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HISTORIC PRESS RELEASE : Ministers to network on social exclusion [December 1998]

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

An expanded Network of Ministers to tackle social exclusion was welcomed today by the newly appointed Chair, the Chief Secretary to the Treasury, Stephen Byers on the first anniversary of the establishment of the Social Exclusion Unit (SEU).

The Network will be made up of Ministers who work closely with SEU and they will act as champions to help guide and present its work. It will now include Ministers from Scotland, Wales and Northern Ireland.

Mr Byers said:

“If we are to achieve our aim of creating a modern Britain and a decent society there must be no forgotten people. That is why tackling social exclusion is a priority for the government.

“In it’s first year the Social Exclusion Unit has made good progress and action is now being taken to cut school exclusions and truancy; reduce rough sleeping and tackle the problems faced by poor neighbourhoods.

“We have established a new way of working across Whitehall. By breaking down the traditional departmental barriers we have been able to respond in a more positive and practical way to the needs of individuals and communities.

“The Unit is a vital part of our programme to modernise government. Providing joined up solutions to deep seated problems is a key aspect of democratic renewal”.

NOTES TO EDITORS

1. The membership of the Ministerial Network on Social Exclusion was announced today in a written answer from the Prime Minister to Robin Corbett MP. It is:

Stephen Byers HM Treasury (Chair)

Hilary Armstrong Department of Environment, Transport and the Regions

Paul Boateng Home Office

John Denham Department of Social Security

Lord Falconer Cabinet Office

Peter Hain Welsh Office

Tessa Jowell Department of Health

Geoffrey Robinson HM Treasury

Barbara Roche Department of Trade and Industry

Lord Sewel of Gilcomstoun Scottish Office

John McFall Northern Ireland Office

Andrew Smith Department for Education and Employment

2. The Social Exclusion Unit was set up by the Prime Minister in December 1997, and is staffed by a mixture of outside experts and civil servants. They come from a number of Government departments and from organisations with experience of tackling social exclusion – the probation service, housing, police, local authorities, the voluntary sector and business. The Unit has a remit to produce ‘joined up solutions to joined up problems’. It is tasked with analysing the web of problems that make up social exclusion, and then improving the mechanisms to prevent them happening.

3. The Unit forms part of the Cabinet Office, and reports directly to the Prime Minister. It works closely with the No 10 Policy Unit and policy officials across Whitehall. It does not cover issues which are dealt with by one Government department, or duplicate work being done elsewhere.

19/12/2022
HISTORIC PRESS RELEASE : Paymaster General announces new panel to improve sector productivity [December 1998]

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

The membership and direction of the new Public Services Productivity Panel was announced today by Paymaster General Geoffrey Robinson.

Speaking at the second Productivity Roadshow in Cambridge, Mr Robinson said:

“The productivity challenge must be met across all sectors of the economy – that includes the public sector. We want to improve the effectiveness and efficiency of public spending, and the quality of service it buys. We are determined that the extra 40 billion billion we are investing in health and education delivers real measurable improvements.

“The new Public Services Productivity Panel will draw on private sector experience to look at ways of improving the productivity of Government departments and other public sector bodies.

“It will examine the Public Service Agreements to determine what will be most critical to each department’s ability to deliver its targets. It will also offer specific recommendations on service delivery improvement.

“I look forward to working with the Panel on how we can improve our productivity in Government.”

The Panel will be chaired by the Paymaster General; and the Vice Chair will be Byron Grote, of BP-Amoco.

Participating in the Cambridge event, Tottenham chief and entrepreneur Alan Sugar said:

“The Productivity Panel is another excellent Government initiative, designed to stimulate innovation and enterprise and I welcome the opportunity to help whenever I can in this worthwhile programme.”

Alan Sugar, a member of the Treasury’s team of business leaders, will tomorrow relaunch his nationwide Enterprise Tour of Schools, with the Chancellor and Paymaster General.

