alan Hughes

Dr. Sue Ion QBE FREng

Sir Paul Nurse FRS

Sir Keith Peters FRS AMS

Dr. Krishnamurty Rajagopal FREng

Professor Michael Sterling FREng

Professor Kathy Sykes

Dr. Mark Walport AMS

The Prime Minister also appointed Professor Janet Finch as CST independent co-chair. Professor Finch will act as co-chair alongside the Government’s Chief Scientific Advisor, Sir David King.

CST is the UK Government’s top-level advisory body on science and technology policy issues. It reports directly to the Prime Minister. CST’s remit is to advise the Prime Minister, the First Ministers of Scotland and Wales and the responsible Minister at the Northern Ireland Office on strategic science and technology policy issues that cut across the responsibilities of individual Government Departments.

Full details of CST’s terms of reference and organisation can be found at:

www.cst.gov.uk

Appointments were made in accordance with the guidance from the Office of the Commissioner for Public Appointments. The appointments will run for three years from 1 March 2007.