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Written Ministerial Statements

Tuesday 6 April 2010


Asset Protection Agency

The Exchequer Secretary to the Treasury (Sarah McCarthy-Fry): On 7 December 2009 the Chancellor of the Exchequer announced the launch of the Asset Protection Agency (APA), an Executive Agency of HM Treasury.

The role of the APA and relationship with HM Treasury has been set out in the APA framework document, copies of which were deposited in the Libraries of both Houses at the time of the announcement.

After careful consideration of the APA's activities in managing the Asset Protection Scheme ("the Scheme") since its launch, the Chancellor has decided on a further delegation of decision making to them from HM Treasury. Previously the APA were authorised to make decisions or exercise rights delegated to them in furtherance of the asset management objective. Under the new delegation they will also be able to consider the reduction of risk to the taxpayer when making decisions or exercising any of the rights that have been delegated to them.

This change reflects our continued commitment to run the scheme efficiently and ensure tight management of the taxpayer's risk.

An amended framework document that reflects this change has been published today and deposited in the Libraries of both Houses. The document is also accessible via the HM Treasury website: www.hm-treasury.gov.uk.

Building Society Capital

The Exchequer Secretary to the Treasury (Sarah McCarthy-Fry): The Government have published a discussion paper on building society capital and related issues, as announced in the Budget 2010. It will be available from the House Libraries from today and is on the Treasury website.

The discussion paper seeks views on the issues raised by the building societies experts' group convened by the Government in 2009, including future options for capital raising by building societies in the light of ongoing regulatory reform.

Double Taxation Agreement (United Kingdom and Germany)

The Financial Secretary to the Treasury (Mr. Stephen Timms): A Double Taxation Agreement with Germany was signed on 30 March 2010. The text of the agreement has been deposited in the Libraries of both Houses and made available on HM Revenue and Customs' website. The text will be scheduled to a draft Order in Council and laid before the House of Commons in due course.

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Valuation Office Agency (KPI)

The Economic Secretary to the Treasury (Ian Pearson): I have today set the following key performance indicators for the Valuation Office Agency for 2010-11:

Customer Satisfaction


Value for Money


Counter-Terrorist Asset-Freezing Regime (January to March 2010)

The Exchequer Secretary to the Treasury (Sarah McCarthy-Fry): In a written ministerial statement on 10 October 2006, Official Report, column 11WS, the then Economic Secretary, my right hon. Friend the Member for Normanton (Ed Balls), undertook to report to Parliament on a quarterly basis on the operation of the UK's counter-terrorism asset-freezing regime. This is the 14th of these reports and covers the period January to March 2010(1).

Asset-freezing designations

In the quarter January to March 2010, the Treasury issued no directions designating persons under the Al-Qaeda and Taliban (United Nations Measures) Order 2006. As a result of the quashing of this order, the one extant direction under the order has no effect.

During this quarter, the Treasury gave no new directions under the Terrorism (United Nations Measures) Order 2009.

There were no financial sanctions designations of persons with links to the UK made at the UN or at the EU, in relation to the Terrorism or Al-Qaeda and the Taliban asset-freezing regimes.

As of 31 March 2010, a total of 226 accounts containing just over £370,000(2) of suspected terrorist funds were frozen in the UK.

Reviews under the Terrorism Order 2006

The Treasury keeps domestic asset-freezing cases under review and completed three reviews in this quarter. All three persons had their designation revoked.

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Maintaining an effective licensing system is important to ensure the overall proportionality and fairness of the asset-freezing regime, whether the individuals concerned are subject to an asset freeze in accordance with a UN or EC listing, or domestic terrorism legislation. A licensing framework is put in place for each individual on a case-by-case basis. The key objective of the licensing system is to strike an appropriate balance between minimising the risk of diversion of funds to terrorism and meeting the human rights and humanitarian needs of affected individuals and their families.

Twenty-four licences were issued this quarter in relation to 15 individuals and/or entities subject to an asset freeze under the al-Qaeda and Taliban and Terrorism regimes.


On 9 February 2010, during the debate on the Terrorist Asset-Freezing (Temporary Provisions) Bill, the Treasury committed to reporting on proceedings taken for any offences under the asset-freezing regime.

