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HISTORIC PRESS RELEASE : Pay increases must be affordable if we are to have long term prosperity – Alistair Darling [January 1998]

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

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

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

He added:

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

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

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

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

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

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HISTORIC PRESS RELEASE : Helen Liddell announces proposals to deliver cost-effective regulation [January 1998]

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

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

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

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

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

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

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

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

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Gordon Brown – 1998 Speech Launching the New Deal

The speech made by Gordon Brown, the then Chancellor of the Exchequer, on 5 January 1998.

Today marks the start of a new deal for Britain’s young. A new beginning in the war against poverty, and the first step in the modernisation of the welfare state in Britain.

It’s the Labour Government’s 1998 new year’s resolution for Britain – to help our long-term unemployed back to work and to give them the skills they need.

Here today from Dundee and Tayside we launch the first of twelve pilot programmes offering jobs and training to every young person six months out of work.

From April, every long term unemployed young man or woman under 25 will be offered the new deal options of work or training.

A total of 3 billion pounds is being invested in jobs.

It is not just the young who will benefit from the new deal.

From June, employers will be offered a 75 pounds a week subsidy to take on the long-term unemployed.

During 1998 lone parents with their youngest child at school will be offered help to find work.

And from this year too disabled men and women, denied the right to work for too long – will be given new opportunities to work.

The old deal – of paying people a few pounds in benefit and then forgetting about them – failed the unemployed and failed Britain.

Today begins the long haul towards full employment in the years to come.

From now on in Britain, young people will have new opportunities and a new contribution they can make under the new deal. Rights go hand in hand with responsibilities and for young people offered new responsibilities from today there will be no option of simply staying at home on full benefit doing nothing.

So it is something for something, not something for nothing

Young people are our future. Yet unemployment among the under- 25s is twice the national average.

With new resources from the windfall levy we will invest in young people and in the skills the whole country needs them to have for the future.

From today there are pilot programmes in every part of Britain, offering every young person unemployed for more than six months the chance of work.

Already 9,000 employers have signed up in our pathfinder areas.

Some of the top household name companies are making their contribution to the new deal.

In the next few weeks, 1 million employers will be contacted and asked to consider taking part.

The programme that starts today in 12 pathfinder areas will offer young people advice, help and training to enter the world of work. From April the programme will operate nationally.

The scheme offers four routes into work and helps each young person pick the route that suits their needs – a job, full-time education, a job in the voluntary sector or a role in the environmental task force.

Tayside

300 million pounds will be invested in scotland under the new deal here in Tayside there are more than 1,000 young people who have been nemployed for more than six months. For them opportunity is available now. The pathfinder approach is to ensure that young people receive the help they need immediately.

Every month, 100 more young people will be entering the programme.

I have no doubt lessons will be learned from the pilot and we will be carefully evaluating the programme in Tayside and other pathfinder areas so that rough edges can be identified.

Here in Dundee some of the biggest companies like NCR and Michelin have committed themselves to the new deal. Stagecoach and National Express, together with Scot-Rail and Travel-Dundee will be mounting travel concessions for young people in Tayside on the new deal and I am grateful to them for their involvement.

This programme will succeed only if we involve all employers who are able to make a contribution.

My appeal to employers is as businesses in the community who can see at first hand the impact of social division and a wasted generation of young people and who know that failure to tackle the problem now will hurt us all in the future.

My appeals is to employers and managers with a reputation for motivating people who will immediately understand how a job can make the difference between what young people are and what young people are capable of becoming.

My appeal to employers is as leaders of the economy who know that however successful their own business is, the economy as a whole will never be at its best unless we unlock the potential of all our people.

I want all of you to feel part of what I believe is a national crusade to clear for one and for all the social divisions that are entrenched in our society because of unemployment.

And this is just the start. The Government believes in helping thousands more from welfare to work in the years to come as part of the long haul towards our goal of full employment.

That is why we are prepared to extend the new deal from the under 25s to the over 25s and are prepared to invest more in the long term unemployed, lone parents and disabled men and women who want the right to work, to make this ambition a reality.

And we will do more. The new deal is our first step towards a new welfare state. And I want men and women who have been unemployed and written off by many to be able to say they now have a new chance to make the best of themselves and to make a contribution, not just to their families, but to the progress of Britain.

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Gordon Brown – 1998 Speech at the Central Organisation of Scottish Local Authorities

Part of the speech made by Gordon Brown, the then Chancellor of the Exchequer, in Glasgow on 27 February 1998.

Since I took over as Chancellor I have always said that a commitment to stability and prudence as well as work and; enterprise will be the watchwords of this Government.

