Thursday 11 June 2015
Business, Innovation and Skills
The Government have sold half of the 30% stake they retained in Royal Mail plc, at a price of 500p per share.
The sale has raised £750 million, which will be used to reduce public debt.
Following independent financial advice, the Government decided that yesterday was a good opportunity to realise value for money from a sale of part of their remaining shareholding in Royal Mail. The shares were sold through an accelerated bookbuild process which enabled the Government to take advantage of the current favourable market conditions. The sale was launched yesterday after the financial markets closed.
Royal Mail has demonstrated that it can thrive in the private sector. It now has the ability to access the funds it needs to ensure that it has a sustainable future and can adapt to the changes in the postal market.
The universal postal service will continue to be protected by the regulatory regime set out in the Postal Services Act 2011. Ofcom has been given a primary duty to ensure that the universal postal service is maintained and the regulatory tools to intervene if it is under threat.
In addition, building on the success of the initial scheme, and in recognition of their work in turning around the Royal Mail, the Government intends to gift up to 1% of the shares of the company to Royal Mail’s UK employees. These shares will come from Government’s remaining holding and they will be subject to sales restrictions.
This builds on the 10% of the total shares in the company that were awarded to Royal Mail employees as part of the 2013 flotation.
The Government see no policy reason to keep their remaining stake in Royal Mail.
Post Office Ltd, which operates the network of branches throughout the UK, remains wholly owned by Government and was separated from Royal Mail in April 2012. The relationship between the Post Office and Royal Mail is a commercial one and a 10-year contract for the delivery of Royal Mail services through post offices was put in place in 2012.
Culture, Media and Sport
The Telecommunications Council will take place in Luxembourg on 12 June 2015. I am representing the UK at this Council, and below are the agenda items, and the positions I intend to adopt on each of them.
The first item is an exchange of views on the Commission’s digital single market strategy, which was published on 6 May. The debate will be informed by two questions from the presidency. My intervention will include: This strategy is strongly welcomed by the UK; Europe should prioritise making it easier for small businesses to start up, scale up and add value to the whole EU economy; and that we should also prioritise the area of e-commerce. My intervention will also lay out early high level HMG views on various parts of the digital single market package including telecoms framework, the data economy and cross border parcel policy.
The second item is for Council to reach agreement for a general approach on the proposal for a decision of the European Parliament and of the Council establishing a programme on interoperability solutions for European public administrations, businesses and citizens (First reading—EM11580/14). I am proposing to abstain from voting on this general approach. My intervention will make it clear that while we support the aims of ISA2 in principle and hope to be able to support a final text following negotiations with the European Parliament, we cannot support the current text.
This will be followed by information from the presidency on the ‘state of play’ on negotiations regarding ‘a regulation of the European Parliament and of the Council laying down measures concerning the European single market for electronic communications and to achieve a connected continent’ (EM 13562/13 and 13555/13 + ADDs 1-2). My intervention will: stress UK’s ambition that the regulation contain a clear timetable of actions that will result in the eventual cessation of mobile roaming charges in the EU; and seek to ensure that the regulation enables member states to bring forward, or maintain, existing parental controls measures, thus permitting the UK to maintain our current regime of online protection for children. Discussion on this item will be preceded and informed by an informal ministerial breakfast whose aim is to reach political agreement on the regulation; my interventions during this discussion will mirror those in Council.
This item will be followed by information from the presidency on a proposal for a directive of the European Parliament and of the Council concerning measures to ensure a high level of network and information security across the Union (NIS directive), (First reading—EM6342/13). I do not intend to intervene on this item. However, if a round table is initiated by others on this item I will remind Council that while the UK supports the aim of raising the level of cyber security across the Union it would be prudent to take our time and make sure we get the detail right so the directive is not unduly burdensome on business.
The Council will then be given a progress report from the presidency on proposal for a directive of the European Parliament and of the Council on the accessibility to public sector bodies’ websites (First reading—EM16006/11). We do not expect a debate on this item and I do not propose to intervene.
There will then follow the adoption of draft council conclusions on the transfer of the stewardship of the Internet Assigned Numbers Authority (IANA) functions to the multi-stakeholder community. I will support these conclusions and do not expect a debate on this item.
Finally, under any other business, the Luxembourg delegation will inform the Council of their priorities for their forthcoming presidency before Council adjourns until the next meeting in quarter four 2015.
Fiscal Sustainability Report
Today the independent Office for Budget Responsibility (OBR) published its fifth fiscal sustainability report (FSR). This document meets its requirement to annually prepare an analysis of the sustainability of the public finances, and provides an important insight into the state of the public finances and the impact that demographic change will have.
