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Written Statements

Volume 671: debated on Thursday 6 February 2020

Written Statements

Thursday 6 February 2020

Treasury

Problem Debt: Breathing Space

The Government are establishing breathing space to help those individuals in problem debt. Today, the Government are updating the House in order to reaffirm our commitment to implementing this in 2021, as planned, and to provide figures from the impact assessment which is also published today.

Breathing space will provide a period of up to 60 days, where people in problem debt would be protected from enforcement action by their creditors and the accrual of further interest and fees on their debts.

This protection will help those in problem debt move towards a sustainable debt solution. The protections from enforcement action, fees and charges will encourage more people to seek out debt advice and to seek it earlier. It will provide them with the time and space to work with their debt adviser in an environment free from creditor pressure, in the knowledge their debt would not escalate due to further interest or charges. This will help give people the time and space they need to choose the right debt solution for them.

To ensure that breathing space works for everyone, people receiving treatment for mental health crisis will be able to enter breathing space without seeking advice from a debt adviser. They will be able to remain in breathing space for the period of their crisis treatment and a further 30 days.

In its impact assessment, the Government forecast;

700,000 people to be helped by breathing space in the first year, rising in time to over 1 million a year.

25,000 - 50,000 a year are expected to receive a breathing space via a specific route designed to support those in mental health crisis treatment.

The Government impact assessment can be found here:

https://www.gov.uk/government/publications/breathing-space-impact-assessment

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Defence

Ministry of Defence Annual Estimate 2020-21

The Ministry of Defence Votes A Estimate 2020-21, will be laid before the House on 6 February 2020 as HC 33. This outlines the maximum numbers of personnel to be maintained for each service in the armed forces during financial year 2020-21.

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Environment, Food and Rural Affairs

Agriculture and Fisheries Council

The UK did not attend the Agriculture and Fisheries Council in Brussels on 27 January 2020.

The UK Government decided that until 31 January UK Ministers and officials only attend EU meetings where the UK has a significant national interest in the outcome of the discussions.

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Foreign and Commonwealth Office

Cemeteries Endowment Fund

I announce today the transfer of the cemeteries endowment fund (“the fund”) from the High Commission in New Delhi to the British Association for Cemeteries in south Asia (“BACSA”), a UK based charity.

The fund was originally established in India in the late 19th century for the purpose of maintaining European graves and cemeteries. Any such cemeteries maintained by the Government of India could be endowed by friends or relatives of deceased persons and such endowments were credited to the fund.

After India gained independence in 1947, arrangements were made for the UK Government, through the High Commission, to take responsibility for the maintenance of the European graves and cemeteries. A parliamentary undertaking, in the form of answers to parliamentary questions in both Houses, was given on 15 March 1949, that the UK Government would be responsible for European cemeteries in India—and had been since April 1948. The Government of India authorised transfer of the fund to the High Commission in June 1949 and the Secretary of State for the Commonwealth Office inherited responsibility for the fund.

Over recent years, it has become apparent that administration of the fund requires dedicated resources. For this reason, the High Commission requested that the fund be transferred to BACSA, a UK-registered charity (charity no. 273422) which would be able to use the fund more effectively in accordance with the fund’s original purpose. BACSA has as its aim to promote the preservation, conservation and recording of former European cemeteries and isolated monuments in south Asia and elsewhere in Asia. It also seeks to promote education in the history of all places in south Asia and elsewhere in Asia associated with European residence, and in particular the territories formerly administered by the East India Company and the British Government of India. Its objectives therefore coincide with those of the fund.

Following appropriate consultation across Whitehall and with BACSA, the fund was transferred to BACSA on 15 March 2019 to the sum of £19,047.64.

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Housing, Communities and Local Government

Local Government Finance

Today I laid before the House the “Local Government Finance Report (England) 2020-21”, the “Referendums Relating to Council Tax Increases (Principles) (England) Report 2020-21” and the “Referendums Relating to Council Tax Increases (Alternative Notional Amounts) (England) Report 2020-21” which represent the final local government finance settlement for 2020-21.

This year’s settlement delivers an increase in core spending power from £46.2 billion in 2019-20 to £49.2 billion in 2020-21. In real terms this is a 4.4% increase and the largest year on year real-terms increase in a decade.

