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Written Ministerial Statements

Thursday 16 June 2011

Communities and Local Government

Housing and Local Government (Unpublished Research Reports)

The Minister for Housing and Local Government (Grant Shapps): Today the Government are publishing a further group of reports presenting the findings from research projects commissioned by the previous Administration. There is a significant backlog of unpublished reports that were produced by the previous Government and over the next few months we will be publishing further reports in groups, themed on particular topics.

The reports and findings are of general policy interest, but do not relate to forthcoming policy announcements. We are publishing these documents in the interests of transparency and as part of our freedom of information commitment to publish the results of all commissioned research. For transparency, all concluded research work is being published, though some reports may not be as complete or in the format that the Department for Communities and Local Government would normally require.

The four reports published below represent the findings from four DCLG research projects commissioned at a total cost to taxpayers of £161,796 and one report from the Homes and Communities Agency commissioned at a cost of £63,600. These findings cover the topics of housing and local government.

Housing reports

(i) Domestic violence—Assistance for households without dependent children.

This study explored the type of assistance provided by local authorities and also other specialist agencies. This report was commissioned in November 2008 at a cost of £70,000.

(ii) Cumulative impacts of regulations on house builders and landowners.

This report provides expert advice on the returns expected from landowners when selling land for housing and the factors that drive this. This report was commissioned in June 2008 at a cost of £3,000.

Homes and Communities Agency report

(iii) New affordable homes: What for whom and where have registered providers been building between 1989 and 2009.

This report analysed available data and evidence to provide an assessment on how the provision and investment of affordable housing by registered providers has changed over the last 20 years (1989-2009) with more detailed case study work in five local authorities. This report was commissioned in February 2010 and cost £63,600.

Local government reports

(iv) Long-term evaluation of local area agreements and local strategic partnerships: Final report.

The report considers the role of local strategic partnerships and the impact of local area agreements, from the point of view of partnership working, efficiency and service improvement. The report was commissioned in 2007 at a cost of £47,898.

(v) Evaluation of inspiring communities: scoping report including the theory of change and outcomes framework.

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This is a scoping report which includes the theories of change for the various projects—why and how the initiatives should work—and the outcomes framework, showing how success should be measured. The report was commissioned in 2009 at a cost of £40,898.

At a time when public budgets must be reduced, the new Government want to ensure their research delivers best possible value for money for the taxpayer and that sums expended are reasonable in relation to the public policy benefits obtained. My Department has rigorous scrutiny and challenge processes for commissioned research.

New projects will continue to be scrutinised to ensure the methodology is sound and that all options for funding are explored at an early stage. This includes using existing work from other organisations, joint funding projects with other Departments or organisations and taking work forward in-house.

These reports and findings are of general policy interest, but do not relate to forthcoming policy announcements and are not a reflection of the current Government’s policies and priorities. DCLG is publishing these reports in the interests of transparency.

Copies of these reports are available on the DCLG website. Copies have been placed in the Library of the House.


Service Personnel and Veterans Agency

The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan): With effect from 16 June 2011, the Service Personnel and Veterans Agency (SPVA) will cease to have the status of executive agency of the Ministry of Defence (MOD).

The SPVA was formed in April 2007 from the merger of the Armed Forces Personnel Administration Agency (AFPAA) and the Veterans Agency (VA). The purpose of the merger was to provide both serving and retired members of the armed forces and their beneficiaries with a single point of contact for all personnel administration matters, and this has been achieved.

The SPVA will become part of the new Defence Business Services (DBS) in 2013. The SPVA will relinquish its agency status from 16 June 2011 as this is not considered critical to delivering its business, but it will retain its name until it is incorporated into DBS to avoid the unnecessary expenditure associated with re-branding. This change in operating status will have no impact on SPVA’s customers and will achieve staff reductions in the support functions of £319,000 per annum, starting in late financial year 2011-12. Wider savings to Government are also anticipated, in particular the costs incurred in auditing the agency’s annual report and accounts.

Deputy Prime Minister

Diamond Jubilee Civic Honours Competitions

The Parliamentary Secretary, Cabinet Office (Mr Mark Harper): On 1 December 2010 I announced the launch of the diamond jubilee civic honours competitions for the grant of city status and of lord mayoralty (or, in

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Scotland, lord provostship) to mark Her Majesty the Queen’s diamond jubilee in 2012. The closing date for entries was 27 May 2011.

