Category: Press Releases

The press release issued by HM Treasury on 30 January 1998.

UK firms should consider carefully how changes to the European business environment following the introduction of the single currency on 1 January 1999 will affect them before they address the practical implications, Chancellor Gordon Brown’s Business Advisory Group on EMU recommended in a report published today.

Welcoming the report, Mr Brown said :

“The report from the Business Advisory Group underlines the importance for all businesses of gearing up to meet the challenges which they must address before the single currency is introduced at the end of the year.  Introduction of the euro provides both opportunities and challenges which must be addressed effectively whether or not the UK joins the single currency.

“A wide range of representatives from all sectors of commerce and industry contributed to the report. It comprises the practical views of those who will need to take the action about how they believe business will be affected and what must be done if business is to take maximum benefit from the changes ahead.

“We shall take close account of their views in the coming months as we continue to work closely with British business to ensure that it can successfully anticipate and prepare for the changing economic environment within Europe.”

The report is a summary of the findings of working parties to the Advisory Group. It is not a statement of the Government’s views, but represents the assessment of the Advisory Group, which includes the CBI, British Retail Consortium, British Chambers of Commerce, the Federation of Small Businesses, the Institute of Chartered Accountants and the TUC as well as other interested bodies such as the Consumers’ Association.

The Advisory Group addressed issues such as information technology, legal and tax implications, accounting issues, an information campaign and arrangements required if the UK decides to join the single currency. Its recommendations cover issues such as: the provision of targeted information to business likely to use the euro; the practicalities of dealing with the euro for trading and retail purposes; and the strategic implications of the single currency.

The press release issued by HM Treasury on 28 January 1998.

In a wide ranging speech to the Chartered Institute of Bankers in London tonight, Alistair Darling set out the Government’s achievements since it came into office.  He stressed that it was vital to ensure pay rises are fair and affordable if the country is to enjoy the fruits of long term prosperity.

He said:

“We have been in Government for eight months.  In that time we have put in place the building blocks which will see us through not just this Parliament, but beyond.  We said we would modernise Britain and we are doing that.

We are building the foundations for the future.  Low inflation.  Stability.  Reforming the Welfare State.  We have started to rebuild the education and health services.  Building alliances in Europe where we can influence and shape our destination.  Building together long-term prosperity for this country.

But if we are to succeed, we need to maintain the strict discipline necessary to put the public finances on a sound footing, and keep them there.  We are not going to repeat the mistakes of the past, when the signals were misread.

We are therefore determined to ensure that pay rises are fair and affordable.  In the public and private sector.  It is in no one’s interest if today’s pay rise becomes tomorrow’s mortgage rise.  The worst form of short-termism would be to pay ourselves today at the cost of fewer jobs tomorrow and lower living standards in the future.

The Government’s responsibilities are clear.  But the same responsibility lies fairly and squarely with boardrooms in the private sector.  Every single one of us has the same responsibility.  Pay awards have to be fair and affordable and must be seen to be so – right across the board.  Those in the boardroom must show the same responsibility as those on the shop floor.”

The press release issued by HM Treasury on 23 January 1998.

Financial developments in Asia will be discussed at forthcoming meetings of the EU and G7, to be chaired by the Chancellor of the Exchequer, Gordon Brown, it was confirmed today.

In a letter to Michel Camdessus, Managing Director of the International Monetary Fund, sent following the first ECOFIN meeting of the UK Presidency of the EU, the Chancellor said:

“European Union Finance Ministers discussed financial developments in Asia at ECOFIN today. As President of ECOFIN I would like to invite you to join us for a similar discussion at a future meeting – perhaps at the Informal ECOFIN on 20-21 March, when we will be joined also by EU Central Bank Governors. The subject will also be prominent on the agenda at the meeting of G7 Finance Ministers and Governors in London on 21 February, where I hope we might begin to draw some lessons for the future from what has happened.”

The text of the letter to Michel Camdessus, which is attached, also puts forward a number of ideas for consideration:

“to help prevent such crises recurring; and to reflect on whether we could improve our techniques for handling crises when they occur.”

M Camdessus
Managing Director
International Monetary Fund
700 19th Street N W
Washington DC 20431
WASHINGTON USA

Dear Michel

20 January

1998 FINANCIAL DEVELOPMENTS IN ASIA

European Union Finance Ministers discussed financial developments in Asia at ECOFIN today. As President of ECOFIN I would like to invite you to join us for a similar discussion at a future meeting – perhaps at the Informal ECOFIN on 20-21 March, when we will be joined also by EU Central Bank Governors.

