The press release issued by HM Treasury on 31 January 2005.

Chancellor Gordon Brown today called for a step change in the participation of young people in volunteering, encouraging young people to do voluntary work as part of their normal lives and enabling them to do voluntary work in the UK during pre-college gap years.  He spoke at a conference forming part of the Chancellor’s pre-Budget consultation, involving the voluntary and community sector and businesses, coming at the start of 2005 – The Year of the Volunteer.

The Chancellor was joined by Home Secretary Charles Clarke, Chief Secretary to the Treasury Paul Boateng, and Economic Secretary John Healey. Ian Russell, Chief Executive of Scottish Power plc, announced the results of the Russell Commission consultation on youth volunteering.  The Russell Commission report will be published around the time of the Budget.

The Chancellor highlighted the importance of voluntary action and mentoring, and called for more people to give up time to help others.  He discussed how to expand the participation of young people in volunteering, how to extend the scope of mentoring, and how businesses as well as individuals can be more involved.  He also launched a new guide explaining the tax incentives for corporate giving.

The Chancellor said:

“I believe we have a goodwill mountain just waiting to be tapped.  Building upon the current engagement of young people – 3 million each year in voluntary work – we find that a majority of young people aged 15 to 24 year old – 59 per cent – want to know more about how to get involved in their communities.

Let us set a practical aim: that the majority of young people do volunteer and that over the next five years 1 million new young people become volunteers. And let us now set a national framework: business, government and the voluntary sector working together to encourage, enthuse and engage youth in community action.”

Home Secretary Charles Clarke said:

“Volunteering enables people to make a real difference in both their lives and the lives of others in a huge variety of ways, from working as a mentor to assisting a neighbour do their shopping. Earlier this month the Chancellor and I launched the Year of the Volunteer 2005 which forms an important part of a cross-Government commitment to encourage citizens to give their time to make communities better places for us all.

“I recognise the important role that volunteering can play in a young persons life and the Russell Commission is currently working in partnership with voluntary groups and businesses to identify and build on what works in UK volunteering. Their proposals will inform the Government’s National Youth Volunteering Strategy and I await the Commission’s report with interest.”

Ian Russell, CEO of Scottish Power said:

“By responding to the needs and aims of young volunteers themselves, the national framework aims to make volunteering the norm among young people and help establish a pattern of lifelong engagement which will be to the mutual benefit of the individual, the local community, and Britain as a whole.”

The press release issued by HM Treasury on 14 February 2005.

Chief Secretary to the Treasury, Paul Boateng, today presented a full signature Memorandum of Understanding in Mali with Minister for Investment Promotion Ousame Thiam in Bamako. This will provide $45.4 million of debt relief between 2005 and 2015. The meeting took place during the Chief Secretary’s visit to West Africa as part of his Commission for Africa consultations with African nations.

Paul Boateng said:

“Africa is a key priority for the UK presidencies of the G7 and G8. Earlier this month in London G7 finance Ministers indicated that they would be willing to provide as much as 100 per cent multilateral debt relief for the poorest countries. The UK is leading the way by paying our share of the debt owed by Mali to the World Bank and African Development Bank, 10 per cent of the total multilateral debt. We are urging other countries to do the same.

To date, in Mali, resources from bilateral debt relief have led to more spending on education, with almost 2,500 classrooms constructed, and almost 2,000 teachers recruited and trained. This new commitment will allow more resources to be spent on poverty reduction.”

Mr Boateng also visited a programme for widows and orphans at Djicoroni. The programme assists 149 widows, giving them a chance to improve their lot in life, and provides education for the children.

Focusing international commitment on Africa is a key priority for the UK presidencies of the G7/G8 and also for the Commission for Africa. The Commission will make recommendations on the further action needed to ensure that Africa shares in the benefits of globalisation, and meets the Millennium Development Goals.

Speaking at a lunch hosted by Minister Thiam, Mr Boateng highlighted the priorities of the Commission and listened to views on Mali’s priorities for the Africa report and the way forward once the report is presented.

