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Lord Howe of Aberavon: Is the Minister aware that, historically, Foreign Ministers of other countries have always been ready to declare the effectiveness of our Foreign Office and the distinguished quality thereof,

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which they always acknowledge, particularly the French, as being second only to their own? Is it not a fact that the management of major programmes such as the DfID programme and others referred to depend on the effectiveness, quality and professionalism of the Diplomatic Service? Is it not crucial that that should not be further jeopardised, otherwise other parts of the programme will continue to be badly managed?

Baroness Kinnock of Holyhead: I thank the noble and learned Lord, and I echo much of what he said about the importance of the FCO being Britain's voice overseas, where we protect and promote British values and make the international system work better for UK interests. The FCO supports the UK economy, saves money for the UK and helps Brits abroad; on average, 38,000 are helped and 75,000 inquiries are made. In our embassies, we also serve the needs of other departments of the United Kingdom, including on visas and other issues.

Baroness Falkner of Margravine: My Lords-

Lord Davies of Oldham: I am sorry, my Lords, but we will have to move on.

Banks

Question

3.29 pm

Asked By Lord Clinton-Davis

The Financial Services Secretary to the Treasury (Lord Myners): The United States has announced a levy to recoup $117 billion that it expects to lose from interventions under the troubled asset relief programme. We believe that UK losses from banking sector interventions will be minimal at worst. The need for a similar levy therefore does not apply. The UK is, however, leading a global debate on how to ensure that banks, not taxpayers, support the financial sector in respect of any future emergencies.

Lord Clinton-Davis: I thank my noble friend for that Answer. In his view, will shareholders in banks and the customers of those banks have to continue payment of what President Obama has described as "obscene bonuses"? In particular, we are being urged by the United States Treasury Secretary to take similar action. How will my noble friend reply to that request?

Lord Myners: My noble friend raises an important point. The bank payroll tax, which we announced on 9 December, is designed to bear down on bonus practice. It is clearly having an impact: JP Morgan Chase and Credit Suisse, among other banks, have said that the UK Government's action here has led them to revisit the size of their bonus declaration. However, other banks are clearly going to pass this cost on to their shareholders. The shareholders of our major banks-and, importantly, as my noble friend says, the customers-will take a very dim view of practices that pay substantial bonuses that are not necessarily the product of talent

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or hard work and, in so doing, impair the capital base of the bank, diminish its ability to support the British economy and impair the brand value of the institution. It would not surprise me if customers took their business away from banks that paid bonuses unwisely.

Lord Forsyth of Drumlean: What representations, if any, have the Government made to ensure that British banks, like the Royal Bank, in which the taxpayer has a substantial interest, will not have to pay this levy in respect of their subsidiaries in the United States? After all, they have not benefited from any of these TARP funds.

Lord Myners: The UK bank payroll tax applies to American, European and other banks operating here in the United Kingdom. The US fee applies to United States banks globally and to foreign banks operating in the United States through a subsidiary rather than a branch.

I am afraid that the noble Lord, Lord Forsyth of Drumlean, for whom I have considerable respect, is again missing the point that government interventions by, in this case, the American Government are limited not to the recipients of funds but to supporting the economy. In fact, the interventions that the American Government are reclaiming money on are largely for the insurance industry and the motor industry rather than for banks. The noble Lord has perhaps misunderstood the thinking behind the American Government's policy, as he so often misunderstands the thinking behind ours.

Lord Newby: Does the Minister agree that there is a widespread view that the one-off bonus tax is an inadequate response to the level of support that the banks in general have received from the Government in the past 18 months? Will the Government now consider a profits tax on the banking sector in return for both the explicit and implicit guarantees that the banks have, and will continue to receive, from the Government?

