Monday 25 November 2013
Business, Innovation and Skills
EU Competitiveness Council
The European Competitiveness Council will take place in Brussels on 2 and 3 December 2013. The UK will be represented by Shan Morgan, Deputy Permanent Representative.
The internal market and industry substantive agenda items on 2 December will be: a general approach on electronic invoicing in public procurement; a general approach on the directive for rules governing actions for damages under national law for infringements of competition law; a progress report on the revision of the European trade mark system; a presentation by the Commission on the annual growth survey; and adoption of Council conclusions on industrial policy, single market policy and smart regulation.
Four “any other business” points will be discussed: information from the presidency on the collective rights management directive; information from the presidency on the European patent and the unified patent court; information from the Commission on the general block exemption regulation; and information from the Greek delegation regarding the work programme for the upcoming presidency.
The substantive space items for day two will be: general approach on the regulation establishing the Copernicus programme and repealing regulation (EU) No. 911/2010; and progress report on establishing a space surveillance and tracking support programme.
The substantive research items for day two will be: general approach on Commission proposals to establish public-public partnerships with member states for the joint implementation of national research programmes; political agreement on amending the council decision establishing the European joint undertaking for international thermonuclear experimental reactor (ITER) and the development of fusion energy; general approach on Commission proposals for joint technological initiatives; and a policy debate on public sector innovation.
The Government objectives for the Council are to:
Ensure that the general approach on the electric invoicing in public procurement is consistent with the Government’s negotiating position;
Support the objectives of the trade mark reforms to improve the well-functioning system so that it delivers even better solutions for users;
Support the directive for rules governing actions for damages under national law for infringements of competition law and ensure that the mandate is consistent with UK priorities;
Endorse the conclusions on the industrial policy, single market policy and better regulation;
Ensure that the regulation establishing the Copernicus programme and repealing (EU) No. 911/2010 is agreed without further modification. Secure political agreement on the ITER proposal which will enable Euratom to make the European contribution to costs of ITER construction over 2014-20.
On 26 March 2013 a statement was tabled announcing that the remaining publicly owned mortgage-style (MS) student loan book was to be offered for sale by the Government under the Education (Student Loans) Act 1990 as amended by the Education (Student Loans) Act 1998.
Today, the Government are announcing the completion of that sale process. The purchaser is Erudio Student Loans Ltd, backed by a consortium composed of CarVal Investors and Arrow Global Ltd. Loans issued on behalf of the Scottish Government and the Department for Employment and Learning in Northern Ireland are also included in this sale, which my Department has undertaken in conjunction with the Student Loans Company (SLC).
The sold loans will continue to be administered by the SLC until they transfer to the purchaser in a few months’ time.
MS loans were available to eligible higher education students who were enrolled between 1990 and 1998. Borrowers are required to repay in fixed monthly instalments over a set period, typically five or seven years. Interest is charged at a rate equivalent to the retail prices index. Repayments can be deferred for a year at a time if a borrower’s income is below the threshold, which is 85% of the national average earnings. From 1 September 2013 the threshold is £28,775. There will be no change to borrowers’ terms and conditions (including interest rates) as a result of the sale; these are set down in regulations and borrowers’ credit agreements.
As a result of a competitive bidding process, Erudio Student Loans Ltd has agreed to pay £160 million for the portfolio of loans. Of this, approximately £43 million will be paid on migration of administration to Erudio. The price paid is greater than the estimated value to Government of retaining the loan book. The terms of the sale transfers the financial risks associated with loan repayments to the purchaser. Any impacts on the public finances will be decided by the Office for National Statistics. However, we would expect there to be a reduction of public sector net debt (PSND). The sale is in line with wider efforts to maximise the value of Government assets.
The sale process assessed all potential bidders against a strict set of criteria, including ensuring that they would provide suitable protections for borrowers upon taking over administration of the loans. Members of the consortium have a great deal of experience managing consumer debt and a history of treating customers fairly and I am content that they are a fit and proper owner of the loan book. They will have to adhere to strict Office of Fair Trading guidance about the treatment of borrowers which includes particular protections for vulnerable borrowers and those in financial difficulty. They have also committed to adhere to best practice guidance issued by the Credit Services Association.
As envisaged in the 26 March statement, the price received is below the £890 million face value of the loans. The price paid for the loan book reflects the fact that the MS loan book is an old, closed portfolio whose value is deteriorating.
Most borrowers repaying their loans on schedule should have fully repaid by now according to the original loan terms. The vast majority of the remaining loans belong to borrowers who are earning below the deferment threshold and so at present have no obligation to repay under the terms of the loans, or who are currently not meeting their obligations under the terms of the loan agreement.
The amount the Student Loans Company (SLC) has been collecting from the portfolio has been reducing year-on-year and the private sector is better placed to maximise returns from the loan book. The SLC would require significant additional investment to increase collection rates, and even then the SLC would be unlikely to achieve the same levels of repayment as specialist private sector collectors. I therefore believe this sale represents good value for money for the taxpayer.