Paul Boateng said:

“Mali is a great country with much potential. I welcome the positive development progress I have seen on this visit. We need to ensure that through working together – through the Commission for Africa and NAPAD  – we continue to tackle all the challenges facing Africa and ensure that Mali can make progress towards the Millennium Development Goals.”

The press release issued by HM Treasury on 24 February 2005.

Chief Secretary to the Treasury, Rt. Hon Paul Boateng and Home Office Minister for Race Equality and Community Cohesion, Fiona Mactaggart today hosted a “Third Sector Summit” at Number 11 Downing Street to conclude the work of the 2004 Voluntary and Community Sector Review.

Fifty key representatives from Third Sector organisations were brought together to discuss with Government and make progress on, the role of the Third Sector in public service delivery, as well as funding issues facing the sector and the benefits and best ways of working in partnership.

The full findings of the 2004 Voluntary and Community Sector (VCS) Review have been published through three publications:

• Working Together, Better Together, which suggests the way forward to build understanding, strengthen local partnerships, and press for progress in particular service areas;
• Exploring the role of the third sector in public service delivery and reform, a discussion document on how the sector can realise its full potential contribution to service delivery, including involvement in the design and evaluation of public services; and
• Effective Local Partnerships, a practical checklist for local practitioners to consider in the development of local compacts, or in entering partnership arrangements with the VCS.

These publications set out the case for the role of the VCS in service delivery and seek to reach out to the local level in order to improve relations between the sector and Government.

During the summit, Ministers also announced:

• plans to update HM Treasury “Guidance to Funders” – with a focus on the implementation of the principle of full cost recovery;
• that HM Treasury and Home Office, among others, will work with the Third Sector in developing the evidence base on the role of the Third Sector and where the sector is best placed to help deliver services;
• a “Clawback Review” in which HM Treasury will review the rules on clawback, endowments and dowries to see how they can be reformed to improve funders’ ability to work in partnership with Third Sector bodies to deliver public and community services; and
• plans to work with the Improvement and Development Agency (IDeA), the Local Government Association (LGA) and National Association of Councils for Voluntary Service (NACVS) to ensure better communication of the benefits of working with the third sector at a local level.

Paul Boateng said:

“Two years ago I chaired a cross-cutting review of the role of the voluntary and community sector in service delivery. This laid the foundation for a new and exciting phase in the relationship between Government and the VCS. Much progress has been made and we continue to push ambitiously for full implementation of this vision. I hope this further contribution will both deepen and reinforce the foundations for future work between Government and the sector.”

Fiona Mactaggart said:

“The voluntary and community sector can do things for people that public authorities cannot, but public authorities need to work in a way which helps them, protecting their independence and developing the infrastructure they depend on. The aim of this summit and the VCS review is to help us to use the expertise and value of the VCS to improve service delivery.”

Kevin Curley, Chief Executive of NACVS said:

“Relations between the local VCS and central Government have come a long way but we need to make sure messages get out to the local level and make a real difference to those on the ground who deliver services and support community groups. VCS organisations are often hamstrung by the lack of awareness of what the sector can offer, the right messages from central Government being ignored by local authorities, and inefficient, unstable and unhelpful funding relationships. Today’s summit was a great opportunity to discuss this and I am glad to see leadership from Treasury and Home Office ministers. We now need to draw in support from the Audit Commission, which inspects local Government, and the LGA which speaks for it.”

The press release issued by HM Treasury on 11 August 2004.

Treasury Minister Dawn Primarolo praised the success of the Redhill Sure Start Centre in Stockton on Tees today as she met staff and parents during a visit to the centre.

Speaking at the Redhill Centre, which provides family support, parent outreach services and child and family health services to local families, Dawn Primarolo said:

“I am delighted to be meeting the staff and parents at the Redhill Sure Start Centre which is providing vital support for families in Stockton on Tees. The Sure Start initiative is an important part of the Government’s drive to abolish child poverty and improve opportunities for all parents.

