Thursday 24 March 2022
Business, Energy and Industrial Strategy
Energy Companies: Special Administration Regime
Today I will lay before Parliament a departmental minute describing a contingent liability arising from the issuance of a letter of credit for the energy administrators acting in the special administration regime for Bulb Energy Limited (‘Bulb’).
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 particulars of the liability created and explaining the circumstances.
I regret that, due to negotiations with the counterparty having only just concluded, I have not been able to follow the usual notification timelines to allow consideration of these issues in advance of issuing the letter of credit.
Bulb entered the energy supply company special administration regime on 24 November 2021. Energy administrators were appointed by court to achieve the statutory objective of continuing energy supplies at the lowest reasonable practicable cost until such time as it becomes unnecessary for the special administration to remain in force for that purpose.
My Department has agreed to provide a facility to the energy administrators, with a letter of credit issued, with my approval, to guarantee such contract, code, licence, or other document obligations of the company consistent with the special administration’s statutory objective. I will update the House if any letters of credit are drawn against.
The legal basis for a letter of credit is section 165 of the Energy Act 2004, as applied and modified by section 96 of the Energy Act 2011.
HM Treasury has approved the arrangements in principle.
Digital, Culture, Media and Sport
Parliamentary Question Correction
I am repeating the following written ministerial statement made today in the other place by my noble Friend, the Minister for Arts, Lord Parkinson of Whitley Bay:
On 9 June 2020, the then Minister for Digital and Culture, Dame Caroline Dinenage MP, answered a parliamentary question from Anneliese Dodds MP (53581) on the tax treatment of emergency grants provided to freelancers by Arts Council England at the beginning of the pandemic, April 2020.
The question was answered, in consultation with the Arts Council, on the basis of information believed to be true at the time. It stated that:
“The Arts Council always recommends that grant recipients refer to HMRC and/or an independent advisor for advice that takes full account of their personal circumstances for tax. In general, as per the agreement reached between the Inland Revenue and the Arts Council of Great Britain in 1978, which we understand still applies, it is the Arts Council’s understanding that:
Grants awarded to support people to take time out to develop and explore their artistic and cultural practice—such as those grants recently made under the Arts Council’s emergency response fund for Individuals—should not be treated as taxable income.
Grants awarded to support the delivery of a specific project or projects would be treated as taxable income.”
Arts Council England was subsequently informed by HMRC that it considered the payments made from the emergency response fund would fall into the taxable category. This was on the basis that—similar to other covid relief grants—they were made to support businesses and jobs, replacing lost revenue of the claimants. This means that, where the claimant is self-employed, the receipts should be included in the computation of their trading profits.
Given the complexity of the tax treatment of grants, and the importance of this issue to recipients, Arts Council England and DCMS queried this decision with HMRC officials. Ultimately, however, HMRC were of the view that these grants needed to be treated consistently with other support funds.
There was a regrettable delay between this decision being finalised and recipients being informed of the tax treatment by the Arts Council. In addition, incorrect information was given from HMRC channels which relied on the statement made in the original answer to the parliamentary question, compounding the confusion.
I therefore asked DCMS and HMRC officials to agree that individuals would not be penalised where they had unknowingly submitted incorrect information and that they would be given the opportunity to correct their tax returns.
Arts Council England wrote on 19 January to all those in receipt of payments from its emergency response fund to advise them of HMRC’s position.
7,484 grants were awarded under Arts Council England’s “Emergency Response Fund for Individuals” programme, totalling £17.1 million, meaning an average grant of c. £2,285.
Recipients were therefore advised, ahead of the submission deadline, that:
they would not be charged a penalty if they filed their self-assessment return up to a month after the deadline;
if they needed to correct their tax return, HMRC would not charge any penalties for errors related to the grant payment in the original return; and that
if recipients did not correct their tax return—for instance, because they remain unaware that they have made an error—and HMRC subsequently discovers the error, HMRC would not charge a penalty if the error is a result of relying on incorrect official information.
This was an unfortunate error on the part of a number of Government and non-governmental bodies. I am very sorry for it. I trust the actions taken by my officials and agreed with HMRC have ensured that no individual is unfairly penalised as a result of this error.
Children with No Recourse to Public Funds
Today I am providing an update following a programme of work undertaken by my officials to consider access to free school meals and the early education entitlement for two-year-olds for children from families with no recourse to public funds.
As Members may be aware, some families with an irregular immigration status have a no recourse to public funds—NRPF—condition as designated by the Home Office. This condition restricts these families from drawing on welfare support and other passported Government support and previously this has meant that their children, regardless of their own immigration status, have been unable to access educational entitlements such as free school meals and the early education entitlement for disadvantaged two-year-olds. All children are entitled to access a school place and maintained schools and academies have a duty to provide free school meals to pupils of all ages that meet the eligibility criteria. These healthy, nutritious meals ensure that children up and down the country are well-nourished, develop healthy eating habits, and can concentrate, learn and achieve in the classroom.