The subject will also be prominent on the agenda at the meeting of G7 Finance Ministers and Governors in London on 21 February, where I hope we might begin to draw some lessons for the future from what has happened.

European countries have a very substantial interest in successful resolution of the current financial difficulties in Asia.   European economic interests in Asia, including British interests, are high. Exports from European Union countries to the region are greater than those from the US. The exposure of European banks is greater than the sum of United States and Japanese exposure.

European countries have therefore: been giving full support to the IMF’s action in seeking to restore confidence in the region, including exceptionally large calls on IMF finance.

As major shareholders, we are ultimately responsible for a significant proportion of the resources committed by the IMF and World Bank. played an active role in getting agreement to the new IMF Supplemental Reserve Facility; encouraged our commercial banks to play an important and positive role in the current global efforts to secure continued rollovers of Korean banking debts. provided 8 of the 13 bilateral contributions to Korea’s second line of defence.

Above all, like my European partners, I believe it is essential to keep the IMF at the centre of the global response to what is a global problem.

European Union countries fully support the action taken by the IMF so far in the region, and the strong programmes of macroeconomic and structural reform to which countries in the region, including Indonesia, Korea, the Philippines and Thailand, have committed themselves. Confidence will not be re-established overnight. But it will return in time, so long as these policies are implemented with wholehearted commitment and vigour.

In time we will then see renewed healthy economic growth in the region.

I can assure you that we will continue to give full and active support to the countries concerned as they tackle their difficulties, through the IMF and in other ways. I am also looking forward to a full exchange of views on developments in Asia at the meeting of G7 Finance Ministers and Governors in London on 21 February. Beyond that, it is already clear that the subject will be high on the agenda for the meeting of ASEM leaders in London in April, and for the G8 Summit in Birmingham in May.

I also recognise the importance of finding a forum to discuss these issues with a wider group of emerging market economies.   In addition to continuing the close cooperation that we have had in the G7 and elsewhere in tackling the crisis as it has developed, we should begin to reflect on the lessons for the future.

We need to consider whether there are further measures that could be taken to help prevent such crises recurring; and to reflect on whether we could improve our techniques for handling crises when they occur.

Among the ideas I would like to see considered are the following:

we should do more to promote transparency in all countries about the operation of economic policy, and economic developments, and the operations of financial institutions. The better the understanding that the market has, the less will be the risk of sudden market readjustments.

I hope the IMF will quickly bring forward proposals for a code of conduct on transparency in fiscal policy, as we agreed in Hong Kong last year, and look for ways to broaden that into other areas.

I hope the Fund will also pursue other ways of improving the quality and timeliness of economic data supplied to the market; the IMF itself should consider being more transparent, also.

There is a balance to be struck here with maintaining the sometimes necessary confidentiality of the Fund’s policy dialogue with its members.

But I believe there are ways in which the Fund could and should begin to make its concerns known in public, certainly when policy advice has been given over a period and not acted on.

We may also need to consider whether there are other ways to encourage international banks and investors to make better use of the information and analysis that is available; the Fund should pay more attention in future, during its regular economic surveillance, to the vulnerability of domestic financial systems to potential shocks and reversals in capital flows.

I believe this should go hand in hand with the desirable widening of the IMF’s Articles to cover capital account issues, on which we agreed in principle in Hong Kong. we need to reflect on different ways to ensure that when there is a crisis, international private sector investors continue to play a full part in its resolution.

It will be important to ensure that private investors have a continuing, and if possible enhanced, incentive to make a full assessment of the risks before they invest in emerging market countries; it is absolutely right for the IMF to have focussed in recent Asian programmes on the need to reform and strengthen domestic financial systems.

We should consider whether more can be done to enhance the quality of assistance we give to emerging market countries in this area, including through improved cooperation with financial regulators in developed countries, who I believe have an important contribution to make, and with the World Bank.

I look forward to discussing these and other issues with you and colleagues over the weeks and months ahead.

Yours sincerely

GORDON BROWN

The press release issued by HM Treasury on 21 January 1998.

The Financial Services Authority (FSA) is to be given extensive supervisory powers over Lloyd’s the Economic Secretary, Helen Liddell announced today.

The FSA will have intervention and authorisation powers to ensure a greater independent element in the regulation of Lloyd’s.

