Wednesday 10 October 2018
Business, Energy and Industrial Strategy
The first day of the Competitiveness Council (Internal Market and Industry) took place on 27 September 2018.
The UK was represented by Katrina Williams, Deputy Permanent Representative to the EU. The legislative and non-legislative “A” items were adopted; the UK abstained on a decision not to oppose the adoption of amendments to the regulation on vehicle type approvals, and on the adoption of European seabass quotas.
Regional policy and competitiveness
The routine “competitiveness check-up” on day one focused on the role that greater convergence in productivity within member states has to play in boosting the EU’s competitiveness. The UK joined others in support of so-called “smart specialisation” strategies and their emphasis on innovation and comparative advantage. Some member states welcomed the Commission’s intention to incorporate a regional element into the European semester. Over lunch, Ministers also discussed the next multi-annual financial framework in the context of competitiveness.
The presidency identified priority areas for the EU on artificial intelligence (AI) relating to the uptake of technology, ethics and liability, and digital skills. The Commission confirmed its intention to publish an action plan by the end of the 2018 and recalled increased investment in AI proposed as part of the Horizon Europe and Digital Europe programmes.
An external speaker, Mr Michael Hirschbrich, urged member states to cultivate a new, positive “data culture” in Europe as a prerequisite for the EU to profit from the revolution in AI and machine learning. Germany felt this would be a challenge for the EU and would require public trust. Several delegations cautioned against over-regulating in this area and others argued that effective communication and realising the potential of new technologies in the delivery of public services would help to raise public trust and awareness.
The UK outlined its investment plans for AI, its inclusive approach to digital skills, work to establish an independent centre for data ethics and innovation, and noted the importance of regulatory co-operation in this area.
Under any other business, the Commission called for the full implementation of the geoblocking regulation and recalled the aims of a recent communication on the retail sector.
The Czech Republic and Latvia summarised the conclusions of events held this year to mark 25 years of the single market. Member states urged the Commission to produce a comprehensive and evidence-based assessment of the remaining barriers to trade, particularly in the area of services.
Day two of the Competitiveness Council (Internal Market, Industry, Research and Space) took place on 28 September in Brussels. I represented the UK during the morning and lunch sessions of the Council. Katrina Williams, Deputy Permanent Representative of the UK’s Permanent Representation in Brussels took the UK’s seat during the afternoon session.
Progress report and policy debate on the Horizon Europe Package: Framework Programme for Research and Innovation 2021-2027
The Council started with a policy debate on the Horizon Europe Package: Framework Programme for Research and Innovation 2021-2027. The UK called for excellence to remain the key criterion for awarding Horizon Europe funding. The UK also suggested that space should become a separate cluster outside of “digital and industry”, and that the secure society cluster should be divided into two distinct clusters; one for “security” elements and one for “social sciences and humanities” elements. The UK also supported the presidency’s approach to the debate surrounding the legal base of the Horizon Europe Specific Programme, agreeing that the aim should be to reach a timely conclusion on the Horizon package.
Lunch debate on the Horizon Europe package—exchange of views with EP rapporteurs
During the lunch debate the Council had an exchange of views with EP rapporteurs Dan Nica and Christian Ehler. The UK made an intervention specifying UK’s priority areas for amendments and encouraging debate amongst MEPs at the first exchange of views on October 8.
Strategic planning process in relation to the Horizon Europe Framework Programme for Research and Innovation 2021-2027
The Council concluded with a policy debate on the strategic planning process in relation to the Horizon Europe Framework Programme for Research and Innovation 2021-2027. The UK made an intervention seeking to help find consensus in Council on the process and status of the plan, agreeing that broad areas for missions and partnerships should be set out in the specific programme and suggesting that the process for selecting specific missions and partnerships should also be included. The UK agreed that more detailed strategic content should be determined at a later date.
The Government remain committed to putting in place all the necessary measures to ensure that the UK can operate as an independent and responsible nuclear state upon the UK’s withdrawal from Euratom.
We remain on track to have all the international agreements that the UK requires to ensure uninterrupted co-operation and trade in the civil nuclear sector ready for the end of March 2019. Significant progress in this area is marked by the signing of a new bilateral nuclear co-operation agreement (NCA) with Australia on 21 August. This is the second NCA to be signed with a priority third country in preparation for the UK’s withdrawal from Euratom, following the new bilateral agreement with the United States signed on 4 May.
The Government have completed their consultation on the draft nuclear safeguards regulations which set out the detail of a new domestic civil nuclear safeguards regime. We are analysing responses to the consultation and will publish a formal response to the consultation in the autumn. We expect to lay draft regulations before Parliament by the end of this year. The regulations, to be made under powers in the Energy Act 2013 and Nuclear Safeguards Act 2018, will enable a domestic nuclear safeguards regime to be established before the end of March 2019.
