Tag: 2003

The press release issued by HM Treasury on 28 June 2004.

Sir Derek Morris today published a consultation document seeking views from all interested parties on his review of the actuarial profession.

Issues which Sir Derek intends to focus on include:

• the role of the appointed actuary
• standard setting and monitoring
• audit, peer review and scrutiny
• disciplinary procedures
• the role of the Government Actuary’s Department

Sir Derek Morris said:

“I hope that all interested parties will feed in their views on all aspects of the Review, and I look forward to discussing the issues with members of the actuarial profession, their customers and other interested parties.”

The closing date for responses to the consultation is 10 September 2004. Sir Derek Morris will publish an interim assessment in the autumn and will submit the final report, with recommendations for change, to the Government in Spring 2005.

The press release issued by HM Treasury on 4 July 2003.

A £1 billion boost for local government, backing enterprise for the regions, was launched today, as John Prescott and Gordon Brown launched a consultation paper on the new Local Authority Business Growth Scheme at the Local Government Association Conference in Harrogate.

The scheme, which will reward local authorities for encouraging business in their area, will allow councils to retain money from business rates where there is increased economic growth in their area.  It should start in April 2005.

The Deputy Prime Minister said:

“This scheme should give councils a real incentive to work together with business to create enterprising and thriving communities.  We want to create a win-win situation where flourishing businesses will benefit everyone in the community.”

The Chancellor said:

“For the first time, all of us in partnership can each secure financial benefits from creating new businesses. Based on historical data, we estimate that, as a result of this measure, local authorities could gain up to £1 billion over the next three years – showing that the next stage of our employment and growth strategy for Britain can only succeed with greater initiative and engagement by local areas. Further reforms in the Pre-Budget Report will reflect this.”

Responses to the Consultation Paper are invited by the end of October.

The press release issued by HM Treasury on 28 October 2003.

Detailed proposals for the Child Trust Fund (CTF) were published today.  As the Chancellor announced in Budget 2003, each child born on or after 1st September 2002 will receive an initial endowment of £250 rising to £500 for the poorest children – a reform which is progressive and universal, benefiting every child and with more to those who need help most.

Amongst the measures announced today are:

• The Government will make a further payment when children are seven years of age. The amount of this payment will be confirmed at a later date.
• Family and friends will be able to contribute up to £1200 a year between them to the fund.
• It will not be necessary to make a specific claim for the CTF – access will be through the child benefit system.
• Providers will be able to offer a variety of accounts. However all providers must offer a stakeholder account – a low cost risk-controlled equity account.
• All income and capital growth will be tax exempt.
• Special arrangements will be made for children in care.

The fund will help to build up a stock of assets for the young person to reinvest or use when they reach 18 years of age, giving them added security and opportunity in adulthood.  Financial education will also help individuals to make better financial choices throughout their lives.

Commenting on the proposals, Financial Secretary Ruth Kelly said:

“The Child Trust Fund will ensure that children will have assets of their own to help them get a better start to their adult life.  It is a leading example of the Government’s commitment to an active welfare strategy based on the principles of security, opportunity and responsibility for all.

“It will also give young people experience of savings and investment opportunities and help them to manage their finances better in later life.”

The press release issued by HM Treasury on 2 July 2003.

A major review of the organisations dealing with tax policy and administration was announced by Chancellor Gordon Brown today.

The review will report to Treasury Ministers and be chaired by Gus O’Donnell, Permanent Secretary to the Treasury working with the revenue departments and their Chairmen. It will examine the best organisational arrangements to achieve Government’s tax objectives both now and into the future.

Launching the Review, the Chancellor said:

“Since 1997, Inland Revenue and HM Customs & Excise have worked effectively with the Treasury to play a key role in support of this Government’s reforming agenda. Their record is one of success and a tribute to the staff of the revenue departments and to their Chairmen, Sir Nicholas and Sir Richard. The revenue departments do a first rate job and this review is intended to build on their success to ensure we make the best of the resources that we have.

“The primary focus of the review will be making public service delivery more effective and efficient. It will be conducted in discussion with unions and other stakeholders.”

