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27 Jan 2010 : Column 1405



27 Jan 2010 : Column 1405

House of Lords

Wednesday, 27 January 2010.

3 pm

Prayers-read by the Lord Bishop of Liverpool.

Passports

Question

3.06 pm

Asked By Lord Marlesford

The Parliamentary Under-Secretary of State, Home Office (Lord West of Spithead): My Lords, British citizens who hold passports issued by other countries are not required to register those details with the Identity and Passport Service, as being a dual national has no bearing on the eligibility for a passport. While British passport applicants are asked to submit with their application any uncancelled passport, including foreign passports, this is simply to assist with identity verification.

Lord Marlesford: My Lords, I thank the Minister. Is it not absurd, at a moment when we are asking people to lose their lives in Afghanistan, in the words of the Prime Minister, to keep terrorism off the streets of Britain, that we are not doing everything that we possibly can in this country to protect ourselves here? Is it not dangerous, now we have this expensive e-borders system-belatedly, but it is now in place-that immigration officers are not able to know, when a British passport is swiped, that the holder may have switched, or may be about to switch, to a different passport for other trips while abroad? That is a real security risk, and I cannot see why the Government do not urgently make it mandatory for the Passport Office to know when passport-holders hold other passports as well.

Lord West of Spithead: My Lords, I know that the noble Lord has had a particular interest in this area. It seems at face value that there is a definite point to what he says, so I have looked into it. It is clear that, because of e-borders and because we are getting biometrics on all these things, that loophole is being closed.

Since the beginning of 2007 we have ensured that someone cannot have a certificate of entitlement for them to be in this country, which would be registered in their foreign passport, if they have decided that they wish to have a British passport; they can have either one or the other. So that has been done as well.

In the past there was the possibility of using different names to try to fool the authorities, but if the name, date of birth and so on are the same then there is no possibility of getting through. Once we have biometrics,

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which are coming in very fast, we can bowl these things out easily, and that is the way of getting around the problem. Trying to stop people getting another passport and trying to register it-on the day of registration they might not have a foreign passport, but the next day they might have one-is too complex. We are closing all the loopholes, and I believe that this has gone away. I hope that that satisfies the noble Lord, although I am willing to talk with him at greater length about this as I am aware of his concern and I have specifically looked into it.

Lord Dear: My Lords, in March 2008 the European Union Committee of your Lordships' House published a report on e-borders, in which it declared itself astonished that there was then no way in which the UK Borders and Immigration Agency could know who was in the country, since there was then no routine recording of entries into the UK or departures from it. One of the most basic requirements of a border control is the ability to count people in and out of the country. Was the Government's undertaking met-namely, that by December 2009 screening systems would be in place to deal with 60 per cent of all passenger and crew movements into the UK? Will their target of 95 per cent by December this year be met?

Lord West of Spithead: My Lords, I could not have put the initial part of that question better myself. This is something that we decided we would do; in the past, we did not check people out. This was done with the previous Administration, for whatever reasons. It is absolutely right that we check people in and out, so we know exactly who is here. On those precise figures, I shall have to come back in writing, because I am not sure exactly where we have got to on that. We are still aiming for 100 per cent in time for the Olympics, and we will be a lot more safe and secure.

With the pilot schemes that we have run, we have already bowled out an awful lot of people when there have been lost or stolen passports. Again, the noble Lord who spoke previously is very interested in that issue. We have been able to arrest those people who have been using them falsely.

Lord Naseby: About 18 months ago, I asked a question of the noble Lord considering the smaller, private airports and the fact that there was no official passport control in those situations. Will they be covered by the 100 per cent target?

Lord West of Spithead: My Lords, the intention is that they will be covered. Indeed, there are issues about boats going backwards and forwards across the Channel, and that sort of thing. There are some real complexities. Clearly, those will be the areas that are hit last; I have flown a number of times in a private jet and at Farnborough, in the private jet area, one is checked very admirably. The only difficulty is with making sure that the chaps are in uniform.

Baroness Falkner of Margravine: My Lords-

Baroness Neville-Jones: My Lords-

Lord Davies of Oldham: We have not heard from the Liberal Benches.



