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Statement

The Chairman of Committees (Lord Brabazon of Tara): On 14 December the House made the following resolution:

In accordance with paragraph 7 of the Report from the House Committee on the SSRB Review of Financial Support for Members of the House of Lords (First Report, HL Paper 12), this House agrees:

the architecture and principles of the new system proposed by the SSRB;that the House Committee should work to prepare resolutions to implement the proposals on a timescale which allows a new system to be operational from the start of the new Parliament;that an ad hoc group of members should be established to consider and consult on issues in the SSRB report and advise on their implementation; andthat the House Committee should monitor and report on the effects of implementation of the new system after a year of operation.

In accordance with the resolution of 14 December, the House Committee has today appointed the membership of the ad hoc group to consider and consult on issues in the SSRB report and to advise on their implementation. The group will have the following membership:

Baroness O'Cathain;Baroness Scott of Needham Market;Baroness Symons of Vernham Dean;Lord Tomlinson;Lord Wakeham (Chairman); andLord Williamson of Horton.

The group will take into account the substantial number of points which have already been raised by Members in debate, and through other forums, but in the mean time if any Member wishes to give further views, they are invited to write to the secretary to the group, Duncan Sagar, in the Clerk of the Parliaments' office.

Sri Lanka

Statement

The Minister of State, Foreign and Commonwealth Office (Baroness Kinnock of Holyhead): My right honourable friend the Secretary of State for Foreign and Commonwealth Affairs (David Miliband) has made the following Written Ministerial Statement.

Seven months have now passed since the end of the conflict in Sri Lanka. I should like to update the House on developments in the humanitarian and political situation in Sri Lanka.

Humanitarian

Since the end of the conflict the UK has focused its efforts on securing an improvement in the humanitarian situation. The end of the fighting in May left over 280,000 internally displaced persons (IDPs) in camps in northern Sri Lanka. The UK's approach to the situation has been fourfold: to advocate for improvements in conditions in the camps so that they meet international standards; to push for the early and safe return of IDPs to their home areas; to support, with the Department for International Development's (DfID) allocation of £12.5 million since September 2008, the vital work of the humanitarian agencies that have been providing assistance to the IDPs; and to urge the Government of Sri Lanka to allow those not yet resettled to have the ability to enjoy unrestricted freedom of movement.

Conditions in the camps have improved to the extent that basic needs are now generally being met. In recent weeks there has been some progress in the return of IDPs. As of 6 December, the UN has confirmed that over 158,000 IDPs have been released. Of this number approximately 29,000 vulnerable people had been transferred to host families or institutions. This leaves fewer than 112,000 people left in the Menik Farm site and fewer than 15,000 people in camps in other locations. It is important that IDPs continue to

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be able to return to their home areas as soon as it is safe to do so. When I spoke to Foreign Minister Bogollogama on 29 October and 4 November, he confirmed that the Government of Sri Lanka were committed to returning those still in the camps. In order to assist this process, the Government have been funding the work of demining non-governmental organisations (NGOs) such as Mines Advisory Group and HALO Trust to help make areas safe for return. We will continue to help clear landmines, to provide transport from the camps and to help civilians to restart their lives so they can return home quickly and safely.

The recent announcement by the Sri Lankan Government that as of 1 December all remaining IDPs have been granted freedom of movement is a positive step. We hope this leads to unrestricted freedom of movement for all IDPs as soon as possible. As my honourable friend the Parliamentary Under-Secretary of State for International Development (Mike Foster) made clear in his Statement of 28 November, we believe that the opening of the camps and granting of real freedom of movement will enable the thousands still living in the camps to start to rebuild their lives. We welcome the fact that a number of national NGOs have now been granted access to some areas where IDPs are returning to such as Vavuniya, Mullaitivu, Mannar and Jaffna in the north. The recent announcement by the governor of the Northern Province that international NGOs will also be allowed to work in these areas on agreed projects is also welcome. It is imperative that all humanitarian agencies are given full access to all IDPs, including ex combatants, so that they can provide them with the help and protection they need both in the camps and in places of return.

