Tuesday 25 October 2016
Hinkley Point C: UK Guarantee
The UK Guarantees scheme was announced in July 2012 with spending cover provided through the Infrastructure (Financial Assistance) Act 2012, receiving Royal Assent on 31 October 2012. The scheme provides a sovereign-backed guarantee to help infrastructure projects raise debt finance. Guarantees for up to £40 billion in aggregate can be offered under the initiative.
As part of the Hinkley Point C negotiations, EDF sought a Government guarantee to assist in bringing forward investment. The Government are confirming that they have approved the provision of a guarantee for up to £2 billion to the project for the construction of its new EPR nuclear plant in Somerset, backed by commitments from the shareholders. The guarantee will be available from 2018 to 2020 if necessary conditions are met and is at Government’s discretion. Even if made available, and EDF have indicated to the Secretary of State for Business, Energy and Industrial Strategy that it is not their current intention to take up the guarantee, I judge the likelihood of any call under the guarantee to be very low.
The Government will report to Parliament on the financial assistance given in line with the requirements set out in the Infrastructure (Financial Assistance) Act 2012.
Apprenticeships transform lives and are vital in making this a country that works for everyone. As well as giving young people the chance to build a better future by taking their first step on the employment ladder, they give those already in work the opportunity to progress further. And for those just about managing, they can unlock a brighter future. That is why we are committed to 3 million new apprenticeships by 2020, spending £2.5 billion to transform this country’s investment in skills, in our people.
For employers, apprenticeships bring great benefits too, by boosting the skills of the workforce and helping to increase economic productivity. Yet for too long far too many employers have under-invested in the skills of their employees compared to other countries. It is time to change that and ensure all employers play their part in improving productivity and social mobility. So we are working in partnership with employers to implement major reforms.
The new apprenticeship levy, which we are introducing in April 2017, will put the funding of apprenticeships on a sustainable long-term footing so we can support opportunities for all. The levy will be set at 0.5% of pay bill and only employers with a pay bill of more than £3 million will have to pay the levy. Employers that are not eligible to pay the levy will continue to receive Government support towards the costs of apprenticeship training and assessment.
The levy applies to all UK employers but apprenticeship funding policy is devolved. It is for the devolved administrations to decide how they use their levy income. This statement sets out how we will fund apprenticeships in England to help build an economy that works for everyone.
To do that we are not only introducing the levy but also reforming the way we fund apprenticeships, introducing a dedicated register of approved apprenticeship training providers and launching the employer-led institute for apprenticeships. These changes will ensure apprenticeships are high quality, meet the needs of employers and provide opportunities for millions more people.
After extensive discussions with employers and training providers we are today publishing the final funding policy for May 2017 onwards and details of the new register of apprenticeship training providers. The adjustments we have made to the funding policy since our proposals in August will help ensure that the reforms benefit more employers, providers and apprentices.
Today we are confirming the final funding policy. Key features are:
Higher funding for STEM apprenticeship frameworks and higher pricing of apprenticeship standards to support improved quality, and greater flexibility to train those with prior qualifications;
Longer period of time for employers to spend funds in their digital account, now with 24 months before they expire, an increase from our original proposal of just 18 months;
A commitment to introducing the ability for employers to transfer digital funds to other employers in their supply chains, sector or to apprenticeship training agencies in 2018, with a new employer group including the Confederation of British Industry, Federation of Small Businesses, British Chambers of Commerce, Charity Finance Group and EEF—the Manufacturers’ Organisation—to help Government develop this system so that it works for employers.
90% contribution from Government to the cost of training for employers that will not pay the levy;
100% contribution from Government to the cost of training for small employers that will not pay the levy and who take on apprentices who are 16 to 18 years old, 19 to 24 year old care leavers or 19 to 24 year olds with an Education and Health Care Plan;
£1,000 each from Government to employers and training providers when they take on 16 to 18 year olds, 19 to 24 year olds who were in care or who have an Education and Health Care Plan;
Help for training providers to adapt to the new, simpler funding model through an additional cash payment equal to 20% of the funding band maximum where they train 16 to 18 year olds on frameworks; and
A simplified version of the current system of support for people from disadvantaged areas to ensure the opportunity to undertake an apprenticeship is open to everyone, no matter where in England they live, their background or family circumstances.
We will continue to work in close partnership with employers and providers in the implementation of these reforms. We know they are major changes and we want to work together to ensure we transform our country’s skills for the benefit of all.
Foreign and Commonwealth Office
Foreign Affairs Council
My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs attended the Foreign Affairs Council on 17 October. The Foreign Affairs Council was chaired by the High Representative of the European Union for Foreign Affairs and Security Policy, Federica Mogherini. The meeting was held in Luxembourg.
