• Treasury strategic review of Pool Re reduces scheme’s overall pricing by 20% in a drive to allow more businesses to access terrorism reinsurance

• Government’s unlimited guarantee will also be extended for another 5 years

• 5-year strategic review of Pool Re backed by its board and members

The review enables Pool Re to modernise its system of reinsurance, by moving for the first time in its history to a treaty-based model of reinsurance, enabling it to offer pricing based off more detailed geographical data. Alongside this, Pool Re will reduce taxpayers’ exposure to the cost of terrorist acts by further transferring risk back to the market.

Pool Re will also collaborate with the government to address the lack of awareness of terrorism reinsurance among small and medium enterprises.

Pool Reinsurance Company Limited (Pool Re) is a mutual company that was established in 1993 when a series of terrorist attacks in Great Britain prompted reinsurers to withdraw from the terrorism insurance market, and as a result, the economy, industry, and the taxpayer were highly vulnerable to the financial cost of future attacks. It corrects market failure by providing its members with an unlimited government guarantee to insure against the potentially catastrophic costs of terrorist acts, and gives them the confidence to offer insurance products to businesses.

Economic Secretary to the Treasury, John Glen said:

The UK is a world leader in terrorism reinsurance – and I am delighted that Pool Re’s board and its members have approved our 5-year strategic review.

The planned reforms will modernise the terrorism reinsurance market, make premiums cheaper for businesses, and most importantly – will extend the government’s unlimited guarantee so insurers have the confidence to insure against the financial costs of terrorist acts.

Angela Knight CBE, Pool Re chair said:

This positive result is very welcome news. The support of members is critical for the future development of Pool Re, and we are delighted that they have shown their support for all the strategic proposals we agreed with HMT.

HMT is committed to reviewing its relationship with Pool Re every five years to ensure that its relationship and the scheme continues to operate in the best interests of Pool Re and its members, the government, the taxpayer and the wider economy.

In an extending Pool Re’s unlimited guarantee, the government has protected taxpayers by ensuring that Pool Re continues to proactively return risk to the market and does not pay special dividends without the Treasury’s permission.

HM Treasury will bring forward legislation when Parliamentary time allows to give Ministers a power to direct public bodies in receipt of a guarantee or arrangement under the act to comply with appropriate controls.

The current unlimited HMT guarantee of Pool Re remains appropriate and important to the provision of available and affordable terrorism insurance in Great Britain.

Further information

• The government’s unlimited guarantee of the scheme (a commitment to extend a repayable loan if needed) meant that insurers were able to access adequate and affordable reinsurance cover for terrorism losses.

• HMT is committed to reviewing its relationship with Pool Re every five years to ensure that its relationship and the scheme continues to operate in the best interests of Pool Re and its members, the government, the taxpayer and the wider economy. This review was launched in September 2020 and is designed to set the strategic direction of Pool Re for the coming 5 years.

• The headline Terms of Reference for this review were:

i) Assessing if the risk share between HMG and the private sector remains appropriate for the good functioning of the UK’s terrorism (re)insurance market.

ii) Considering if the scheme rules that govern Pool Re require updating to enable or formalise operating practices which are of mutual interest.

iii)Ensuring that the requirements HMG sets for companies classified by the ONS to the central government sub-sector are met, without compromising Pool Re’s ability to operate effectively.

• Pool Re currently offers reinsurance based of four geographical zones. The proposed changes to the scheme will enable the firm to use a new, more advance model for terrorism risk, based on the collection of significantly more detailed geographical data.

• Please read the review here: HM Treasury’s review of Pool Reinsurance Company Limited 2020-2022

J’ai lu avec intérêt un article arguant que le Brexit avait contribué à l’isolement du Royaume-Uni au sujet de l’Ukraine, tout en admettant que Boris Johnson était un des premiers à avoir proposé des sanctions à l’encontre de la Russie en excluant des banques russes du système SWIFT – ce qui a ensuite été mis en pratique par l’UE –, et que le Royaume-Uni avait été le premier pays à donner des armes de défense aux Ukrainiens en début d’année – ce qui a été suivi comme un exemple par d’autres pays européens. L’article a donc critiqué à la fois la mise en œuvre de la Revue Intégrée, qui a pour but d’activer une diplomatie forte autour du monde, soutenue par des partenariats ; mais il a aussi jugé la ‘réactivation’ des alliances historiques comme une faiblesse. N’y aurait-il pas là une contradiction ?

