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Written Ministerial Statements

Thursday 31 January 2008


Asset Freezing Regime (October - December 2007)

The Financial Secretary to the Treasury (Jane Kennedy): In a written ministerial statement of 10 October 2006, the previous Economic Secretary undertook to report to Parliament on a quarterly basis on the operation of the UK’s counter-terrorism asset freezing regime. This is the fifth of these reports and covers the period October-December 2007.(1)

Dedicated asset freezing unit

In “The Financial Challenge to Crime and Terrorism”, published in February 2007, the Treasury announced that it would be setting up a dedicated asset freezing unit which, acting in response to advice from law enforcement and security agencies, will increase the resources and operational focus that the Government are able to bring to bear on asset freezing. The Treasury’s asset freezing unit became operational on 24 October 2007.

Asset freezing designations

In the quarter October-December 2007, the Treasury made six domestic designations under the Terrorism (United Nations Measures) Order 2006.

None of these were persons already designated under earlier Orders.

The Terrorism Order and the Al-Qaida and Taliban Order provide, where appropriate, for designations to be made confidentially and with restricted circulation of notice.

No persons were designated on this basis in this quarter.

No persons were designated on the basis of closed source material provided by law enforcement and intelligence agencies.

There were no financial sanctions listings at the EU or the UN in relation to terrorism or Al-Qaida and the Taliban of persons with links to the UK.

A total of 288 separate accounts containing approximately £1.4 million(2) of suspected terrorist funds are currently frozen in the UK.


The Treasury keeps domestic asset freezing cases under review. A number of formal reviews have been initiated in this quarter and the review of five cases was completed. In four cases a decision was taken to de-list the designated person and in one case the designation was continued.


In accordance with UN Security Council Resolution 1452 (2002), the Treasury operates a licensing system
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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:

In addition, the households of four listed persons were granted benefits licences in accordance with the policy set out in the previous Economic Secretary’s statement of 3 July 2006 to Parliament.

Tax Avoidance

The Financial Secretary to the Treasury (Jane Kennedy): Recent disclosures to HM Revenue and Customs indicate that individuals are claiming relief against income tax for manufactured payments that are paid using tax avoidance schemes and that substantial sums of tax are at risk.

Tax avoidance is unfair on the majority of taxpayers and can undermine the funding of public services. The Government are determined to take appropriate and prompt action to counter avoidance. Therefore the Government propose to introduce appropriate legislation in Finance Bill 2008 that will be effective from today, 31 January 2008.

A draft of the material that will be contained in Finance Bill 2008, together with draft explanatory notes and background material, will be published today on HMRC’s website at: http://www.hmrc.gov.uk.

Aviation Taxation

The Exchequer Secretary to the Treasury (Angela Eagle): I am announcing today the publication of a consultation document on reforming the taxation of aviation. My right hon. Friend the Chancellor of the Exchequer made the announcement at pre-Budget report 2007 that air passenger duty was to be replaced by a duty paid per plane. This reform will send better environmental signals, encourage the more efficient use of aircraft and ensure aviation makes a greater contribution to both environmental costs and the public finances.

This consultation document sets out options for the detailed design of the new per plane duty, puts forward a number of proposals for how it would operate, and seeks the views of stakeholders on these proposed options. The formal consultation period will run for twelve weeks from today and close on 24 April 2008.
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Design issues to be considered include the basis of the duty, exemptions, general aviation, impact on the freight and transit—or transfer—industry and administrative details.

The consultation document has been deposited in the Libraries of the House and is available in the Vote Office and on the Treasury website at: www.hm-treasury.gov.uk

Budget Statement

The Chancellor of the Exchequer (Mr. Alistair Darling): I propose to deliver my Budget statement to the House on Wednesday 12 March.

Children, Schools and Families

Dedicated Schools Grant

The Minister for Schools and Learners (Jim Knight): I am announcing today the launch of a review of the distribution formula for dedicated schools grant (DSG).

