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Written Statements

Volume 598: debated on Tuesday 14 July 2015

Written Statements

Tuesday 14 July 2015

Treasury

ECOFIN

A meeting of the Economic and Financial Affairs Council will be held in Brussels on 14 July 2015. Ministers are due to discuss the following items:

Current Legislative Proposals

The presidency will inform delegations about the state of play of current legislative proposals in the field of financial services.

Presentation of the work programme of the Luxembourg presidency

The Luxembourg presidency will present its six-month work programme in the ECOFIN area and invite an exchange of views.

Five Presidents’ report: Completing Europe’s Economic and Monetary Union

The Commission and the Eurogroup president will present the Five Presidents’ report on the plan for completing Europe’s Economic and Monetary Union.

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Financial Ombudsman Service

The annual report and accounts 2014-15 of the Financial Ombudsman Service has today been laid before Parliament.

The report forms an important part of the accountability mechanisms for the Financial Ombudsman Service under the Financial Services and Markets Act 2000 (FSMA), and assesses the performance of the Financial Ombudsman Service over the past 12 months in discharging its functions.

[HCWS105]

Defence

Royal Military Police

I wish to inform the House that I am laying today, on behalf of the Secretary of State for Defence, the first report from Her Majesty’s inspectorate of constabulary inspection of the Royal Military Police.

This is the first report as directed within the Armed Forces Act 2011, which requires Her Majesty’s inspectors of constabulary to inspect, and report to the Secretary of State, on the independence and effectiveness of investigations carried out by each service police force. The Royal Military Police were the first to be inspected in October 2014.

I consider this report to be very positive and it provides assurance from an independent civilian authority that, on the whole, the leadership of the Royal Military Police is good. Ten recommendations have been made for improvement, in particular concerning crime recording and monitoring the effectiveness of investigations. The Army are implementing an action plan to address the recommendations.

Copies of the report will be available in the Vote Office and Printed Paper Office.

[HCWS102]

LYNX ZF540

I wish to inform the House of the findings of the service inquiry into the accident involving an Army Lynx helicopter (Mark 9A variant) on 26 April 2014, in which Captain Thomas Clarke, Flight Lieutenant Rakesh Chauhan, Warrant Officer Class 2 Spencer Faulkner, Corporal James Walters and Lance Corporal Oliver Thomas tragically died. On the day of the accident, the aircraft was conducting a training sortie when it crashed approximately 20 km south of Kandahar Airfield in the Chaghray Ghar Valley, Afghanistan.

A service inquiry was convened by the director general of the Military Aviation Authority (now the director general of the Defence Safety Authority as of 1 April 2015) to establish the cause and examine those factors which contributed to the accident, and in order to make recommendations to prevent a recurrence and enhance air safety. The service inquiry panel has conducted an independent, thorough and objective inquiry and their report is now complete. Copies have already been provided to the next of kin, HM Coroner for Oxfordshire and relevant personnel and units in Defence to ensure the timely dissemination of the air safety lessons contained within it.

A copy of the service inquiry report, redacted in accordance with the provisions of the Freedom of Information Act 2000, is also being placed in the Library of the House today and on the www.gov.uk website. Our deepest sympathies remain with the families of those who lost their lives in this tragic accident.

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Home Department

Gangmasters Licensing Authority

The 2014-15 annual report and accounts for the Gangmasters Licensing Authority are being laid before the House today and published on www.gov.uk. Copies will be available in the Vote Office.

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Security Industry Authority

I am today announcing the first triennial review of the Security Industry Authority, part of the Government’s commitment to ensuring that public bodies continue to have regular independent challenge. The review will focus on examining whether the SIA is operating efficiently and whether its control and governance arrangements continue to meet the recognised principles of good corporate governance. I will inform the House of the outcome of the review when it is completed.

[HCWS100]

International Development

African Development Bank

It is normal practice, when a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, for the Minister concerned to present a departmental minute to Parliament giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until 14 parliamentary sitting days after the issue of the statement, except in cases of special urgency.

The UK has purchased shares in the multilateral development banks through special or general capital increases before. The African Development Bank is reissuing additional shares that were originally issued for the AfDB’s sixth general capital increase (GCI VI), but were either forfeited or not taken up by other non-regional shareholders. The UK is currently half the way through making payments for its subscription under this share issue that was approved by Parliament in May 2011. Further shares have also become available as a special capital increase (SCI) to non- regional shareholders, following the ratification of South Sudan as a member of the bank. This is required to maintain the approximate shareholding balance between regional and non-regional members of the bank to 60:40 respectively.