Il faut être clair : je n’ai pas pour objectif de débusquer chaque idée fausse à propos du Royaume-Uni. Le but est avant tout de mettre fin à cette guerre terrible en Ukraine. Et pour y arriver, il faut une détermination collective face à l’horreur que Poutine a déclenchée ; une détermination fondée sur notre attachement commun et profond à la paix, à la démocratie et à la liberté.

Bien entendu, l’Union européenne joue un rôle essentiel à cet égard, un rôle auquel nous, au Royaume-Uni, attachons une grande importance. C’est pourquoi la Ministre des affaires étrangères britannique Liz Truss a assisté au Conseil des Affaires Etrangères avec le Secrétaire d’Etat américain Antony Blinken et le Secrétaire général de l’OTAN Jens Stoltenberg. C’est pour cela aussi que nous avons dédié plus de 400 millions de livres d’aide humanitaire et économique pour l’Ukraine, et redoublé nos renforts de l’OTAN – nous faisons tout ce qui est en notre pouvoir pour montrer notre solidarité à l’égard de nos amis, en particulier ceux du flanc est.

Le Royaume-Uni soutient ces efforts, avec les Etats-Unis entre autres, avec une force catalytique. Il y travaille dans le cadre du format « Quad » (avec la France, les Etats-Unis et l’Allemagne), ainsi qu’avec les pays du groupe de Višegrad, mais aussi à Londres avec le lancement du Groupe de Soutien International à l’Ukraine avec Mark Rutte et Justin Trudeau la semaine dernière, ou encore lors de la réunion de la force expéditionnaire commune (JEF) cette semaine. La diplomatie n’est pas un jeu à somme nulle. Il s’agit de rassembler autant de partenaires que possible pour faire force ensemble. D’où le poids de la résolution de l’Assemblée Générale de l’ONU, approuvée par 141 Etats, condamnant les actions du gouvernement russe.

Prenons l’exemple des sanctions. Depuis l’invasion de la Russie, le Royaume-Uni a sanctionné plus de mille personnes, entités et filiales parmi les plus importantes et les plus précieuses de Russie. Cela porte à plus de 800 le nombre total de personnes visées, y compris contre 18 des principaux oligarques russes, dont la valeur totale des richesses dépasse 30 milliards de livres sterling. Cela a un coût pour le Royaume-Uni, tout comme les sanctions européennes vont avoir un coût pour les Français. Mais si notre objectif commun est de soumettre une pression économique punitive à l’encontre du régime russe, en démontrant que rien – ni personne – n’échappe à la possibilité d’être sanctionné, je dirais que les trains de sanctions complémentaires du Royaume-Uni, et des Etats-Unis, et de l’Union Européenne, et du Canada font la force.

Enfin, je souhaite clarifier la position du gouvernement britannique sur cette fameuse question de la sécurité européenne. J’ai moi-même travaillé sur la Revue Intégrée de la sécurité, du développement et de la politique étrangère du Royaume-Uni et je tiens à attirer votre attention sur cette ligne fondamentale : « Notre engagement envers la sécurité européenne est sans équivoque ». La région euro-atlantique reste la pierre angulaire de notre sécurité, et il est absurde de suggérer le contraire. En dehors de l’OTAN – ce qui n’est pas facile à dire étant donné son poids et le soutien des Etats-Unis – nous travaillons ensemble, de manière bilatérale, par l’intermédiaire de l’OSCE et de petits groupes nommés plus haut pour défendre nos valeurs communes, contrer les menaces partagées et renforcer la résilience dans notre voisinage. Le constat positif de tout cet épisode tragique est la coordination étroite qui perdure entre l’UE, le Royaume-Uni et les Etats-Unis.

