Thursday 2 July 2020
Business, Energy and Industrial Strategy
I would like to update the House on a commercial agreement that the Government has concluded with Celsa Steel (UK) Ltd.
Since the start of the covid-19 pandemic, the Government have set out a far-reaching package of support to protect jobs and the UK economy. However, in exceptional circumstances, where a viable company of strategic importance has exhausted all other options available to it, the Government has said that we will consider bespoke support on a “last resort” basis.
There is an extremely high bar for making use of taxpayers’ money in this way, and any companies seeking support from the Government should do so only as an absolute last resort.
Such circumstances applied to Celsa, which is a key supplier to the construction industry.
While commercial confidentiality prevents me from setting out detail, I can assure the House that the Government have agreed terms that will protect taxpayers’ money and ensure that the financial burden is shared with the company’s shareholders and lenders.
The Government have agreed legally binding contractual conditions with Celsa on employment, climate change and tax. We have also put in place legally binding conditions on corporate governance, including restraints on executive pay and bonuses. We would expect any company seeking such support from the taxpayer to play their role in our society’s shared endeavours and challenges in the same way.
More broadly, the Government have already taken wide-ranging actions to support the UK steel industry, including more than £300 million in relief for electricity costs since 2013. We have also created public procurement guidelines with annual reports on the proportion of public sector steel bought from British companies, and details of a steel pipeline on national infrastructure projects worth around £500 million over the next decade.
This agreement achieves a positive outcome and secures over 1,000 jobs, including more than 800 positions at the company’s main sites in South Wales.
We want to praise the commitment of Celsa’s workforce and management. Our focus is now on working with all parties to secure the company’s future success, as well as ensuring that the loan is repaid and Celsa continue to deliver employment, climate change, corporate governance and tax commitments.
Digital, Culture, Media and Sport
Contingencies Fund Advance
The Department for Digital, Culture, Media and Sport has sought in its main estimate 2020-21—Central Government Supply Estimates, 2020-21, Main Supply Estimates, HC 293 published 4 May 2020—the resources, capital and cash it requires to operate for this financial year.
The funds associated with this estimate will not be released until the Supply and Appropriation Bill achieves Royal Assent later in the summer. The Department has therefore sought a contingencies fund advance which will be repaid once Royal Assent has been obtained.
Parliamentary approval for resources of £550,327,000 and capital of £41,808,000 has been sought in a main estimate for the Department for Digital, Culture, Media and Sport. Pending that approval, urgent expenditure estimated at £592,135,000 will be met by repayable cash advances from the Contingencies Fund.
Biometrics Commissioner Annual Report
My noble Friend the Minister of State, Home Office (Baroness Williams of Trafford) has today made the following written ministerial statement:
I am pleased to announce that my right hon. Friend the Home Secretary is today publishing the sixth annual report of the Biometrics Commissioner, together with the Government’s response.
The Commissioner, Paul Wiles, is appointed under Section 20 of the Protection of Freedoms Act 2012. His responsibilities are:
to decide applications by the police for extended retention of DNA profiles and fingerprints from persons arrested for serious offences but not charged or convicted;
to keep under review national security determinations made by chief officers under which DNA profiles and fingerprints may be retained for national security purposes;
to exercise general oversight of police use of DNA samples, DNA profiles and fingerprints.
His report is a statutory requirement of section 21 of the Protection of Freedoms Act 2012.
I am grateful to Mr Wiles for this report, which we have published in full.
Copies of the report will be available from the Vote Office. The Government’s response will be placed in the Libraries of both Houses.
Housing, Communities and Local Government
Local Government Funding: Covid-19
I wish to set out to the House the further measures this Government are putting in place so that local government can continue to fulfil its essential role in the national response to covid-19 and lead us through the next phase of recovery.
I said at the start of the pandemic that we would ensure local authorities have the resources they need. To do that, the Government have provided £27 billion to support local councils, businesses and communities; including £3.8 billion of support specifically for local authorities. This funding has allowed councils to deliver for their communities: including helping get rough sleepers off the streets, establishing our shielding programme, controlling infection in care homes and providing support for 800,000 small and medium-sized businesses.
The comprehensive plan I am announcing today demonstrates my commitment by ensuring that local councils have the certainty they need to manage their finances to the end of the financial year. The plan covers covid-related expenditure, income losses from sales, fees and charges, and irrecoverable tax losses.
Additional funding for spending pressures
We recognise the pressures on councils and our communities have not yet passed, and today I have announced a further £500 million to help ensure that councils have the money they need to meet costs in the coming months. I would like to thank councils for the financial information they have provided, and I will continue to work with my cabinet colleagues to monitor the pressures on the sector.
This award follows two previous rounds of grant allocations. The first was primarily focused on getting emergency support into adult social care. The second round addressed both expenditure pressures and income shortfalls. With the benefit of better data, we now plan to address income shortfalls separately to expenditure and so we have created a new formula for the additional £500 million. This formula will reflect the factors which the data returns have told us correlate most closely with expenditure, and will take account of population, deprivation and the way that service costs vary across the country. Details on allocations will be announced in due course.
The pandemic has had an unprecedented impact on councils’ income from sales, fees and charges, for which they could not have planned. To help mitigate this, the Government are also introducing a co-payment scheme to compensate local authorities for relevant, irrecoverable losses in 2020-21. Under this scheme councils bear the first 5% of losses compared to their budgeted income—reflecting the fact these income sources are by their nature volatile from one year to the next—but the Government will support those worst affected by covering 75p in every pound of losses beyond this.
Irrecoverable tax losses
I am also committed to supporting the sector through an apportionment of irrecoverable council tax and business rates losses between central and local government, to be agreed at the spending review. I have announced today that the repayment of collection fund deficits arising in 2020-21, will be spread over the next three years rather than the usual period of a year, giving councils breathing space in setting budgets for next year.
Taken together, these measures will give local councils sufficient confidence to continue to deliver the services their communities rely on. Nevertheless, my Department will continue to work closely with councils to monitor the situation as it develops, and I will return to the House setting out any further measures necessary should a changing situation require it.