The local government finance settlement relies on collaboration. My Ministers and I have engaged extensively with the sector, holding meetings with representative groups, with councils, and with MPs. During this process, we received over 200 representations from organisations or individuals, and these have been carefully considered before finalising the settlement. I would like to take this opportunity to thank all colleagues in the House, and council leaders and officers, who have contributed to the consultation process.

This year’s settlement is a strong and well-balanced package that delivers significant extra resources to the priority areas of adult and children’s social care, whilst protecting other vital service areas.

Extra social care resources

This Government are serious about protecting the millions of people who rely upon adult and children’s social care in their daily lives. To do this, this settlement will allow local authorities to access an additional £1.5 billion for social care. This comprises £1 billion of additional grant—for both adult and children’s social care—and a proposed 2% council tax precept for adult social care, which will enable councils to access a further £500 million. Some £150 million of the additional grant will be used to equalise the distributional impact of the adult social care council tax precept.

These additional resources sit on top of the existing social care package, which will continue at 2019-20 levels, and mean that local authorities will have access to almost £6 billion of dedicated funding across adult and children’s social care in 2020-21.

Core settlement resources

The local government finance settlement for 2020-21 will also protect other key services by providing a uniform percentage uplift in core settlement resources, in line with the change in the small business rates multiplier. Vital services are also protected by continuing other key grants from 2019-20.

Council tax

Local authorities will continue to be able to increase council tax in 2020-21 by a core principle of up to 2%, without holding a local referendum, with a bespoke council tax referendum principle of 2% or £5, whichever is higher, for shire district councils, and a £10 Band D council tax referendum principle for all police authorities. Authorities with adult social care responsibilities will be able to increase their council tax by a further 2% on top of the core principle, without holding a local referendum, to be spent exclusively on adult social care.

The proposed referendum principles strike a balance between giving local authorities the flexibility to address service pressures, and not overburdening council tax payers with excessive increases which do not have local support.

The 2020-21 final local government finance settlement will mean that the expected average council tax increase for 2020-21 will be the lowest since 2016.

New homes bonus

The Government will be making a new round of allocations of the new homes bonus for 2020-21, amounting to £907 million.

As part of this, I am committing an additional £7 million to maintain the growth baseline for payments at 0.4%. We will make no legacy payments on these new allocations, but the Government will make legacy payments on allocations made in earlier years which are due to be paid in 2020-21.

In order to ensure that the new homes bonus is focused on incentivising homes where they are needed most, I am announcing that the Government will consult on the future of the housing incentive in the spring. This will include moving to a new, more targeted approach that rewards local authorities where they are ambitious in delivering the homes we need.

Rural services delivery grant

We will continue to recognise the extra costs of delivering services in rural areas and propose to maintain last year’s rural services delivery grant of £81 million, which is the joint-highest paid to date. It will be distributed using the same methodology as in 2019-20, which allocated funding to the top quartile of local authorities on the “super-sparsity” indicator.

Conclusion

This settlement acts as the foundation for a robust and resilient future for local government finance, delivering on calls for certainty and stability from local government. For those who deliver key front-line services, it provides significant extra resources where they are needed most.

I look forward to debating this topic with all MPs next week.

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International Trade

Free Trade Agreements

On Monday the Prime Minister set out our approach to negotiations with the European Union. This statement sets out the Government’s proposed approach to negotiations with other priority partners. Further details will be made available to Parliament as the negotiating process develops.

Having left the European Union the UK now faces an opportunity to re-emerge after decades of hibernation as a campaigner for global free trade. According to the IMF, 90% of global GDP growth is forecast to come from outside the EU over the next 5 years. The UK needs to be ready to capitalise upon this. As set out in our manifesto, this Government have ambitious goals for British trade. We aim to secure free trade agreements with countries covering 80% of UK trade within the next 3 years. We will drive a hard bargain and, as with all negotiations, we will be prepared to walk away if that is in the national interest. Independence will allow the UK to become a truly global Britain, championing free trade and showing the UK is a force for good.