27 Jan 2010 : Column 1407

Baroness Falkner of Margravine: My Lords, last week we were told of the introduction of no-fly lists and other enhanced screening measures, including enhancing the watch list. Will the Minister confirm that the details of passport holders who have dual nationality are there to be cross-referenced against these new lists when they are set up? Could he also give us an estimate of how long it will take before all British citizens have biometric passports?

Lord West of Spithead: My Lords, I shall answer that in reverse order of sequence, starting with the fully biometric passport. Passports are slightly biometric obviously, through facial recognition, but they will have fingerprints as well by 2012. That will be a process from the beginning of that year-people will start getting fingerprints on their passports, and that is how that will be done. As for matching passports, people who come into this country through e-borders and getting their visas will have to give biometrics. There will be biometrics on our passports, so it will be impossible to have two names. You might have a passport under a different name, but it will immediately flag up, and that will be a reason to ask straightaway what is going on and to move forward and do something about it.

Baroness Neville-Jones: My Lords-

Baroness O'Neill of Bengarve: My Lords-

Lord Davies of Oldham: It is the turn of the Cross Benches.

Baroness O'Neill of Bengarve: Can the Minister tell the House what progress has been made in dealing with the land border with the Republic of Ireland, where we have a distinctive set of problems?

Lord West of Spithead: My Lords, the position there is that there are no controls for passports going across there. This is intelligence-based, and we have been doing more operations there on an intelligence basis, but there is nothing further on that. There was some debate in this House about the common travel area, and I think that that will have to move forward in a further Session.

Baroness Neville-Jones: Will the Minister say whether the Government have implemented the provision in the Identity Card Act 2006 which requires those applying for or renewing passports to be registered with the national identity register? If they have not done so, what is their intention?

Lord West of Spithead: My Lords, I am afraid that I do not have the answer at my fingertips. I shall come back in writing on that point, if I may. What is interesting with the identity card is that 3,500 people have them already and another 25,000 have applied for them. They are proving a huge success-there is a big rollout happening in London. I have one myself, and it is actually quite useful, I have to say.



27 Jan 2010 : Column 1408

Finance: Alternative Investment Market

Question

3.14 pm

Asked By Lord Lee of Trafford

The Financial Services Secretary to the Treasury (Lord Myners): One of the qualifying conditions for the inclusion of a share in an individual saving account is that the share must be officially listed on a recognised stock exchange. Shares traded on AIM do not meet this definition. The wider UK tax system distinguishes between listed and unlisted shares for tax purposes, and not just in the area of ISAs. AIM shares are unlisted and have been ever since the market was established. AIM shares benefit from other tax advantages, including the enterprise investment scheme, the possibility of inclusion in venture capital trusts and advantageous inheritance tax treatment.

Lord Lee of Trafford: First, I declare an interest as the holder of a number of shares in AIM-quoted companies. I am rather disappointed with the noble Lord's reply. Surely, an ISA investor should be allowed to choose whether they invest in main-market companies or in AIM companies? Is it not nonsense that an ISA investor can buy an overseas stock, such as Kraft, to include in their ISA, or can invest in shares quoted on the Channel Islands Stock Exchange, yet be barred from the 1000-plus smaller-growth UK companies on AIM, which would appreciate ISA eligibility from a capital-raising point of view?

Lord Myners: Those with whom we regularly consult on the ISA rules and the treatment of the AIM market are very clear that if AIM shares were to be included in ISAs, and AIM shares were therefore to lose the advantages that they currently have under inheritance tax procedures and inclusion in venture capital trusts, they would prefer to remain with the existing arrangement. Nineteen million people have ISA accounts; that is a considerable achievement in terms of increasing investment and tax-protected savings.

Lord Northbrook: Why are AIM stocks not allowed in ISAs when they are allowed in self-invested personal pension schemes?

Lord Myners: I think that I have already answered that question.

Lord Newby: My Lords, the Minister may feel that he has answered the question, but I suspect that the majority of the House either did not hear his answer or did not understand it. It seems to some of us that there is an inconsistency in allowing these AIM shares to be eligible for SIPPs but not for ISAs. Can he explain why that is such a matter of principle?



