Tag: 2003

The press release issued by HM Treasury on 15 July 2003.

Detailed proposals for simple low-cost investment products, with a lighter-touch sales process were announced by the Government today, following an open consultation earlier this year.

These products, to be known as ‘stakeholder’ products, will address the basic needs of savers and are particularly aimed on those on lower incomes. They will go on sale in 2005. The proposals follow on from Ron Sandler’s recommendations published in his review of the retail savings market.

A suite of three products will be introduced:

• A short-term investment product. The existing CAT standard cash ISA will become part of the stakeholder suite.
• A medium-term investment product. There will be two investment options, both with a maximum equity exposure of 60% of the fund’s value:

• A long-term investment product. The existing stakeholder pension will become part of the suite. There will be a requirement for the default fund to be lifestyled, whereby assets in the fund are gradually moved from equities towards fixed income as the policyholder nears retirement. DWP will be discussing the detail of the default requirement with stakeholder providers during the summer and will consult on draft regulation in early 2004.

The Government is also committed to making the Child Trust Fund (CTF) available within the stakeholder product suite. Further details will be set out in the September 2003 CTF publication.

The Government agrees with Ron Sandler’s recommendation that a price cap is an essential component of these regulated products in a market that is characterised by lack of price competition and consumer weakness. The level of the cap will be set later this year when the FSA market research into the sales process is completed.

Announcing the Government’s decisions Financial Secretary to the Treasury Ruth Kelly said:

“Many people worry about financing their future but find it difficult to make the right decisions when faced with a vast array of complex investment products. Stakeholder products aim to overcome this problem by being flexible, simple, low-cost and risk controlled. They will help many more people, particularly the less well-off, share in the benefits of investment and better plan for their future.

“It was clear from the responses to the consultation and our own analysis that the most sensible time to finalise the price cap is when the results of the FSA work on the sales process is known. In an ideal market there would be no need for a price cap but the lack of competition and complexity of the financial services industry make one necessary.

“There has been a positive and constructive response from industry and consumer organisations to the consultation.  As well as delivering consumer benefits stakeholder products should help the industry overcome the lack of trust that many people currently have in it. The Government will continue to work closely with all parties to ensure there is a smooth introduction of the products.”

Pensions Minister Malcolm Wicks said:

“The stakeholder pension will be an integral part of the suite of stakeholder products continuing to offer a wide range of investment options. It can now provide added security for people as the default fund will now have to include lifestyling, which gradually moves investments towards a fixed income as the customer approaches retirement.

“All stakeholder pensions schemes will be required to provide this safeguard and we will be working closely with stakeholder providers on the detail of this provision to ensure that the switch to the new requirements is as straightforward as possible”

The press release issued by HM Treasury on 15 July 2003.

1. The starting point for my Review was an examination of the way HMCE operated in the field of investigation and prosecution of serious crime, in particular excise diversion fraud, in the mid to late 1990s. The first three chapters of the Report seek to set the background to the way HMCE operated in law enforcement, explain the circumstances in which excise diversion frauds took place and provide an account of excise diversion fraud emanating from London City Bond between 1995 and 1998. Chapters Four and Five contain a detailed summary of the events surrounding a number of trials which were heard between the autumn of 1998 and 2001 concerning allegations of excise diversion fraud centred on London City Bond, and the subsequent successful appeals against conviction which resulted in orders for retrials. In Chapter Six I provide a detailed account of the evidence given at the hearing before Mr Justice Grigson in Liverpool, the early termination of which led directly to the commissioning of my Review.

2. One allegation raised in the Liverpool hearings which has attracted considerable publicity is whether HMCE incited the commission of criminal offences at London City Bond so as improperly to entrap defendants or those from whom they obtained diverted goods. I found no evidence that officers of HMCE or any employee of London City Bond incited or persuaded any trader to commit fraud, or that they actively encouraged crime which would not otherwise have been committed. A full account of my findings on this issue is to be found in the commentary on the collapse of the Liverpool hearings in Chapter Six.

