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Written Statements

Volume 675: debated on Monday 27 April 2020

Written Statements

Monday 27 April 2020

Business, Energy and Industrial Strategy

Coronavirus Large Business Interruption Loan Scheme

I am tabling this statement for the benefit of hon. and right hon. Members to bring to their attention the details of the Coronavirus Large Business Interruption Loan Scheme.

Like the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme will be facilitated by the Government-owned British Business Bank and delivered through its delivery partners. Lenders will offer loans of between £30,000 and £50 million to support viable businesses with a turnover of £45 million and above that are affected by the coronavirus outbreak. There will be no limit on the number and aggregate value of loans that can be made under the scheme.

The scheme is available on a temporary basis from 20 April for an initial six months, and can be extended as required. The key parameters of the scheme are as follows:

the percentage of the remaining balance of each loan that is guaranteed by the Government will be 80%;

there will be no portfolio cap for the lender, enabling lenders to benefit from capital relief to help lenders to price loans competitively;

a personal guarantee approach that mirrors the existing CBILS programme (no personal guarantees permitted on loans below £250,000, and personal guarantees up to a maximum of 20% of losses post-business recovery);

interest charged at commercial rates (but lenders are expected to ‘pass through’ benefit of the guarantee);

businesses with turnover of up to £250 million can access a maximum debt facility of £25 million, those with higher turnovers can access facilities of up to £50 million; and

facilities will be available with a maximum term of three years.

The new scheme was launched on 20 April. The Government will be subject to a new statutory contingent liability, and I will be laying a departmental minute today containing a description of the liability undertaken.

For more information on this and other support for business, please go to: https://www.businesssupport.gov.uk/

[HCWS198]

Contingencies Fund Advance

I hereby give notice of the Department for Business, Energy and Industrial Strategy having drawn advances from the Contingencies Fund totalling £12,409,000,000 to enable expenditure on covid-19 support packages for business to be spent ahead of the passage of the Supply and Appropriation Act. The schemes are:

Small business grant scheme

Grant scheme for retail, hospitality, and leisure sectors

Small business grant scheme

Grant scheme for retail, hospitality, leisure sectors

Total £m

RDEL

7,330

5,079

12,409

The funding is urgently required to support businesses during the coronavirus pandemic, and to enable local authorities to administer the scheme.

Parliamentary approval for additional resources of £12,409,000,000 will be sought in a main estimate for the Department for Business, Energy and Industrial Strategy.

Pending that approval, urgent expenditure estimated at £12,409,000,000 has been met by repayable cash advances from the Contingencies Fund.

The cash advances will be repaid upon receiving Royal Assent on the Supply and Appropriation Bill.

[HCWS197]

Cabinet Office

Recall Petitions: Indemnity for Petition Officers

It is necessary for the Cabinet Office to indemnify petition officers in England, Scotland and Wales against uninsured claims that arise out of the conduct of their duties should a recall petition under section 1(1) of the Recall of MPs Act 2015 be triggered. This is because for the purposes of recall petitions, like returning officers and acting returning officers at elections, petition officers are independent officers. They are separate from both central and local government. As a result, they are exposed to a variety of legal risks varying from minor claims for injury at designated signing places, to significant recall petition complaints and associated legal costs.

Insurance for specific elections has historically provided extremely poor value for money, with claims made under such cover being smaller than the cost of the insurance premium. An indemnity therefore provides better value for money and this approach has been taken for elections since 2009.

It is normal practice, when a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, for the Department concerned to present to Parliament a minute giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until 14 parliamentary sitting days after the issue of the minute, except in cases of special urgency.

On this basis, I have today laid a minute setting out the Cabinet Office’s intention to extend the current arrangements which indemnify petition officers for claims that arise out of the conduct of their duties in relation to the Recall of MPs Act 2015. This Act requires a recall petition to be held if one of the provisions under section 1 of the Act is met in relation to an MP. The responsibility for the conduct of the petition will rest with the petition officer for the constituency in which the petition is to be held. Section 6 of the Recall of MPs Act 2015 provides that every constituency is to have a petition officer for a recall petition and identifies who the petition officer is for each constituency: in England and Wales, it is the person who is the acting returning officer for UK parliamentary elections for the relevant constituency; in Scotland it is the returning officer for UK parliamentary elections for the relevant constituency. The petition officer is an independent entity, separate from both central and local government.

