Tag: Treasury

The press release issued by HM Treasury on 17 December 2004.

Progress positive but further work needed, the Government said today, as it brought forward new proposals to strengthen the Myners principles. This follows the conclusion of its review into how effective the Myners principles have been in improving pension schemes’ investment decision-making.

The review marks another important step in the Government’s programme of reform to improve the efficiency of the investment chain which links savers and the companies in which they invest.  This is of vital economic importance for productivity and long-term growth, because the investment chain is a critical mechanism for ensuring that investment is efficiently allocated.

Announcing publication, Financial Secretary Stephen Timms MP said:

“I welcome the efforts that pension schemes, particularly the larger ones, are making to adopt the Myners principles: everyone – consumers, industry and Government, but especially pension schemes themselves – stands to benefit as a result.  However, our review shows that further action is needed to accelerate progress in key areas, in particular in relation to trustee expertise and decision-making processes.”

Paul Myners, author of the original Myners Review, said:

“I am very pleased that the principles are now widely accepted as the benchmark of best practice for investment decision-making. But more change is needed before the vision of a much-better functioning system I set out in my original report will be realised.”

The Government proposes to strengthen and amplify the Myners principles in respect of the areas where progress has lagged.  These revisions will make clear that:

• the chair of the board should be responsible for ensuring that trustees taking investment decisions are familiar with investment issues and that the board has sufficient trustees for that purpose;
• for funds with more than 5,000 members, the chair of the board and at least one-third of trustees should be familiar with investment issues (even where investment decisions have been delegated to an investment subcommittee);
• funds with more than 5,000 members should have access to in-house investment expertise equivalent at least to one full-time staff member familiar with investment issues;
• as well as contracting separately for investment and actuarial advice (as the principles currently require), in relation to investment advice, funds should also contract separately for strategic asset allocation and fund manager selection advice. (This is consistent with Sir Derek Morris’s analysis in his interim assessment of his review of the actuarial profession – see below.);
• trustees should provide the results of monitoring of their own performance to members, and ensure that key information provided to members is also available on a dedicated fund website.

The Government will also explore, in conjunction with stakeholders, the practicalities of a voluntary, independently-compiled report on compliance with the Myners principles by trustees, akin to the FRAG reports commissioned by custodians to demonstrate to clients their compliance with various internal control procedures. This would help provide an informed commentary on how the principles are being implemented, and help trustees validate and benchmark their decision-making procedures more effectively.

The interim assessment of Sir Derek Morris’s review of the actuarial profession, also published today, provides further analysis of the investment consultancy market, and identifies a need: to increase trustee knowledge and understanding; to encourage greater scrutiny and market testing of advice; and to discourage the supply of such advice being bundled with other services.

The press release issued by HM Treasury on 20 December 2004.

Paul Myners today published his report on the corporate governance of life mutuals commissioned by the Treasury in March 2004.

The Government welcomes the report, which provides a thorough analysis of the issues, and a proportionate and pragmatic set of recommendations. The review builds on the work of Sir Derek Higgs on corporate governance and complements the reviews by Sir Derek Morris, Paul Myners and Ron Sandler in improving the efficiency of the investment chain which links savers and the businesses in which they invest.  The issues identified by Paul Myners in this report concerning the influence of members of life mutuals echo those he considered in the review of institutional investment for members of occupational pension schemes.

Paul Myners’ report recommends adoption by life mutuals of the Combined Code on corporate governance, which has been annotated to reflect the circumstances of life mutuals.  The annotations serve to emphasise the importance, in the life mutual context of greater transparency and accountability in the boardroom, formal performance appraisal, proactive support for non-executive directors and closer links between non-executive directors and mutual members.  Complementary proposals aim to foster accountability by life mutuals to their members and to other market monitors through promoting better member relations and disclosure of relevant information.

The Government believes Paul Myners recommendations will encourage the success of the sector and protect the interests of its members. It calls on the mutual life sector to begin implementing the recommendations put forward by the review now. The Financial Secretary to the Treasury, Stephen Timms MP, plans shortly to meet industry leaders to affirm this message.

The Government will be reviewing the impact of implementing the proposals after two years after the Code comes into effect.

Stephen Timms said:

 “Mutual life offices are an important part of the UK’s financial services sector, providing a home for the savings of nearly 10 million members.  The way in which these organisations are run is important to the overall health of the economy as well as to the financial well-being of the individual policyholders concerned.   The challenge for life mutuals – and in particular its representative bodies – is to build on the momentum of this report to drive forward the review’s recommendations.  The Government is now looking for life mutuals to respond.”