Specific points the review will cover will include:

• ways to enhance service delivery to taxpayers and how these are most effectively ensured.  Inland Revenue and Customs & Excise together deliver some of the most important functions for the Government, for the public, and for the business community.  They have a very large number of customers in common.  The review will have a particular remit to examine whether, through closer working between the revenue departments or through organisational change, costs to honest taxpayers and compliance costs to businesses can be reduced;
• the coherence of administrative systems, including information and efficient use of resources across the broad area of tax administration taking into account future technological developments which will open new avenues for enhanced services;
• how best to ensure consistent and effective enforcement of the law against those who do not pay their fair share, particularly those who make a business out of cheating the tax system.  As part of this review we will examine work being done separately by the Government on the links between tax organisations and the law enforcement agencies;
• the most appropriate structure for delivering policy advice to Ministers.  Currently officials working on strategic tax policy questions are spread across three departments.  A more co-ordinated approach to fiscal policy advice is desirable, and the review will look at how we can best create a focus for tax policy work;
• a new framework for accountability for those working on tax, to set out more clearly the roles and responsibilities of all those involved.  Greater clarity will provide better certainty both for officials and Ministers.  The review currently being conducted by Gus O’Donnell which was announced in the Government’s response to the Fourth Report 2003 of the Treasury Select Committee will form part of this work.

The press release issued by HM Treasury on 7 July 2003.

A review looking into how Government can support regional and national  Museums more effectively was launched today by Chief Secretary to the Treasury Paul Boateng. The review aims to help museums and galleries acquire important works of art that might otherwise be sold abroad.

A consultation paper “Saving Art for the Nation” published today examines the existing taxation and funding arrangements which affect the ability of museums and galleries to acquire and display works of art and culture. The findings of the consultation will contribute to the review.

The Chief Secretary has asked Sir Nicholas Goodison who was until recently Chairman of the National Art Collections fund, to lead the review.

Paul Boateng said:

“The Government recognises the importance of ensuring that important works of art stay in the country so that we can all enjoy and learn from them. We already work closely with the arts world to ensure that where possible museums and galleries are able to display precious works of art. The review aims to ensure that the support on offer is practical, well-targeted and value for money.”

Estelle Morris, Minister for the Arts, supporting the review said:

“I welcome the launch of this review of support for acquisitions. DCMS is working to make progress and is looking forward to finding some practical solutions to prevent the loss of cultural objects that are important to this country.”

Sir Nicholas Goodison, said:

“Acquisitions refresh and enrich the public collections, which are a crucial part of our cultural life. I greatly welcome the Government’s wish to look at these subjects. I look forward to hearing everyone’s views.”

The press release issued by HM Treasury on 7 July 2003.

Further details on the key reviews that will form the backdrop to the next Spending Review were announced in the House of Commons today by Chancellor Gordon Brown.

The terms of reference for three reviews were announced today:

• The Devolving Decision Making Review which will examine how best to achieve decentralised delivery and responsive local and regional services. This will be done in a way that is consistent with equity and efficiency, and against a clear framework of national standards.
• The Childcare Review which will consider whether the long-term projection for childcare and early years education is sufficient to meet the Government’s aims for employment and educational attainment. It will look at how fast the sector can expand and what more needs to be done in particular areas such as childcare for school age children and the role of extended schools.
• The Child Poverty Review will set out what further action is required to halve child poverty by 2010 and eradicate it by 2020.  It aims to ensure the welfare system and the range of public services work together to avoid the waste and poor outcomes which still occur all too often. Among the specific issues it will look at are increasing employment opportunities; improving the effectiveness with which current investment in public services tackles material deprivation; improving life chances; and dealing with the crisis points that families often face, all with an eye to the particular issues facing families in deprived areas.

The Review of the Voluntary and Community Sector will focus specifically on five public service areas: Health and Social Care; Crime and Community Cohesion; Education and Employment; Housing and Homelessness; and Children and Families.  It will build on the foundations laid in last year’s Cross-Cutting Review of the Role of the Voluntary and Community Sector in Service Delivery and will make practical recommendations about specific areas where Government, the voluntary and community sector and social enterprise can work together even more closely to deliver world class public services.

The Chancellor also announced today that the first stage of the Review of Efficiency in Public Services will be completed later this month.  The Review examines new ways of providing Departments, their agencies and other parts of the public sector with incentives to exploit efficiency savings, and so release more resources for front line delivery. It will make proposals for strengthening the drivers of efficiency and offer examples of existing good practice in the wider public sector.  The Review will lay the basis for a continuing programme of work to improve efficiency.

Paymaster General Dawn Primarolo, will lead the Review of Financial Support for 16-19 year olds.  The review is examining the incentives for young people to participate in education and training and the interaction between this support and any new minimum wage for 16 and 17 year olds.  The review will look at ways of improving the system of financial support in order to increase young people’s participation in education and training and at ways to simplify the system radically in the long-term. The Paymaster General will work with children’s groups, the Local Government Association, the Low Pay Commission and in consultation with young people and their parents. It will report in spring 2004.

Sir Michael Lyon’s review on the scope for relocating public sector activities from London and the South East is conducting a public consultation on the impact of previous relocations and the economic effects of decentralization. In parallel Government Departments are preparing proposals for relocating activities and contributing to the Review.