The OBR also published the second welfare trends report (WTR). This report provides a transparent and independent analysis of welfare spending, in line with a request from the Chancellor in December 2013 to publish information on trends and drivers of welfare spending, and sources of error compared to the previous forecast.
The FSR was laid before Parliament earlier today and copies of both reports are available in the Vote Office and Printed Paper Office.
Changes since last year’s fiscal sustainability report do not change significantly the path of the long-term projections, with the FSR’s key conclusion reiterating that:
“longer-term spending pressures, if unaddressed, would put the public finances on an unsustainable path.”
As the OBR notes in its analysis, this is due to the spending pressure generated by an ageing population, which is projected to increase age-related spending by 3.9% of GDP from 2019-20 to 2064-65. Without additional policy change, the overall budget surpluses that are assumed to continue after this Parliament bring debt down to a low of 54% in the early 2030s, before being outweighed by age-related pressures that put debt back onto an upward trajectory. Debt reaches 87% of GDP in 2064-65 and is expected to continue rising thereafter. The report projects that tax revenues will remain at a relatively constant share of GDP from 2019-20 onwards, although in its detailed analysis of oil and gas revenues, it highlights the sharp scale of the decline in tax receipts from the North sea.
The Government take the sustainability challenge seriously. As life expectancy continues to increase, there is a need for a regular and structured way in which to consider changes to the state pension age in future. That is why the Government will carry out a regular review of state pension age every six years, starting in this Parliament. Details of the core principle to guide that review were set out alongside autumn statement 2013, including that people should expect to spend on average up to a third of their adult life in receipt of the state pension. The OBR projects that this would have a substantial positive impact on long-term fiscal sustainability, with state pension spending projected to be 0.8% of GDP lower by 2064-65 than if the state pension age had risen with currently legislated changes.
Reforms to the state pension come alongside the Government’s reforms to public service pensions, which will rebalance taxpayer and member contributions in the short term while ensuring costs are sustainable and fair in the long term. The previous Government implemented reforms to rebalance contribution costs between the taxpayer and the member, to change the uprating measure to CPI, and to reform the schemes’ designs in line with Lord Hutton’s recommendations. HM Treasury has estimated that these reforms will save more than £430 billion by 2061-62.
Spending on health rises from 6.2% of GDP in 2019-20 to 8.0% in 2064-65, as the population ages, with spending on social care rising from 1.2% to 2.2% over the same period. Given the particular spending pressures that arise in health and social care, including non-demographic factors, the Government are committed to ensuring that care services are as efficient and effective as possible. This includes funding the NHS’s own plan to deliver a modern, efficient and sustainable NHS and continuing to integrate health and social care services through policies such as the pooling of around £6 billion of health and care funding in Greater Manchester and the £5.3 billion Better Care Fund.
On the revenues side, the OBR have revised their oil and gas forecast down to £2.1 billion between 2020-21 and 2040-41 with companies’ net revenues expected to be low over the period. The OBR’s analysis clearly demonstrates the impact of falling production and cost escalation on the profitability of the sector—the onus is now on industry to make real improvements in these areas to improve their competitiveness. At Budget, the Chancellor introduced a radical package of reforms to support the sector, worth £1.3 billion, including reducing the headline tax rates and introducing a new investment allowance to reward companies investing in the UK continental shelf. This package is expected to lead to £4 billion of additional investment and an increase in production by 15% by 2019-20.
Recognising the scale of the long-term challenge, the Government are committed to ensuring that our public finances are put on, and remain on, a sustainable path for the long term. The OBR analysis makes it very clear that the Government’s medium-term fiscal consolidation plan is a vital step towards achieving long-term fiscal sustainability. This includes Government reforms to change the welfare system to ensure it promotes work and personal responsibility, while putting expenditure on a more sustainable footing.
Over the last Parliament, the Government halved the deficit from its post-war peak, but the deficit remains one of the highest in the developed world. This Parliament, the Government will complete the task of getting the public finances into surplus, so that we bear down on our excessive national debt, and begin to address the long-term challenges that we face.
The fiscal sustainability report and the welfare trends report published today are key examples of the great strides the OBR have taken in delivering greater transparency and credibility to our fiscal forecasts since its creation, five years ago. This Government remain committed to supporting the OBR in its role to provide independent and authoritative analysis of the UK’s public finances. The Chancellor has therefore asked Sir David Ramsden, Chief Economic Advisor to the Treasury, to complete a Treasury review on the existing regime and framework of the OBR including a focus on its role in enhancing UK fiscal credibility. The outcomes of the review will be published in the summer.
The Chancellor announced yesterday, following advice from the Governor of the Bank of England and N M Rothschild, the Government’s independent advisor, that the Government plans to initiate share sales of RBS in the coming months. Copies of the advice have been made available on HM Treasury’s website.