Free school meals
In 2020, we temporarily extended free school meal eligibility to include some children of groups who have NRPF. I am pleased to confirm that, following a cross-Government review, we will permanently extend eligibility for free school meals to children from all families with NRPF, subject to the income thresholds as follows:
£22,700 per annum for families outside London with one child.
£31,200 per annum for families within London with one child.
£26,300 per annum for families outside London with two or more children.
£34,800 per annum for families within London with two or more children.
These thresholds were developed to create comparative thresholds with broad equivalence with families with recourse to public funds, and who qualify for free school meals due to being in receipt of welfare benefits.
In addition to the income thresholds outlined, we are incorporating a capital savings threshold of £16,000. This is the same maximum capital threshold for access to universal credit and therefore achieves parity with families with recourse to public funds.
This permanent extension will begin from the start of the summer term, 19 April 2022. Newly eligible free school meal pupils will be recorded in exactly the same way as other free school meal pupils. We will shortly publish guidance advising schools how to check and validate eligibility for NRPF families.
All children in receipt of free school meals will attract pupil premium funding for their school and—dependent on meeting other criteria—will also be able to receive free home-to-school transport. The department will provide funding to meet the additional costs incurred through the established processes.
The early years are crucial for children’s development and for establishing the foundations for future success.
Since September 2020, some NRPF households have been able to access the two-year-old early education entitlement. However, my department is going to consult as soon as possible on whether there are any additional groups of children from NRPF families who should be eligible for the two-year-old entitlement that we have not already identified.
These changes will help to ensure that every child gets the best possible start and receives the right support, in the right place, at the right time.
Canada Trade Policy
Today, the Department for International Trade is publishing a comprehensive set of documents setting out the UK’s strategic approach to an enhanced free trade agreement (FTA) between the UK and Canada. In line with our commitments to scrutiny and transparency, these documents have been published and placed in the Libraries of both Houses.
As a recently independent trading nation, the UK is now able to champion its own trade policy by securing agreements with new international partners, as well as by upgrading the terms of our existing continuity agreements to better suit the needs of UK businesses and the economy. We signed the UK-Canada trade continuity agreement (UK-CAN TCA) on 9 December 2020, which committed both parties to enter negotiations on a bespoke trade agreement by 1 April 2022. As such, negotiations will be launched today, 24 March 2022, with negotiations due to begin shortly afterwards. The negotiation objectives published today were informed by our call for input, which requested views from consumers, businesses, and other interested stakeholders on priorities for upgrading our agreement with Canada.
Canada is an important trading partner with a well-developed economy. Despite the slowdown to global trade in 2020 due to the coronavirus pandemic, goods exports to Canada still increased by £478 million and Canada remained one of our top 20 trading partners (ranked 16th), with total trade in goods and services worth £19.2 billion.
UK exports enjoy an estimated £58 million less in duties under the UK-CAN TCA, relative to trading without one. An upgraded agreement can provide the opportunity to support further trade liberalisation and benefit businesses, including the 10,300 small and medium-sized enterprises (SMEs) already exporting to Canada.
Enhancing the terms of our agreement with a historically connected partner like Canada can provide opportunities for businesses across the entire UK, support the UK’s transition to net zero and strengthen our vision for global Britain. We share a Head of State and work together across a range of bilateral and international initiatives including as members of the Five Eyes, G7, G20, NATO, and as signatories of the Paris climate agreement. These new negotiations are just another way in which our important partnership is delivering against all the priorities as set out in the UK’s integrated review. Further, these negotiations provide a valuable opportunity to pursue high ambition in areas of mutual interest including, championing, and supporting women’s economic empowerment through trade, updating our digital trade package, promoting innovation, and supporting our role as a global leader in climate action.
A bespoke trade agreement with Canada will also complement the UK’s accession to the comprehensive and progressive agreement for trans-Pacific partnership (CPTPP), of which Canada is an influential member.
The Government are determined that any agreement must work for consumers, producers, investors, and businesses alike. We further remain committed to upholding our high environmental, labour, public health, food safety and animal welfare standards, alongside protecting the national health service (NHS).
HM Government are committed to transparency obligations, and we will continue to update and engage with key stakeholders as well as Parliament and the devolved Administrations throughout our negotiations with Canada.
India Trade Negotiations
The second round of UK-India free trade agreement negotiations began on 7 March and concluded on 17 March. A delegation of 44 Indian officials undertook technical talks in London. The negotiations, at official level, were conducted in a hybrid fashion, with some negotiators in our dedicated UK negotiations facility, and others attending virtually.
