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

A major new initiative to tackle harmful tax competition was agreed by G7 Finance Ministers today at a meeting in London chaired by Chancellor of the Exchequer Gordon Brown.

The G7 agreement paves the way for more international exchange of tax information to curb international tax evasion and avoidance through tax havens and preferential tax regimes. It reinforces the recommendations of the OECD Report for curbing harmful tax competition and the complementary EU Code of Conduct on business taxation.

It also commits the G7 to leading international action on tax related crime by gathering more intelligence through money laundering systems and providing for it to be shared internationally by tax authorities.

Announcing the UK inspired initiative, Mr Brown said;

“Our agreement today represents a major breakthrough in tackling the growing problems caused by harmful tax competition, and the tax evasion and avoidance it generates. This reinforces the OECD’s vital work to curb the damaging effects of tax havens and preferential tax regimes.

“We are determined to put in place strong and practical measures to tackle the growing threat of international tax crime and evasion through tax havens and preferential tax regimes. The globalisation of business and finance makes this an increasingly pressing issue.

“This initiative paves the way for co-ordinated international action to allow information to be passed to tax authorities, so that honest citizens and business do not have to pay the price of the activities of tax fraudsters. We in the G7 are committed to building practical co- operation at every level to counter these threats.”

The G7 agreement;

i) reinforces the OECD’s Report which provides a platform for tackling harmful tax competition, and for obtaining more information about transactions in tax havens and preferential tax regimes. This complements and mutually reinforces the EU Code of Conduct on Business Taxation;

ii) addresses a potential weakness in international anti-money laundering systems by ensuring that financial institutions report suspicions about the movement of criminal assets regardless of whether they believe that the criminality involved is tax related. This is partly motivated by growing evidence that criminals can evade anti money laundering systems by presenting their affairs as tax related to reassure their bankers, brokers and professional advisors;

iii) provides an important new source of intelligence to tax authorities by making it possible for suspicious transaction reports received by law enforcement agencies to be made accessible to those investigating tax related crimes domestically or overseas.

To advance this agenda the UK will attach an officer of the Inland Revenue’s Special Compliance Office to the Economic Crimes Unit of the National Criminal Intelligence Service (NCIS), which is responsible for analysing and allocating reports of suspected money laundering. These arrangements will allow domestic and international money laundering intelligence to flow to the Inland Revenue for the first time.

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

Chief Secretary announces package of measures to tackle market abuse Tough new powers to help the new Financial Services Authority (FSA) tackle market abuse and financial crime were announced today by the Chief Secretary, Alistair Darling.

The measures, including steps to tackle insider dealing more effectively, will be included in the bill to modernise the financial services system.

This will further enhance the reputation of the UK financial markets as clean and fair places to do business by giving the FSA more effective powers to deal with the few bad apples, including the power to fine rogue traders.

The proposed package includes:

• giving the FSA the power to prosecute cases of insider dealing, other areas of market manipulation and breaches of the Money Laundering Regulations;
• the power to levy fines;
• a new civil regime for combatting market abuse;
• a Code of Market Conduct, produced by the FSA, setting out behaviour which would be unacceptable in the markets;
• giving the FSA rule making powers concerning anti-money laundering systems; and
• the creation of a single tribunal to consider appeals against the FSA’s use of its powers.

The Competent Authority for listing (presently with the London Stock Exchange) will also be given the power to fine issuers and directors for breaches of the listing rules.

These powers will be contained within the draft legislation that the Government will be publishing for consultation in the summer.

Announcing the measures the Chief Secretary said:

“We are determined to ensure that the financial markets are open and clean places to do business. London’s reputation depends upon that. That’s why we promised to crack down on insider dealing. Now we are delivering on that promise to make sure that insider dealers, and others who abuse the markets, do not get away with it.

“The FSA’s job is to sustain confidence in the market and to assist in the detection and prevention of financial crime. The FSA will now have the powers it needs to do that job.

“Its powers of intervention and discipline will be tough and effective. In some areas we are significantly extending the options available to the FSA.

“These proposals will further enhance the UK’s position as one of the best regulated and attractive financial markets in the world. We are determined to maintain London’s position as one of the foremost financial markets.”

On the FSA’s power to levy fines, Mr Darling said:

“Putting the powerful regulatory sanction of fining on a statutory basis will greatly enhance the FSA’s authority.”

