Thursday 20 April 2017
Business, Energy and Industrial Strategy
BEIS Arm’s Length Body
The Government are announcing today the sale of the UK Green Investment Bank plc (GIB) to Macquarie Group Ltd (Macquarie), with a £2.3 billion deal which secures a profit on the Government’s investment in the bank, provides value for taxpayers and ensures GIB continues its green mission, in the private sector.
GIB has been a real success story since it was created in 2012—the world’s first dedicated green investment bank, established to accelerate private sector investment into the UK green economy. It has fulfilled that mission, supporting almost 100 green infrastructure projects in the UK so far, and attracting £3 of third-party funding for every £1 it invests. It has shown, as it set out to do, that green investment can be both green and profitable. Having demonstrated its success, the Government decided to move GIB into the private sector where it can continue its success on an even greater scale.
The deal, secured through a competitive process as set out in a report to Parliament on 3 March 2016, will meet the objectives outlined by Government of securing value for money for the taxpayer while ensuring GIB continues its green mission, free from the constraints of public sector ownership. It has the backing of GIB’s independent board.
Under the ownership of Macquarie, one of the largest infrastructure investors in the world, GIB will invest more into the green economy than ever before, with £3 billion of new investment targeted over the next three years, exceeding GIB’s track record of committing £3.4 billion of investment over the four and a half years since it was founded. GIB will become the primary vehicle for Macquarie’s renewable energy investment in the UK and Europe, allowing GIB to expand internationally.
Macquarie has today published a series of commitments over the future of GIB under their ownership, including that GIB’s green purpose and green objectives will be maintained. This is in line with the “special share” in GIB to safeguard GIB’s green purposes, which will be held by five independent trustees who will have the power to approve or reject any proposed change to GIB’s green mission.
Macquarie has also committed to continue GIB’s investment approach, targeting investments across all areas of the green economy and across all stages of the project lifecycle, including the critical phases of development and construction. This will ensure GIB remains a specialist green investor supporting renewable energy investment and emissions reduction in the UK.
Macquarie is committed to maintain the GIB platform and brand, and to utilise the skills and experience of GIB employees in Edinburgh and London. GIB’s Edinburgh office will be home to a new revenue generating project delivery business providing services to the green energy portfolios of GIB and Macquarie in the UK.
The transaction value of around £2.3 billion ensures that on completion, all taxpayer funding invested in GIB has been returned with a substantial profit. This comprises proceeds from the sale of around £1.7 billion, with a further £0.6 billion of GIB’s current outstanding commitments which will be met by Macquarie and its partners, rather than by taxpayers.
As part of the transaction, a number of GIB’s offshore wind assets will be moved into a new offshore wind investment vehicle, which GIB will manage and hold a 25% stake. Investors in this investment vehicle will be long-term institutional investors Macquarie European Infrastructure Fund 5 (MEIF5) and the universities superannuation scheme (USS). This type of transaction structure matches GIB’s existing approach to asset ownership, providing a mechanism for long-term institutional investors to invest in low-carbon projects while ensuring GIB can recycle its capital into new green investments.
The Government will continue to hold a £130 million portfolio of a small number of GIB’s existing investments. This portfolio will continue to be managed by GIB until these investments can be sold on in a way which returns best value for taxpayers’ money.
The Government would like to put on record their gratitude to GIB management and staff, who have all played a key role in GIB’s success, and who have worked tirelessly and professionally to support the sale process while continuing to source and finance green projects across the UK.
The sale proceeds will be received on completion of the transaction, which is expected to take around two months. The transaction is conditional on certain regulatory approvals including EU merger clearance. Under the Enterprise Act 2016, the Government are required to provide a full report to Parliament on completion of the transaction.
Conduct Guidance for General Election
The Prime Minister will write to ministerial colleagues providing guidance on the conduct of Government business during the general election period. The Cabinet Secretary has issued parallel guidance to civil servants on their conduct during this period. The guidance comes into force on 22 April 2017.
Copies of the documents have been placed in the Libraries of both Houses and on the Cabinet Office website at gov.uk.
Culture, Media and Sport
Digital Economy Bill
I have placed in the Library of the House the Department’s analysis on the application of Standing Order No. 83 O of the Standing Orders of the House of Commons relating to public business in respect of the Lords amendments to the Digital Economy Bill.
I have retrospectively laid before Parliament a Ministry of Defence (MOD) departmental minute describing the contingent liabilities within the Astute boat 5 and 6 whole boat contracts with BAE Systems Marine Ltd.
