GAD Provides Key Analysis For High Profile Government Review

Publication of the Airline Insolvency Review final report

Airport

Airport

The new Airline Insolvency Review: final report has been published, providing recommendations on how to protect consumers in the event of an airline or travel company failure. Experts in the Government Actuary’s Department (GAD) supplied advice and analysis to the review team, including the complex task of calculating the cost of protection which the report recommends charging to airlines.

The review draws on lessons from the collapse of Monarch Airlines in October 2017. This was when 85,000 passengers were repatriated – in the UK’s largest peacetime repatriation operation – by the Civil Aviation Authority.

Repatriation Costs

GAD played an integral part in the preparation of the report by analysing the cost implications of financial options. Actuaries and analysts examined the likely losses that occur when airlines become insolvent and assessed the cost of the different financial options. Analysis from GAD estimated repatriation costs and looked at the cost of setting up a system which would pay for passenger protection.

The report’s key recommendations include:

  • proposals for a new Flight Protection Scheme amounting to less than 50 pence per person, which would protect passengers if an airline became insolvent while they were abroad
  • reforms to the UK’s airline insolvency regimes so an airline’s own aircraft can be used to repatriate its passengers should it fail
  • plans to improve awareness, and the take up, of safeguards which protect customers with future bookings, should airlines collapse
Key Partners

As one of the authors of GAD’s Airline Insolvency Review – Risk Analysis Phase 2 report, Chris Paterson, commented: “The analysis carried out by our team is an integral part of a suite of publications and data produced for the review.

“We provided estimates of the cost of protecting passengers in the case of an airline insolvency, which were used in the report’s recommendations.”

GAD’s full report is Annex D of the supporting evidence research reports.

Investigation Into London Capital & Finance Launched

An investigation into the circumstances surrounding the collapse of the investment firm and the Financial Conduct Authority’s supervision of the firm

HM Treasury

HM Treasury

  • Dame Elizabeth Gloster will lead the investigation into LCF and how the FCA exercised its powers in relation to it
  • The findings will be reported to HM Treasury
  • HM Treasury will also review the regulation and marketing of the kinds of retail investment products issued by LCF

An independent investigation into the circumstances surrounding the collapse of investment firm London Capital & Finance (LCF) and the Financial Conduct Authority’s (FCA’s) supervision of the firm has been formally launched today (Thursday 23 May).

The Economic Secretary to the Treasury, John Glen, has approved the FCA’s appointment of Dame Elizabeth Gloster to lead the investigation and has laid before Parliament the direction to initiate this work. Mr Glen has also announced that the Treasury will begin a wider policy review in response to the case, including a review of the regulatory regime for ‘mini-bonds’ and other non-transferrable securities.

The Economic Secretary, John Glen, said:

We urgently need to get to the bottom of the circumstances around the collapse of LCF.

Dame Elizabeth will bring her vast experience and rigour to this important investigation, which will help ensure this type of thing doesn’t happen again.

The Treasury will also be looking at how the current regime for these investments works, so customers are properly protected and the UK’s financial system can continue to be one of the safest in the world.

Dame Elizabeth has had a distinguished career as a barrister and as a judge on the High Court and the Court of Appeal. As well as her current work as an international arbitrator, she has deep experience in commercial law and will bring expertise in financial services, insolvencies and regulation to the role. She will look at how the FCA exercised its powers and whether it fulfilled its statutory objectives with respect to LCF. The FCA will report the findings of the investigation to the Economic Secretary, as well as the lessons it will take from those findings.

Further Information

In April the Economic Secretary wrote to the FCA to set out that he would order an investigation into the failure of LCF, using Treasury powers under section 77 of the Financial Services Act 2012. Section 77 gives the government wide ranging powers to direct an investigation.

The move follows a meeting of the FCA board earlier this year where they agreed that a statutory investigation was in the public interest and requested the Treasury direct the FCA to carry out an investigation.

The Treasury will commission research into the wider market for ‘mini bonds’ and other non-transferable securities, and their role in the economy. The Treasury will also consider the regulatory arrangements currently in place for the issuance of these investments, including the Financial Promotions regime which governs the marketing of those products.

The Treasury will work with Her Majesty’s Revenue and Customs to review the tax rules for the Innovative Finance Individual Savings Accounts (IF ISAs) and the relationship of these rules to the financial services regulators.

DASA Security Showcase

The Defence and Security Accelerator (DASA) will be hosting a Security Showcase event in central London on 26 June 2019

Defence and Security Accelerator (DASA)

Defence and Security Accelerator (DASA)

This is the first DASA security focused event which will bring together the security innovation community, showcasing a number of innovations applicable to the security sector from suppliers who have already received funding through DASA competitions.

There will be briefings from across Government and front line services, with suppliers having the chance to see the range of services available through DASA which helps innovative concepts to reach the marketplace.

There will also be a networking opportunity for innovators from industry, academia, Government and front line service end users.

If you are interested in attending this event, please register on our Eventbrite Page by 6pm, 12 June 2019.

Appeal For Landowners To Take Part In Pioneering Project

A pioneering project looking into whether temporarily flooding agricultural land around the Humber could benefit farmers and wildlife is appealing for land

Trial Plot

Trial Plot

The Water for Farming and Wildlife (WFFW) project, a partnership between the Environment Agency and RSPB, is looking for landowners who can offer one to five hectares of land near to the estuary to work with them (costs to be covered) for a duration of nine or 18 months.

