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The world has been united in its condemnation of North Korea’s action, which was carried out in direct defiance of the will of the international community. Comments made by world leaders, nuclear experts and international organisations have highlighted North
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Korea’s isolation. This issue has underlined the scale of the counter-proliferation threat that we face. The international community are working together to overcome this threat to peace and security.

Discussions are taking place within the UN Security Council in New York. Partners have unanimously condemned the DPRK’s actions and agreed that a robust response is needed. Negotiations will continue. The UK will be pushing for a robust response given the clear threat posed to international peace and security by North Korea’s pursuit of nuclear weapons, including legally binding sanctions. Under Security Council Resolution 1695 adopted in July there exists already a sanctions regime which requires all states to prevent missile-related items being transferred to or from North Korea. Any new sanctions will have to go further than this. They will make it clear to North Korea that it must return to the six-party talks, and stop disregarding the concerns of its neighbours and the international community. We should in particular strongly support the need for measures to prevent DPRK from exporting goods and technologies, which would help others develop nuclear and ballistic missile capabilities.

Immediately following the test, my right hon. Friend the Prime Minister and I both issued statements making it clear that North Korea’s actions were both highly irresponsible and provocative. Since then, I have discussed the situation with Foreign Ministers including Chinese Foreign Minister Li, Japanese Foreign Minister Aso and US Secretary of State, Condoleezza Rice. Those contacts will continue over the hours and days ahead. We have also called the DPRK ambassador in London to the Foreign Office to make clear our views.

Trade and Industry

UK Assisted Areas

The Minister for Industry and the Regions (Margaret Hodge): A two-stage public consultation seeking views on the designation of future assisted areas from 2007-13 took place from February to August 2006. Approximately 420 written responses were received from a wide range of stakeholders and interested parties. There were several regional and national information events hosted across the country. Furthermore, the review team and I personally met several delegations to consider individual representations. We have responded positively to all representations and amended the proposed map where in our judgment this is possible and consistent with the principles and criteria the UK Government have determined and the constraints established by the rules set by the European Commission. Copies of the Government’s response to the consultation and the assisted areas map(1) being sent to the European Commission for approval have been placed in the House Library.

The assisted areas map will be sent to the European Commission today and it has up to two months to approve it. The assisted areas map is not final until it is approved by the European Commission as complying with its guidelines on regional aid. Upon receipt of this approval, the assisted areas map will be implemented through UK legislation making it operational from January 2007.

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Much has changed since the last review of assisted areas in 1998-99. The UK economy has prospered growing faster than any of the G7 industrialised nations. Further countries have joined the European Union. The combination of these two factors has meant that less of Britain is eligible for assisted areas status. The European Commission guidelines published last December specified that the proportion of the UK population covered by assisted areas for 2007-13 will be reduced from the 30.9 per cent. currently covered to 23.9 per cent.

Assisted areas status gives us flexibility to support investment, job creation and retention propositions in the more disadvantaged areas of the UK. This helps us tackle regional disparities in economic performance and to promote social cohesion across the UK. In England we will be working with the regional development agencies to recommend that those areas losing assisted areas status in 2007-13 be recommended for Tier 3 coverage. This will offer SFIE to small and medium-sized enterprises under the new European Commission SME block exemption.

The Government carried out an open and transparent review of the assisted areas in response to new European Commission guidelines on regional aid adopted last December.


EU Transport Council

The Minister of State, Department for Transport (Dr. Stephen Ladyman): I will attend the first Transport Council of the Finnish presidency which takes place in Luxembourg on 12 October.

The main items on the agenda are: the mid-term review of the 2001 White Paper on transport policy; the Galileo satellite navigation project; the draft regulation on aviation security; and two aspects of aviation external relations.

There will be a policy debate on the mid-term review of the Commission White Paper on European transport policy. The review, entitled “Keep Europe Moving—Sustainable Mobility for our Continent”, appeared in July. It reviews the EU’s transport objectives between 2001 and 2010, as set out in the 2001 White Paper. Evident in the review is a change of emphasis, the aim now being to get the best from each transport mode, rather than seeing present and future policy in terms of conflict between road and rail. Key themes are better regulation, competitiveness, transparency, innovation and logistics.

