Category: Press Releases

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

Further steps towards the full integration of financial services were announced today by the Chief Secretary, Stephen Byers.

From January 1999 the Financial Services Authority (FSA) will take responsibility for supporting the Building Societies Commission (BSC), the Friendly Societies Commission (FSC) and, in relation to credit unions, the Chief Registrar of Friendly Societies, and for acting on behalf of the Treasury in the conduct of insurance supervision under the Insurance Companies Act.

The regulators are already working closely together with the FSA developing the new regulatory structure and contributing to the draft Financial Services and Markets Bill published today.

Chief Secretary, Stephen Byers said:

“This transfer will promote early integration of financial regulation and help achieve the benefit of a single regulatory culture ahead of the legislation. This transfer in no way affects the consultation we have started today on the draft Bill.”

A Contracting Out Order under the Deregulation and Contracting Out Act 1994 will pass the functions of the Insurance Directorate to the FSA. Treasury Ministers will still remain accountable to Parliament for insurance functions.

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

Proposals to modernise and simplify the structure of the UK’s financial regulatory structure were published today by the Chief Secretary, Stephen Byers.

Under the draft Financial Services and Markets Bill the Financial Services Authority (FSA) will become the single regulator for the UK’s financial services industry, backed by law.

Publishing the Bill, Mr Byers said:

“This bill will allow the creation of a financial regulatory system that is independent, flexible and accountable to those regulated by it and to the consumers that it protects.

“A single regulator will remove the scope for duplication, gaps and inconsistency that affects the current system.

“In the light of the personal pension mis-selling scandal we also want to see an improvement in standards so that customers are better protected and better informed about the products  they buy.

“Financial services is an important and internationally competitive sector of the economy. These reforms are the opportunity to apply best practice across the board and to  shape a financial regulator that will maintain confidence in UK markets at home and abroad, setting an example for  financial regulation around the world.

“We have consulted widely in putting this draft bill together and we are now delivering on our commitment to publish it in  the summer.  There will now be a further period of public consultation on the detail of the draft Bill.  I also  anticipate – and welcome – the involvement of the Treasury  Select Committee in the consultation process.  This  consultation is an important part of the process to ensure that the new system is efficient and effective. We want to lay the  foundations of a regulatory system that will last well into  the 21st century.”

The main features of the Bill include:

• new statutory objectives for the FSA to improve transparency and accountability. The FSA will be required to report annually on its achievements against the objectives of market confidence, public awareness, the protection of consumers and the reduction of financial crime.
• a single set of powers for the FSA. This will allow the regulator to authorise all those kinds of financial services business requiring regulation. It will have flexible powers to make rules governing regulated activities, subject to consultation and cost-benefit analysis. It will have full powers, where necessary, to investigate and intervene in authorised firms’ activities and to discipline, including the power to fine.

• powers for the Treasury to change the scope of what is regulated. For example, the Council of Mortgage Lenders’ code of practice is to be reviewed in 1999. If required, it would be possible to make mortgages subject to regulation under the Bill.
•  a new independent appeals tribunal. This will come under the Lord Chancellor’s Department and will give and effective right of appeal for those affected by the FSA’s decision.
• single ombudsman and compensation schemes to ensure improved access for consumers by providing single points of entry and improved public profile. This will reduce the scope for confusion about the roles and responsibilities of different schemes.
•  a new regime to regulate financial promotion. The draft Bill includes a single framework to cover existing activities such as issuing advertisements and making unsolicited ‘cold calls’, taking account of changes in technology.
• new civil fines for market abuse which will fill a gap in the current framework and will complement, not replace, the criminal regime.
• the recognition of investment exchanges and clearing houses. TheFSA will continue to be able to recognise the status of such bodies.
• statutory oversight of Lloyd’s. New FSA powers will provide, for the first time in many areas, a major element of external regulatory accountability.

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

“Britain needs more world-class management.” This was the message from the fifth in the series of seminars aimed at boosting UK productivity hosted by the Chancellor, Gordon Brown, and the Secretary of State for Trade and Industry, Peter Mandelson. The seminar was addressed by CK Chow and Sir Christopher Hogg.

Setting out the agenda for today’s meeting, Gordon Brown said :

“Improving the quality, drive, and ambition of British management lies at the heart of meeting the national challenge we have set ourselves – to raise the productivity of the British economy. Without outstanding management at every level and in every sector of the economy then we will struggle to invest, we will struggle to innovate, and we will struggle to compete internationally.

“Too many of our brightest and best choose to avoid management as a career. We need to ask ourselves why industry fails to attract them.

“British industry has recognised the challenge. Throughout this series of high-level seminars their representatives have consistently highlighted the critical role of management. Today’s seminar therefore addresses the subject directly and represents a first step towards taking up the challenge.”