Political

Beyond the immediate humanitarian concerns the UK has underlined to the Government of Sri Lanka the importance of securing genuine reconciliation between Sri Lanka's communities.

At the end of May the Sri Lankan president issued a joint statement with UN Secretary-General Ban Ki-Moon recognising the need to work towards a lasting political solution. The UK has consistently maintained that one of the prerequisites for lasting peace in Sri Lanka is a political settlement that fully takes into account the legitimate grievances and aspirations of all communities. Presidential elections have now been announced for 26 January 2010. Parliamentary elections in spring 2010 will be a further opportunity for the voice of Sri Lanka's communities to be heard. Free, fair and credible elections will allow Sri Lanka's communities to have their say in shaping the country's future. Adequate arrangements must be made to ensure IDPs can vote in upcoming elections. It is important for all those who want to play a role in Sri Lanka's future to agree to an inclusive political solution that addresses the underlying causes of the conflict.

The EU has made clear its belief that accountability is integral to the process of reconciliation. We therefore welcome President Rajapakse's decision to appoint an independent committee to look into the incidents cited in the US State Department's report. We will continue to press the government of Sri Lanka to live up to this

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and his earlier commitment made to UN Secretary-General Ban Ki-Moon in May to take measures to address possible violations of international humanitarian law.

GSP+ (General System of Preferences plus)/Human Rights

The EU's GSP+ trade preference scheme is intended to provide vulnerable economies with incentives to achieve standards in sustainable development, human rights, labour standards and good governance. Beneficiary countries are required to implement effectively certain international human rights conventions. On 19 October 2009 the European Commission published a report of its investigation into Sri Lanka's compliance with three of these conventions. The report was clear about Sri Lanka's failings in the implementation of the International Covenant on Civil and Political Rights, the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment and the Convention on the Rights of the Child. This report has reinforced our serious concerns over the human rights situation in Sri Lanka and we share the Commission's assessment. The Commission is expected to issue its formal recommendation on Sri Lanka's continued access to the GSP+ scheme shortly. We are clear that, in order to continue enjoying access to the GSP+, Sri Lanka must meet fully its human rights obligations. I have urged the Government of Sri Lanka to take urgent action to address the issues raised by the Commission in its report such as the lack of effective investigations into alleged disappearances and the need to uphold the right to freedom of expression. As EU foreign ministers made clear in our conclusions of 27 October, the EU will maintain a dialogue with Sri Lanka on the steps necessary to address the problems highlighted by the Commission's investigation, in order effectively to implement the conventions.

Commonwealth Heads of Government Meeting (CHOGM)

When the Heads of Commonwealth Governments met in Port of Spain in November members agreed that Australia will host CHOGM in 2011. The most important thing for the UK was that the host for each Commonwealth summit demonstrably embodies our shared values-including respect for human rights and democracy. While we welcome the recent progress on freedom of movement for IDPs in Sri Lanka, given our ongoing concerns about the humanitarian and human rights situation at the time, the UK was unable to support Sri Lanka's bid to host CHOGM in 2011. However, Commonwealth leaders accepted the President of Sri Lanka's offer to host the summit in 2013.

Conclusion

We have regularly made clear our view that the Government of Sri Lanka have a unique opportunity-and duty-to work for genuine political reconciliation. As a measure of the UK's ongoing commitment to the future of Sri Lanka, we remain at the forefront of international efforts to help ensure lasting peace there. My right honourable friend the Prime Minister's special envoy for Sri Lanka, my right honourable friend the Member for Kilmarnock and Loudoun (Des Browne), continues to engage the Tamil diaspora and he has updated honourable Members on his recent activities.



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We will continue to work directly with the Government of Sri Lanka and with international partners including the EU, UN and Commonwealth, to urge the Government of Sri Lanka to resolve the underlying causes of the conflict through an inclusive political process which addresses the legitimate grievances and aspirations of all communities-Sinhalese, Tamils and Muslims.

St Helena

Statement

Lord Brett: My right honourable friend the Secretary of State for International Development (Douglas Alexander) has made the following Written Ministerial Statement.

