Category: Press Releases

The press release issued by HM Treasury on 11 December 1997.

All pensions firms, including the thousands of firms that are not being individually monitored by the Treasury, must get their act together and speed up their processing of cases, Helen Liddell, Economic Secretary, said today.

Mrs Liddell spoke after she published the latest monthly progress statistics in response to a Parliamentary question.  This revealed the position at the end of November for each of  41 pensions companies which together account for about four out of every five cases for review.   The figures show continuing variation in firms’ performance, with many  firms making headway, but too many still lagging behind.

Publishing the figures Mrs Liddell said :

“There is no cut-off point that makes a firm too small to be expected to honour  the personal pensions review.  Each and every firm – from the large household names to the smallest IFA – must get on with the urgent task of processing cases and making redress where it is due.  No-one is off the hook.

“Although much of the focus in the press has been on larger firms, I have not forgotten about the thousands of smaller firms, and neither have the regulators.”

Commenting on the figures, Mrs Liddell said :

“Too many people are still facing long delays in getting the redress that is due to them.  A few firms are now making very promising progress, but there is still  a long way to go for most of the firms listed, and sadly some have still not progressed beyond the initial stages.

“Regulatory discipline is fast becoming a real prospect for some companies.   It is now up to each firm to make every effort to make rapid progress so that the powers I outlined in the House of Commons last month do not need to be used.”

The press release issued by HM Treasury on 10 December 1997.

Up to date figures show that the Government is delivering on  ts spending promises by reallocating money to key priority areas, while sticking to the Control Total figures for this year and next, Chief Secretary Alistair Darling confirmed today.

He commented:

” We promised to stick to the existing spending ceilings for the first two years of this Parliament and that is what we are doing, whilst redirecting resources to key areas such as hospitals and schools as we said we would. This is a Government which is keeping its promises by making a substantial difference to the pattern and direction of public expenditure, while putting the public finances on a sound footing.”

Detailed figures contained in a written Parliamentary Answer show that the Government has already provided:

• an extra 1 billion Pounds for schools next year;
• an extra 1.2 billion Pounds for the NHS next year;
• an extra 300 million Pounds for patient care in the NHS this winter, paid for by switching savings from the Defence budget and from the nuclear industry, and from efficiency savings; and
• 190 million Pounds this year and next, to provide all pensioner households with a winter fuel bonus, paid for from savings on our net contributions to the European Union.

The Government has also fulfilled its commitments to fund key priorities by transferring resources from programmes which benefited only the few to those that benefit the many:

• it has passes legislation to phase out the Assisted Places Scheme, releasing money to cut class sizes to 30 or less for all five, six and seven-year-olds; and
• the Nursery Vouchers scheme will be ended from April 1998, releasing money for new local partnerships to deliver a nursery place for all four-year-olds.
• 100 million Pounds has been saved from NHS red tape for front line patient care, 10 million Pounds of which is going to ensure that all women have speedy access to breast cancer services. There will be more savings next year.

In addition to this spending within the Control Total, the Windfall Tax on the profits of the privatised utilities will fund the key elements of the Government’s Welfare to Work
programme over the lifetime of this Parliament:

• 3.1 billion Pounds for the New Deal for Young People to  give every young person who has been unemployed for six months the opportunity to work or train
• 400 million Pounds for the New Deal for the Long Term Unemployed to give new opportunities to every person unemployed for two years;
• 1.3 billion Pounds for the New Deal for Schools, funding a programme of investment in new technology and repairing school buildings;
• 225 million Pounds for the New Deal for Lone Parents; and
• 195 million Pounds for the New Deal for the Long Term Sick and Disabled.

The Chief Secretary gave details of the spending plans for each Department within the Control Total in answer to a Parliamentary Question from Stephen Timms MP. A copy of the Question and Answer are attached.

The press release issued by HM Treasury on 10 December 1997.

Private sector bidders are being invited to provide in-depth training in Private Finance Initiative (PFI) project management, project finance and negotiating skills for civil servants, Paymaster General Geoffrey Robinson announced today.

In the the third Public/Private Partnership (PPP) of its own, the Treasury’s Private Finance Taskforce is seeking tenders for a partner to re-focus Civil Service training and help create PFI experts in the public sector.

Commenting on the announcement, made in response to a recommendation of the Bates Review of PFI, Mr Robinson said :

“In the past, a good job has been done training civil servants in the basics of PFI. But it is essential that Government Departments build on that to train and create their own specialists to ensure the best performance and value for money from PFI projects.

“With a growing number of PFI projects signed or close to signature, Departments are keen to benefit from training events delivered by PFI practitioners with real and extensive experience in the field. The Treasury Taskforce has worked together with other Departments to identify specific training requirements, which we are now seeking a partner to help deliver.