Lord Myners: The bank payroll tax is not an isolated package, but is part of a co-ordinated programme of action around capitalisation, liquidity management and enhanced governance as a result of the Walker report and other actions that we have taken to improve the strength of the banking system. The G20 policy principles and the FSA's code on reward also fit into the thinking behind this particular tax to bear down on what we regard as unreasonable behaviour. Contemplation of a higher rate of taxation for one industry alone would almost certainly be in contravention of European human rights legislation and would distort the flows of capital. But, importantly, the issue of a levy or other resolution method is high on the agenda for a seminar that I will be chairing at No. 11 next Monday on how we get the banking sector to internalise the cost of failure and no longer rely on the taxpayer.

Lord Howarth of Newport: Will my noble friend share with the House the Government's thinking about how to develop a co-ordinated, international response to ensure that the banks and wider financial services industry globally do not land us in another financial catastrophe in the course of the next economic cycle?



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Lord Myners: The thinking behind resolution mechanisms, contingent capital and levies is very much on the basis that to be effective there must be global co-ordination. That is why my right honourable friend the Prime Minister put that on the agenda at the G20 Finance Ministers meeting in November in St Andrews and why we are pressing for continued work in this area in anticipation of the IMF spring meeting, so that we get global co-ordination around a response mechanism to make the world's banking system more robust and more able to cope in the future with its own problems.

Baroness Noakes: My Lords, the Minister talked about leading global discussions. Can he confirm that those discussions will involve all the countries which would benefit if the actions by some of them drove financial business away from the centres where it now takes place?

Lord Myners: The work to which the noble Baroness refers is taking place through the IMF and the G20. The seminar that we are holding next week is largely focused on the work of the G7 and international support agencies. We absolutely recognise that a commercially successful, profitable, responsible banking and financial services sector is an important national asset that we will cherish, protect and ensure grows in a way that supports broader economic interests in the future.

Cluster Munitions (Prohibitions) Bill [HL]

Bill Main Page
Copy of the Bill
Explanatory Notes

Report

3.37 pm

Report received.

Video Recordings Bill

Bill Main Page
Copy of the Bill
Explanatory Notes

Third Reading

3.38 pm

Bill passed.

Security and Counterterrorism

Statement

3.38 pm

The Chancellor of the Duchy of Lancaster (Baroness Royall of Blaisdon): My Lords, with the leave of the House, I shall repeat a Statement made in the other place by my right honourable friend the Prime Minister. The Statement is as follows.

"With permission, I should like to update the House on the measures that we are taking to enhance our security and our protection against terrorism. Yesterday, at a regular meeting of our National Security Committee, Ministers and I received the latest intelligence and information from the chiefs of our security and intelligence agencies, the head of the UK Border Agency, the country's senior counterterrorism officials and police officers, and the Chief of the Defence Staff. Also yesterday I spoke to President Obama about our security measures.



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The failed attack over Detroit on Christmas Day signalled the first operation mounted outside Arabia by al-Qaeda in the Arabian peninsula, the Yemen-based organisation with close links to the al-Qaeda core in Pakistan. We know that a number of terrorist cells are actively trying to attack Britain and other countries. Earlier this month, the Home Secretary and the Transport Secretary made Statements to Parliament setting out the urgent steps that we are taking to enhance aviation security, including new regulations for transit passengers. Today, following the advice that the Government have received, I want to announce further measures to strengthen the protection of our borders, maximise aviation security, and enhance intelligence co-ordination at home and abroad.

Earlier today, I paid tribute to those members of our Armed Forces who most recently gave their lives in the service of the security of our country in Afghanistan. The action that we are taking to counter terrorism at its source in the Afghanistan-Pakistan region and elsewhere is a central part of our wider counterterrorist strategy. All our actions, which we will update regularly, are founded on what is and must be the first and most important duty of government: the protection and security of the British people.

Although the UK's borders are already among the strongest in the world, I now want to set out how we will further strengthen our protection against would-be terrorists: first, by extending our Home Office watch list; and secondly, in partnership with security agencies abroad, by improving the sharing of information on individuals of concern. I can announce today that, as well as extending our watch list, we intend for the first time to use it as the basis for two new lists: first, a no-fly list; and secondly, a larger list of those who should be subject to special measures, including enhanced screening prior to boarding flights bound for the UK. We will use the new technology that we have introduced and our partnerships with police and agencies in other countries to stop those who pose the greatest risk from travelling to this country. Over the coming months we will go further in taking action against people before they even board a plane to the UK.