I am pleased to announce that 26 applications for city status and 12 for lord mayoralties have been received. This is a magnificent response to the competition and it is clear an impressive amount of effort has gone into all the applications that have been submitted.

The full list of applicants for city status is:


















Milton Keynes




St Asaph

St Austell


Tower Hamlets


The cities applying for a lord mayoralty are:






Newport (Gwent)




St Albans



The process of assessing the entries will begin shortly. Careful consideration will be given to all applications, after which Ministers will formally provide their advice to Her Majesty, as such honours are awarded under the royal prerogative. The results are expected to be announced early in 2012.

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Energy and Climate Change

Post-Energy Council (Luxembourg 10 June)

The Minister of State, Department of Energy and Climate Change (Charles Hendry): Andy Lebrecht, Deputy Permanent Representative to the EU, represented the UK at the Council.

The Council began with a report by the Commission on the progress of the regulation on energy market integrity and transparency (REMIT). The Commission noted the importance of the issue for the development of the internal energy market and reported that informal trilogues with the European Parliament would begin on 16 June with the aim of reaching a First Reading agreement.

The Council then agreed conclusions on the energy efficiency action plan and the Commission outlined the next steps on energy efficiency, including the publication of a draft energy efficiency directive in June. There were a number of interventions by member states, noting the importance of energy efficiency.

The presidency presented a summary of the informal Energy Council discussion in Hungary on the forthcoming 2050 energy road map. The Commission explained that work would continue over the summer on scenarios for the road map and highlighted the challenges of meeting the 80% to 95% emissions reductions targets and the importance of member states’ decisions on energy mix. The UK noted the importance of the road map setting out potential scenarios to enable each member state to make such decisions. In response to requests from several member states, the Commission said that it would carry out a study for the autumn on the impacts on EU markets of national decisions about energy mix.

The Commission noted the agreement reached by ENSREG on the content of nuclear safety tests and that the tests had begun. The UK emphasised that nuclear security should not be included in the stress tests, being a matter of national security

Poland briefly outlined its plans for its presidency. Key issues will be security of supply and international co-operation, offshore drilling and infrastructure.

The Commission reported on a number of international energy relations issues, including the need for rapid progress over the southern corridor. Ministers discussed the issue of financing for energy infrastructure over lunch.

Environment, Food and Rural Affairs

Environment Council (21 June 2011)

The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman): My right hon. Friend the Secretary of State for Energy and Climate Change and I will represent the UK at the Environment Council in Luxembourg on 21 June.

At this Council, Ministers will take note of progress reports relating to the proposal for a directive on control of major accident hazards involving dangerous substances

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(“Seveso III”) and to the proposal for a regulation regarding the possibility for member states to restrict or prohibit the cultivation of GMOs in their territory.

The presidency will also seek the adoption of Council conclusions on the protection of water resources and integrated sustainable water management in the European Union and beyond, a road map for moving to a competitive low-carbon economy in 2050 and the EU biodiversity strategy to 2020.

The lunch discussion will be on climate change and the status of international negotiations.

The following topics will be covered under “any other business”:

Information from the Commission on aviation/emissions trading scheme implementation;

Information from the Commission on the Conference on the Implementation of the EU Environmental Law (Brussels, 15 June 2011);

Information from the Commission on CSD 19 conclusions and possible way forward to Rio+20;

Information from Romanian delegation on the meeting of Environmental Ministers from the Black Sea Economic Co-operation countries (Bucharest, 31 May 2011) ;

Information from the Dutch delegation on the risks associated with nanomaterials;

Information from the French delegation on the management of cormorants;

Information from the Lithuanian delegation on nuclear installations planned in the EU neighbourhood (Kaliningrad region and Belarus);

Information from the Austrian delegation on new challenges in the light of the Fukushima accident—reflections of countries without nuclear power (Vienna, 25 May 2011);

Information from the Swedish delegation on global, regional and bilateral action on short-lived climate forcers;

Information from the Danish delegation on the use of industrial gas credits under the effort sharing decision;

Information from the presidency and Commission on the outcome of the first meeting of the Open-Ended Ad Hoc Intergovernmental Committee for the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (Montreal, 5- 10 June 2011);

Information from the Slovak delegation on the third meeting of the Conference of the Parties to the Framework Convention on the Protection and Sustainable Development of the Carpathians (Bratislava, May 25-27, 2011) ; and

Presentation by the Polish delegation on the work programme of the incoming presidency.