The UK currently holds 1.684% of the shares in the bank and the Government wish to increase its shareholding. The UK currently has the smallest shareholding of all G7 countries. The UK joined the bank in 1983, and at the time elected not to take up the full allocation of shares on offer. This small shareholding means that the UK’s vote on all AfDB issues carries less weight than many other shareholders, as it represents a smaller percentage of the total vote. Subscription to the additional shares available will increase the UK’s shareholding to approximately 1.72%. If we are able to subscribe to the total GCI VI shares available, this would increase our shareholding to 1.87%. Failure to participate in this share issue would decrease the UK’s shareholding to 1.65%.

The UK has been allocated 3,157 shares from the SCI issue and 1,453 additional shares from GCI VI. Combined, this equates to an additional 4,610 shares. Under the terms of this share issue, of the allocated shares, 6% must be “paid-in” at a cost of £2,755,377 and the remainder (£43,267,406) will be callable—that is, a contingent liability.

The SCI share issue has a long deadline, as the first payment is not required until 4 October 2016. However, under the terms of the GCI VI share issue, the first payment should be deposited with the bank by 2 October 2015; otherwise the UK will forfeit the shares. If it is not possible to secure parliamentary approval for the statutory instrument in the short amount of parliamentary time available before the end of October, we would still plan to proceed with seeking the House’s approval of the instrument. This would enable the UK to purchase any further shares that are transferred due to these and other forfeited shares.

We also expect other shareholders may not be able to meet this tight deadline, and shares will be reissued again to shareholders. DFID is therefore seeking approval of a payment up to £7,946,866.67. This figure equates to the total amount of GCI VI shares available to all shareholders plus the UK’s allocation of the SCI. This will allow the Government to react quickly to any further reallocation of this share issue (GCI and SCI) and increase the likelihood of the UK being able to meet the short deadlines that are part of the bank’s rules for share reallocations.

DFID’s total contingent liability is currently £10.7 billion if the total approved funds were fully utilised it would increase by £124,570,794 or 1.17%. I have today laid a departmental minute outlining details of the liability.

A draft statutory instrument, seeking approval for the Department for International Development (DFID) to pay up to the capital amount of £7,946,866.67 is being laid before Parliament in accordance with section 11 of the International Development Act 2002. This will be considered by the Select Committee on Statutory Instruments. The final value of the callable shares will appear in DFID’s financial accounts as a contingent liability.

The main risk associated with this share issue is that the UK will be asked to pay for the additional capital of £43,267,406 of the currently available shares or up to £124,570,794 if the UK is issued further shares from this allocation. Although the AfDB has the right to call for payment for these shares if there is a crisis affecting the bank’s assets or loans, this has not occurred in relation to existing callable shares and, given that the bank has an AAA credit rating, it is very unlikely to occur in practice. If the liability is called, provision for any payment will be sought through the normal supply procedure.

The Treasury has approved the proposal in principle. If, during the period of 14 parliamentary sitting days beginning on the date on which this minute was laid before Parliament—that is, 14 to 21 July and 7 to 17 September—a Member signifies an objection by giving notice of a parliamentary question or by otherwise raising the matter in Parliament, final approval to proceed with incurring the liability will be withheld pending an examination of the objection.

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Justice

Civil Justice Council and Family Justice Council

On 4 November 2013 the triennial review of the Civil Justice Council (CJC) and Family Justice Council (FJC) was announced in Parliament. I am pleased to announce the conclusion of the review and publication of the report today.

Stage one of the review concluded that both the CJC and FJC should continue to exist as an NDPB and that there is a continuing need for the functions of both councils.

Stage two reviewed the control and governance arrangements of the CJC and FJC in order to consider whether both bodies are complying with recognised principles of good corporate governance. This review has resulted in a small number of recommendations to drive greater transparency and encourage diversity in membership of the councils, particularly of the CJC.

The review was publicised on my Department’s website and stakeholders were invited to contribute through a call for evidence. A critical friends group ensured a robust approach to the review and provided comment and challenge on the conclusions. I am grateful to all who contributed to the triennial review. The final report has been placed in the Libraries of both Houses.

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