The introduction of a new civil regime for combatting market abuse, including market manipulation and misuse of inside information, will mean that the FSA will be able to impose a fine on any person or firm, regulated or not, who engages in this type of abuse. The Chief Secretary made clear, however, that these powers are to complement and not replace the existing criminal offences in this area.

The Chief Secretary also announced that the FSA would, for the first time, be given powers to prosecute the criminal offences of insider dealing, market manipulation and breaches of the Money Laundering Regulations. He said:

“As the FSA will have the relevant knowledge and expertise it makes good sense to give them prosecution powers in this area.”

On the civil fines regime, Mr Darling said:

“It is essential that the financial markets are protected from abuse. Damage to the markets damages the economy as a whole. For the first time, the regulator will have a set of coherent and comprehensive civil powers in this area.”

The proposed legislation will also give the Treasury the power to prescribe the markets, and the products traded on those markets, which would be covered by the new regime. Mr Darling said that the initial coverage was likely to cover abuse, on or off-markets, which affects investments traded on recognised investment exchanges.

The new regime would be underpinned by a Code of Market Conduct, produced by the FSA following consultation, which would give greater certainty to the markets as to what kinds of behaviour were acceptable or not. The Chief Secretary said:

“It is not our intention that the new regime should stop generally acceptable market behaviour – far from it. Nor do we want to deter proper innovation in the financial markets. The aim of the Code is to provide market participants with a clearer understanding of the types of practices that will be tolerated and those that will not.”

The Chief Secretary also announced the creation of a single tribunal to consider appeals against the FSA’s use of its regulatory powers. The tribunal will be independent of the FSA and managed as part of the Court Service. He said:

“It is right to arm the regulator with an effective array of sanctions but these must be balanced by a satisfactory appeals mechanism. The new arrangements will be at least equal to, and in many cases better than, those available under the present system.”

Mr Darling also announced new powers for the Competent Authority for listing (presently with the London Stock Exchange), giving them the power to fine issuers for breaches of the listing rules, as well as directors and ex-directors where they had been directly responsible for such breaches. He said:

“The Stock Exchange currently does a good job in setting and policing the listing rules but it lacks the full range of powers. I am determined to remedy that. Effective regulators must have effective powers.”

The Chief Secretary also made clear that the current recognition and exemption regime for investment exchanges and clearing houses would be carried forward into the new legislation. He said:

“The UK’s recognised investment exchanges and clearing houses enjoy a substantial reputation throughout the world. This is due in part to their special place within the regulatory framework.

“This is the right regime to be taken forward in the new bill given the expertise of such bodies in the operation of their own markets, and their strong incentives to deliver well regulated markets.

“However, the new legislation will give the FSA greater powers of intervention to make sure that, in the rare event that something does go wrong, swift corrective action can be taken.”

The announcements were made in response to a Parliamentary Question from Ivor Caplin [Hove].

The press release issued by HM Treasury on 6 May 1997.

STATEMENT FROM THE CHANCELLOR on the Central economic objectives of the new Government.

The central economic objectives of the new government are high and stable levels of growth and employment. Our aim therefore is to rebuild British economic strength with a modern industrial base,high levels of investment and a culture of entrepreneurship  that, through economic opportunity for all, unlocks British economic potential.

This can only happen if we build from solid foundations of prudent economic management and sound finance. The enemy of growth, and the investment necessary for it, is the instability of short periodic bursts of high growth followed by recession.

So we must break from the short termism of the past – the  economic instability that has characterised the British economy not just in recent years but for most of the century. That is why I want British economic success to be built on the solid rock of prudent and consistent economic management, not the shifting sands of boom and bust.

Now is the time for long-termism. This is the time to set the British economy on a new long term course that will deliver high levels of growth and employment through lasting stability.

First interest rates.  Over the last few days, I have been scrutinising all the available economic data and taking a view on the economic outlook,informed by the latest Treasury forecast. Having looked at the latest internal information  now available to me, my judgement is that we have inherited a situation in which, in the absence of corrective action, inflation will overshoot the Government’s inflation target next year.  This view,in fact, confirms what the Bank of England has repeatedly advised over recent months, as reflected in the published minutes of the monthly monetary meetings.

