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Written Ministerial Statements

Thursday 21 June 2007


Financial Services Authority

The Economic Secretary to the Treasury (Ed Balls): The annual report 2006-07 of the Financial Services Authority (FSA) has today been laid before Parliament. Copies are available in the Libraries of both Houses.

The report forms a key part of the accountability mechanism for the Financial Services Authority under the Financial Services and Markets Act 2000 (FSMA), and assesses the performance of the Financial Services Authority over the year ended 31 March 2007 against its statutory objectives.

London Insurance Market Reform

The Economic Secretary to the Treasury (Ed Balls): Following Budget 2006, the Chancellor established a High Level Group to consider issues related to the international competitiveness of the UK financial sector, recognising the opportunities presented by emerging markets and the strength of international competition from other financial centres. As part of this work, the Chancellor asked Lord Levene, Graham Millwater and Andrew Kendrick to review the business processes of the London market. The Treasury too has been working closely with the Financial Services Authority and the wholesale general insurance market to identify market led reform and modernisation that can enable the industry to remain competitive in a global market. The Treasury has also been developing its understanding of the business environment for this sector. The Treasury, Financial Services Authority and wholesale general insurance market will take stock again and assess progress in the autumn.

As part of this wider work on reforms of the London insurance market, Lloyd’s of London has been working with the Treasury to identify areas where its corporate governance arrangements are out of step with modern practices. Following these discussions, the Treasury has decided to develop legislative proposals to modernise the governance arrangement for Lloyd’s. These proposals will take the form of a Legislative Reform Order to amend Lloyd’s Act 1982. The aim of the proposals will be to update the governance arrangements of the market to reduce costs and unnecessary bureaucracy. The Treasury will have extensive consultation with interested parties and intends to publish proposals in the New Year. Any proposals will meet the preconditions and restrictions of the Legislative and Regulatory Reform Act 2006.

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Companies' Foreign Profits

The Paymaster General (Dawn Primarolo): The Treasury has today published a discussion paper entitled “The Taxation of the Foreign Profits of Companies: A Discussion Document”. Copies of the document are available in the Vote Office and the Libraries of both Houses.

Credit Unions

The Economic Secretary to the Treasury (Ed Balls): There are currently over 2.6 million Child Trust Fund accounts open of which around three-quarters have been actively opened by parents. The Government are committed to ensuring that all families, including lower income families, get the most from the scheme.

The Government believe that credit unions have an important role to play in delivering the Child Trust Fund. Credit unions offer a community-based alternative for people who may lack financial confidence, and be initially wary of large, commercial banks and building societies.

Where credit unions serve communities in low-income areas, they can be vital in targeting those encountering exclusion from mainstream financial services, helping clients obtain money advice in the course of providing a loan, and connecting people to other mainstream opportunities. The Government hope that credit unions will take full advantage of the opportunities offered by the Child Trust Fund to build on this success.

Child Trust Fund rules allow credit unions to offer both cash and Stakeholder accounts. The Government are encouraged that several credit unions have already chosen to provide these accounts: Leeds City Credit Union, Clwyd Coast Credit Union, Leicester Credit Union, Dragonsavers, Loans and Savings Abertawe and Bristol Credit Union, and are keen to see more do so in the future.

All MPs with credit unions in their Constituencies have a role to play in encouraging their participation in the Child Trust Fund scheme so that we can achieve our goal of giving every child the best start in life. Credit unions interested in becoming a provider can find more information at http://www.hmrc.gov.uk/ctf/providers.htm.

Credit Unions

The Economic Secretary to the Treasury (Ed Balls): Following my announcement in November 2006 of a review of co-operatives legislation—principally the Industrial and Provident Society Acts and Credit Unions Act—the Treasury has been carrying out research and holding informal discussions with representatives of the sector and other stakeholders.

I am now able to announce the publication of the first stage of a two-stage consultation to be undertaken by the Treasury, which will seek to identify the legislative needs of cooperatives and credit unions and put forward the most effective solutions. The aim of the review is not to give mutuality a privileged position but to allow the whole mutual sector—including building societies and friendly societies—to compete on a level playing field and to remove artificial restrictions that do not provide any benefit to members.

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The focus of the review is on cooperatives and credit unions because their legislation is the oldest and most disparate. Important changes to the legislation have been made in recent years, particularly, through the Industrial and Provident Societies Act 2002, and the Co-operatives and Community Benefit Societies Act 2003

This review will build on that earlier work, clarify the needs of the sector and identify the right outcomes. The review will impact on over 8,000 industrial and provident societies and over 500 credit unions.

The first stage of the review will close for responses on 12 September 2007. We hope to begin the second stage as soon as possible thereafter. Copies of the review are available in the Vote Office and Libraries of both Houses and will be published on the Treasury website.

Communities and Local Government

Hot Water Safety

The Parliamentary Under-Secretary of State for Communities and Local Government (Angela E. Smith): The Government are committed to ensuring that Building Regulations support the safety of hot water systems in the home. We have been working closely with the industry to develop guidelines and training notes to help ensure that those who install and maintain these systems are aware of the problems and dangers posed. I am very grateful to the industry for the work that has already been done.

However, it's clear we should do more as in the last six months there have been a number of tragic incidents as a result of defective hot water systems. I am therefore announcing today that I will undertake a new review of Part G of the Building Regulations to determine whether changes are needed, and can be made, that would improve the safety of these systems in the future. This review will cover the whole of Part G dealing with sanitary installations and the hot water systems that serve them as one package. The Department is now considering the scope of the review with the intention of beginning informal consultations shortly.

