Tag: Kwasi Kwarteng

The statement made by Kwasi Kwarteng, the then Secretary of State for Business, Energy and Industrial Strategy on 5 September 2022.

Today I will lay before Parliament a departmental minute describing a number of contingent liabilities arising from the issuance of letters of credit for the energy administrators acting in the special administration regime for Bulb Energy Limited (“Bulb”). These letters of credit replace previous ones provided, announced within past written ministerial statements, which soon expire.

It is normal practice when a Government Department proposes to undertake a contingent liability of £300,000 and above, for which there is no specific statutory authority, for the Department concerned to present Parliament with a minute giving particulars of the liability created and explaining the circumstances.

I have ensured that Parliament has been afforded the full 14-sitting-day notification period to allow the proper scrutiny of these new contingent liabilities.

Bulb entered the energy supply company special administration regime on 24 November 2021. Energy administrators were appointed by court to achieve the statutory objective of continuing energy supplies at the lowest reasonable practicable cost until such time as it becomes unnecessary for the special administration to remain in force for that purpose.

My Department has agreed to provide a facility to the energy administrators, with letters of credit issued, with my approval, to guarantee such contract, code, licence, or other document obligations of the company consistent with the special administration’s statutory objective. I will update the House if any letters of credit are drawn against.

The legal basis for a letter of credit is section 165 of the Energy Act 2004, as applied and modified by section 96 of the Energy Act 2011.

HM Treasury has approved the arrangements in principle.

Publication of latest bounce back loan scheme and lender performance data

Today the Government provide an update on the performance of the bounce back loan scheme (BBLS), which was designed to provide rapid access to finance for small businesses affected by the coronavirus pandemic. The data in this release includes specific information on the value of loans marked as suspected fraud, and claims made and settled by individual lenders who are accredited for the scheme.

This data release is part of the Government’s ongoing commitment to transparency in relation to BBLS. The Government will continue to provide updates at regular intervals. This update will be published on the BEIS website to allow members to further scrutinise the data.

The data in this publication is as at 31 July 2022, unless otherwise stated. The data comes from information submitted to the British Business Bank’s (the Bank’s) scheme portal by accredited scheme lenders.

As of 31 July 2022, businesses have drawn a total of £46.6 billion through BBLS. The first evaluation of BBLS, published in June 2022, found that up to 500,000 businesses could have permanently ceased trading in 2020 in the absence of the scheme.

It is unfortunate that some have taken the decision to take advantage of this vital intervention by defrauding the scheme for their own financial gain. The Government have always been clear that anyone who sought to do so is at risk of prosecution.

Checks were put in place from the outset to reduce the risk of fraudulent applications being successful. Lenders are the first line of defence, and were required to make or maintain know-your-customer and anti-money laundering checks and use a reputable fraud bureau to screen applicants against potential or known fraudsters. Lenders reported preventing over £2.2 billion-worth of fraudulent applications as a result of these checks.

The Government remain focused on working with the Bank, lenders and law enforcement agencies to tackle fraud in the scheme. This work is supported by the Public Sector Fraud Authority, who have led the development of a sophisticated analytics programme to better understand the level and types of fraud committed against the scheme.

We are working with enforcement bodies including the National Investigation Service (NATIS) and the Insolvency Service to investigate instances of fraud, recover fraudulent loans and penalise fraudsters. Since September 2020, NATIS has opened 273 investigations into BBLS fraud, with a total value of £160 million. Some 78 suspects have been dealt with to date, with 49 arrests made. Meanwhile, Insolvency Service activity on BBLS fraud has so far resulted in 242 director disqualifications, 101 bankruptcy restrictions and 1 criminal prosecution. This enforcement activity is in addition to recovery work being undertaken by lenders as part of their obligations under the BBLS guarantee agreement.

At spring statement 2022, the Government announced an additional £48.8 million of funding over three years to tackle public sector fraud. This included further investment of £13.2 million in NATIS, effectively doubling their capacity to investigate BBLS fraud, and £10.9 million to enhance the Bank’s counter-fraud and assurance work programme.

Headline figures

£28.3 billion: the outstanding balance of total drawn loans making payments on schedule

£4.7 billion: the amount that has been fully repaid by borrowers

£3.2 billion: the outstanding balance of loans in arrears that haven’t yet progressed to defaulted

£1.4 billion: the outstanding balance of loans defaulted that haven’t yet progressed to claimed

£2.6 billion: the outstanding balance of loans claimed that haven’t yet progressed to settled

£1.2 billion: the total settled amount (the amount paid out to lenders under the BBLS guarantee agreement)

£1.1 billion: the total drawn value flagged by lenders as suspected fraud

Notes:

The values stated above will not add up to the total drawn values as set out in column 1 of table 3 (Detailed loan status by lender). That is because the above figures  do not take account of events which can reduce outstanding balances—for example: partial repayments of a loan, certain recoveries received in respect of a loan, and amounts written off loans by lenders.