As Rothschild noted, the UK is currently in a position where alongside the United States, the taxpayer can comfortably expect to secure proceeds which exceed what they put in to overall banking sector interventions.
The Chancellor was advised that it is in the interests of the taxpayer to begin sales soon, with decisions on specific details of a sale to be made in due course.
Energy and Climate Change
The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Penrith and The Border (Rory Stewart) and I will attend the EU Environment Council in Luxembourg on 15 June.
Following the adoption of the agenda the list of “A” items will be approved.
During the legislative deliberations, there will be a policy debate on the proposal for a directive on the reduction of national emissions of certain atmospheric pollutants.
The one non-legislative item on the agenda is the road to the United Nations framework convention on climate change (UNFCCC), conference of the parties in Paris, for which there will be an exchange of views. Over the lunch Ministers will be invited to discuss further aspects of the international climate change negotiations, namely the Lima-Paris action agenda and possible long-term goals for 2050 and 2100.
The following any other business items will be discussed.
Proposal concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme.
An update from recent international meetings.
The European fund for strategic investments—an opportunity for environmental projects.
The Lisbon charter—a guide for public policy and regulation of drinking water supply, sanitation and waste water management services.
The work programme of the incoming Luxembourg presidency.
Employment, Social Policy, Health and Consumer Affairs Council
The Employment, Social Policy, Health and Consumer Affairs Council will meet on 18-19 June in Luxembourg. The Health and Consumer Affairs part of the Council will take place in the morning of 19 June.
The main agenda item is the following:
Regulations on medical devices and in vitro diagnostic medical devices: the presidency plans a general approach on medical devices. The regulations seek to address weaknesses in the current regulatory system, ensure a more consistent level of implementation across the EU, and ensure that the EU will continue to be viewed by business as an innovation-friendly regulatory environment.
The UK has broadly supported the Commission’s proposals in order to ensure high standards of patient safety. At the outset of negotiations the UK identified three areas as priorities:
avoiding an ineffective and bureaucratic process proposed by the Commission involving additional pre-market scrutiny of higher risk devices by a central committee of member state experts;
ensuring sufficient flexibility is in place to allow health institutions to manufacture and use diagnostic tests developed ‘in-house’; and
resisting proposals to introduce additional regulatory burdens.
Under ‘any other business’ there will also be presentations on three other issues by the following delegations:
Slovenia—follow-up to the informal meeting of EU Health Ministers on a new framework for the EU alcohol policy;
Cyprus, Greece, Italy and Malta—importance of the health dimension in the European agenda on migration;
Luxembourg—priorities for their forthcoming presidency, which will run from July until December 2015.
It is also available online at: http://www.parliament.uk/writtenstatements.
Terrorism Prevention and Investigation Measures
Section 19(1) of the Terrorism Prevention and Investigation Measures Act 2011 (the Act) requires the Secretary of State to report to Parliament as soon as reasonably practicable after the end of every relevant three-month period on the exercise of her TPIM powers under the Act during that period.
The level of information provided will always be subject to slight variations based on operational advice.
TPIM notices in force (as of 31 May 2015)
TPIM notices in respect of British citizens (as of 31 May 2015)
TPIM notices extended (during the reporting period)
TPIM notices revoked (during the reporting period)
TPIM notices revived (during the reporting period)
Variations made to measures specified in TPIM notices (during the reporting period)
Applications to vary measures specified in TPIM notices refused (during the reporting period)
The number of subjects relocated under TPIM legislation
The TPIM Review Group (TRG) keeps every TPIM notice under regular and formal review. A TRG was held on 16 March 2015. The next TRG will take place in June.
On 20 April 2015 the Court of Appeal agreed that the appeal brought by DD in the case of DD v. Secretary of State for the Home Department  EWHC 3820 (Admin) (which resulted in a judgment in which the High Court determined a preliminary issue in DD’s appeal against the revival of his TPIM notice), could be withdrawn with all the issues to be heard again by the High Court. This Court of Appeal order is available at: http://www.bailii.org referenceT1/2014/4078.
The case of DD v. Secretary of State for the Home Department  EWHC 3820 (Admin) was heard again at the High Court between 21 and 24 April 2015. The judgment is expected to be handed down in June.
I wish to apologise to the House on behalf of the Ministry of Justice following the provision of misleading information to Members. In its annual accounts to be published today, the National Offender Management Service (NOMS) is releasing amended data for prison crowding. It has become apparent that crowding figures previously published in the NOMS annual report, and doubling figures published in the Prison Performance Digest, have understated the level of crowding in each year back to 2008-09.
These incorrect figures have in turn informed public statements from the Ministry of Justice, including statements to Parliament.