Foreign Affairs Council
A provisional report of the meeting and conclusions adopted can be found at:
European Union global strategy
The Council discussed the follow up the EU global strategy on foreign and security policy and adopted Council conclusions. The Foreign Secretary made clear that the UK would continue to support European security after Brexit. He encouraged other European countries to spend more on defence and exploit the EU’s soft power.
The Council discussed Tunisia and adopted conclusions on the joint communication “Strengthening EU support for Tunisia”, which was presented by Member states Mogherini and Commissioner Hahn. Member states welcomed the EU stepping up its support but underlined that Tunisia needed to deliver reform for real progress to be made.
Foreign Ministers discussed the situation in Syria, in light of recent developments on the ground and the escalation of violence, including in Aleppo. The Foreign Secretary briefed Ministers on the 16 October London meeting that he had hosted. Ms Mogherini concluded that the EU should work closely with the UN both on the humanitarian track and on preparing for the post-conflict phase.
Foreign Ministers took stock of recent developments related to the external aspects of migration. Ms Mogherini briefly updated the Council on migration partnership frameworks, underlining to Ministers her view that they had created a positive change in attitude within partner countries.
Ministers agreed without discussion a number of measures:
Council conclusions on the Democratic Republic of Congo
The Council adopted decisions on partnerships priorities and compacts with Jordan for the period 2016-18 and with Lebanon for the period 2016-20.
The Council renewed the EU restrictive measures in view of the situation in the Republic of Guinea until 27 October 2017.
The Council approved the state of preparations of the first inter-summit meeting of the Ministers of Foreign Affairs of the Community of Latin American and Caribbean States (CELAC) and of the European Union, which will take place on 25 and 26 October 2016 in Santo Domingo.
The Council adopted the provisional agenda of the second EU-Iraq Co-operation Council, which will take place on 18 October 2016 in Brussels.
The Council adopted the common foreign and security policy report “Our priorities in 2016”.
The Council authorised the signature of an acquisition and cross-servicing agreement between the EU and the United States of America.
The Council approved the High Representative’s report on the 24th Operation Althea six-monthly review.
IBRD Loan to the Government of Iraq
I have today laid a departmental minute outlining details of a contingent liability of the US dollar equivalent of £360 million which DFID has undertaken, in respect of the World Bank Group.
The twin shocks of the Daesh insurgency and the 40% decline in Government revenue following the fall in oil prices since 2014 have threatened Iraq’s stability. At the G7 in May, the IMF, World Bank and G7 partners pledged to provide a $12 billion package of assistance to the Government of Iraq. The World Bank’s share of the package comprises three $1 billion development policy loans from the International Bank for Reconstruction and Development (IBRD) arm of the World Bank, with the first to be disbursed this year. Provision of the IBRD loans will be conditional on Iraq committing to, and implementing, reforms in the areas of public expenditure, energy efficiency, and transparency of state-owned enterprises. These reforms complement the package of reforms already agreed between the Government of Iraq and the IMF in July of this year, and will support Iraq’s economic development.
The IBRD’s internal rules on loan exposure to any one country constrain the extent to which it can increase its lending to Iraq. This proposed UK guarantee will allow the IBRD to increase the size of its 2016 loan by the US dollar equivalent of £300 million. This will support fiscal stability in Iraq, and will underline the UK’s commitment to supporting a key ally in the fight against Daesh.
DFID’s contingent liability under this agreement is expected to be the US dollar equivalent of £360 million, covering the equivalent of £300 million of loan principal, plus the equivalent of around £60 million of interest payments. The agreement would be in place for the expected 15 year life of the IBRD loan. France and Canada are also currently considering using the same guarantee instrument to guarantee further additional IBRD lending to Iraq.
For the guarantee to be triggered, the Government of Iraq would have to be in arrears with the IBRD for over 180 days. The risk of Iraq defaulting, and the UK guarantee being called upon, is the same as the risk of Iraq defaulting on other IBRD lending. There is a strong incentive for Iraq avoiding a default, as this would prevent the IBRD from providing any further funding to Iraq. But in the event that the Government of Iraq do default on a loan repayment to the IBRD, and the liability is called, the UK will provide a payment to the World Bank, in proportion to the UK’s guaranteed share of the overall IBRD loan. The payment will prevent the loss on the loan from impacting on the World Bank’s other lending activities. If the liability is called, provision for any payment will be sought through the normal Supply procedure.
If the Government of Iraq subsequently provide a payment to reduce its arrears, the World Bank will transfer the UK’s share of the payment into a UK-controlled trust fund held at the Bank, to be used towards other World Bank activity as the UK sees fit.
European Maritime Safety Agency
The Government welcome the efforts of the Commission to address the ongoing migration crisis, but have decided not to opt in to the JHA content in the proposal for a regulation of the European Parliament and of the Council amending regulation (EC) No. 1406/2002 establishing a European Maritime Safety Agency (EMSA).