Food and Catering Services (Government Buying Standards)

The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice): I am pleased to announce that the “Government Buying Standards for Food and Catering Services” has today been published. There are Government buying standards for commonly procured goods and services in 10 major product groups, but this has not previously included food and catering.

These are mandatory on central Government and we will encourage the rest of the public sector to use them. We want to support and develop a profitable and competitive food chain and to ensure a secure, environmentally sustainable and healthy supply of food.

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Where Government lay down standards of production, they should ensure that their own purchases meet these standards.

Therefore, these standards will set an example and provide a clear, credible and workable example for the wider public sector to follow. This is something that has not been done before and has been cited as one of the key barriers to progress in driving up standards of public sector food. In particular, the standards deliver an undertaking for 100% sustainably sourced fish.

DEFRA and Department of Health economists conducted an economic impact assessment on proposals, which we then opened up for review by a wide range of stakeholders ranging from catering and food suppliers, public procurement practitioners and Government Departments to sustainability NGOs and consumer groups. More than 50 responses were received.

In response to the review, some changes were made to the criteria, which were then agreed across Government.

The standards that have been agreed cover:

Sustainably sourced fish.

Animal welfare.

UK or equivalent production standards where this does not increase overall costs.

Higher environmental standards, such as organic or Integrated Production (for example LEAF, or Linking Environment And Farming) for a proportion of food.

Seasonal produce.

Fairly traded produce.

Energy and waste management.


Home Department

Control Powers (11 March - 10 June)

The Secretary of State for the Home Department (Mrs Theresa May): 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 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.

The future of the control order regime

On 23 May 2011, the Terrorism Prevention and Investigation Measures Bill was introduced in the House of Commons. A copy of the Bill can be found on Parliament’s website. The home page for the Bill is:


The Bill makes provision for the abolition of control orders and their replacement with a new, less intrusive and more focused regime. The control order system will continue to operate until its replacement is in force.

The exercise of the control order powers in the last quarter

As explained in previous quarterly statements, control order obligations are tailored to the individual concerned and are based on the terrorism-related risk that individual poses. Each control order is kept under regular review to ensure that the obligations remain necessary and

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proportionate. The Home Office continues to hold control order review groups (CORGs) every quarter, with representation from law enforcement and intelligence agencies, to keep the obligations in every control order under regular and formal review and to facilitate a review of appropriate exit strategies. During the reporting period, three CORGs were held in relation to the orders in force at the time. Other meetings were held on an ad hoc basis as specific issues arose.

During the period 11 March 2011 to 10 June 2011, one new non-derogating control order was made, with the permission of the court, and served. One non-derogating control order which was made, with the permission of the court, during a previous quarter was served during this quarter. A control order already in force at the beginning of this reporting period was revoked on the direction of the court and a new order made and served in its place. Two control orders have been renewed in accordance with section 2(6) of the 2005 Act in this reporting period.

In total, as of 10 June, there were 12 control orders in force, all of which were in respect of British citizens. All of these control orders were non-derogating. Three individuals subject to a control order were living in the metropolitan police district; the remaining individuals were living in other police force areas.

One set of criminal proceedings for breach of a control order was concluded during this reporting period following a CPS decision that prosecution was no longer in the public interest in the light of the revocation of the control order to which they were related.

During this reporting period, 60 modifications of control order obligations were made. Twenty-five requests to modify control order obligations were refused.

Section 10(1) of the 2005 Act provides a right of appeal against a decision by the Secretary of State to renew a non-derogating control order or to modify an obligation imposed by a non-derogating control order without consent. Three appeals have been lodged with the High Court during this reporting period under section 10(1) of the 2005 Act. A right of appeal is also provided by section 10(3) of the 2005 Act against a decision by the Secretary of State to refuse a request by a controlled person to revoke their order or to modify any obligation under their order. During this reporting period two appeals were lodged with the High Court under section 10(3) of the 2005 Act.

