Written Ministerial Statements
Ministerial Pensions
(12 years, 2 months ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
On 15 March I laid before the House an amendment scheme to the ministerial pension scheme to introduce an increase in member contributions from April 2012 and set out the detail in a written ministerial statement, Official Report, column 33WS. In order to ensure that this change in contributions does not inadvertently increase the benefits earned by the members of this pension scheme, which are determined by a complex calculation, it is now necessary to make some further small technical changes by way of an amendment scheme.
I have notified the trustees of the Parliamentary Contributory Pension Fund, the Independent Parliamentary Standards Authority and the Government Actuary of the need for this further technical amendment scheme to deliver the contribution increase on which I consulted last year.
The details of the amendment scheme have been laid before the House.
London Olympics 2012 (Suppliers' Marketing Protocol)
The Minister for Sport and the Olympics (Hugh Robertson)
London 2012 has already generated thousands of opportunities for businesses throughout the country. This written ministerial statement seeks to set out how businesses that have worked on the games can make the most of their extraordinary achievement and experience within the terms of their contracts.
The Government, the London Organising Committee of the Games (LOCOG) and their partners are absolutely committed to creating a lasting business legacy from the Olympic and Paralympic games. As part of that legacy, it is important that businesses who have won a contract are able to identify to potential customers and in recruiting new employees the contribution they have made towards the success of the games.
The costs of staging the games have been funded with a significant contribution from sponsors—in excess of £l billion from international sponsors, broadcast rights-holders and domestic sponsors, including 44 domestic sponsors who are major British-based businesses such as British Airways, British Telecom, British Petroleum, Lloyds TSB, Deloitte, Airwave, Atkins, GlaxoSmithKline, Next, Thames Water, Thomas Cook, Sainsbury’s, Cadbury/Trebor, and John Lewis.
Collectively, they are powerful advocates for London 2012, both in the UK and in overseas markets, and have made possible community, sporting and education programmes that will make these games stand apart, such as LOCOG’s schools based Get Set programme which now reaches children in 80% of schools across the UK. Many have gone much further, such as Sainsbury’s sponsorship of the school games. Their partnership with London 2012 will reach communities across the UK. To highlight but a few—GE’s £4.8 million funding of a new intensive care unit in Homerton hospital, Coca-Cola’s sponsorship of street games, and McDonald’s financial and training support for the London 2012 games makers. Sponsors’ contributions depend on their ability to secure exclusive association with the games within their sector for purposes of marketing and other promotional activity.
To ensure that suppliers, who have been engaged on commercial terms and have not purchased sponsorship rights, do not prejudice LOCOG’s ability to benefit from the significant value provided by its sponsors, contracts with suppliers contain the London 2012 “No Marketing Rights Clauses”. However, to enable the appropriate identification by businesses of the way in which they have contributed to the games, LOCOG has developed a detailed protocol which allows businesses that have supplied goods and services to the games to refer to that fact in different contexts. For example, such businesses may mention the work they have undertaken in relation to the games in the form of an accurate factual statement in the following materials:
client lists;
pitch documents;
annual and statutory reports;
social or informal business contexts;
internal communications.
Full guidelines, including examples of what suppliers may say about their work on the games are set out in the protocol issued by LOCOG and available on its website at:
http://www.london2012.com/mm/Document/ Publications/StategiesPolicy/01/25/45/23/L2012 SuppliersNoMarketingRightsProtocolpublishedSept10 _Neutral.pdf.
The protocol also provides that businesses that wish to refer to their work relating to the games in other contexts should talk to LOCOG about whether and how this should be done.
One of the major benefits of staging the Olympic and Paralympic games in 2012 is the significant boost the games will give to the UK economy. With the Olympic Delivery Authority (ODA), Government and other key stakeholders, LOCOG has developed and implemented a pragmatic approach which allows case studies, promotional events and visits to be used to showcase what London 2012 as a whole has brought for the UK. This permits a level of publicity that is proportionate and made in the context of promoting the business benefits of the games. This includes most recently the publication of the Beyond 2012 legacy document, as well as the Springboard to Success suppliers directory.
2012 is a unique opportunity to showcase and promote wider British business. The GREAT campaign will showcase to the world all that is best about the UK as a place to visit and do business.
I am also placing copies of the protocol in the Libraries of both Houses.
Afghanistan
(12 years, 2 months ago)
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The Secretary of State for Defence (Mr Philip Hammond)
I wish to clarify answers that I gave in response to questions from the hon. Member for Ilford South (Mike Gapes) and my hon. Friend the Member for Banbury (Tony Baldry) as printed in the Official Report, 26 April 2012, columns 1124 and 1130 respectively.
Column 1124
The hon. Member for Ilford South (Mike Gapes) asked the following:
In 2014 or 2015 when our combat role has ended, who will provide force protection for our trainers?
The final sentences of my response should have been:
The Afghan national officer training academy is being built within the perimeter of an Afghan facility, the perimeter of which will be defended by Afghan troops.
Inside this Afghan National Army perimeter, UK personnel based at the Academy will operate from within a coalition force Operating Base, and will therefore be protected by UK or coalition military personnel.
