Written Ministerial Statements
Monday 23 February 2009
Treasury
ECOFIN
The Chancellor of the Exchequer (Mr. Alistair Darling): The Economic and Financial Affairs Council was held in Brussels on 10 February 2009. The following items were discussed:
Preparation of the meeting of the European Council
a) European economic recovery plan
Ministers held a debate on the current state of implementation of the European economic recovery plan (EERP), including a first horizontal evaluation report from the European Commission. The Government are a firm supporter of the timely, targeted and temporary measures taken at national level under the framework of the EERP to stimulate growth in the EU.
ECOFIN exchanged views on the financial aspects of the Commission’s proposals for energy and broadband projects to be funded through the EU budget. The Government will continue to scrutinise the Commission’s proposals in detail.
b) Key issues paper
ECOFIN held an orientation debate on the “key issues paper” on economic and financial issues for the Spring 2009 European Council. The full version of the paper will be agreed before the European Council based on the outline proposed by the presidency. The Government supported the outline, which emphasises the serious challenges in 2009, and the remaining need for action to stabilise financial markets and facilitate a speedy economic recovery.
c) Reduced rates of VAT
Following a political discussion by Ministers, the presidency indicated it that it would reflect on how to take the dossier forward in response to the European Council’s request to settle the issue by March. A further discussion is expected at the ECOFIN meeting on 10 March, in the run-up to the next European Council, on 19 and 20 March. The Government continue to believe that member states should be allowed the flexibility to apply reduced rates of VAT where they do not materially affect the functioning of the single market.
General budget of the EU: Discharge procedure in respect of the implementation of the budget for 2007
ECOFIN adopted a recommendation to the European Parliament on the discharge to be given to the Commission for implementation of the EU general budget for 2007. The UK welcomes the references within the recommendation relating to the key role of member states in improving financial management and accountability of EU funds under shared management.
The Council took note of an intervention by the Dutch Minister calling for work to enhance greater co-ordination between member states and at international level on temporary measures aimed at short selling. The Commission and the Committee of European Securities Regulators (CESR) will look further into these issues, which the UK welcomes in the wider context of effort to improve corporate governance.
Breakfast meeting on the economic situation
Ministers discussed the implementation of financial rescue packages. They agreed that the priority is to fully restore the functioning of credit channels, and on that basis agreed to a set of lines of communication. ECOFIN agreed that, to safeguard banking sector stability, measures to deal with impaired assets could usefully complement agreed instruments, consistent with principles set in October 2008. ECOFIN will continue to monitor this issue closely. The UK fully supports these measures and the ECOFIN lines of communication as the basis of a flexible, co-ordinated European response to the financial situation.
Missing Trader Intra-Community Fraud
The Financial Secretary to the Treasury (Mr. Stephen Timms): This is to announce a new procedure where HMRC suspect that there are serious indirect tax irregularities, knowing involvement in transactions that form part of a Missing Trader Intra-Community (MTIC) fraud and have reason to believe dishonest conduct has occurred, where neither criminal investigation nor the Civil Investigation of Fraud procedure outlined in Code of Practice 9(2005) is appropriate.
Code of Practice 9(2005) covers HMRC investigations of suspected serious fraud against the Exchequer where, for policy or operational reasons, it is considered inappropriate to launch a criminal investigation. Where cases are not suitable for Code of Practice 9 (2005) or criminal investigation, for indirect taxes, there is already a procedure for penalties to be imposed for dishonest conduct in cases involving lower level fraud set out in Notice 160 (Enquiries into Indirect Tax Matters (2007)).
This statement introduces a new notice, Notice 161, which explains how enquiries into serious indirect tax irregularities will be handled in cases involving transactions that form part of an MTIC fraud and where HMRC have reason to believe dishonest conduct has occurred.
The procedure complements HMRC’s policy of providing a level playing field for all businesses by supporting those who wish to comply but dealing severely with those who seek an unfair advantage through non-compliance. It will be used in cases where HMRC suspects knowing involvement in transactions that form part of a (MTIC) fraud.
A copy of the new Notice 161, is being placed in the House of Commons Library.
Asset Freezing Regime (Counter-Terrorism)
The Economic Secretary to the Treasury (Ian Pearson): In a Written Ministerial Statement on 10 October 2006, the then 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 ninth of these reports and covers the period October to December 2008.(1)
In the quarter October to December 2008, the Treasury made one domestic designation under the Al-Qaida and Taliban (United Nations Measures) Order 2006.
There were three financial sanctions listings at the UN, and none at the EU, in relation to terrorism, or Al-Qaida and the Taliban of persons with links to the UK.
As of 31 December 2008, a total of 253 separate accounts containing just over £632,500(2) of suspected terrorist funds were frozen in the UK.