“The wide range of services the Redhill Centre provides to families, including 50 childcare places, help local parents with bringing up children as well as developing their full potential in the workplace. These will be improved even further when it becomes one of the 2,500 new children’s centres, which bring together in one location a variety of services currently offered to young children, parents and carers.

“I am also pleased that many of the parents here are able to take advantage of support for childcare from new tax credits. Over 17,500 families in Stockton on Tees receive tax credits, with 28,700 children already benefiting. I would urge all parents who think they might be eligible to contact the Inland Revenue to ensure they claim their full entitlement.”

The press release issued by HM Treasury on 21 October 2004.

Treasury Minister John Healey praised the ongoing achievements of the Yorkshire and Humber Enterprise Adviser Service when he met with members of the team at Hemsworth Arts and Community College today.

Following the recommendations of Sir Howard Davies’ Review of “enterprise and the economy in education”, the Chancellor announced a pilot programme of Enterprise Adviser schemes in Budget 2003 to work with 1,000 secondary schools throughout the country.

The Yorkshire and Humber Enterprise Adviser Service’s 14 Enterprise advisers have been working in 114 schools throughout the Region since early 2004. They use enterprise education and activities in schools to develop the skills and confidence that young people need in employment.

The scheme is receiving over £2 million of funding over two years from the Learning and Skills Council.

Speaking in Hemsworth, John Healey said:

“To create a dynamic business culture in this country we need to start within the education system, showing young people the importance of entrepreneurship and the many opportunities available to them. By enthusing the adults of tomorrow in business and enterprise we will help to ensure that all parts of Britain enjoy the economic prosperity that comes from a skilled, diverse and entrepreneurial workforce.

“The Yorkshire and Humber Enterprise Adviser Service is doing excellent work in establishing links between the school and the business community and in promoting the enterprise agenda. I have been impressed by the commitment and innovation of the advisers, teachers and students participating in this scheme at Hemsworth College today. I wish the Service continuing success in the future.”

Eddie Rodgers, chief executive of the West Yorkshire Enterprise Partnership, who manage and deliver the Enterprise Adviser Service Programme in the Yorkshire and Humber region said:

“This project is about giving school leavers a better idea of different career options and the confidence to go into the workplace. Young people need to have the self-belief to be able to make decisions about their future and, if necessary, take some risks. Working closely with schools, our enterprise advisers are bringing entrepreneurial skills into the classroom so that young people are not only prepared for work but can also consider the possibility of running their own business.”

The press release issued by HM Treasury on 4 November 2004.

New financial backing for an initiative to get thousands of unemployed St Helens residents back to work was welcomed today by Paymaster General Dawn Primarolo on a visit to the town.

St Helens’ Chamber has secured a £524,000 grant from the Merseyside Objective One programme to continue its Starting Point initiative, which aims to provide 3,500 unemployed local people with personalised training, support and back to work plans.

The Chamber will work with local employers and companies looking to relocate to St Helens to offer support with recruitment, including screening applicants, tailoring training for new recruits and supporting new workers in the first months of their new jobs. Starting Point was set up in 2001, and the new funding will enable the service to continue until at least 2007.

Dawn Primarolo today visited St Helens as part of a fact-finding tour on the impact that Objective One funding is making on Merseyside. She said:

“Objective One funding has, along with domestic funding and support, given Merseyside an enviable opportunity to build a new era of prosperity for local people. The bedrock of this transformation must include effective action to tackle the spectre of unemployment that has lingered for so long over some local communities.

“This investment in St Helens will provide vital help and training for people looking for work. It is to be welcomed as an important step towards restoring not just personal pride but also the economic fortunes of the entire borough.”

Starting Point provides a one-stop-shop for employers and jobseekers in St Helens town centre, on Hardshaw Street, where those looking for work can get personalised training, support and advice to pursue the jobs they are best suited to.

