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Terrorist Organisations

7. Mr. Jim Murphy (Eastwood): If he will make a statement on the progress made by Customs and Excise in tracing the assets and bank accounts of proscribed terrorist organisations. [35748]

The Economic Secretary to the Treasury (Ruth Kelly): Customs and Excise is one of the many investigative and law enforcement agencies that are actively engaged in the fight against terrorism—in particular, by disrupting and cutting off the finances of terrorist organisations. Since 11 September, the Government have ordered the freezing of the assets of more than 200 individuals and 100 organisations, undermining and preventing access to the sources of terrorist financing. We will continue to give priority to closing down all sources of such financing.

Mr. Murphy: I thank my hon. Friend for that answer and pay tribute to her and my right hon. Friend the Chancellor for the leading role that they are playing. She will be aware that one of the difficulties faced by the international community is the different interpretations of what is a proscribed terrorist organisation. For example, the UK rightly proscribes Hezbollah, but the European Union does not as yet do so. Can she tell the House whether the moneys seized from these terrorist organisations are being retained by the Treasury? Would not a more sensible course of action be to ensure that the money seized from al-Qaeda is invested in Afghan reconstruction and that money from Hamas is used to help

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Palestinian poverty reduction? I believe that such measures would be constructive and very welcome indeed.

Ruth Kelly: I thank my hon. Friend for his comments. As he knows, it is incredibly important to track down terrorist financing, whatever its source. The UK remains committed to doing exactly that, but of course, we also remain committed, for example, to the reconstruction of Afghanistan—one of the good causes to which he drew attention. We stand ready, together with our neighbours, to provide all the assistance and humanitarian relief that Afghanistan needs.

My hon. Friend also drew attention to the use of funds that are frozen by the Treasury. Those funds are not the property of the UK Government and we certainly cannot decide arbitrarily to use them for good causes. However, we must, in conjunction with the international community, regularly review whether such freezing orders should still apply. I can tell the House that the UN sanctions committee decided last month to review the asset-freezing sanctions against the central bank of Afghanistan. It is our intention to work urgently and closely with the new, legitimate Afghan Government to return the bulk of the £70 million that had been frozen against the country's Government previously.

Mr. John Wilkinson (Ruislip-Northwood): Is it not reprehensible that a terrorist organisation that is probably the most murderous in the world and has killed tens of thousands of people and kidnapped many more, including most recently the brave presidential candidate, Ingrid Betancourt in Colombia—namely, the Revolutionary Armed Forces of Colombia—is not a proscribed organisation under the terms of the Terrorism Act 2000? Nor is any murderous terrorist organisation in Latin America, such as Sendero Luminoso, proscribed under the 2000 Act. Is that not a scandal, and does it not fatally inhibit the vital work of Customs and Excise in freezing the assets of this murderous organisation, which is involved in drug dealing and kidnapping?

Ruth Kelly: The hon. Gentleman will be well aware that a UN sanctions order must be carried out by consensus among the 15 members of the Security Council; it is, in effect, a political decision to freeze the assets of individuals, organisations or states and can be appealed against in the usual way by individuals or organisations. We must gain an international consensus in that forum to take such measures. That is what we are committed to doing against any organisation, individual or state in respect of which we can prove a link to terrorist financing, and we remain at the forefront of international efforts in that regard.

Rev. Martin Smyth (Belfast, South): The Minister will be aware that the distinction between proscribed and other terrorist organisations is a shambles anyway, because non-proscribed organisations are also in receipt of such funds. We should congratulate those forces in our country that are doing something about this matter. May I press her on whether there have been discussions at an international level dealing with fiscal crime—primarily, such crime is money laundering in the name of terrorism

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and organisations—and on whether we can now obtain extradition orders to bring back to this country those who are guilty of some of the crimes that we are fighting?

Ruth Kelly: Before 11 September and subsequently, the United Kingdom has been at the forefront of measures in the fight not only against terrorism but money laundering in general. We are working with the G7 in the international arena to develop measures and encourage countries to fulfil international standards against money laundering and terrorist financing. We are also working with our overseas territories and Crown dependencies to ensure that they meet the tough international standards.

Hon. Members know that we completed consideration of the Proceeds of Crime Bill last night. It will enable our authorities to take tough action against money laundering and reduce the complexities that were inherent in the system. We are therefore working domestically and internationally to crack down on money laundering and terrorist funding wherever it occurs.


