Monday 11 December 2017
Business, Energy and Industrial Strategy
Cape Town Convention: MAC Protocol
The UK has opted in to a proposal authorising the EU to open negotiations on the conclusion of a protocol to the convention on international interests in mobile equipment on matters specific to mining, agricultural and construction equipment (the MAC Protocol).
The convention on international interests in mobile equipment, or Cape Town Convention (‘CTC’) as it is commonly known, is an international private law treaty which aims to reduce the cost of raising finance for certain high value mobile equipment. Three protocols to the CTC have been adopted covering aircraft, rail and space assets. The UK ratified the aircraft protocol in 2015. Adoption of such protocols is viewed as boosting growth in the relevant manufacturing industries (hence the UK adoption of the aircraft protocol).
A key feature of the CTC is to reduce the cost of raising finance through the operation of special insolvency provisions aimed at giving finance and leasing companies greater certainty and control over recovering assets subject to security or leasing agreements in the event of payment default or insolvency.
The CTC project is undertaken under the auspices of UNIDROIT, the intergovernmental organisation focused on harmonisation of private international law. UNIDROIT is currently in the process of concluding a new protocol covering mining, agricultural and construction assets.
On 23 August 2017, ahead of the meeting of the second session of the Committee of Governmental Experts on 2 to 6 October 2017, the Council presented a draft Council decision to authorise the Commission to open negotiations on the conclusion of the MAC Protocol together with draft negotiating directives.
We fully recognise the importance of international efforts to reduce the cost of raising finance for equipment vital for economic growth, particularly in lower and middle income countries where financing costs can significantly inhibit investment and development. Reduced financing costs will also lead to increased demand, providing a boost to manufacturing including UK businesses in the mining, agricultural and construction sectors. The three sectors are all major exporters from the UK with certain niche manufacturers selling up to 95% of their production overseas. Between them the three industries employ over 50,000 people in the UK. They are vital elements of our industrial strategy. Preliminary economic assessment of the MAC Protocol suggests the benefits may amount to $32 to $48 billion annually for developing countries and $36 to $50 billion annually for developed countries.
After due consideration the Government have decided to opt in to the negotiating mandate as proposed by the Council.
As the negotiating mandate is currently restricted so as to preserve the EU negotiating position it is not therefore depositable within Parliament.
The Government will continue to work with the scrutiny Committees if and when they consider whether to opt in to a Council decision to sign and conclude the MAC Protocol. I will also update Parliament on the Government’s opt-in decisions at these stages.
The Competitiveness Council took place on 30 November and 1 December in Brussels. The UK was represented by Lord Henley on the first day and by me on the second.
EU industrial strategy
Discussions focused on the recent publication of a renewed EU industrial policy strategy. Ministers agreed that European industry needed to adapt to changes in the global economy and the digital revolution. The EU should improve investment in research and development and support for SMEs, and strengthen its internal market. The UK noted that its recently-published industrial strategy identified many of the same challenges and drivers of growth, and stressed its commitment to an open, liberal market economy based around fair competition and high standards.
A number of member states cautioned against arbitrary targets for industrial output, emphasising that support to industry was one policy among others to boost Europe’s competitiveness alongside a commitment to free trade and access to global value chains. Others called for greater sectoral support and called for the Commission to propose a longer-term vision for EU industrial policy towards 2030. Ministers agreed Council conclusions.
Single digital gateway
Ministers voted to adopt the proposed general approach on the single digital gateway. Member states generally expressed support for the objectives of the proposal and agreed that easier access to good quality online information and procedures was important for the internal market. There was broad agreement that the presidency had struck a good balance between ambition and flexibility. Voting in favour of the general approach, the UK noted its strong support for e-Government initiatives and underlined the importance of maintaining a focus on user needs. The Commission welcomed the agreement but noted the extension of the implementation period to five years.
Unified Patent Court
A number of member states joined the presidency and the Commission in pressing those member states yet to complete ratification of the Unified Patent Court to finalise preparations so the court can become operational in 2018. The UK re-stated its commitment to passing the final necessary domestic legislation currently before Parliament.
European defence industrial development programme (EDIDP)
The presidency noted the EDIDP would run from 2019 to 2020, providing €500 million towards the joint development of defence prototypes and increasing European industrial competitiveness. Timelines were ambitious with a general approach anticipated at the 12 December General Affairs Council. The Commission was looking for a €1.5 billion fund after 2020, covering both defence research and prototype development.
Vice President Ansip updated the Council on the implementation of the digital single market. He described the paradigm-shifting and multi-faceted impact of digitalisation on the world. He urged Ministers to help progress initiatives rapidly and ambitiously. The presidency and Commission noted the provisional agreement on geo-blocking with the European Parliament.