A key priority is to deepen trade and investment relationships with like-minded partners, starting with the USA, Japan, Australia and New Zealand. These bilateral negotiations will also be a potential stepping-stone to joining the comprehensive and progressive agreement for transpacific partnership. Regarding the UK-USA FTA the Government will be setting out their negotiating objectives in due course, alongside a response to the public consultation as well as an initial economic assessment. This will be the first in a series of statements setting out our plans for FTAs with global partners.

By striking free trade agreements with partners across the globe, the UK has the opportunity to increase prosperity in all parts of our country. In the negotiations the Government will strike a tough bargain and seek an agreement in the national interest that removes tariffs and cuts red tape to support British businesses and benefit British consumers, as well as setting out cutting edge rules that will help underpin our world-class digital economy. Any agreement must respect the autonomy and sovereignty of both parties. In its negotiations, the Government will be acting on behalf of the whole UK family and our overall principle is to ensure all parts of the UK benefit from any deal. In addition, nothing in any agreement will undermine the Government’s commitment to tackling climate change.

The Government have been clear that when we are negotiating trade deals, the NHS will not be on the table. The price the NHS pays for drugs will not be on the table. The services the NHS provides will not be on the table. We will not agree measures which undermine the Government’s ability to deliver on our manifesto commitments to the NHS.

As we committed to in our manifesto, in all of our trade negotiations we will not compromise on our high environmental protection, animal welfare and food standards.

Over the last 3 years, the UK has developed a world-class trade negotiation function, bringing the best talent from international organisations, leading law firms, business, civil society and Government. The Government have the capacity to conduct all of its priority negotiations.

Further information on some of the priority areas of the UK-US FTA, is set out below.

Goods market access

The FTA will secure comprehensive, far-reaching and mutually beneficial tariff reductions—taking into account sensitive UK products—which will increase access to the US market for UK businesses, and lower prices and increase choice for UK consumers. This market access will be further supported through the FTA by efficient, predictable, and transparent customs procedures, with a reduction in technical barriers to trade. The FTA will aim to remove measures that currently restrict UK trade and to prevent their imposition in future, while upholding the safety and quality of products on the UK market

Trade remedies

An FTA with the US will enable the UK to protect its interests when threatened by unexpected surges in imports of goods or unfair trading practices, while making the appropriate commitments to transparency, due process and proportionate use of trade remedies. It will also remove trade distorting tariffs.

Sanitary and phytosanitary standards (SPS)

The UK will maintain its own autonomous sanitary and phytosanitary (SPS) regime to protect public, animal and plant life and health and the environment, reflecting its existing high standards. We will not compromise on our high animal welfare and food standards.

Sustainability

The Government will maintain and seek to advance the UK’s world-leading environmental, labour and anti-corruption standards, including to support domestic climate ambition and UK low carbon industries, technology and innovation.

Trade in services

The FTA with the US will provide a boost for our world-leading services sectors including in key UK export sectors such as financial services, telecommunications, professional and business services, and transport services. The Government will make it easier for professionals from across the UK to do business in the US, including by easing business travel, securing ambitious commitments to ensure fair competition and consolidating and improving market access for UK services exporters.

Mutual recognition of professional qualifications

An FTA with the US will encourage the mutual recognition of UK and US professional qualifications, by strengthening regulatory co-operation, so that qualification requirements do not become an unnecessary barrier to trade.

Investment

The US and UK are each other’s biggest investors, creating high-skilled jobs and growing our economies. At the end of 2018, British companies had investments worth £295.1 billion in the US.

The Government will address market access barriers and ensure UK investors operating in the US have the same level of protection and standards of treatment they receive in the UK.

SMEs

Over 31,600 small British businesses are already exporting goods to the US. The Government will seek to include a specific SME chapter in the US FTA to support and further stimulate this trade.

Digital trade

The Government will set global best practice by future-proofing the agreement to take account of changing technology and developing areas of the economy. For example, the Government will secure cutting-edge provisions which maximise opportunities for digital trade across all sectors of the economy.

Intellectual property

Recognising our two world-leading Intellectual Property regimes, the US FTA will secure provisions that support UK creative and innovative industries, whilst maintaining consumer access via an effective and balanced global framework.

Government procurement

To maximise access for UK companies to Government procurement opportunities at US federal and state level the UK will seek additional market access outcomes that go beyond the level set in the World Trade Organization agreement on Government procurement.

