Tag: 2002

The press release issued by HM Treasury on 2 July 2002.

Credit Union members will be given similar protection to bank customers under new regulatory measures that come into effect today.  The new arrangements will be overseen by the Financial Services Authority (FSA).

Ruth Kelly, Financial Secretary to the Treasury, said:

“Today’s announcement is a milestone for the credit union movement. For the first time credit union members will receive a similar level of protection to that afforded to bank and building society customers.

The Government believes that credit unions have an important role in tackling financial exclusion, encouraging saving and providing affordable credit. FSA regulation will allow credit unions to offer a wider range of services and compete more effectively for deposits.

The Government received strong support from across the credit union movement for regulation by the FSA. There has been a wide-ranging consultation to ensure that the new regime is proportionate.”

The press release issued by HM Treasury on 9 July 2002.

Ruth Kelly, Financial Secretary to the Treasury, today welcomed the publication of Ron Sandler’s review of the market for medium and long-term retail investment commissioned by Chancellor Gordon Brown.

Ruth Kelly said:

“This report sets out a vision of a simpler, more transparent and more competitive medium and long-term savings industry which the Government endorses.

Ron Sandler’s recommendations have the potential to benefit consumers, the retail investment industry and improve the workings of the market. They will bring greater competition, greater efficiency and more productive investment. If we can produce simpler, safer products that consumers can understand and that are economic for providers to sell, we will be able to boost the level of saving.”

Work and Pensions Secretary Andrew Smith welcomed the support Mr Sandler’s proposals give to the pensions agenda:

“Millions of people depend on the retail savings industry for their income in retirement. I welcome any proposals which can give them a better deal.”

Key recommendations of the Review include:

• a set of safer, good value, easy to understand ‘stakeholder? investment products. These would be able to be sold through a lighter touch regime for sales and advice of investment products;
• Reforms to with-profits policies to make their structure and management simpler and more transparent;
• Tax measures aimed at simplifying the current regime for retail savings products.

Ruth Kelly added:

“A set of ‘stakeholder products? would provide safer, good value products that ordinary people can understand. Greater focus on product design can clear the way for a streamlined sales process. This will make it profitable for providers and distributors to sell to a wider range of less well-off people. That will encourage people to save.

Building on Ron’s suggestions, we will be consulting consumers representatives, the industry and the FSA on these stakeholder products and their design. We will be working closely with the FSA who will separately want to consult on the regime for their sale.

The proposals also represent a real opportunity for the industry and others to think radically about the provision of financial advice. They offer the potential to extend access to low cost, good quality, generic advice to the mass market.

The Report tackles longstanding concerns about with profits policies. While at the same time recognising the value that many people give to being able to smooth out investment returns. And he has recognised that change in this market cannot come overnight. This balanced approach provides an opportunity to move to a new stable future for with profits.

Ron’s proposals on distribution, consumer education and investment will produce a more transparent, better-informed and hence more competitive market.

We will consider the proposals on tax as part of the Budget process in the usual way.”

The press release issued by HM Treasury on 12 July 2002.

The Government today published “Towards Full Employment in the European Union”. The paper sets out the challenges facing EU labour markets and the benefits of meeting the employment targets set at the Lisbon and Stockholm summits.

Ruth Kelly, Financial Secretary to the Treasury said:

“The Government firmly believes that through concerted and joined up action and the spreading of best practice Europe can create the quantity and quality of jobs necessary to deliver new levels of prosperity and social justice.

Employment matters.  It is key to prosperity and social inclusion.  It lies at the heart of our domestic policies.  And it is central to the vision of a dynamic, competitive and socially inclusive knowledge-based economy set out by European Union leaders at the Lisbon summit in 2000.”

Notes to editors

1.  The European Union contains 15 labour markets, with different cultures, traditions, frameworks and institutions. Yet we share a common goal – employment opportunity for all. The Government has set out its views on the challenges facing labour markets in the UK and other EU Member States in moving towards our long-term goal of full employment in the EU.

2. The EU has three employment targets for 2010 (70% total employment rate, 60% female employment rate and 50% older workers employment rate) and though the UK already has employment levels in each group, above the target rates, the EU as a whole must improve labour market performance and increase participation in order to meet these targets. There are real and tangible benefits to Member States and the EU as a whole in meeting these targets, not least to productivity and economic growth. Moreover, the paper shows the key importance of employment  policy in promoting social inclusion.