NOTES FOR EDITORS

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

Geoffrey Robinson MP, Paymaster General (Chair)

Byron Grote, Group Chief of Staff, BP (Vice Chair)

Lord Simon, Department of Trade and Industry

Lord Sainsbury, Department of Trade and Industry

Dame Sheila Masters DBE, Partner KPMG

Clare Spottiswoode, Senior Vice President, Regulatory Affairs, Azurix

John Mayo, Finance Director, GEC plc

John Makinson, Group Finance Director, Pearson plc

Andrew Foster, Controller of Audit, The Audit Commission

John Dowdy, McKinsey

2. The Panel’s remit is to advise the Government on ways of improving the productivity and efficiency of government departments and other public sector agencies. It will report to the Cabinet Committee charged with overseeing departments’ progress against their new Public Service Agreements.

3. The roadshow was held at TWI (The Welding Institute) at Abington, near Cambridge. There will be other similar regional events throughout the UK over the next few months, as part of the Government’s consultation on the Pre-Budget Report. Ministers from a number of Government Departments will be involved – they will want to discuss directly with local business people and others possible solutions for closing the productivity gap. The roadshow will end in Birmingham on 5 February.

4. The Pre-Budget Report was published on 3 November. As well as setting out the steps needed to secure high and stable levels of employment, it forms the basis for a wide-ranging consultation on the steps that need to be taken to address the UK’s long-standing productivity gap.

19/12/2022
HISTORIC PRESS RELEASE : EMU business advisory group recommends preparations for single currency [January 1998]

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.

19/12/2022
HISTORIC PRESS RELEASE : “Pay awards have to be fair and affordable across the board if we are to achieve our long term project” says Alistair Darling [January 1998]

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.”

19/12/2022
HISTORIC PRESS RELEASE : EU and G7 meetings to discuss Asia [January 1998]

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

19/12/2022
Helen Liddell – 1998 Speech to the Life Insurance Association Conference

The speech made by Helen Liddell, the then Economic Secretary to the Treasury, on 21 January 1998.

Thank you for inviting me to your conference. I know that this audience represents a wide range of insurance industry interests and I welcome this chance to get together again.

I should like to speak this morning about the Government’s plans for reform of financial services regulation.

The speed with which the new Government announced our reforms in May reflected the importance we attach to the industry. An efficient and clean financial sector is of benefit to the whole UK economy. Effective regulation is central to attaining our wider economic aim of a stable, low inflation economy with sustainable growth and high employment. An economy with a world-leading financial services industry, of which your own sector is a most important and valuable part.

Single regulator

The key element of our reforms is the creation of a single, statutory regulator.

A single regulator will be better placed to provide effective and consistent regulation across the traditional financial sectors of banking, investment services and insurance. This is the logical way to go as traditional business boundaries continue to get more blurred.

The single regulator will be more effective because there will be no duplication of effort, no doubt about which body is responsible. Firms will benefit because they will no longer be supervised by several bodies with overlapping regulatory demands.

Many firms are currently subject to a range of statutory regimes, for insurance, investments and deposit taking. In many cases equivalent provisions relating to different kinds of business are subtly different – in some cases radically so. It is not in anyone’s interests for firms to have to consider in each case which regime they are operating under. Neither theirs nor their customers.

Stages of reform

Our reforms are already taking shape. Last October we launched the new regulatory body, the Financial Services Authority, under the excellent chairmanship of Howard Davies.

The transfer of banking supervision from the Bank of England to the FSA will be effected by a Bill currently before Parliament. At the same time, we are drafting a second bill which will complete the task of dismantling the old, fragmentary arrangements based on self-regulation and putting in place a new, fully statutory system. We intend to publish a draft of the bill for consultation in the Summer. As a result of the two bills, the FSA will replace nine existing regulators. The FSA’s role will also include the authorisation of those members of the professions who carry on investment business.

The FSA will be a unique one-stop service for financial regulation. There will be a single supervisor for all financial services providers. Wholesale and retail; from the smallest independent financial advisers to the biggest City firms. What it will not be is a one size fits all bureaucratic monolith.

Statutory objectives

When the Chancellor launched the FSA he announced that it would have a set of statutory objectives written into the second bill. The objectives will set down the responsibilities of the FSA, who will be required to comment annually on performance against them in their annual report to the Treasury.

The FSA will have a responsibility to sustain confidence in the UK financial system and markets. The FSA’s role as a prudential supervisor of financial institutions and its oversight of markets are both essential to the maintenance of confidence in the UK financial system.