3.  I have also examined the linked case of Operation Stockade which Ministers referred to me subsequently. That trial, the appeal, and other later proceedings are considered in Chapter Seven. In subsequent chapters I analyse the problems arising in the investigation and prosecution of the London City Bond cases, what changes have been put in place since those events, and what further changes are required.

4. It is clear that a number of things went badly wrong.  I cover this in more detail in Chapter Eight. The issues I identify include the absence of a strategic approach to excise diversion frauds; poor communications; serious deficiencies in the handling of informants; and failure to comply with disclosure obligations.

5. But the London City Bond events took place in the mid to late 1990s and they must be seen in perspective.  Since those events there have been four independent reviews other than my own.  There have been significant changes in the external environment, including statutory changes, and major alterations in the way HMCE is structured and managed, including a much clearer strategic direction for the whole organisation.  I deal with these changes in Chapter Nine.

6. One of the most striking differences in recent years is the increase in the size and complexity of many of the cases investigated and prosecuted by HMCE.  HMCE do not walk alone in this changed environment.  Similar changes have been experienced by other investigators and prosecutors.  Many major cases investigated and prosecuted by HMCE fall squarely within the definition of serious and organised crime.  They often involve long and complex investigations whose tentacles extend widely and sometimes link with investigations being conducted by other agencies.  The investigations generate huge quantities of paper which have to be processed and managed.  HMCE also deals with a large number of less complicated cases which generally proceed relatively satisfactorily through the criminal justice system.  The statistics for HMCE prosecutions demonstrate that they are an organisation which enjoys considerable success in investigating and prosecuting less serious crime which falls within its remit.

7. HMCE is a many-faceted organisation.  It is a tax collection agency and a frontier control agency, as well as a law enforcement agency.  I accept that this does mean some issues are more complex for HMCE than they might be, for example, for some police forces and prosecuting authorities.  Nevertheless, HMCE is an important part of the law enforcement community and it is in the public interest for it to be as effective as possible, and equally importantly for it to be seen to be effective.  In examining the impact of the changes that have taken place within HMCE since the events of London City Bond I have borne these points very much in mind.  However, one of the things that has struck me most forcibly during the course of this Review is the negative perception of HMCE within the criminal justice community in particular; and the fact that perception and reality are somewhat out of step.  One investigator to whom I spoke said:  “The most valuable thing that we have lost is our reputation”.  I agree.  I will not repeat what is said elsewhere in the Report, in particular in Chapter Nine, but I am very clear that the perception issue is one that can only be addressed by radical action.

8. Ministers, and senior management at HMCE, are understandably anxious to “draw a line in the sand” so that the events of the London City Bond cases can be put behind them and they can move forward unencumbered by the detritus of the past.  I understand that anxiety.

9. It is often said that the most important asset of an organisation is its staff.  That is no less true of HMCE than elsewhere.  Those staff I saw welcomed the Review as necessary, recognised the perception problems and appreciated the greater strategic direction they were receiving.  Amongst them I detected no lack of integrity or commitment to the change process.  In many I saw a deep-seated desire to regain their reputation so that they were able to operate in an atmosphere where their word was trusted by both the courts and those representing defendants.  I have no doubt that these views are widely shared by staff at all levels within HMCE.

10. To be an effective organisation the staff need leadership, management and a culture and systems that foster and reward integrity, high standards and professionalism.  I am satisfied that much of the necessary ground work has been done and that personnel and machinery has been, or is being put in place to achieve the changes HMCE need to make. There is much that is good and some that is excellent within the present department.  But the task is not yet complete and in some areas there is a considerable distance yet to travel.  I agree that HMCE should now put the events of the London City Bond cases behind them and move forward, but not in a spirit of complacency.  I cannot give an unqualified assurance that all is now well.  The recommendations I make are designed to reinforce the change process, and in some cases to accelerate it or take it in a slightly different direction.