There are two measures of prison estate capacity: (i) certified normal accommodation (CNA), also known as the uncrowded capacity, which refers to the number of prisoners that cells, cubicles or rooms were originally designed to hold, and (ii) operational capacity, which is the number of prisoners a prison has been assessed as capable of holding, taking into account regime facilities and the requirement to maintain order and control. Crowding means, for example, that two prisoners may be sharing a cell originally designed for one. All prisons’ regimes, facilities and staffing are structured to provide for the total number of prisoners within it and NOMS will only crowd where it has been assessed as safe and decent to do so.
Errors in the published figures, used to provide parliamentary answers, were due to misinterpretation on the part of some prisons, which reported the number of prisoners held in excess of the number that cells were designed to hold (CNA), rather than the number of prisoners affected by crowding. In instances where two prisoners were held in a cell designed for one, both prisoners should be counted as being in crowded conditions. Some prisons, however, were only counting the additional prisoner.
The public should rightly expect this information to be accurate. Publication of clear, reliable figures on how many prisoners we hold in crowded conditions is an important part of making sure we can be held to account. It is therefore unacceptable that these incorrect figures have been published over the last six years and that these errors were not identified sooner. Since discovering these errors, we have taken urgent steps to ensure that figures will in future be subjected to rigorous quality control.
A table—available as an attachment online—shows updated national figures for crowding, which is measured as the percentage of prisoners who are held in a cell, cubicle or room where the number of occupants exceeds the uncrowded capacity of the cell, cubicle or room from 2008-09 to 2014-15. The table also contains amended data on the level of doubling, defined as the percentage of the prison population held two to a cell designated as a single cell.
The amended figures have been calculated following an exercise to validate data and make appropriate corrections. The new data will also be published in the 2014-15 NOMS annual report.
Going forward, we have put robust new checks in place to quality assure figures as they are submitted, and to prevent incorrect figures from being published again. I will be writing to Members who have been provided with incorrect information and I once again apologise to the whole House for these mistakes.
Attachments can be viewed online at:
http://www.parliament.uk/business/publications/written-questions- answers-statements/written-statement/ Commons/ 2015-06-11/HCWS29/.
I have today placed in the Libraries of both Houses a copy of the Command Paper setting out the details of the Ebola medal for service in West Africa. The Ebola medal pays tribute to the bravery and selflessness of civilian and military personnel who have taken on great personal risk to support the UK Government’s response to the Ebola crisis in West Africa. I would like to put on record my admiration for the commitment shown by people helping those suffering with Ebola.
It is also available online at: http://www.parliament.uk/writtenstatements.
Investigatory Powers Review
In 2014 the Government asked the Independent Reviewer of Terrorism Legislation, David Anderson QC, to conduct a review into the operation and regulation of law enforcement and agency investigatory powers, with specific reference to the interception of communications and communications data. David Anderson has completed that review and I am pleased to be publishing his report today. I can confirm that no redactions have been made to the report.
I am very grateful to David Anderson for a thorough and comprehensive report. The Government’s intention is to bring forward legislation relating to the security, intelligence and law enforcement agencies’ use of investigatory powers and to have that legislation enacted before the sunset provision in the Data Retention and Investigatory Powers Act 2014 takes effect on 31 December 2016.
The Government will take full account of David Anderson’s report, which I believe offers a firm basis for consulting on our new legislation. The Government will need to give further consideration to the detail of both David Anderson’s recommendations and those in the Intelligence and Security Committee’s Privacy and Security report published in March, before we develop our proposals. But this report is a very important and valuable contribution to the continuing debate about the role of the security, intelligence and law enforcement agencies, their use of investigatory powers and their oversight. The Anderson review was taken forward with cross-party support and I believe that it should help us continue to take this issue forward on the basis of cross-party consensus. The Government’s proposals will be brought forward for pre- legislative scrutiny by a Joint Committee of Parliament in the autumn.
As David Anderson’s report highlights, there are a range of threats against the UK and its interests, from terrorism, both at home and overseas, to cyber attacks from criminals. Many groups, not just the Government, have a role to play in ensuring the right capabilities are in place to tackle those threats. It is particularly important to engage communications service providers in developing solutions, given the technology supporting modern communications. That is why I appointed Sir Nigel Sheinwald as my data envoy to engage with industry and others to explore the possibilities for a sustainable long-term basis for providing data when it is needed to protect our security. In parallel to new legislation, the Government will be taking forward Sir Nigel’s advice, including pursuing a strengthened UK-US mutual legal assistance treaty process and a new international framework. As David Anderson recognises in his report, updated powers, and robust oversight, will need to form the legal basis of any new international arrangements. We will continue to work closely with the companies to take all these issues forward.
Attachments can be viewed online at: http://www. parliament.uk/business/publications/written-questions- answers-statements/written-statement/Commons/ 2015-06-11/HCWS27/.