To aid the reader’s understanding of the data, the terms used in this publication are defined at the end.

All businesses remain responsible for repaying their loans under BBLS and are fully liable for the debt.

It is important to recognise that it is still relatively early in the life of the scheme, and therefore it is too soon to definitively assess the performance of the BBLS scheme as a whole. Data being collected from accredited scheme lenders is subject to refinement, addition, and correction over time. Please see “Limitations and further considerations” for further background.

The statement made by Kwasi Kwarteng, the Secretary of State for Business, Energy and Industrial Strategy, in the House of Commons on 20 July 2022.

BEIS has been committed to improving the business environment and delivering upon the pillars of the plan for growth. We have a plan to secure more domestic energy, support people with the cost of living now, grow the economy and raise wages by reindustrialising our industrial heartlands and unleashing innovation, and accelerate great British science. At the same time, we recognise the power of the private sector and have taken steps to boost enterprise by making the UK the best place in the world to start, grow and invest in a business.

We have seen a significant increase in the global wholesale price of gas as a result of covid-19 aftershocks coupled with Putin’s illegal war in Ukraine, which has led to pressure on business and family budgets.

Tackling the cost of living to help families keep more of their own money:

Raising the national minimum wage and national living wage, giving a full-time worker a £1,000 a year pay rise. Uprating the national living wage has provided a pay-rise for about 2.5 million UK workers. This included the largest ever uplift of a £1,000 a year pay rise for full time workers aged 23 and over.

Helping now with the cost of living by ensuring families receive at least £400 of their electricity bills this winter. Our energy bills support scheme grant payment will take £400 off family electricity bills.

Increasing support this winter with at least £250 additional support for most vulnerable. The warm home discount (£150), winter fuel payments (between £100 and £300) and cold weather payments (£25/week), which ensure that the most vulnerable can heat their homes over the colder months.

Protecting the energy price cap, insulating families from the significant increase in wholesale gas prices. The energy price cap also currently shields 22 million consumers from being overcharged by suppliers. The cap will remain in place until at least the end of this year, ensuring consumers pay a fair price for their energy.

Shielding the public from rip-offs and boosting competition. Draft legislation will be published this autumn to give the Competition and Markets Authority (CMA) enhanced powers to tackle bad business practices, including making it illegal to pay someone to write or host a fake review and making it easier for consumers to opt out of subscriptions.

Pioneering British science to cure cancers and develop technologies so people have better lives:

Establishing the Advanced Research and Invention Agency (ARIA) to improve people’s lives through state-of-the-art technologies. ARIA will support high-risk, high-reward research and projects which support transformative change, including securing £800 million (by 2025/26) at the spending review, agreeing key principles with devolved authorities and setting out ARIA’s independence.

Securing biggest ever research and development budget. We have secured £39.8 billion of R&D investment supporting our commitment to ensure total R&D investment reaches 2.4% of GDP by 2027.

Strengthening the UK vaccine ecosystem to ensure resilience against covid-19 and other future health emergencies. The Vaccine Taskforce has already invested over £395 million in UK manufacturing infrastructure and skills. We have ambitious plans to invest more alongside industry to secure our domestic vaccine resilience. Areas of focus include mRNA capability and investments which will strengthen the resilience of the UK’s vaccine supply chains.

Developing cures for disease, diagnostics and other life-saving research. With DHSC we are committing up to £200 million to healthcare research, diagnostics and manufacturing, building on our world leading covid-19 vaccination programme.

Setting out our visions for the UK to be a global hub for innovation by 2035. We will do this by working with private business, reforming our existing R&D institutions and supporting seven technology families from quantum computing to artificial intelligence.

Building a world-leading UK space sector. We have published the national space strategy backed by £1.75 billion and aligned civil and defence policy for the first time. Through our part owned OneWeb satellite system, we have seen the launch of multiple waves of UK satellites. We also invested £20 million in specialised technology to support the James Webb telescope launch, marking a significant step in space discovery and our understanding of the universe.

Boosting British manufacturing and reindustrialising our former heartlands to drive long-term growth:

Delivered two gigafactories, bringing back manufacturing to Britain. We have announced funding for two major gigafactories in the UK using the automotive transformation fund. Envision AESC based in Sunderland and Britishvolt in Blyth, Northumberland, will have a total capacity of over 40GWh, create over 3,500 direct jobs, as well as 1,000s more in the supply chain and will see over £2 billion of private sector investment in the region. We have also helped secure Ford’s investment of £230 million in production of electric vehicle components at Halewood.