8. Paul Holmes (Chesterfield): What estimate he has made of the level of public sector net capital investment as a proportion of national income over the period of the first comprehensive spending review. [35749]

The Chief Secretary to the Treasury (Mr. Andrew Smith): The figures, including the projection for the current year, which is the last year covered by the first comprehensive spending review, were set out in the pre-Budget report. They show that public sector net investment increased from 0.7 per cent. of gross domestic product in 1998-99 to 1.3 per cent. in 2001-02. That is an increase of £5.6 billion in real terms.

Paul Holmes: I am sure that the Chief Secretary agrees that the Chancellor was right to criticise the Conservative Government for their shameful level of investment in public services between 1992 and 1997. However, Treasury figures show not only that the average percentage of GDP invested in public services was 1.5 per cent. a year from 1992 to 1997, but that that average was 0.6 per cent. between 1997 and 2002. That is less than half the Conservative Government's investment. Does the right hon. Gentleman agree that if the Conservative record was shameful, the Labour record in the past five years is a disgrace, and that it is no wonder that public services such as the national health service and transport are in such a mess?

Mr. Smith: We inherited a legacy from a Conservative Government who cut net public investment year on year. In our first five years, we doubled net public sector investment. This spring, such investment will be twice the level that we inherited. The hon. Gentleman has experienced the benefits of that in his constituency. As my hon. Friend the Member for Bolsover (Mr. Skinner) said earlier, the junction 29A development has brought £47 million of new investment to the area. Shirebrook has meant £27 million of investment, generating thousands of

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jobs in north Derbyshire. It is the biggest investment in the area since the pits were sunk, thanks to Labour government, not Liberal Democrat opposition.

Mr. Harry Barnes (North-East Derbyshire): Hon. Members could bring an unending list of projects worthy of capital expenditure to my right hon. Friend's attention. I shall present a petition for funding in my constituency to him next week. Nevertheless, doubling percentage expenditure, which my right hon. Friend mentioned in his initial answer, is an exceptional achievement of which we should be proud. The development of junction 29 is a phenomenal improvement to provisions in Chesterfield, North-east Derbyshire and Bolsover. Those improvements are much needed and are now being provided. Will he simply refuse to listen to moaning minnies who put an alternative viewpoint?

Mr. Smith: I thank my hon. Friend for his comments and commend him on his energetic efforts on behalf of his constituency. That is resulting in the benefits and schemes that he described. The contrast is simple: it is between a Government who believe in public investment and are substantially increasing it and a Conservative Government who cut it by an average of 15 per cent. a year in their last term in office. We are increasing it by 40 per cent. a year. That is a sharp contrast between Labour investment and Tory neglect.

Mr. John Bercow (Buckingham): Since 1997, the Government have raised an extra £130,000 million in taxes, but the Institute for Fiscal Studies has found that the lowest levels of net public investment as a share of national income since the second world war have occurred in the same period. Why?

Mr. Smith: I should have thought that the hon. Gentleman would have started by thanking us for all the tax cuts that this Government have brought in, notably the 3 percentage point cut on business. On levels of public investment, I make no apologies to the House. It is the Conservative party that should apologise. After five years of Labour in government, public sector net investment will be more than double the level that it was when the Tories left office. The reason for that is that we are increasing that investment, whereas they were cutting it. The Conservatives cut net investment by an average of 15 per cent. a year in their last term; we are increasing it by 40 per cent. a year.

The people of this country are seeing the benefits of that investment not only in the programmes to which I have referred, but in the 245 modernisation schemes for accident and emergency units throughout the country that had been neglected by the Conservatives, in the 17,000 schools that have had repairs carried out, and in the 50 road schemes that are now under way. There is a very clear contrast between our investment and the Conservatives rundown.

Lynne Jones (Birmingham, Selly Oak): The Chancellor told the House a little while ago that Government debt was now around 30 per cent. of gross domestic product, compared with the Maastricht criterion of 60 per cent. of GDP. Does my right hon. Friend agree,

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therefore, that the lack of availability of public capital should not be a factor in determining the value for money of private finance initiatives?

Mr. Smith: The private finance initiative and public-private partnership programme is additional to conventional public sector investment, which, as I have said, we have doubled during this spending review period. On the level of debt that we inherited, the 44 per cent. of GDP that the Tories left us was crippling the country through debt interest repayments. It is because we took the tough decisions that we did, and because we will stick to our tough fiscal disciplines, that we are saving £8 billion a year on the cost of debt interest. That is enabling us to make the record investment in public services from which health, transport, the fight against crime and our other front-line priorities are benefiting.

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