The press release issued by HM Treasury on 20 December 2004.

Launching the final report of his independent review of the governance of mutual life offices, Paul Myners said:

“Good corporate governance is essential to all forms of business. It provides the checks and balances that ensure that firms are run efficiently and meet the objectives of their owners, whether shareholders or the members of a life mutual.”

“It also has its limitations. In formulating the review’s recommendations, I have recognised that risk is inherent in the conduct of business, and necessarily so.    Good corporate governance can ensure those risks are identified and appropriately managed, but it does not eliminate them, and it should not be believed that it does.   Indeed measures that sought to eliminate risk could destroy the very purpose of these entities.”

Commenting on the review’s recommendations, he said:

“The recommendations I am making today aim to achieve greater accountability by life mutuals to their members.  In doing so I have looked to develop a package of measures to help improve accountability, recognising that there are limits on what can be expected of life mutual members.  This includes measures to better enable other external monitors to scrutinise life mutuals, promoting better internal scrutiny of management by firm’s boards as well as the role of the Financial Services Authority.”

“My approach is to address these issues in a realistic and proportionate way, with recommendations based on established practice and common sense.  Taken together they provide the basis for life mutuals to ensure that their governance will compare very favourably to best practice in proprietary companies.  I am not recommending legislation, as the issues identified do not warrant it.  I expect the recommendations in the report to be taken forward by life mutuals and their trade bodies, supported by FSA supervision.”

“The FSA has made considerable strides in recent years in recognising the importance of good corporate governance to good regulation.  I hope it will take into account the lessons from this review as it further develops and refines its approach.”

Recommendations include:

• Promoting greater engagement by life mutuals of their members, through guidance on fair and accessible voting procedures on a member relations strategy.  This includes promoting dialogue with members as well as facilitating communication among members.  Members also have a clear responsibility to look after their own interests as the effective owners of life mutuals;
• Proposals to better inform life mutual members and the market through providing better information, including on directors’ remuneration, and for large mutuals, publication of forward-looking strategic information in the form of an Operating and Financial Review;
• Promoting adherence to best practice corporate governance through producing a life mutual specific piece of guidance.  This takes the form of a number of annotations to the Combined Code to reflect the particular characteristics of life mutuals. The Review’s objective is that this Code will be used by the FSA as its benchmark when it looks at governance as part of its risk monitoring process;
• Proposals that give particular prominence to the need for a strong independent element on life mutuals’ boards, and underlines the importance of board appraisals.  Monitoring of business risks should be an explicit function of the non-executive directors; and
• Helping equip non-executives to deal with the challenges they face in monitoring a complex, technical business. Proposals in the report aim to foster informed discussion and challenge. The company secretary or equivalent in friendly societies has a very valuable and pro-active role to play in this regard and in supporting non-executives more generally.

Commenting on the report, Sir Derek Higgs said:

“I welcome Paul Myners’ proposals for enhancing the governance of life mutuals. They build pragmatically on the sound, common sense principles of the Combined Code.”

Financial Reporting Council (FRC) chairman Sir Bryan Nicholson commented:

“These are sensible, proportionate recommendations that build on the principles of good corporate governance set out in the Combined Code.  The FRC stands ready to support the Association of Mutual Insurers in promoting best practice in the life mutual sector through the Code.”

Callum McCarthy, Chairman of the FSA said:

“The FSA sees effective corporate governance in authorised firms as being crucial to our statutory objectives of maintaining market confidence and consumer protection.   So we welcome the recommendations of this report that are aimed at strengthening governance in one of the sectors we regulate.  In particular, we support the aims behind the annotations to the Combined Code which we hope, when they are finalised, will provide a useful benchmark against which we will be able to measure governance standards in mutual life offices.”

The press release issued by HM Treasury on 24 December 2004.

Chancellor Gordon Brown today instructed the Bank of England, acting as HM Treasury’s agent,  to direct all UK financial institutions to freeze any funds held for or on behalf of the entity, the Movement for Islamic Reform in Arabia (MIRA) immediately.

The action has been taken because the Treasury have reasonable grounds for suspecting that the organisation is acting on behalf of Sa’ad Al-Faqih, who was listed by the UN as an associate of Al-Qa’ida yesterday, 23 December 2004.

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

Sir Nicholas Goodison today published his review of regional and national museums’ and libraries’ ability to compete in the market-place for works of art and culture and called for a boost to private giving and a new emphasis on collections and curation.
Sir Nicholas said:

“We have a problem that we must solve. