Thursday 23 May 2019
Business, Energy and Industrial Strategy
Contingent Liability Notification: British Steel
Today I lay before Parliament a departmental minute describing a contingent liability arising from an indemnity for the official receiver acting in the insolvency of British Steel Limited.
It is normal practice when a Government Department proposes to undertake a contingent liability of £300,000 and above, for which there is no specific statutory authority, for the Department concerned to present Parliament with a minute, giving details of the liability created and explaining the circumstances.
British Steel Limited entered into liquidation on 22 May 2019. The official receiver has been appointed as liquidator and the Department for Business, Energy and Industrial Strategy has provided him with an indemnity in respect of:
carrying out the proper performance of the official receiver’s duties as liquidator of the company: and
maintaining, securing and funding the ongoing operation of the company’s undertaking, and distributing the assets of the company in the ordinary course of the official receiver’s duties as liquidator of the company.
It has not been possible to observe the usual waiting period for this contingent liability, since it only materialised when the company entered into liquidation yesterday morning.
HM Treasury has approved the proposal in principle.
Financial Conduct Authority Investigation: London Capital and Finance
I have today laid a direction before Parliament requiring the Financial Conduct Authority (FCA) to carry out an independent investigation into the events and circumstances surrounding the failure and placing into administration of London Capital & Finance Plc (LCF), using powers under Sections 77 and 78 of the Financial Services Act 2012.
Following a request from the FCA, I announced on 1 April the Government’s intention to direct the FCA to launch an investigation into the events at LCF and the circumstances surrounding them. Today’s direction orders this investigation and sets out the terms on which it will be carried out.
The direction requires the FCA to appoint an independent person to carry out the investigation on its behalf, with the approval of HM Treasury. I have approved the FCA’s appointment of Dame Elizabeth Gloster to carry out the investigation on its behalf. The investigation is expected to run for 12 months.
The investigation will look at the actions, policies and approach of the FCA, as the institution with statutory responsibility for the authorisation and supervision of LCF during the relevant period. It will focus on whether the FCA discharged its functions in a manner which enabled it to effectively fulfil its statutory objectives, and may consider any other matter deemed relevant for this purpose.
This independent investigation is separate to the investigation by the Serious Fraud Office, working in conjunction with the FCA, into individuals associated with LCF.
I have also announced today that, alongside this independent investigation, the Government will separately review the wider policy questions raised by the case. This will include research into the wider market for non-transferable securities, such as mini bonds, and their role in the economy. The Treasury will begin work alongside this to consider the regulatory arrangements currently in place for the issuance of these investments, including the financial promotions order which governs the marketing of those products.
The Government are committed to creating a stronger and safer financial system. The independent investigation into the supervision of LCF will ensure that the events and circumstances surrounding the collapse of LCF are better understood. Its findings will help to properly protect those who invest their money in the future.
Copies of the direction are available in the Vote Office and Printed Paper Office.
A meeting of the Economic and Financial Affairs Council (ECOFIN) was held in Brussels on 17 May 2019. The UK was represented by Mark Bowman (Director General, International Finance, HM Treasury). The Council discussed the following:
Early morning session
The Eurogroup President briefed the Council on the outcomes of the 16 May meeting of the Eurogroup, and the European Commission provided an update on the current economic situation in the EU. Ministers then discussed the possibility of the European Investment Bank developing country strategies. Lastly, the Commission updated on the state of play on negotiations on the definitive system of value added tax.
The Council discussed the directive on general arrangements for excise duty (recast), the regulation on administrative co-operation of the content of electronic registers, and the directive on the structures of excise duty on alcohol and alcoholic beverages.
Current financial services legislative proposals
The Romanian presidency provided an update on current legislative proposals in the field of financial services.
The Council held an exchange of views on digital taxation in the international context, and the presidency and Commission updated the Council on the outcomes of the G20, IMF and World Bank spring meetings that took place in April. The Council then mandated the Economic and Financial Committee to approve the terms of reference for the upcoming G20 meeting in June. Lastly, the Finnish delegation debriefed the Council on the first meeting of the Finance Ministers coalition for climate action.
The Council adopted conclusions on the outcomes of the 2019 in-depth reviews of macroeconomic imbalances in member states as part of the macroeconomic imbalances procedure; and the implementation of 2018 country-specific recommendations.
Institutional cycle priorities
Under the non-legislative AOB, the presidency informed the Council on the follow-up discussions in regards to priorities for the next institutional cycle in the ECOFIN area.
Following on from the discussions at April informal ECOFIN in Bucharest, EU Finance Ministers held a working lunch to discuss the challenges of labour mobility and their potential solutions, followed by an exchange of views on the way forward in areas of the economic and monetary union, specifically in regards to the reform support programme.
Foreign and Commonwealth Office
FCO Services operates as a trading fund of the FCO. I have set it the following performance targets for 2019-20:
1. Achievement of a return on capital employed of at least 3.5% (statutory commitment)
2. A productivity ratio of at least 80%, measuring actual billable hours v. available billable hours
3. In-year customer satisfaction results averaging at least 80%
4. A Your Say score for “Employee Engagement” of at least 60%
5. An average Your Say score for “My Manager” of at least 63%
FCO Services will report to Parliament on its success against these targets through its annual report and accounts for 2019-20.
FCO Services is a trading fund of the Foreign and Commonwealth Office (FCO). It provides a range of integrated, secure services worldwide to the FCO and other UK Government Departments, supporting the delivery of Government agendas. Services include protective security, estates and construction, cloud computing, communications and monitoring, logistics, translation and interpreting. This is combined with a portfolio of global maintenance work. FCO services also manages the UK National Authority for Counter Eavesdropping (UK NACE), helping protect UK assets from physical, electronic and cyber-attack.
Housing, Communities and Local Government
Planning: Mineral Resources
On the 6 March 2019, Mr Justice Dove handed down his judgment in the case of Stephenson v SoS MHCLG  EWHC 519 (Admin). In accordance with the terms of the court order, paragraph 209 (a) of the national planning policy framework has been quashed.
For the avoidance of doubt the remainder of the national planning policy framework policies and, in particular, chapter 17 on “facilitating the sustainable use of minerals” remain unchanged and extant.
For the purposes of the national planning policy framework, hydrocarbon development (including unconventional oil and gas) are considered to be a mineral resource. Specific policy on the planning considerations associated with their development is set out at paragraphs 203-205 and the remainder of 209 of the national planning policy framework. In particular, paragraph 204 (a) of the national planning policy framework states that planning policies should "provide for the extraction of mineral resources of local and national importance” with paragraph 205 stating that “[w]hen determining planning applications, great weight should be given to the benefits of mineral extraction, including to the economy”.
In addition, the written ministerial statements of 16 September 2015 on ‘shale gas and oil policy’ and 17 May 2018 on ‘planning and energy policy’ also remain unchanged and extant. The written ministerial statements sit alongside the national planning policy framework. Planning practice guidance is also unaffected by the ruling.
This suite of policies and guidance remain material considerations in plan making and decision taking for hydrocarbon development and they should be afforded appropriate weighting as determined by the decision maker.
We remain committed to the safe and sustainable exploration and development of our onshore shale gas resources.