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House of Commons Hansard
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Written Statements
15 October 2018
Volume 647

Written Statements

Monday 15 October 2018

Treasury

Bilateral Loan to Ireland

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HM Treasury has today provided a further report to Parliament in relation to the bilateral loan to Ireland as required under the Loans to Ireland Act 2010. The report relates to the period from 1 April 2018 to 30 September 2018.

A written ministerial statement on the previous statutory report regarding the loan to Ireland was issued to Parliament on 24 April 2018, Official Report, column 21WS.

[HCWS1008]

Contingent Liability Notification

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I can today confirm that I have laid a Treasury Minute informing the House of the contingent liability that HM Treasury has taken on in authorising the sale of a portfolio of Bradford & Bingley (B&B) and NRAM loans acquired during the financial crisis under the last Labour Government.

On this occasion, due to the sensitivities surrounding the commercial negotiation of this sale, it has not been possible to notify Parliament of the particulars of the liability in advance of the sale announcement.

The contingent liability includes certain market standard time and value capped warranties and indemnities confirming regulatory, legislative and contractual compliance. The maximum contingent liability arising from these warranties and indemnities is approximately £49 million. There are further remote fundamental market-standard warranties which are capped at £983 million.

As part of the transaction, UK Asset Resolution (UKAR), the holding company for B&B and NRAM, also terminated interest rate swaps, which hedged the risk of changes in interest rates, held against these mortgage loans. These swaps were taken out by B&B and Northern Rock more than 10 years ago when the loans were issued, in line with good risk management practice. Due to the fall in long term interest rates, there is a substantial cost for terminating the swaps.

The net impacts of the sale and the termination of the swaps on a selection of fiscal metrics are as follows:

Public Sector Net Debt is reduced by £449 million in 2018-19;

Public Sector Net Borrowing is increased by a total of £100 million by 2022-23; and

Public Sector Net Financial Liabilities is reduced by £83 million in 2018-19.

UKAR will incur an accounting loss of £180 million on the transaction in 2018-19. UKAR is expected to make an overall profit in 2018-19.

The net present value of the assets if held to maturity was estimated by UKAR’s advisers to be £741 million using Green Book assumptions. UKAR received £943 million in exchange for the assets.

I will update the House of any further changes to B&B and NRAM as necessary.

[HCWS1009]

Finance (No.3) Bill

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Finance (No.3) Bill will be published on Wednesday 7 November.

Explanatory notes on the Bill will be available in the Vote Office and the Printed Paper Office and placed in the Libraries of both Houses on that day.

Copies of the explanatory notes will also be available at: www.gov.uk.

[HCWS1002]

JHA Opt-in Decision: Sovereign Bond Backed Securities

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The Government have decided not to opt in to a provision in the proposed EU regulation on an enabling framework for sovereign bond backed securities that aims to remove unwarranted regulatory obstacles to the market-led development of sovereign bond backed securities (SBBS), which currently do not yet exist in practice. This is primarily a matter for member states in the euro area whose Government bonds would be included in the scope of the product and therefore whose national debt markets would be affected. The proposal is currently stalled due to significant opposition from member states and industry.

Article 17 of the proposed regulation requires that where member states have chosen to lay down rules for criminal sanctions, they shall ensure that information can be shared between competent authorities in the EU. As the provision requires co-operation involving law enforcement bodies, the Government believe these are JHA obligations and therefore our JHA opt-in is triggered.

The Government have decided not to opt in to these provisions as there are no significant benefits to be gained from doing so. The obligation to share information will only fall on member states who have a relevant criminal sanctions regime. The Government have no intention to introduce a criminal sanctions regime in a way that would lead to this regulation imposing an obligation on the UK or on our competent authorities.

[HCWS1004]

Counter-Terrorist Asset Freezing

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Under the Terrorist Asset-Freezing etc. Act 2010 (TAFA 2010), the Treasury is required to prepare a quarterly report regarding its exercise of the powers conferred on it by Part 1 of TAFA 2010. This written statement satisfies that requirement for the period 1 April 2018 to 30 June 2018.