On 5 April 2011 a judgment was handed down by the Court of Appeal in BM v Secretary of State for the Home Department [2011] EWCA CIV 366, in relation to the appeal brought by BM against the decision of the High Court to uphold his control order. The Court of Appeal allowed BM’s appeal. It found that the High Court did not consider the correct legal test at the initial review of the control order because it only considered whether the control order was necessary at the date of the hearing and not at the date it was made. It further found that, on the basis of the evidence before it, the control order was flawed from the outset. The Court of Appeal made clear that it only considered the open evidence against BM in reaching this decision. The judgment recognised that the Secretary of State argued that the control order was justified on the totality of the evidence, including closed evidence that was not before them, but found that they should consider only the open evidence that was before them so as to avoid delaying the outcome of this case. The Court of Appeal

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directed that the control order should be revoked 48 hours after hand-down with retrospective effect from the date on which it was made.

On 20 May 2011 a judgment was handed down by the High Court in CD v Secretary of State for the Home Department [2011]EWHC 1273(admin) in relation to the appeal brought by CD under section 10(3) of the 2005 Act against the decision to refuse to remove an obligation that would require him to relocate away from his previous area of residence. The judge dismissed the appeal, concluding that the relocation obligation was a necessary and proportionate measure to protect the public from the risk of what is an immediate and real risk of a terrorist related attack. The judge also found that the Secretary of State should contribute to the travel costs of CD’s family. He made clear that the finding in this case does not mean that a contribution to travel costs should be made in every case of relocation.

Most full judgments are available at: http://www.bailii.org.

Justice and Home Affairs (Post-Council Statement)

The Secretary of State for the Home Department (Mrs Theresa May): The Justice and Home Affairs (JHA) Council was held on 9 and 10 June in Luxembourg. My right hon. Friend the Secretary of State for Justice, the Scottish Cabinet Secretary of Justice, Kenny MacAskill MSP, and I attended on behalf of the United Kingdom, the following issues were discussed at the Council:

(The Council began in Mixed Committee with Norway, Iceland, Liechtenstein and Switzerland (non-EU Schengen states). The presidency reported that preparations for the VIS go-live date of October 2011 were on track. The Commission underlined the importance of member states notifying their preparedness by the end of July to allow time for the necessary legal and technical preparations.

The update on the Commission-led project to implement the central element of the second generation Schengen Information System (SIS II) confirmed that implementation was still on track.

The Council agreed the draft regulation on creating an IT agency. This will now be considered by the European Parliament to establish whether it can be the basis for a first reading deal.

In advance of the June European Council, Ministers held a wide-ranging debate on borders, asylum and migration, adopting conclusions reacting to three Commission communications on immigration issued last month. The UK highlighted that a stable, secure and prosperous future for the region required effective management of migration, mobility and security. Migration should be considered in assessing reform in the European neighbourhood. The global approach to migration provided the tools and principles for partnerships on migration and member state involvement was vital. Dialogue had to be balanced and transparent. On asylum, the UK raised concerns about the emphasis on legislative solutions: the problem was not a lack of rules, but implementation of the existing ones. While agreeing to the draft conclusions, the UK stated that they did not believe that the common European asylum system was in the UK’s national interest and any further opt-in decision would be taken on a case-by-case basis, taking account of national interests. The UK opposed suspension of the Dublin

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arrangements for the return of asylum seekers to their first port of entry into the EU and relocation or burden-sharing options but supported practical co-operation. Finally, the UK said a comprehensive approach to migration had to address the issue of free movement. Public support could not be undermined by fraud and abuse of residence rights and associated benefits. The UK and Frontex figures showed sham marriage was on the rise, with evidence of links to organised crime. The balance between safeguarding rights and protecting citizens was vital. The UK said that this issue should be discussed at a future meeting to meet the Stockholm programme commitments in this area.

The Commission presented proposals to amend Regulation (EC) No 539/2001 which lists third country nationals who must possess visas to cross the external borders of the Schengen area and those exempt from this requirement. The Commission’s amendments also include the introduction of a suspension mechanism to allow for the temporary reintroduction of visa requirements in an emergency situation. It would apply to all current and future countries granted Schengen visa waiver (not just the western Balkans). The Commission stressed that it would be applied only in very exceptional cases and as a last resort. The UK does not participate.