We will not make the mistakes of previous Labour Governments who failed to control spending and then had to cut back.

And we will learn the lessons of the late eighties where the public finances and the economy’s ability to sustain growth were misjudged, plunging us into the longest recession since the war.

So the Budget on 17 March will not be a Budget with quick fixes for the short term. The Budget will be an investment Budget for the long-term, laying the foundations to build a more dynamic and successful economy.

We will not sacrifice our spending discipline and commitment to prudence – instead there will be consistency to ensure long-term prosperity.

With a 400 billion Pounds national debt, 25 billion Pounds a year interest payments, a borrowing requirement of 23 billion Pounds last year and with the deficit continuing into next year, ensuring prudence in our public finances is our priority – not just in one year but in every year across the economic cycle.

Just as there will be no return to boom-bust in the economy so there will be no return to soft options in public spending.

We are all long termists now – the best guarantee for our future.And long term measures for enterprise and work – making work pay – will come top of my agenda.

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HISTORIC PRESS RELEASE : UK is a world leader on public private partnerships, says Geoffrey Robinson [February 1998]

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

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

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

Mr Robinson said:

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

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

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

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HISTORIC PRESS RELEASE : Seven principles for jobs – G8 agrees new agenda [February 1998]
The press release issued by HM Treasury on 22 February 1998.

G8 Agrees New Agenda

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

Commenting on the Conference, UK Chancellor Gordon Brown said:

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

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

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

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

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

Seven broad principles have been agreed to guide the action the G8 countries will take. These are:
- sound macroeconomic policies;
- structural reforms to labour, capital and product markets;
- fostering entrepreneurship and an economic climate favourable to the growth of small and medium-sized firms;
- enhancing employment, education and training including for the young, long-term unemployed, lone parents and the disabled;
- reforming tax/benefit systems to provide work incentives to foster growth and employment and the successful transition from welfare to work;
- encouraging lifelong learning; and
- promoting equal opportunities and combatting discrimination.
The Conference agreed the seven principles to guide employment policy and Heads of State and Government will be asked to endorse them at the Birmingham Summit in May.

In conclusion, the Chancellor said:

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

The Chancellor said he would:
- continue to use the UK’s chairmanship of the G8 and
  Presidency of the EU to advocate the new agenda on employment and economic reform;
- write to the Heads of International Financial Institutions including the IMF and OECD to report on policy initiatives agreed at the Conference; and
- carry out an examination of how help can be given to entrepreneurs and SMEs, and enhance access for small firms to venture capital.
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HISTORIC PRESS RELEASE : UK initiative to help Asia [February 1998]

The press release issued by HM Treasury on 17 February 1998.

The UK today launched an initiative aiming to increase the amount of European technical assistance available to the troubled economies of Asia. The initiative will focus on financial sector restructuring and poverty impact assessment, and is being developed in the run up to the ASEM 2 Summit on 3-4 April, when Asian and European Leaders will meet in London.

Chancellor Gordon Brown and Secretary of State for International Development Clare Short discussed their ideas with World Bank President Jim Wolfensohn when they met earlier today.

The initiative involves two parts: the establishment of an ASEM Trust Fund at the World Bank to help countries to assess the poverty impact of the crisis and to assist with financial sector restructuring; and more effective co-ordination of technical assistance in the financial sector.

The Chancellor said:

“Countries in Asia restructuring their financial sectors will need a good deal of technical assistance. Europe has great expertise to offer in this area, and we are putting in place arrangements to ensure this can be mobilised effectively”.

The Secretary of State for International Development said:

“It is vital that countries receive help with financial restructuring and that the poverty impact of Asia’s current financial difficulties is properly understood. We are working closely with the World Bank to assess the impact on the poor and ensure that the appropriate policy response is taken.”

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HISTORIC PRESS RELEASE : UK to provide up to $10 million to help relieve debt burden of Mozambique [February 1998]

The press release issued by HM Treasury on 17 February 1998.

The Government has announced that it is willing to make a supplementary contribution of up to $10 million towards relieving the debt burden of Mozambique.

The announcement, made by Chancellor Gordon Brown and Secretary of State for International Development Clare Short, follows a meeting today with James Wolfensohn, President of the World Bank, the Archbishop of Canterbury George Carey, the Catholic Archbishop of Liverpool Patrick Kelly, David Bryer from Oxfam and Sir Humphrey Maud, Deputy Director General of the Commonwealth Secretariat.