On account of the House having agreed to rise early for the Easter recess and also to reduce the number of days for which it will sit each week, the current indemnity will expire before the full 14 sitting days are possible. Consequently, there will be a short period of time where petition officers will not be covered by an indemnity. However, this causes no problem in practice, because the Coronavirus Act 2020 makes provision for the deferral of the organisation of any recall petitions (on the basis that the petition officer no longer needs to open the recall petition on the 10th working day after receiving notification from the Speaker but instead needs to open the petition before 6 May 2021). So the course of action described in this statement and the minute protects petition officers appropriately, and ensures that the House is provided the full 14 sitting days to lodge any objections.

We will also provide a certificate confirming that we will bear any employee liabilities of the returning officer which would otherwise be covered by insurance procured under the Employers’ Liability (Compulsory Insurance) Act 1969.

An indemnity was previously provided by the Home Office to returning officers for the 2012 police and crime commissioner elections and the Cabinet Office regularly provides indemnities for UK parliamentary elections. HM Treasury has approved the indemnity in principle.

[HCWS202]

Treasury

Contingencies Fund Advance

HM Revenue and Customs will incur new expenditure in connection with the Government’s response to the coronavirus covid-19 pandemic in 2020-21.

Parliamentary approval for additional resources of £42,000,000,000 for this new expenditure will be sought in the main estimate 2020-21 for HM Revenue and Customs. Pending that approval, urgent expenditure estimated at £42,000,000,000 will be met by repayable cash advances from the Contingencies Fund.

[HCWS201]

Education

Qualifications Summer 2020

I would like to update the House on arrangements for awarding qualifications in England this summer following the Secretary of State’s previous written ministerial statement (HCWS176) made on 23 March.

In the Secretary of State’s previous statement, he said that the independent qualifications regulator, Ofqual, would develop and set out a process for GCSEs, AS levels and A levels that would provide a calculated grade to each student which reflects their performance as fairly as possible, and work with the exam boards to ensure this was consistently applied for all students.

On 3 April, Ofqual set out details on how GCSEs, AS and A levels will be awarded this summer. The information can be found on: www.gov.uk.

Ofqual has also launched a consultation on aspects of the new system for grading these qualifications, with a deadline for response of 29 April. The consultation is available on: www.gov.uk.

I can confirm that AS and A level results will be published on 13 August and GCSE results on 20 August, as originally planned.

Releasing results on the planned dates will enable students to progress to higher or further education and allow students time to decide whether they wish to sit exams in the autumn term, and to prepare for those exams if necessary.

I can also confirm that we are continuing to work at pace with Ofqual to determine the approaches to assessment and awarding of vocational and technical qualifications, as well as other general qualifications which are not GCSEs, AS levels or A levels. On 9 April, Ofqual set out its approach for the assessment and awarding of these qualifications. Qualifications which are used for progression to further and higher education should, as far as possible, be treated in the same way as GCSEs, AS and A levels, with students receiving a calculated result. Calculated results will draw appropriately on a range of evidence, depending on the structure of the qualification. It will not be appropriate to issue calculated results for all vocational and technical qualifications, such as those used to signal occupational competence. These qualifications should, wherever possible, receive adapted assessments. The information can be found on: www.gov.uk.

On 24 April, Ofqual also launched a consultation on implementation of these measures. The consultation closes on 8 May. It can be found on: www.gov.uk.

The aim is to ensure that results for vocational and technical qualifications and other general qualifications that are used for progression to further or higher education are made available at the same time as GCSEs, AS and A levels.

[HCWS199]

Work and Pensions

Pensions: COVID-19 Response

I am writing to inform the House of the steps this Government are taking to support pension savers, pension schemes, trustees, employers and existing pensioners during the coronavirus pandemic.

General pensions levy

On 31 March 2020, the Government revoked the planned increase in the general pensions levy on occupational and personal pension schemes that was due to take effect on 1 April 2020. The levy recovers funding provided by the DWP in respect of the core activities of the pensions ombudsman, and part of the activities of the Pensions Regulator and the Money and Pensions Service. These measures will result in an estimated £4.9 million of savings for the private pensions sector.

We will now be focused on reviewing the structure of the levy and engaging with industry, at the appropriate time, on the best way forward on levy funding.

Coronavirus job retention scheme

Key to supporting both businesses and pension savers is the coronavirus job retention scheme (CJRS) which offers an unprecedented package of support for businesses. This scheme has been designed to be as straightforward as possible, ensuring it aligns with and works for most business practices.

Under this scheme, the grants available to employers will support business by covering up to 80% of a furloughed worker’s regular salary, capped at £2,500 per month. Additionally, these grants will also cover employer pension contributions into registered pension schemes on behalf of furloughed employees for any workplace pension scheme. Employers can claim up to the minimum employer pension contribution of 3% of qualifying earnings required under employers’ automatic enrolment duties, even if it is not an automatic enrolment pension scheme.