Mr Mandelson said:

“Management has a vital role to play in raising Britain’s competitiveness. Spreading best practice is a challenge for large and small firms, and is a key element of my Department’s work. Together with partners such as the CBI, TEC/Business Links and the Management and Enterprise NTO, we shall continue to seek to improve practices and business performance.

“But we must also look to the managers of tomorrow. Schools and business have a responsibility to foster the spirit of enterprise in our young people. They hold the key to building the world class management this country needs.

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

Helping more people on low incomes gain access to financial services is the main aim of a Taskforce established today by the Economic Secretary, Helen Liddell.

The Taskforce, chaired by Fred Goodwin, Deputy Group Chief Executive of the Royal Bank of Scotland, will look at ways banks can help credit unions. Its remit will be to:

• explore ways in which banks and building societies can work more closely with credit unions to increase their effectiveness;
• look at ways to widen the range of services that are provided to credit union customers; and
• encourage the continued expansion of the movement.

Its role will be to identify best practice in these areas and how this can be promoted more widely as well as proposing new areas for co-operation.

Helen Liddell said:

“Credit unions have an important role as a place for savings and source of low cost credit for the less well-off. They can also provide a first rung on the ladder of financial services for young people.

“We want to build on that. If banks and credit unions work together we could see more people having access to bank accounts and credit who do not presently do so.”

The Taskforce membership will be made up of senior representatives from banks, building societies and the credit union movement. The Treasury will provide the secretariat.

The first meeting will be held around September. The Taskforce will be asked to produce a first report by the turn of the year and a final report by the middle of next year.

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

Business is responding positively to the need to prepare for the launch of the single currency on 1 January 1999, but more needs to be done by small businesses. These are the main findings of the first six-monthly report on preparations for EMU from the Treasury’s Euro Preparations Unit (EPU), Getting ready for the euro: first report July 1998.

The EPU was established in December 1997 to provide support for businesses in preparing for the euro. It has rapidly established a team involving private sector representatives as well as Treasury and DTI staff with expertise in dealing with business.

Welcoming the report, Lord Simon said :

“Preparing for the launch of the single currency on 1 January 1999 must be a priority for British businesses large and small. Today’s report sets out what has been done so far to help businesses to ensure that they are not behind the competition when the euro arrives.

“I am pleased to see all sectors of business responding to the call to help companies – particularly small businesses – prepare for the launch of the euro. This first EPU report sets out the progress made over the past six months.

“The report looks at progress in a range of business areas, including the financial, retail,tourism, manufacturing, IT, legal and public sectors.

“It also looks at what the Government is doing to help business and the public sector prepare. We have already achieved a great deal. We have sought to find out what businesses themselves see as their priorities through a nationwide programme of seminars, then acted to provide the information which they see as the key to enabling businesses to ready themselves. Businesses can now access this directly through a telephone information line and an internet website.

“As well as continuing to produce factsheets and other material tailored to particular business requirements, we shall build on our face to face dialogue with local business through twelve regional forums which will carry forward the programme of sharing information and experience so that all can benefit.

“The business awareness campaign will continue. This week advertisements targeted at small and medium sized enterprises are appearing in national newspapers, and a television campaign and direct mail contact with 1.6 million businesses will begin in early Autumn.

“The report also summarises some of the approaches being taken in the other EU countries, so that we can learn from their approach.

“But the message is not getting across to everyone, particularly to small businesses. The first six months of the EPU has been marked by solid progress. We shall continue to build on this through the next six months and beyond.”

Today’s report sets out progress achieved and future strategies to :

assess business awareness and preparedness for the launch of the euro on 1 January 1999; help business achieve readiness by 1 January 1999;

look at what needs to be done to prepare to give the UK the option of joining the single currency if the essential tests set out by Government are met in the future.

The press release issued by HM Treasury on 20 July 1998.

The 1000th participant of the Chancellor’s Financial Sector Scheme was this evening welcomed by Chancellor Gordon Brown and Economic Secretary Helen Liddell at a reception at No. 11 Downing Street.

The Scheme, which since 1992 has offered work placements to young high-flyers from Russia and the other 14 successor states to the Soviet Union, has chosen Alexander Antipov, aged 25 from Moscow, as its 1000th  participant. Mr Antipov has been placed with Scudders Investment UK to research international bond markets.

Thanking the 500 companies who have taken part in the Scheme, Chancellor Gordon Brown said:

“This Scheme has been a major contributory factor in the development of the economic future of Russia and its neighbours. It is an excellent example of public and private sectors working together, building relationships between high-flying individuals and leading British companies. Alexander is typical of the high calibre of all those who have been involved in the scheme since it began, and I am delighted to welcome him to Britain.”

Former participants in the Scheme have risen to positions of prominence in their home countries.  One of the first participants who came to the City in 1992 and worked at Royal Sun Alliance is now the Deputy General Director of Ingosstrakh, one of Russia’s top five insurance companies.  Another participant who did a work placement at Allied Dunbar in 1995 is now on the Board of the National Reserve Bank where he heads up the Treasury function, while another is a financial advisor to President Yeltsin’s Government.