Our e-Borders scheme is a vital component of our strategy to strengthen and modernise the UK's border controls. It has already achieved significant success, enabling nearly 5,000 arrests for crimes that include murder, rape and assault. As a result of the £1.2 billion investment that we are making, we will by the end of this year be able to check all passengers travelling from other countries to all major airports and ports in the UK, whether they are in transit or the UK is their final destination, by checking against the watch list 24 hours prior to travel and then taking appropriate action. The e-Borders system will give us a better picture than ever of people coming into and out of our country.

Today my right honourable friend the Home Secretary is meeting his European counterparts to push for swift agreement at EU level on the ability to collect and process data on passenger records, including on travel within the EU, and to enforce the European Commission's recent approval of the transmission of advance passenger information to our e-Borders system by carriers based in other member states.



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As the Detroit bomber highlighted, we also need-and are sponsoring-research on the most sophisticated devices, capable of identifying potential explosives anywhere on the body. As President Obama and I discussed, greater security in our airports, with the new body scanners introduced from next week, an increase in explosive trace testing and the use of dogs, must be matched by demanding greater guarantees about security in those international airports from which there are flights into our country. I can today inform the House that we have agreed with Yemenia Airways, pending enhanced security, that it suspends its direct flights to the UK from Yemen with immediate effect. We are working closely with the Yemeni Government to agree what security measures need to be put in place before flights are resumed. Aviation security officials are at present looking at this. I hope that flights can be resumed soon, but the security of our citizens must be our priority.

We will also work with our partners in the International Civil Aviation Organisation, the EU and the G8 to promote enhancements to the international aviation security regime, including stronger security arrangements in airports and greater sharing of information. My right honourable friend the Home Secretary will be discussing initial proposals with European and US counterparts this week. We will also offer increased assistance to countries whose weaknesses in aviation security may present a wider threat to the international community, including to the UK.

It is because we fully recognise the global nature of the terrorist threat that we face today that our response must also be truly global. Plots against the UK and our interests originate in various parts of the globe. Some of the intelligence that we need in order to protect our people against attacks will be here in Britain; some will be held by our international partners and passed to us, just as we help them with our information about the threats that they face; and some information will come from the most unstable parts of the world. So, in tackling these threats to life and our way of life, our security services-to whom I pay tribute-need to be able seamlessly to track and disrupt terrorist activity and movements, whether within the UK or beyond. This requires ever closer working between our agencies themselves, and with our international partners.

I can announce that, as part of the work, I have asked the Cabinet Secretary to lead on intelligence co-ordination. Our three intelligence agencies have already begun to set up joint investigating and targeting teams to address potential threats upstream, long before the individuals concerned might reach our shores, ensuring that at all times we continue to deliver improvements in the way we collect, share and use intelligence, and building on previous reforms, including the Joint Terrorism Analysis Centre set up in 2003, the Office for Security and Counter-Terrorism and the National Security Secretariat in 2007.

In addition to all those measures to protect British lives at home and in the air, we are tackling the problem of global international terrorism at its source. I have said before that Yemen is both an incubator and a potential safe haven for terrorism, and, along with

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Somalia, is the most significant after the Pakistan-Afghanistan border areas. We and our allies are clear that the crucible of terrorism on the Afghan-Pakistan border remains the No. 1 security threat to the West. But at the same time we must recognise that al-Qaeda's affiliates and allies, pushed out of Afghanistan and under increasing pressure in Pakistan, are seeking to exploit other areas with weak governance, such as parts of Yemen, Somalia and the Sahel.

In Yemen, we have been at the forefront of the international effort for some time, assisting the Government through intelligence support and through support for their coastguard and for the training of counterterror personnel. We are also helping to tackle some of the root causes of terrorism by supporting political, economic and social reform. By next year, our commitments will total some £100 million, making the UK one of the leading donors. We are also increasing our capacity-building in Somalia, working with the transitional Government and the African Union.