I have to make decisions on interest rates the results of which will only be clear eighteen months ahead.  In reaching my decision I am influenced by the forecasts I have now received for inflation in 1998.  But I have also been influenced by what we see in the economy today, which affects these forecasts:

• recent rapid growth of consumer spending which has grown by 4 per cent over the last year;
• house prices, which are currently rising at an annual rate of 6 to 9 per cent, and are rising particularly rapidly in the south east;
• the recent pick up in average earnings, which are currently growing at 5 per cent a year;
• and the rate of growth of broad money which has been above its monitoring range for over a year.

Against these pressures, I have had to weigh the current strength of sterling, particularly against the Deutsche Mark.  And I have also taken into account the subdued level of producer price inflation, disappointing levels of manufacturing activity, the weakness of industrial investment and the reduced optimism about prospects for exports,all of which are associated with sterling’s strength.

No one should doubt my determination to create the conditions in which British business, and manufacturing, can flourish. But because inflation is the enemy of investment, we must ensure that it is under control, as it has not been so often in the recent past. We want a stable and competitive pound over the medium-term, consistent with our objective of price stability. I am convinced that it is in the interests of industry that our commitment to low inflation is delivered in practice.

Looking at all the evidence, I believe that the case for an immediate tightening of policy is conclusive.I have decided to raise interest rates by  1/4  per cent with immediate effect. The Governor has indicated his positive agreement with my decision.

Price stability is, as I have said, an essential precondition for the Government’s objectives of high and sustainable levels of growth and employment. The question is how to achieve the long-term stability that we seek?

As the Prime Minister and I have always made clear, this is a new Government that is going to move beyond the old dogmas of the past, and provide a modern and lasting framework for economic prosperity. I have said on repeated occasions that we must tackle the underlying weakness of the British economy- low investment, skill shortages and inadequate infrastructure – all of which have beset the British economy in recent years. These problems are themselves some of the underlying causes of inflation.

I have also made clear that reform is required to put monetary policy on a stable, long-term footing. In a speech in May 1995 and subsequently in our 1995 policy document, A New Economic Future for Britain, I set out my view of the proper roles of the Government and the Bank of England in economic policy.

Government has a responsibility to the public in setting the objectives of economic policy and that means that the Government rather than the Bank of England must set the targets for monetary policy.

However, as I have repeatedly made clear since 1995, we will only build a fully credible framework for monetary policy if the long-term needs of the economy, not short-term political considerations, guide monetary decision-making. We must remove the suspicion that short-term party political considerations are influencing the setting of interest rates.

As our election manifesto said:

“We will reform the Bank of England to ensure
that decision-making on monetary policy is more
effective, open, accountable and free from
short-term political manipulation.”

It has become increasingly clear that the present arrangements for policy-making are not generating the confidence that is  necessary. That is one reason why Britain has higher long-term interest rates than most of our major competitors. And the perception that monetary policy decisions have been dominated by short-term political considerations has grown.

I am now satisfied that we can put in place,with immediate effect, reforms of the Bank of England to ensure that it can discharge responsibilities for setting interest rates in an effective, open and accountable way.

This is the time to take the tough decisions we need for the long-term interests and prosperity of the country.  I will not shrink from the tough decisions needed to deliver stability for long-term growth. I have therefore decided to give the Bank of England operational responsibility for setting interest rates, with immediate effect. The Government will continue to set the inflation target and the Bank will have responsibility for setting interest rates to meet the target.  The Government’s policy is set out in a letter I sent to the Governor yesterday, the text of which I am releasing now. It is the Government’s intention to legislate for these proposals as soon as possible.  In the interim, the Governor has agreed to put in place the arrangements that will apply once the legislation has been enacted.

The main elements of the reforms are as follows. In place of the current personalised system of decision-making, decisions will be made by  a new nine-member Monetary Policy Committee, on the basis of a majority vote.  This is similar to arrangements in other countries including the USA and other G7 members. In addition to the Governor and two Deputy Governors, nominated by the Government, who will sit on the committee, the Government will also appoint four members of the Monetary Policy Committee from outside the Bank of England.

Openness of decision-making will be ensured by the publication of minutes of proceedings and votes of the Monetary Policy Committee. There will be enhanced requirements for the Bank of England to report to the Treasury Select Committee of the House of Commons to explain and be questioned on their decisions. The Court of the Bank of England will review the performance of the Bank of England, including that of the Monetary Policy Committee. The Court will be substantially reformed to make it representative of the whole of the United Kingdom and to take account of the full range of Britain’s industrial and business sectors. These changes in accountability and the new breadth of representation on the Court amount to the most radical internal reform to the Bank of England since it was established in 1694 – over 300 years ago.