The UK’s overall aim is to ensure continued emphasis on reducing regulatory burden, ensuring the proper working of the internal market and protection of the environment. This means that new Commission proposals should be based upon a rigorous impact assessment; that the rules of the internal market are monitored to see that they are working properly; that liberalisation of the domestic passenger rail market is
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treated as a priority; and that measures such as aviation emissions trading are brought forward to help mitigate environmental damage.

There will be a report from the Commission on its communication on freight transport logistics, entitled “Freight Logistics in Europe—Key to Sustainable Mobility”. The communication “examines whether and where the EU could offer added value to enhancing the development of freight transport logistics in Europe and the world”. The Commission plans to present an action plan for freight transport logistics in 2007. The Finnish presidency will take forward consultation on the communication and prepare for the action plan. Logistics is Finland’s central presidency priority in the transport field. The UK supports this initiative from the Commission and the proposal to develop an action plan. However in future discussions on the action plan we will need to ensure that any regulatory proposals that emerge are proportional and supported by industry needs.

The presidency will aim for a general approach on two draft regulations related to management of the Galileo programme. The first amends the statutes of the Galileo Joint Undertaking (Regulation 876/2002 EC) to allow for its closure at the end of 2006; the second amends the regulation (1321/2004 EC) which established the Galileo supervisory authority, allowing it to take over the joint undertaking’s responsibilities for the current development phase. The UK supports these amendments, which aim to ensure that an appropriate management structure is in place, with an efficient transition of responsibilities for managing the Galileo programme.

The Council will consider conclusions on the Commission communication of June 2006, taking stock of the Galileo programme. We believe these provide a useful reinforcement of our objectives for the programme. The Commission is also expected to report on progress in the PPP concession contract negotiations, and possibly on its delayed deliberations on the involvement of third countries in the programme.

We will examine the emerging deal very carefully for its justification in terms of value for money, affordability, and risk to the public sector. We are also pressing the Commission to bring forward proposals for the new financial mechanisms which will be needed. A successful PPP should deliver a value for money deal and ensure that all member states are in a position to participate in the potential economic benefits.

The Council will aim to reach political agreement on the regulation on civil aviation security, replacing and improving on the 2002 regulation. The new proposal would help to clarify, simplify, and further harmonise legal requirements with the aim of enhancing overall security in civil aviation. Early agreement on the proposed new regulation is highly desirable.

In addition, under AOB, there will be reports from the presidency and the Commission on recent developments in aviation security.

The Commission will give progress reports on two aspects of aviation external relations on which it has been given mandates to negotiate agreements—with the US on a comprehensive air transport treaty, and with Russia on payments for Siberian overflights. Both issues remain the subject of on-going discussions with the respective Governments.

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South Western Franchise

The Parliamentary Under-Secretary of State for Transport (Mr. Tom Harris): The Department announced on 22 September, the award of the South Western rail franchise to Stagecoach South Western Trains Ltd. (Stagecoach Group plc) for a period of 10 years from 4 February 2007.

Stagecoach has undertaken to pay the Department for Transport a premium of £1,191 million NPV over the life of the franchise. The franchise has been awarded for 10 years, with the final three dependent on service performance achieving preset targets, including further performance improvements.

The South Western franchise combines two existing franchises, South West trains and the Island Line, both currently operated by Stagecoach plc. South West trains operates the busy commuter routes into London Waterloo, and serves destinations in south-west London as well as places further afield such as Bournemouth, Bristol, Exeter, Paignton, Plymouth, Portsmouth, Reading, Salisbury, Southampton and Weymouth. Island Line is a much smaller business, serving five towns between Ryde Pier Head and Shanklin over 14 km of track.

The Department has awarded the franchise in line with the requirements set out in the invitation to tender (ITT), a commercially confidential document issued to bidders in March 2006. A supporting stakeholder briefing document was published at the same time setting out the specification included in the ITT.

The current timetable operated will remain largely unchanged. However, there are a number of improvements including a second train each hour to Weymouth from Waterloo, a new Salisbury—Romsey service via Southampton and Southampton Airport Parkway and additional late evening and Sunday services on several London suburban routes.

The new operator has addressed the continuing growth in passenger demand by redeploying the existing rolling stock, initiating a refurbishment programme to increase capacity on the suburban fleet and investing in additional rolling stock.

