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.

The press release issued by HM Treasury on 10 September 2004.

Europe needs even more radical reform if it is to tackle high unemployment and achieve sustained growth, the Chancellor, Gordon Brown, will say in a report to EU Finance Ministers today.

Gordon Brown tells Finance Ministers:

“Europe must create 21 million new jobs to meet the target for 2010 – and yet unemployment is still rising. So I will tell colleagues today that there is no security without change and that greater flexibility is an essential route to greater employment”.

Presenting a report to today’s meeting of European Finance Ministers on the progress of the Lisbon Agenda, the Chancellor outlined four urgent priorities to break down barriers to economic growth and employment:

• break down regulatory barriers for business with the Four Presidencies initiative insisting on a new competitiveness test for all new regulation;
• achieve greater flexibility in labour market employment policies so that we equip Europe’s peoples with the jobs and skills to compete in the new global economy;
• set a new and more urgent timetable for concrete and credible reforms to complete the Single Market with specific deadlines; and
• break down the barriers to better trading relationships with the United States and the rest of the world.

Gordon Brown said:

“Starting today, Europe must commit itself to radical new reforms, becoming more flexible and outward-looking, creating the jobs, growth and prosperity our citizens deserve and expect.

And in Britain, we will be coming forward in the Pre Budget Report with the measures needed to boost enterprise, raise productivity and make our economy more flexible.”

Details

European Finance Ministers will today debate Wim Kok’s mid-term review of Europe’s progress against the Lisbon agenda. The Treasury’s submission to Wim Kok’s review highlights the key steps needed to give renewed stimulus to growth and reform in Europe, including:

• action to refocus reform on jobs and productivity, by streamlining  the existing 102 Lisbon benchmarks and focusing on core headline targets;
• annual Lisbon scorecards and commitments ranking Member States’ progress with economic reform and setting out European leaders plans for reforms in the year ahead;
• further regulatory reform, building on the January 2004 Four Presidency Initiative (Ireland, Netherlands, United Kingdom and Luxembourg), to reduce the burden of new and existing legislation on enterprising and innovative businesses;
• reform of state aid, ending the use of aid to create national champions and protect declining industries from competition, and further flexibility for Member States to promote enterprise and innovation;
• urgent reform of labour markets, with all Member States implementing the detailed recommendations of the November 2003 European Employment Taskforce report;
• further steps to create a dynamic and competitive Single Market, through liberalisation in services and a more effective competition policy that ensures real gains for businesses and consumers;
• taking action to promote innovation and enterprise; and
• trade and investment liberalisation, with strong EU leadership in multilateral trade negotiations and further action to build a stronger transatlantic economic relationship.

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

A new permanent, more generous tax relief for small British films will ensure the ongoing success of the British film industry, Paymaster General Dawn Primarolo said today.

The new tax relief, to be unveiled at a No.11 Downing Street reception for leading representatives of the British film industry, will replace the old Section 48 relief, which is due to expire in July 2005.

Launching the new tax relief, Dawn Primarolo, said:

“2003 was a record year for film production in the UK and employment in the film and video industries has increased by over 75 per cent in the last decade.

“We now want to build upon the success of the old Section 48 relief in supporting the production of British films and creating investment and employment opportunities in the industry.

“This new, more generous relief will ensure that the UK continues to be recognised as one of the best places in the world to make a film.”

Estelle Morris, Films Minister, said:

“This new tax relief underlines the Government’s commitment to a stable, sustainable and successful film industry that will go on producing award-winners like Mike Leigh’s Vera Drake.

“In particular, the relief delivers on our determination to remain a major centre for international film-making. Our ongoing Review of the UK’s co-production treaties will produce a set of re-focused and fit-for-purpose agreements which the industry wants and needs. Announcements on the progress of this Review will be made later in the year.

“We will also continue working closely with the UK Film Council to improve distribution of British films, building on their excellent work to date in ensuring that home-grown cinema gets seen by as wide an audience as possible.”

