Category: Press Releases

The press release issued by HM Treasury on 23 February 1999.

The second six monthly report on the work of the Treasury Euro Preparations Unit (EPU), Getting ready for the euro : second report February 1999 is published today.

Welcoming the report, Lord Simon, the Minister for Trade and Competitiveness in Europe, said:

“This report reflects the substantial programme of work undertaken by the EPU and the many business representatives and public sector bodies with which it has liaised closely
in recent months.

“It shows that considerable progress has been made. The second EPU survey of SMEs shows  a doubling of awareness levels, and a trebling of action levels, in the run up to 1 January 1999,  following the Government’s business information campaign.

“But much more remains to be done to ensure that SMEs –  almost half of whom have direct or indirect trading links with the eurozone –  are prepared to maintain and improve their competitiveness in the new euro environment.

“This work has done a great deal to inform the outline national changeover plan, also published today, which sets out the practical steps which would be needed for the UK to join the euro.”

Getting ready for the euro : second report January 1999 offers a benchmark of progress on preparations in the UK and sets out further preparation activity planned over the next six months. It  focusses on preparations in individual sectors of the economy, including financial markets; retail financial services; retailers; travel and tourism; multinationals and subsidiaries; small businesses; business services; and public authorities.

The report includes case studies illustrating practical responses to the need to prepare for the euro in these sectors,  and contact points for further information. It also includes information about the successful EPU advertising campaign and direct mail contact with 1.6 million SMEs. The latter provided new information on regional levels of business awareness of the euro, and expanded data on estimated levels of use of the euro in the UK.

The report looks further ahead at preparations for the option of the UK joining the single currency.  There are some examples of organisations which are already taking steps to prepare for possible UK entry into the single currency. Future editions of Getting ready for the euro will focus increasingly on these preparations and report on progress on the areas of further work set out in the National Changeover Plan.

The press release issued by HM Treasury on 23 February 1999.

The opening of another non-EU overseas investment exchange in London will reinforce the attractiveness of the City as a major financial centre for overseas traders, Economic Secretary Patricia Hewitt said today.

Ms Hewitt was announcing the recognition by HM Treasury of the Cantor Financial Futures Exchange as an overseas investment exchange under sections 37 and 40 of the Financial Services Act 1986. Ms Hewitt said:

” I am pleased that the Cantor Financial Futures Exchange has been able to satisfy the conditions laid down in the Financial Services Act to be recognised as an overseas investment exchange. UK firms and financial traders will shortly be able to access the exchange through terminals based here in London.

“Increased competition between exchanges should benefit markets and investors, promoting improved efficiency and innovation and strengthening the UK financial services industry. Greater liquidity and depth will also reinforce London’s position as one of the world’s top international financial centres.

“More overseas exchanges do business in the UK than in any other country. London offers a wide range of choice for internationally mobile financial services firms, making it extremely attractive for them to base their operations here. “

The press release issued by HM Treasury on 16 February 1999.

All 41 of the largest firms reviewing pensions mis-selling have made sufficient progress with the priority review to be removed from the Treasury’s monthly list, the Economic Secretary Patricia Hewitt announced today.

Consistent with the treatment of the 20 firms already removed from the list, the Personal Investment Authority (PIA) have confirmed that the remaining 21 have now made sufficient effort and progress towards their targets to also be removed. Welcoming the PIA’s assessment, Ms Hewitt said:

“It is good news that it is no longer necessary to publish figures for the priority review. PIA are satisfied that all 41 firms have now devoted significant energy and resources to compensating their mis-sold customers, and I am pleased to take their advice and suspend publication of the list.”

But Ms Hewitt made it clear that she reserves the right to resume publication of firms’ progress, with phase 2 of the review, if necessary. She said:

“Firms should not draw much comfort from today’s decision. I still expect them all to conclude the priority review and make swift progress with phase 2. If there is any evidence of attempts to avoid or delay phase 2 I will not hesitate to resume publication of information about firms’ progress.”

With the regulators’ advertising campaign for phase 2 of the pension review now well underway, Ms Hewitt reminded younger people to take the opportunity of finding out whether they might be due redress for mis-selling:

“The pension companies are now writing to younger people who may be affected by pension mis-selling. I urge anyone who receives a letter with R U Owed on the envelope to read it carefully and decide whether they wish to put their case forward for review.”