In response to a Parliamentary Question from Jackie Lawrence [Preseli Pembrokeshire], Mrs Liddell said:

“In her statement of 23 July 1997, my right hon friend the President of the Board of Trade announced that the supervision of insurance business, including that carried on at Lloyd’s, would ultimately become a responsibility of the proposed Financial Services Authority (FSA).  Since then, I have been considering the options for the future regulatory arrangements for Lloyd’s in the context of the comprehensive reforms which we will implement in the forthcoming financial services reform bill.  As we have already made clear, we intend to publish a draft Bill for consultation in the Summer.

“Holders of insurance policies underwritten at Lloyd’s should enjoy the benefits of  the same kind of supervisory regime as those with policies issued by other insurers.  I intend as part of the modernisation of the prudential supervision powers currently available to the Treasury under the Insurance Companies Act 1982, that the FSA will have much more extensive supervisory powers in relation to Lloyd’s.  I intend that these should include enhanced powers of intervention and a requirement for authorisation by the FSA of managing agents, who are responsible in practice for running underwriting syndicates.  I also intend that the FSA should have reserve power to undertake direct authorisation and supervision of Members of Lloyd’s, should that prove to be appropriate in due course.

“Certain activities at Lloyd’s are similar to business which is currently regulated by the Financial Services Authority under the Financial Services Act 1986. Members’ agents advise Members of Lloyd’s about which syndicates they should participate in  and I intend that their activities should be subject to authorisation by the FSA.  In addition, the emerging secondary market in syndicate capacity  resembles markets subject to control under the 1986 Act.  I intend that the FSA should oversee the operation of the market under a regime similar to that currently in place for recognised investment exchanges.

“These arrangements will continue to allow scope for a major role by the Council of Lloyd’s in ensuring that Lloyd’s continues be a well-regulated, successful and important part of the UK financial services industry. They will however provide, for the first time in many areas, a major element of external regulatory accountability.”

In a speech to the Life Insurance Association tomorrow, Mrs Liddell will say:

“Lloyd’s itself has recognised the need for a greater independent element in its regulation. It rightly believes that businesses which are well regulated – and are perceived to be so – will be in a better position to compete in global markets.”

The press release issued by HM Treasury on 21 January 1998.

Preventing young children from becoming socially excluded is top of the agenda at a seminar being hosted by the Treasury today.

The seminar, the first in a series of three, is part of a Cross Departmental Review which aims to consider whether the multiple causes of social exclusion affecting young children could be more effectively tackled at the family and community level.

Representatives from Government, local authorities, universities and voluntary organisations will attend and speak at the event. The aim is to ensure that the best information is available to inform decisions.

Tessa Jowell, chair of the Ministerial Committee said:

“We want to help those young children, who are at present not getting the support and help from services they need in early childhood, who fall behind before they even get to school and never catch up.

“We want services to be flexible and responsive to the needs of each child so everyone can get the best possible start in life.

“If Government departments work together not only can we give best value to the child but we can also get value for money by cutting the costs of crime and unemployment which can so easily follow if children do not get help at an early age. “

The Treasury is organising the event and leading the review in close collaboration with the Prime Minister’s Office, the Social Exclusion Unit and other Government Departments eg the Department for Education and Employment and the Department of Health.

The first seminar will look, in particular, at which children are most at risk of becoming socially excluded. The second seminar in February will look at the effectiveness of different forms of early intervention to help children and how services can be delivered effectively.

The press release issued by HM Treasury on 14 January 1998.

“Pay increases must be affordable right across the board, from boardroom to shop floor, in both the private and public sectors, if we are to bring about the long term stable growth and prosperity we all want to see”.

That was the clear message from Alistair Darling, Chief Secretary to the Treasury, speaking tonight at an event organised by Ernst and Young.

He added:

“Since we took office we have begun to put in place the building blocks we need to bring about the long term prosperity we all want to see.

Our strategy is based around building a stable framework for fiscal and monetary policy, encouraging investment in our economic infrastructure, the education and skills of our workforce and rebuilding the welfare state around the work ethic.

This means we have to take tough decisions now. We are not going to repeat the mistakes of the past, where the economic signals were misunderstood and an unsustainable boom led to bust.

Central to this aim is the need to make sure pay increases are fair and affordable, in both the public and private sectors.

We are determined to deliver long term growth and prosperity.”

The press release issued by HM Treasury on 14 January 1998.

