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Written Statements

Volume 637: debated on Tuesday 6 March 2018

Written Statements

Tuesday 6 March 2018


ECOFIN: 20 February 2018

A meeting of the Economic and Financial Affairs Council (ECOFIN) was held in Brussels on 20 February 2018. The UK was represented by Mark Bowman, director general, international and EU, HM Treasury. EU Finance Ministers discussed the following:

Early morning session

The Eurogroup President briefed Ministers on the outcomes of the 19 February meeting of the Eurogroup, and the Commission provided an update on the current economic situation in the EU. Ministers also discussed developments regarding United States tax reform.

Appointment of the vice-president of the European Central Bank

The Council agreed a recommendation confirming the nomination of Luis de Guindos as vice-president of the European Central Bank.

Financial services legislation

The Bulgarian presidency provided an update on current legislative proposals in the field of financial services.

Sustainable finance

The Council exchanged views on the recommendations of the high-level expert group on sustainable finance.

Discharge of the 2016 EU budget

Ministers approved a Council recommendation to the European Parliament on the discharge to be given to the Commission in respect of the implementation of the 2016 EU budget.

EU budget guidelines for 2019

Ministers adopted Council conclusions on the guidelines for the 2019 budget, which will serve as a point of reference in the forthcoming budgetary cycle.

Public procurement and strategic investment

The Commission presented information on the public procurement strategy it adopted on 3 October 2017.


Financial Services

Following the Financial Conduct Authority’s (FCA) announcement that it has now concluded its enforcement investigations into the Co-op Bank and related individuals, I have today laid a direction before Parliament requiring the Prudential Regulation Authority (PRA) to carry out an independent review into the prudential supervision of the Co-operative Bank between 2008 and 2013, using powers under section 77 of the Financial Services Act 2012.

In November 2013, the then Chancellor of the Exchequer announced the Government’s intention to direct the regulators to launch an investigation into the events at the Co-operative Bank, following its withdrawal from the bidding process to purchase 632 bank branches from Lloyds Banking Group — known as Project Verde. It was stated at the time that this review would not take place until the conclusion of all regulatory enforcement action relating to the Co-operative Bank. Today’s announcement by the FCA means that this has now happened.

The review will look at the actions, policies and approach of the Financial Services Authority, and latterly the PRA, as the institutions with statutory responsibility for the prudential supervision of the Co-op Bank during the period in question. It will focus on the outstanding questions identified by the House of Commons Treasury Committee in its 2014 report ‘Project Verde’ (HC 728-I). As recommended by the Committee, the review will have access to all relevant documents and correspondence, including the record of Government contacts concerning the Lloyds “Verde” bidding process.

I have approved the PRA’s appointment of Mr Mark Zelmer to carry out the independent review on its behalf. The review is expected to run for 12 months, after which HM Treasury will publish a report of the review’s findings. A copy of this report will be laid before Parliament.

The Government are committed to creating a stronger and safer banking system. A vital part of this is ensuring that our regulatory system can learn from past events. The launch of this independent review is a further demonstration of this commitment.


Double Taxation Convention: United Kingdom and Mauritius

A protocol to the Double Taxation Convention with Mauritius was signed on 28 February 2018. The text of the Protocol is available on HM Revenue and Customs’ pages of the website and will be deposited in the Libraries of both Houses. The text will be scheduled to a draft Order in Council and laid before the House of Commons in due course.



Contingent Liability

I am pleased to inform the House that I am today laying a departmental minute to advise that the Ministry of Defence (MOD) has received approval in principle from Her Majesty’s Treasury (HMT) to recognise new contingent liabilities associated with the Astute boat 7 “whole boat” contract. Negotiations are ongoing and the contingent liabilities will come into force on signature of the contract.

The departmental minute describes the contingent liability that the MOD will hold as a result of placing the Astute boat 7 “whole boat” contract, which will provide for the production and testing of the vessel. The maximum contingent liability against the MOD is unquantifiable and will remain until the out of service date of the submarine.

It is usual to allow a period of 14 sitting days prior to accepting a contingent liability, to provide Members of Parliament an opportunity to raise any objections.

Within the boat 7 contract, BAE Systems Marine Ltd limit their exposure to product liability to £1 billion per incident and £300 million in any 12-month period. This limits the contractor’s exposure for claims by the MOD for losses associated with the product being defective or deficient, and creates an exposure for MOD to third party claims against the contractor for losses associated with the product being defective or deficient. It is the view of the Department that the likelihood of any claim is remote.

The boat 7 contract also includes a narrative Shipbuilders Risks Indemnity (SRI) condition rather than Defence Condition (DEFCON) 663 which would provide a standard form of SRI.


National Employer Advisory Board

The Ministry of Defence (MOD) has conducted a review of the role and status of the National Employer Advisory Board (NEAB), a non-departmental public body sponsored by the Department.

The review found that the NEAB had made a major contribution to shaping Defence’s relationships with employers, particularly in connection with the Future Reserves 2020 White Paper (2013). However, although there was a continuing requirement for support in this area, the scale of need, in the foreseeable future, was unlikely to be sufficient to justify a standing board, constituted as a non-departmental public body, and committed to meeting a set number of times each year.

After careful consideration, I have decided that the NEAB should be dis-established with effect from 1 April 2018. In doing so, I have taken account of the growing success of defence relationship management (DRM)1, and the emergence of other ad hoc sources of advice on employer issues, which together are now well placed to meet our current requirements in this area.

I would like to take this opportunity to thank the chairman and individual members, past and present, for all they have done to support the MOD.