11. My detailed analysis of the further changes required, along with recommendations, can be found in Chapters 10, 11 and 12.  A summary is given below.  For most people my most significant recommendation so far as HMCE itself is concerned will be that HMCE should continue to have a separate role as an investigating force; and so far as the Solicitor’s Office is concerned, that there should be a complete separation of the prosecuting function for HMCE’s criminal cases from the organisation itself, through the creation of a separate prosecuting authority.  I realise this will be regarded by some as a far-reaching step, but my researches show that only a radical move such as this is likely to be sufficient for HMCE to overcome the negative perceptions that exist within the criminal justice system.  An associated recommendation is that the investigators should be provided with more dedicated expert legal advice to help improve the quality of cases that reach the new prosecuting authority.

12. In Chapter 12 I consider a number of criminal justice issues which have been thrown into prominence by the facts surrounding the London City Bond cases.  These all have wider application than simply to HMCE.  No one could claim that our criminal justice system works as effectively as it should.  I have been particularly struck in the London City Bond cases by the considerable emphasis given to attacks on the process by which cases were investigated; and by the challenges facing prosecutors in these large and complex cases in meeting the demands of the Criminal Procedure and Investigations Act.  I make recommendations in both these areas.  I have also examined, and made separate recommendations on, the operation of the Regulation of Investigatory Powers Act 2000.

Summary of recommendations

Law enforcement

(i) I have considered carefully whether HMCE should retain its role as an independent investigating force.  I have concluded that it should.  I believe that any organisational change to remove HMCE’s investigation role would hinder the progress that has already made to put right what has gone wrong.  It might also hinder the fight against serious and organised crime.  (Paras 10.1 to 10.16.)

(ii) I make three recommendations about the handling of human sources of information.  In so doing I have considered the statutory regime provided by the Regulation of Investigatory Powers Act 2000, and the action that HMCE has taken to comply with that regime.  My recommendations are:

a. The proposed new procedures for handling and managing human sources are implemented as a matter of urgency and that clear guidance is issued to all law enforcement officers about their responsibilities under the regime.  (Chapter 10 para 95.)

b. When the proposed new procedures for handling and managing human sources are implemented, consideration should be given to putting in place a system which ensures that all those who deal at any level with any source keep records in a durable and retrievable form, compliant in all respects with the Paragraph 3 contents requirements of the Regulation of Investigatory Powers (Source Records) Regulations 2000 (Chapter 10 para 100.)

c. Consideration is given to expanding the role of the SMUs and the NSU in the control and management of all human sources of intelligence posing potential risk (Chapter 10 para 104.).

iii. It is of considerable importance that investigators are both well trained, and regularly trained.  In the course of my Review I have found deficiencies, particularly in the regularity of training provided.  The basic training provided to investigators is reasonably thorough and comprehensive and is regularly updated.  However, subsequent training is somewhat ad hoc and not systematic.  I have not been prescriptive about the solution, but have recommended that HMCE give consideration to the following:

a. Regular refresher training for investigators every five years.

b. Specific training geared to particular key jobs within investigation, to include a written test before an officer is allowed to take up the new post.

c. Training to reflect changes in the criminal justice system.  (Chapter 10 para 115.)

iv. Customs investigators are not currently subject to systematic external scrutiny.  I believe they should be.  This would be of benefit to them internally; and would also contribute to improving the perceptions of HMCE held by those outside the department.  I have suggested that:

A separate study is undertaken with a view to identifying how additional external scrutiny can best be introduced into HMCE investigation work.  The review might start with looking at how the existing professional standards team could be enhanced and its reputation reinforced through external input.  But a review should not necessarily confine itself to that limited scope.  (Chapter 10 para 128.)