Hungary introduced a paper expressing concern about the impact of the tobacco track and trace implementing legislation on SMEs. Commissioner Andriukaitis emphasised its importance for public health and tackling illicit tobacco trade and underlined that its impact had been considered carefully. The final text included a number of SME derogations.
The Commission presented its recent public procurement package, stressing that more strategic use of procurement could help deliver environmental and social objectives. Savings of €200 billion per annum were possible through increased professionalism. The Commission confirmed that all elements were voluntary.
Ministers had a lunchtime discussion on the automotive industry; the UK and others stressed the fast-changing nature of the sector. Germany and the Commission provided an update on the SME Action programme. Bulgaria presented its plans for its presidency.
Day two—Space and Research
The Formal Competitiveness Council (Space and Research) took place in Brussels on 1 December. I represented the UK in the morning and Katrina Williams represented the UK in the afternoon.
Council conclusions on the mid-term evaluation of the Copernicus programme
The Council adopted conclusions on the Commission’s recent mid-term evaluation of the Copernicus earth-observation space programme, which underline the importance of maintaining its free and open data policy.
EU space programmes
The Council then held a debate on the future direction of EU space programmes, in light of the recent mid-term evaluations. The UK outlined the links to the UK’s industrial strategy, highlighting the importance of international collaboration and the desire for the UK to discuss future cooperation with the EU on space programmes as soon as possible.
Council conclusions on Horizon 2020
Next was a discussion on the Council conclusions on Horizon 2020. Ministers agreed the conclusions in document 15320/17. The UK set out its interest for an ambitious science and innovation agreement with the EU and stressed the need to focus on EU added value, simplification and international collaboration in framework programme 9 (FP9).
The mission-oriented approach in the ninth EU RDI framework programme
The Council then discussed the missions-orientated approach to FP9. The Commissioner (Moedas) encouraged member states to engage fully in the forthcoming consultation process. The UK highlighted the need to ensure continued focus on basic research and emphasised the need to avoid duplication of efforts undertaken at national level.
The European Commission gave an update on the European open science cloud. Hungary gave an update on the extreme light infrastructure project, which was on schedule to begin operations in 2018. Bulgaria then presented its presidency plans. Their priorities for science and innovation include the next framework programme (FP9), the future of the ITER project and the transfer of knowledge, data and research results to innovators and researchers. They will also focus on the roadmap for the governance and funding of the European open science cloud and the European supercomputer EuroHPC.
Help to Save Accounts
The Government are committed to supporting people at all income levels and all stages of life to save.
Help to Save is a Government backed savings account to help working people on low incomes build up their savings. They will be able to pay in up to £50 a month and receive a 50% Government bonus on their savings.
Subject to the approval of the House, Help to Save will begin with a trial in January 2018, rolling out in stages to increasing numbers and available to all those eligible from October 2018 at the latest.
Introducing it in this controlled way will allow HM Revenue and Customs to thoroughly test and develop it at every stage so that it provides the best customer experience possible, and a quality service for savers over the lifetime of the scheme.
From January, HM Revenue and Customs will start to invite Working Tax Credits customers into the trial, gradually increasing their numbers, with the expectation that Universal Credit customers will start to be invited in from April. Eligible customers will still have the full five years to register for Help to Save from the end of the trial, and the overall cost of the programme to Government will be the same.
Today regulations will be laid in the Commons which will set out the detail of how Help to Save will operate. The draft regulations were subject to a consultation and a summary of the responses and changes made have today been published at
The Higher Education and Research Act 2017 (HERA) achieved Royal Assent on 27 April 2017. It set out a number of significant reforms that will improve the value for money that students receive from their investment in higher education. These include the establishment of a new regulator, the Office for Students (OfS), with a remit to drive value for money, a rigorous framework for assessing teaching and student outcomes, and provisions that make it easier for students to switch provider.
The Act also includes a power for the Government to set higher annual fee amounts for courses completed on an accelerated basis, which can be matched by higher corresponding student loan amounts. This measure will provide valuable new options to prospective students.
The way in which degrees are currently taught and studied has stayed largely unchanged for many years. The vast majority of providers offer a traditional three years of study regardless of subject, spread out across 30 weeks a year and with a long summer vacation every year. It is wrong that this is the only choice that most students have. The growing dominance of the classic three-year residential degree reflects more the convenience of the sector and financial incentives on providers than the needs of students for flexible ways of pursuing higher education. And it may be deterring some from higher education, and slowing the return of others to productive work.