In July, we set out details of our ambition to seek a close association with Euratom—specifically, through the negotiation of a nuclear co-operation agreement (NCA) between Euratom and the UK that is more comprehensive and broader than any existing agreement between Euratom and a third country.
Simultaneously, we are ensuring that the necessary legislation is ready, and the civil nuclear industry is prepared for all potential scenarios, including the unlikely event that the UK leaves the EU and Euratom at the end of March 2019 without an agreement (a no-deal scenario). We have laid a number of statutory instruments before Parliament on Euratom-related issues and have published a technical notice on civil nuclear regulation to support businesses and other interested parties in making informed plans and preparations for a no-deal scenario.
Today I will be depositing a report in the Libraries of both Houses that sets out further details on the overall progress on the Government’s implementation of their Euratom exit strategy, including EU negotiations, domestic operational readiness, legislation and international agreements. This report is being laid in accordance with section 3(4) of the Nuclear Safeguards Act 2018 and follows two voluntary quarterly updates to Parliament.
The initial commitment to quarterly reporting on a voluntary basis was set out in my written ministerial statement of 11 January 2018, Official Report, column 9WS. Section 3(4) of the Nuclear Safeguards Act 2018 provides for four statutory quarterly reporting periods in respect of which the Secretary of State must lay a report before Parliament. This is the first such report and covers the three-month reporting period from 26 June until 26 September. I plan to lay the next report on Euratom exit progress in January 2019.
Future Accommodation Model
It was previously announced that the future accommodation model (FAM) was being developed with the intention of changing the way in which we provide accommodation to service personnel to ensure that a career in the armed forces can be balanced better with family life. We are committed to making the changes necessary to enable our armed forces to work flexibly, reflecting the realities of modern life and to make a new accommodation offer to help more service personnel live in private accommodation and meet their aspirations for home ownership.
This commitment is being delivered through the FAM which aims to design and deliver a new accommodation model that improves and modernises aspects of the accommodation offer for service personnel and better meets the enduring operational and financial needs of the Department.
We had hoped to run a pilot towards the end of this year and remain committed to this policy principle, but the pilot scheme will now take place in 2019. This will allow the Ministry of Defence additional time to fully evaluate the scope of the pilot and better understand its impact on service personnel, with a view to delivering the most effective model. The pilot, in 2019, will also allow us to continue to work closely with broader departmental and cross-Whitehall initiatives to support service personnel accommodation.
We value the input we have had from service personnel, frontline commands and the families federations, and look forward to continuing to work with them on the implementation of FAM in the future. I will update the House in due course.
Digital, Culture, Media and Sport
British Board of Film Classification: Contingent Liability
I am today laying a departmental minute to advise that the Department for Digital, Culture, Media and Sport (DCMS) has received approval from Her Majesty’s Treasury (HMT) to recognise a new contingent liability which will come into effect when age verification powers under part 3 of the Digital Economy Act 2017 enter force.
The contingent liability will provide indemnity to the British Board of Film Classification (BBFC) against legal proceedings brought against the BBFC in its role as the age verification regulator for online pornography.
As Members know, the Digital Economy Act introduces the requirement for commercial providers of online pornography to have robust age verification controls to protect children and young people under 18 from exposure to online pornography. As the designated age verification regulator, the BBFC will have extensive powers to take enforcement action against non-compliant sites. The BBFC can issue civil proceedings, give notice to payment-service providers or ancillary service providers, or direct internet service providers to block access to websites where a provider of online pornography remains non-compliant.
The BBFC expects a high level of voluntary compliance by providers of online pornography. To encourage compliance, the BBFC has engaged with industry and charities and undertaken a public consultation on its regulatory approach. Furthermore, the BBFC will ensure that it takes a proportionate approach to enforcement and will maintain arrangements for an appeals process to be overseen by an independent appeals body. This will help reduce the risk of potential legal action against the BBFC.
However, despite the effective work with industry, charities and the public to promote and encourage compliance, this is a new law and there nevertheless remains a risk that the BBFC will be exposed to legal challenge on the basis of decisions taken as the age verification regulator or on grounds of principle from those opposed to the policy.
As this is a new policy, it is not possible to quantify accurately the value of such risks. The Government estimate a realistic risk range to be between £1 million and £10 million in the first year, based on likely number and scale of legal challenges. The BBFC investigated options to procure commercial insurance but failed to do so given difficulties in accurately determining the size of potential risks. The Government therefore will ensure that the BBFC is protected against any legal action brought against the BBFC as a result of carrying out duties as the age verification regulator.
The contingent liability is required to be in place for the duration of the period the BBFC remains the age verification regulator. However, we expect the likelihood of the contingent liability being called upon to diminish over time as the regime settles in and relevant industries become accustomed to it. If the liability is called upon, provision for any payment will be sought through the normal Supply procedure.
