Written Statements

Tuesday 8th July 2014 Written Statements

Tuesday 8 July 2014

Student Loans Company

Tuesday 8th July 2014 Written Statements

[The Minister for Universities and Science (Mr David Willetts)]

I would like to update the House on the use by the Student Loans Company (SLC) of letters under the trading name of Smith Lawson and Company.

Since 2005 the SLC has been issuing letters to graduates that fall into arrears when repaying loans or grant overpayments under the trading name of Smith Lawson and Company. The company has sent out letters to an estimated 309,000 customers under this name. These letters were sent to graduates who had failed to respond to several attempts to contact them by the SLC, and were used as a low-cost alternative to referring those graduates to third-party debt collection agencies. The practice was approved in late 2004 by the company’s board of that time and Ministers in the previous Administration. The use of this approach had not been brought to my or the Secretary of State’s attention before the recent media coverage.

In February this year, the Office of Fair Trading (OFT) contacted BIS and SLC to express its concerns about the practice and particular wording of these letters. It considered the letters to be misleading because they created the impression that debts had been escalated for collection by transfer to a third party. The OFT recognised that SLC was not now collecting debt governed by the Consumer Credit Act, but advised that the letters be brought into line with its guidance. The company agreed to change the letters to change one misleading reference to “our client” and increase the size of the reference to the SLC in the letter but decided to continue with the use of the trading name. The company has a strategic objective to collect every pound that is owed and this was a factor in its decision. These changes were due to come into effect in early July.

The company has now stopped the use of Smith Lawson letters and trading name. It took this action on 27 June following the recent decision by the Financial Conduct Authority to sanction Wonga, the payday lender, for its aggressive and misleading practices. Although the SLC did not break any rules or charge graduates for receiving these letters, it was clear that a public body should be holding itself to the highest standards in the treatment of its customers. No further use will be made of the Smith Lawson trading name. The only exceptions after 27 June were two letters sent manually in error and a small number of automated follow-up emails.

Christian Brodie, the chairman of the SLC made a clear and unequivocal apology on behalf of the company in a discussion with the Secretary of State on Thursday 2 July. I also spoke to Mr Brodie on Thursday to investigate what had happened. Mr Brodie tendered his resignation as chairman to the Secretary of State but this was not accepted. The Secretary of State and I have confidence in his leadership of the Student Loans Company. We see Mr Brodie having a very important job to do at the SLC to oversee the significant investment BIS is making in the company to enable it to transform its products and operations and overall levels of customer service. We are both clear that it would be unfair for Mr Brodie to take the blame for a practice that was nearly 10 years old, particularly as he had only been chairman since he joined in February of this year.

He has proposed the following plan, which I endorse:

The suspension of the use of these letters will be permanent and future dealings with customers in arrears will be fair and transparent.

The SLC will seek assurance from its legal advisers that the company is fully compliant with the spirit as well as the letter of consumer credit protection and financial services legislation and related regulations in the light of the Smith Lawson experience.

The first task of the soon to be appointed executive director for repayments and fraud will be to conduct a review of SLC’s repayment and collection strategy to give assurance to the board that the company is treating people fairly, while at the same time ensuring that SLC continues to collect outstanding debts.

As part of a review of the SLC board’s effectiveness, which Mr Brodie had already commissioned, the SLC will specifically review the Smith Lawson experience, the events of March/April 2014 and the negotiations with the OFT and their aftermath.

I had already begun the process of appointing two new non-executive directors to the SLC board by the end of this year. Mr Brodie had indicated to me prior to recent events that he would value candidates with strong track records in customer service and repayments to add to the expertise of the existing board members.

It is important that the Government recover taxpayers’ money, but it must do so in a way that is fair. It must not use misleading tactics to get people to do the right thing. The SLC has apologised and now stopped issuing letters under the Smith Lawson trading name. I will be working with the company to ensure that lessons are learned to ensure there is no repeat in future. The company is now ensuring that its procedures and correspondence adopt the high standards of customer service expected of it as a public sector organisation. The company’s new approach to debt collection will be cleared by the SLC board and BIS Ministers.