In addition to the reviews that will feed into SR2004, Derek Wanless has been asked to provide an update on the long-term challenges in implementing the “fully engaged” scenario to improve population health as set out in his 2002 report. The terms of reference will be published in due course.

The press release issued by HM Treasury on 9 July 2003.

Raising skills levels will be central to the next Spending Review, announced Chancellor of the Exchequer Gordon Brown today.

Speaking at the launch of today’s National Skills Strategy, Gordon Brown said:

“That we have this morning leading industrialists, educationalists and Trades Unionists alongside a dozen Ministers, Cabinet Ministers and MPs is a testimony to the importance, not just of the Skills White Paper Charles Clarke is launching this morning, but a testament to the growing and central importance of education, training and skills to the whole future of the British economy.

“Entrenching stability and tackling excessively high levels of unemployment were the necessary starting points in 1997 of our strategy for growth and prosperity.

“Having made progress in entrenching stability and raising employment our national priority must be to ensure a flexible economy by raising skills levels.

“Only by becoming number one for our skills will our economy become number one for its success.

“Tomorrow, I will present to Parliament further measures for labour market flexibility, which alongside this new Skills Strategy, will aid the push towards our objective of full employment.  But everyone here knows already that skills – particularly in basic and intermediate qualifications – are, today the British Achilles’ heel, the most worrying inflexibility of all within our labour market and this is the first comprehensive strategy for years to tackle the problem.

“Today we find that there are almost 600,000 vacancies in the economy. The North East, which used to have few vacancies, has today over 10,000.

“There are not just vacancies in the South East but in every region. In Wales there are nearly 15,000, in the West Midlands 24,000, in Scotland over 25,000 and in the North West nearly 30,000.

“And in every region we are short of important skills today. While around 25 percent of the UK’s workforce have degree level skills, there are still 8 million men and women with low or no skills – 20 percent of 18 to 24 year olds.

“In some Local Authorities, nearly 100 per cent of 16 year olds are participating in education or training. In others – Salford, Milton Keynes, and Harrow – it is less than 70 per cent.

“Some Local Authority areas in our country have nearly 65 per cent of 16 year olds with 5 A*-C GCSE, others have less than 30 per cent.

“And we also need a step change in the skills of the 80 percent of those in today’s workforce will still be there in 2010.

“So as well as the new measures and the new partnership announced by Charles today:

• Including the entitlement to free training for anyone without a good foundation of employability skills;
• Targeted support for those at higher level skills such as technicians, to get the training they need;
• Better information, advice and guidance on skills, training and qualifications; and
• The new National Skills Alliance and regional devolution of skills budgets,

“We are extending the Employer Training Pilots from six to twelve areas, around a quarter of the country, offering incentives for firms to give their staff paid time off to train towards basic skills and NVQ Level 2.

“And with apprenticeships, which a few years ago were dying, already rising to 220,000, we today offer finance so that by 2004 over a quarter of young people aged between 16 and 22 will enjoy an apprenticeship with even more benefiting by the end of the decade, giving every young person who works hard and tries hard the chance of an apprenticeship or college or university.

“I can say today with certainty that skills are going to be central to the next Spending Review and I look forward to continuing to work closely with Charles Clarke, Andrew Smith and Patricia Hewitt, as well as with all of you here, from CBI, TUC, Small Business Council – central and local government, employers and employees as we take this strategy forward.”

The press release issued by HM Treasury on 10 July 2003.

A consultation on improving the definition of research and development (R&D) for tax credit purposes was published today by Chancellor Gordon Brown. ‘Defining Innovation’ will ensure that the definition is up to date,  technologically consistent and internationally competitive.

Chancellor Gordon Brown said:

“The Government introduced R&D tax credits in recognition of the importance of innovation for driving up the UK’s productivity.  They have been welcomed by businesses because they provide a real incentive for additional R&D spending. We now intend to build on the success of R&D tax credits by ensuring that the definition of R&D provides businesses with the clarity and certainty they need.”

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

“R&D is vital to firms’ survival and growth. Innovations in production processes and the development of new or improved products and services can cut costs, improve quality and win orders. R&D tax credits have a key role to play and it is essential that companies understand which activities will qualify, so that they can more effectively plan their investment in R&D.”

Since the R&D tax credits were introduced – in 2000 for small and medium-sized companies and 2002 for large companies – the Government has worked closely with businesses and their representatives to make sure the operation of the tax credits scheme is as straightforward as possible. An improved definition of R&D will help companies understand the likely benefit of the credit at an early stage in their R&D planning their R&D activities, giving them greater investment certainty.

