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Written Statements

Tuesday 20 March 2007

Armed Forces: Army Regional Command Structure

The Minister of State, Ministry of Defence (Lord Drayson): My right honourable friend the Minister of State for the Armed Forces (Adam Ingram) has made the following Written Ministerial Statement.

My Written Ministerial Statement of 29 November 2006 (Official Report, col. WS 108) contained an error. The first tiret of the second paragraph should have read:

From April 2007 garrisons should be commanded by the local deployable brigade commander.

Banking: Unclaimed Assets Scheme

Lord Davies of Oldham: My honourable friend the Economic Secretary (Ed Balls) has made the following Written Ministerial Statement.

As announced in the 2005 Pre-Budget Report, the Government have been working with the banking and building society sector to design an unclaimed assets scheme which both preserves the rights of the individual consumer and at the same time allows these assets to be reinvested in the community. The Government welcomed the commitment from the industry and since then we have been working together to design a scheme.

The Government are today publishing a consultation document outlining a proposed scheme, including details of the banks' and building societies' proposed changes to the banking code and proposals for legislation.

The proposal is made with the support of the British Bankers' Association and the Building Societies Association and these organisations have signalled in the foreword to the consultation document their commitment to making the scheme work successfully.

A further consultation document will be released later in the spring to consider the most effective means of distributing the available assets, taking as its basis the statement in the 2005 Pre-Budget Report that the funds should be reinvested in the community, with a focus on youth services that are responsive to the needs of young people, and also on financial inclusion and capability.

The 2005 Pre-Budget Report also announced that there will be an option for small locally based financial institutions to focus on these needs in their local communities. These will typically be building societies, often playing an important role in these communities. It is proposed that small locally based financial institutions will be defined by reference to a threshold level of total assets as in practice this indicates both relatively small and local institutions.



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In line with previous announcements, it is proposed that banks and building societies will participate in the scheme on a voluntary basis, but the scheme will be backed by legislation to resolve issues concerning financial liability for the participating financial institutions and their customers.

It is proposed that the unclaimed assets scheme will apply to bank and building society accounts where there has been no customer-initiated activity for at least 15 years. On this basis, the banks and building societies estimate that a stock of several hundred million pounds may currently lie unclaimed. They also estimate that a further flow of perhaps tens of millions of pounds may become available each year. These estimates are before the impact of a comprehensive reuniting exercise that banks and building societies will launch in advance of the scheme, building on their existing arrangements to help customers track down their accounts.

It is proposed that unclaimed assets falling within the definition will be transferred to a central reclaim fund. However, for customers the process for reclaiming the money will not change—they need simply to visit their bank or building society, which will repay them as now. The reclaim fund will bear the financial risk for repaying customers who want to reclaim their assets after the introduction of the scheme. Centralising the risk in a single reclaim fund will allow it to be pooled and managed as efficiently as possible. The reclaim fund will need to be managed prudently so that money is available to fund applications for reclaim. Banks and building societies will be responsible for calculating the amounts to be transferred and for handling the interaction with those customers, so customers will not need to have a direct relationship with the reclaim fund. It is proposed that the reclaim fund will be a freestanding body, independent of government, the banking industry and the distribution mechanism. It could either be an existing body or a new body. The banking industry's representative bodies will take the lead in selecting or setting up the body, which will then be wholly independent.

The reclaim fund will hand over for reinvestment in the community those assets not needed to cover anticipated reclaim requests. The need to manage assets for potential reclaim at a later date in order to protect customers' interests will, of course, mean that the reclaim fund will need to hold back a proportion of the assets it receives from the banks and building societies. As well as effective and prudential management of the fund, it is also proposed that customers' interests will be further safeguarded by access to the Financial Ombudsman Service for any disputes between themselves, the fund, and their bank or building society on these issues, and changes to the banking code will clarify how the banks and building societies will themselves interact with the scheme.

Copies of the consultation document will be available in the Libraries of the House.



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Benefit Fraud Inspectorate Reports

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton): My honourable friend the Parliamentary Under-Secretary of State for Work and Pensions (James Plaskitt) has made the following Statement.

On behalf of my right honourable friend the Secretary of State for Work and Pensions, the BFI inspection reports were published today on Glasgow City Council and the London Borough of Hounslow. Copies have been placed in the Library.

The BFI reports detail a range of strengths and weaknesses in the housing benefit services provided by councils and make recommendations to improve the security and efficiency of benefit delivery.

My right honourable friend the Secretary of State is considering the reports and may ask the councils for proposals in response to the BFI’s findings.

Corruption

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Triesman): My right honourable friend the Minister for Trade, Investment and Foreign Affairs (Ian McCartney) has made the following Written Ministerial Statement.