27 Jan 2010 : Column 1409

Lord Myners: I apologise if my earlier answer was not clear. The distinction is between whether the shares are on a listed and regulated stock exchange or not. AIM is not judged to be a listed and regulated exchange. Therefore, companies listed on AIM do not qualify for ISAs. The rules for self-invested pension schemes include the ability to invest in one's own company, which is clearly a very different regime for an entirely different requirement.

Lord Hodgson of Astley Abbotts: Will the Minister not accept that, in the country at large, his remarks this afternoon will sound extraordinarily complacent? His Government's economic policies have brought this country to the edge of ruin, and small and medium-sized companies are finding it difficult and expensive to find bank borrowings to fund their expansion. The only way for them to fill that gap now is equities, and for small and medium-sized companies to have this extremely valuable source of equity shut off must surely be a mistake. It must be right for us to encourage investment and savings as a way of getting ourselves out of the hole we are in. Why cannot the Minister see this?

Lord Myners: I hope that I am never guilty of complacency over something as important as the performance of the economy, and the criticality of smaller businesses which are the lifeblood of a successful economy. That is why we have focused so much, through various schemes, on ensuring the flow of credit and finance to smaller companies. The noble Lord should recognise that AIM is a market for listed companies. At the time of listing, it is not in itself a source of new capital for investment. That takes place before, so buying a share of an existing company does not represent the flow of new funds into a business. There is a very clear distinction between the primary market and the secondary market.

Baroness Noakes: My Lords, the Minister said that shares could be treated as eligible either for ISAs or for the others reliefs that he described. In practice, the other reliefs have on the whole become less valuable, in particular the venture capital trust reliefs. It is important to ensure that there is a lively market providing finance to small and medium-sized enterprises. Will the Minister look at this again?

Lord Myners: My Lords, I am surprised that the noble Baroness says that venture capital trust tax incentives are in some way less attractive. It is possible for an individual to invest £200,000 per annum in a VCT for an up front income tax relief on investment of 30 per cent. I hope that in the Minister's-

Noble Lords: Oh!

Lord Myners: I am sorry, I am referring to myself. I hope that in the Minister's self-direction he both avoids complacency and at the same time remains open to ways in which we can further improve the system. One of the first things I did when I became a Minister was to ask officials to produce a report on the issue raised by the noble Lord's question. Without wishing to fall into the trap of appearing complacent, I was persuaded by the answers I was given.



27 Jan 2010 : Column 1410

Lord Northbrook: My Lords, how is it that figures from the Stock Exchange show that the amount raised by AIM-based VCTs has declined from £196 million in 2005-06 to only £6 million in 2008-09?

Lord Myners: The noble Lord is probably aware that these things happen during a bad market.

Lord Forsyth of Drumlean: My Lords, is the Minister not using a circular argument? Who decides what is a recognised exchange? Both AIM and the main Stock Exchange deal in listed shares. The Minister can change the rules quite easily. Why should one lot of quoted shares be treated differently from another?

Lord Myners: My Lords, the decision on whether an exchange is recognised will fall within the question of whether it meets the definitions set out in the European directive on prospectuses.

Northern Ireland: Cross-border Police Co-operation

Question

3.21 pm

Asked By Lord Cope of Berkeley

Baroness Royall of Blaisdon: My Lords, work is at an advanced stage in the implementation of the recommendations relating to cross-border policing powers. Officials, police officers and public prosecutors from both sides of the border are meeting again tomorrow to consider the outstanding issues, including the draft procedural manuals.

Lord Cope of Berkeley: My Lords, I am grateful to the noble Baroness for that Answer and particularly to know that the procedural manual which was originally promised for last April is getting near production. We all agree that the policing relationships and the co-operation between the two police forces are absolutely excellent at all levels, but these legal and jurisdictional problems continue to make it much more difficult than it need be to investigate and prosecute crimes near the border. Can we expect progress tomorrow over, for example, the extension of the criminal jurisdiction Acts, so that money laundering, as well as murder and the other things on the list, can be tried in either jurisdiction?

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