New support for energy intensive industry to protect it for the future. We have announced a three-year extension to EII compensation scheme in the British energy security strategy and more than doubling the budget. This goes alongside our consultation on “other” energy support measures to reduce electricity prices to improve competitiveness for these industries.

Commenced the National Security and Investment Act protecting British industry from hostile activity. This gives the Government greater powers to protect our national security by screening and, if necessary, intervening in investments and other acquisitions of control over sensitive entities and assets in the UK economy.

Taken significant steps to begin to compensate postmasters who have suffered as a result of the appalling Horizon IT failings. This has included announcing that Government will provide funding for interim compensation payments of up to £100k ahead of full funding for eligible postmasters whose Horizon-related convictions have been quashed. We have also announced £19.5 million interim compensation for the “GLO” group of postmasters who exposed the Horizon scandal—to be followed as soon as possible by final compensation.

Securing Britain’s energy to ensure more cleaner, cheaper energy is generated in this country:

Accelerating domestic energy independence through the British energy security strategy (BESS). The BESS and the Energy Security Bill includes support for household energy affordability and efficiency, new and ambitious commitments on nuclear and renewable energy, and setting out the role of the North sea in our low-carbon transition, including delivering our £1 billion commitment to carbon capture and storage clusters by 2030.

Largest-ever renewable energy auction providing 11 GW of great British electricity, with wind power coming in cheaper than ever. Earlier this month, we secured a record 11 GW of renewable energy through the biggest contracts for difference round yet—enough to power around 12 million homes.

Rebuilding Britain’s proud nuclear sector. We have passed the Nuclear Energy (Financing) Act 2022, which will unblock obstacles and cut costs. We are also investing in the sector through the £120 million Future Nuclear fund, £100 million for Sizewell C (in addition to driving forward negotiations), £120 million to develop small modular reactors. We have also established Great British Nuclear, a landmark moment in Britain’s nuclear history, to ensure we deliver multiple new projects this decade.

Securing strong domestic oil and gas extraction. We have given the UK’s oil and gas sector clarity about the role hydrocarbons will play in our energy need with an upcoming new licencing round, backed by the North sea transition deal we will ensure jobs are protected and technologies developed.

Kickstarted UK hydrogen industry with capital and revenue support as well as world-leading legislative framework. Over the last year, we published our hydrogen strategy and investor roadmap and launched a net zero hydrogen fund worth up to £240 million to nurture the UK’s world leading hydrogen economy. The Energy Security Bill also provides a legislative framework for our hydrogen business models.

Denying Britain’s enemies access to funding by ending Putin’s revenue streams. We also committed to end the use of Russian oil and coal power by the end of 2022 and are working with allies to support then away from use of expensive fossil fuels.

Backing other renewable technologies to build stronger domestic supply chain. We have provided a £60 million boost for floating offshore wind projects, supported entrepreneurs to find innovative ways to reduce expensive fossil fuel dependence through the energy entrepreneurs fund, and ringfenced £20 million per year for tidal stream electricity.

Worked with our colleagues across Government to deliver the UNFCC COP26 summit in Glasgow in November 2021 to move 90% of the global economy to net zero. This followed the publication of our heat and buildings and net zero strategies, which laid out a clear path to decarbonise all sectors of the UK economy and achieve net zero by 2050. The summit was attended by 120 world leaders and over 40,000 registered participants. The resulting Glasgow climate pact increases the likelihood of delivering the Paris commitment 1.5 degree scenario.

Since publishing the “The Ten Point Plan for a Green Industrial Revolution” in November 2020, we have landed £22 billion of inward investment into home-grown clean technologies, and estimate to have created around 68,000 green jobs.

The statement made by Kwasi Kwarteng, the Secretary of State for Business, Energy and Industrial Strategy, in the House of Commons on 20 July 2022.

I am tabling this statement for the benefit of hon. and right hon. Members to bring to their attention the details of the extension to the Recovery Loan Scheme (RLS).

RLS is facilitated by the Government-owned British Business Bank and delivered through its delivery partners. Under the extension, lenders will offer facilities of up to £2 million to support businesses that would otherwise be unable to access the finance they need, or would only be able to do so at a higher rate of interest. There will be a £6 billion cap on the aggregate value of loans provided through the scheme for the first two years.

The extension covers the period from 1 August 2022 to 30 June 2024. Under the extension, the following changes will come into force:

The maximum amount of external finance available will be £2 million per business in Great Britain; for businesses in scope of the Northern Ireland Protocol, the maximum amount will be £1 million per business.

The requirement for businesses to certify that they have been affected by the covid-19 pandemic will no longer apply. To lend through the scheme, lenders will be required to certify that they would not have been able to offer a facility to the business on their normal commercial terms, or that they would have only been able to do so at a higher interest rate.