The departmental minute describes the contingent liability that the MOD will hold as a result of placing the Astute boats 5 and 6 whole boat contracts, which will provide production, test and commissioning of the fifth and sixth Astute class submarines, HMS Anson and HMS Agamemnon. The maximum contingent liability against the MOD is unquantifiable and will remain until the respective 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. I apologise, but on this occasion, it was not possible to do so.
For boat 6 the Department was faced with exceptional sequencing from the completion of difficult negotiations. The Department faced the prospect of losing the deal and its associated £110 million savings, due to new changes to single source contract regulations introduced on 1 April 2017. As such the Secretary of State for Defence decided to proceed with the agreement, following scrutiny of the contract by the Department’s investment approvals committee which confirmed that the contract offered best value for money for the taxpayer, and subsequent approval by HM Treasury.
As a result of detailed work in connection with the boat 6 contract it has been recognised that contingent liabilities arising from the boat 5 contract, which has hitherto been considered not to require notification to Parliament, are in fact the same as those for boat 6 and should therefore have been notified, notwithstanding the fact that that no credible scenario has been identified in which a claim could exceed contractual limits.
Within both the boat 5 and 6 contracts, BAE Systems Marine Ltd limited 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 the MOD for 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.
Department of Health Arm’s Length Bodies
The Department of Health has completed its triennial reviews of the Human Fertilisation and Embryology Authority, the Human Tissue Authority and the Committee on Mutagenicity of Chemicals in Food, Consumer Products and the Environment and is today publishing the associated reports. A copy of each review report can be found online. Additionally, the review of the NHS Pay Review Body and the Review Body on Doctors’ and Dentists’ Remuneration will be subsumed within a cross-cutting review of the classification of the Department of Health’s advisory non-departmental public bodies.
Each review, which took place during 2015-16, consulted with a wide range of stakeholders and concluded that the organisations perform necessary functions effectively. The reports contain recommendations intended to support each organisation’s future performance, efficiency, and governance.
Attachments can be viewed online at: http://www. parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2017-04-20/HCWS599/.
In a world of serious threats to UK and global stability, Britain’s leadership on the world stage is more important than ever. When we look around the world today, people are drowning on perilous migration routes. Children are dying from preventable diseases while drug-resistant infections are brewing that threaten us here at home. Violence and conflict are pulling people back into poverty.
As we exit the EU, Britain will be more, not less, outward-looking and engaged on the world stage. Intensifying our efforts as a global leader in international development is a crucial part of this. A safer and more prosperous world, supported by our international development work, is firmly in the UK’s interest.
Our humanitarian leadership helps Britain stand tall in the world. Since the beginning of the year we have faced the largest humanitarian crisis since the creation of the United Nations. Now, more than 20 million people across four countries face starvation and famine.
The UK is a world leader on humanitarian responses and today I am announcing that the UK will increase funding to tackle humanitarian crises in both Yemen and Nigeria for this coming year. We will lead the world in supporting famine stricken areas by stepping up our emergency assistance.
The UN has described the situation in Yemen as
“the largest food security emergency in the world”
and last month declared that the country is now on the brink of famine. We will provide £139 million for Yemen for financial year 2017-18, an increase of £27 million on the £112 million delivered by the UK last year.
UK support will provide life-saving aid to hundreds of thousands of desperate people, in recognition of the scale of the current crisis which has left some 19 million Yemenis—two thirds of the population—in urgent need of humanitarian aid.
Nigeria is one of the world’s largest humanitarian crises. More than 20,000 people have been killed there since the start of Boko Haram’s violent insurgency in 2009 and millions more are in need of food, water and shelter. The UK was one of the first on the ground to respond to the humanitarian crisis in north-east Nigeria. Last year alone we reached over a million people with food and provided 34,000 children suffering from malnutrition with life-saving treatment.
We continue to lead this challenge by increasing our support this year to £100 million, making the UK the largest donor in 2017. Last year (2016), we provided around £70 million for emergency food, shelter and health care for hundreds of thousands of people displaced by Boko Haram’s violent insurgency. The funding will assist the UN, the International Committee of the Red Cross and international NGOs to reach the most vulnerable people displaced by Boko Haram:
Over 1 million people will receive food assistance.
60,000 children will be treated for severe acute malnutrition.
Clean water will be provided for over 530,000 people.
At least 100,000 children will gain access to education.
The humanitarian needs in 2017 are unprecedented. More than 20 million people across four countries face starvation and famine. In Syria, Iraq and elsewhere, we see ambulances being used as car-bombs; girls stolen as sex slaves; children made to conduct executions; barrel bombs being dropped among civilians. The UK will continue to speak out against these outrages, and stand up for respect for the rules of war and for basic humanitarian principles.