v. As part of the recognition by senior management at HMCE that there were serious problems which had to be tackled, a number of quality and management assurance systems have been introduced since the mid-1990s.  Whilst I welcome that development, I do have some concerns that there may be too many and that some rationalisation would be of benefit.  I have recommended:

That a review should be established to examine the full range of new assurance systems put in place in law enforcement since the events of the late 1990s; and that HMCE practice should be compared with that in the Police and other investigators, with a view to streamlining, where possible, the number of assurance systems in place whilst ensuring that HMCE are fully able to comply with the requirements on them as a professional investigating force.  (Chapter 10 para 133.)

vi. I have spent a little time looking at the way Customs is structured.  It is a UK-wide organisation with a regional structure.  I have made one general recommendation here and two which apply particularly to Scotland.  There is a separate legal system in Scotland and it is important that investigators identify at an early stage of their investigations whether any subsequent prosecution is to take place in Scotland, or elsewhere in the United Kingdom.  It is also important that Customs staff have available to them dedicated expert advice about the Scottish legal system.  With all these issues in mind I have made the following recommendations:

a. That HMCE management keep the issues of regional organisation under review to ensure that it best fits the needs of the organisation.  (Chapter 10 para 138.)

b. That arrangements are put in place to provide specialist qualified legal advice for the investigators and intelligence officers operating in Scotland.  (Chapter 10 para 152.)

c. That a system  is put in place to ensure, so far as possible, that an early decision is taken in each investigation with a Scottish dimension as to whether the legal requirements of the Scottish system  should be applied.  Such a decision would be case specific.  (Chapter 10 para 154.)

Solicitor’s Office

vii. The structure of the Solicitor’s Office has been subject to considerable change over the last few years, most recently as a result of the Gower/Hammond Review (see Chapter Nine and Appendix Six).  These changes have rightly been directed towards increasing the independence of the prosecuting lawyers within the Office so that they can more easily and perceptibly exercise their role as prosecutors.  I welcome the changes that have been made and recognise that the effect of those changes is being felt.  However, I have concluded that these changes do not go far enough.  Prosecuting solicitors at HMCE must be in a position where they are able to exercise their “minister of justice” role without fear or favour; and as importantly they must be seen by others as in a position to do this.  I have concluded that a vital element in restoring confidence in HMCE within the criminal justice system is the assurance that prosecutions are conducted by lawyers who are wholly independent.  I have therefore recommended that:

The Solicitor should no longer retain any responsibility for prosecutions brought by Customs & Excise.  All prosecuting functions should be removed from the Customs & Excise Solicitor’s Office and prosecutions conducted by a separate prosecuting authority.  (Chapter 11 para 14.)

viii. I have also made what I consider to be complementary recommendations to the above.  There has now been in existence for some time a small corps of what are known as Investigation Legal Advisers.  These are lawyers who are dedicated to providing advice to investigators pre-knock – that is to say before any criminal proceedings are commenced.  I welcome this development; but believe that more is needed, both in terms of additional lawyers and their greater use by the investigators.  This should improve the quality of cases which are presented to the new prosecution authority and ensure that the investigators receive regular and professional legal advice.  My detailed recommendations are:

a. The number of ILAs should be substantially increased to enable the objectives of Customs identified in paragraph 11.36 to be achieved (the appointment of an ILA at the outset of all sensitive, complex or substantial investigations)

b. ILAs should continue to have no part in the prosecution process.

c. The CPS Inspectorate should inspect and report on the ILAs to give an assurance as to the quality of their work.

d. Consideration is given to the transfer of responsibility for the ILAs to the Economic Secretary to the Treasury.

e. A review is conducted of the procedures for the recording and retention of advice given by the ILAs in the course of investigations, and the assurance of the quality of that advice given.  (Chapter 11 para 58.)

ix. Another welcome development since the Gower/Hammond review has been the introduction of independent inspection of the Prosecution Office by Her Majesty’s Crown Prosecution Service Inspectorate.  I believe the work already done should be built on and my recommendations are as follows:

a. HMCPSI be given a clear and defined role in inspection and assuring the new prosecution organisation.