During this second round, talks focused on draft treaty text. Technical discussions were held across 26 policy areas over 60 separate sessions.
Both countries continue to share an ambition to secure a modern and comprehensive deal that would remove trade barriers and create new opportunities for business in the UK and India. The UK-India deal is a key opportunity to deepen our economic relationship with a dynamic and fast growing economy in the Indo-Pacific region.
This deal is part of a wider trading relationship with India. The 2030 Roadmap agreed last year sets the ambition of doubling trade with India by 2030 and provides a framework for the UK-India relationship that goes beyond the free trade agreement.
The third round of official level negotiations is due to take place in April 2022. We will focus on agreeing treaty architecture and seeking market access commitments to deliver benefit to UK consumers and businesses.
We remain clear that any deal the Government strikes must be in the best interests of the British people and the economy.
The Government will keep Parliament updated as these negotiations progress.
Leader of the House
State Opening of Parliament
I can confirm that the State Opening of Parliament will take place on Tuesday 10 May.
As is usual, the current session of Parliament will be prorogued ahead of the Queen’s Speech and this time will be used to enable logistical and security preparations for the State Opening of Parliament. The likely date of prorogation will be confirmed in due course.
Abortion Services Commissioning: Northern Ireland
l am under a legal obligation by virtue of Section 9 of the Northern Ireland (Executive Formation etc) Act 2019 to ensure that the recommendations in paragraphs 85 and 86 of the 2018 Report of the Committee on the Elimination of Discrimination Against Women—“the CEDAW Report”—are implemented.
Two years after the Abortion (Northern Ireland) 2020 Regulations established the framework for abortion services, women and girls, are still unable to access high-quality abortion and post-abortion care in Northern Ireland. This is unacceptable. Without access to services in Northern Ireland, women and girls are being placed at an increased risk of harm.
It is increasingly clear that the Northern Ireland Department of Health is not going to ensure relevant healthcare services are available by the 31 March 2022 deadline that I set in my direction of July 2021. Recent events, such as the resignation of the First Minister and the Deputy First Minister consequently leaving office have created a further obstacle to progress as the Executive Committee cannot meet to approve matters. This ongoing inaction leaves me no choice but to prepare work on further regulations to ensure services are commissioned.
Therefore, I am committed to return to Parliament directly following the Assembly election in May and, if necessary, make regulations and directions that will:
place a duty on the Department of Health to make abortion services available as soon as is reasonably practicable;
remove the need for executive committee approval before services can be commissioned and funded. The regulations will do this by providing that directions under the Abortion (Northern Ireland) Regulations 2021, which require action to be taken to implement the recommendations of the CEDAW report, must be complied with irrespective of whether the matter has been discussed or agreed by the executive committee. This means that the Department of Health will have no further barriers to commission and fund services; and
confer on me the power to do anything that a Northern Ireland Minister or department could do for the purpose of ensuring that the recommendations in paragraphs 85 and 86 of the CEDAW report are implemented.
To provide additional oversight, I am immediately setting up a small team in the Northern Ireland Office with relevant experience in reproductive healthcare and financial monitoring to provide me with expert advice and to work alongside the Department of Health.
If I assess the Department of Health is not complying with the duty I place on it, I am prepared to use my powers to intervene.
Machinery of Government
I am making this statement to bring to the House’s attention the following machinery of government change.
From the post-war period through to 1970, approximately 3,500 British children in care were sent abroad to former British colonies. Governmental responsibility for these children, who are now aged between 60 and 90, has been held by the Department for Health and Social Care, or DHSC. The Department provides funding for the work of the Child Migrants Trust, which manages applications to the family restoration fund, and also applications to the ex-gratia payments scheme that was set up for former child migrants to apply.
Responsibility for matters relating to those British children in care who were being sent abroad up until 1970, funding for the Child Migrants Trust, and the operation of the family restoration fund will transfer from DHSC to the Department for Education—DFE—from 1 April 2022. This will bring together ownership of policy responsibility for former British children in care who were sent abroad by the state with DFE’s existing responsibility for children’s social care.
Work and Pensions
State Pension: Legal Entitlements and Administrative Practices Exercise
I wish to update the House on the state pension correction activity that is addressing historical errors, that were unaddressed by successive Governments. We are fully committed to ensuring that any historical errors are addressed as quickly as possible, to ensure that individuals receive the state pension they are rightfully due in law.
As of 28 February 2022, we have undertaken 58,809 reviews, repaid £94.3 million, and informed individuals of how much they will be receiving in arrears and the reasons for the change to their state pension rate. More details will be available in the publication on gov.uk.
The Department now has a dedicated team of over 500 people working on the correction activity and, recognising the scale and complexity of the activity, we will continue recruiting.