There were two previous sales of mortgage style loans in 1998 and 1999 which passed the majority of the performing MS loans to the private sector. The SLC has successfully ensured that 69% of the approximately 1 million borrowers retained after the previous sales have repaid in full by collecting £2.9 billion in repayments.
The sale allows the SLC to focus on its core business of supplying income contingent loans to current students and collecting repayments from these loans.
Income contingent repayment (ICR) loans, offered to students after 1998, have not been included in this sale. The Government are in the process of exploring options for the potential future sale of the ICR loan book.
Community Amateur Sports Clubs
The Government are committed to delivering and maintaining a real sporting legacy after the success of the London 2012 Olympic and Paralympic games. An important part of this commitment is to encourage greater participation in sport at a community level and local amateur sports clubs have an essential role to play here, making sport accessible and getting people involved.
The Community Amateur Sports Club (CASC) scheme provides a number of tax reliefs, similar to those available to charities, to support grassroots amateur sports clubs. After a review of the scheme it became clear that some of the original legislation was unclear.
As a result, the Government introduced new eligibility conditions for CASCs in the Finance Act 2013. These included provisions to make detailed rules in regulations once a consultation had taken place.
A public consultation on the proposed changes to the CASC scheme ran from 3 June to 12 August. The Government are pleased to say that there were over 140 written responses to the consultation. The Government will today publish a summary of responses to that consultation and will also outline the package of reforms they will be taking forward to make the CASC qualifying conditions clearer and more transparent.
The consultation responses document will be published at:
The Government have decided to keep the rules as simple as possible for community sports clubs, which are mainly run by volunteers. These changes will make it easier for them to understand the CASC rules and will encourage other clubs to apply for the benefits of CASC status. These new rules will:
encourage participation in local sport by ensuring that clubs are open to anyone who wants to take part in grassroots sport;
encourage local donations by extending corporate gift aid to CASCs;
increase the corporation tax exemption thresholds for CASCs so that they align with those given to charities;
support promising individuals who may not otherwise be able to afford to play by allowing clubs to make limited payments to players; and
ensure that clubs can generate modest amounts of income and still be considered an amateur sports clubs for the purposes of the CASC scheme.
The Government expect draft regulations to be published early next year.
These measures demonstrate the Government’s commitment to supporting and encouraging grassroots sport as part of the Olympic legacy. The Government strongly believe that as many eligible amateur sports clubs as possible should benefit from the available tax reliefs. Therefore the rules governing CASC status are vital to the health of grassroots sport. The package of changes announced will increase participation in these sports clubs.
Foreign and Commonwealth Office
British Intergovernment Services Authority
Other countries are increasingly seeking support from the British Government to help them to design and deliver better civil infrastructure. Britain, with a combination of Government expertise and industrial capability, is well-placed to provide this support. And we are establishing Government to Government (G2G) arrangements with other countries to do so. These G2G arrangements offer significant benefits to the countries with which we are working. They also offer valuable benefits to Britain. They can open new export opportunities for British companies; help foreign countries to develop infrastructure we would like them to have; and build stronger bilateral relationships. They particularly support our prosperity agenda.
As with any major contract, these G2G deals can carry commercial risk, and they require specialist private sector commercial skills. To manage risk and to enable the Government to bring in the skills needed for successful delivery of G2G programmes the Foreign and Commonwealth Office is establishing a new Government-owned company, the British Intergovernment Services Authority Ltd, or BISA.
BISA is already established as a private limited company. It is not yet trading. But over the coming months, and as G2G business flow requires, we intend that it will grow into a fully operational company. In my official capacity I hold BISA’s shares. The shareholding will pass automatically to my successors. BISA will have its own chief executive and board. The chief executive and board members will between them have the range of business, programme and international political skills required for success. The chief executive will be accountable to Parliament. The work of BISA will be overseen by a cross-Whitehall panel, which will provide advice to me as shareholder. BISA will be wholly funded by revenue from work it does for foreign Governments. BISA will establish subsidiary companies to deliver individual G2G programmes.
BISA is established under the Companies Act 2006. As a limited liability company it will contain its own legal and financial liabilities. So these liabilities will not be underwritten by the British Government. It will apply corporate best practice, in particular in the areas of risk management, financial management, transparency, recruitment, bribery and corruption and human rights.
We expect BISA to operate across a range of different sectors. If BISA works on programmes involving export of licensable goods it will be subject to the same export controls as any other company exporting from the United Kingdom.
BISA is a resource for the whole of Government. It can support other Government Departments’ export efforts through: assisting the development of G2G opportunities; structuring G2G deals; developing and managing G2G contracts; and provision of specialist staff.
