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Prior to the closure of the consultation period on 30 September 2007, the Government received a total of 23 substantive responses from a range of groups, including industry and non-governmental organisations, and over 5,000 brief emails and letters. These have now been published on the BERR website at www.berr.gov.uk/europeandtrade/strategic-export-control/legislation/export-control-act-2002/review/index.html.

Since the public consultation period closed, the Government have been analysing the responses and considering the case for change. The initial response commits the Government to introduce change in a number of areas of significant concern. Notably it puts into action the commitment announced by the Prime Minister, in his Mansion House Speech on 12 November 2007, to extend export laws to control brokering and trafficking of small arms by UK persons anywhere in the world and to give consideration to extending these controls to cover other weapons of concern.

The initial response also commits the Government to:

extend the coverage of extra-territorial trade controls to include trading in MANPADs (ie portable weapons designed to fire missiles at aircraft) and those cluster munitions which cause

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unacceptable harm to civilians when carried out by UK persons anywhere in the world;rationalise the licensing treatment of long range missiles and unmanned air vehicles; add “sting sticks” to the current UK list of torture equipment, to which the most stringent controls are applied; and start EU negotiations to introduce a new “torture end use control” which will allow all EU states to bring under control any item which is known to be for use in torture.

The Government are currently undertaking further research and consultation with a view to reaching an agreement on some of the other change options that have been proposed. We hope to publish a further response to the change proposal in spring 2008.

Once the Government have finalised their position, they will aim to introduce the new legislation in three stages. The addition of sting sticks to the UK list of torture equipment is relatively straightforward to implement; this will be our first priority and we will act with immediacy. In the next stage we will then focus on the more complex changes to the controls on small arms, MANPADs and cluster munitions, so that change in these areas of high concern is also implemented speedily. In the final stage, the Government will introduce any further changes that may be necessary following further consideration, for example the potential extension of extraterritorial trade controls beyond small arms, to other types of weapons; the case for strengthening of controls on the export of non-controlled equipment for military end use in destinations of concern and introducing a register of traders in military equipment.

Financial Reporting Council: Funding

The Minister of State, Foreign and Commonwealth Office & Department for Business, Enterprise and Regulatory Reform (Lord Jones of Birmingham): My honourable friend the Parliamentary Under-Secretary of State for Trade and Consumer Affairs (Gareth Thomas) has made the following Written Ministerial Statement.

The Financial Reporting Council (FRC) is the UK’s independent regulator and standard setter for accounting, auditing and the actuarial profession. The FRC’s remit was expanded in 2004 as a result of the Government’s review of audit and accounting regulation, and again in 2006 to include actuarial standards and regulation.

The Government believe the FRC has adapted well to its new responsibilities, and in particular welcome the recent changes it has made to its governance arrangements to increase its effectiveness and efficiency. The Government remain strongly supportive of the FRC. The FRC’s operating bodies continue to exercise functions delegated to them by the Secretary of State, and indeed the Secretary of State is in the process of updating the delegation of functions concerning audit regulation in line with the Companies Act 2006 and the Audit Directive.



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Corporate reporting and governance in the UK are widely recognised domestically and internationally as being of a very high standard generally. The FRC’s integrated and market-led approach to regulation underpins these standards. This approach continues to receive strong support from companies, investors, the accountancy profession and other stakeholders.

For many years the Government contributed one-third of the FRC’s core operating costs for its responsibilities for accounting, auditing and corporate governance. However, this position is not consistent with the funding arrangements for other similar regulatory bodies such as the Financial Services Authority and the Pensions Regulator, or with funding for the FRC’s actuarial regulation. Nor does it sit well with the FRC’s new board, which is now composed largely of private sector rather than ministerial appointees. The Government have therefore concluded that, as a market-led regulator, the FRC should in future be funded largely by market participants.

The FRC will consult market participants on the options for new funding arrangements. In order to allow an orderly transition to stable, new, long-term funding arrangements, the Government have confirmed that they will continue to make a substantial contribution to the FRC’s costs for at least the 2008-09 financial year.

Immigration: Migration Reform

The Parliamentary Under-Secretary of State, Home Office (Lord West of Spithead): My honourable friend the Minister of State for Borders and Immigration and Minister for the West Midlands (Liam Byrne) has made the following Written Ministerial Statement.

Over the next year, the Government will deliver the biggest shake-up of the immigration system for over 45 years. As part of these reforms I am today laying the first of a series of new immigration rules implementing the points-based system (PBS). The PBS will build on a package of measures already being introduced to deliver our four objectives of protection, prevention, accountability and compassion.

Steps to strengthen our border protection will include; checking fingerprints before we issue a visa, screening all travellers against watch-lists and introducing a single border force with police-like powers for frontline staff. The PBS will form part of a robust system that is designed to prevent illegal migration. Associated measures will include big fines for employers who don't make checks and compulsory ID cards for foreign nationals make checks easier. We will continue to welcome those who promise to abide by the rules but we will hold to account those that break the rules, including automatic deportation for those who commit a serious offence.