The Treasury keeps domestic asset freezing cases under review. Ten formal reviews have been completed in this quarter; five persons or entities were delisted, with the remaining five continuing to be listed.
In accordance with UN Security Council Resolution 1452 (2002), the Treasury operates a licensing system 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 to listed persons:
Nine listed persons were granted legal expenses licences;
Fifteen listed persons were granted a basic expenses licence (including licences for benefits payments);
One listed person was granted a licence for extraordinary expenses.
In this quarter no households of listed persons were granted benefits licences.
Judgement on the Treasury’s appeal against the High Court ruling in the case of A, K, M, Q & G v. HM Treasury, in which the judge ordered that the relevant legislation be quashed, was handed down by the Court of Appeal on 30 October 2008. The Court of Appeal overturned the High Court’s decision. The Court of Appeal upheld the Terrorism Order—although it severed that part of the Order which it concluded was ultra vires—and the Al-Qaida and Taliban Order, confirming that the Government acted lawfully in making these Orders. This judgment ensures that the UK is able to maintain an effective terrorist asset freezing regime in accordance with our UN obligations.
(1)( )The detail that can be provided to the House on a quarterly basis is subject to the need to avoid the identification, directly or indirectly, of personal or operationally sensitive information.
(2)( )This figure reflects account balances at time of freezing and includes approximately $58,000 of suspected terrorist funds frozen in the UK. This has been converted using exchange rates as of 31 December 2008. Future fluctuations in the exchange rate may impact on the contribution this sum makes to future totals of suspected terrorist funds frozen.
Communities and Local Government
Zimbabwe (Resettlement Scheme)
The Minister for Local Government (John Healey): There are an estimated 3,000 British citizens and British nationals in Zimbabwe with the right of abode in the UK who are 70 or over or who are vulnerable because of their care needs or medical conditions.
The Government’s advice to vulnerable British people and their families has been that if they are concerned about the situation in Zimbabwe they should consider their need to remain. This advice has been unchanged since 2007 and still stands.
But the Government are concerned about older and vulnerable British people who may be increasingly unable to support themselves in Zimbabwe and who are unable to return to the UK without assistance. We recognise that a power-sharing accord has now been agreed and that Morgan Tsvangirai was sworn in as Prime Minister on 11 February. However, some British people have been badly affected by the collapse of Zimbabwean infrastructure and we cannot expect this to be put right overnight. They are facing severe difficulties getting access to the food, medicines and care they need.
The Government are therefore ready to offer assistance in resettling in the UK to those older and vulnerable British people who are unable to make their own arrangements to leave and unable to support themselves financially in Britain. The Government are making arrangements to receive, assess needs of and support those eligible British citizens and British nationals with the right of abode who wish to resettle in the UK, including through early access to benefits.
We are putting in place reception arrangements and provision for appropriate accommodation and support. The Local Government Association, ADSS housing associations, local authorities and charities are involved in discussions on practical support and funding. The costs of this programme will be met by Government.
This is a cross-Government programme, involving a number of Departments, which the Prime Minister has asked me to co-ordinate.
We are informing older and vulnerable British people in Zimbabwe of the assistance available through the British Embassy in Harare. It is difficult to anticipate the extent of interest in this offer, but we estimate that up to 750 people may wish to come to the UK over 18 months.
The British Embassy is not advising British people to leave Zimbabwe and continues to provide a full range of consular services to those who remain.
Foreign and Commonwealth Office
NATO Parliamentary Assembly
The Secretary of State for Foreign and Commonwealth Affairs (David Miliband): My hon. Friend the Member for Wakefield (Mary Creagh) has replaced my hon. Friend the Member for Glasgow, North (Ann McKechin) as a Member of the United Kingdom delegation to the NATO Parliamentary Assembly.
Health
Funding (Department of Health and Food Standards Agency)
The Minister of State, Department of Health (Mr. Ben Bradshaw):
Subject to the necessary Supplementary Estimate, the Department of Health’s element of the Departmental Expenditure Limit (DEL) will increase by £26,403,000 from £98,565,431,000 to £98,591,834,000 and the Administration Cost Limit will be increased by £3,280,000 from £219,163,000 to £222,443,000. The
Food Standards Agency DEL increases by £700,000 from £137,720,000 to £138,420,000. The overall DEL including the Food Standards Agency will increase by
£27,103,000 from £98,703,151,000 to £98,730,254,000. The impact on resource and capital are set out in the following table:
| Change | New DEL | ||||
| Voted £million | Nonvoted£million | Voted £million | Nonvoted£million | Total £million | |
| *The total of “administration budget” and “Near cash in Resource DEL” figures may well be greater that the total resource DEL, due to definitions overlapping. **Depreciation, which forms part of resource DEL, is excluded from the total DEL since the capital DEL includes capital spending and to include depreciation of those assets would lead to double counting. | |||||
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