The project started in 2015 with the Environment Agency and RSPB researching the feasibility of techniques that could be used to both create permanent or temporary wetland habitats and provide management benefits to local farmers, such as by helping control pests control and irrigation.

This research included looking at similar studies already carried out in the Netherlands and the US.

In 2018, the team carried out experiments on 10m x 10m plots that were filled with water with the change in certain soil nutrients, water quality and wildlife assessed. While small, the trial plots quickly attracted wading birds, including moorhens.

The team would now like to carry out field trials on plots averaging 2ha and are looking for landowners to take part.

Alys Farndale, of the Environment Agency, said:

We’re appealing to landowners to offer some land so that we can study the potential risks and benefits to soil health.

So far, early results from our small-scale trials suggest that land can be brought back into use with no discernible differences to growing crops.

The field scale trials will help us to fully understand potential risks, benefits and logistics of temporary wetlands in the Humber area, as well as understanding benefits to wildlife.

Turning fields into temporary wetland can be good crop rotation practice. Other studies, such as in the Netherlands, suggest that it could even lessen the need for pesticides, and we are keen to test whether this is true for farmland around the Humber.

Seonaidh Jamieson, who lead on the project for the RSPB, said:

We need to think of novel ways to provide space for nature and work with the elements.

Temporary wetlands could help link vital habitat for waders if adopted into agricultural rotations in the future.

Being involved in this stage of the project means you will help to collect essential information to shape the future of the landscape.

The project is being done alongside the Humber Strategy Review, which is investigating ways of managing tidal flood risk over the next 100 years due to the threat of rising sea levels.

Miss Farndale said:

Climate change is a real threat. More intense rainfall is becoming more frequent and climate change is already increasing sea levels around the UK coast.

A changing climate will alter the frequency, intensity, duration and timing of extreme weather – as a result of which, we expect to see an increase in extreme events such as flooding.

We need to develop ways to adapt to this changing climate.

Miss Farndale added that the Water for Farming and Wildlife project also links in with the Government’s plans on how to support farmers and landowners after we leave the EU.

Farmers and landowners currently receive a payment through the Common Agricultural Policy but the Government plans to introduce a ‘public money for public goods’ system post Brexit,” she said.

This vision is a shift in how farmers are rewarded for their work and is outlined in Defra’s Environmental Land Management scheme.

James Copeland, from the NFU, said:

With changes to future reward schemes and climate change, the results of this project could provide further tools for farmers to consider within their farming business and future support.

To show your interest or for more information, email alys.farndale@environment-agency.gov.uk. The deadline is Friday 14 June.

RAF Typhoon Jets Trial Miniature Missile Decoy Device

The RAF has commenced trials of a new cutting-edge missile decoy device on its Typhoon fighter jets

Typhoon fighter jets. Crown Copyright

Typhoon fighter jets. Crown Copyright

Speaking at the Typhoon Ministerial Meeting in Germany, Defence Minister Stuart Andrew announced the beginning of a series of capability tests of BriteCloud, a drinks-can sized missile decoy to protect combat jets from the latest radar-guided missiles.

BriteCloud uses powerful radar emissions to disrupt the targeting system within air-to-air and surface-to-air missiles, drawing them away to a safe distance. The device can be fired from an aircraft flare dispenser without the need for modification to the aircraft.

Designed and manufactured in Luton by Leonardo, the miniature decoy has been tested and released for the first time aboard the RAF’s fleet of Typhoon aircraft. The MOD has been working with Leonardo on the development of BriteCloud since 2012 and has so far invested £27m in the system, with the project sustaining 50 jobs in Luton.

Defence Minister Stuart Andrew said:

Britecloud offers the RAF a powerful and cost-effective way to keep our pilots safer than ever on the frontline.

These trials show UK industry is once again at the heart of defence innovation, providing our Armed Forces with state-of-the-art capabilities and creating high-tech jobs across the country.

The first Britecould trial with Typhoon aircraft took place in the UK in April. Thirty three BriteCloud 55 rounds were dispensed from aircraft flown by the RAF’s 41 Test and Evaluation Squadron against a range of threats designed to mirror those faced on the battlefield.

Further trials are planned to ensure the decoy launches safely from the aircraft and to develop a range of operational uses for the technology on the battlefield, including adding the devices to military helicopters and C-130 Hercules aircraft. The Typhoon trials will also inform how such decoys could be used on the RAF’s Lightning stealth jets.

Should the trials be succesful, the devices will be available for frontline aircrews by the end of 2019.

Sir Simon Bollom, CEO of the MOD’s Defence Equipment and Support organisation, said:

Our ongoing partnership with Leonardo continues to drive vital research and development that leads to the kind of innovation demanded by our RAF today. The trials of BriteCloud on Typhoon demonstrates how we are constantly striving to find a technological edge and protect our service personnel.

Wg Cdr Pete Ward, SO1 Typhoon said:

The initial flight-trial of Bright-cloud from RAF Typhoon aircraft was a key milestone in moving closer towards a viable and extremely valuable capability for the warfighter; trials will now move to operational testing and validation before the initial operating capability is declared, planned at this time for later in 2019

The MOD invested £4.4bn with industry in in the South-East in 2017/18, sustaining almost 27,000 jobs across the region.

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