The FSA must also protect consumers by ensuring that firms are competent and financially sound and give their customers confidence in their integrity, while recognising customers’ own responsibility for their decisions. This will set down in law the need to protect consumers.

I am sure I do not need to tell you how much importance I attach to this objective in the life insurance industry.

It is essential also that the FSA should promote the improvement of public understanding of the benefits and risks associated with financial products. I believe that the FSA has a key role in helping to educate customers, to enable them to discharge their own responsibility to themselves to make sensible choices.

The FSA must also monitor, detect and prevent financial crime.

In delivering these objectives, the FSA has an obligation to facilitate innovation in financial services and to take account of the international nature of financial services business.

The FSA will also have to be efficient and economic and to ensure that costs and restrictions on firms are proportionate to the benefits of regulation.

Cost-effective regulation

I know that this last point will be of particular importance to you, who will be responsible for meeting part of the FSA’s costs. I can assure that, as with all aspects of the objectives, we regard it as more than an aspiration.

Cost effectiveness goes hand in hand with effective consumer protection. The costs of regulation are met by firms. This means they are passed on to consumers in the form of higher charges or lower returns.

We will be taking specific steps in the Bill to achieve cost effective regulation. Not only must the FSA use its resources effectively, it will need to show the industry and the public that it is doing so. So it will be required to publish its proposed budget for consultation at the same time it publishes its proposals for fees.

Also, where the FSA introduces a new rule or change to an existing one, it will have to consult the public and practitioners by publishing the proposals. These proposals will include estimates of the costs and benefits, and other options. This requirement goes well beyond the requirement in the current legislation for the SROs to take account of the costs of compliance.

Complaints

Now let me touch briefly on two further areas I know are of interest to those here today – the issues of consumer complaints and compensation. These are fundamental to our plans to provide an effective level of protection for consumers.

We intend to establish a system of complaints handling arrangements which will ensure that consumers receive help when they need it in a manner that is simple and easily accessible.

At present the Insurance Ombudsman Bureau and the Personal Insurance Arbitration Service are just two of at least eight schemes which relate to different sectors of the financial services industry. There are also separate procedures for complaints against professional bodies. These schemes operate in different ways, with differences between the schemes in terms of eligibility criteria and limits on awards.

The result is a confusing alphabet soup of arrangements. Consumers do not always know where to turn to when they have a complaint.

Whilst I welcome the recent initiatives which have been taken by the various ombudsmen to streamline their operations within the boundaries of the current system, we intend to undertake more fundamental changes to harmonise complaints handling arrangements in line with our approach to regulation. I have recently announced our intention to establish a single, statutory Financial Services Ombudsman. Consumers will have a single point of access to the complaints handling arrangements. There will be a clear and simple means to seek redress to a scheme which will be independent of both consumers and practitioners. The scheme will be compulsory for firms.

This will put firms in no doubt about the obligation to deal with complaints fairly and quickly. Complainants will have access to a highly visible ombudsman scheme.

The scheme will of course need to be set up in a way which draws on the best features of the existing schemes. I am confident that the FSA will enjoy the assistance and full cooperation of the various ombudsmen and of the industry.

Compensation

We will also establish a simpler and where appropriate more harmonised set of arrangements for dealing with compensation when firms are unable to meet their obligations. Currently, there are multiple schemes – the Policyholder Protection Scheme, the Deposit Protection Scheme, the Investors Compensation scheme, the Building Society Investor Protection Scheme and even the Friendly Society Protection Scheme. Each has its own set of rules and eligibility criteria.

We will replace this patchwork with a single scheme with a single board with harmonised administrative arrangements. The creation of a single scheme, like the establishment of the Financial Services Ombudsman, will benefit both consumers and the financial services industry.

There will be easier access for consumers, greater clarity about who is eligible and in what circumstances. There will be clearer governance arrangements which will be underpinned by statute.

I believe that effective arrangements to deal with complaints and compensation will build confidence in the industry. The Financial Services Authority is currently consulting on these issues. I welcome their desire to work with the industry and consumers in order to get the details right.

Lloyd’s

There is one further very important area I would like to talk about, which is again relevant to our determination to apply statutory regulation consistently across the board. This is Lloyd’s.