It is clear that a balance must be struck between ensuring health and safety risks are tackled without placing undue regulatory burdens on industry. The proposals for any amendments will be subject to full consultation and regulatory appraisal.

Social Housing

The Minister for Housing and Planning (Yvette Cooper): My hon. Friend the Under Secretary of State for Defence and Minister for Veterans and I have recently reviewed the way in which current housing legislation impacts on those leaving the Armed Forces. This follows representations from Service personnel and others that the local connection provisions in housing legislation put Service personnel and those leaving the Armed Forces at a disadvantage when trying to access social housing.

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Local authorities in England are responsible for framing their own policies and procedures for allocating social housing. In deciding who gets priority for social housing, housing legislation allows local authorities to take into account whether someone has a local connection with their district. Not all local authorities take local connection into account. Where they do, the legislation can put Service personnel at a disadvantage since an individual cannot establish a local connection with an area through residence or employment there when serving in the Armed Forces.

The Government are committed to aiding the effective transition of Service personnel to civilian life, and access to suitable housing is a vital part of this. Many will have bought their own home during their time in Service—and the Ministry of Defence has several schemes in place to encourage this—or will do so on leaving. However, for some Service leavers home ownership may not be an option and they may wish to apply for social housing. We believe it is important that the service they have given to their country does not place them at any disadvantage in this respect. The Government have therefore decided to make the necessary changes to housing legislation, at the earliest opportunity, to ensure that Service personnel are treated fairly and put on an equal footing with other people applying for social housing.

The detail of how the change will be effected will need to await the outcome of the current review of housing policy which the Secretary of State for Communities and Local Government announced, following publication of Professor Hills' wide ranging report on social housing on 20 February 2007. We will bring forward our proposals in due course.

Education and Skills

Care Matters: Time for Change

The Secretary of State for Education and Skills (Alan Johnson): A year ago, when I was appointed as Education Secretary, I said that children in care would be my top priority so I am genuinely delighted to be able to announce that the White Paper “Care Matters: Time for Change”, is available on the DFES website. There is no more deserving or vulnerable group than the nation's 60,000 children in care. This White Paper aims to ensure that the State's expectations for them match the aspirations that loving parents would have for their own children. The measures focus on improving stability and outcomes for children in care, backed by a £305 million financial package over the next four years.

The paper includes measures on promoting family and friends care:

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There are also measures to promote stable, successful placements and education:

The White Paper will ensure access to leisure activities, personalised education for all children in care and increasing educational support for those who are falling behind:

Lastly, there will be greater support for young people moving from care into adulthood:

This document builds on the Green Paper “Care Matters: Transforming the Lives of Children and Young People in Care”, published in October 2006. It also takes on the messages we heard from young people in care and others in the consultation responses, which we published earlier this year and which are also available on our website.

Environment, Food and Rural Affairs

Government Decontamination Service

The Minister for Climate Change and the Environment (Ian Pearson): The 2006-07 Annual Report and Accounts for the Government Decontamination Service will be laid before Parliament today.

Copies will be available in the Libraries of both Houses.

Home Department

Control Orders

The Minister for Security, Counter Terrorism and Police (Mr. Tony McNulty): Section 14(1) of the Prevention of Terrorism Act 2005 (the 2005 Act) requires the Secretary of State to report to Parliament as soon as
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reasonably practicable after the end of every relevant three-month period on the exercise of the control order powers during that period.

The level of information provided will always be subject to slight variations based on operational advice.

Control orders continue to be an essential tool to protect the public from terrorism, particularly where it is not possible to prosecute individuals for terrorist-related activity and, in the case of foreign nationals, where they cannot be removed from the UK.

During the period 11 March 2007 to 10 June 2007, one new control order was made with the permission of the court under section 3(1 )(a) of the 2005 Act and, on 30 March 2007, served on a British citizen. This replaced an order, relating to an individual referred to as AF, that was quashed by the High Court.

During this reporting period, no control orders were renewed in accordance with section 2(4)(b) of the 2005 Act.

One control order has expired since the last report.

In total, therefore, there are seventeen control orders currently in force, eight of which are in respect of British citizens. Seven of the individuals live in the Metropolitan Police Service area; the rest fall within other police force areas.

As Parliament will be aware, four of the seventeen individuals currently subject to a control order have absconded—one in January 2007 and three in May 2007. Details in relation to the three absconds that took place during this reporting period were given in my statement of 24 May. Parliament has also previously been informed of two other absconds: the individual who absconded in August 2006, after a control order was made, for example, signed against that individual, but before it had been served on him (this order has therefore never been in operation); and the individual who absconded in September 2006, who is no longer subject to a control order, as the order expired during this reporting period.

The High Court anonymity orders for the August and September 2006 absconders were lifted at a High Court hearing on 25 May. However, an extant anonymity order remained in place with regard to criminal proceedings in relation to the September 2006 absconder, so his identity was not made public at that time. For police operational and legal reasons, the Government are not currently seeking to lift the anonymity of the other (January 2007) absconder. Finding individuals who have absconded is an operational matter for the police, and investigations are ongoing.

During the period, sixteen modifications of control order obligations were made and fourteen requests to modify a control order obligation were refused. A right of appeal exists in section 10(3) of the 2005 Act against a decision by the Secretary of State in relation to an application by an individual subject to a non-derogating control order to revoke such an order or modify an obligation imposed by such an order. An appeal has been made in respect of one modification request that was refused.

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