Britain is, in fact, one of the few major industrial nations in which its Central Bank does not have operational responsibility for decisions on interest rates. And our record on inflation and interest rates over recent years is poor, while other countries with independent Central banks have performed better.

Taken as a whole, these proposals will ensure that decisions are taken for the long-term interests of the economy and not on the basis of short-term political pressures. This is the way to create the stability we need for higher investment and high levels of growth and employment.

The changes I have proposed are the right decisions: the right decisions for business which wants to plan ahead with confidence, the right decisions for families who have suffered enough from the uncertainties of short-term economic instability, and the right decisions for Britain.

The specific reforms I am proposing are British solutions, designed to meet British domestic needs for long term stability. Our monetary reforms provide the platform for stability  and are the building block for  a new economic policy that will equip us for the challenges of the future: one that takes steps to ensure higher levels of investment, for which I will announce new measures in due course, and improving employment opportunity by the modernisation of the welfare state. These measures will be addressed in the coming Budget and future Budgets.

But there is, as I have suggested today, a more long term context. In the last century, Britain was industrially pre-eminent. The history of this century has been one of economic decline, not least because of short termism and the pursuit of stop-go economics. I am determined that we make the right preparations for  long term national economic success, as we look to the century that lies ahead, so that we can move forward again economically. I am therefore setting in place a long term policy for long-term prosperity. The ultimate judgement of the success of this measure will not come next week , or indeed in the next year but in the long- term. I am convinced that this radical reform, together with measures we will announce to equip our economy for the challenges ahead, creates the platform of stability upon which Britain can build.

The press release issued by HM Treasury on 23 June 1997.

Paymaster Accepts Bates Review in Full New Treasury Taskforce to Combine Project and Policy Expertise Private Finance Panel Stood Down and Executive Disbanded 27 Other Recommendations Promise Real Change

Paymaster General Geoffrey Robinson today announced new institutional and policy changes to streamline the Private Finance Initiative:

Launching his programme of action to re-invigorate PFI, he said:

“We promised to re-invigorate the PFI and that is what we have done.  Malcolm Bates has applied a businessman’s mind to this policy and produced specific recommendations which I accept in full.  We have started work today on those where the Treasury leads and will pursue others as an agenda for action.  We will make a reality of the PFI idea.

“Malcolm says the public sector structure must be simplified and responsibilities made entirely clear.  Departments and agencies must be accountable for their own procurement decisions. However, he has identified an immediate need for strong central input to ensure delivery of quality transactions that provide a sound basis for future business.

“To meet this need, I am creating a new Treasury Private Finance Taskforce  – combining project and policy expertise. We will appoint a top class Chief Executive on the projects side who will report direct to me.

“The new Chief Executive will focus on the quality of PFI transactions.  He will be supported by 6-8 Executives from the private sector with direct project management experience and financial skills.  Until now, the Treasury has been involved too late in the process, leading to frustration and increased costs.  The Taskforce will help central government departments and agencies  road-test significant projects for their  commercial viability before procurement begins.

“The Taskforce’s policy side will also have its hands full. Malcolm’s review include specific recommendations to produce rapidly more standardised documentation for key stages of the procurement process.  We want greater certainty wherever it can be provided.

“The Private Finance Panel will be stood down.  I have written to all members today thanking them for their past contribution.  Malcolm Bates acknowledges the immense value that high calibre members made in freely giving their time to meet key players, speak at conferences, write articles and support a growing band of Executives.  However, he felt their on-going role was unclear and was keen to simplify organisational structures.

“Malcolm’s proposal to strengthen departmental Private Finance Unit’s alongside the  new Treasury Taskforce is directly in line with a key recommendation of the 12 point plan published in our business manifesto.  It also takes away the need for Private Finance Panel Executive.  I therefore accept his recommendation that it should be disbanded by the end of September.  Opportunities will, of course, exist within the new
structure for those individuals currently with the Executive who have the skills and experience we now require.

“The agenda for action is detailed, practical and full of common sense.  I am sure it will be welcomed as long overdue by companies and departments who have struggled for too long under previous management.  I am confident that at last we have the foundations on which public and private sectors in partnership can deliver an Initiative to be proud of.”