For a vast majority of its time Lloyd’s has been a successful part of UK financial services industry, making an important contribution to the economy and balance of payments.

As you will be aware though, it suffered huge losses – 8 billion Pounds – in the period 1988-92. There were a number of reasons for this which were out of Lloyds’ hands – such as natural and man-made disasters. But the losses were exacerbated by bad underwriting decisions and practices.

Since then action has been taken. I should like to pay credit to Lloyd’s for resolving its financial difficulties through the successful implementation of Reconstruction and Renewal’ in 1996 and for all it has done to improve regulatory arrangements.

But more needs to be done. 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.

Lloyd’s is a complex organisation – many of us tend to think of it as a big insurance business. But far from being one business it is – even now – many separate businesses operating under a common umbrella. This means that it needs to be looked at from a number of different angles.

Prudential supervision

The first is prudential supervision. As with all insurance regulation, the first priority is protection of policyholders. We intend to give FSA much more extensive prudential supervision powers in relation to Lloyd’s. These will be more like the powers it will have for insurance companies, such as fitness and properness checks and comparable powers of intervention. They will also include a requirement for FSA authorisation of managing agents. These are the people who are responsible in practice for running underwriting syndicates.

We intend that the FSA should have reserve powers to authorise and supervise Lloyd’s members direct, if that proves appropriate in future. But we do not intend that the FSA should supervise individual Names, so long as Lloyd’s own supervision is adequate.

Protection of capital providers

Protection of capital providers is another important area. Individual members of Lloyd’s are advised by members’ agents, who act like financial advisers. We propose to extend the authority of the FSA in this area to the authorisation and regulation of members’ agents. This will give increased protection to members of Lloyd’s, some of whom have suffered from bad advice in the past.

We recognise that the main risk to capital providers is the risk to which they are exposed through the contracts of insurance which they underwrite. The enhanced insurance supervision arrangements I mentioned should also provide a substantial benefit to members in reducing those risks.

Capacity auctions

Next, I would like to say something about capacity auctions. Recently, participation on a syndicate has moved from being a privilege to a right. As a result, a market has developed in trading capacity for different syndicates. This market, which currently operates through a series of auctions run by the Corporation of Lloyd’s, is analogous to an investment market. This market will be overseen by FSA under a regime similar to that currently in place for recognised investment exchanges.

Role of the Council

Finally, these arrangements will continue to allow scope for a major role for the Council of Lloyd’s in ensuring Lloyd’s continues to be a well-regulated, successful and important part of the UK financial services industry. This reflects the special role of the Council of Lloyd’s in controlling the affairs of the Society.

Taken together, I believe that these changes to the regulatory regime for Lloyd’s will however provide, for the first time in many areas, a major element of external regulatory accountability.

Conclusion

The Government is committed to reform and to achieving the best financial regulatory system we can. The UK financial services industry has achieved a great deal, but a lot of people remain, sometimes rightly, suspicious of its capacity to act in their best interests. This lack of confidence tarnishes the whole industry. The FSA and the industry it regulates need to work together to ensure that confidence is maintained in those areas where standards are highest and improved where standards have fallen short.

In short, the regulatory system must be more effective, providing an adequate level of protection for consumers. It must be transparent and inspire public confidence in the regulatory structure. It must be efficient, imposing only such burdens and restrictions which are necessary to achieve sound regulation.

I fully recognise the importance of working with the insurance industry and its customers in designing the new framework of regulation.

There will be further opportunities for discussion – not least when our draft bill is published for consultation next summer. But I do not want to wait until then to hear the views of the life insurance industry. Various representative bodies in the life insurance industry are already in touch with me and my officials to make sure we are aware of your ideas and concerns. I urge you to continue this dialogue in the coming months.

19/12/2022
HISTORIC PRESS RELEASE : Stronger Powers for the Financial Services Authority [January 1998]

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.”

19/12/2022
HISTORIC PRESS RELEASE : Helping children:A top priority for Government [January 1998]

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.

19/12/2022
PRESS RELEASE : Martyn’s Law to ensure stronger protections against terrorism in public places [December 2022]
The press release issued by the Home Office on 19 December 2022.
New laws to keep people safe will scale up preparedness for, and protection from, terrorist attacks.