‘Defining Innovation’ consults on:

• rewriting the current definition of R&D for tax purposes, published by the DTI, so as to provide greater clarity and certainty for companies;
• exploring areas where the definition might be extended, such as design, to take account of the full range of innovative activities carried on by companies; and
• providing greater certainty over what constitutes ‘consumable stores’ for tax credit purposes; the extension of the credits to include expenditure on licences for advanced software; and the definition of  ‘qualifying bodies’ (to which large companies can subcontract R&D).

The R&D tax credit is an integral part of the Government’s strategy to improve productivity growth in the UK. The consultation on the definition of R&D will complement broader policy development to support innovation and growth by UK business, including the Lambert Review on business-university collaboration, and the DTI Innovation Review. These will both report by the autumn.

Through the R&D tax credit and other policy measures, the Government can help create a supportive framework for business. But it can only deliver its innovation goals for the UK by working with businesses investing in research, technology and the skills needed to generate productivity gains. To raise the profile of R&D skills and careers and provide a link between policy initiatives, such as the R&D tax credit, and business, the Government will support the creation of an R&D Employers Forum by this autumn, as recommended by Sir Gareth Roberts in his 2002 review of science, engineering and technology skills.

The press release issued by HM Treasury on 14 July 2003.

Paul Boateng, Chief Secretary to the Treasury, today welcomed the appointment of John Tiner as the new Chief Executive Officer of the Financial Services Authority, and confirmed his appointment to the FSA Board in this capacity.

Mr Tiner, who is currently Managing Director, Consumer, Investment and Insurance at the FSA, will take up post as CEO on 22 September 2003.

Welcoming the appointment Mr Boateng said:

“I am pleased with the appointment of John Tiner as Chief Executive of the FSA.  His extensive knowledge and experience of the financial services market will be invaluable.  His expertise in regulatory regimes will be particularly important when the FSA assumes responsibility for general insurance and mortgages next year.”

John Tiner will be the first Chief Executive Officer of the FSA following the Government’s decision to split the roles of Chairman and Chief Executive.  Callum McCarthy, who replaces Sir Howard Davies as Chairman, also takes up his post on 22 September 2003.

The press release issued by HM Treasury on 14 July 2003.

The links between universities and industry are increasing, especially in some research driven sectors, but there is room for improvement, according to Richard Lambert, who has today published a  summary of the consultation responses and the issues raised in his review of business-university collaboration.

Richard Lambert said, “I have been impressed by the efforts that the universities have madeover the last 10 years to disseminate as well as to create knowledge. In some respects the business side is less impressive – apart from the pharmaceutical and aerospace sectors, there are relatively few research intensive businesses located in the UK. This translates into weak demand for the knowledge created in universities. The question is what can be done to encourage more businesses to collaborate with universities.”

A number of positive messages emerged from the consultation. It is clear that the amount of collaboration is increasing and that government funding for knowledge transfer activity in universities – so called “third stream funding” – has generated a marked culture change in universities and has built up their capacity to transfer knowledge. However there are a number of areas where further progress could be made, including:

• Stronger engagement from business – particularly small and medium sized businesses, which often do not collaborate with universities but who could benefit significantly from collaboration. A number of universities commented on the difficulties that they face in engaging with SMEs.
• Greater clarity over intellectual property – many respondents commented that negotiations over intellectual property and overhead costs could be a major sticking point. There appears to be a lack of clarity about intellectual property ownership in the UK, but equally a lack of consensus about what to do about it.
• Improved skills and experience in some technology transfer offices – UK universities are generally much less experienced at technology transfer than their US counterparts. Many UK universities have set up technology transfer offices but their performance is mixed – some are first rate while others are less impressive. There is also a sense that there has been an over-emphasis on spinning out new companies in the UK rather than licensing to existing ones.
• Better financial incentives for collaboration – many respondents commented that the Research Assessment Exercise is a significant barrier to collaboration, that academics are not sufficiently incentivised and rewarded for collaboration with industry and that the current funding streams do not promote enough multi-disciplinary research. Universities have asked for an increase in and greater certainty about future third stream funding levels and a move away from the competitive bidding process.
• Improved university management and governance – a number of businesses have reported difficulties in dealing with some universities and expressed a desire for university governance structures to be modernised.
• A better dialogue between businesses and the universities about the UK’s future skill needs – a number of respondents commented on the lack of an effective mechanism for business to influence the courses and teaching on offer at universities.
• A greater role for the RDAs in brokering relationships between business and universities – universities have an increasingly important role to play in their regional and national economies and in providing graduates with the skills that the economy needs. RDAs have a key part to play in linking them with their local businesses.

Richard Lambert said, “I think that the big question is whether there is scope to manage universities in a different way – for the Government to specify some measures of success, which if met by the universities would mean that they could be given greater freedoms to behave in a more entrepreneurial way.”

The review will be examining these issues in more detail over the next few months and will submit its final report, with case studies and recommendations, to the Government in October 2003.