This report also covers the UK’s implementation of the UN’s ISIL (Daesh) and Al-Qaida asset freezing regime (ISIL-AQ), and the operation of the EU’s asset freezing regime under EU regulation (EC) 2580/2001 concerning external terrorist threats to the EU (also referred to as the CP 931 regime).

Under the UN’s ISIL-AQ asset freezing regime, the UN has responsibility for designations and the Treasury, through the Office of Financial Sanctions Implementation (OFSI), has responsibility for licensing and compliance with the regime in the UK under the ISIL (Daesh) and Al-Qaida (Asset-Freezing) Regulations 2011.

Under EU Regulation 2580/2001, the EU has responsibility for designations and OFSI has responsibility for licensing and compliance with the regime in the UK under Part 1 of TAFA 2010.

A new EU asset freezing regime under EU Regulation 2016/1686 was implemented on 22 September 2016. This permits the EU to make autonomous Al-Qaida and ISIL (Daesh) listings.

The attached tables set out the key asset-freezing activity in the UK during the quarter.

The recently passed Sanctions and Anti-Money Laundering Act 2018 (SAMLA) will help ensure that UK counter-

terrorist sanctions powers remain a useful tool for law enforcement and intelligence agencies to consider utilising, while also meeting the UK’s international obligations.

Under SAMLA, a designation could be made where there are reasonable grounds to suspect that the person or group is or has been involved in a defined terrorist activity and that designation is appropriate. This approach is in line with the UK’s current approach under UN and EU sanctions and would be balanced by procedural protections such as the ability of designated persons to challenge the Government in court.

Attachments can be viewed online at: http://www. parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2018-10-15/HCWS1003/.

[HCWS1003]

Defence

Defence Industry and Shipbuilding: Response to a Resolution of the House

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I would like to thank all hon. and right hon. Members, my predecessor, the hon. Member for Aberconwy, (Guto Bebb) and the Minister for Defence People and Veterans the Under-Secretary of State for Defence, my right hon. Friend the Member for Bournemouth East (Mr Ellwood) for their contribution to the Opposition Day debate on Defence Industry and Shipbuilding which took place on 11 July 2018. The passionate and constructive comments of Members clearly demonstrated this House’s support for shipbuilding.

Naval shipbuilding has a particularly important place in our defence industry. As a maritime nation, our prosperity as well as our security hinges on the strength of our navy.

All Royal Navy warships, by which we mean destroyers, frigates and aircraft carriers, will have a UK-owned design, and will be built and integrated in the UK.

All other naval vessels, including Royal Fleet Auxiliaries, will be procured through international competition to secure the best designs and value for money for the UK taxpayer. This does not mean that other naval vessels cannot be built in the UK, rather, it means the UK shipbuilding industry has an opportunity to put forward internationally competitive and innovative bids. We have actively engaged UK shipyards to take part in the Fleet Solid Support ships competition. It is in the Government’s and the taxpayers’ interests to have a robust competition and we anticipate receiving strong bids from UK shipyards.

We will continue to work closely with the defence industry to energise this crucial sector of our economy to achieve our strategic aim—to have a modem, innovative, internationally competitive sector capable of meeting the country’s defence and security needs, both now and in the future.

[HCWS999]

Grant in Kind

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I have today laid before Parliament a Ministry of Defence departmental minute describing a gifting package which the UK intends to make to the Government of Nigeria.

This gift, a grant in kind, is comprised of a range of equipment intended to equip Nigerian army specialists facing Boko Haram militants in North-East Nigeria. Improvised explosive devices (lEDs) are an insidious and pervasive threat faced daily by Nigerian military personnel deployed in the struggle against Boko Haram. Not only do they pose a significant threat to the lives of Nigerian soldiers, but their impact on humanitarian access is severe, and if left unaddressed they will threaten civilian lives for many years to come.

The equipment granted by the UK, including metal detectors and other specialised C-IED equipment, meets a specific request by the Nigerian armed forces for C-IED assistance. It will complement the delivery of UK military training, help meet an identified operational requirement, and, most importantly, it will help save lives.

The departmental minute, which I have today laid before Parliament, describes a gifting package to the Nigerian armed forces comprised of priority items that provide immediate benefits. These items are metal detectors, binoculars, equipment to access and manipulate suspect devices, and equipment to facilitate their safe disposal.