Column 1130
My hon. Friend the Member for Banbury (Tony Baldry) asked the following:
Because of the need to balance the Ministry of Defence budget, a number of service personnel will be made redundant later this year, including, I suspect, a number who have recently returned from Afghanistan and a number based in my constituency with the Royal Logistic Corps. However, those people have skills that are much sought after by local employers, so will my right hon. Friend ensure that MOD officials work with the local community to set up a social enterprise to ensure that the skills of the service personnel who are made redundant are made known to local employers as swiftly as possible, and so that as many of those skills and those people can be brought into the local labour market as swiftly and speedily as possible?
The first sentences of my response should have been:
Exemption from redundancy extends to anyone who is within six months of deploying to Afghanistan, is on operations, or is on their Post Operational Leave or any accrued Operational Rest and Recuperation.
Therefore, the majority of service personnel would be exempt from compulsory redundancy for a period of between four and seven weeks after returning from operations in Afghanistan.
I apologise to the House for the errors in my original answers.
Sale of Actis
(12 years, 2 months ago)
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The Secretary of State for International Development (Mr Andrew Mitchell)
I wish to inform the House of the Government’s decision to sell its residual 40% ownership interest in Actis Capital LLP (Actis).
Actis is a fund management business which promotes and manages private equity funds on behalf of third-party investors in a range of developing countries.
Actis was created in 2004 as a spin-out from CDC Group plc (CDC), the UK’s development finance institution, following a reorganisation in which CDC moved from being a direct investor to being an intermediated investor. CDC sold a 60% stake in Actis to Actis management for £373,000. I would refer the House to the written statements of 8 January and 8 July 2004 by the then Secretary of State for International Development on the reorganisation of CDC.
DFID does not take part in the day-to-day operations of Actis, has no board representation and very limited governance rights.
Since 2004 Actis has performed well. It is now established as a leading and successful fund manager in its own right, with some US$4.6 billion of funds under management. Yet despite the successful performance of funds managed by Actis, as a consequence of the ownership structure and financial arrangements put in place in 2004 under the previous Government, DFID has not received any payment whatsoever or direct financial benefit from Actis.
In my evidence to the International Development Committee of this House in January 2011 and in the context of that Committee’s report on the future of CDC, I said that I thought that the arrangement entered into in 2004 by the then Government represented poor value for the taxpayer, that there was no reason for the Government to retain their shareholding in Actis and that moreover, if we can realise proper value for it, in the interests of the taxpayer, then we should do so. The International Development Committee took a similar view as it subsequently recommended in its report that DFID’s shareholding in Actis should be sold, but that care must be taken to achieve maximum value.
DFID’s financial adviser on the sale process—Canaccord Genuity Hawkpoint Limited (Hawkpoint)—has looked closely at the Government’s position and rights within Actis and at Actis’s future prospects. Hawkpoint has advised that, even if Actis continues to be successful, the Government have no realistic prospect of receiving direct profit distributions in the foreseeable future. Hawkpoint estimates the current value of the Government’s 40% ownership stake in Actis at US$ nil to US$3 million. The Government followed an open and competitive sale process. Our advisers identified and approached a number of potential bidders who were believed to have the strategic rationale and the financial capacity to acquire the DFID stake. DFID also advertised publicly in the Financial Times (Worldwide) that the DFID stake was for sale. Following Hawkpoint’s discussions with potential bidders, no third-party bidders subsequently came forwards with a credible offer for the DFID stake as currently constituted. The Government therefore decided to proceed on the basis of the offer made by Actis management.
The Government have now concluded their negotiations with the management team. In consideration of the sale of its stake in Actis, DFID will receive both an upfront cash payment and a share in the future profitability of Actis’s funds. The cash element will comprise US$13 million payable in two equal instalments, the first instalment payable on completion and the second instalment 12 months after completion. The profit share element will comprise a 10% share of carried interest profit of Actis Emerging Markets Fund 3 and Actis Infrastructure Fund 2, which have to date invested in 34 businesses across the developing world, and a 7.5% share of carried interest profit in Actis’ latest Fund 4, which is currently being raised.
The carried interest consideration will be payable over time and its value will depend on the size and future performance of Actis’s funds. However, if Actis’s funds continue to perform strongly, as they have done historically, then this profit share would generate a substantial return for the Government and for the British taxpayer, which mid-point calculations developed by our financial advisers indicate could over time deliver an amount in excess of US$100 million (undiscounted). In the event of a subsequent transaction taking place within the next five years which attributes a significantly higher value to Actis, provisions have been agreed enabling the Government to share in the proceeds of that transaction.
The Actis business has been created through combined contributions from CDC and the Actis partners. CDC contributed the initial investment portfolio to be managed, the people and their associated infrastructure and knowledge base. Beyond that initial contribution, CDC has continued to support the viability and economics of Actis through its formative years via its commitment to invest in further substantial funds raised and managed by Actis.
On the back of that support, Actis has built a successful business measured in terms both of investment performance and third-party funds raised. Under previous arrangements, the UK taxpayer was not able to benefit directly from the success of the Actis business. By giving the Government the chance to share in the future profits of funds managed by this successful business, I believe that this sale represents a much fairer and better deal for the taxpayer.
The US$13 million cash element of the consideration is alone significantly above Hawkpoint’s estimate of the value of DFID’s existing stake at between US$ nil and US $3 million, with significant scope for upside beyond this through Government’s share in carried interest.
I am today publishing Hawkpoint’s fairness opinion to Government and other information about the sale on the DFID website and will also place copies in the Library of the House.