The press release issued by HM Treasury on 16 February 1999.

A team of top private sector managers is being brought into Whitehall to help deliver a 8 billion Pounds annual efficiency plan as part of the Government’s drive to reform public services.

The Public Services Productivity Panel, which will be chaired by Chief Secretary to the Treasury Alan Milburn MP, will include leading figures from the world of business and audit.

Today the Prime Minister will hold a joint meeting of the Panel and PSX, the Cabinet committee charged with ensuring the delivery of the Government’s modernisation programme in public services.

Ministers believe that delivering real change for the better in schools, hospitals and other services is the priority for the remainder of this Parliament and the achievement against which the Government will be judged.

The focus for the Panel’s work will be on ensuring that new government investment such as the extra 40 billion Pounds for health and education brings modern, high quality services.

All government departments have been set demanding targets through new Public Service Agreements to improve performance and efficiency with funding tied to results.

This new approach to improving the quality and responsiveness of public services has involved the Government setting itself 500 targets covering all the major services.

Key targets include reductions in school class sizes, hospital waiting lists, and vehicle crime.

The Panel will look at departments’ systems for managing and monitoring performance against their 500 targets.

It will report to Ministers on where changes is needed and where productivity could be improved.

In particular, the Panel will advise the Government about how increased efficiency and value for money can be delivered in public services.

The Government’s efficiency targets aim to release over 8 billion Pounds a year by 2001-2.

The Treasury has agreed that every pound in efficiency gains can be reinvested in frontline services and other priorities.

Individual targets include:

• 1% unit cost savings in colleges and universities in 1999/2000 worth 70 million Pounds ;
• 2% rising to 3% efficiency and value for money gains in social services worth 200 Pounds million next year;
• 2.5% annual efficiency gains in the driving and vehicle licensing authority worth 4 million Pounds next year;
• 2% a year improvements in the police service worth 150 million Pounds next year;
• 2.5% annual efficiency gains in the Treasury worth 1.5 million Pounds next year.

Across Whitehall improvements in efficiency will feature a drive to improve procurement and a fight against fraud and days lost through staff sickness absence.

The Panel will also focus on how systems to spread best practice in public services can be improved.

Ministers are concerned about variable performance. They cite huge variations in cost and outcomes as evidence of the scope for dramatic improvements in efficiency and performance:

• for all surgical procedures, the lowest cost NHS Trust is 30 per cent below average, and the highest around 60 per cent above the average
• nationally, the reported percentage of emergency readmissions within 28 days of discharge for patients aged 75 and over is 8.1%. In the worst ten health authorities, 1 in 8 patients are readmitted; whereas in the best, around 1 in 30 patients are readmitted
• schools from parts of the country with similar social and economic characteristics produce differing GCSE attainment – with average scores as low as 25 points per pupil for some schools, and as high as 45 points per pupil in other
• Gwent force detected 44% of crimes in 1997-98; whereas Gloucestershire detected under 20% – compared to a national average of 26%.

Speaking today, the Prime Minister said: “These top British businessmen and women will play a major part in driving though greater efficiencies and freeing an extra 8 billion Pounds for front line services such as schools and hospitals.”

Alan Milburn said: “Delivering real tangible change for the better in the key public services is the priority for the remainder of this Parliament.

The Government is committed to delivering modern first class services which make the very best use of the extra cash the Government is providing.

We are determined that 40 billion Pounds worth of extra investment in health and education brings 40 billion Pounds worth of improvements.

The Panel will help identify the root and branch changes that are needed to ratchet up public service productivity and performance.

This new efficiency drive will free more resources for frontline services.”

NOTES FOR EDITORS

1.  The members of the Public Services Productivity Panel are:

• Alan Milburn MP,
• Chief Secretary (Chair) Byron Grote,
• Group Chief of Staff, BP (Vice Chair) John Dowdy,
• Principal, McKinsey & Co Andrew Foster,
• Controller, Audit Commission Dame Sheila Masters DBE,
• Partner, KPMG John Makinson,
• Group Finance Director, Pearson plc John Mayo,
• Finance Director, GEC Lord Sainsbury,
• Minister of State, DTI Lord Simon,
• Minister for Trade and Competitiveness in Europe,
• DTI/HM Treasury Clare Spottiswoode,
• Senior Vice President, Regulatory Affairs, Azurix

2.  The Panel’s terms of reference are “to advise the Government on ways of improving the productivity and efficiency of Government departments and public sector bodies”. The Panel will report to a Cabinet Committee (PSX) chaired by the Chancellor.