b. This relationship should ideally be placed on a  statutory basis.

c. Specific and adequate resources are made available to HMCPSI for this purpose.

d. If appropriate, and this will depend on whether the Prosecutions Office remains part of Customs, joint inspection should be undertaken involving HM Customs & Excise internal assurance division and HMCPSI.

e. As part of the further definition of HMCPSI’s role, it should specifically have the function of quality assuring the work of and advice given by the Investigation Legal Advisersn.  (Chapter 11 para 76.)

x. HMCE is a major prosecutor in both the Crown Court and the Magistrates’ Court.  As such I think HMCE representatives should be more systematically involved with the Court Service and with other players in the criminal justice system.  I make the following recommendation to that effect.

I consider that more regular and systematic dialogue between, for example, HMCE and the Court Service on practical issues, and HMCE and the Home Office on policy issues, would be a profitable and fruitful development for all involved.  I recommend that the Head of the new Prosecuting Authority takes the lead in putting suitable arrangements in place.  (Chapter 11 para 80.)

Criminal Justice System

xi. I have spent some time considering, and discussing with a number of practitioners, how the current disclosure regime operates in cases of the size and complexity of the London City Bond cases.  I do not believe the system works satisfactorily and neither do any of the judges or practitioners to whom I have spoken.  I am aware that the Government is presently making changes to that regime through the Criminal Justice Bill now before Parliament.  I hope that those changes are sufficient to address the problems prosecutors have in determining what is relevant against wholly inadequate defence case statement.  If those measures do not achieve the desired outcome, I make the following recommendation:

That if appropriate the disclosure regime is reconsidered and consideration given to effecting secondary disclosure by providing to the defence the schedule of non-sensitive material held or inspected by the prosecutor in connection with the case for the prosecution against the accused and permission granted to the defence to inspect any material so disclosed that appeared relevant.  (Chapter 12 para 48.)

xii. One of the striking features about many of the London City Bond cases was the extent of the attacks by the defence on process issues.  Whilst it is vital that the defence has the ability to raise issues of abuse of process, it is clear that a significant number of applications are ill-founded and take up extensive, disproportionate and valuable court time.  Although a Practice Direction already exists, its provisions are not universally followed.  I have therefore recommended that:

Consideration be given by the new Criminal Rules Procedure Committee to the introduction of rules, or alternatively issuing by the Lord Chief Justice of practice directions, giving judges greater power to control the proceedings before them on all applications in criminal proceedings to be determined by the judge alone.  (Chapter 12 para 77.)

xiii. Finally I have considered another aspect of the Regulation of Investigatory Powers Act 2000:  the sections dealing with interception of communications.  I believe there is a lacuna in the present regime so that where all intercepted material has been destroyed there is no procedure for the prosecutor to be assured that nothing the interceptors have heard underlines the prosecution case or assists the defence.  In the light of that I recommend that:

a. Consideration is given to amending the Code of Practice [issued pursuant to Section 17 of the Regulation of Investigatory Powers Act 2000] to make provision for the assurance of the prosecutor where all intercepted material has been destroyed.  (Chapter 12 para 115.)

It has also become apparent that many judges do not have sufficiently regular experience of cases involving intercept evidence necessarily to be fully acquainted with all the implications of RIPA.  I therefore additionally recommend that:

b. Consideration is given to including the topic (RIPA Part 1) within the syllabus of the Judicial Studies Board refresher course on criminal law.  (Chapter 12 para 117.)

The press release issued by HM Treasury on 15 July 2003.

The Government today published the review by Mr Justice Butterfield into HM Customs and Excise investigations and prosecutions, and the Government response to the review in the form of a written ministerial statement (attached in full). Both John Healey, Economic Secretary to the Treasury, and Attorney General Lord Goldsmith, QC found the report thorough, detailed and thoughtful.