The Ministers commented:

” This Government is determined to work together with other countries, the World Bank and other international institutions to help deal with the proportion of the world’s population which is living in extreme poverty. The top priority is to deal with the most needy and deserving debtor countries as fast as possible. Mozambique has a strong track record of economic reforms yet still faces a growing debt burden. The Government is willing to make a contribution of $10million as part of a solution towards filling the $100million gap left by the Paris Club which will help give Mozambique the fresh start it so badly needs.”

It is important that the international community meet the target set out in the Mauritius Mandate statement that all eligible poor countries should have at least have embarked on the process of securing a sustainable exit from their debt problem by the year 2000.

The UK, working with the World Bank and other creditors, is seeking to put together an exceptional package which will provide the level of debt relief provisionally agreed for Mozambique by the World Bank and IMF Boards late last year. The need for such a package was a result of the Paris Club’s decision in January to provide $170million of its $270million share of debt for Mozambique, leaving a gap of $100million.

The Chancellor will keep the issue of debt relief, and particularly the consequent funding arrangements, before G7 and EU colleagues. The Birmingham Summit will consider the issue as part of the wider development agenda.

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Alistair Darling – 1998 Speech at the Securities Institute

The speech made by Alistair Darling, the then Chief Secretary to the Treasury, on 6 February 1998.

Introduction

3.   Tonight I want to talk about three things. First, our overall economic approach. Second, I want to say a brief word about Europe and EMU. Finally, our reforms to financial services. I also want to say a word about the future of the Stock Exchange.

Our Macroeconomic Approach

4.   So let me start by looking at the Government’s economic objectives.

5.   We won the election because we promised to look to the long term. To end the short-termism that had characterised so much of the past.

6.   In the nine short months since we took office we have put in place the building blocks we need to deliver the long term project. Our objective is to raise the rate of sustainable growth to increase the prosperity of the country so that everyone can share in higher living standards.

7.   First, we have introduced the platforms for monetary stability and low inflation – the essential precondition for growth. This is good for business, for savers and for those on low incomes.

8.   Within days of entering office, we announced that we would give operational independence to the Bank of England to set interest rates in order to achieve the Government’s target of low inflation. And the Bank of England Bill which delivers this reform has now received its third reading.

9.   We now have a central bank with the most open and accountable set of procedures anywhere in the world. And already long term interest rates, and inflation expectations, have fallen.

10. Second, fiscal stability. The Chancellor in his Budget last July put in place a deficit reduction plan to reduce the huge burden of debt left by the last government. The national debt doubled in the six years after 1990. We spend 25 billion Pounds a year servicing public debt: more than we spend on schools. At this stage in the cycle we should not be adding to the country’s debt.

11. Third, stability in public spending. The Comprehensive Spending Review of public expenditure now under way is a root and branch examination of the 320 billion Pounds the Government spends. Over 5000 Pounds for every man, woman and child.

It will ensure we have affordable and sustainable public finances and will set the spending priorities for this Government for the rest of this Parliament and beyond. And we have already started to do that with new money for schools and hospitals. And of course we are committed to modernising the Welfare State. Making work pay. Improving skills.

12. And stability depends on removing barriers to growth. We are determined to expand our economic capacity and to create the right climate for high levels of investment. That is why we have reformed the corporation tax system, for example, removing the distortions that hinder long term high quality investment.

EMU

13. This Government is committed to open markets in Europe and elsewhere. We are outward looking. We have to be and that has driven our policy in Europe as elsewhere.

14. Our relationship with Europe has changed. We are now engaging. constructively in Europe. We are putting place the necessary preparations which will allow Britain to decide to join EMU if economic conditions justify it.

15. We’re one of the most open economies in the world – trading 25 per cent of our GDP compared with America’s 10 per cent. And nearly 60 per cent of our exports are to mainland Europe and an astonishingly high level of international investment into Europe – 30 per cent of it – comes to the UK.

16. In less than a year from now the German business selling products to France and the Netherlands will be able to do so without exchange rate risk, with lower transaction costs and with more transparent prices, something that in itself will be a big challenge to a British competitor hoping to supply the same order.

17. So EMU will lead to fiercer competition for trade and for future investment across Europe. And the time to prepare is now long overdue.

18. I know that this will be a major challenge for the securities market. And we are working with business to prepare for the introduction of the Euro in 1999. The Euro will affect each and every one of us.

Our approach to the reform of the UK regulatory system

19. And if we are to achieve stability we need a regulatory environment that commands the support and respect of the industry and public alike.

20. We promised reform at the election. And three weeks after the election we set out how we would deliver the radical overhaul to the regulatory system we promised.

21. And in October the new Financial Services Authority was launched. It will take over the work of nine existing regulators.