The new rules for the points system strengthen our power to automatically refuse applications in which deception is used. Those who breach our immigration laws will be barred from returning to the UK for a fixed period of up to 10 years. The new rules also begin to implement the PBS Tier 1 (General) route for highly skilled migrants.



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Separately from the PBS changes, we are laying today amendments to the immigration rules that will restrict migrants in certain circumstances from taking employment as a doctor in training.

General Grounds for Refusal

The highly skilled tier will let Britain recruit some of the most successful people in the world. At the same time, we are toughening the immigration rules to make it easier to keep out migrants who we do not want. All PBS migrants will need to provide original documents to prove that they are entitled to the points they claim. Where we have any suspicions about the documents, we will conduct rigorous checks and will disregard any document that we cannot verify. Any application in which deception is used will be refused automatically.

Under the new rules, those who try to cheat their way into Britain by lying in their immigration applications will automatically be refused. Those who breach our immigration laws will be barred from returning to the UK for a fixed period of up to 10 years. This sends out the message that, although we welcome highly skilled migrants who wish to contribute to our society, we will not tolerate those who do not play by the rules.

Anyone who has used deception when applying for a visa will have any future applications to come here refused for 10 years. Anyone who has used deception in any other application, or committed any other breach of the rules, will be refused permission to come back for the following periods, depending on how they left the UK after doing what they did:

ten years if they were removed or deported;five years if they left voluntarily at public expense (eg through an assisted voluntary return); orone year if they left voluntarily at their own expense.

Where migrants have left the UK at public expense, we will also require them to repay the cost of their departure if they want to return, once we have introduced primary legislation that allows us to do so.

Tier 1 (General)

We are implementing the PBS Tier 1 (General) route for highly skilled migrants, and their dependants. The route will be open to migrants applying in-country from 29 February 2008; and open to applicants applying overseas in India from 1 April 2008. The route will be opened to all applicants applying overseas by the summer. Tier 1 (General) builds upon the success of the highly skilled migrant programme (HSMP) in attracting and retaining the most talented migrants who have the most to contribute economically.

PBS Tier 1 (General) will create a rigorous and single stage application process. India is our most important market for Tier 1 (General) so we are starting there.

I announced PBS fees in a Written Ministerial Statement laid on 30 January.



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The points-based system will be simpler, with clearer and more consistent outcomes for all parties. We are laying immigration rules today that will support those objectives by:

simplifying the process for introducing specified application forms and procedures for applications or claims in connection with immigration.amending the rules for indefinite leave to remain as a work permit holder to allow time spent as a highly skilled migrant or PBS Tier 1 (General) to count towards the current five-year qualifying period for settlement. This will correct an inconsistency in the immigration rules whereby time spent as a work permit holder can count towards an application for indefinite leave to remain as a highly skilled migrant, but time spent as a highly skilled migrant does not count towards an application for indefinite leave to remain as a work permit holder.

Doctors in training

There are a limited number of postgraduate and speciality training posts in the NHS and in recent recruitment rounds significant numbers of UK-trained doctors have been displaced by doctors who have trained abroad. We are therefore amending the immigration rules to reduce the level of competition for training posts in the short-term.

Highly skilled migrants, Tier 1 (General) migrants and their dependants will, in certain circumstances, have a condition imposed on their leave to enter or remain in the UK prohibiting them from taking employment as a doctor in training. This condition will not apply to migrants already in the UK with leave as a highly skilled migrant or as a postgraduate doctor/dentist undertaking the foundation course. These restrictions will be temporary pending the Department for Health implementing a sustainable solution to NHS recruitment issues.

Local Government: Future Unitary Structures

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Andrews): My honourable friend the Minister for Local Government (John Healey) has made the following Written Ministerial Statement.

Following our announcement of 5 December [Official Report, col. 65WS] on decisions on unitary proposals, I have today requested the Boundary Committee under Section 4 of the Local Government and Public Involvement in Health Act 2007 to advise on certain matters respectively relating to the unitary proposals made by Exeter City Council, Ipswich Borough Council, and Norwich City Council.

These proposals are three of the 26 proposals submitted by councils in response to the Secretary of State’s Invitation to Councils issued on 26 October 2006.

On the basis of her judgments that there was not a reasonable likelihood that these proposals would meet all of the outcomes specified by the five criteria set out in the invitation, the Secretary of State is at present

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not minded to implement these proposals. However, she believes, having regard to the circumstances of each area and to certain strengths that the proposals possess, notwithstanding her assessment of them against the criteria, that there could be alternative proposals covering the whole or part of the wider county area which would achieve those outcomes.