Students on accelerated degree courses can secure a degree qualification in their preferred subject, studying the same content for the same number of weeks over the life of the course as the standard equivalent degree, subject to the same quality assurances. But by studying for more weeks each year, they are able to graduate within only two years, and with significantly lower student debt—good news for the student and for the taxpayer.
I believe there is significant untapped potential for accelerated courses, starting first with degrees, in higher education. They offer benefits to students of lower costs, more intensive study, and a quicker commencement or return to the workplace. Innovative providers would like to offer more of these courses but face significant financial and operational disincentives in the current system.
But for these accelerated courses to become more mainstream, we need to be upfront about why more universities are not already offering them. Many universities are concerned about changing existing models and the costs associated with doing that. This includes extra teaching hours, capacity to research, or not being able to rent out rooms over the holidays. A three-year course condensed into two is more expensive to run.
That is why I am proposing a balanced package that ensures universities are able to cover these additional costs but must charge at least 20% less in tuition for an accelerated two-year degree than they can for its three-year equivalent.
The launch of the OfS and the new fee arrangements will help incentivise greater provision. This in turn will give students a genuine choice of accelerated degrees across the full range of undergraduate courses.
In the debate in Parliament on the passage of the Bill, we committed to consult on the detail of our proposals. The consultation that I am launching today fulfils that commitment so far as accelerated degrees are concerned.
The proposals on which we are consulting are:
Arrangements enabling greater provision and take-up of accelerated degree courses will be in place in Academic Year 2019/20, subject to Parliament passing secondary legislation which sets fees and loans specific to accelerated degrees.
Accelerated degree courses subject to the new fee arrangements will be undergraduate first degree qualifications recognisably provided within a more intense period of study than other equivalent courses.
The OfS will support and encourage more providers to offer accelerated degree courses, over a more diverse range of subjects than are currently offered.
The OfS will also act as regulatory gatekeeper, determining whether degree courses meet the statutory definition of ‘accelerated courses’.
The current means-tested living cost support package (the “long course loan”) available to students whose courses last for longer than 30 weeks and three days each academic year will continue to provide maintenance for students on accelerated degrees on the same terms.
The annual tuition fee and loan upper limit for accelerated degree students at approved (fee cap) providers would be set at 20% higher than the standard level. For example, based on current fee limits, the annual accelerated limit for a TEF-rated provider would be £11,100 (vs £9,250 for the three-year equivalent). This would give students who opt for accelerated degrees a £5,500 or 20% saving in the total cost of tuition fees
The annual tuition fee loan limit for students at approved providers (i.e. those outside the fee cap system) would be also be set at the standard level plus 20%. For example, based on current loan limits, students at TEF-rated approved providers would have an annual tuition fee loan limit of £7,398 (vs £6,165 for the three-year equivalent).
Existing quality assurance arrangements for accelerated degrees should continue to apply, including after the OfS becomes responsible for monitoring them on 1 April 2018.
This balanced package offers students significant savings on the costs of graduating, while also addressing the additional in-year costs providers incur by condensing the final standard third year of teaching into the first two years of the accelerated degree course. The 20% uplift in annual fee revenue should cover the extra costs associated with accelerated provision for most courses in most providers.
Accelerated degrees are referenced in the Industrial Strategy published last month, which notes their potential to widen choice for students. And they have enjoyed cross-party support since Shirley Williams championed them in the 1960s. In the passage of the Higher Education and Research Bill this year, MPs and peers from all sides called for Government to support them. The proposals I am announcing today will remove the barriers to accelerated degrees, and make them a real choice for many more future students.
Attachments can be viewed online at:
Exiting the European Union
General Affairs Council
Lord Callanan, Minister of State for Exiting the European Union, has made the following statement:
I will be attending the General Affairs Council in Brussels on 12 December 2017 to represent the UK’s interests. Until we leave the European Union, we remain committed to fulfilling our rights and obligations as a full member.
The provisional agenda includes:
Preparation of the European Council, 14 to 15 December 2017: Draft conclusions
The Estonian presidency will present the final draft conclusions on the agenda for the December European Council.
European Council follow-up
The presidency will provide an update on the implementation of the October European Council (OEC) conclusions. The OEC agenda included: migration; digital; defence; and external relations, which involved discussions on Turkey, the Democratic People’s Republic of Korea and Iran.
Legislative programming—joint declaration on interinstitutional programming
Following the exchange of views on the 2018 Commission work programme at the November General Affairs Council, the presidency will present the “joint declaration” of the European Parliament, European Commission and Council of Ministers, which sets out the priorities for 2018.
European Semester 2018—annual growth survey
The Commission launched this year’s European Semester on 22 November and is due to present this year’s annual growth survey.