John Healey, Economic Secretary to the Treasury, said: “The Government welcomes this report.

“The Butterfield report lays bare the major failings in the LCB investigations but it also confirms the far-reaching changes made in Customs since then, which mean that the same problems should not happen again.

“The report warns against complacency, and makes recommendations for reinforcing the changes in Customs still further, which I accept in full and Customs will implement.

“Mr Justice Butterfield encourages Customs to put the events of LCB behind them. His report allows Customs to draw a line under what happened in the 1990’s and continue to rebuild its reputation as an effective law enforcement agency in bringing some of the most serious smugglers and other criminals to justice.”

The Attorney General, Lord Goldsmith QC, said:

“We asked Justice Butterfield to carry out this review because we wanted to understand what went wrong with the LCB cases, and ensure the arrangements for bringing drug dealers and other criminals to justiceare the best they can be.

“This report makes a range of important proposals for further improving the way Customs investigates and prosecutes crime, and for enhancing the effectiveness of the criminal justice process.

“A key recommendation is that the Prosecutions Group should become a separate prosecuting authority, accountable to the Attorney General. The Government strongly agrees that the independence of prosecutors must be
protected. Independent prosecutorial decision-making is a key constitutional safeguard. We will be considering how the independence of Customs prosecutors can be further enhanced, and responding in the autumn.”

The press release issued by HM Treasury on 15 July 2003.

The Treasury today published “PFI: Meeting the Investment Challenge” on the evolving role of PFI in delivering cost effective investment in public services.

The document sets out the Government’s approach to PFI, provides detailed analysis of the performance of the PFI programme to date and outlines a number of proposals that, as PFI evolves, will ensure the public sector effectively captures the value for money benefits that PFI can deliver, including:

• reforms to improve the assessment of value for money appraisal by the public sector, to continue to ensure there is no bias in favour of any one procurement option and the decisions are made on the basis of best value for money. These include reforms to the Public Sector Comparator to ensure consistency with the reforms made at last year’s revision of the ‘Green Book’ (the Treasury’s guidance to departments on project appraisal). These changes mean that a value for money assessment of both PFI and conventional procurement options are fully taken into account prior to the procurement of a project, and that there is greater clarity on transferring soft services staff to ensure that application of value for money does not come at the expense of employee terms and conditions;
• measures to improve the efficiency of the procurement process, including more rigorous enforcement of standardisation, the accreditation of advisors, new models of procurement and greater transparency;
• proposals to revise the scope of PFI and focus its use on where it works best  – exploring new applications for PFI where existing evidence suggests it could deliver benefits – as foreshadowed in the Chancellor’s Social Market Foundation speech earlier this year – in social housing, urban regeneration and waste, but using conventional procurement methods in areas such as IT and small value projects where experience suggests that, conventional methods are  the best approach for driving more efficient procurement.
• investigating the potential for new methods of financing projects, for example, through “framework funding” for small PFI schemes bundled together and by piloting the potential for using credit guarantees as an additional means of funding PFI projects.

Paul Boateng, Chief Secretary to the Treasury said:

“The Government’s objective is deliver world class public services.  To achieve this, sustained increased in investment and matching reforms are needed to deliver efficient and responsive public services.  PFI has an important role to play in delivering this investment.

“The benefits of good procurement are not confined to those sectors where PFI is already well-established, and new applications for PFI will be explored where existing evidence suggests it could deliver benefits – in social housing, urban regeneration and waste.”

Total investment will rise to more than £47 billion by 2005/6. PFI has accounted for between 10 and 14 per cent of total annual investment in public services since 1997. This year investment through PFI is expected to be around £4.6 billion.  Almost 60 per cent of PFI projects are on-balance sheet, i.e. classified to the public sector.

The document sets out details of research conducted by the Government, which confirms a largely positive impact of PFI to date, with 89 per cent of projects delivered on time or early and with the costs of signed deals only changing where the public sector’s requirements changed.