I have carefully considered the views received in response to the public consultation on air access for St Helena. I have also considered the reasonableness of proceeding with funding an airport in the prevailing economic conditions and the urgent requirements upon the department to protect vulnerable countries around the world from the impact of the global downturn.

The present calls on DfID funding and the current economic conditions mean that proceeding with the project would not be appropriate at this time. DfID is committed to supporting the people of St Helena and so, rather than make a decision at this juncture, I have instructed my officials to conduct a further analysis of two particular issues that have been brought to my attention through the consultation, and require more detailed scrutiny:

potential cost savings to the airport contract which might be enabled by recent technological developments; and options for funding the capital cost of the airport through a possible public/private partnership.

In addition, my officials will also analyse further the costs and options for a replacement ship.

I expect this to take around six months and will make a further Statement when it is complete.

The director responsible for the overseas territories will be visiting St Helena in the first quarter of 2010 to discuss this announcement with both government and the private sector.

Taxation: Anti-Avoidance

Statement

The Financial Services Secretary to the Treasury (Lord Myners): My right honourable friend the Financial Secretary to the Treasury (Stephen Timms) has made the following Written Ministerial Statement.

This Government have put in place a comprehensive set of tax reliefs for charities and for those who choose to donate to charities. These tax reliefs provide valuable incentives to encourage people to give and provide support to the charity sector. In the UK we are rightly proud of our charity sector which continues to undertake important work in the UK and around the world.



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It is therefore particularly regrettable that we have become aware of an artificial, aggressive and offensive tax avoidance scheme that seeks to abuse those tax reliefs available for donations to charity. A similar scheme to exploit this same relief was shut down in Finance Act 2004 and we are aware other schemes to exploit these reliefs have been marketed since then.

This Government will not tolerate tax avoidance or tax evasion, and will act promptly to tackle both of these, so I am today announcing changes to be made to legislation, with immediate effect, to counter these schemes.

The scheme exploits the relief available for donations of listed shares and other types of qualifying investments (including land) to charities in Section 431 of the Income Tax Act 2007 and Section 587B of the Income and Corporation Taxes Act 1988.

An offshore company sells to a taxpayer listed shares with a market value well in excess of the amounts paid. However the offshore company has an option to buy back the shares, exercisable after three years, for £1. The taxpayer then gifts the shares to a charity and gets tax relief on the higher market value of the shares, despite having paid only a fraction of that market value for the shares. The option to buy back the shares is not taken into account for the purposes of determining the amount of the relief. The rules disregard contingent liabilities, such as an option, until the liability crystallises, typically by the exercise of the option in this case. In reality the option is never exercised and the scheme organiser gets their money back from the charity through some contrived arrangements.

The benefit to the charity is typically less than half of one percent of the value of the tax relief obtained.

The Government do not accept that these highly contrived arrangements have the effect sought, but will remove any doubt by introducing appropriate legislation in Finance Bill 2010. The new rules will reduce the tax relief on such arrangements to the lower of the cost of acquisition to the donor of the shares or investments gifted, or the market value at the date of disposal, where the acquisition was made as part of a tax advantage scheme. This legislation will have immediate effect from 15 December 2009.

The legislation will not affect genuine donations to charity where tax avoidance arrangements are not involved and HM Revenue and Customs (HMRC) will be consulting with the charity sector to ensure the legislation achieves its intended effect.

Further details are contained in a draft explanatory note published on HMRC's website today with the proposed draft legislation.

It is particularly offensive that individuals seeking to avoid tax do so in a way that exploits charity tax reliefs.

I am therefore giving notice of our intention to deal with any arrangements that emerge in future that are designed to take advantage of the tax reliefs for donations of qualifying investments under Section 431 of the Income Tax Act 2007 and Section 587B of the Income and Corporation Taxes Act 1988. The Government introduced these reliefs in 2000 with the intention that they should be used only for genuine donations to

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genuine charities. Where HMRC become aware of arrangements which attempt to frustrate that intention the Government will introduce legislation to close them down, where necessary with effect from today.