Subject to completion of the departmental minute process, delivery is expected to be undertaken over the coming weeks. The total cost of this proposed package of equipment is approximately £775,000.

[HCWS1000]

Digital, Culture, Media and Sport

Loneliness Strategy

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I refer to my oral statement made to the House on the evening of 15 October.

[HCWS1007]

Exiting the European Union

EU Exit

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As announced by the Prime Minister and the Secretary of State for Exiting the European Union on 18 July 2018, the Government are publishing a series of technical notices. We published 25 of these notices on 23 August, 28 on 13 September, and 24 on 24 September. Last Friday, 12 October 2018, we published a further 29 notices. These notices are designed to inform people, businesses and stakeholders about steps they may need to take in the event of a no-deal scenario.

Notices were published on the following areas:

Accounting and audit if there is no Brexit deal

Breeding animals if there is no Brexit deal

Classifying, labelling and packaging chemicals if there is no Brexit deal

Commercial fishing if there is no Brexit deal

Consumer rights if there is no Brexit deal

Control on mercury if there is no Brexit deal

Control on persistent organic pollutants if there is no Brexit deal

Existing free trade agreements if there is no Brexit deal

Export and import of hazardous chemicals if there is no Brexit deal

Exporting GM food and animal feed products if there is no Brexit deal

Exporting objects of cultural interest if there is no Brexit deal

Funding for British Overseas Territories if there is no Brexit deal

Geo-blocking of online content if there is no Brexit deal

Health marks on meat, fish and dairy products if there is no Brexit deal

Importing high-risk food and animal feed if there is no Brexit deal

Maintaining the continuity of waste shipments if there is no Brexit deal

Meeting climate change requirements if there is no Brexit deal

Meeting rail safety and standards if there is no Brexit deal

Plant variety rights and marketing of seed and propagating material if there is no Brexit deal

Providing services including those of a qualified professional if there is no Brexit deal

Rail transport if there is no Brexit deal

Regulating biocidal products if there is no Brexit deal

Regulating pesticides if there is no Brexit deal

Sanctions policy if there is no Brexit deal

Structuring your business if there is no Brexit deal

Taking horses abroad if there is no Brexit deal

Trading and moving endangered species protected by CITES if there is no Brexit deal

Trading electricity if there is no Brexit deal

Trading gas with the EU if there is no Brexit deal

Notices are being published on gov.uk. These can be found here:

https://www.gov.uk/government/collections/how-to-prepare-if-the-uk-leaves-the-eu-with-no-deal.

Copies of notices will be placed in the Libraries of both Houses to ensure all Members have access.

[HCWS1005]

General Affairs Council

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Lord Callanan, Minister of State for Exiting the European Union, has made the following statement:

I will attend the General Affairs Council in Luxembourg on 16 October 2018 to represent the UK. Until we leave the European Union, we remain committed to fulfilling our rights and obligations as a full member.

The provisional agenda includes:

Preparation of the European Council on 18 October 2018 and European Council follow up

The Council will discuss the draft conclusions for the October European Council. The conclusions are expected to cover migration, internal security and external relations.

The presidency will also provide an update on progress in implementing previous European Council conclusions.

Rule of Law in Poland/Article 7(1) Treaty of the European Union (TEU) reasoned proposal

The Commission will provide Ministers with an update on the rule of law in Poland and will invite Poland to provide a response.

Rule of Law in Hungary/Article 7(1) Treaty of the European Union (TEU) reasoned proposal

The presidency is expected to provide Ministers with an indication of how it intends to organise future Council proceedings following the triggering of the Article 7(1) TEU procedure for Hungary.

Multiannual financial framework 2021-2027

Ministers will discuss progress on the multiannual financial framework proposals with the presidency.

[HCWS1011]

Health and Social Care

Child Death Review

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Today I am publishing, on behalf of the Government, the statutory and operational guidance “Child Death Review” which outlines the framework which all practitioners involved in a review of a child’s death should follow. Clinical Commissioning Groups and Local Authorities, as the new child death review partners, must make local arrangements for the review of all child deaths, in England.