Employers will get practical assistance with recruitment, vocational training and developing the skills of their workforce.

Specialised support will be provided for local people and hard-to-reach groups such as the long-term unemployed.

Other funding for the £1 million initiative will come from the single regeneration budget and neighbourhood renewal funds managed by the St Helens local strategic partnership.

Dawn Primarolo today saw other projects in St Helens that have benefited from Objective One funding, including a £1.7 million facelift to the Theatre Royal, the ongoing £1 million refurbishment of the George Street Quarter and the Bold Miners Centre, which was re-opened as a community centre and training facility following a £1.4 million refit.

The press release issued by HM Treasury on 13 December 2004.

Enterprise and high skilled jobs are now the key to long-term prosperity in Britain, the Economic Secretary to the Treasury – John Healey MP – outlined today when he visited the West Midlands. He pointed to the Government’s commitment to take tough decisions to achieve American levels of business creation and ensure that, at every level, Britain has the best educated and most flexible workforce in the world.

While there are 300,000 more businesses in the UK than in 1997, if the UK had a business start up rate equivalent to the US 1.8 million more businesses would be in place. And if the West Midlands had a start up rate equivalent to the most enterprising areas in the UK, it would have an extra 16,670 businesses.

John Healey today led a round table discussion with a group of small businesses, chambers of commerce and Advantage West Midlands (the Regional Development Agency). His speech outlined the importance of small business start-ups, building an enterprise culture, and securing workforce development. He will also point to the recent Pre-Budget Report, which included:

• the publication of Philip Hampton’s interim report on rationalising inspection and enforcement regimes;
• the extension of Common Commencement Dates to other areas of legislation;
• deregulation in the financial services industry;
• new rules guiding the implementation of European Union regulations;
• significant reductions in compliance burdens for small businesses through the integration of HM Customs & Excise and the Inland Revenue;
• measures to improve support for small businesses by challenging the RDAs to use their new devolved powers to go beyond the one-size-fits-all business advice of the past and provide focused, tailored mentoring and support for small firms;
• accepting in full the Graham Review recommendations to increase the effectiveness of the Small Firms Loan Guarantee scheme, deregulating Business Angel investors in small firms, and making tax changes to facilitate university spin-outs;
• roll out by 2007-08 of the National Employer Training Programme following successful pilots in areas including Birmingham and Solihull, Shropshire, and the Black Country; and
• the establishment of the Leitch Review of Skills.

The business consultation visit – the first in a national series – is a chance for local West Midlands firms and agencies to contribute their views to preparations for next year’s Budget.

John Healey said:

“In any modern and vibrant economy the presence of high-growth businesses is vital. Small businesses make a disproportionately important contribution to our economic prosperity. That is why the Government is determined to rise to the challenge of securing an enterprise culture and skilled workforce to ensure American levels of business start up.”

The press release issued by HM Treasury on 1 July 2004.

Following his selection as the Labour Party’s Prospective Parliamentary Candidate for Normanton last night, Ed Balls, Chief Economic Adviser to the Treasury, this morning submitted his resignation from the Treasury.

Commenting on Ed Balls’ resignation, the Chancellor said:

“Ed has been a close colleague of mine for the last ten years and I want to thank him for the great contribution he has made to the Treasury’s work over the last seven, first as economic adviser and for the last five years as Chief Economic Adviser. He has played a central and decisive role in developing and implementing policies to achieve economic stability and record levels of employment, to increase funding for public services and to tackle poverty in Britain and abroad. I know he has a great contribution to make in the future.”

Permanent Secretary to the Treasury, Gus O’Donnell said:

“I would like to thank Ed for his outstanding contribution to the Treasury over the past seven years. He has had an enormous and positive impact on the department and its thinking which will continue to influence us in the future. He has also been a great colleague to work with and will be missed throughout the Treasury.”