I am pleased to publish today the Government's report to the Organisation for Economic Co-operation and Development (OECD) on the UK's progress with implementation of the OECD Bribery Convention. This complements the report my right honourable friend the Secretary of State for International Development (Hilary Benn) published on 12 March, Combating international corruption: UK action plan 2006-07: interim progress report, which summarised a wide range of activities we have undertaken to tackle international corruption. The report published today, which was a subject for discussion last week in Paris at the OECD Working Group on Bribery, accounts for the work we have done in response to the OECD's “phase 2 review” of the UK, published in March 2005. It outlines the achievements we have made in implementing the OECD Bribery Convention, as well as addressing some of the challenges we have come across in this work. Some additional developments post-date the Government's submission of the report to the OECD.

First, the changes we have made to UK co-ordination in this area are significant, allowing us to be more effective in our efforts across the board. My right honourable friend the Secretary of State for International Development's appointment as the ministerial lead on fighting corruption was important. But this is by no means the only development. On the law enforcement side, there has been major progress. The Foreign and Commonwealth Office (FCO) has made it clear to all law enforcement agencies in the UK what practical support it can offer to transnational investigations. On specifics, the Government have confirmed the lead role of the Serious Fraud Office (SFO) in handling foreign bribery allegations and the SFO has created a special unit to vet such allegations. Since March 2005, the SFO has received 53 allegations, launched six new

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investigations and made four arrests. My noble and learned friend the Attorney-General (Lord Goldsmith) has stated that he will seek additional resources for the SFO's work in this area, should that be necessary.

With funding from the Department for International Development (DfID), the City of London Police created a new dedicated 10-person unit to increase law enforcement capacity to investigate foreign bribery allegations. Set up in November 2006, the unit has already taken on four investigations and made its first arrests in January. In parallel, DfID has funded extra staff for the Metropolitan Police Service's Proceeds of Corruption unit to increase the UK's capacity to counter the laundering of corrupt assets in the UK's financial system. The Metropolitan Police has £34.6 million-worth of allegedly corrupt assets under restraint. The Met has responded to requests from the Nigerian Government relating to two former Nigerian state governors. In one case, £1 million has been returned. In the other, property bought in London—which was frozen by swift police action under the 2002 Proceeds of Crime Act—will now be sold so that the funds can be returned to the people of Nigeria from whom they were stolen. We have worked hard on proposals for an International Corruption Investigation Support Centre; a facility which poor countries can use to obtain legal advice on asset recovery and mutual legal assistance. There have been discussions with other interested donors and key service providers. An international expert meeting will take place on 21 March to agree proposals. Furthermore, changes in the UK's mutual legal assistance mechanisms will result in faster execution of requests from other countries.

In addition, the FCO has assumed a greater co-ordinating role in awareness-raising activities. This has allowed us to make best use of our guidance materials—a revised leaflet explaining UK anti-corruption law and a DVD, launched by my right honourable friend the Secretary of State for International Development and myself last November. There is more systematic training for officials working overseas and law enforcement personnel, the latter drawing particularly on the experience of the Ministry of Defence Police Fraud Squad. And the fight against corruption has featured in the FCO's regular dialogue with the trades union movement, to complement the rolling programme of sessions we hold for the UK business community, both in the UK and overseas. So, all in all, including inside the Palace of Westminster, there is much greater awareness in the UK of international corruption than there was a few years ago.

I should comment on legislative developments since March 2005, beginning with the question of comprehensive corruption legislation, which has been taken forward since we submitted this written report to the OECD last month. My right honourable friend the Secretary of State for the Home Department (John Reid) published the Government's response to the Home Office's 2005-06 consultation on 5 March (Official Report, col. WS 115) and his Statement dealt with it in detail. Times have changed since the Law Commission first reported on this area of the law in 1998. Not only has the OECD published three reports

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on the UK's implementation of this convention and the UN convention come into force, our law enforcement agencies now have several years' practical experience of applying the UK's current legal framework. All of these have helped to inform the Government's thinking. We continue to believe that our law meets the requirements of the OECD convention. The objective of this exercise is to clarify and modernise our legislation. As my right honourable friend the Secretary of State for the Home Department made clear last week, the consultation confirmed that there is broad support for reform of the Prevention of Corruption Acts and the Government remain committed to a fundamental reform. We shall bring forward legislative proposals as soon as we are in a position to do so. Ministers have asked the Law Commission to review the law of bribery and, in the light of their findings, to prepare a draft Bill, complete with extra resources to expedite the process. The Law Commission will have a broad mandate to consider the full range of structural options for a new modern and consolidated bribery law.

We have also been active in a number of other international fora. For example, the UK was a key participant at the first Conference of States Parties to the UN Convention against Corruption in December 2006, ensuring that we can take forward implementation on the crucial issues of asset recovery, technical assistance and review mechanisms. We also funded the participation at that conference of civil society representatives from more than a dozen developing countries to ensure that their voice was heard. And we continue to help to deliver on G8 anti-corruption commitments; for example, on asset recovery.

The report also outlines a good degree of progress in the crown dependencies and overseas territories. Guernsey and Jersey have both made progress towards implementing international anti-corruption treaties, as have several Overseas Territories. We have already extended the UN Convention against Corruption to the British Virgin Islands and hope to be in a position to extend this and the OECD convention to the Cayman Islands when it enacts new legislation later this year. We shall continue to raise the subject with the dependencies and territories at relevant opportunities, including at the highest level.