ECOFIN

Tuesday 8th July 2014 Written Statements

[The Financial Secretary to the Treasury (Nicky Morgan)]

A meeting of the Economic and Financial Affairs Council will be held in Brussels on 8 July 2014. Ministers will discuss the following items:

Level 2 legislation on bank contributions under bank recovery and resolution directive and the single resolution mechanism

The Commission will brief the Council on the preparation of implementing legislation that will determine the contributions to be paid by banks to resolution funds established under the directive on bank recovery and resolution (BRRD) and the regulation on the single resolution mechanism (SRM).

Presentation of the Italian presidency work programme

The incoming Italian presidency will make a public presentation of its work programme for ECOFIN.

Review of the EU2020 strategy

Council will hold an initial discussion as part of a mid-term review of the Europe 2020 strategy.

Savings taxation: update on negotiations with third countries

Following agreement on the amended savings taxation directive, the Commission will update the Council on third country negotiations on the directive between the EU and Switzerland, Liechtenstein, Andorra, Monaco and San Marino.

Azerbaijan (EU Programmes)

Tuesday 8th July 2014 Written Statements

[The Minister for Europe (Mr David Lidington)]

I wish to inform the House that the Government have opted into the following measures:

Council decision on the signing and provisional application, on behalf of the Union, of a protocol to the partnership and co-operation agreement between the European communities and their member states, and the Republic of Azerbaijan, on a framework agreement between the European Union and the Republic of Azerbaijan, on the general principles for the participation of the Republic of Azerbaijan in Union programmes.

Council decision on the conclusion of a protocol to the partnership and co-operation agreement between the European communities and their member states, and the Republic of Azerbaijan, on a framework agreement between the European Union and the Republic of Azerbaijan on the general principles for the participation of the Republic of Azerbaijan in Union programmes.

Azerbaijan and the wider south Caucasus region are of strategic importance to the UK and the EU. The UK is the largest foreign direct investor in what is one of the fastest growing economies in the world. Continued stability in this region is key for the UK’s prosperity and energy security goals, and it is therefore in our interests to promote EU-Azerbaijan engagement.

Azerbaijan’s access to Union programmes provides an opportunity for closer engagement with the EU and to promote continued reforms towards European standards. More broadly, the UK remains a strong supporter of Azerbaijan’s progression towards closer ties with the EU as part of our long-standing support for strengthened ties in the eastern neighbourhood region.

These Council decisions relate in part to the Republic of Azerbaijan’s eligibility to participate in the Fiscalis 2020 Union action programme and the Customs 2020 Union action programme, thus triggering the UK Justice and Home Affairs opt in. I believe it is in the UK’s interest to opt into these measures, as we have already opted into the internal EU instruments establishing the Fiscalis and Customs 2020 Union action programmes.

Modern Slavery

Tuesday 8th July 2014 Written Statements

[The Secretary of State for the Home Department (Mrs Theresa May)]

Modern slavery affects people from all over the world, including here in the United Kingdom. The Government are committed to stamping out this abhorrent crime, building on the UK’s strong track record in supporting victims and tackling the perpetrators. That is why we have introduced the Modern Slavery Bill, which will have its Second Reading in the House of Commons later today. The Bill will give law enforcement the tools to tackle modern slavery, ensure that perpetrators can receive suitably severe sentences for these appalling crimes, and enhance support and protection for victims. However, we recognise that legislation is only one part of the solution. The Government are also taking forward a comprehensive programme of activity, which includes:

trialling child trafficking advocates;

establishing safeguarding and trafficking teams at the border;

working with the private sector to address modern slavery in supply chains; and

reviewing the national referral mechanism.

This programme of activity will be set out in a new modern slavery strategy which will be published in the autumn.

Today we have published a document setting out our activity on modern slavery, which is available on the gov.uk website, a copy of which will be placed in the Library of the House. Copies will also be available in the Vote Office.