3. Since 1997, employment in the UK has increased by 1.5 million.  Long-term unemployment among young people has been virtually eradicated.  In Europe, 10 million net new jobs have been created in the five years since the launch of the European Employment Strategy or Luxembourg Process.

4. The successful labour market policy mix will vary according to a Member State’s needs structures and institutions.  But EU experience makes it possible to identify a number of key elements.  These include tax-benefit reform, active labour market policy, promoting equally opportunities, well designed and targeted employment protection legislation, education and encouraging entrepreneurship. The combination of different national circumstances, and different strengths and weaknesses, means that there is no single EU blueprint for labour market reform. To reach the Lisbon and Stockholm goals, Member States must identify and address their own problems in the light of their own circumstances and preferences.

The press release issued by HM Treasury on 18 July 2002.

Chancellor Gordon Brown and Competition Minister Melanie Johnson today accepted undertakings from the four main clearing banks to pay interest on current accounts or provide free money transmission services to their SME customers in England and Wales.

Mr Brown said:

“The access to finance and the quality of service small businesses receive from banks are critically important to theirs, and the British economy’s, productivity and prosperity. I welcome the steps taken by the banks to take forward the Competition Commission’s proposed remedies to promote competition in this sector. Many of the 3.5 million small businesses in the UK have the potential to benefit from today’s announcement.”

Melanie Johnson added:

“I am pleased that the banks have addressed the interim remedies which we wanted to see in place by the end of the year. I now hope we can also make good progress on the long term remedies which are needed to make competition in this market as effective as possible.”

The banks concerned are the Royal Bank of Scotland Group, HSBC, Barclays and Lloyds TSB.  The rate of interest paid will be at least the Bank of England Base Rate less 2.5%.  Each bank has undertaken to implement the remedy no later than 1 January 2003.

The press release issued by HM Treasury on 19 July 2002.

Yorkshire business will benefit from the £375 million Spending Review boost for Regional Development Agencies (RDAs), Economic Secretary and Yorkshire MP John Healey told local business representatives in Leeds today.

Speaking to a 200-strong audience at the conference ‘Unleashing the Power of Yorkshire Business’, organized by Yorkshire Forward, Mr Healey said :

“RDAs are a cornerstone of the Government’s new regional economic policy.  This substantial extra money will further strengthen their role as catalysts for economic development in the regions.

It will boost RDAs? work on driving forward economic development and regeneration in the regions. RDAs are being given considerable new influence in areas with a direct bearing on regional economic performance.

For the first time they will be given responsibilities in the areas of transport, tourism, planning and housing. They will also work closely with the Small Business Service (SBS) and Learning and Skills Council (LSC) to pilot the regional management of services to small businesses and improvements to adult skills.

Yorkshire and Humberside is a dynamic and productive region. I am sure businesses here will see and seize the new opportunities with their traditional acumen. Local industries and inward investment in bio-technology, digital and creative industries, are powerful drivers of economic growth, creating employment opportunities and raising the standard of life for local people.

With extra resources and flexibility within the Single Pot funding framework, Yorkshire Forward, working with Local Learning and Skills Councils, Local Authorities, schools, colleges, and the business community, will be able to do even more to promote growth across the region.

The agencies that Government is now giving strategic leadership, substantial funds and increasing freedom to drive the regional economic opportunities, all have bases here in Yorkshire and are all strongly business-led: Yorkshire Forward, SBS and LSCs.

The challenge now for business is two-fold: to take advantage of new initiatives on skills, investment and ICT, but also to get involved with Yorkshire agencies to help lead and influence plans for the future.”

The press release issued by HM Treasury on 23 July 2002.

The Government today published its science, engineering and technology strategy, which sets out how the additional £1¼ billion investment in science and technology from the 2002 Spending Review will be used to boost the UK’s  economic performance and  raise levels of  innovation and growth. Building on the Spending Review commitment of additional resources, this strategy demonstrates how the Government is strengthening the science and technology research base and improving scientific and technical skills throughout the UK. This includes classroom to PhD training, school labs to national research facilities, world class research and development, and business innovation.

As part of this strategy, the Government is today setting out its full response to the review by Sir Gareth Roberts of the supply of skilled scientists and engineers into the economy. The Government is positively embracing the wide range of recommendations and investing new resources to implement them.