To date, the Government has closed 563 PFI deals with a total value of over £35 billion. Recent years have seen the steady growth of the market in PFI with projects in a wide range of sectors such as health, education, defence and housing, including 34 hospitals and 239 new or refurbished schools that are already up and running.

The press release issued by HM Treasury on 18 July 2003.

The Government today published a consultation document on implementing the EU Distance Marketing of Financial Services Directive (DMD).

The Directive sets common standards for the information that must be supplied to consumers of financial services prior to a contract being concluded at a distance, such as by telephone, internet, fax or mail.

The DMD will:

• Bring substantial benefits to both consumers and business.  Many financial services transactions like banking, credit, insurance, personal pension, investment or payment nature are likely to be conducted by electronic means across borders between Member States.
• Allow businesses to offer consumers a wider choice of methods by which contracts can be concluded.  It will mean that businesses would be able to operate on a level playing field and be more proactive in conducting business cross border.
• Benefit consumers through increased cancellation rights, more flexibility of choice and improved benefits in respect of the additional information that will be available to them.
• Bring greater competition among suppliers, with potentially beneficial effect on prices for the consumer.
• Enhance the working of a single market by giving consumers the confidence to buy products on a cross border basis, with providers being governed by a common set of core standards across the European Union.

The press release issued by HM Treasury on 21 July 2003.

Damian McBride, currently Head of VAT Strategy at Customs and Excise, has been appointed as Head of Communications and Strategy at HM Treasury. He will take up post in September 2003.

Damian McBride has previously held posts at HM Treasury and Customs and Excise. He replaces Michael Ellam who took up post in July 2000.

The press release issued by HM Treasury on 22 July 2003.

Speaking to the US Council of Foreign Relations Transatlantic Taskforce in New York, the Chancellor said:

“The transatlantic relationship now accounts for up to $2.5 trillion of commercial transactions every year, including $500 billion of foreign trade, and provides employment to over 12 million people. One fifth of total US merchandise exports and one third of total US services exports now go to the EU. In the 1990s, US firms ploughed nearly twice as much capital into the Netherlands than into Mexico.  Corporate America’s foreign assets located in Germany alone are now greater than total US assets in the whole of South America.

“And at the same time, direct European investment in the USA has increased  more than ten fold in one decade – to over $200 billion a year – with more European capital now invested annually in America than US capital invested annually in Europe.  During the 1990s as a whole, nearly three quarters of all foreign investment in the US came from Europe and there is now more European investment in Texas than all US investment in Japan.

“This means that both Europe and America have a vital interest in each other’s economic prosperity. So this is the right time for a new era of engagement between America and Europe.  Instead of seeing globalisation as inviting a weakening of transatlantic ties, we must strengthen them to create a new transatlantic alliance for prosperity that is in both our interests.

“Last month a new joint British-Dutch study that we submitted to the European Commission reported that if we broke down the tariff barriers and the barriers to trade in services between Europe and the United States, employment in Europe could increase by one million, growth in Europe could rise by up to two per cent and in America by up to one per cent.

“Today I want to make some practical proposals about the way forward. As a first step, building on the work already done, I believe the US administration and the EU Commission should work with the UK and other Member States to produce a more detailed analysis of precisely where the barriers to trade across the Atlantic lie, and quantify the benefits of greater trade and investment liberalisation.

“Second, we must take a more pro-active approach to removing non-tariff barriers.  In particular, we should set an example to the world with new levels of bilateral regulatory co-operation, assessing the impact on trade and investment before legislation is introduced.

“Third, we need to involve business more in driving forward this agenda. So I have called upon the EU and US to re-launch and reinvigorate the transatlantic business dialogue.