The proposal—which has now been adopted—forms part of a wider package of measures by the Commission to ensure the protection of the EU’s external borders.
The Commission has taken the view that the challenges which have arisen from the recent migratory crisis cannot be adequately dealt with by member states acting in an uncoordinated manner and that integrated border management should be a shared responsibility of a new European Border and Coast Guard into which national authorities with coastguard and border control responsibilities, the European Maritime Safety Agency (EMSA) and European Fisheries Control Agency (EFCA) can provide additional resources and contribute to better, more effective co-ordination and co-operation.
The core tasks of EMSA currently deliver a high, uniform and effective level of maritime safety and prevention of pollution within the EU, achieved by ensuring a consistent application of EU maritime law.
The amendments to the EMSA founding regulation will have the effect of immediately expanding EMSA’s role and responsibilities beyond its current core tasks of managing maritime pollution and safety. It will formally establish co-operation for the prevention, detection and investigation of criminal offences by enabling EMSA to make available information with other national authorities with coastguard and border control responsibilities, the European Fisheries Control Agency (EFCA) and the European Border and Coast Guard Agency, which is currently accessible through ship reporting and other information exchange systems.
Such co-operation is indirect—EMSA itself will have no role to play in the exchange or analysis of such information between the agencies—and there is little practical or operational benefit for the UK from this measure. The Government maintain that the effect of the measure amounts to an obligation that falls within the scope of the JHA section of the treaties and is, therefore, subject to the UK’s JHA opt-in. It is on that basis that the Government have decided not to opt in.
Work and Pensions
An error has been identified in a reply to a written question given to the hon. Member for North Thanet, Official Report, 9 September 2013: Column 612W.
The reply given was:
Sir Roger Gale: To ask the Secretary of State for Work and Pensions which French tropical overseas territories were included in his Department’s average temperature calculations in respect of winter fuel payments to expatriate UK citizens living in the EU member states. 
Steve Webb: From 2015-16 winter fuel payments will no longer be payable to individuals in countries where the average winter temperature is warmer than the warmest region of the UK (South-West England). The Government have worked with the Met Office to analyse comparable winter temperature data across all EEA countries. The Met Office used recognised administrative regions for each country. For France this was the 27 regions, including French Guyana, Guadeloupe, La Reunion, Martinique and Mayotte. It does not include the French overseas territories, which are not part of the EEA.
It should have said:
From 2015-16 winter fuel payments will no longer be payable to individuals in countries where the average winter temperature is warmer than the warmest region of the UK (South-West England). The Government have worked with the Met Office to analyse comparable winter temperature data across all EEA countries. The Met Office used recognised administrative regions for each country. For France this was the 27 regions, including French Guiana, Guadeloupe, La Reunion and Martinique. It does not include the French overseas territories, which are not part of the EEA.
Employment, Social Policy, Health and Consumer Affairs Council
The Employment, Social Policy, Health and Consumer Affairs Council met on 13 October 2016 in Luxembourg. Damian Hinds MP, Minister of State for Employment at the Department for Work and Pensions, represented the UK.
The Council reached a general approach on the proposal to amend the carcinogens and mutagens directive, which protects workers from the risk of exposure to carcinogens and mutagens in the work place. The UK, along with all member states and the Commission, supported the proposal.
The Council also reached political agreement on the directive to implement the social partner agreement on the ILO Work in Fishing Convention. The UK supported the proposal but also submitted a minute statement which outlined reservations on its application to the self-employed and competence.
There was a policy debate on the Commission’s New Skills agenda proposal and an endorsement of the Employment Committee (EMCO) opinion on it. The UK intervention set out the UK’s skills plan and apprenticeship reforms, emphasising the importance of putting employers at the heart of the system. The UK welcomed the EMCO opinion, including recognition that many of these issues were member state competence.
The Council endorsed the Social Protection Committee (SPC) and the EMCO reports on the European semester. The Commission noted and endorsed the streamlining of the European semester process.
There was an exchange of views, followed by a lunch time discussion, on youth employment. The Commission highlighted the tools and funding the Commission has made available to fight youth unemployment. There was then an exchange of views on long-term unemployment.
The presidency outlined the agenda for the Tripartite Social summit on 19 October.
The Council adopted Council conclusions on the Court of Auditors report on Roma integration. Introducing the item, the presidency noted that 6 million Roma living in the EU still faced discrimination and disadvantage. It would bring a second, broader, set of conclusions to Council in December.
The Council generally endorsed the joint EMCO/SPC opinion on the social pillar. The presidency and the Commission confirmed this would not pre-empt member state Government responses to the on-going Commission consultation.
Under any other business, the presidency provided information on the revision of the Blue Card directive, the action plan on integration of third country nationals, and the collaborative economy. The Greek delegation provided an update on labour market reforms in Greece.