Martyn’s Law will ensure better protection against the continued and evolving threat that the UK faces from terrorism.

Support, guidance and training will help embed best practice and drive-up standards across the UK.

The UK’s resilience to terrorism is to be stepped up, as the Government announces details for the Protect Duty, now to be known as ‘Martyn’s Law’ in tribute of Martyn Hett, who was killed alongside 21 others in the Manchester Arena terrorist attack in 2017.

Working closely with security partners, business and victims’ groups, including Figen Murray and the Martyn’s Law Campaign Team, and Survivors Against Terror, the new duty will require venues to take steps to improve public safety, with measures dependent on the size of the venue and the activity taking place.

The threat picture is complex and ever evolving. Recent attacks demonstrate that terrorists may choose to target a broad range of locations. Martyn’s Law will ensure that security preparedness is delivered consistently across the UK, ensuring better protection of the public.

Prime Minister, Rishi Sunak, said:

The way the city of Manchester came together as a community in the wake of the cowardly Manchester Arena attack, and the amazing work of campaigners like Figen Murray who have dedicated their lives to making us safer and promoting kindness and tolerance, is an inspiration to us all.

I am committed to working with Figen to improve security measures at public venues and spaces and to delivering this vital legislation to honour Martyn’s memory and all of those affected by terrorism.

Figen Murray, mother of Martyn Hett said:

Martyn’s Law isn’t going to stop terrorism, but common-sense security, and making sure venues are doing all they can to keep people safe, could mean fewer suffer what myself and the families of Manchester have had to endure.

I welcome the Government’s commitment to including smaller venues and working quickly on this legislation. It is vital we now take the necessary steps to protect ourselves and others wherever possible and I hope other countries learn from this ground-breaking legislation.

Home Secretary, Suella Braverman said:

Protecting the public from danger is a key responsibility of any government. The terrorist threat we face is diverse and continually evolving, which is why this legislation is so important.

I would like to thank Figen Murray and the Martyn’s Law campaign for their support in the development of this vital reform.

Their tireless efforts have helped inform our approach and the heart-breaking stories from survivors and their families are a constant reminder as to why we must deliver on this commitment to work together to improve public security.

The plans have been developed following public consultation and extensive engagement across industry, charities, local authorities, security experts and with survivors. 70% of the thousands who responded to the consultation agreed that those responsible for publicly accessible locations should take measures to protect the public from potential attacks.

Martyn’s Law will follow a tiered model linked to activity that takes place at a location and its capacity aimed to prevent undue burden on businesses.

A standard tier will apply to locations with a maximum capacity of over 100 which can undertake low-cost, simple yet effective activities to improve preparedness. This will include training, information sharing and completion of a preparedness plan to embed practices, such as locking doors to delay attackers progress or knowledge on lifesaving treatments that can be administered by staff whilst awaiting emergency services.

An enhanced tier will focus on high-capacity locations in recognition of the potential consequences of a successful attack. Locations with a capacity of over 800 people at any time, will additionally be required to undertake a risk assessment to inform the development and implementation of a thorough security plan. Subsequent measures could include developing a vigilance and security culture, implementation of physical measures like CCTV or new systems and processes to enable better consideration of security.

The Government will establish an inspection and enforcement regime, promoting compliance and positive cultural change and issuing credible and fair sanctions for serious breaches.

Dedicated statutory guidance and bespoke support will be provided by the Government to ensure those in scope can effectively discharge their responsibilities, with even small venues also able to benefit from this and take voluntary action. Expert advice, training and guidance is also already available on the online protective security hub, ProtectUK.

Martyn’s Law will extend to and apply across the whole of the United Kingdom and the Government will publish draft legislation in the early Spring to ensure the law stands the test of time.
19/12/2022
Alistair Darling – 1998 Speech to Ernst and Young Network Dinner
The speech made by Alistair Darling, the then Chief Secretary to the Treasury, on 14 January 1998.

“OUR ECONOMIC APPROACH”

Introduction

UK Economy

The world has been transformed over the last few years. We live in a global economy. We are moving towards a single global economy in many respects. Industries typically span geographical and political boundaries. No country can go it alone, in economic terms. Our objective is to ensure Britain is equipped to rise to the challenge of the world’s new and fast changing economies.

