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HM Revenue and Customs: Operation Gestalt

Lord McKenzie of Luton: My honourable friend the Financial Secretary (John Healey) has made the following Written Ministerial Statement.

In a letter to the Chairman of the Treasury Select Committee on 29 September 2004 (a copy of which was deposited in the Library of the House), I reported that the Metropolitan Police Service (MPS) was conducting an investigation—Operation Gestalt—into Customs and Excise's handling of a series of excise diversion frauds on the London City Bond in the mid-1990s. I can today update the House on significant developments in the police investigation.

HM Revenue and Customs (HMRC) yesterday received confirmation that the Crown Prosecution Service (CPS) has considered a report from the MPS relating to allegations of non-disclosure to the Butterfield review involving two very senior then serving officers, Terry Byrne and David Pickup, and also Sir Richard Broadbent, former chairman of Customs and Excise. The CPS has concluded that there is insufficient evidence to charge any of these individuals with a criminal offence and that further work on this matter would not be justified.

The chairman of HMRC, David Varney, has confirmed that the department will now discuss with David Pickup a return to work in accordance with the department's procedures. Terry Byrne retired from HMRC in November 2004 on reaching the age of 60.

I made clear in my letter of 29 September 2004, and HMRC has also consistently stated, that it would be wrong and unjust to prejudge the outcome of investigations, and that the term "under investigation" should not be taken to mean that charges would follow. This has been an extremely difficult and unpleasant period for the individuals concerned. It is, however, necessary that reports of serious alleged wrongdoing are properly and independently investigated.

The MPS's Operation Gestalt investigation continues. A total of 12 current and former HMRC officials at present remain under investigation. The department has in place established contact and welfare arrangements to support the officers affected.
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The priority of the department continues to be to ensure that: the MPS receives HMRC's full and active co-operation with the investigation; the rights of all individuals involved are protected; and the department's ongoing law enforcement operations are maintained while the investigation is ongoing.

National Probation Service and National Offender Management Service: Annual Report

The Minister of State, Home Office (Baroness Scotland of Asthal): My honourable friend the Parliamentary Under-Secretary of State for the Home Department (Fiona Mactaggart) has made the following Written Ministerial Statement.

The National Probation Service has today published its annual report for 2004–05. The Prison Service and the Office for Contracted Prisons published their annual reports and financial accounts for 2004-05 on 19 July. Copies of all the annual reports have been placed in the Library.

Performance against all the National Offender Management targets for 2004-05 is indicated in the table below. A full breakdown of the performance of both public and contracted prison establishments, in relation to applicable key performance indicators (KPIs), will be placed in the Library. The breakdown includes updated figures for those establishments managed by the Office for Contracted Prisons.
Performance against the National Offender Management Targets for 2004–05

Public Protection Targets
Category A Escapes00
Total Escapes from Prisons and Prison Escorts
Less than0.05%0.03
Escapes from
Contracted Escorts (NOMS)
1:20,0001:38,894 Reducing Re-Offending Targets
Education Awards (Probation Service)Basic Skills starts
Basic Skills Awards achieved
Education Awards (Prisons)Basic skills awards achieved56,08063,628
Key Work Skills awards achieved
Drug Treatment and Testing Orders13,00010,322
Of which lower intensity orders1,000329
Drug Treatment and Testing Order successful completions35%36%
Intensive Control and Change Programmes started1,790841
Intensive Control and Change Programmes completed1,100125
Enhanced Community Punishment completions30,00038,473
Offending Behaviour Programmes completions (Probation Service)15,00015,595
Offending Behaviour Programmes (Prisons)7,0008,364
Of which Sex Offender Treatment programmes1,1801,232
Of which Living Skills Programmes5,8207,132
Drug Treatment Programmes Completions (prisons)3,9004,902
Employment, Training and Education (ETE) place on release38,00041,146
Breach proceedings initiated within 10 days90%87%
Proportion of orders and licences in which the offender complies70%79%
Justice and Reparation Targets
Timely Arrival at Court (NOMS)75%79%
Pre-Sentence Reports to the Magistrates courts within 15 days90%73%
Victim Contact85%93%
Decency Targets
Mandatory Drug TestsLess than10%11.8%
Self-inflicted DeathsLess than112.8 per100,000113.7 per100,000
Serious AssaultLess than1.56%1.56%
Overcrowding (public prisons)Less than24%23.7%
Overcrowding (contracted prisons)Less than34.5%26.1
Organisational Targets
Staff Sickness (public prisons only)Less than12.5 days/person12.7
Staff Sickness (Probation Service)Less than9 days/person12.3
Ethnic Minority Staff (public prisons only)At least6%5.7%
Regionally set employment targets for ethnic minority staff8.4%10.91 (Apr-Dec 2004)
Clear proposals in court reports for minority ethnic offenders95%97%

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Uganda: Poverty Reduction

The Lord President of the Council (Baroness Amos): My right honourable friend the Secretary of State for International Development (Hilary Benn) has made the following Written Ministerial Statement.

I have decided to reduce UK budget support this year to Uganda by £20 million. £15 million of this money will be used to provide humanitarian relief in northern Uganda, and £5 million will be held back until after the elections in February (when a decision will be taken on whether to disburse it). Overall this
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will cut UK poverty reduction budget support (PRBS) to Uganda to £30 million, below the 2004–05 figure of £35 million.

The UK and Ugandan Governments signed a new poverty reduction budget support (PRBS) arrangement in December 2004 for a grant of up to £145 million over three years. This arrangement links budget support to reforms detailed in Uganda's poverty eradication action plan (PEAP), including macro-economic management and governance. The criteria which guide our disbursement are drawn directly from the PEAP and include both the "prior actions" agreed for the World Bank's Poverty Reduction Support Credit (PRSC) and specific indicators on governance.

We disbursed £35 million out of our £40 million allocation in 2004–05, but cut £5 million due to concerns about the progress of Uganda's political transition leading up to multi-party elections in 2006.

The disbursement decision for 2005–06, which has just been made, follows a further assessment of Uganda's performance. In a number of respects this is still strong. Growth in 2004-05 was 6 per cent and Uganda is on track to meet almost half of the MDG targets, although additional efforts will be required to achieve them all. Negotiations on the PRSC with the World Bank have now concluded. Ten of the eleven "prior actions" have been successfully completed, but worryingly a "prior action" on the execution of the budget has only been partially met because expenditure on public administration significantly overran. Our governance assessment has highlighted concerns about: delays in putting in place the legal basis for multi-party elections; the continuation of state financing for the movement system in a new era of multi-party politics; and more recently, and particularly worryingly, about issues associated with the arrest and trial of the leader of the Forum for Democratic Change, one of the main parties that plans to contest the election.

The decision to reduce the PRBS commitment to £30 million in 2005–06 takes into account the need to ensure that Uganda's budget is still able to finance key expenditures that are crucial to improve the lives of poor people.

The decision to reallocate £15 million to humanitarian assistance provided through the UN reflects our concern about the serious humanitarian situation in northern Uganda. This is not being fully addressed by the Ugandan Government or the finance that has so far been committed to humanitarian agencies. Our additional assistance will be focused on providing food and improving access to basic services, especially healthcare.

A decision on the remaining £5 million will be made after the elections in February. We will continue to monitor Uganda's performance closely. I will make a decision on our PRBS commitment to Uganda in 2006–07 in the light of our assessment of Uganda's continuing commitment to the partnership objectives set out in Partnerships for Poverty Reduction: Rethinking Conditionality.

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