A similar scheme for China has recently been announced by the Secretary of State for International Development, Clare Short, following the success of the Chancellor’s  cheme.  The first participants in the China Financial Training Scheme are expected
to arrive in the UK in 1999.

NOTES TO EDITORS

Chief Executives of over 40 major City companies will attend the reception at No 11 as will most of the Ambassadors from the states of the former Soviet Union.

The Chancellor’s Financial Sector Scheme started in 1992 following an offer made by the then Chancellor, Norman Lamont to President Yeltsin to help Russia make the transition to a market economy.  The Scheme was devised to offer short work placements to young high-flyers from Russia and the other 14 successor states to the Soviet Union.  In the early days of the Scheme, most participants did their work placements in the City in the financial sector.  More recently, the Scheme has broadened out to include legal and accountancy work and to take in other regions of the UK.

The Scheme is funding through DFID’s Know-How Fund, and is managed by the British Council and Digby Morgan Consulting.

The press release issued by HM Treasury on 9 July 1998.

Helen Liddell speaks to Local Government Association Conference.

Local authorities have a key role to play in preparing their local business communities and must also prepare themselves for the introduction of the euro on 1 January 1999, Economic Secretary Helen Liddell said today.

Speaking at the Local Government Association Conference in Bournemouth the Minister said that as part of the public sector, local authorities were vital in ensuring the UK is ready for the introduction of the euro. She said:

“It is vital for local authorities to encourage local business communities to think strategically about theeuro, to prepare for its launch, and fit that into the changing economic environment.”

But she also emphasised that they themselves must be ready, particularly in the area of procurement policy. The Minister said:

“Public procurement policy will be a key area for consideration. Suppliers may expect to invoice in the euro. If you insist on paying in sterling there may be a premium to pay.

“Many of you will also be involved in public private partnerships, and other consortia. There may be pressure to deal in euros in some of these. It is vital to assess the implications.”

Mrs Liddell called on local authorities to pay their full part in the twelve regional forums that have been set up to identify key regional issues arising from the introduction of the euro. She said:

“We are setting up regional groups across the country to bring together key strategic partners with an interest in gearing UK business up to the challenge of the euro. I urge you to play a full and active part in ensuring they are a success.”

The Minister also pointed to the creation of a working group which brings together key local government representatives, chaired by the Department of Environment, Transport and the Regions. The aim of the group is to ensure that ongoing preparations and information about the euro is effectively communicated to local government.

On a national level, the Government was playing its part in preparations, including:

the creation of a Business Advisory Group to look at private sector preparations and a Euro-Coordinators Group to examine preparations in the public sector;

the Treasury Euro Preparations Unit which has already produced publications, set up a telephone help-line and a website; and

preparations for an advertisement campaign on television and in newspapers and journals to raise awareness and help make sure the UK is ready for the euro.

The press release issued by HM Treasury on 7 July 1998.

Independent Financial Advisers (IFAs) were today blasted by the Economic Secretary Helen Liddell for their lack of progress in sorting out personal pensions misselling.

The Minister called in 30 senior representatives of IFAs and IFA networks and told them she was very concerned about the slow progress in the sector. IFAs were seriously lagging behind the major pension firms who had made big strides in sorting out their pensions cases.

Mrs Liddell said:

“Enough is enough. My patience is exhausted by the lack of progress of IFAs. I am amazed at the attitude of firms who seem to think their inaction is defensible, and when faced with phase 2 of the review choose to blame everyone except themselves.

“People have lost out as a result of having been sold products, which were wrong for them. IFAs have a clear responsibility to sort out whether any of their customers deserve compensation and provide it where it is warranted Where there was misselling, those who took the profit should now face the pain.”

The meeting followed on from an announcement yesterday by the Personal Investment Authority (PIA) that 41 IFAs were being disciplined for failings connected with the pensions review. The Minister said:

“I hope this action by the PIA makes it absolutely clear to all IFAs that discipline is a real prospect if they fail to deal with their cases. The review must be tackled with professional diligence and businesslike rigour. Nothing less will do. We are talking about people’s life savings and their future welfare.”

The Minister called into question the future of the IFA sector and said she would be keeping a careful eye on IFAs’ progress over the next few months and said if actions was warranted it would be taken. She said:

“In the long term, if the IFA sector fails to put its house in order, and genuinely command the trust of customers, it will not only call into question the viability, but possibly the desirability, of the current industry structure.”

Mrs Liddell advised the public to be very careful when using an IFA. She said:

“In my opinion anyone thinking of taking advice should check out the IFA thoroughly. Check their attitude to the consumer protection that regulation provides, and to putting right past problems – including their progress with the pensions review. Ask if they have ever been fined or disciplined by the regulators.”