This is why Britain pledged £110 million of UK aid to provide up to 1 million people in Somalia with emergency food assistance, over 600,000 starving children and pregnant and breastfeeding women with nutritional help, 1 million people with safe drinking water, and more than 1.1 million people with emergency health services. In South Sudan, where 7.5 million people are in need of assistance after famine was declared, the UK was one of the first major donors to confirm our response to a UN appeal, announcing £100 million of support less than 24 hours after the appeal was launched. This will provide: food for over 500,000 people; life-saving nutritional support to more than 27,500 children, and safe drinking water for over 300,000 people.
The UK is at the forefront of the humanitarian response to the Syria crisis, providing life-saving support to millions, supporting refugees to remain in countries in the region and enabling their hosts to accommodate them. The crisis in Syria is the UKs largest ever response to a single humanitarian crisis.
The £2.46 billion provided to Syria and the region since 2012 has provided nearly 25 million food rations, over 9.5 million relief packages and over 7 million health consultations.
We co-hosted the “Supporting Syria and the Region” conference in London in February 2016, which secured the largest amount of pledges ever in one day for a humanitarian crisis. On 4 and 5 April this year, we co-hosted the Brussels conference on the “Future of Syria and the Region”, which secured pledges of $9.7 billion.
I am pleased to announce the UK will pledge an additional £75 million, as part of our Brussels commitment, to help kick start economic growth and create jobs in Lebanon and Jordan over the next three years. These funds will leverage up to £250 million of concessional finance from multilateral development banks, including through the global concessional financing facility.
As the global migration crisis has made clear, the challenges facing the international development system in the 21st century go beyond anything witnessed before. More than ever, the world needs strong global institutions and leadership for today and for the future. The UK is a founding member of many of the world’s leading international organisations and we remain deeply committed to the spirit and values of the international system.
The UK will continue to champion an open, modern and innovative approach to development and will use our leading position to build a coalition for reform of the global aid system so that it is ready for the challenges of the 21st century. We are promoting investment in the poorest countries, helping them to get on the road to industrialisation. We are driving progress on economic development and working with businesses to stimulate investment in the world’s most difficult frontier markets, where jobs and economic opportunities are desperately needed. In the long run, it is sustainable growth, trade and investment that will provide a sustainable route to poverty reduction. Defeating poverty is a joined-up effort across the whole of Government including using the opportunity of leaving the EU to free up trade with the world’s poorest.
I also would like to update the House on how we are reforming UK aid to maximise its impact by driving new standards and outcomes. DFID’s economic development strategy sets out how Britain will establish new trade, investment and economic links and end global poverty. The multilateral development review spells out how we are raising the bar, requiring more of our partners, by following the money, people and outcomes. The bilateral development review confirms how DFID is reforming the entire global development system to tackle the global challenges of our time.
As a key part of this, my ministerial team and I have conducted a detailed line-by-line review of every programme in DFID’s portfolio, either already approved or in design phase. Each of these programmes has been scrutinised on the basis of their value for money and their strategic fit with the Government’s priorities for global Britain. The savings from programmes which will not continue will be recycled to fund better value programmes aligned to our priorities, while still delivering our planned results and commitments.
In the 2015 spending review the Government announced plans to make over £400 million of efficiency savings by 2019-20. DFID will save closer to £500 million in this period, through reform of procurement and commercial practices, estates, IT and departmental pay. These changes are included in the Department’s ambitious new value for money “Agenda for Action”.
In addition, a comprehensive review of DFID’s management and relationship with suppliers is under way. This review will drive greater transparency and efficiencies from DFID’s suppliers through new codes of practice and contractual obligations; more competition, innovation and choice in our supplier market; and increased transparency of fees and costs throughout our supply chain.
These bold measures will drive value for money without compromising our commitment to being a global leader in international development. In 2015-16, it is estimated that DFID supported:
The immunisation of approximately 20 million children, saving 250,000 lives: we are on track to meet DFID’s commitment of immunising 76 million and saving 1.4 million lives.
Reaching 13.3 million children under 5, women of childbearing age and adolescent girls through our nutrition-relevant programmes; on track to meet DFID’s commitment of 50 million.
5.9 million women from 2012 to 2015, and 1 million women in 2015-16, to use modern methods of family planning. This gives a total of 6.9 million for the period 2012-16; on track to meet DFID’s commitment of 24 million between 2012 and 2020.
3.1 million children to gain a decent education; on track to meet DFID’s commitment of 11 million.
11.3 million people to access clean water and/or better sanitation; on track to meet DFID’s commitment of 60 million.