The press release issued by HM Treasury on 12 June 1997.

Geoffrey Robinson, Paymaster General, today took the first step in creating a Treasury Enterprise and Growth Unit by  announcing the appointment of Harry Bush, a senior Treasury official, to head the team which will be working with the Paymaster and business on the development of policies to help promote growth and innovation.

Notes to Editors

1.   Increasing the sustainable rate of long-term growth is central to the Government`s economic policy.

2.   In his speech to the CBI the Chancellor announced that the Paymaster General will head a new Enterprise and Growth Unit within the Treasury.

3.   Growth is already a central part of the work of a number of  Treasury teams.  The  new Enterprise and Growth Unit will complement this and ensure that the whole Treasury puts promoting growth at the top of its agenda.  A biography of Mr Bush is
attached.

Biography

Harry Bush, age 43, was educated at Quintin Kynaston School (north London) and Merton and Nuffield Colleges (Oxford).  He joined the Treasury in 1979.  Since then he has worked in a number of areas including export credit policy, press office, defence expenditure control and nationalised industries.  Most recently he has been working with other departments, industries, the City and overseas governments on privatisation issues.  Mr Bush will be taking up his new post immediately on promotion to Deputy Director (Grade 3).

The press release issued by HM Treasury on 5 June 1997.

Chancellor Gordon Brown, Chair of the Welfare to Work Committee, today appointed Sir Peter Davis to Chair the Advisory Task Force on the New Deal for Young People and the Long-Term Unemployed.  Sir Peter is Group Chief Executive of the Prudential and Chairman of Business in the Community.

The Task Force will be a powerful tool in helping to deliver the Government`s commitment to help 250,000 young unemployed people move from welfare to work and to provide new opportunities to the long-term unemployed.

Making the announcement Mr Brown said:

“This government is determined not to continue down the road of a permanent have-not class, unemployed and disaffected from society.  Our Welfare to Work
programme, funded from the proceeds of the Windfall Levy, will break this cycle of despair and give hope and opportunity to a whole section of our society. The best form of welfare for people of working age is work.

“For the programme to be a success, it is vital that there is an enthusiastic response from employers and the voluntary sector.  Sir Peter, who was knighted
this year for services to training and industry, has the perfect blend of experience and skills to turn our ambitious plans into reality.  He and his Task Force will be bringing his considerable energy and business skills to bear on this priority task.  Sir Peter will get British business working to get the British back to work.”

Looking forward to his challenge, Sir Peter said:

“My work with both the Basic Skills Agency and Business in the Community has demonstrated to me the vital importance of getting unemployed people into work or proper training schemes.

“I was pleased to accept this position but in order to make time available, I am giving up certain outside commitments.  I have therefore today told David Blunkett that I must stand down after eight years as Chairman of the Basic Skills Agency.”

The press release issued by HM Treasury on 5 June 1997.

A call to city business to second their brightest staff to the proposed new Securities and Investment Board was issued today by Helen Liddell, Economic Secretary.

Speaking at the Institute of Economic Affairs seminar, Mrs Liddell said that secondments of this sort were routine in the US and they must start to happen here.

Mrs Liddell said:

“Who can you second to this new purposeful regulator? It will need people who are knowledgable and streetwise. This will be no soft option. SIB can use your smartest and strongest.

“Men and women of this calibre face a challenging environment with a unique opportunity to help shape the nature of regulation in the future. And when they return to you, … what a powerful resource you will have to help build your own business.”

The Minister went on to set out the broad framework for reform of financial services regulation and how she wanted to see the City of London being a centre of excellence in this area. She said:

“The UK financial services industry needs a regulator which is a world leader. We must seize the opportunity now to develop a modern regulatory structure to see us through well into the next century.

“The enhanced SIB … will be a pace setting, world leading regulator, overseeing and helping generate an environment where business prospers and is able to compete at home and overseas, meeting the challenges ahead is essential for a world beating industry.”

Mrs Liddell emphasised the Government’s commitment to openness and called on businesses to put forward their views in the future structure of regulation.

The Minister said:

“We recognise that we need to take the advice of those who do know how the industry works. If the industry ignores this opportunity to help shape the new regulatory regime, then they will have no one else to blame but themselves.