Next the Council discussed elements of amending the Frontex regulation. The Commission underlined the importance of reaching agreement with the European Parliament by the June European Council. Frontex agreed on the need for urgency; the agency was at a critical point and could not continue without a revised regulation. There was general agreement on balancing member state responsibilities for border control with the obligation of others to provide resources to support them. The Commission stated that the respect of fundamental rights was of the highest political importance to both the European Parliament and the Commission; the Council would have to agree to the independent monitoring of return operations. Member states disagreed on another name for the proposed “European Border Guard System”. Discussions on the regulation will continue at COREPER ahead of a further trialogue with the European Parliament next week.

The presidency presented Council conclusions confirming that Bulgaria and Romania had successfully completed the Schengen evaluation process; the Council will discuss accession in September.

Finally the Commission presented the main findings from the first six months of monitoring the impact of granting visa liberalisation to the western Balkans. Even though the large majority of travellers are bona fide, there had been a high number of unfounded asylum applications in certain member states relating to minority populations (especially Roma). The Commission underlined that the western Balkan countries were starting to address these problems. A number of follow-up measures would now be necessary, including targeted information campaigns, increased use of border controls and entry bans, and targeted assistance to minority populations.

Following Mixed Committee, Interior Ministers held a lunchtime discussion on asylum where the Commission presented revised proposals to amend the procedures and reception conditions directives. The upcoming Polish presidency said all their efforts would be focused on agreeing at least a core of a common system by 2012. The UK reiterated that a common asylum system would not be in the UK’s national interest.

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After lunch, the Council resumed with the Commission giving a short update on three legal migration directives: seasonal workers, intra-corporate transferees and the single permit for residence and work on which they hoped the electronic storage of data would allow a way forward. The UK is not participating in these measures.

Next the Council agreed conclusions on establishing priorities in the fight against organised crime over the next two years.

The Commission presented its air cargo security progress report on the implementation of the EU action plan of 30 November 2011. Commissioner Malmström regretted the negative vote at the Regulatory Committee (the preceding day) due to “difficulty” between transport and security officials in member states and called for greater co-operation. The UK expressed “extreme disappointment” at the outcome in Regulatory Committee, emphasised the threat remained significant and that the proposals voted on would significantly improve standards and called for Transport Ministers to reconsider this.

The presidency adopted the Council conclusions aligning internal and external counter-terrorism. The EU counter-terrorism co-ordinator (EU CTC) presented his discussion paper, highlighting the Arab spring, EU engagement in Pakistan and disappointment at the Regulatory Committee vote. The UK welcomed the EU CTC’s paper, specifically the importance of communication; the link between CT and drugs, the rule of law and organised crime; nuclear security, aviation security; political dialogue with the Arab world and progress on EU PNR. The UK agreed the threat remained strong and said that the EU must target efforts on areas of greatest risk (while complementing member states’ actions) and welcomed the EU Pakistan strategy. The UK asserted the importance of EU passenger name records, committed to supporting the communicators’ network, thanked the Presidency for the conclusions on aligning internal and external CT and highlighted the launch of the UK’s new Prevent strategy.

Under AOB there was a presentation of the project “Police Equal Performance" which is designed to enhance law enforcement capacity in cross-border activities in the western Balkans; a finalised proposal should be completed by the autumn. The upcoming Polish presidency gave a presentation on their priorities which included the common package for asylum; action to tackle synthetic drugs; the Eastern partnership, civil protection; and management of the external border.

The justice day commenced with the Council reaching a general approach on the directive on combating attacks against information systems. The UK welcomed the text, although noted reservations about the developing trend of providing in all such instruments for extra-territorial jurisdiction based on jurisdiction; this should not become the default approach.

Next, the Commission introduced its package of proposals on corruption, including a Commission decision on an anti-corruption reporting mechanism and a paper on EU accession to GRECO (the Council of Europe’s Group of States Against Corruption). The Commission thought Europe had to take this in hand and that corruption had a significant cross-border element, hence the importance of EU involvement in improving the patchy implementation of existing international standards. The Commission was mindful of avoiding additional burdens through the reporting mechanism.

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The presidency secured a partial general approach on articles 1 to 18 and Y of the draft directive on the European Investigation Order (EIO), although acknowledged that aspects of the text might need to be revisited at a later stage. Many member states congratulated the presidency on the progress made over the last few months, although it was clear that substantial concessions had been made across the Council, with the grounds for refusing to execute an EIO being the most controversial issue. The UK could not support the current text, maintaining its parliamentary scrutiny reservation. The UK disagreed with the current exceptions to the dual criminality check which executing states could undertake in respect of the most sensitive and serious investigative measures. The drafting of the provision on ne bis in idem might also need to be revisited at a later stage. The incoming Polish presidency intends to continue the negotiations.