This action will not affect the vast majority of charities and donors who organise their affairs in a straightforward and ordinary way. The Government continue to believe charities make an important contribution to our society and do not deserve having their reputation called into question by such offensive tax avoidance.

Transport: Severe Weather

Statement

The Secretary of State for Transport (Lord Adonis): My right honourable friend the Minister of State for Transport (Sadiq Khan) has made the following Ministerial Statement.

In February Britain experienced its worst winter for 18 years. It is important that we learn the transport lessons from that experience, so that the country is better prepared for similar severe events in future. To this end, the then Secretary of State, the right honourable Geoff Hoon MP, commissioned the UK Roads Liaison Group (UKRLG) to conduct a review of the difficulties experienced in the operation of winter maintenance service at that time.

The UKRLG published its report on 4 August (available from the Libraries of the House or from www.ukroadsliaisongroup.org), and I am grateful for the thorough way in which it reviews events. The report makes 19 recommendations, and I am pleased to announce today that the Government have accepted them all, which together should improve our preparedness to face up to the challenges presented by severe winter weather in the future.

Most of the recommendations are addressed to local highway authorities and salt suppliers. It is, of course, for each authority to consider these and decide for themselves how best to take them forward. I commend them to authorities' attention.

The report addresses four recommendations specifically to the Department for Transport and the Highways Agency.

First, it recommends that the Highways Agency should hold a reserve of salt above that which it needs to meet its service standards, in order to reduce overall demand for salt at critical times. In addition to supporting the UKRLG review, the agency has carried out its own internal exercise to identify those areas of its business which may be improved, to further strengthen its winter service resilience. A number of improvements have been identified and implemented, including a review of the salt stock levels that will be held across the strategic road network in England. The agency has previously implemented a risk-based approach to set its salt stock levels each year. By identifying and considering the impact of issues which may affect salt supplies and associated stock levels, a suitable salt stock profile for each of the agency's operational areas is derived for the winter season ahead. The increased

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risk of a salt shortage similar to that experienced last season has been considered when setting the salt stock profiles for this winter season, in order to increase the agency's salt stock resilience.

UKRLG further recommend that the department should publish an information leaflet for highway authority elected members and senior managers on preparation for severe winter conditions. We have produced such a leaflet and have arranged for this to be distributed today.

The report proposes that the department should make preparations to enable rapid introduction of derogation against drivers' hours regulations for specific categories of vehicles and drivers if necessary in times of severe adverse weather conditions. We agree with the recommendation that it is important to implement such derogations quickly, when the need has been identified. We believe that the department's response in February was as swift as was possible; but we will review our processes to ensure that we remain ready to deal with applications for derogation as quickly as possible.

UKRLG considered the operation of the centrally co-ordinated Salt Cell that was set up in February. The report concludes that the possibility of a future government-run Salt Cell should only be considered as a matter of last resort, but that the Government should develop a contingency plan for any future Salt Cell, to be used in extremis. I again accept the recommendation. My department is working with a number of stakeholders, both within and without Government, to develop robust protocols against such an eventuality.

Co-operation and co-ordination between highways authorities and suppliers will be a key component in better management of winter service in the future, however severe the weather. The Highways Agency had already identified the need to develop a closer relationship with its salt supply chain partners. A strategic Salt Liaison Group (SLG) has been established to discuss issues affecting salt usage and supply for the strategic network. Local highway authorities may wish to reflect on how similar arrangements might benefit them. As part of its own review of lessons learnt, the agency also highlighted the need for improved communications to give earlier warning of any developing salt supply issues. Again, local authorities may wish to consider how they can implement a more precautionary, focused dialogue with salt suppliers in the same way.

There is already good communication between the Highways Agency and local authorities, and the agency shares a number of depots with local authorities. As well as the cost efficiencies associated with depot sharing, it can provide access to the network at operationally important locations that may not otherwise be available. The Highways Agency recognises the importance of depot sharing in providing a cost-effective solution to planning and maintaining an effective winter service. However, depots are often not suitable for sharing on account of their location, their size or other operational constraints. Each proposal therefore needs to be considered on its individual merits, to ensure that service delivery for both authorities will not be compromised.



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