3.  Public Service Agreements in the full range of Government activity were published in a White Paper in December 1998 (“Public Services for the Future: Modernisation, Reform and Accountability” (Cm 4181)). The Agreements, containing over 500 measurable objectives and efficiency targets, set out what the Government will deliver in return for the extra resources provided in the Comprehensive Spending Review.

The press release issued by HM Treasury on 5 February 1999.

In a unique series of ‘productivity roadshows’, Treasury and other Government ministers have toured every region of the country seeking views and listening to business. This ground- breaking consultation will help to inform Budget decisions on how the UK should address the productivity challenge.

Speaking at Coventry University’s TechnoCentre at the tenth and final Productivity Challenge Roadshow, Chancellor Gordon Brown and Trade and Industry Secretary Stephen Byers hailed the roadshows as a major success, encouraging all business sectors to enter the debate.

The Chancellor said:

” Raising our productivity is not simply about working harder, it’s about working better – encouraging enterprise and innovation, increasing access to finance for investment, improving our education and our skills.

“Within our agenda for productivity, we are committed to investment in education, science and innovation and in our infrastructure to create a high productivity economy. Taken together with our sound public finances, low inflation and lower interest rates, this makes Britain the best place for investment for the future.

“We are determined that the extra 40 billion Pounds investment in health and education will deliver new standards, new targets and new disciplines. The long-term investment the country needs is being met with the additional 11 billion Pounds we are investing through the Private Finance Initiative.

“Businesses also need to invest in the skills of their employees with schemes such as Investors in People. The ‘them and us’ culture in British industry must be removed once and for all, and so we want to make it easier for all employees to become stakeholders in their companies. Employee commitment is a vital strength for companies competing and succeeding in the global economy.”

The press release issued by HM Treasury on 3 February 1999.

Stakeholder pensions came a step closer today with publication of proposals for more flexible management of pensions investments. This will enable members of the new stakeholder schemes to see where their money is invested, and how much that investment is worth.

The Government Pensions Green Paper set out the objective to ensure that all who can save for their retirement do so. Proposals for a second state pension will help low earners for whom a funded pension is not suitable. But, where appropriate, the Government aims to encourage moderate and high earners to take out funded pensions.

Previously the choice has been between occupational pensions, which are not always available, and personal pensions, which may not be appropriate for moderate earners. The proposed new stakeholder pension schemes – which will benefit form the new flexibility in investment announced today – were developed to meet this gap in pension provision.

The proposals for a new investment mechanism – set out in a consultation document announced by Alistair Darling, Secretary of State for Social Security, and Alan Milburn, Chief Secretary to the Treasury – will also help those who wish to move jobs. Instead of having to sell up their investments and re-invest them in a new company or personal pensions scheme, they can move their investments with them.

The new investment mechanism will be available to the whole range of personal and occupational pensions schemes as well as for stakeholder pensions when these become available. Subject to consultation, the new mechanism should be available from later this year for personal pensions.

Welcoming the proposals, Alistair Darling said:

“The pensions reforms which we published in December will mean far greater security for the future. Stakeholder pensions are a crucial part of our plans. They will provide the secure, flexible and value for money pensions that those on middle incomes lack under the current system.

“Today’s proposals for a new investment mechanism for pensions will help to ensure the success of stakeholder schemes, and those using other pensions vehicles.

“Both the pensions Green Paper and this consultation document make clear that the stakeholder pension schemes need to be run in a way that protects their members’ interests. That is why we shall legislate to enable stakeholder schemes to be set up under trust law. “But, as we made clear in the Green Paper, we also want to consider alternatives to a trust basis for stakeholder schemes provided the governance arrangements give sufficient protection to members’ interests, ensuring value for money, compliance with minimum standards and other regulatory requirements, high standards of service and good-quality information.”

The new investment mechanism for pensions will help stakeholder schemes which use it to deliver :

• value for money : because savers can invest in a range of ‘pooled’ savings products, including unit and investment trusts and open-ended investment companies (oeics), which have much lower overheads than individual investments.
• flexibility : because these products will be easy to value and transfer between different stakeholder, personal and occupational pension schemes, reducing the scope for misselling.
• security : because the investments in the pension must be held safe by an authorised firm independent of the fund manager.