UK taxpayers can be equally proud of our record on humanitarian response: in 2015-16 we reached 5.1 million people, including 1.6 million women and girls.
Our support has been life-saving and life-changing, as shown by DFID’s leadership of the international response to Ebola in Sierra Leone. The British response to Ebola in 2015 was an example of Britain’s development impact and influence. Experts from DFID co-ordinated a joined-up effort across Government, bringing together the best of British expertise to defeat that disease.
UK aid is being focused on where the need is greatest—from fragile and conflict-riven states that need help the most urgently, to protecting lives, reducing poverty, and working with Governments who receive our aid to get them to step up and take responsibility for investing in their own people. When we invest in stability, jobs and livelihoods, and sound governance, we address the root causes of problems that affect us here in the UK. It is not in our national interest to simply sit on our hands and wait until these problems reach breaking point or find their way to our doorstep.
This is where our aid budget, along with our world-class defence and diplomacy, acts not only in the interests of the world’s poorest, but also in Britain’s long-term national interest.
Work and Pensions
Extending the Motability lease (following reassessment from disability living allowance (DLA) to personal independence payment (PIP))
The Motability scheme plays a vital role in the lives of many disabled people and their families in supporting their mobility through the provision of a car, scooter or powered wheelchair. Motability has no role in determining who should receive disability living allowance or personal independence payment.
In September 2013, the charity put in place a transitional support package, which includes up to £2,000 as a lump sum for those disabled people who are not entitled to the enhanced rate of the mobility component of personal independence payment following reassessment from disability living allowance to personal independence payment in order to help them remain mobile.
Over the last few months, DWP and Motability have been working closely together to explore further ways of helping disabled people.
A key focus of this work has been how best to support Motability customers who are in the process of any reconsideration or appeal.
Today I am able to announce that Motability has kindly offered to enhance their disability living allowance-personal independence payment transitional support package to allow scheme customers to retain the car for up to eight weeks after their disability living allowance payments end, a significant increase from the three weeks they are allowed today.
In addition customers who are eligible for a transitional support payment will be able to retain their car for up to six months, including during the processes of reconsideration or appeal. For those who take advantage of this option, the level of transitional support payment will be reduced.
Once the full guidance for claimants is available, I will place a copy in the Library of the House.
PIP rapid reclaim
Currently, entitlement to personal independence payment ends after 13 weeks for most claimants when they go abroad. On returning to the UK they must make a new claim from scratch and may need to undergo a face-to-face assessment. We will shortly be implementing a new, rapid reclaim process that will enable eligible former personal independence payment claimants who are returning to the country to start receiving their personal independence payment payments much more quickly.
Eligible claimants will be those who:
were in receipt of personal independence payment prior to their absence abroad;
were out of the country for more than 13 weeks but returned within 12 months of when they left;
have not have reached their award review date of their previous claim (typically 12 months prior to the claim end date);
can confirm that their needs have not changed since before their absence abroad.
This new process will be implemented within the next two months. We estimate that eligible claimants will be able to access the benefit within two weeks of making a new claim on their return. By accessing financial support more quickly, where relevant, claimants will have faster access to the Motability scheme.
The UK labour market is a great success story for this country. The latest labour market statistics have shown that the UK employment level has risen to a near record high of 31.84 million, with the employment rate achieving a joint record high of 74.6%. In particular, the female employment rate is at a near record high of 69.9% while for older workers (50-64) the employment rate has reached a joint record high of 70.9%. The overall unemployment rate has fallen to 4.7%, the lowest rate in over a decade, alongside inactivity which is at a near record low of 21.6%. The employment rate of 16-to-24s who are not in full-time education is at 75.4%, the highest in over 12 years. The proportion of 16 to 24-year-olds year olds who are not in full-time education or employment is down to 5.1%, a joint record low.
Two planks of our approach to continuing to support people into work have been to enable older people to stay in the labour market for longer, and to support disabled people and people with long-term health conditions to move into and stay in work.
In February this year the Government published “Fuller Working Lives: A Partnership Approach”, which set out the ambition to support individuals aged 50 and over to remain in and return to the labour market and tackle the barriers to doing so. Through a combination of headline measures, Government will continue to monitor progress on “Fuller Working Lives”.
In October last year we published “Improving Lives: The Work, Health and Disability Green Paper”. This set out the action we intend to take to bring about change across welfare, employers and health systems and invited views on a 10-year strategy for reform. Since publication we have run a 15-week national consultation, which closed in February 2017. We received a great response to the consultation from a wide range of disabled people and people with long-term health conditions, and organisations with an interest.