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Written Ministerial Statements

Tuesday 22 November 2005


HM Revenue and Customs

The Paymaster General (Dawn Primarolo): HMRC have today reached a settlement of their claim for compensation from Electronic Data Systems Ltd. (EDS) and Electronic Data Systems Corporation for the problems experienced with the IT system developed by EDS to support the launch of the Tax Credit system in 2003 and the subsequent operation of Tax Credits.

The aggregate settlement is £71.25 million (seventy-one million, two hundred and fifty thousand pounds) including an up front payment and payments of additional amounts over time. Details of the settlement are commercially sensitive and therefore bound by a legal confidentiality agreement as is normal in agreements of this nature.

I have written to the Chairman of the Treasury Committee to inform him of this settlement and David Varney, as Chairman of HMRC, has written in similar terms to the chairman of the Public Accounts Committee and the Public Administration Committee. Copies of all three letters have been placed in the House of Commons Library.


Education and Youth Council

The Minister for Higher Education and Lifelong Learning (Bill Rammell): My right hon. Friend the Secretary of State for Education and Skills chaired the EU Education and Youth Council held in Brussels on 15 November. I represented the UK during the Education Council and Peter Peacock, Scottish Minister for Children and Young People, represented the UK during the Youth Council.

There were four substantive items on the Education agenda in the morning:

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At the Youth Council after lunch:

The night before the Council, my right hon. Friend the Secretary of State for Education and Skills hosted jointly with Commissioner Figel a meeting of the EU-level social partners and the extended troika of current, previous and future Presidencies. This gave the social partners the opportunity to offer their views on the issues to be discussed at the following day's Council.


NHS Foundation Trusts

The Secretary of State for Health (Ms Patricia Hewitt): In accordance with schedule 2, paragraph 11 (5) of the Health and Social Care (Community Health and Standards Act 2003, Monitor's review and consolidated accounts of National Health Service foundation trusts 2004–05, HC 622, was laid before Parliament today. Monitor's statutory name is the Independent Regulator of NHS foundation trusts. Copies of the document are available in the Library.
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National Reducing Re-offending Delivery Plan

The Parliamentary Under-Secretary of State for the Home Department (Fiona Mactaggart): I have today placed in the Library of the House copies of the National Reducing Re-Offending Delivery Plan, which the Government are launching today. The Delivery Plan builds on the Reducing Re-Offending National Action Plan, which was published in July last year and it includes updates on the 60 plus action points that were agreed across Government at that time.

The Delivery Plan charts the real progress National Offender Management Service (NOMS) and its partners have made over the last 18 months in delivering services to offenders that address the reasons why they re-offend. For example, the proportion of offenders released from prison without accommodation to go to has dropped by a third in the last year, the number of educational awards offenders have achieved has risen by 40 per cent. and the number completing a drug treatment course in prison or a drug testing order in the community is up by a third. The Delivery Plan also sets out the key actions the Government intend to take over the next 18 months towards the delivery our target of reducing re-offending by 10 per cent. by the end of the decade.

The Delivery Plan acknowledges that this is only the beginning and it reaffirms our commitment to build on what we have put in place. Key to delivering our target will be continuing to work with our partners nationally, but also to develop further regional and local partnerships that include business, civic society and voluntary and faith sector contributors as the most significant driver of progress. The Delivery Plan will be built upon in the NOMS five-year strategy that is being developed.

We will also shortly be publishing, with colleagues in the Department for Education and Skills and the Department for Work and Pensions, a Green Paper, "Reducing Re-offending Through Skills and Employment". We have been developing proposals for embedding skills and employment for offenders as key tenets of the broader national delivery plan for reducing re-offending which we are announcing today. We look forward to publishing a document which will be the start of a constructive dialogue with our partners about how in the future we can most effectively equip offenders for employment and with the basic skills needed for law-abiding adult life, engage employers fully in design and delivery of programmes for offenders and drive improvement in the quality of the programmes offered to offenders.

Proceeds of Crime Act (Money Laundering)

The Parliamentary Under-Secretary of State for the Home Department (Paul Goggins): I have today laid in draft before Parliament the Proceeds of Crime Act 2002 and Money Laundering Regulations (Amendment) Order 2005.

The draft Order brings to a conclusion an informal consultation exercise which the Home Office conducted last year on whether the law on the duty of accountants, auditors and tax advisers to report money laundering under the Proceeds of Crime Act 2002 needed to be
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changed to bring it fully into line with European Community law, and if so how. This followed representations from the Institute of Chartered Accountants in England and Wales that the current legislation discriminated unfairly against accountants, auditors and tax advisers, contrary to the second EC Money Laundering Directive (2001/97/EC.)

The consultation exercise resulted in over 40 responses mostly from the accountancy and legal professions. For the most part the accountancy profession argued that UK law was not compliant with the Directive and needed to be amended whereas the legal profession argued that there was no need for a change in the law.

In response the Government have decided to amend section 330 of the Act to provide for the defence to the "failure to disclose" offence, which currently applies to professional legal advisers in certain circumstances, to be extended to include accountants, auditors and tax advisers who satisfy certain conditions. The equal treatment between these professions, which the draft Order provides for, will apply only to the very limited extent that they are carrying out effectively the same functions in relation to legal advice. The exemption from the obligation to report money laundering to the appropriate authorities is therefore a narrow one which should only apply in specified and appropriate circumstances.

It should be noted that the limited exemption from the requirement to report money laundering does not extend to all accountants, auditors and tax advisers. It will apply only to those who are members of a professional body which requires a test of competence as a condition of membership and the maintenance of professional standards, including sanctions for non-compliance with those standards.

The amendments to the Proceeds of Crime Act made by the Order also provide a defence for a person who is employed by, or is in partnership with, a professional legal adviser or other relevant professional adviser, as defined in the Order.

The Money Laundering Regulations 2003 (S.I. 2003/3075) also give effect to the second EC Money Laundering Directive. In addition to amending section 330 of the Proceeds of Crime Act, the Order also amends the Money Laundering Regulations 2003.

The principal purpose of the EC Directive is to combat money laundering. The Government support the measures in the Directive and is folly committed to working with the financial services industry to maintain strong defences against money laundering. The amendment to the Proceeds of Crime Act, to which the Order gives effect, will help reduce the regulatory burden on accountants, auditors and tax advisers in certain circumstances without damaging the effectiveness of the money laundering reporting regime.

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