Launching the Government’s science, engineering and technology strategy at the Wellcome Trust, Paul Boateng, Chief Secretary to the Treasury, said:

“Our investment in science represents the largest sustained increase in science spending for more than a decade. We are taking forward Sir Gareth Roberts’ recommendations, which will ensure we have a strong supply of scientists and engineers in the UK. The investment we are making will allow science to be properly funded in the long term, and will fund the development of research in new areas.

We are determined to make sure that the UK remains at the forefront of scientific and technological progress, and that it converts this advantage to our economic gain.”

Patricia Hewitt, Secretary of State for Trade and Industry, said:

“Today’s announcement shows we’re delivering on the manufacturing strategy that I published in May. Our manufacturing strategy said that more needed to be done to stimulate innovation and close the productivity gap . Today we’re putting our money where our mouth is, with one and a quarter billion pounds to fund our science strategy. I am determined to drive a coach and horses through old-fashioned views on manufacturing. Our investment today will help companies innovate to produce the products that people want to buy tomorrow.”

Estelle Morris, Secretary of State for Education and Skills, said:

“This new investment will support scientists and budding scientists from school age through to post graduates and from schools through to cutting edge research. It will boost teaching skills, fund increases in pay in higher education and provide exciting new training opportunities.  The Government investment in science is a recognition of its importance both to the economy and to society.”

Hosting the launch, Dr Mike Dexter, Director of The Wellcome Trust said:

“The Wellcome Trust shares the government’s vision for improving science teaching in our schools, research infrastructure in our universities, stipends and salaries for our Ph Doctorates and researchers, and the translation of research into real benefits for society. We also applaud the government’s recognition of the role that charities play in driving forward these programmes. In recognition of this positive investment in science, the Wellcome Trust has announced a number of strategic partnerships with government.”

Responding to the Government’s commitment to strengthen science and technology skills, Sir Gareth Roberts, President of the Science Council and President of Wolfson College, Oxford, said:

“I am delighted that the Government is taking forward wholeheartedly the conclusions of my report on science and engineering skills alongside additional investment in scientific research. Through these measures I believe the Government can secure a strong future for science, engineering and innovation in the UK.”

The strategy, issued jointly by DfES, DTI and H M Treasury, ties together the major increases to science, engineering and technology spending across schools, universities and the research base, along with the Government’s actions to boost business innovation through wider economic reforms. It also sets out how the Government will improve the way it manages science within Government. The new spending plans will:

• move the research base onto a more sustainable long term footing, by providing a dedicated capital funding stream, increasing to £500 million a year by 2004-05 for universities’ science research infrastructure, and providing an additional £120 million a year from 2005-06 to the Research Councils to increase their contribution to the costs of research projects undertaken in universities;
• increase resources for science and engineering research programmes by £400 million a year by 2005-06 (compared to 2002-03), an average rise of 5 per cent per year in real terms;
• increase resources for knowledge transfer from the science base (including funding from OST and DfES), with £90m per year by 2005-06 for a newly enlarged Higher Education Innovation Fund. This will be complemented by rising resources (an extra £50m by 2005-06) for DTI’s programmes to stimulate business innovation; and
• provide for an additional investment by the Office of Science and Technology of £100 million a year by 2005-06 (in addition to significant extra resources for DfES) to ensure a strong future supply of skilled scientists and engineers by taking forward the recommendations of Sir Gareth Roberts’ Review.

To demonstrate the importance of a strong science base for British manufacturing industry, these announcements coincide with the laying before Parliament of a Command Paper on manufacturing policy.

In response to Sir Gareth Roberts’ review the Government will:

• bring forward measures to address difficulties in recruiting and retaining science and maths teachers , building on student loan write-offs and the flexibilities already available to schools;
• create a new national centre for excellence in science teaching (in partnership with the Wellcome Trust) to provide enhanced training opportunities;
• introduce a major programme to pay undergraduates and postgraduates (particularly in science, maths and technology) to go back into schools and support teachers and pupils;
• review the maths and science curricula to ensure they appeal to pupils whilst meeting the needs of employers and higher and further education;
• invest to modernise science and technology laboratories and equipment in universities and schools;
• increase the minimum stipend for Research Council students to £12,000 by 2005-06, with the average stipend for Research Council PhD students rising to over £13,000 over the same period;
• increase the pay of Research Council funded postdoctoral researchers by an average of over £4,000 by 2005-06;
• ensure that Research Council funded PhD students and postdoctoral researchers have access to significantly improved training opportunities to develop further the transferable skills important to employers;
• make further resources available for universities to recruit and retain key academic staff, including those in science and engineering; and
• work with employers to improve the employment prospects for scientists and engineers choosing to work in business research and development.