“Fourth, because we know that, in today’s world, prosperity and security go hand in hand, I believe that transatlantic bilateral co-operation should not be at the expense of an ambitious multilateral agenda. Europe and America must work together in the World Trade Organisation. It is estimated that if we were to halve protectionism in agriculture and in industrial goods and services we would increase the world’s yearly income by nearly $400 billion dollars: a boost to growth of 1.4 per cent. Developing countries would gain the most in terms of GDP growth – $150 billion a year – but all countries and regions, including ourselves, stand to benefit. So in the next few months running up to Cancun we must pursue a common agenda to break the deadlock in world trade. Europe and America must take the lead in the trade talks and work together if they are to succeed – standing firm and resisting political pressures for protectionism.

And in relation to Iraq, the Chancellor said:

“Britain and the US were right to take military action against Saddam Hussein. We should not forget that Saddam had used weapons of mass destruction against his own people, and that resolution 1441 – which listed the weapons of mass destruction believed to be in Iraq, as agreed unanimously by the UN Security Council – made clear that compliance this time had to be full, unconditional and immediate.”

The press release issued by HM Treasury on 25 July 2003.

The Treasury and Department for Education and Skills today published a consultation document on proposals for how to use the £25 million Parenting Fund, which was announced as part of the 2002 Spending Review.

The Parenting Fund will assist voluntary and community organisations in the delivery of Parenting Support.

The proposals for consultation are the result of a close working relationship between representatives from the voluntary and community sector and Government.  The consultation document proposes that the Parenting Fund be used to achieve four key objectives:

• Contributing to an expansion in support available to all parents – for example, increasing the availability of help-lines.
• Increasing support services for groups who currently receive little access – for example, assisting voluntary and community organisations who provide services to black and minority ethnic families, fathers or parents of adolescents.
• Spreading parenting support services to wider geographical areas.
• Increasing the capacity of the whole parenting support sector to grow – for example, by increasing workforce skills and developing infrastructure.

Paul Boateng, Chief Secretary to the Treasury, said:

“The Government is committed to enabling parents and families to access the support, help and advice that they need.  The Parenting Fund is a significant investment of resources to support voluntary and community organisations in the important work they do to deliver parenting support.  The manner in which the proposals have been drawn up is another example of an innovative and constructive working collaboration between government and the voluntary and community sector, which I am truly proud of.”

Margaret Hodge, Minister of State for Children, said:

“Being a parent is one of the hardest jobs most of us have to do.  All parents at some point need help on how to do it.  Not all have help readily at hand from their families and friends.  I am delighted that we have the extra resources of the Parenting Fund.  I look forward to hearing views from outside government on the best ways of targeting the fund to help families get the support they need.”

The press release issued by HM Treasury on 1 August 2003.

The Government today published a consultation document on economic instruments to improve household energy efficiency.

As announced in the Budget, following the initial consultation last year the Government is consulting in more detail on specific economic instruments to encourage greater energy efficiency by households.

The initial consultation sought views on the ways in which economic instruments could be used to overcome market failures which prevent improvements in household energy efficiency. Given the generally positive response to the consultation, supporting action in this area, and following the publication of the Energy White Paper  and its focus on energy efficiency, the Government has decided to consult further.

This consultation is launched with the aim of gathering further information on the likely impacts and effectiveness of the identified measures and responses will help to inform the Government’s policy development in this area.

The press release issued by HM Treasury on 6 August 2003.

HM Treasury, the Financial Services Authority and the Bank of England today jointly published a guide to the EU Financial Services Action Plan (FSAP). The FSAP consists of a set of measures intended to achieve a Single Market in financial services across the EU by 2005.

John Healey, Economic Secretary to the Treasury, commented:

“With the Financial Services Action Plan nearing completion, it is essential that all stakeholders should be consulted on, and fully understand, the measures. Together with the Financial Services Authority and the Bank of England, we have prepared this guide so that all those involved are aware of the impact of new measures and the competitive opportunities of further EU financial integration .”

The guide is intended for financial institutions, companies and consumer groups in the UK that are not yet sufficiently familiar with the FSAP’s potential impact.