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Independent Tariff Policy: Consultation

This morning the Department for International Trade launched a public consultation to inform the development of the UK’s new independent tariff policy.

Now that Britain has left the EU, it will use its new powers to make its mark internationally as a champion of free trade and a bulwark against the forces of protectionism that exist in the world. The Government’s message is that free trade is good for all nations, is right for the UK and will deliver benefits for British businesses, households and consumers.

As part of our new approach, the Government are developing a new UK most favoured nation (MFN) tariff schedule which will enter into force on 1 January 2021. This will be a bespoke regime known as the UK global tariff (UKGT). It will be designed specifically for the UK economy and will replace the EU’s common external tariff, which is currently applied on imports into the UK. It will ensure UK businesses compete on fair terms with the rest of the world while benefiting households through greater choice and lower prices.

This is the first time in almost 50 years that the UK will be able to set its tariff rates on imported goods. This consultation represents an opportunity for every business, every person and every civil society group, in every part of the UK, to have their say. We are calling on businesses, consumers and other groups to help us shape this new instrument of trade policy for the UK.

To inform the development of this bespoke regime, the Government are seeking views on a series of potential amendments as the UK moves away from the EU’s common external tariff. These are:

simplifying and tailoring the tariff;

removing tariffs on key inputs to production;

removing tariffs where the UK has zero or limited domestic production.

The Government will also seek views through a series of events across UK regions and devolved Administrations to engage with businesses, business representatives, consumers, civil society groups, associations and other interested individuals and organisations.

The Government previously developed the temporary tariff regime (TTR) in 2019. The temporary tariff regime was developed for a possible scenario in which the UK left the EU without a deal. Now that the withdrawal agreement has been approved by both the EU and the UK, this scenario is no longer relevant.

The consultation will close on 5 March 2020 and once the Government have carefully considered available evidence, including the consultation responses, an announcement on the UK’s new global tariff schedule will follow in due course.

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Export Licences: Saudi Arabia

I gave a statement to Parliament on 26 September 2019 on matters related to the breaches of the undertaking given to the Court of Appeal on 20 June 2019 by the then Secretary of State that we would not grant new licences for export to Saudi Arabia of arms and military equipment for possible use in the conflict in Yemen, and the broader commitment to Parliament, also on 20 June 2019, that we would not grant new licences for exports to Saudi Arabia or its coalition partners which might be used in the conflict in Yemen.

The UK Government are deeply concerned by the ongoing conflict and humanitarian crisis in Yemen. The Government fully support the peace process led by the UN special envoy, Martin Griffiths, and urges the parties to engage constructively with this process. A political settlement is the only way to bring long-term stability to Yemen and to address the worsening humanitarian crisis.

In relation to the breaches, I announced that the permanent secretary had commissioned, on my behalf, a full independent investigation to establish the precise circumstances in which these licences were granted, establish whether any other licences have been granted in breach of the undertaking to the Court or contrary to the parliamentary statement, and confirm that procedures are in place so that no further breaches of the undertaking can occur.

This investigation, led by an independent senior official (the director general of policy group in the Department for Work and Pensions), has now concluded. The report identifies the circumstances in which these licences were granted and assesses the interim procedures which were put in place to ensure no further breaches can occur. It is noted that no further breaches of the undertaking or the parliamentary statement have been identified since I updated the House.

The report notes the steps that have been taken to ensure that there have been no further breaches. In particular, the report states that the

“new processes established address the shortcomings that led to the breaches...The process has a greater iterative and real-time involvement, with the weekly meeting process providing more opportunities for information to be updated and changes in circumstances to be reflected in decision-making. There is greater senior involvement and oversight which should strengthen assurance.”

The interim process has led to improved, timely information sharing across Government and there is now a clear process in place to ensure that any changes in circumstances in the conflict in Yemen are addressed. Further steps have already been taken forward, including increased governance and risk management within the export control joint unit (ECJU), to meet the issues identified in the report.

I will be considering whether any further action is necessary to ensure the continuance of robust and rigorous operations and assurance processes more widely within ECJU.

I will be placing copies of the report in the Libraries of both Houses.

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