To complement the programme of resources and reform from the Government, the Wellcome Trust is committing an additional £280 million over the next 5 years for complementary funding across the range of shared priorities. This will support new programmes of science research and improved training for science teachers. This commitment follows the major contributions of the Wellcome Trust to research infrastructure funding in the previous two Spending Reviews.

There will also be a new strategic alliance with the Wellcome Trust to strengthen clinical veterinary teaching and research in universities. The Department for Environment Food and Rural Affairs (DEFRA) are announcing today that they will be investing £15 million between 2003-04 and 2005-06 into this area, in addition to an associated investment of £25 million over five years from the Wellcome Trust.

The press release issued by HM Treasury on 23 July 2002.

The Government today began a consultation examining ways in which greater disclosure of beneficial ownership of companies could help law enforcement agencies tackle financial crime.

Potential benefits of greater disclosure are:

• enhanced deterrence and prevention of financial crime
• reduced credit costs  for business
• higher recovery rates of criminal assets
• higher business confidence

In a joint statement, Ruth Kelly, Financial Secretary to the Treasury and Melanie Johnson, Parliamentary Under Secretary of State for Competition, Consumers and Markets, said:

“The Government is determined to ensure that the UK stays at the forefront of the international fight against organised crime and terrorist funding. The consultation will examine ways of further strangling the flow of funding for crime and terrorism and demonstrates the UK’s continuing commitment to the highest international standards in preventing money laundering and combating terrorist funding.

We need  to ensure that  UK companies  are not subject to disproportionate new burdens.  Any new regulations should be proportionate and careful attention will be paid to the impact of any potential changes, in particular on small companies.

We hope this Assessment will offer the opportunity for the key issues to be widely discussed and are keen to hear the views of industry, law enforcers and policy makers in this field.”

The press release issued by HM Treasury on 25 July 2002.

Community sport will benefit as tens of thousands of clubs gain from Government changes to help community amateur sports clubs (CASCs) ease their tax bills.

From today, many CASCs can be better off if they register with the Inland Revenue to claim tax reliefs, which mean:

• fundraising income up to £15,000 exempt from tax
• income from interest exempt from tax
• rental income up to £10,000 exempt from tax
• disposals assets exempt from capital gains tax
• gift aid on individual donations
• inheritance tax relief on gifts
• gifts of assets on no-gain, no-loss basis for capital gains
•  business relief on gifts of trading stock

Welcoming the new tax package for sport in the community, Treasury Minister John Healey said:

“We want to encourage as many people as possible – particularly young people – to take up sport. These measures will make it easier for local sports clubs to offer them the chance.

Sports clubs play an invaluable role in their communities.  Local people give their time willingly and voluntarily to make these clubs work.  Despite the improved Charity Commission guidance issued in April, not all-amateur sports clubs can apply for the tax benefits of charitable status. The new tax package rectifies this, offering clubs many of the benefits of charitable status.

I hope that as many clubs as possible will now register for the tax breaks – it is simple to do and could bring huge benefits.”

Sports Minister Richard Caborn said:

“This is great news for amateur sport. Building on the work done by DCMS, the Charity Commission and Sport England on improved guidance for sport, this package should ensure that no amateur club will miss out on a range of real financial benefits.”

Trevor Brooking CBE, Chairman of Sport England, welcomed the change:

“Combined with the Charity Commission’s extension of charitable status, which will also benefit many of these clubs, this tax relief change will benefit grass roots sport.  It will help clubs off the pitch so they can perform better on it.”

The Charity Commission announced in November 2001 that it would recognise as charitable “the promotion of community participation in healthy recreation by the provision of facilities for the playing of particular sports”. DCMS subsequently worked with the Commission on the improved guidance for sport which was published in April 2002. However, Treasury and DCMS consultation with CASCs and their representative bodies revealed that CASCs who could not, or did not want to, apply for charitable status needed an alternative system of support.

The tax relief package was designed to meet these concerns and ensure that community sport in the UK is put on the best possible basis to encourage and develop local talent.

For a great many clubs, charitable status remains appropriate and offers wider benefits, including:

• mandatory 80 per cent business rate relief
• tax exemption for trading income
• Payroll Giving, and tax reliefs for gifts of shares or land and buildings by individuals and companies

Charitable status can also open up new sources of funding (e.g. grants available from other charities such as community foundations).