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.
Government Asset Sale
Today, I can confirm that the Government are announcing their intention to proceed with the second sale from the “plan 1” (i.e. pre-2012) English student loan book. The sale covers loans issued by English local authorities only under the previous (pre-2012) system, specifically those which entered repayment between 2007 and 2009, with a total face value of around £3.9 billion. This is the second sale of the Income Contingent Repayment (ICR) loan book, and it is proceeding on the basis that there is a reasonable prospect of achieving value for money. It will only complete subject to market conditions and a final value for money assessment.
As the Government have previously made clear, the position of all graduates, including those whose loans are part of a sale, will not change as a result of the sale. A sale will not alter the mechanisms and terms of repayment and sold loans will continue to be serviced by Her Majesty’s Revenue and Customs (HMRC) and the Student Loans Company (SLC) on the same basis as equivalent unsold loans. These protections mean that purchasers will have no right to change any of the current loan arrangements or to directly contact borrowers. Government have no plans to change, or to consider changing, the terms of pre-2012 loans.
The sale terms are expected to include a number of warranties and indemnities for sale arrangers and investors, which give rise to contingent liabilities for Government. In this case, although there is specific statutory authority for the liability under the Sale of Student Loans Act 2008, I believe it is appropriate to notify Parliament before incurring these liabilities. As a matter of record I have placed a departmental minute in the Libraries of both Houses describing the contingent liabilities that the Department for Education will hold on behalf of Government as a result of this second sale of the pre-2012 English student loan book. The maximum contingent liability against the Department for Education is unquantifiable and is expected to be in place for as long as there are outstanding securities.
The House will also be informed if and when a sale is completed.
Deportation with Assurances Review
In November 2013, the then Home Secretary asked David Anderson QC to conduct a review of the framework of the UK’s Deportation with Assurances (DWA) policy, and to make recommendations on how the policy might be strengthened or improved, with particular emphasis on its legal aspects. My predecessor published Mr Anderson’s report and made copies available in the vote office on 20 July 2017.
On announcing Mr Anderson’s report to this House, the then Home Secretary stated that the Government would respond through a Command Paper. I am pleased to be publishing this Command Paper today (Cm 9712). Copies will be available in the Vote Office.
Report of the Independent Reviewer of Terrorism Legislation
Max Hill QC, the Independent Reviewer of Terrorism Legislation, has prepared a report on the operation in 2017 of the Terrorism Act 2000, the Terrorism Act 2006, the Terrorism Prevention and Investigation Measures Act 2011, and The Terrorist Asset-Freezing etc. Act 2010.
In accordance with section 36(5) of the Terrorism Act 2006, I am today laying this report before the House, and copies will be available in the Vote Office. It will also be published at: www.gov.uk.
I am grateful to Mr Hill for his report. I will carefully consider its contents and the recommendations he makes, and will respond formally in due course.
Ebola Outbreak in the DRC
The current outbreak of Ebola was declared in North Kivu, Democratic Republic of the Congo (DRC), on 1 August. Following my written ministerial statement of 13 September, Official Report, column 38WS, I am updating the House on how the UK Government are continuing to support the response in DRC, and preparedness in neighbouring countries.
Since my last update, the number of confirmed Ebola cases in this outbreak has continued to rise, and stood at 146 on 7 October. The geographic coverage has also widened, with confirmed cases near the Ugandan border on Lake Albert. On 29 September, the World Health Organisation (WHO) raised the risk of national and regional spread of the outbreak from “high” to “very high”. The DRC Government, which are leading the response with the support of WHO, are preparing an extended response plan which will extend key activities for several months longer. As well as the response in the affected area, activities are also planned to support Ebola preparedness in other provinces across DRC.
One of the key challenges is insecurity. Attacks by armed groups in the affected area have disrupted the response and remain a major risk. This instability, as well as the area’s significant commercial links with neighbouring countries, means that there is a large amount of cross-border movement by both commercial travellers and refugees. WHO has developed a regional plan to help neighbouring countries at risk from Ebola to prepare for any potential cases.
My Department is ready to respond quickly and effectively to all kinds of sudden onset emergencies. That is why we maintain a central crisis reserve. In 2018-19, I have approved up to £20 million from this reserve to contribute to Ebola responses in the affected region. All donors have been asked not to announce figures for specific activities, to avoid putting implementing partners at risk from criminal elements. I hope the House will respect the need for discretion about this.
Through the crisis reserve, the UK Government provided early funding to the existing outbreak response, and to the WHO regional preparedness plan for at-risk countries bordering DRC. We will also be funding key UN posts in these countries to ensure they are prepared to deal with cases of Ebola.