Personal guarantees will be permitted, but not required, for facilities under £250,000—as has been the case to date for facilities above £250,000. This brings the scheme in line with standard commercial practice in business lending. Principal private residences may not be used as security under any circumstances.

Otherwise, scheme parameters are unchanged. As previously:

The minimum facility size will be £25,001 for loans and overdrafts and £1,000 for asset and invoice finance.

Businesses will be required to meet the costs of interest payments and any fees from the outset.

Businesses who have made use of the previous coronavirus loan schemes will be able to access the scheme.

Given the above, the maximum contingent liability for lending up to the £6 billion cap on the scheme is £4.2 billion.

I will be laying a Departmental Minute today containing a description of the liability undertaken.

The statement made by Kwasi Kwarteng, the Secretary of State for Business, Energy and Industrial Strategy, in the House of Commons on 19 July 2022.

The Advanced Research and Invention Agency (ARIA) is the Government’s new science funding agency. Backed by £800 million out to 2025-26, ARIA will pursue the scientific and technological discoveries that have the potential to profoundly change our world for the better.

Today, I am delighted to update the House on ARIA’S leadership and confirm that I have appointed Ilan Gur as ARIA’S first CEO, and Matt Clifford MBE as ARIA’S Chair.

Ilan Gur is Founder and CEO of Activate, a non-profit organisation that empowers scientists and engineers to bring ground-breaking research to market.

Ilan Gur previously founded two science-based start-ups and served in the first cohort of Programme Directors at ARPA-E. He obtained his PhD in Materials Science and Engineering from the University of California, Berkley. He will take post on 15 August for an initial fixed term of two years.

As ARIA’S founding CEO, Ilan Gur will play a pivotal role in setting the agency’s paradigm-shifting research agenda and establishing ARIA’s culture and organisational structure. He will be tasked with identifying, recruiting and inspiring a team of exceptional technical talent to tackle the world’s greatest challenges.

To support Ilan Gur, Matt Clifford MBE will take the helm as ARIA’s first Chair. Matt Clifford is co-founder and CEO of Entrepreneur First, an international investor in technical talent that has helped to build technological companies worth over $10 billion.

Matt Clifford is co-founder and non-executive director of Code First Girls, has served as a Council member at Innovate UK, and a Trustee of the Kennedy Memorial Trust. Before starting Entrepreneur First, Matt Clifford worked at McKinsey & Co and earned degrees from the University of Cambridge and the Massachusetts Institute of Technology. Matt Clifford will take post on 15 August for a fixed term of four years.

Both appointments have been made in accordance with the Governance Code on Public Appointments following a fair and open competition overseen by an Advisory Assessment Panel.

These appointments mark an important milestone in ARIA’s creation, ahead of the agency becoming fully operational later this year.

The statement made by Kwasi Kwarteng, the Secretary of State for Business, Energy and Industrial Strategy, in the House of Commons on 16 June 2022.

I am today laying before Parliament the first annual report under the National Security and Investment Act 2021. I will place copies in the Libraries of both Houses and the report will also be published on gov.uk.

The National Security and Investment Act 2021 protects the UK from risks to national security arising from acquisitions of control of entities and assets. In doing so it also maintains the UK’s status as an attractive place to invest. The system is predictable, enabling businesses involved in acquisitions to have certainty when engaging with it and it provides clear and efficient clearance processes for relevant acquisitions to be assessed, for remedies to be applied if necessary.

The new National Security and Investment (NSI) system commenced on 4 January 2022. The Act requires me to report on the system each year after 31 March.

I am pleased to lay the first NSI Act annual report before the House today. This fulfils my requirements under section 61 of the Act for this year.

The report shows that the system has started strongly. As of 31 March, the Investment Security Unit received 222 notifications and accepted 201 of them. To that date I had issued 17 call-in notices. Of those notifications that were cleared without any further action, all were cleared within the statutory 30 working-day limit. I had not imposed any final orders (the means by which I can impose conditions on, block, or unwind an acquisition) by 31 March in relation to the 17 call-in notices issued, though the full national security assessment process was still ongoing for many of them.

Because the data covers only the first three months of the Act’s operation, we cannot draw long-term conclusions or observe patterns with accuracy. However, the system is operating well and, extrapolating out, volumes at each stage are within the estimates provided by the impact assessment.

We brought forward the reforms in the NSI Act to protect national security while keeping the UK open to investment. The early data is encouraging and shows that these objectives can be complementary rather than mutually exclusive. Those who wish us harm should be in no doubt that we will always act to protect the UK’s national security interests. Equally, the Government’s ambition is for the UK to be the best place in the world to invest and to start and grow a business, so I hope that business leaders and investors will take confidence from this report.