This is a welcome step forward which will help to ensure that high quality PFI projects are delivered efficiently and effectively.”

The press release issued by HM Treasury on 8 December 1997.

The Treasury today published the principles which will govern changes to the Block budgets for the Scottish Parliament and National Assembly for Wales after devolution. The Government set out its position clearly in the White Papers and what is published today follows on from that.  Chief Secretary, Alistair Darling, said:

“The paper published today follows the principles which the Government set out in the devolution White Papers.

“The Government’s decision to publish these principles now shows our commitment to openness.  The Block arrangements and’ Barnett’ formula have operated for almost 20 years, but the principles underpinning them have never been spelt out in public before.

“We are publishing these principles now to inform debate during the passage of the Scotland and Wales Bills.”

PRINCIPLES TO GOVERN DETERMINATION OF THE BLOCK BUDGETS FOR THE SCOTTISH PARLIAMENT AND NATIONAL ASSEMBLY FOR WALES

1.  The Government set out its position on the Block and formula arrangements in its White Papers on Scottish and Welsh devolution published in July (Cm 3658 and Cm 3718 respectively).  The Scottish White Paper, Scotland’s Parliament, said:

“In practice these arrangements, based on the Block and formula, have produced fair settlements for Scotland in annual public expenditure rounds and have allowed the Secretary of State for Scotland to determine his spending decisions in accordance with Scottish needs and priorities.  They have largely removed the need for annual negotiation between the Scottish Office and the Treasury.  The Government have therefore concluded that the financial framework for the Scottish Parliament should be based on these existing arrangements with, in future, the Scottish Parliament determining Scottish spending priorities.”

The Wales White Paper, A Voice for Wales, said:

“The Government proposes that the financial arrangements for the Assembly will largely replicate the existing system.

Annual changes to the Welsh Block will be calculated by the population-based formula used at the moment.  These arrangements based on the Block and formula have worked in practice, producing fair settlements for Wales in annual public expenditure rounds.”

2.  The Scottish Parliament and National Assembly for Wales will therefore have block budgets, which they will be free to allocate in response to local priorities among the functions under their control and for which they will be accountable to local people.  This note outlines the principles set out in the White Papers and describes how they will govern changes made to these block budgets under devolution.

Settling Scotland’s and Wales’ shares of UK public expenditure: the “Barnett” formula

Existing position

3.  All UK tax revenues are pooled.  Decisions about the allocation of UK public expenditure are made in the light of the Government’s judgement of relative priorities and relative needs.  Changes to the shares of public expenditure available to the Secretaries of State for Scotland and Wales are determined by a formula linked to changes in provision for equivalent spending programmes in England.

4.  This formula, which has operated for almost 20 years, is known as the “Barnett” formula.  It provides that, in settling new plans for public expenditure, Scotland and Wales should receive a share of the planned cash changes in provision for equivalent public services in England which is proportionate to their population. In other words, Scotland’s and Wales’ shares of changes in relevant planned spending in England are the same proportions as their populations represent of England’s population.  The formula applies only to changes in spending plans, not to the underlying baselines which remain unaffected.  The formula also applies only to changes in the block budgets: expenditure on agriculture in Scotland and Wales, and expenditure on nationalised industries in Scotland, is outside the block budgets at present and is settled separately.

After devolution

5.  These arrangements will continue under devolution, with only minor adjustments.  Changes to the block budgets for which the Scottish Parliament and the National Assembly for Wales will become responsible will continue to be determined by a formula linked to changes in provision for the equivalent spending programmes in England.  The formula will continue to be based on relative populations.  The spending for which the devolved administrations in Scotland and Wales will assume responsibility is set out in the annexes to this note.

6.  The Government intends that these population shares will be re-calculated annually on the basis of the latest population estimates for England, Scotland and Wales published each year by the Office of National Statistics.  The population ratios will next be updated for the purpose of determining changes in the Scottish and Welsh block budgets for 1999-2000.

7.  The Government intends that this population-based formula will apply to changes in almost all the expenditure under the control of the Scottish Parliament and National Assembly for Wales.  It will not apply to changes in agriculture programmes 100% funded by the EU.   The Government will also want to consider whether this approach or another formula is appropriate in relation to provision for Council Tax Benefit and Housing Benefit which will both come within the Scottish Block for the first time after devolution; Housing Benefit is already within the Welsh Block, but, as in Scotland, Council Tax Benefit will come within the Block for the first time.  Adjustments to the Scottish and Welsh block budgets not determined by the Barnett formula