I am announcing today my intention to roll out nationally both domestic violence protection orders (DVPOs) and the domestic violence disclosure scheme (DVDS) across England and Wales from March 2014. This follows the successful conclusion of two pilots to test these provisions. Tackling domestic violence and abuse is one of my key priorities. I am determined to see reductions in domestic violence and abuse and the Government’s updated violence against women and girls (VAWG) action plan sets out our approach for achieving that. The Government are committed to ensuring that the police and other agencies have the tools necessary to tackle domestic violence, to bring offenders to justice, and to ensure victims have the support they need to rebuild their lives.
Domestic violence protection orders are a new power introduced by the Crime and Security Act 2010, and enable the police to put in place protection for the victim in the immediate aftermath of a domestic violence incident. Under DVPOs, the perpetrator can be prevented from returning to a residence and from having contact with the victim for up to 28 days, allowing the victim a level of breathing space to consider their options, with the help of a support agency. This provides the victim with immediate protection. If appropriate, the process can be run in tandem with criminal proceedings.
The domestic violence disclosure scheme introduces a framework with recognised and consistent processes to enable the police to disclose to the public information about previous violent offending by a new or existing partner where this may help protect them from further violent offending. The DVDS introduces two types of process for disclosing this information. The first is triggered by a request by a member of the public (“right to ask”). The second is triggered by the police where they make a proactive decision to disclose the information in order to protect a potential victim (“right to know”). Both processes can be implemented within existing legal powers.
High Speed Rail (London - West Midlands) Bill
Later today the High Speed Rail (London - West Midlands) Bill will receive its First Reading. This is a significant step forward in the Government’s strategy for a high-speed rail network that will address the critical capacity constraints that we face and improve connectivity between our great cities. This is vital to ensure that the country is equipped to compete economically in the 21st century.
The Bill includes the powers necessary to construct and operate phase 1 of HS2 between London and the west midlands. Alongside the Bill I will also be publishing several other related documents.
As required by Standing Orders I will publish an environmental statement (ES) alongside the Bill. This ES describes the railway, the alternatives considered to it, the significant environmental effects that are likely to arise from its construction and operation, and the measures proposed to avoid or reduce these effects. It has been informed by the consultation on the draft environmental statement held earlier this year and includes HS2 Ltd’s response to that consultation.
Following publication of the ES a public consultation will be held that will close on 24 January 2014. A report summarising the responses will be produced by an independent assessor appointed by the House authorities.
I will also publish the Command Paper “The Government response to the HS2 Design Refinement Consultation”. In October I announced my decisions in relation to the proposals for tunnels at Northolt and Bromford, and this document sets out my decisions in relation to the remaining 12 design proposals that were consulted on between May and July this year.
I will also publish two Command Papers addressing issues outstanding from the October 2012 property and compensation consultation. “HS2 Property and Compensation for London-West Midlands Decision document—Impact on Social Rented Housing” sets out the Government’s approach to the replacement of lost social rented housing. It affirms our commitment to working with key stakeholders in order to ensure that where social rented housing is lost as a result of HS2, it is replaced in a manner sympathetic to local needs and reflective of the relevant local authority’s strategy for social housing.
“HS2 Property and Compensation for London-West Midlands Decision document—Properties above Tunnels” addresses our policies relating to properties above tunnels and other underground excavations, providing clarity and reassurance for property owners and the wider market.
Copies of these Command Papers and the ES will be placed in the Libraries of both Houses. The documents can also be found on: www.gov.uk/dft.
Work and Pensions
2012 Statutory Child Maintenance Scheme
Today the Government will open the 2012 statutory child maintenance scheme, delivered by the Child Maintenance Service, to all new applicants. We will no longer be accepting new applications to the 2003 scheme, delivered by the Child Support Agency.
The flat rate of child maintenance will also increase from £5 to £7 for 2012 scheme cases only. This change will increase the amount of money flowing to children and restore approximately the value of the flat rate in real terms, compared with what it was when introduced in 2003.
Those wishing to make an application to the 2012 scheme will first need to go through a gateway conversation, delivered by the Child Maintenance Options service. This will ensure that applicants consider their alternatives before turning to the statutory scheme. This will be a tailored conversation appropriate to individual circumstances. For example, those who have been victims of domestic violence will be fast-tracked through the gateway.
The Government aim to ensure that parents who are able to make their own family-based arrangements are supported and encouraged to do so, while an efficient and effective statutory service is still available as a backstop for those who really need it.
Today’s changes to the statutory service represent a key milestone in our progress to reform child maintenance. But we are also aiming wider: our starting point is that children tend to do better when they have a positive relationship with both parents and we want to make working together the norm across all parenting issues, not just child maintenance. We are supporting separated parents to do this through the Help and Support for Separated Families (HSSF) initiative. As part of this, we have launched the Sorting out Separation web app; an HSSF mark; the HSSF Telephony Network; and an Innovation Fund to test and evaluate new interventions to help separated parents work together.