Next the Council adopted conclusions on the memory of crimes committed by the totalitarian regimes in Europe. Several member states intervened to recall the importance of action in this area and said they would prefer a legally binding instrument in this field.

The Council then agreed the proposed resolution establishing a road map for future action on protection of victims’ rights. The road map is a statement of political intent, and sets out the basis for future legislative measures. The UK agreed the road map.

The Commission also presented the recently published victims package, including a draft directive on rights in criminal proceedings, a regulation on protection measures in civil matters and a communication on strengthening victims’ rights in the EU. The UK noted the presentation and has yet to make its decision on the opt-in for the directive and regulation.

The presidency also introduced its political guidelines which aimed to set the direction for fundamental issues in the matter of the proposed regulation on succession and wills. The compromise was welcomed by the majority of member states. The UK was grateful for explicit commitment to revisit some issues at a later point to facilitate its possible participation.

Over lunch, Ministers discussed a presidency paper on the future of EU criminal policy.

After lunch the Council noted the proposal for a regulation on electronic publication of the Official Journal of the European Union, which would give proper recognition and legal certainty to the electronic version. As some member states (including the UK) could not lift their parliamentary scrutiny reservations, the text could not be forwarded to the European Parliament for consent, but agreement would enable quick progress to be made should reservations be lifted.

The Council agreed the revised road map on implementation of the European e-justice action plan and endorsed the report of the working party on e-law, without discussion.

The presidency gave an update on the state of play on negotiations on the accession agreement of the European Union to the European convention for the protection of human rights and fundamental freedoms. The Commission expressed the view that considerable progress has been made in the timeframe and they looked forward to continuing work with the Council of Europe.

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Then the Commission introduced the recently published communication on protection of the financial interest of the Union through criminal law and administrative investigations.

The Commission presented its communication on protecting EU funds against fraud and other criminal conduct. Commissioner Reding highlighted the proposed reform of the internal structure of Eurojust, in order to provide OLAF (the EU’s anti-fraud office) with a judicial partner, and the importance that a European public prosecutor (EPP) could play in protecting public money across EU. The Government have made it clear that they will not participate in an EPP.

There was a presentation on the missing children Europe conference that took place on 25 and 26 May 2011. The presidency and the Commission recalled the successful conference to raise awareness of the 116000 hotline for missing children, although were disappointed that a substantial number of member states had not yet fully implemented the helpline, the deadline for which had now passed. The UK has implemented the hotline and it is fully operational.

Slovenia also updated delegations on the Brdo conference of the western Balkans, held on 15 April at Brdo pro Kranju, which focused on improving judicial co-operation in criminal matters, in particular in relation to organised crime and asset recovery.

Germany also informed the Council of its impending accession to the network for legislative co-operation, which would take place on 17 June at the next meeting of the network, in Budapest.

Finally, Poland presented its priorities for the presidency, which begins on 1 July 2011, and confirmed that they would focus on protection of citizens’ rights. They hoped to make progress on the regulation on succession and wills and the Brussels I regulation and prioritise the Commission’s package of proposals on victims. Poland also indicated that it would hold discussions on EU contract law at the informal JHA Council on 18 and 19 July.


Chiltern Railway (Penalty)

The Parliamentary Under-Secretary of State for Transport (Norman Baker): I have decided to impose a penalty on Chiltern Railway of £350,000, having taken account of the outcome of a statutory consultation process.

The penalty relates to four breaches of the terms of the company’s franchise agreement which occurred before management of Chiltern transferred to Arriva UK trains in early 2011. These involved late delivery of two station improvements, and two timetable changes which were not properly authorised by the Department for Transport and which could, if un-rectified, have significantly reduced the value of the franchise to the Department. These breaches were in the context of the company’s poor performance in meeting a number of its detailed contractual obligations over a substantial period.

The Department imposes such penalties very rarely. When it does so, the aim is to encourage train operators to comply with their contractual obligations to the Department under franchise agreements. It should be emphasised that the penalty does not relate to Chiltern’s operational performance. As a number of consultees

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commented, the company is noted for its high standard of performance and customer satisfaction, and for the substantial investment it is making in improving services.