Smartcard technology will be rolled out by 2009, so that passengers will benefit from electronic ticketing across the franchise area. This will include the acceptance of existing Oyster products in London zones 1 to 6. This means that passengers on South Western services in London can use Oyster pay as you go products as well as newly available smart tickets.

Fare structures will change to incentivise travel outside the busiest periods of peak time, and in conjunction with the rolling stock initiatives, will address the key objective of accommodating future demand levels. The introduction of smartcards will facilitate the ability of the operator to offer flexibile tickets to support this goal. Regulated fares will continue to be consistent with Government fares policy, while Stagecoach will continue to have flexibility to make changes to unregulated fares.

Some £40 million investment in enhancements at stations will be delivered. Waterloo station and 13 other stations in the franchise area will be gated. Extra
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security measures, including more visible staff and CCTV at all stations and on all trains, will be introduced.

The Department required bidders to submit a number of priced options as part of their bids. Stagecoach has been asked to ensure that 95 per cent. of the passenger franchise footfall will travel through stations that have been granted secure station accreditation.

Stagecoach will also operate an hourly Waterloo-Exeter service once Network Rail has built the necessary infrastructure, expected to be by December 2009. Until this new service can be implemented, existing services operating west of Exeter to Plymouth and Paignton will continue to run.

The current two trains per day operation between Bristol and Waterloo will be retained throughout the new franchise.

New GSM-R radio equipment will also be fitted to all units in line with Network Rail’s programme of updating radio systems across the network.

The decision on the future of the Island Line has been deferred to allow time for more extensive discussion with key stakeholders as to the most appropriate way forward, and recognising the recent Community Rail designation of the railway.

Further work is also needed to assess the most appropriate use of the platforms at Waterloo International once Eurostar operations vacate in late 2007.

In summary, the successful bid has addressed the objectives for the South Western franchise. Performance will increase to 92.5 per cent. by 2009-10 (93.3 per cent. by the end of the franchise), demand growth will be accommodated through capacity and ticketing initiatives, and stakeholder aspirations have been reflected in the timetable. The franchise improves security on trains and at stations, and offers value for money to passengers and taxpayers.

Civil Aviation Act

The Parliamentary Under-Secretary of State for Transport (Gillian Merron): My right hon. Friend the Secretary of State for Transport is responsible for determining the remuneration of board members of the Civil Aviation Authority (CAA) under paragraphs 6 and 7 of schedule 1 to the Civil Aviation Act 1982. This responsibility includes determining pension provision for current and former board members. In practice, board members’ pensions are broadly analogous with the Civil Aviation Authority Pension Scheme (CAAPS).

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Under paragraph 7 (2) of schedule 1 to the 1982 Act, once the Secretary of State has made a determination he is obliged to lay a statement before each House of Parliament containing particulars of that determination.

With effect from 6 April 2006 the CAAPS rules have been amended to take account of changes in pensions legislation introduced by the Finance Act 2004.

The CAA Section of the CAAPS has been amended to reflect these legislative changes. The determination, which has been laid before Parliament today, has been made to bring the named current CAA board member’s pension into line with the CAAPS.

As a consequence of the changes the salary for pension purposes is now no longer subject to the earnings cap (established under S590C of the Income and Corporation Taxes Act 1988) which existed previously. Mr. Arscott (a pension member by analogy) will now have his benefits calculated on that basis with a commensurate increase in his pension.

The determination relates only to the pension payable to Mr. Arscott and does not affect the pension arrangements for any other member of the board.

Work and Pensions

Gas Safety

The Parliamentary Under-Secretary of State for Work and Pensions (Mrs. Anne McGuire): My noble friend the Under-Secretary of State for Work and Pensions has made the following statement:

Gas is widely used in households across the country. Gas today is safer to use than 10 years ago, with the number of fatalities down by a third. Yet 20 to 30 people still needlessly die every year from preventable gas-related carbon monoxide poisoning.

New research suggests that faulty gas appliances are still being used in many homes and that public awareness of CO poisoning risks is worryingly low.

It is not right for the current situation to continue. The Health and Safety Executive (HSE) is conducting a review to improve consumer gas safety. Gas safety stakeholders need to work with the HSE in that review to produce proposals that will put in place a modern, effective gas safety regime. I am calling on the gas industry meanwhile to do all it can to increase public knowledge of the dangers of unsafe use of gas. I intend, with ministerial colleagues, to meet the industry to review its actions and progress.

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