In view of recent developments, we have increased our support, through WHO, for the response and preparedness activities in DRC and neighbouring countries. This funding will support a range of activities including surveillance, vaccinations, infection prevention and control, community engagement and safe and dignified burials.
To help people affected by, or at risk from, Ebola is the right thing to do. It is also in our national interest to find ways of building resilience to such deadly diseases. Therefore I stand ready to approve additional support, if required.
The UK Government are also drawing on all available scientific data about the latest outbreak. At present, it is not possible to make long-term projections about the course of the epidemic with any certainty but it is reasonable to assume that the outbreak will continue into 2019. We will continue to liaise closely with WHO and others to ensure that the available scientific evidence is reflected in scenario planning.
The current response is deploying an experimental vaccine to contacts of infected people and frontline health workers. This vaccine was developed with support from UK Aid following the west Africa Ebola epidemic. In DRC, over 14,000 people—over 5,000 of whom are health workers—have been vaccinated during this outbreak so far. The UK is also supporting training in preparation for clinical trials of several of the new therapeutic drugs for Ebola.
Public Health England assesses the risk of this outbreak to the UK as negligible to very low. They will continue to monitor and assess the outbreak closely. The UK Government remain at full readiness to respond should that risk change.
Justice and Home Affairs Council
I will attend the Justice and Home Affairs Council for Justice Day on Thursday 11 October.
Following the partial general approach already agreed at Council in June on titles III, IV and V of the proposed directive on restructuring and insolvency (discharge from insolvency, efficiency of procedures and data collection requirements), work has focused on the remaining titles I, II and VI. These cover, subject matter and scope, measures on preventive restructuring frameworks and final provisions. In the light of the progress made, the Council will discuss a general approach on the restructuring directive. The UK supports the aims of the directive to progress the objectives of the Commission’s capital markets union action plan, and will support the general approach.
The Council will discuss the proposed regulation relating to improving law enforcement access to data held by communication service providers (E-Evidence). There will be a policy debate on the issue of whether a member state should be notified when a production or preservation order is issued to a service provider based in their territory or where the person whose data is sought is based in their territory. The debate will focus on the regulation, which the UK is not participating in.
There will be an any other business item on sale of goods.
There will be a presentation by the director of the EU’s Fundamental Rights Agency (Michael O’Flaherty) following on from the publication of the FRA’s annual report on the fundamental rights situation in the EU, and in the light of the event the FRA held across a wide range of fundamental rights topics last month (25 to 27 September). The Council will also be asked to discuss, and potentially adopt, Council conclusions on the EU’s latest annual report on the application of the charter of fundamental rights.
There will also be a discussion on free and fair elections (including freedom from personal data misuse and cyber incidents), focusing on the upcoming European Parliament elections. The UK’s exit from the EU will mean that we will not be taking part in future European parliamentary elections.
There will be a lunchtime discussion covering EU financing for justice. The UK does not participate in the current justice programme (2014-20) and will be a third country when the next justice programme and the other programmes likely to be discussed enter into force. The UK will consider its participation as a third country in due course.
The Commission will provide an update on the planned preparatory steps on the legal and organisational measures to be taken to make the European Public Prosecutor’s Office (EPPO) operational. The UK does not participate in the EPPO.
Ministers will exchange views on ways to reinforce judicial co-operation in criminal justice through mutual recognition tools, including the European arrest warrant and European investigation order. The UK values our co-operation under these tools and will highlight our commitment to the principle of mutual recognition and the importance of close operational working between member states to ensure that they function efficiently.
The Home Secretary will attend the JHA Council for Interior Day on 12 October.
There will be a policy debate on the proposed regulation to amend the European border and coast guard regulation which aims to reinforce the EU’s integrated border management strategy and further protect the external borders by providing the European Border and Coast Guard Agency with a standing corps of 10,000 staff with executive powers, their own equipment and the ability to act in third countries. This is a Schengen building measure which the UK does not participate in.
The Council will discuss the proposed recast of the EU returns directive. The UK chose not to participate in the current version of this directive. The UK will need to decide whether to participate in this recast.
The Council will discuss developments under the comprehensive approach on migration. The presidency will focus on the common European asylum system, co-operation with north African countries on a range of migration issues including search and rescue disembarkations, and work to tackle organised immigration crime. The UK supports work to strengthen the EU’s external borders and to intensify relationships with key third countries in order to break smuggling networks and ensure that protection is given to those most in need.
The Council will discuss proposed EU JHA funding programmes for the next (2021-27) multiannual financial framework. These programmes will commence after the UK’s exit from the EU and the end of the envisaged implementation period. The UK will not be participating in any future programmes as a member state. The UK will consider options to participate as a third country on a case-by-case basis where there is benefit to the UK.
There will be further debate on the reform of the common European asylum system, including the issues of solidarity, responsibility and relocation in the context of the Dublin IV proposal, in which the UK is not participating.