Commenting on the greater flexibility of the scheme, Alan Milburn said:

“Pension schemes are not just significant in retirement. They often play an important part in career decisions throughout our working lives.

“The low upfront charges these investments offer should reduce the financial penalties frequently faced by people changing jobs. This will increase the freedom for individuals to follow new career paths without feeling locked into their current jobs.

“This should encourage flexibility in the job market and support the Government’s productivity agenda as well as benefiting millions of individual pension holders.”

Comments are invited by 31 March, the same timetable as for other issues covered in the Green Paper ‘A New Contract for Welfare: Partnership in Pensions’.

The press release issued by HM Treasury on 2 February 1999.

Chief Secretary Alan Milburn today outlined how the Government will drive forward the development of the Private Finance Initiative (PFI) and new forms of Public Private Partnerships (PPPs) in his first major speech on the subject.

Mr Milburn said that the Government will pursue a twin-track approach – improving and extending the PFI while alongside that developing and defining other forms of PPP.

Speaking at a Transport PFI Conference in London, Alan Milburn said:

“This Government has revitalised PFI. We have got PFI working in sectors like health where it had not worked before. We have come a long way in the last 21 months but recognise that there is more to do to make PFI and PPPs more generally a genuine national success story.

“We are pioneering new ways of doing things. New partnerships between the public and private sectors. A new understanding that improved public services and better value for money go hand in hand.

“This Government is committed to public private partnerships in general and PFI in particular. In the past, the dogma of the right insisted that the private sector should be the owner and provider of public services. And the left insisted this was all the responsibility of the state. The modern approach to public services rejects these arguments both of the old right and the old left.

“In many cases the best way forward is through new partnerships between the public and private sectors. Where each brings something to the table. Where we combine private sector enterprise experience with public service values. For this Government the key test is what works. We recognise that what the public want is better quality, more responsive public services. Quite rightly, they want their services to be both dependable and modern. Their concern – like the Government’s – is about outcomes not ownership.

“In developing and defining PPP models we will build on our success in getting PFI working. Ours will be a twin track approach. That means improving and extending the PFI and building on the reservoir of expertise that is growing by the day in both the public and private sectors in finding forms of PPP that best suit the specific needs of particular public services.

“We will be taking action to make PFI deals easier to complete. We are now looking at how to streamline the process of putting a PFI deal together. There is little doubt that the similarities between PFI deals means that both time and money could be saved by having more standard template contracts. We will publish a guidance paper on standard model clauses by the end of this month. And next month we will publish guidance on accounting treatment that will help determine the optimal level of risk transfer that will deliver value for money.

“We will continue to improve, identify and develop new opportunities and partnerships with both the public and private sectors. The Government is committed to taking forward a whole range of public private partnerships. That will of course include PFI but not to the exclusion of other forms of partnership. We are committed to making PFI work even better. But not all of our eggs will not necessarily be in the PFI basket. Again for us what counts is what works.”

The press release issued by HM Treasury on 2 February 1999.

A consultation document on new recognition requirements for exchanges and clearing houses is published by HM Treasury today. Announcing publication, Economic Secretary Patricia Hewitt said:

“We have said that we will publish the key secondary legislation to be made under the Financial Services and Markets Bill for consultation. We are consulting on these regulations well in advance so that we have time to get them right.”

The Financial Services and Markets Bill, published for consultation last summer, broadly carries forward the main features of the existing recognition and exemption regime for exchanges and clearing houses. To be recognised, an investment exchange or clearing house has to meet certain requirements. In future these will be contained in secondary legislation rather than on the face of the Act.

Ms Hewitt added:

“It is a key feature of the new legislation that it should be able to keep up with the fast changing financial markets. Putting the recognition requirements in secondary legislation will make it easier for us to respond to any market developments in this area.”

The deadline for comments on the consultation document published today is 30 April.

The press release issued by HM Treasury on 1 February 1999.

Northern Ireland is increasingly being seen as an excellent location in which to set up in business, Financial Secretary Barbara Roche said today.

Last year was a record year with over 0.5 Pounds billion of new investment flowing into the region providing for over 5,000 jobs. Speaking at the Interpoint Centre in Belfast at the Government’s Productivity Challenge Roadshow, Mrs Roche said:

“In recent years Northern Ireland has grown quicker than any other region in the UK, but there is still a long way to go to meet the productivity challenge. All of us must learn how to work better and improve our skills so that we can adapt to meet the demands of a modern economy.