Avec tous ces exemples de partenariats, de diplomatie active, de coordination, de bonne foi, j’espère pouvoir enclencher un nouvel état d’esprit. Le Royaume-Uni reste un pays profondément européen, ainsi qu’un acteur mondial. Le succès d’un de nos alliés est le succès de nous tous – surtout s’il agit de sauver des vies. Ecartez-vous des récits inutiles présentant des gagnants et des perdants – seul Poutine pourra en profiter. L’heure est à l’unité pour trouver un moyen d’en finir avec cet enfer.

Dame Menna Rawlings, Ambassadeur du Royaume-Uni en France

The Charity Commission has opened a statutory inquiry into and frozen the bank account of a grant-making charity, after three of its founding trustees were made subject to financial sanctions.

Genesis Philanthropy Group was registered in 2018 with charitable purposes which include advancing the education of the public in the arts, culture, and heritage of the Jewish people.

Three of the four founding trustees of the charity (as previously recorded on the charity’s entry on the public register), Petr Aven, Mikhail Fridman and German Khan, have been named as ‘designated persons’, added to the list of those subject to financial sanctions by the UK government relating to Russia.

The Commission’s position is that individuals subject to financial sanctions in the UK cannot discharge their duties as a trustee of a charity.

The Commission’s register of charities has been amended to reflect the fact that the three individuals have ceased to be trustees of the charity.

The inquiry, which opened on 16 March 2022, will examine whether the charity can continue to operate and is viable, and whether the trustees have discharged their legal duties and responsibilities in their management and administration of the charity.

The regulator has frozen the charity’s bank account, meaning that no one can access or move funds held in its account without the Commission’s prior consent.

The Commission may extend the scope of the inquiry if additional issues emerge.

It is the Commission’s policy, after it has concluded an inquiry, to publish a report detailing what issues the inquiry looked at, what actions were undertaken as part of the inquiry and what the outcomes were.

[Reports of previous inquiries] are available on GOV.UK

Ends

Notes to Editors:

1. The Charity Commission is the independent, non-ministerial government department that registers and regulates charities in England and Wales. Its purpose is to ensure charity can thrive and inspire trust so that people can improve lives and strengthen society.
2. The effect of designation by the UK government, which include freezing financial assets, means that a designated person cannot hold, access, or manage funds. Matters relating to sanctions should be directed at the Office of Financial Sanctions Implementation.
3. The resignation of an individual as a trustee does not preclude the Charity Commission from taking further action against them if this is deemed necessary and in the public interest.
4. The charity proactively reported a serious incident to the Commission following the designation of two of the trustees by the EU and has been in regular contact with the Commission about the situation. A second serious incident was reported following the UK designation of the three founding trustees.

• The Covid Corporate Financing Facility which provided a quick and cost-effective way to raise working capital for large firms comes to an end, with every penny repaid.
• The Bank of England facility provided almost £38 billion of support to more than 100 of the UK’s biggest firms, and made a profit for the taxpayer whilst protecting millions of jobs.
• Firms that employ almost 2.5 million people were directly supported including those in the car industry, travel, hospitality, and high street stores.

Household names, such as Gatwick Airport, the Football Association and the National Trust, were among more than 100 of the UK’s biggest employers that benefitted from the Covid Corporate Financing Facility (CCFF). The scheme has recouped every penny that was lent – plus a profit of over £60 million.

Rishi Sunak said the Bank of England administered scheme, which was launched in March 2020 at the start of the pandemic, was another example of the government offering support at unprecedented speed to protect millions of jobs and taxpayer’s money simultaneously.

Chancellor Rishi Sunak said:

We not only took unprecedented action but did so at unprecedented speed to protect jobs and businesses throughout the pandemic.

The CCFF scheme ensured that many of the UK’s biggest employers could continue to pay wages and suppliers, protecting millions of jobs – and on top of that every penny has been repaid.

