Examination of Witnesses (Questions 520
- 539)
TUESDAY 8 DECEMBER 2009
RT HON
STEPHEN TIMMS
MP AND SARAH
MCCARTHY-FRY
MP
Q520 John Thurso:
What discussions have you had with the Crown Estate regarding
seabed leasing for renewable energy offshore?
Sarah McCarthy Fry: We manage
the Crown Estate at arms length, as I am sure you are aware. The
Crown Estate does keep the Treasury informed regularly—
Q521 John Thurso:
But have you had any discussions with them on that subject?
Sarah McCarthy Fry: We have not
had discussions. There has been some correspondence around it
but mainly it is within their remit. It is their remit to deliver
best value for the taxpayer.
Q522 John Thurso:
So the Treasury has not discussed licensing of renewable energy
seabed leases with the Crown Estate?
Sarah McCarthy Fry: That is for
the Crown Estate to manage. They have to deliver within their
remit to us.
Q523 John Thurso:
Have you had any discussions with DECC regarding the Crown Estate's
role in licensing of offshore?
Sarah McCarthy Fry: I personally
have not. I am not aware if any officials have but I can certainly
find out.
Q524 John Thurso:
And what discussions have you had with the Secretary of State
for Scotland, bearing in mind that there are two Secretaries of
State who have the power to direct, namely, the Chancellor and
the Secretary of State for Scotland? Have you had any discussions
on this matter with him?
Sarah McCarthy Fry: I personally
have not had discussions with the Secretary of State for Scotland
but I am sure that the Chief Executive of the Crown Estate has.
Q525 John Thurso:
I am sure he has too but I am more interested in whether you have.
Sarah McCarthy Fry: I personally
have not, no.
Q526 John Thurso:
In fact, I know he has had discussions but I am more interested
in whether the Treasury has. The Government's White Paper requires
there to be 33 gigawatts of offshore energy, mostly through offshore
wind but some through tidal energy, by a date into the 2020s.
That is equivalent to half the installed capacity of the United
Kingdom's generation of energy. Do you not find it extraordinary
that as the department that is charged with oversight of the Crown
Estate, who are the people who are going to license this, you
have had no discussions with them on how they are going to license
Britain's energy future?
Sarah McCarthy Fry: As I said,
the Crown Estate are managed at arm's length and we know that
they are trying to build their board so that they have the expertise
on there to be able to deliver to the Treasury their remit, to
manage the Estate to deliver a return, which is an agreed return,
but also to do it in a sustainable manner.
Q527 John Thurso:
The reason I ask these questions is that I was given to understand
in informal discussions with DECC that they had tried to see the
Crown Estate and had a very unsatisfactory brush-off on the grounds
that they report to you and not to them, so I was just interested
to know whether you had actually had any discussions and it would
seem that perhaps there have not been any.
Sarah McCarthy Fry: As I say,
I personally have not but I will find out whether officials have.[9]
Q528 John Thurso:
Do you intend in the future to keep a closer eye on what they
are doing?
Sarah McCarthy Fry: I think this
is an area that it is important to keep track of, particularly
as they are responsible for the offshore areas, and I think it
is something that will get a greater focus.
Chairman: Let us turn to National Savings.
Q529 Mr Brady:
Can I ask what NS&I's top priority for the future should be?
Is it there to provide value for its customers or to support government
macroeconomic policy?
Sarah McCarthy Fry: The sole aim
of NS&I is to reduce cost to the taxpayer of Government borrowing
now and in the future, and they do that through the sale of savings
and investment products to the retail market.
Q530 Mr Brady:
So it is not there for its customers; it is there for Government
macroeconomic policy?
Sarah McCarthy Fry: That is the
purpose of it, and, obviously, if they can help their consumers
and their customers—they do not set out to be the absolute
best buy, so in that sense they are not setting out to attract
the customers. Their aim is to reduce the cost to the taxpayer
of Government borrowing.
Q531 Mr Brady:
And was it right for NS&I to stop discretionary marketing
during the flight to safety?
Sarah McCarthy Fry: Yes, I believe
it was. We had targets that they had to meet. They had over-achieved
those targets and it was felt right that then that should cease.
Q532 Mr Brady:
And did they ask for Treasury approval before making that decision?
Sarah McCarthy Fry: Yes, I believe
so.
Q533 Mr Brady:
What consideration was given to the possibility of going further
and stopping taking deposits at that point?
Sarah McCarthy Fry: I am not aware
that that was considered.
Q534 Mr Brady:
How are you monitoring NS&I's performance now that they have
suspended the value-add indicator?
Sarah McCarthy Fry: As I say,
they have already over-achieved against their target, so now it
is just a question of monitoring to ensure that they fit within
the market place as they had intended, not to be right at the
top.
Q535 Mr Brady:
There is no other performance indicator expected of them?
Sarah McCarthy Fry: Not to my
knowledge.
Q536 Mr Brady:
Can you look into that?
Sarah McCarthy Fry: I will get
back to you on that.[10]
Mr Brady: Thank you.
Q537 Peter Viggers:
The Government announced in the Budget of 2007 that public sector
accounts would be prepared in accordance with International Financial
Reporting Standards, IFRS, with effect from 2008-09, but there
was some slippage and the reason for the slippage was given to
us as "uncertainties around the impact of the introduction
of IFRS on public sector net debt". There has been further
slippage. The Department of Health and the Ministry of Defence
have negotiated exemption from trigger points and we have been
critical of that and said that the adoption of International Financial
Reporting Standards will fail if the Treasury does not assert
its authority and aid departments in meeting the agreed milestones.
How high a priority for you is the implementation by government
departments of IFRS?
Sarah McCarthy Fry: I think it
is important that we move to International Financial Reporting
Standards; it is a priority for us, and we have made steady progress
against the 32 trigger points. I believe that Louise Tulett advised
the Committee that 41 out of 43 departments have now met the deadline
for the September accounts to be in to the NAO. We are taking
stock of the progress against that and we are moving forward,
and it is a priority that we move towards the standards.
Q538 Peter Viggers:
The two non-compliant departments presumably being Health and
Defence?
Sarah McCarthy Fry: I am not where
which the two are but we are working closely with them.
Q539 Peter Viggers:
When the Government does become fully compliant more PFI deals
will have to be put onto the balance sheet. What estimate have
you made of the impact on the Government's net debt figure?
Sarah McCarthy Fry: A lot of PFI
deals, of course, already are on the balance sheet and I think
the newer ones coming on are on there. I do not have a figure
but I can certainly write to the Committee.
9 Ev 111 Back
10
Ev 112 Back
| 