“Together we have the opportunity to put in place the sort of regulation that will meet the industry and consumers’ needs. We have flagged up our intention now in order to take people with us. We are not in the business of developing an overbearing bureaucracy. What we want is a regulator that is appropriate, responsive and flexible, a regulator that recognises the varying levels of sophistication of the investing community”

The press release issued by HM Treasury on 4 June 1997.

CHANCELLOR LAUNCHES UK ACTION PLAN TO CREATE LASTING JOBS IN EUROPE

A new UK initiative to cut unemployment across Europe was launched today by Chancellor Gordon Brown.  Mr Brown has sent his proposed Action Plan to his Finance Minister colleagues in the EU.  He will raise it at the Economic and Finance Council in Luxembourg on Monday.

Mr Brown commented: “Europe needs to create real and lasting jobs for all of its people.  We must act now to complete the single market and ensure that for those countries that join, EMU works on the basis of sustainable convergence.

“As I said last week in describing the G8 jobs initiative, employability is the key to a cohesive  society which offers opportunity to all its citizens.  Better education and higher skills, combined with reduced burdens on business, are the way to guarantee the high and stable levels of growth and employment which are the core goals of our economic policy.

“This is the new economic agenda.  It enables us to benefit from flexible labour markets, while ensuring that everyone can share in the rewards of a more dynamic economy.

“We intend to make this a key theme of our Presidency of the G8 and of the European Union.

“This approach is just as essential in Europe.  Something must be done urgently to increase the job creating potential of the European Union’s economies.  A new focus on creating lasting jobs is needed.  We need to increase the flexibility of Europe’s work force, look at how to combine an efficient welfare state with a dynamic job creating economy and remove the bureaucratic barriers keeping people from jobs.

“My action plan for Europe involves the ECOFIN Council focusing on how to use best practice to cut unemployment across the community; seeks to extend and complete the single market so that its job creating force can be renewed, and focuses on how the small business sector can create more jobs in the context of the single market and EMU.

“I intend to discuss these priorities with my ECOFIN colleagues in Luxembourg on Monday.

“These are practical proposals.  We will be looking for concrete results by the end of the British Presidency of the European Union in a year’s time.”

The historic press release issued by HM Treasury on 31 July 1997.

Key measures to improve the long-term performance of the UK economy became law today as the Finance (No2) Act 1997 received Royal Assent, reflecting the Government’s pledge to put its Manifesto promises into action.

Commenting on the completion of the legislation required to implement the Summer Budget’s measures, Financial Secretary Dawn Primarolo said:

” We said we would introduce measures for long-term stability – and we have, with a 5 year deficit reduction plan.

We said we would introduce measures to encourage investment – and we have.

We said we would introduce a windfall tax to fund a comprehensive scheme to get people off welfare and into work – and we have.

We said we would reduce VAT on fuel to 5% – and we have.

And we have done so much more, including providing extra money for our priority areas of schools and the health service.

This is a Government which keeps its promises. We are determined to equip the country properly for the future by putting in place the long-term framework for stability, investment and employment that it needs.”

NOTES TO EDITORS

The Summer Budget was on the 2 July 1997. The Finance Bill was published in draft on Friday 4 July. The Finance Bill was published on Tuesday 8 July. 2nd Reading of the Bill was on Thursday 10 July. Committee of the Whole House took place on 15-16 July. Standing Committee was from 17-23 July in 9 sittings.Report stage and Third Reading was on 28-29 July. The Bill went to the Lords on 31 July and was also enacted on that day.

The press release issued by HM Treasury on 31 July 1997.

A blueprint for the new single financial regulator, submitted by the Securities and Investment Board (SIB), was welcomed today by the Chancellor Gordon Brown.

Writing to Sir Andrew Large, the outgoing Chairman of the SIB, the Chancellor said:

“I have been especially impressed by the positive contribution which has been made by all the regulatory bodies. This spirit of co-operation and common purpose will stand us in excellent stead as the plans for the single regulator are implemented.”

The Chancellor said that the plan set out a sound basis for implementation by the new Chairman, Howard Davies. He also underlined the importance of maintaining the regulatory standards during the transition to the new arrangements.

In the letter he also took the opportunity to thank Sir Andrew Large for his five years of service as the Chairman of the SIB. The Chancellor said that, since the announcement on 20 May of the creation of the SIB, enormous progress had already been made.

The Chancellor reiterated his aim of publishing a draft financial services bill for consultation next Summer.