Following on from this week's discussions in Paris, the Government will continue to inform the OECD of further progress in this vital area. This co-operation will include our usual constructive approach to the preparation for and conduct of a future on-site visit to the UK by experts from two other OECD countries in the coming year and contributions to a further written report on the UK. The visit and report will focus on the operation of our legal framework and law enforcement capacity and systems. We fully anticipate further recognition of the high level of transparency that characterises the UK's activities in this field. And we welcome the opportunity to demonstrate the degree of our commitment to all aspects of the fight against international corruption. As well as work under the OECD Bribery Convention, we shall continue to pursue our wider efforts in this regard, including by pushing for

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effective implementation of the UN Convention against Corruption, through G8 initiatives, the provision of technical assistance by DfID, the FCO and law enforcement experts and continued close engagement with the business community in key sectors.

Employment: Clergy Working Group

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Truscott): My honourable friend the Parliamentary Under-Secretary of State for Employment Relations and Postal Services (Jim Fitzpatrick) has made the following Written Ministerial Statement.

The Department of Trade and Industry (DTI) set up the Clergy Working Group in 2004 to look at clergy working conditions as part of its review of employment status issues. The working group included representatives from trade unions and many faith groups and was chaired by the DTI.

Discussions within the Clergy Working Group have resulted in the development of a statement of good practice. The statement represents minimum standards which faith groups should aim to achieve, on a voluntary basis, in a variety of areas—terms and conditions of work; resolving disputes; development and personnel support; and information and consultation.

As a first step, the DTI is asking faith groups to assess the current position in relation to the standards in the statement and in two years’ time will ask faith groups what progress has been made. Individuals will have an opportunity to contribute to this process at both stages. Based on the information and evidence provided, the DTI will consider whether any further action is appropriate, including legislative action. The DTI will encourage other faith groups, which did not participate in the working group, to consider joining this process.

Health: NHS Trusts

The Minister of State, Department of Health (Lord Hunt of Kings Heath): My right honourable friend the Secretary of State has today made the following Written Ministerial Statement.

Pursuant to the dissolution of 41 National Health Service trusts on 1 April 2006, 1 July 2006 and 1 October 2006 and their reconfiguration through the establishment of 16 new NHS trusts, I propose to create originating capital for the new NHS trusts equal to the net assets transferred to them and therefore to remit the outstanding debt of the dissolved trusts.

These operations involved no overall loss to the Exchequer. A minute giving particulars and circumstances of the proposed remission, which has been approved in principle by Her Majesty's Treasury, has today been laid before Parliament.

The minute has been placed in the Library.



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Identity and Passport Service: Business Plan

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

The Identity and Passport Service is today publishing its business plan for the year commencing April 2007. Copies of the document will be placed in the Library of the House.

Passports

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

Further to the Statement of 2 May 2006 by the honourable Member for Leigh (Andy Burnham), then Parliamentary Under-Secretary of State for the Home Office, announcing the proposed introduction of interviews for adult first-time passport customers, the House will wish to know that I am announcing today the opening of the first passport interview offices commencing in May with further offices to be added progressively throughout 2007.

Passport interviews are part of the continuing fight against attempted passport fraud and forgery and are being introduced alongside other counter-fraud initiatives. These changes are critical because of increasing levels of attempted passport and identity fraud. It is widely recognised that the very nature of identity fraud makes it difficult to be precise when estimating the scale of the problem in terms of the number of fraudulent passport applications. The Identity and Passport Service has sought to address this issue through special exercises that scrutinise a representative sample of passport applications.

During the period 31 October 2005 to 30 September 2006, a sample of several thousand applications was scrutinised by specialist Identity and Passport Service teams with support from fraud investigators. This found that 0.25 per cent of applications (equivalent to 16,500 fraudulent passport applications a year) were

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believed to be from people attempting to obtain a passport fraudulently. Almost half of these applications were stopped by existing Identity and Passport Service processes. The remainder had gone undetected. Our current estimate is therefore that the level of undetected fraud is about 0.15 per cent (equivalent to 10,000 applications against the planned 6.6 million passports issued per year).

Although precise figures are difficult to obtain, it appears that the level of attempted fraud is increasing and getting more sophisticated. Analysis of the frauds shows that the main fraud threat is from first-time adult applications followed by first-time child applications.

The Identity and Passport Service has developed a comprehensive counter-fraud strategy that will help to mitigate these patterns of fraud including:

checking biographical information to ensure that the identity claimed on the application form is real, living, and can be linked to the customer through cross checks against a range of public and private sector databases;the development of facial recognition systems to check applicant images against a database of images of suspected fraudsters;checking applicants against increasingly sophisticated internal watch files including the database of passports reported lost or stolen;strengthening its business processes for identity authentication, and training and support for passport examiners and specialist fraud units; and interviews for all first-time adult customers.
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