The policy of child death reviews has, until recently, been the responsibility of the Department for Education. I welcome the Prime Minister’s decision on the transfer of policy for child death review set out in her written statement to the House on 18 July. This change will result in child deaths becoming part of the national Learning from Deaths Programme and its aim is to learn lessons to save more children’s lives and ensure that the way the NHS engages with the bereaved, continuously improves.

Related areas that remain the responsibility of the Department for Education include children’s social care including safeguarding children and child protection.

The revisions to the child death review process have been necessary to reflect the legislative changes introduced through the Children and Social Work Act 2017. The reforms underpin a stronger but more flexible statutory framework—one that will support local partners to work together more effectively to review the deaths of children in order to try to prevent deaths recurring by the same cause.

The findings from local reviews will be reported to the National Child Mortality Database (from April 2019), where the information, for the first time will be analysed centrally and will provide additional learning beyond what can be achieved by local systems. The data will be analysed at the Child Mortality Data Unit at the University of Bristol and will be used to inform strategic improvements in health and social care for children, and to help health and social care providers to learn about how they can reduce child deaths.

NHS England plan to publish shortly “When a Child Dies - A Guide for Parents and Carers”. The guide has been developed by a group of bereaved parents, and support organisations and professionals.

Child Death review is an important piece of guidance for agencies, organisations and practitioners to know what they must do individually and collectively to robustly and thoroughly review and learn from every child death.

[HCWS998]

Home Department

Offensive Weapons Bill Memorandum

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I am today placing in the Library of the House the Department’s analysis on the application of Standing Order 83L in respect of the Government amendments tabled for Commons Report stage for the Offensive Weapons Bill Scheduled for the 15 October 2018.

[HCWS1001]

Housing, Communities and Local Government

Leasehold Reform

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I have published a technical consultation on how to implement the Government’s reforms to the leasehold system in England.

This consultation marks the next step in my personal commitment to tackle exploitative and unjustifiable practices in the leasehold sector, making homeownership fairer for all.

Unjust leasehold terms also risk making relatively new houses unattractive to buyers. Therefore, last year the Government announced they would introduce legislation to prohibit the unjustified granting of new residential long leases on new build or existing freehold houses, other than in exceptional circumstances, and restrict ground rents in newly established leases of houses and flats to a peppercorn.

In addition, we want to address loopholes in the law to improve transparency and fairness for leaseholders and freeholders. This includes providing freeholders with equivalent rights to leaseholders to enable them to challenge the reasonableness of estate rent charges or freehold service charges for the maintenance of communal arrears and facilities on a private or mixed estate.

Finally, we want to introduce measures to improve how leasehold properties are bought and sold.

The consultation details a number of proposals setting out how our plans may work in practice. It asks important questions to understand people’s views on how this could affect them. It sets out and seeks views on:

how the changes to prevent unjustified new leasehold houses will work in practice, in what circumstances any exemptions will be provided, and how the policy will be enforced;

the future nominal ground rent for new leasehold properties being capped at £10 per annum, and what exceptional circumstances may warrant exemption;

how we intend to provide freeholders with equivalent rights to leaseholders to enable them to challenge the reasonableness of an estate rent charge or a freehold service charge for the maintenance of communal arrears and facilities on a private or mixed estate; and

measures to improve how leasehold properties are bought and sold.

We will use the evidence we gather to inform the legislation and the accompanying impact assessment.

The consultation will run for six weeks and will close on 26 November 2018. It is available online at: https://www.gov.uk/government/consultations/implementing-reforms-to-the-leasehold-system, and I have placed a copy in the House Library.

Since becoming Secretary of State, I have already taken steps to ensure excessive and unfair leasehold practices are brought to an end. No new Government funding schemes will now support the unjustified use of leasehold for new houses.

This consultation, and the legislation which will follow, will make the leasehold system fairer, more transparent, and cheaper for home owners in the future.

[HCWS1010]

Ratings (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

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I am today placing in the Library of the House the Department’s analysis on the application of Standing Order 83O in respect of any motion relating to a Lords amendment for Commons consideration of Lords amendments stage for the Ratings (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill.

[HCWS1006]