1 Defence Relationship Management, a Future Reserves 2020 White Paper commitment, was created in 2014 to manage the MOD’s relationship with employers in support of the Defence People objectives including the recruitment and retention of reserves; resettlement of service leavers; rehabilitation of wounded, injured and sick; and improving employment opportunities for service spouses and partners.


Environment, Food and Rural Affairs

Water Supplies: Severe Weather

The exceptionally cold spell last week and the rapid thaw that followed has caused widespread water supply issues in the country. Over the weekend and at the start of the week tens of thousands of people across the south-east of England have experienced loss of water supply in their homes and even more have had to cope with low water pressure following leaks from burst pipes. We recognise that this has been a difficult time for many residents and businesses.

The immediate priority is to get water back up and running for those people who have been affected, in particular vulnerable people, and businesses, hospitals and care homes. Water companies have been following standard practice including isolating bursts and redirecting water to mitigate this problem. Bottled water has been provided in the areas most badly affected and water has been provided by tanker to keep hospitals open.

Today I have chaired a meeting of water company chief executives, OFWAT and Water UK to make sure that water companies in England are working to restore supplies as quickly as possible, and that water companies in other parts of the country are preparing for the thaw as it spreads across the country, including learning any lessons from places that have already experienced higher temperatures.

The challenge the sector faces is the sheer number of bursts following the rapid change in weather across multiple companies’ networks. Many of these have been relatively small and difficult to detect; some of the loss of pressure is due to leaks in private homes and businesses.

Water companies have been working hard to address the issues. This includes increasing their staff on the ground out identifying where bursts have occurred and repairing them, as well as moving water across their networks to balance supply across the areas they serve. We should recognise the efforts of the engineers and all involved working through the night to fix these problems. Once the situation is restored to normal we expect OFWAT to review the performance of the companies during this period.

This Government actively support a properly regulated water sector. We have high expectations of water companies on increasing their investment in their water and sewerage networks. This was laid out clearly in the strategic policy statement issued to OFWAT last September, and reinforced by the Secretary of State for Environment, Food and Rural Affairs last week when he addressed the water industry and said that he expects the industry to increase investment and to improve services by maintaining a resilient network, fixing leaks promptly where they occur and preparing for severe weather.


Foreign and Commonwealth Office

Biological and Toxin Weapons Convention

States parties to the biological and toxin weapons convention (BTWC) held their annual meeting 4 to 8 December 2017. This was the first such meeting since the convention’s eighth review conference in November 2016, on which I made a statement to the House on 10 January 2017, Official Report, Vol. 634, column 8WS [HCWS400].

The convention is one of the foundation stones of the international disarmament and arms control system. The UK, one of the convention’s three depositary Governments, is strongly committed to its effective and universal implementation as an essential instrument in helping combat and mitigate the threats posed by biological warfare. Our objectives are to enable the convention to remain relevant in addressing the evolving threats of biological or toxin weapons being developed or used, and to keep pace with the rapid and diverse advances in many fields of science and technology.

At December’s meeting of states parties, we sought to agree a substantive new programme of work to advance our objectives, through a series of expert technical meetings leading up to the next review conference in 2021. The UK, with the US and Russia, the two other depositary Governments for the convention, worked with many other states throughout 2017 to build consensus around common elements of such a substantive new work programme.

I am pleased to inform the House that this hard work is paying dividends. States parties joined consensus to agree a new programme of expert meetings each year from 2018 up to and including 2020. The meetings will discuss issues such as the preparedness and response to any potential use of biological and toxin weapons, and developments in science and technology. The agreed programme will discuss and promote common understanding and effective action on these issues, aiming to strengthen the implementation of the convention as a whole to respond to evolving challenges. Importantly, future annual meetings of states parties have authority to respond to these expert discussions, including by taking necessary budgetary and financial measures by consensus with a view to ensuring the proper implementation of the work programme.

This outcome was the product of determined diplomacy over a number of years. The achievement is all the more notable after the disappointing result of the 2016 review conference, and a cycle of relatively unproductive meetings which had lowered expectations of progress on a more ambitious work plan.

The UK will continue to work hard to support further tangible progress towards universal and effective national implementation of the convention, and to enable it to maintain its relevance and vital role as a keystone agreement in the broader international disarmament and non-proliferation architecture.


Health and Social Care

Abortions in England for Women in Northern Ireland

On 29 June 2017, the then Minister for Women and Equalities wrote to MPs and informed them that women normally resident in Northern Ireland would no longer be charged for abortions received in England. An update informing the House of progress was given on 23 October 2017. The scheme is now in place and I am pleased to provide a further update.

The three main providers of abortions in England have been awarded grants by the Department of Health and Social Care to fund service provision in England for women resident in Northern Ireland. The cost of this service will be met by the Government Equalities Office with additional funding provided by HM Treasury. A small number of procedures will continue to be provided through the NHS where this is necessary for medical reasons. NHS providers will reimbursed by the Department of Health and Social Care.

Women from Northern Ireland seeking medical support in England are eligible for:

A consultation with an abortion provider in England, including an assessment of whether the legal grounds for an abortion are met;

The abortion procedure;

HIV or sexually transmitted infection testing as appropriate;

An offer of contraception from the abortion provider; and

Support with travel costs if the woman meets financial hardship criteria.

This is comparable with the experience that women in England receive.

We have established a central booking service that will be run by the British Pregnancy Advisory Service. The central booking service will simplify the process for women who choose to access these services. It means that women from Northern Ireland will have a single telephone number to call and an appointment will be made with the most appropriate provider, based on the woman’s requirements, her medical condition and the availability of the providers. The central booking service has been up and running since 1 March 2018.

This scheme does not change the position in relation to the provision of abortions in Northern Ireland. Our scheme does not include the provision of any services in Northern Ireland.