In my statement to the House on 25 June 2007 I announced that although the DSG for 2008-11 would be distributed using the spend plus method, there would be a review of the formula for distributing school and early years funding with the aim of developing a single, transparent formula that would be available for use from 2011-12. A consultation on the terms of reference for the review was launched in August 2007. I am today publishing a summary of the responses to the consultation and placing a copy of that summary in the Library of the House. I am grateful to all those who responded to the consultation.

The overwhelming majority of respondents to the consultation—88 per cent.—supported the aims of the review and the need to introduce a formula for the distribution of DSG. Their view was that it would be unsustainable to continue with the spend plus methodology for the longer term.

The overarching aim of the review will be to produce a funding system that should support schools and local authorities to raise the educational achievement of all children and young people and to narrow the gap in educational achievement between all children, including those from low income and disadvantaged backgrounds. The resultant distribution formula for DSG should be based on the principles of transparency, simplicity and stability.

A number of respondents to the consultation suggested that consideration should be given to removing the ring-fence on the DSG and to the payment of school funding through general formula grant, with decisions on the level of schools expenditure taken locally. Over the past ten years the Government have invested record amounts in education. Overall per pupil funding, including capital funding, will reach £6,600 by 2011—nearly a three-fold cash increase since 1997 and more than double in real terms. This demonstrates our continuing commitment
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to raising standards for all young people, and we are determined that further increases in school funding should be spent in schools, so that we can meet our long-term aim that per pupil funding for schools should match the level of support available to children in independent day schools. Consequently the review will start from the premise that the ring-fence on DSG will remain. However the review will examine the scope for greater flexibility in the use of DSG to support the delivery of Every Child Matters outcomes and the implementation of the children’s plan.

There will be a number of key themes to the review. We will carry out a needs led analysis to assess the feasibility of using this method to set the basic entitlement to funding that local authorities will receive for each of the pupils in their schools. We will look at the additional costs that should be taken into account in high wage areas and high housing cost areas, in co-ordination with the review of area costs recently announced by my right hon. Friend the Secretary of State for Communities and Local Government, and with the review of teachers’ pay bands recommended by the School Teachers’ Review Body. We will commission work to review the costs of educating pupils with additional educational needs (AEN). With the introduction of diplomas and the raising of the age of compulsory participation in education and training to 18, we will review the scope for working towards a common 14-19 funding system. Finally, we will also consider the scope for introducing incentives into the funding system, for example, to improve pupil progression.

I am writing to a range of partner organisations today to invite them to become members of a new DSG formula review group. The group will steer the work of the review and report its recommendations to Ministers. Special interest groups of stakeholders will be invited to attend meetings and submit papers on particular issues. The development phase of the review will continue until December 2009, followed by a consultation period from January to March 2010. The broad decisions from the review will be announced in July 2010, in preparation for the school funding settlement in autumn 2010 for 2011-12 onwards.

The Future of Rural Schools

The Minister for Schools and Learners (Jim Knight): I have today written to local authorities to remind them of our policy and guidance on rural schools. A copy of the letter has been placed in the Library of the House.


Defence Training Review Rationalisation Programme/BORONA Programme

The Minister for the Armed Forces (Mr. Bob Ainsworth): This statement updates the House on the defence training review (DTR) rationalisation programme and BORONA programme following announcements made last year on DTR on 25 October 2007 (Official Report, column
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15WS) and BORONA on 12 September 2007 (Official Report, column 122WS). The BORONA Programme will establish HQ ARRC, 1 Signal Brigade and 102 Logistics Brigade in enduring bases in the UK.

Work continues on DTR package 1, which aims to deliver training for engineering and communications and information systems at a new site at St Athan in South Wales. It is still anticipated that the Department will be in a position to consider the main investment decision in the spring of this year. As part of this work to secure contract signature as soon as possible for package 1, a programme of risk reduction work to the value of £9.5 million has been proposed with the Metrix consortium. A departmental minute outlining this activity was laid in the House on 29 January. The proposed activities will be focused on the property and the estate, in particular securing planning consent and development of the training solution. The cost of this work is included in Metrix’s overall bid and is at no additional cost to the Department.