The key objective of our economic policy is to achieve high and stable levels of growth and employment, to allow everyone to share in higher living standards.

The need for stability

Over the past forty years, our economy has had an unenviable history of boom and bust. Stop-go has meant higher interest rates, less investment, fewer successful companies and lost jobs. It has been the inevitable result of a failure to take a long-term view, and to bow to short term pressures – political and economic.

The economy we inherited in May was in danger of over-heating, with unsustainable growth in demand and a threat of inflation rising well above its target. And despite five years of upswing, public borrowing was too high for the point in the economic cycle. The national debt doubled in the six years from 1990. And at this stage of the cycle the we should not be adding to that problem. This year alone the taxpayer will pay out 25 billion Pounds in interest payments on debt – more than we spend on our schools.

So we need to address the fundamental weaknesses in the economy. Instability, under-investment, the need to improve education and skills and the need for welfare reform – all of which have been neglected for too long.

In the eight months since we took office we have begun to put in place the building blocks we need:
- first, the need to achieve stability and to raise the rate of sustainable growth;
- second, to increase productivity; and
- third the need to remove barriers to growth, invest in education and modernise the welfare state, and tackle the need to expand markets.
In the short time since the election, we have begun to lay the foundations to secure Britain’s long-term economic future.

Openness and transparency

Stability will of course depend, to a large extent, on markets having confidence in the commitment of Government to prudent and sound management of the economy. So economic policy must be open and transparent. Openness builds confidence and credibility. It is essential in today’s global economy.

And in our fiscal and monetary policies, we have set out open and transparent frameworks that have clearly enhanced our credibility.

The Government will now publish a Pre-Budget consultation document each year setting out the economic issues we face. Operational independence for the Bank of England. The new code for fiscal stability. All these measures add to openness and transparency, and will enhance credibility in our determination to look to the long term.

So the building blocks are there. Firstly stability.

Stability

Long-term stability – in monetary and fiscal policies, low inflation and sound public finances – is an essential pre-condition for high levels of growth and employment.

Monetary policy

That is why one of our first acts in office was to establish a wholly new monetary policy framework for the UK.

This framework gives operational independence to the Bank of England for setting interest rates to meet the Government’s inflation target, while enhancing accountability and ensuring policy is conducted in an open way. We now have one of the most open procedures for making monetary policies decisions in the world. Since the new monetary framework was announced, long-term interest rates have fallen by more than a full percentage point, partly reflecting a fall in inflation expectations. Clear evidence that anti-inflation credibility has been enhanced.

Fiscal policy

As with our approach to monetary policy, so in fiscal policy we have established clear rules, a new discipline, openness and accountability.

A key element of the new fiscal framework is the adoption of two strict fiscal rules:
- first, the golden rule, that on average over the economic cycle, the government will borrow only to finance its investment;
- and second that, as a proportion of national income, public debt will be held at a prudent and stable level on average over the cycle.
Our tough approach to public borrowing, embodied in a five-year deficit reduction plan, means, from public sector borrowing of 7 per cent of GDP four years ago, we are now set to cut the deficit to 1 1/4 per cent in the current financial year and just 1/2 per cent next year.

And the new Code for Fiscal Stability will require the Government to produce estimates of the cyclically-adjusted fiscal position and long-term projections, so that past policy mistakes are not repeated. We are determined not to repeat the mistakes of the late 1980s, where the signals were misread. Over-optimistic assumptions led to an unsustainable boom, followed by one of the deepest recessions this country has ever seen.

We will maintain strict discipline in public spending, rooting out waste and inefficiency as part of the Comprehensive Spending Review. This review will not only achieve discipline in the public finance but it will also set our spending priorities for the rest of this Parliament and beyond.

Together these tough fiscal rules, the deficit reduction plan and a root and branch review of public sector efficiency will ensure a break from the short-termism and expediency of the past. And our fiscal policy will be more credible for being open and accountable and will ensure new long-term stability for the public finances.

Productivity

The second key challenge is to raise productivity.