The Financial Services Authority (FSA) must be cost effective in order to protect the consumers’ purse and the competitiveness of the UK financial services industry, and that goes hand in hand with providing effective protection for the consumer, the Economic Secretary Helen Liddell said today.

Addressing the Law Society Commerce and Industry Group the Minister said that the FSA will be required to publish its proposed budget for consultation at the same time as it publishes its proposals for fees.She said:

“Not only must the FSA use its resources effectively, it must also show the public and the industry that it is doing so.

“After all, the costs of regulation are met by the firms under regulation. This means they are ultimately passed to consumers in the form of higher charges or lower  returns. Firms themselves need to know that the UK will remain a competitive place to do business.”

The Minister also announced that where the FSA introduces a new rule or change to an existing one, it must consult the public and practitioners by publishing the proposals. Their proposals will include estimates of costs and benefits of the proposals and other options. Mrs Liddell said:

“This statutory requirement to publish cost-benefit analysis will allow much more focussed consultation than sometimes happens now. Indeed firms will be able to challenge the FSA’s estimates if they believe they are inaccurate.”

The Minister stressed this goes well beyond the current requirement upon the Self-Regulatory Organisations (SROs) to take account of the costs of compliance.

The press release issued by HM Treasury on 24 February 1998.

The UK is leading the way in Europe and around the world in its partnership approach to using private finance capital and expertise in the provision of a wide range of public infrastructure services, Paymaster General Geoffrey Robinson said today.

Speaking to a Public Private Partnerships conference in London, Mr Robinson said that countries from Europe and from further afield such as Australia, Brazil, China, South Africa, Taiwan and United Arab Emirates were interested in what the UK government had achieved in developing public private partnerships.

Mr Robinson said:

“The British approach to gathering private and public sectors engaged in effective partnerships is the way forward into the next millennium. Many countries have already contacted the British government to share best practice and experience with contracts in areas as diverse as hospitals, schools, light rail schemes, IT systems and government accommodation.

“The Government’s success in developing its initiative is breeding success both at home and abroad.  The British model is being taken up by many governments around the world.  They realise that the newly invigorated PFI is bearing fruit and want to learn from our experiences.

“The development of PFI and PPPs abroad is providing an enormous additional market for those British companies already familiar with, and well versed with the concept.”

The press release issued by HM Treasury on 22 February 1998.

G8 Agrees New Agenda

A new international employment agenda to promote jobs and tackle unemployment and social exclusion has been agreed by the G8 countries at a Conference on Growth, Employability and Inclusion in London this weekend.

Commenting on the Conference, UK Chancellor Gordon Brown said:

“The G8 has set itself a new agenda based on seven principles for action. It is now important that the principles are turned into practice. I am delighted that the G8 backed my suggestion of presenting job Action Plans to the Birmingham Summit of Heads of State and Government in May.

“A new employment agenda is vital given the background of intensified global competition and technological advances we all face as the 21st century approaches.”

UK employment policies were also given strong endorsement at the Conference. Education and Employment Secretary, David Blunkett said:

“G8 members share the priorities we have set for our domestic employment policy – promoting employability and adaptability and tackling skill shortages. For the first time at an international summit the key principle of lifelong learning was specifically endorsed. It is clear we have to deliver on education, skills and employment.

“We all face the challenge of change. We need to improve the skills of everyone in the labour market and to bring those excluded from employment into the world of work.”

Seven broad principles have been agreed to guide the action the G8 countries will take. These are:

• sound macroeconomic policies;
• structural reforms to labour, capital and product markets;
• fostering entrepreneurship and an economic climate favourable to the growth of small and medium-sized firms;
• enhancing employment, education and training including for the young, long-term unemployed, lone parents and the disabled;
• reforming tax/benefit systems to provide work incentives to foster growth and employment and the successful transition from welfare to work;
• encouraging lifelong learning; and
• promoting equal opportunities and combatting discrimination.

The Conference agreed the seven principles to guide employment policy and Heads of State and Government will be asked to endorse them at the Birmingham Summit in May.

In conclusion, the Chancellor said:

“We must ensure that the important messages of this Conference are heard by policy makers around the world and
that we continue to share best practice.”

The Chancellor said he would:

• continue to use the UK’s chairmanship of the G8 and
  Presidency of the EU to advocate the new agenda on employment and economic reform;
• write to the Heads of International Financial Institutions including the IMF and OECD to report on policy initiatives agreed at the Conference; and
• carry out an examination of how help can be given to entrepreneurs and SMEs, and enhance access for small firms to venture capital.