The penalty has been reduced from the proposed level of £500,000 in the light of the responses to the consultation, and in particular the welcome and clear assurances from Chiltern that it has stepped up its commitment and oversight at senior management level to ensure compliance with the terms of its franchise.

The receipts from the penalty will be retained by the Department and reinvested in transport. No decision has been made at this stage as to the final use of the funds.

Thameslink Rolling Stock

The Minister of State, Department for Transport (Mrs Theresa Villiers): The Department for Transport is today announcing the identity of the preferred bidder for the new fleet of trains required for the Thameslink programme. This represents a significant milestone in the delivery of this crucial rail upgrade project.

The £6 billion Thameslink programme includes major improvements to central London stations such as Blackfriars, Farringdon and London Bridge and will generate significant benefits for passengers. It will make travelling across London and the south-east faster, easier and more reliable and will reduce crowding on some of the busiest sections of London’s transport network. It will see the introduction of a new generation of electric commuter trains operating with metro-style frequency at up to 24 trains per hour through the central section during the morning and evening peaks.

This new fleet of trains comprises some 1,200 carriages. By the end of 2018, this will almost double the capacity of Thameslink’s core central London section in the peak periods. It is a major part of the Government’s commitment to introduce an additional 2,100 carriages on to the rail network by 2019, as announced in November of last year. The new Thameslink fleet is expected to release existing carriages for use elsewhere on the network, particularly as further routes are electrified, for example in the north-west of England and the Thames Valley commuter lines.

The competition to supply trains and maintenance services for the Thameslink programme was designed and launched under the previous Administration in 2008, in accordance with EU procurement procedures. In October 2009 the previous Government announced that the two remaining short-listed bidders were Siemens Plc with Cross London Trains (XLT) and Bombardier Transportation UK Ltd with VeloCity. Since then, a great deal of work has been undertaken by the Department with both bidders to refine proposals and to secure best and final bids.

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Following the completion of the process, I can announce today that the preferred bidder for the supply of the new Thameslink trains will be Siemens Plc with Cross London Trains (XLT)—a special purpose company comprising of Siemens Project Ventures GmbH, Innisfree Ltd and 3i Infrastructure Plc.

The Siemens-led venture will deliver the first new train on to the network by the start of 2015, with the order complete by the middle of 2017. The new trains will offer a step change in passenger experience, with greater passenger carrying capacity, improved passenger communication and easier access for passengers with specific mobility needs. They will also deliver high-levels of reliability with the owner and manufacturer of the trains liable for financial penalties if the trains do not perform.

The choice of Siemens Plc with Cross London Trains (XLT) as preferred bidder represents the best value for money for taxpayers. Siemens is today confirming that this announcement will create up to 2,000 new jobs in their UK operations and across the UK supply chain in train component manufacturing, with a particular focus in the North-East of England, and in the construction of the depots and subsequent maintenance of the new fleet of trains.

These jobs are additional to those created by the Thameslink infrastructure works which are currently underway. At the peak of construction activity—during the reconstruction of London Bridge station from 2013 to 2018—we expect around 3,000 people to be directly employed on the Thameslink infrastructure works as a whole, with as many again employed in related jobs in the wider community. Taking account of other investments in rail announced by this Government, including Crossrail and the Inter City Express programme, the total peak construction employment rises to around 17,000 people.

In order to maintain momentum on the Thameslink programme, it is important that discussions with Siemens Plc and Cross London Trains move forward quickly to enable financial close to occur as soon as practicable. That is, of course, subject to the Government being satisfied that the proposal continues to offer value-for-money as the commercial discussions are concluded.

The alternative bidder, Bombardier Transportation UK Ltd with VeloCity—a special purpose company comprising Bombardier Transportation (Holdings) UK Ltd, RREEF Ltd, Serco Holdings Ltd, Amber Infrastructure Group Ltd and SMBC Leasing (UK) Ltd—also presented an attractive proposal and it is our intention to retain them as the reserve bidder.

This announcement of the preferred bidder for these new trains marks further progress in the delivery of the Thameslink programme, and reinforces the Government’s commitment to upgrading the capacity, quality and reliability of our transport infrastructure and ensuring high value for money for the taxpayer in delivering major rail projects.