Victims' Commissioner's Annual Report

Tuesday 8th July 2014 Written Statements

[The Minister for Policing, Criminal Justice and Victims (Damian Green)]

I am pleased to announce that the Victims’ Commissioner, Baroness Newlove of Warrington, has today published her annual report. I have placed a copy in the Library of each House.

The role of the Victims’ Commissioner, as set out in the Domestic Violence, Crime and Victims Act 2004, is to promote the interests of victims and witnesses, encourage good practice in their treatment and keep under review the operation of the statutory victims’ code.

The report outlines the impressive work undertaken by the Victims’ Commissioner and her team during the Baroness’s first year of office. In addition, the report highlights the priorities she has identified to improve services and support for victims and witnesses during 2014-15: monitoring compliance with victims’ code; complaints and redress for victims; restorative justice (RJ); putting victims first when cases are dealt with out of court; giving victims, including vulnerable victims, a voice. The Victims’ Commissioner will continue to ensure that the views of victims are represented to Ministers.

The role of Victims’ Commissioner has been full-time since 2 June 2014. This will enable Baroness Newlove to spend more time focusing on her priorities; undertaking the important role of supporting victims of crime; continuing her work with victims of antisocial behaviour and holding the Government and criminal justice agencies to account for providing victims with the service to which they are entitled under the victims’ code.

Aviation Security

Tuesday 8th July 2014 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

On 2 July the Department for Transport announced that some of our aviation security measures would be stepped up in response to potential threats to aviation from terrorist organisations. The House will be aware that the United States Government made a similar announcement on the same day regarding flights to the United States.

In conjunction with our international partners and the aviation industry, the UK Government keep aviation security under constant review. The UK has some of the most robust aviation security measures in the world and it goes without saying that at all times the safety and security of the public is our paramount concern.

As a result of the changes we are implementing, some passengers may notice additional security measures on some routes, both to and from the UK. Passengers on some routes may also be required to show that electronic devices in their hand luggage can be powered up or face not being allowed to bring the device on to the aircraft. Passengers are therefore advised to make sure electronic devices being carried in their hand luggage are charged before they travel.

This advice is in line with that issued by the United States and we have updated our official advice to passengers accordingly. For obvious reasons we will not be commenting in detail on the measures or the routes affected. We will work with the aviation industry to minimise disruption as far as possible.

I would reiterate that there is no change to the threat level, which remains at substantial.

I know the whole House will recognise the fact that we face a constantly evolving threat from terrorism and must respond accordingly to ensure the protection of the public against those who would do us harm. The update we are making to our security measures is an important part of that process. While we do everything we can, where possible, to minimise the disruption to people’s journeys, we will continue to take all the steps necessary to ensure that public safety is maintained.

HS2 Phase One: Property Consultation 2014

Tuesday 8th July 2014 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

Further to my commitment in the 9 April decision document “Property Compensation Consultation 2013 for the London-West Midlands HS2 route”, I am today announcing to the House the launch of a consultation on additional assistance for people near the route of phase 1 of the proposed high-speed railway, between London and the west midlands.

The “Property Consultation 2014” sets out two proposals:

An “alternative cash offer” that would give rural owner occupiers within the rural support zone a choice between selling their home to the Government for what it would have been worth had there been no plans for HS2 and remaining in their home and receiving 10% of that value. We would apply a minimum payment of £30,000 and payments would be capped at £100,000. This scheme would launch by the end of 2014 and last until one year after the trains start running; and

A “homeowner payment scheme” that would give rural home owners outside the voluntary purchase area but within 300 metres of the line the opportunity to share in the benefits of HS2 as it would run near them but will not provide them with a direct benefit. We are proposing to taper payments as follows: owner occupiers between 120 metres and 180 metres of the centre line of the railway would receive £22,500, those between 180 metres and 240 metres £15,000 and those between 240 metres and 300 metres £7,500.

The Government are committed to assisting those who are impacted by HS2. These proposals build on the comprehensive package of compensation and assistance which I set out in April.

This consultation will close on 30 September 2014.