8.  There are a number of circumstances in which the block budgets under the control of the Secretary of State for Scotland and Wales are open to adjustment other than on the basis of the Barnett formula.  These exceptions will continue to apply under devolution.
Adjustments may be made where:

a.  the UK Government decides to make a uniform general adjustment to public expenditure programmes;

b.  action taken by the Scottish or Welsh administrations in a devolved area has knock-on costs for the UK Government or vice versa.  The block budgets may be adjusted downwards to for costs incurred by the UK Government as a result of the actions of the devolved administrations, or upwards to compensate the devolved administrations for costs which they incur as a result of actions by the UK Government and are not allowed for through the operation of the Barnett formula.  The block budgets will not however be adjusted upwards by reason of additional costs incurred as a result of actions by the UK Government which the UK Government is expecting English departments with parallel responsibilities to absorb within existing spending plans;

c.  the devolved administrations receive capital receipts as a result of a privatisation or major change in the role of the public sectors in Scotland or Wales.  In these circumstances, the block budgets may be adjusted downwards in the year in which the receipts occur to reflect the continuing interest in these receipts of UK taxpayers as a whole who financed the underlying capital assets in the past.  Proceeds from the sales of other capital assets under the control of the Scottish Parliament or National Assembly for Wales will be available to be re-cycled within Scotland or Wales;

d.  the devolved administrations receive significant trading surpluses from the commercial exploitation of publicly-funded  assets: the UK Government may take these surpluses into account settling block budgets;

e.  local authority self-financed expenditure grows more rapidly than equivalent expenditure in England over a period and in such a way as to threaten targets set for public expenditure as part of the management of the UK economy.  In such circumstances it will be open to the UK Government to take the excess into account in  considering the level of the block budgets.

9.  These principles concern the determination of changes to the block budgets under the control of the Scottish Parliament and the National Assembly for Wales,  not the level of Westminster grant to support these budgets.  The latter may also be affected by changes in the level of self-financed items of expenditure – local authority capital expenditure funded by borrowing, for example – which currently count towards the lock Budgets.

In-year changes to the block budgets for Scotland and Wales

10. The arrangements outlined above apply to changes in the plans for expenditure in future years in Scotland and Wales.  These paragraphs deal with changes in-year to the budgets arrived at under the arrangements outlined above and in particular with access to the UK Reserve for the devolved Scottish and Welsh administrations.

11. The general presumption, as at present, is that the Scottish and Welsh administrations will contain in-year pressures on their budgets by re-allocating priorities within their Blocks, not through access to the UK Reserve. Access to the Reserve may however be considered at the discretion of the UK Government in exceptional circumstances and specifically where:

a.  the Government is making available additional provision in-year for equivalent services in England in order to cope with exceptional circumstances affecting  the UK as a whole unforeseen at the time spending plans for the year concerned were settled; and

b.  Scotland or Wales face exceptional and unforeseen domestic costs – arising, for example, from a natural disaster – which cannot be reasonably absorbed within the planned block budgets without major dislocation to existing services.

Revising these principles

12. As noted above, the formula will be updated annually to take account of population changes and from to time to take account of other technical changes.  Any more substantial revision would need to be preceded by an in-depth study of relative spending requirements and would be the subject of full consultation between the devolved administrations and the UK Government.

The press release issued by the Treasury on 5 December 1997.

Business readiness for trading in the single currency after 1 January 1999 will be boosted by a new Euro Preparations Unit (EPU) within the Treasury, Chancellor Gordon Brown announced today.

Announcing the setting up of the EPU, which will also involve the Department of Trade and Industry, he said :

“Both Government and business must prepare intensively for EMU. The changes affecting British business within its largest export market are just thirteen months away. Together, we must be ready to take advantage of the opportunities and prepare for the challenges which lie ahead.

“The Government is committed to help business prepare to compete successfully against other firms using the euro from January 1999. We will also be working with business on what must be done to prepare for the option of joining the single currency  ourselves in the next Parliament.

“To achieve these aims we need resources dedicated to the task. The new Euro Preparations Unit I am announcing today marks a significant step forwards towards providing the assistance business requires.”

Building on work already in progress, the EPU is intended to be fully operational early in the New Year. The Unit will include around 15 members drawn from the Treasury, DTI and other Government Departments and business.

Reporting in first instance to Lord Simon,  it will support the existing Standing Committee on preparations for EMU and stimulate and steer business and public authority  preparations.

The press release issued by the Treasury on 3 December 1997.

“We want to encourage people to save and invest. We want to build the savings culture. That is good for individuals. It is good for businesses and it is therefore good for the country as a whole,” the Chief Secretary Alistair Darling said at the Proshare Annual Awards dinner in London tonight.

Highlighting the new Individual Savings Account he said:

“Everyone should have the opportunity to provide for themselves – whether they are saving for their future, for their retirement or simply for a rainy day.

ISAs are aimed at encouraging everyone to save. They will be simple, flexible and accessible – something everyone wants and will get.

Our objective is to develop a tax system for savings which benefits the many and not just the few. Half the adult population don’t save. So everyone should have the opportunity to save in a tax-favoured environment, however small the amounts they are able to put aside.