We have requested the Boundary Committee to advise on these proposals by 31 December 2008. We have in parallel issued guidance under Section 6 of the Act to which the Boundary Committee must have regard in making a recommendation or alternative proposal to the Secretary of State.

I have placed copies of the request and guidance in the Library of the House and they are also available on the departmental website.

The Secretary of State has specified in her request that the matters on which the committee’s advice is sought include whether for the areas affected by these proposals—in each case the city or borough area and the remaining county area—there could be alternative unitary proposals that would meet the five criteria specified in the request.

Our request also specifies the possibility of the Committee making alternative proposals, which may involve merging the whole or part of the districts of Great Yarmouth and Waveney or, if essential, involve changes to the boundaries of the existing Devon unitaries—Plymouth City and Torbay Borough. Given that these latter councils are already established unitary councils, our request about alternative proposals is on the basis of maintaining the concept of the City and the Borough.

When providing its advice, it is a matter for the Boundary Committee to decide whether to make an alternative proposal. The Act provides that the Secretary of State may decide to implement by order, with or without modification, any alternative proposal made by the committee, or to take no action on it.

Ministry of Defence: Goat Experiments

The Parliamentary Under-Secretary of State, Ministry of Defence (Baroness Taylor of Bolton): My honourable friend the Parliamentary Under-Secretary of State for Defence (Derek Twigg) has made the following Written Ministerial Statement.

The Ministry of Defence (MoD) has today announced the end of its immediate requirement for testing on live goats as part of its hyperbaric research in support of the MoD's submarine escape rescue and abandonment system (SMERAS).

This research programme has been aimed at improving the accuracy of the information relating to the likely risk of the incidence of decompression illness following escape from a submerged submarine in varying depths and internal submarine pressures. Information obtained from these trials has been used to provide advice to submarine crews in the event of early abandonment of a disabled submerged submarine. This information enables the crew to make an informed judgement of the relative risks of delaying abandonment until rescue

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arrives. The welfare of its personnel is paramount to the MoD and this advice forms an integral part of MoD's duty of care to its submarine staff.

The MoD only conducts animal testing where absolutely necessary and all work involving animals is carried out in strict accordance with the requirements of the Animals (Scientific Procedures) Act 1986. Therefore, all testing using animals is subject to regular review to assess the need to continue with such work.

The MoD has recently reviewed the requirement for further such hyperbaric research. The testing programme was aimed at improving the accuracy of the information relating to the likely probability and consequence of decompression illness following escape from a submerged submarine in varying depths and internal submarine pressures. This requirement has now been achieved, and the review has concluded that the remaining associated areas of uncertainty in submarine escape and rescue relate to events that are considered highly unlikely, and do not therefore need to be addressed by means of animal testing. The MoD has endorsed these recommendations and as a result, it has no immediate need to continue animal testing of this type.

Transport for London: Funding

Lord Bassam of Brighton: My right honourable friend the Secretary of State for Transport (Ruth Kelly) has made the following Ministerial Statement.

As part of the 2007 Comprehensive Spending Review, I was able to agree a funding settlement with the Mayor of London for Transport for London (TfL) through to 2017-18. This settlement included details of funding for Crossrail and provision for costs relating to Metronet in the light of its move into administration.

This 10-year funding settlement underlines the Government’s commitment to deliver the transport investment central to our continued growth and prosperity. It carries forward our commitment to modernising and extending the capital's public transport system, including the upgrade of the London Underground. It sustains our support for transport projects central to our preparation for the Olympics in 2012. And it supports the delivery of Crossrail. I am taking this opportunity to place copies of letters setting out details of the TfL settlement in full in the Library of the House and on my department’s website.

I can set out these details now because those elements of the settlement that relate to Metronet are no longer commercially sensitive. As the House will know, in 2003, the Metronet companies (Metronet Rail BCV Ltd and Metronet Rail SSL Ltd) entered into public-private partnership (PPP) contracts with London Underground Ltd (LUL), which is now a subsidiary of TfL. Under the PPP agreements, the Metronet companies were responsible for the maintenance, renewal and upgrade of discrete parts of LUL’s infrastructure. LUL remains responsible, in the public sector, for delivering services to customers.



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The PPP contractual arrangements were accompanied by put option agreements, whereby LUL could be required to purchase Metronet’s debt six months after any defined “insolvency event”. This borrowing was undertaken to finance the maintenance and renewal of the Tube network under the PPP contracts, and was already reflected in planned public spending.

In advance of the entry into the PPP contracts, the Transport Secretary at the time wrote on 7 March 2003 to the providers of finance of Metronet stating:

This letter of comfort was notified to Parliament as a contingent liability, and the existence of that letter of comfort has been recorded in successive resource accounts for the Department for Transport, without quantification of the amount in question.

On 18 July 2007, the Metronet companies entered into PPP administration, following a lengthy period of poor performance which led to their insolvency. This constituted an “insolvency event” for the purposes of the put option agreements.


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