Mr Balls said:

“It has been a privilege to serve this government and this Chancellor of the Exchequer at the Treasury since 1997. I would like to thank Gordon Brown, Gus O’Donnell and all my colleagues for everything they have done over that time. I have been constantly in awe of the professionalism, talent and dedication to public service of the Treasury civil servants and political team that I have worked with in the important work the Treasury has done over these years.”

Gus O’Donnell has today appointed Michael Ellam to the new post of Director of Policy and Planning. Mr Ellam will have responsibility for short to medium-term coordination of policy, working closely with Ed Miliband who, as Chairman of the Council of Economic Advisers will have responsibility for the coordination of long-term policy.

The press release issued by HM Treasury on 15 July 2004.

Paymaster General Dawn Primarolo today laid new legislation to make payments from the Thalidomide Trust to victims of Thalidomide tax-free, a move which will be worth £1 million per year in lower tax and increased tax credits for recipients of the payments.

Since 1974, the Thalidomide Trust has been subject to the same rules that govern payments from all ‘discretionary trusts’.  Up until now some payments from the Trust have counted towards the victims’ ‘taxable income’, increasing their tax bills and also reducing their level of entitlement to tax credits.

Following consultation with the Inland Revenue the Trust will change the way it makes its payments to victims so that they can be classified as “periodical” and fall within the scope of legislation governing “structured settlements”. This allows the Treasury to make use of a hitherto-unused provision of the Income and Corporation Taxes Act 1988 to designate the “periodical payments” to Thalidomide victims as exempt from income tax.

The new legislation will take effect from 5th August 2004, after which payments from the Trust to victims will be discounted as “income” for the purposes of calculating the victims’ income tax liabilities and their entitlement to tax credits.

The total value of the change to Thalidomide victims in terms of lower income tax and additional tax credits will be around £1 million per year. For individual victims, it could be worth up to £60 a week, £240 a month, or £3,120 per year.

Commenting on the changes, Dawn Primarolo said:

“I am delighted that, working closely with Thalidomide Trust, we have been able to find this solution, which will bring real financial benefits to those affected by the Thalidomide disaster. Today’s announcement demonstrates our continued commitment to helping the most vulnerable in society, and acting where we can to ensure a fair tax system. The hundreds of individuals who have campaigned for this change and worked hard to achieve it deserve our praise and thanks today.”

Details:

The Thalidomide Trust was set up in 1973 to support the victims of Thalidomide. The initial trust funds were provided by way of a donation from Distillers (later Guinness, now Diageo) who made the Thalidomide Drug.

Donations to the trust by Distillers/Guinness/Diageo have been made as follows:

• Under a 1974 agreement, Distillers agreed to pay out £14m under deed of covenant at £2m per year for 7 years, later adjusted to £19m in 1978 when more victims came to light;
• In May 1995, Guinness agreed to enter into a further ‘entirely voluntary and charitable’ covenant to pay an additional £2.5m per year for a period of 14 years (the Trust was running out of funds at this time); and
• In June 2000, Diageo agreed to extend the additional contributions until 2022 and index link them from April 2000.

The beneficiaries are taxed on the payments at their marginal rate of tax with credit given for the 40 per cent tax deducted by the trustees. So if the beneficiary is a higher rate taxpayer they have no further tax to pay. However if, as is more usual, they are a non-taxpayer or basic / standard rate taxpayer they can reclaim some or all of the tax deducted.

Since the 1970s, successive governments have given a total of £12.8 million to the Thalidomide Trust. £5.8 million was given in 1974 and 1978 (around the time the Trust was created) to offset the tax due on payments to beneficiaries.

In 1996, £7m was paid as a “one-off” and “final” contribution in recognition of what the government of the day called “the unique and tragic circumstances which surround the Thalidomide disaster”.

The press release issued by HM Treasury on 8 September 2004.

The Chancellor of the Exchequer has this day appointed the Right Honourable Peter Benjamin Mandelson to be Steward and Bailiff of the Manor of Northstead.