As we promised in our manifesto the ISA builds on the experience of PEPs and TESSAs. That is why investments in ISAs will be tax-free.

We spend 1.3 billion Pounds on tax relief under the present system – rising to 1.7 billion Pounds in 2001-02. Much of this goes to those who can already afford to save significant amounts and to tie their savings up for long periods of time. That isn’t an efficient use of public money. Our objective is to bring in new savers.

Far better and fairer to use the existing provision to bring the benefits of ISAs to a much wider population of savers – possibly encouraging 6 million new savers. That is right in principle and it is fair.”

On investment, he added:

“We must expand our economic capacity and create the right climate for high levels of investment. That is why we have reformed the corporation tax system, removing the distortions that hinder long term, high quality investment. In the last Budget we cut
corporation tax to the lowest level ever. And we intend to cut the main rate again when ACT is abolished in 1999. This further enhances our position as the country with the lowest rate of corporation tax of any major industrialised country and one of the lowest tax burdens on business.”

The press release issued by the Treasury on 3 December 1997.

The UK Government fully supports the programme of economic and financial reform announced today by Korea in agreement with the International Monetary Fund (IMF), Chancellor Gordon Brown said today.

The Chancellor said :

“The UK Government fully supports the IMF programme which has been agreed by  Korea. This programme will involve approximately $21 billion of IMF finance, along with financing from the World Bank and the Asian Development Bank.

“In addition, the UK, together with a number of other countries, has agreed to consider the provision of further financial support for Korea.  This will be made available only  if unanticipated circumstances create the need to supplement resources provided by the International Financial Institutions, while Korea remains in compliance with the IMF arrangements. The UK is willing to consider a contribution of up to $1.25 billion.

“Agreement with the IMF on Korea’s programme of reform marks an important step in restoring confidence in Asia, and in helping safeguard the stability of the world financial system.

“As a major IMF shareholder, the UK believes that acting with the support of the IMF is the right way for the Korean authorities to have handled their financial situation. And as a major World Bank shareholder we support its crucial role in restructuring the
financial sector of the Korean economy.

“As an open economy, the UK benefits from substantial trade and investment flows with Asia and the rest of the world. Global financial stability is crucial if we are to deliver sustained economic prosperity and job creation at home.

“We have a strong national interest in working with our international partners and the IMF to help Korea reform its economy and overcome its present financial difficulties. I welcome today’s announcement.”

The press release issued by the Treasury on 3 December 1997.

The membership and terms of reference of the committee which will consider possible memorials to Diana, Princess of Wales, was announced today by the Chancellor, Gordon Brown.

The Chancellor, who is to chair the Committee, said:

“Diana, Princess of Wales was greatly loved, and I consider it an honour to have been asked by the Prime Minister to chair this important committee. The  public have responded magnificently to my request for proposals for commemorating the work of the  Princess of Wales.  Every one of the 7,000 proposals so far has been carefully read and every one will be taken into account.”

NOTES FOR EDITORS

The Prime Minister asked the Chancellor to chair a committee To consider possible memorials to Diana, Princess of Wales.   The Chancellor’s new committee is to be made up of:

• the Lord Chamberlain, Lord Airlie, representing the
  Royal Household;
• Lady Sarah McCorquodale, representing Earl Spencer
  (who will also attend meetings when he is in the
  country) and the Princess’s family;
• Lord Attenborough;
• Mr Paul Burrell;
• Baroness Chalker;
• Diane Louise Jordan;
• Mr Anthony Julius;
• The Hon Rosa Monckton;
• Jane Tewson.

Its terms of reference are:

“To advise HM Government as to how the life of Diana, Princess of Wales, can best be commemorated, complementing the work of the Diana, Princess of Wales, Memorial  Fund. In taking forward this work, the Committee will take into account the views of   members of the public, and have regard to the charities and causes which the Princess supported.”

The press release issued by HM Treasury on 2 December 1997.

The first edition of a new quarterly report providing greater detail of the UK’s holdings of foreign currency and gold was published jointly today by the Treasury and the Bank of England.

The report shows for the first time the size of the UK’s forward foreign exchange position and the currency composition of the UK’s foreign currency assets.

On publication of the report the Economic Secretary, Helen Liddell said:

“This report is another key step in the Government’s drive towards greater transparency in economic policy making.

“Greater openness improves the quality of economic decisions, strengthens their legitimacy and credibility, and reduces the likelihood of unpredictable and counterproductive reactions in financial markets.”

The report shows that the level of the Government’s reserves, including the forward book was $42.3 billion at end-September, an underlying increase of $50 million on end-June. Net forward holdings of foreign currency were $1.24 billion at end-September.

The level of the Bank of England’s holdings of foreign currency and gold was $1.98 billion at end-September.