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House of Lords

Tuesday, 11th December 2001.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Southwark.

Gibraltar: Financial Services

Lord Waddington asked Her Majesty's Government:

    What are the implications for the economy of Gibraltar of any challenge to Gibraltar's position as an offshore financial centre.

The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, Her Majesty's Government fully support international financial initiatives that promote enhanced co-operation on taxation and regulatory issues, including through the IMF, the OECD harmful tax practices initiative and the EU tax package. We believe that Gibraltar's finance sector can continue to flourish within the framework of those initiatives and we are in consultation with the Government of Gibraltar on those issues. Gibraltar co-operates with the appropriate international bodies and was inspected earlier this year in accordance with the financial action task force criteria and the IMF.

Lord Waddington: My Lords, I thank the Minister for that full and helpful reply. Are the Government confident that Gibraltar's financial services industry, which was set up with the encouragement of the British Government, will not be undermined by any action of the European Commission? How are the Government going to persuade the Commission to spend less time looking at Gibraltar's taxation arrangements and more time protecting British citizens in Gibraltar from interference by Spain in their right of free movement?

Baroness Symons of Vernham Dean: My Lords, the Government are confident that Gibraltar's financial services industry will not be undermined. There are many initiatives in progress—non-tax initiatives as well as the taxation initiatives to which the noble Lord referred, which include the EU tax package and the directive on taxation of savings. We do not believe that either of those will harm Gibraltar. We believe that Gibraltar is in a position to comply. As the noble Lord knows, we have also been pursuing the other matters that he raised through the European Union. I hope that we shall continue to be able to make progress on those issues.

Lord Hardy of Wath: My Lords, will my noble friend comment on the anxiety in Gibraltar about Spain's attitude in regard to telephone communications?

Baroness Symons of Vernham Dean: My Lords, we are discussing that with the Spanish Government. We

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are concerned about the various telecommunications problems that Gibraltar is experiencing. The Commission is fully aware of our concerns. We have raised the issue with the Spanish Government at official and ministerial level. As my noble friend may know, Spain has agreed to increase the total number of telephone numbers available to Gibraltar from 30,000 to 100,000. We hope that that constructive first step will help to alleviate the immediate shortage.

Lord Howell of Guildford: My Lords, does the Minister agree that, with 20 per cent of Gibraltar's GDP now coming from financial services, there is the potential for a flourishing development of that business? If Gibraltar has greater self-determination in the future, it could become a very active and effective micro-state. Will she assure us that nothing is being raised in the current negotiations that could put obstacles in the way of that development? Does she also agree with the recommendation of the Foreign Affairs Select Committee in another place that if Spain does not normalise border relations as they should be normalised, the British Government should not hesitate to invoke Article 227 of the Treaty of Rome in dealing with the matter?

Baroness Symons of Vernham Dean: My Lords, the noble Lord is right. Gibraltar's financial sector accounts for 20 per cent of its GDP. That is a remarkable growth from virtually nothing 10 years or so ago. Over the years, successive British governments have welcomed and supported the development of the financial sector and we shall continue to do so. Part of the way in which we are able to support the financial sector is through good regulation to ensure its long-term future and to maintain its reputation, not only in Gibraltar, but in a number of our overseas territories. We have also regularly defended Gibraltar's interests in international bodies. For example, earlier this year we successfully defended Gibraltar's record on money laundering and last summer we refused to give in to unreasonable Spanish demands on the OECD initiative.

The noble Lord also raised a point about the European Union. We are trying to resolve some of the difficulties in our discussions with Spain, but we have not ruled out turning to the European Union if necessary.

Lord Wallace of Saltaire: My Lords, I have previously noted that British dependencies account for a significant proportion of the world's offshore financial centres. While they serve useful functions, there are also a whole range of semi-legal and non-legal activities associated with all offshore financial centres. Do the Government have a clear strategy for the whole range of British dependencies that now operate as offshore financial centres, several of which have had substantial increases in their activities in recent years?

Baroness Symons of Vernham Dean: My Lords, I believe that Her Majesty's Government are addressing

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those issues. I did so when I was the Minister responsible for the overseas territories, my noble friend Lady Scotland did so when she took over that position and my noble friend Lady Amos does so. A wide range of issues is involved, including money laundering and terrorist financing. Gibraltar has been investigated but it has been decided that it should not be blacklisted or included among those countries that are subject to further queries in relation to such issues. Another issue includes tax initiatives, which was raised by the noble Lord, Lord Waddington. We are looking at OECD harmful tax practices and, again, we hope that Gibraltar will be in a position to comply with the OECD exercise. Other issues include the EU tax package. That range of issues applies to Gibraltar and the whole strategy must be applied to our overseas territories as a group.

Lord Barnett: My Lords, while no one would wish to damage an excellent financial services sector, can my noble friend assure us that action is being taken to deal with money laundering, including the laundering of terrorist money—assuming it can be found? In that context, there is also the question of tax evasion, which undoubtedly often takes place in some of those offshore centres.

Baroness Symons of Vernham Dean: My Lords, the EU directive on the taxation of savings is designed to deal with tax evasion. The United Kingdom wants that legislation to go ahead. It is important because it deals with the very issue of tax evasion. The whole purpose of the proposal—it is currently a draft proposal—is to create a level playing field, which we all need in this respect. We continue to press other countries, including, as I am sure my noble friend knows, the United States and Switzerland, to implement equivalent measures in those countries.

NHS: Decontamination Services

2.46 p.m.

Baroness Knight of Collingtree asked Her Majesty's Government:

    What action they propose to take with regard to the report on the inadequate sterilisation of surgical instruments made in the BBC XPanorama" programme of Sunday, 11th November.

The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, over the past year, we have carried out a comprehensive survey of decontamination facilities and practices in the NHS. Those hospitals falling below the necessary standard were required to produce action plans. As a result, all NHS acute hospitals in England now have access to satisfactory decontamination services. The results of that work, and a comprehensive survey, are being published today.

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Baroness Knight of Collingtree: My Lords, is it correct that the Government asked an expert in this field, Mr David Hurrell, to investigate the effectiveness of the methods used to sterilise hospital instruments in the NHS? If so, why was it that after Mr Hurrell produced his report and the Government had read it, he was given orders to keep it strictly confidential and to destroy all copies of it, as the XPanorama" programme disclosed? Is not the chairman of the panel investigating CJD quite right to say:


    XIt is astonishing to hold back such information from the public"?

Finally, since Scotland has made similar information public, why cannot we have the same openness in England?

Lord Hunt of Kings Heath: My Lords, the snapshot survey to which the noble Baroness referred is being published alongside the full survey that the Government are publishing today. The snapshot survey was a small-scale survey that was based on a limited number of NHS trusts, and it informed the advice and guidance that was given to the NHS. It was followed by a full-scale survey and a requirement for action plans from those NHS trusts that were not producing adequate services. As a result, all acute trusts are providing satisfactory services in relation to decontamination. The snapshot survey has informed the whole process. It was undertaken during the past two years and it, too, is being published today.


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