John Woodward, Chief Executive Officer of the UK Film Council, said:

“Film makes a major contribution to our economy and to our culture. Obviously, as with Section 48, the new tax credit will take a few months to bed down but it is extremely good news that the new relief will apply to 100 per cent of the film’s costs – rather than just the money spent in the UK.

“The increase in the budget of films which qualify for the tax credit from £15 million to £20 million is also very much welcome.

“As well as securing this vital and effective support for film production, we now look forward to continuing discussions with the Government on the shared policy goal of improving the distribution of British films in the long term.”

Key features of the new relief include the following:

• the money will be paid direct to film-makers, not through third parties, so it will be less open to abuse;
• the relief will cover 20 per cent of production costs compared to the 15 per cent covered by the old Section 48 relief;
• films with budgets of up to £20 million will be able to benefit, compared to a limit of £15 million under Section 48;
• for the first time, the relief will include an added incentive for films to be profitable;
• the relief applies to all production expenditure, not just that spent in the UK; and
• the maximum relief which can be claimed on a qualifying film will rise typically to £4 million compared to £2.25 million under Section 48

The new relief will come into effect from July next year, but details are being announced today so that the industry can plan the finances of films in development with confidence about what the tax arrangements will be when those films are completed.

The new relief will be unveiled at a reception hosted by Dawn Primarolo at 5.30pm at 11 Downing Street, to be attended by Estelle Morris, Sir Alan Parker, Lord Attenborough, Tim Bevan, Andrew MacDonald, Barbara Broccoli and several of Britain’s other leading film producers.

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

The first meeting of the independent advisory panel appointed by Sir Derek Morris to advise him on the conduct of his independent review of the actuarial profession was held this week following the closure of the Morris Review consultation exercise. The review received over one hundred responses from a wide range or individuals and organisations including individual actuaries, users of actuarial services, professional bodies, actuarial consulting firms, and clients of the Government Actuary’s Department. Commenting on the success of the consultation exercise, Sir Derek said:

“The response to our consultation has been highly encouraging. This is an important exercise that I hope will make a significant contribution to the future development of the actuarial profession itself and to the direction of Government policy towards the profession.”

“I should like to thank all those individuals and organisations that contributed. The review team will read with interest the views that have been expressed and publish an interim assessment paper in the autumn. This will set out the key issues that have been raised in the consultation process and will identify possible options for change.”

The members of the advisory panel are:

Adair Turner: currently chair of the UK Pensions Commission, vice chairman of Merrill Lynch Europe, a director of United Business Media plc, and chair of the UK Low Pay Commission.

Philip Broadley: Group Finance Director and a board member of Prudential plc since 2000. Previously worked for the UK firm of Arthur Andersen where he became a partner in 1993. He is a chartered accountant.

Steven Haberman : Deputy Dean and Professor of Actuarial Science at the Cass Business School, City University. Fellow of the Institute of Actuaries, Royal Statistical Society, Institute of Mathematics and its Applications, and an invited member of the New York Academy of Sciences.

Paul McCrossan; Fellow of the Society of Actuaries and the Canadian Institute of Actuaries. Served on the Council, and as President, of the Canadian Institute of Actuaries. Elected chairman/president of the IFAA, the then international organisation of actuarial associations representing professional actuaries worldwide, in 1995.

Peter Tompkins: partner in the Human Resource Services business of PricewaterhouseCoopers. Heads the practice’s Investment Consulting Business and provides retirement and actuarial advice to a range of investment and insurance clients.

Elaine Kempson: Professor of Personal Finance and Social Policy Research and Director of the Personal Finance Research Center at Bristol University.

Roger Munson OBE: a chartered accountant, formerly a  partner with the UK accountancy firm Coopers & Lybrand. Also held a number of other professional responsibilities, including membership of the Accounting Standards Board. Member of the Competition Commission 1996-2003.  From 2002 has been an advisory director of Ofwat.