Economic Crime and Anti-corruption
Economic crime and corruption do great harm to individuals, businesses, the integrity of our financial system and the UK’s international reputation. We must do more on economic crime to safeguard our prosperity, and the UK’s reputation as a world-leading place to do business.
The Government are making a step change in their response to the threat. A broad and deep public-private partnership is at the heart of this new approach. The Minister of State for Security will become the Minister of State for Security and Economic Crime. Further, the Government will:
Establish a new Ministerial Economic Crime Strategic Board chaired by the Home Secretary, to agree strategic priorities across Government; ensure resources are allocated to deliver those priorities; and scrutinise performance and impact against the economic crime threat.
Create a new multi-agency National Economic Crime Centre (NECC) hosted in the National Crime Agency to task and co-ordinate the law enforcement response, working in the closest possible partnership with the private sector.
Create a dedicated team to use the power in the Criminal Finances Act 2017 to forfeit criminal money held in suspended bank accounts.
Legislate to give the National Crime Agency powers to directly task the Serious Fraud Office, who will continue to operate as an independent organisation.
Publish draft legislation on the creation of a register of the beneficial ownership of overseas companies and other entities that own property in the UK or participate in Government contracts.
Reform of the Suspicious Activity Reports (SARs) regime, in partnership with the private sector, law enforcement and regulators, to reduce tick-box compliance, direct the regime to focus on the highest threats, help firms better protect themselves and improve law enforcement outcomes.
Review disclosure procedures to explore how to make prosecutorial processes more effective and efficient. The Attorney General will lead this work.
Support a Law Commission review of the Proceeds of Crime Act 2002 to identify improvements to our powers to confiscate proceeds of crime.
In addition, the Government are today publishing the UK’s first cross-Government anti-corruption strategy, and the Prime Minister has appointed John Penrose MP as her Anti-Corruption Champion. A copy will be available from www.gov.uk, and placed in the House Library.
The strategy provides a framework to guide UK Government efforts against corruption both domestically and internationally for the period up to 2022. It sets six priorities to:
reduce the insider threat in high risk domestic sectors (ports and borders, prisons, policing, defence);
strengthen the integrity of the UK as a centre of global finance;
promote integrity across the public and private sectors;
reduce corruption in public procurement and grants;
improve the business environment globally; and
work with other countries to combat corruption.
There will be ministerial oversight of implementation and my Department will provide an annual written update to Parliament on progress.
To support the delivery of these commitments, responsibility for the Joint Anti-Corruption Unit will transfer from the Cabinet Office to the Home Office. This change will be effective immediately.
Scrap Metal Dealers Act 2013
My right hon. Friend the Home Secretary is today laying before the House the Home Office report on its review of the Scrap Metal dealers Act 2013 (Cm 9552).
The Scrap Metal Dealers Act 2013 was introduced in October 2013 as a response to high levels of metal theft at that time. The purpose of the Act was to reduce these thefts by strengthening regulation of the scrap metal industry. Section 18 of the Act commits the Government to review the Act within five years of commencement and to publish a report which assesses whether it has met its intended objectives and whether it is appropriate to retain or repeal it or any of its provisions.
As set out in today’s Home Office report, we are satisfied that the Act has made a positive contribution to the falls in levels of metal theft that have occurred since it was commenced. We are satisfied, therefore, that the Act should be retained.
Copies of the report are available from the Vote Office and also on the Government’s website at: www.gov.uk.
EU Council: UNHCR Executive Committee
The Government have taken the decision not to opt in to EU Council decision on UNHCR Executive Committee conclusion on machine-readable travel documents for refugees and stateless persons.
The UNHCR conclusions urge states who have not yet done so to take necessary measures to introduce machine-readable convention travel documents for refugees and stateless persons lawfully staying in their territory at the earliest convenience. The conclusions also encourage existing national systems for civil documentation to include refugees and stateless persons and to limit fees for refugees and stateless persons. They commit member states to further strengthening international solidarity and burden-sharing to facilitate the transition to machine- readable travel documents to refugees and stateless persons. The EU Commission published a Council decision seeking agreement to an EU position supporting these conclusions.
The UK already offers travel documents to recognised refugees and stateless persons which exceeds the recommendation to issue machine-readable travel documents. Home Office travel documents are machine-readable and also include a biometric chip that contains a digital facial image of the document holder, similar to the British passport. Furthermore, the UK already complies with the points on costs of refugee travel documents; we align with the 1951 and 1954 UN Conventions which state that signatory states should charge no more than is charged for a national passport.
The Government are committed to taking all opt-in, decisions on a case-by-case basis, putting the national interest at the heart of the decision making process. As the UK is compliant with the conclusions, the UK has decided not to opt in to this Council decision.