By easing the burden of workplace pensions for employers with furloughed staff we are helping them better manage costs during the crisis while supporting long-term saving for the future. The measures recognise the importance of protecting the hard won improvements in retirement provision for millions of savers achieved through automatic enrolment.

The CJRS went live on 20 April and claims can be backdated to 1 March where workers have already been furloughed. Information on the scheme can be found here:

https://www.businesssupport.gov.uk/faqs/.

To help support employers, the Pensions Regulator has detailed guidance on its website here:

https://www.thepensionsregulator.gov.uk/en/covid-19-coronavirus-what-you-need-to-consider/automatic-enrolment-and-pension-contributions-covid-19-guidance-for-employers.

We are continuing to work closely with the pensions industry to explain the detail of the CJRS scheme and to help providers take a pragmatic approach to disruptions to workplace pensions experienced by their clients.

Defined benefit schemes

The Government also recognise that these are challenging times for defined benefit pension schemes. The current scheme funding regime, overseen by the Pensions Regulator, is sufficiently flexible to cope with the current situation and the Regulator’s guidance published on 27 March sets out specific easements to its regulatory regime in recognition of the difficulties that some schemes and sponsors may have in the context of the current emergency. This can be found at:

https://www.thepensionsregulator.gov.uk/en/covid-19-coronavirus-what-you-need-to-consider/db-scheme-funding-covid-19-guidance-for-employers.

The best possible protection for members of defined benefit schemes is a strong profitable employer, and with the existing flexibilities and easements there is no reason why a pension scheme should push an otherwise viable employer into insolvency.

In the event where a sponsoring employer does become insolvent, and the scheme is not well enough funded to secure full benefits, the Pension Protection Fund, which is well equipped to weather market turbulence, will pay members compensation.

The Pensions Regulator has already set out its expectations of trustees of both defined benefit and defined contribution pension schemes and for employers and administrators, including the key risks they should focus on. The Regulator has confirmed that it will take a proportionate and risk-based approach towards compliance and enforcement decisions during these challenging times, with the aim of supporting employers, providers and savers.

Pension scams and transfers

The Government are committed to protecting savers during these unprecedented times and we are working with regulators to identify additional ways to support and safeguard individuals. At present, there is no robust evidence to suggest that savers are making hasty decisions to transfer pension funds or are being targeted by fraudsters. However, we are continuing to work closely with the Pensions Regulator, the Financial Conduct Authority (FCA), the Money and Pensions Service (MaPS) and pension providers to identify any new trends or issues and will take proportionate action if required.

In addition, we have supported the collaborative approach the Pensions Regulator, the FCA and MaPS have taken, communicating to savers to use MaPS, Pensions Wise or the Pensions Advisory Service channels for guidance before making decisions about retirement to protect people against scams. Furthermore, MaPS has produced information and guides to support individuals in making decisions about their money, debt and pensions at this challenging time. This includes reiterating that where appropriate Pension Wise guidance sessions can help an individual to understand their options fully. This can be found at: https://www.moneyadviceservice.org.uk/en/articles/coronavirus-what-it-means-for-you.

Access to state pension and benefits for people asked to shield themselves

There are approximately 900,000 users of the Post Office card account (POca) system for accessing their pensions or benefits. These POca customers ordinarily need to leave the house to access payments at the Post Office. The Department has worked closely with the National Shielding Service which is contacting clinically vulnerable citizens who have been advised by NHS England to shield as a result of the coronavirus pandemic.

We launched a new service on 10 April through which we have contacted 27,000 citizens who have POca accounts and we considered who may need support to access their benefit or state pension payment.

The Department has worked tirelessly to identify those older, vulnerable customers who urgently require help to access their payments. For those needing help, DWP visiting officers are able to discuss a number of options available to customers over the phone and we have worked closely with Post Office Ltd to provide contact free cash payments by Royal Mail special delivery to support the most vulnerable, with guaranteed next day delivery. This cash service adds to a range of measures we are using to support these individuals shielding at home.

State pension

In November 2019 the Government announced measures to increase most state pension rates by 3.9% in line with the annual growth in earnings, at the same time as announcing an end to the benefit freeze.

This meant that on 6 April 2020 the full rate of the basic state pension increased from £129.20 to £134.25 per week and the full rate of the new state pension increased from £168.60 to £175.20 per week—with working age benefits uprated by inflation. This was the largest increase in state pension in eight years.

[HCWS200]