The final CCFF repayments were made today, with all companies paying back what they owed. The scheme has made a profit of over £60 million for the taxpayer because the rate of interest applied to the cash provided by the Bank of England was priced at rates comparable to the market before Covid. Companies therefore paid back a slightly larger amount at maturity compared to the finance they borrowed initially.

Peter Vermeulen, Chief Financial Officer at the National Trust, said:

The HM Treasury team did an amazing job during the height of the pandemic. The National Trust, like many other large organisations, experienced an unprecedented liquidity squeeze, accompanied by enormous levels of uncertainty around the future.

The CCFF was set up swiftly and in a highly transparent manner. The team at HM Treasury issued clear guidance and worked tirelessly to support us with the application and the associated legalities.

We cannot commend the team highly enough for the excellent work they have done. It was an essential lifeline for the National Trust and has safeguarded some of the essential work we do on cultural and natural heritage, for the Nation. Thank you.

Mark Burrows, Chief Operating Officer at The Football Association, said:

The pandemic was a serious challenge for The FA. We were faced with huge losses from cancelled events and competition disruptions affecting our broadcasting rights.

As a not-for-profit organisation that reinvests its surplus into grassroots football, being able to rely on the security of CCFF as a quick and cost-effective way to raise working capital meant we were able not only to continue to support our business, but grassroots football across the country.

Through the purchasing of short-term corporate debt – known as commercial paper – the CCFF provided a quick and cost-effective way to raise working capital for companies who were fundamentally strong but were at risk of experiencing severe disruption to cashflows. Because it lent directly to large companies, the scheme also provided banks with the space to lend to a wider population of firms who could have otherwise gone bust during the pandemic.

The scheme helped companies across a range of sectors including the car industry, travel, hospitality, and high street stores. It kept cash flowing and delivered on the government’s commitment to do everything it could to support the economy and protect jobs.

Further information

• UKGI, as the government’s centre of excellence in corporate finance and corporate governance, established the Covid Intervention Resolution Group (CIRG) to support the Chancellor in his lending decisions as part of the access review process introduced in October 2020, and to monitor the loan portfolio until maturity.
• The CCFF was part of an unprecedented package of support for business throughout the pandemic including VAT cuts, business rates holidays and government backed loans worth around £400 billion.

Further stakeholder reaction

Stewart Wingate, Chief Executive Officer, Gatwick Airport, said:

The CCFF loan provided valuable support to the airport during the COVID-19 pandemic and helped ensure that we were able to stay open and maintain our role as a critical piece of national infrastructure.  This allowed us to maintain flights for essential travel and cargo, including medical equipment and other vital supplies during the pandemic.

Richard Hutton, Finance Director at Greggs, said:

In the spring of 2020, quick access to the CCFF was crucial for Greggs as we sought to protect our employees and others who depend on us through the early stage of the pandemic. It gave us essential breathing space whilst alternative commercial facilities were arranged.

The speed of response from the HMT and Bank of England teams was essential in providing stability at a critical time.

Neil Martin, Chief Executive Officer Europe, Lendlease, said:

This facility helped support our business in emerging from the pandemic in a strong position to be able to meet the needs of our customers, clients and the communities in the UK, we were very grateful for the support.

The London School of Economics said:

COVID has been a financial challenge for LSE as it has for all UK universities. Throughout, our priorities have been to protect the education and experience we offer our students, as well as our staff and research capability. Coupled with other credit facilities and reserves, the Bank of England’s CCFF has been a very helpful component in delivering those priorities.

Martin Watts, Director of Treasury at L&Q said:

The funds helped us to protect jobs, maintain vital services to residents, and continue with our development programme. With the support of the Bank of England, we delivered over 5,500 new homes in the period from 1 April 2020 to 31 December 2021, of which 3,200 were affordable.

Utilising the scheme meant that our balance sheet was well capitalised, enabling us to provide additional reassurance to key stakeholders in line with our prudent approach to risk management.