Government and industry must work together to remove systematically all barriers to raising productivity: in product markets through encouraging competition and innovation; in capital markets through measures to enhance growth and investment, not least for innovative small businesses; and in the workplace through encouraging the creativity and flexibility of inventors, managers and workforces. We need to rediscover our capacity to invent and see that there is profitable production.

We are examining how, to improve productivity, we can help leading-edge businesses gain funds to develop new technologies; how we can improve Britain’s poor record of investment in research and development; and how we can make it easier for small businesses to draw on venture capital to create jobs and a more entrepreneurial culture.

We have taken measures to tackle long-term under-investment in both capacity and skills, including a cut in corporation tax to its lowest ever level. We are determined to increase investment in education – the key to our future.

But we still need further structural reforms if we are to encourage a more dynamic economy through increased competition and through reforms in welfare and employment policy. We are committed to a wholesale modernisation of the welfare state.

Employment

And to achieve high and stable levels of growth and employment we must ensure that people are skilled and employable and making work pay. Today sees further reports of skills shortages, which constrain our ability to expand.

We are addressing the obstacles that prevent people taking up and benefiting from work:
- the absence of marketable skills;
- the failure of the tax and benefits system to make work worthwhile;
- the poverty and unemployment traps that for far too many mean that work does not pay;
- the lack of employment opportunities;
- and the scarcity of affordable child care.
Reform to both the tax and benefit system is needed as part of the modernisation of the welfare state, that has remained largely unreformed since its foundation in the 1940s.

And the Government’s welfare to work initiative will get the young and long-term employed from welfare into work.

Since May we have made a start by announcing a New Deal worth almost 4 billion Pounds, providing jobs for young unemployed, the long-term unemployed, and to lone parents [and the long-term sick and disabled].

Helping lone parents into work is one of the most effective long-term ways to tackle family poverty.

We are also introducing a plan to extend out-of-school childcare clubs to every community in Britain. Funds will be available to set-up as many as 30,000 new out-of-school clubs, which will provide places for nearly 1 million children.

Last week we launched the New Deal for the young and long-term unemployed. There will be 12 pathfinder projects to give those under the age of 25 and unemployed for more than 6 months the skills to get them back to work and give them the skills they need.

All these measures are focussed on getting the young and long-term unemployed from welfare to work. And they are all part of our strategy to meet the challenge of increasing employment opportunities for all.

Europe

Key to our economic approach is our European strategy. In October the Chancellor declared for the principle of the single currency. There is no constitutional bar to entry.

But any decisions to join must be based on a hard headed assessment of the economic benefits of joining. We must have satisfactory answers to these questions:
- would joining EMU create better conditions for firms making long-term decisions to invest in Britain?;
- how would our financial services be affected?;
- would there be sufficient convergence between economies so Britain could live comfortably with Euro interest rates?;
- is our economy sufficiently flexible to deal with any emergent problems?;
- and will joining Europe promote higher growth, stability and a lasting increase in jobs?
On the basis of these fives tests, the Government has decided that it would not be in our economic interest to join in the first wave in 1999. We need a settled period of convergence before we can make a decision on membership.

So we will join a single currency when and if it is in our economic interest. But we believe there are potentially clear benefits for business and that is why we have begun making extensive preparations, helping and advising business with the euro.

Pay

The Government is taking the long term view. 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.

The challenge is to steer a long-term course towards sustainable growth. Where prosperity can increase year on year, where public finances can deliver the public services we want and need.

We have put the policies in place to bring this about. But if we are to succeed we must 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, where the economic signals were misunderstood and an unsustainable boom led to bust – with all the consequences that brought about.

Central to this aim is the need to ensure that pay increases are affordable right across the board, from boardroom to the shop floor, in both the public and private sectors. People have to understand that to bring about long-term stable growth, pay increases must be fair and affordable.

For its part, the Government will be applying these principles to public sector pay. We are determined to deliver long-term growth and prosperity. It is essential, if we are to succeed in rebuilding this country and increasing prosperity for all the people in a sustainable way.

Conclusion

We are governing for the long term. The building blocks are being put in place to bring the long term prosperity we all want to see. This means we have to take tough decisions now. But it is right that on pay, as with every other issue, we avoid measures that bring short term gain but long term pain. This is the approach the British people expect of us. It is what we promised at the election. And we are delivering on our promises.
19/12/2022