“The Good Friday Agreement and the Chancellor’s 315 million Pounds initiative offer the stability businesses need to plan for the future.  We must ensure that we grasp this opportunity and build a world class economy in Northern Ireland”.

Throughout the 1990s the Northern Ireland economy performed well. GDP rose by 15.6% between 1989 and 1996, compared to 9.1% for the UK as a whole. Manufacturing output rose by 24% between 1990 and 1998, compared to the UK rate of 3.5%. Employment has grown while unemployment has been falling steadily.

Northern Ireland’s economic strategy is currently being reviewed to take account of changing needs and a draft report will soon be presented to the new Assembly for its consideration. This strategy will be a major building block to improving local productivity and generating future prosperity for Northern Ireland.

While in Northern Ireland Mrs Roche also visited Fast Engineering and Randox Laboratories in County Antrim.

The press release issued by HM Treasury on 29 March 1999.

A major Treasury study on the causes and scale of poverty and inequality in Britain and the best means of tackling it was launched today by Chancellor Gordon Brown, Social Security Secretary Alistair Darling and Minister for Public Health Tessa Jowell.

The six-month research study “Tackling Poverty and Extending Opportunity” contains shocking conclusions on the scale of poverty and inequality, and the passage of inequality from generation to generation.

The study, based on 1997 figures, shows:

• 12 million people in the UK – nearly a quarter of the population – live in relative poverty – almost three times the number in 1979;
• inequality rose by a third between 1977 and 1996 – almost unique among developed countries;
• inequality is passed from generation to generation – the children of the low paid are much more likely to be low paid.

It is the most extensive Government analysis yet of child poverty, showing that:

• 4 million children were living in poverty in 1995 – three times the number of 20 years ago;
• 2 out of every 5 children are born poor. Many of them born to families who were not poor before the birth of their child. As many as 1 in 6 families are pushed into poverty with the birth of a child;
• poverty damages a child’s life chances. By the time children are 22 months old there are clear social class differences in their rate of educational development and these differences continue to widen when children start school.

The study concludes that work and access to work is the key driver in Britain today and lack of work is the primary cause of poverty. It shows:

• the number of workless households has more than doubled over the last 20 years;
• work is the best route out of poverty – 8 out of 10 people who moved into work moved out of the poorest fifth;
• education is key to success in the labour market – what you learn is directly related to what you earn – half of people who have no qualifications are without a job.

Work history also has a profound effect on life chances of individuals and their children:

• in the mid 1990’s half of those leaving unemployment were unemployed again within the year;
• people get stuck in a low-pay, no-pay cycle. The number of men stuck in this cycle or on a long-term, low-paid job has doubled since the early 1980s from 1 in 14 to 1 in 7.

The findings in the Treasury report are backed-up by research published today by the Joseph Rowntree Foundation confirming that the Government is right to be concerned about persistent and scarring nature of poverty, particularly on children.

The paper highlights the strategy the Government is pursuing to tackle this poverty and inequality. The strategy covers investment in education to give poor children an equal chance to fulfil their potential, help for families, help to get into work and additional £6  billion a year in support for children. It includes:

• 375,000 people are already participating in the New Deal. It has already helped 55,000 young people, 6,000 long-term unemployed workers and 6,000 lone parents from welfare into work;
• reform of the tax and benefit system to make work pay and remove the unemployment and poverty traps for families with children. The Working Families Tax Credit will provide every family with children with a full-time job a guaranteed minimum income of £200 a week. It means working families will be £24 better off than if they were on Family Credit;
• increases in Child Benefit – by next year it will be worth £15 for the first child and £10 for the second and subsequent children;
• making sure that all children have the chance to thrive when they start school by providing £540 million for the Sure Start programme to deliver integrated services for children under 4 targeted at the areas of greatest need. Budget 99 announced further support for the very earliest stages of development with a Sure Start Maternity Grant to replace the Maternity Payment at double the rate (£200). Investing an additional £19 billion in education over the next 3 years to raise standards and narrow the performance gap.

As a result of these measures one and a quarter million people will be lifted out of poverty by the end of this parliament – 700,000 of them children. And the poorest fifth of families with children will be over £1,000 a year better off.