After reviewing further options for package 2, which aims to provide training for logistics and personnel administration, police and guarding, security, languages, intelligence and photography, it has become apparent that the Metrix consortium is not able to offer an affordable and acceptable package 2 solution and, as a consequence, the competition has been brought to a close. The decision has therefore been taken to remove provisional preferred bidder status from Metrix. This does not have any impact on the Department’s commitment to the DTR programme, and particularly in pursuing a package 1 Metrix solution with vigour, but it does allow the Department to focus its efforts on alternative approaches for package 2, which are not legally constrained by the original terms of the procurement. These alternatives may continue to be open to Metrix and other potential industry partners. Options will continue to aim to rationalise and improve the estate, maintain the Department’s commitment to its supervisory care responsibilities under the Blake agenda, and match the scale of investment in training modernisation to what is affordable. A further DTR update on both packages will be provided later this year after the appropriate investment decisions are made.

In addition, I wish to advise the House on defence estate solutions related to both the DTR and BORONA programmes. Following the announcement to release Princess Royal barracks, Deepcut, for disposal on 8 January 2008 (Official Report, column 7WS), and further work on the defence estate, an agreement has been reached that, in principle, the Defence College of Logistics and Personnel Administration (DCLPA) and the Director Royal Logistics Corps (DRLC) will relocate to Worthy Down and Southwick Park. This move, which will consolidate elements of DCLPA and logistics training already on these sites, will allow the closure of the Deepcut site, currently anticipated to be not before 2013.

A decision has also been taken that, under the BORONA Programme, both 1 Signal Brigade and 102 Logistics Brigade returning from Germany will move to Cosford. This will maintain a significant long-term defence presence on this site and continue to provide the associated benefits that this brings to the local community and to the West Midlands following the
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relocation of the DTR package 1 units currently based there. Furthermore, Metrix propose to establish a learning centre and design facility at the Cosford site which may also generate other business and employment opportunities for the local area.

The BORONA programme team (BPT) will now develop proposals to deliver construction and service requirements at Cosford. In addition, the BPT will also draw up detailed plans and undertake wide consultation with all interested parties, including local authorities, health, education and welfare providers as well as the trades unions. A key piece of this consultation work will involve communication and discussion with the German authorities and with our locally engaged workforce in Germany and their representatives. This detailed planning and consultation will review all possible options and will result in recommendations, including the actual timings of the moves, being made for a final investment decision in Spring 2009.

The implications of these moves on our people will continue to be handled sensitively and in full consultation with trade unions and staff. However, both of these estate solutions are still subject to the appropriate final investment decision being made, after which further updates will be announced.

Porton Down Veterans

The Parliamentary Under-Secretary of State for Defence (Derek Twigg): The Ministry of Defence has for some months been in discussions with solicitors representing a group of Porton Down veterans regarding compensation claims arising out of their participation in the programme of trials undertaken at the Chemical Defence Establishment during the cold war. I am pleased to report that an amicable settlement has now been reached with respect to these claims. This settlement is without admission of liability by the Ministry of Defence and involves the payment of a global sum of £3 million in full and final settlement of all claims made by the group.

The Government have in the past made clear the debt owed by the nation to those who took part in the trials at Porton Down designed to ensure that the United Kingdom had the defensive and deterrent capabilities to counter the real and horrific threat that chemical weapons would be used against our armed forces or civilian population, as they had against others; the security of the country rested on these trials and the contribution of those who took part in them.

The trials were in many cases conducted under considerable pressures of time as new threats emerged. The Government accept that there were aspects of the trials where there may have been shortcomings and where, in particular, the life or health of participants may have been put at risk. The Government sincerely apologise to those who may have been affected.

Mental Health Statistics

The Parliamentary Under-Secretary of State for Defence (Derek Twigg): I can inform the House that the Defence Analytical Services Agency (DASA) will be publishing its second quarterly report recording figures on service personnel assessed with a mental disorder on its website at: www.dasa.mod.uk today. I shall also place copies in the Library of the House.

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