22. In the global economy where markets are changing every day, where innovation and diversity are an essential part, it is vital that we have a new regulator that has both power and flexibility.

23. The draft financial services Bill, updating and replacing the various pieces of legislation covering financial services, will be published this year for consultation.

24. And lets not forget the role of management which sets the ethos and the ethics of its business. Management is an essential part of good business and good practice. That’s good for them and its good for business. Good regulation must be complimentary to the business process.

25. The FSA will cover the whole of the industry – domestic and global; wholesale and retail. So let me say a word about the future of the London Stock Exchange and where its role as the Competent Authority for Listing in the UK should properly lie.

26. Discussion about financial regulation has often concentrated on the need of investors. But we should not forget the needs of those seeking to raise capital.

27. Firms, public bodies and governments all use the UK’s capital markets to provide funds for enterprise growth and efficient financing of public services. Investors clearly need reliable and timely information about the capital markets. This is where the regulation of public offers and listing of securities has a vital part to play. There is a clear public interest here.

28. However, we must recognise that the environment in which the Stock Exchange operates has changed radically, and will continue to do so. This gave us a strong reason to look again at the regulatory structure in this area.

29. Ten years ago, the Stock Exchange was the only practical option for UK companies seeking to raise equity capital. Now, in the world of electronic markets and cross-border trading, they have a wider choice.

30. The other major change is regulation itself, and the creation of the Financial Services Authority as the central body with the legal clout and scope to cover the full range of financial services effectively.

31. We have had to decide whether the London Stock Exchange should continue to be the UK competent authority for listing. Or whether this function should be transferred to the FSA.

32. The London Stock Exchange enjoys a substantial reputation throughout the world. However, whilst listing is a distinct function, it is closely related to the regime for which the FSA is to become responsible for.

33. As I announced today in Parliament. Having considered the matter we have decided that the balance of the argument is for continuity in practice with the Stock Exchange continuing with its current role.

34. While we wish the Stock Exchange to carry on the good job they have been doing, we also recognise that circumstances may change and that we need to be prepared for it.

35. We will therefore take a power in the bill reforming financial services regulation so that we could transfer all or parts of the competent authority function to another body, in practice most likely to be the FSA.

36. Treasury Ministers will remain accountable to Parliament for this decision. Before such a significant change in the structure of UK financial regulation were made, we would need to be sure that it was fully justified on the balance of arguments and that arrangements for satisfactory transition were in place.

Conclusion

37. We have been in Government for nine 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 that we would modernise Britain and we are doing that.

38. We are building the foundations for the future. Low inflation. Stability. Reforming and modernising the Welfare State. We are building monetary and fiscal stability to provide a platform for the future. 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.

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HISTORIC PRESS RELEASE : The future of the London Stock Exchange – Alistair Darling announces the next step in modernising financial regulation [February 1998]

The press release issued by HM Treasury on 6 February 1998.

The next step in the Government’s wide-ranging plans to modernise the financial regulation system was announced by the Chief Secretary, Alistair Darling today.

In a speech to the Securities Institute in Edinburgh, Alistair Darling said that the London Stock Exchange would continue as the competent authority for listing in the UK. He went on to say:

“The London Stock Exchange enjoys a substantial reputation throughout the world. However, whilst listing is a distinct function, it is closely related to the regime for which the FSA is to become responsible for.

The Stock Exchange will carry on as the listing authority. But we recognise that circumstances may change.

The Bill reforming financial services regulation will therefore allow the Government to transfer all or part of the London Stock Exchange’s function to the Financial Services Authority should that prove necessary in the future.

Before a change was made, we would need to be sure that it was fully justified on the balance of arguments and that arrangements for satisfactory transition were in place.”

In response to a Parliamentary Question, Mr Darling said:

“The London Stock Exchange (LSE) is currently, under the Financial Services Act 1986, the competent authority for listing in the United Kingdom. I have considered future arrangements against the background of our decision to have a single statutory regulator for financial services, the Financial Services Authority.

I have concluded that the case for change at this stage is not made. The LSE is operating satisfactorily in creating and enforcing listing rules in a way which gives confidence to investors, while meeting the commercial needs of users. Before any changes were made we would need to be sure that this was fully justified on the balance of the arguments, and that arrangements for satisfactorily transition were in place.

Accordingly this will be a matter kept under review. Among the factors which may be relevant to any decision to transfer functions could be the institutional arrangements for tackling market abuse and the impact of increased competition in the UK’s securities markets.

The new bill to reform the 1986 Act will therefore name the LSE as competent authority. However, I also intend that the bill will include a power for the Treasury to transfer the competent authority functions, in part or in whole, to another body by secondary legislation.”

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