As with all aspects of the fight against terrorism, this new threat can be met only through enhanced co-operation, so we will now work more closely with allies in the region to pool efforts, resources and expertise. Next week, here in London, alongside our conference on Afghanistan, we will be hosting a special meeting to strengthen international support for Yemen in its efforts against al-Qaeda, to help the Government of Yemen advance their internal reforms and to increase capacity-building and development assistance in a way that directly addresses poverty and grievances which can fuel insecurity and extremism.

Since 2001, we have reformed domestic defences against the terrorist threat, trebled our domestic security budget, doubled the staff in our security services and reformed our security structures to bring greater co-ordination across government. We have responded to the changing nature of the threat by bringing in new powers and new terrorism-related offences. Nearly 230 people have been convicted of terrorist or terrorist-related offences since 2001. Today's announcements demonstrate that we will continue to be vigilant, adapting our response to changing terrorist techniques".

I commend this Statement to the House.

3.47 pm

Lord Strathclyde: My Lords, I thank the noble Baroness the Leader of the House for repeating the Statement made earlier by the Prime Minister. Finding the right balance between ancient liberties and security is a delicate matter and something that I think this House has been rather better at than another place. If I may say so, it has certainly been better than the Government, whose security policy has been consistently reactive, and all too often over-reactive. One only has to think of the example of 42-day detention without trial. Thank goodness that old dog has not been let loose again. I hope the noble Baroness will confirm that she sees no need for it.

I said that the Government had too often been reactive and had played catch-up. That is surely the case in respect of militant radicalisation of Muslim youth. For too long the Prime Minister dithered about proscribing Islam4UK, which we on this side repeatedly

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asked to be banned. Now he has acted. Will the Government now ban Hizb ut-Tahrir? Does the noble Baroness share my concern that the United Kingdom is now widely seen by other countries as a base for radicalisation?

University freedom is vital, but can the noble Baroness tell the House what appraisal the Government have made of radical activity on FE campuses? Could not more be done to help those in Muslim communities combating those threatening a British way of life that most British Muslims hold dear? Could we not ensure that every woman and child in immigrant families is fully educated in the British language and our way of life? Must we not be rigorous in shutting out from any kind of taxpayer funding bodies that do not accept the pluralism of our way of life and ways of faith as a permanent British reality?

The Government intend to react to the Detroit bomber by imposing full-body scans at all airports. We support all action that is necessary and proportionate; we accept the security advice. However, will the noble Baroness tell the House four things: the timescale for this, the cost, the number of ports and airports involved, and the anticipated impact on travel times? How will this be required of countries of provenance? Is not the brutal reality that the terrorist target is as much the plane flying towards the UK or the US as that flying out?

The Statement seemed to say that by December, with 24 hours' notice, we will be able to prevent anyone boarding a flight to the UK from anywhere in the world. Is that what was meant? If not, precisely what was meant? This might be an ideal, but how will it be imposed? For example, has every EU country signed up to full-body scanning, or laborious body searches, at every international airport? If so, on what timetable?

Mass murder is possible-as seen tragically in Madrid and here on 7/7-on other modes of transport, or indeed on none. Is not the abiding overall need not for general measures, helpful though they may be, but for targeted measures, proper profiling and layered security? Questioning mothers taking pictures of their children in Whitehall, holding the DNA of innocent people or detaining, for example, a suspicious-looking character like the noble Lord, Lord West-as I read in the Daily Mail the other day-makes a mockery of targeted security policy and undermines consent. Therefore I welcome the targeted measures in the Statement: for example, the announcement of the extension of the Home Office watch list. I also particularly welcome the action on a no-fly list. This is something that my noble friend Lady Neville-Jones has been advocating for some time, and for which she asked the Secretary of State for Transport when he made his Statement last week. I and my noble friend welcome the fact that this has been taken up, however belatedly. Will the noble Baroness also tell the House what is being done, in the light of this episode, to improve targeting of potential terrorists, for example by enhancing the training of security staff at airports to identify risk factors?


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