In the quarter January to March 2010, there have been no proceedings taken for breaches of the prohibitions of the Terrorism orders or the Al-Qaeda and Taliban Order.


The Supreme Court Judgment and the Terrorist Asset-Freezing (Temporary Provisions) Act 2010: As referred to in the 13th quarterly report to Parliament for the period October to December 2009, on 4 February 2010 the Supreme Court quashed the Terrorism (United Nations Measures) Order 2006. The Government fast-tracked temporary legislation to prevent suspected terrorists' assets from being unfrozen. The Terrorist Asset-Freezing (Temporary Provisions) Act 2010 came into force on 10 February 2010 and temporarily validates the Terrorism (United Nations Measures) Orders 2009, 2006 and 2001, ensuring that asset freezes under those orders remain in place. The Act expires on 31 December 2010. Before then, the Government intend to introduce more permanent legislation that will establish the terrorist asset-freezing regime in primary legislation. A draft of the legislation, the Terrorist Asset-Freezing Bill, was published on 5 February 2010. The Bill can be found at:


On 11 March 2010, the Government published a public consultation document which sets out the Government's approach to terrorist asset freezing and their proposals for more permanent terrorist asset-freezing legislation and seeks the views of the public and other interested parties on the proposals. The consultation document can be found at:


Al-Qaeda and Taliban (Asset-Freezing) Regulations 2010: On 4 February 2010, the Supreme Court also quashed the Al-Qaeda and Taliban Order. Assets previously frozen under that order remain frozen under EC Regulation 881/2002. The EC regulation is directly applicable in UK law, but secondary legislation is required to provide for penalties for failing to comply with the prohibitions in the EC regulation and to establish a UK framework for the effective administration of asset freezes against persons listed by the EU as being associated with al-Qaeda or the Taliban.

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In order to put in place penalties and establish such a framework, the Government laid new regulations before Parliament, the Al-Qaeda and Taliban (Asset-Freezing) Regulations 2010.

The regulations were laid on 25 February 2010 and debated in the House of Lords on 25 March and in the House of Commons on 30 March. They came into effect at midnight on 31 March.

Communities and Local Government

Local Government Investments (Revised Guidance)

The Parliamentary Under-Secretary of State for Communities and Local Government (Barbara Follett): The Government are grateful for the Communities and Local Government Committee's second report of session 2009-10, "Local authority investments: the role of the Financial Services Authority".

The Committee's primary recommendation is that-

Having carefully considered the recommendation, the Government are not persuaded that such a course would be appropriate. The Department for Communities and Local Government has issued revised statutory guidance on investments that came into force on 1 April 2010. This includes a new recommendation that authorities' investment strategies should comment on their use of Treasury management advisers. This will encourage officers to make explicit their procedures for using advisers and will give elected Members the opportunity to scrutinise those arrangements.

The revised "Guidance on Local Government Investments" is available at: http://www.communities. gov.uk/documents/localgovernment/pdf/1501971.pdf

Copies of the guidance have been placed in the Library of the House.

Sustainable Communities Act

The Secretary of State for Communities and Local Government (Mr. John Denham): I am today updating the House on progress the Government have made in implementing the Sustainable Communities Act 2007.

The Government remain committed to the Sustainable Communities Act. Local authorities put forward proposals to improve their local area to the Local Government Association (LGA), in its capacity as the selector, last summer. In December the LGA produced a shortlist of 199 proposals which Government are required to consider and respond to under the Act. The Government are working to try to reach agreement with the LGA on which proposals should be implemented. My officials
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worked very closely with their counterparts from the LGA to set up three discussion panels which provided an opportunity for the proposals to be discussed in further detail between LGA and Government officials. These panel meetings proved to be very helpful in clarifying issues behind proposals from both a Government and LGA perspective and gathering further useful evidence. Consideration of the proposals is ongoing with other Whitehall Departments. Many of the proposals are complex and the Government are investigating further issues raised by the LGA as part of the process. Once again I would like to thank the LGA for their continuing efforts in assisting the Government in this significant task.

In the meantime, I am pleased to inform the House that the Government will be taking action to make progress with the following proposals:

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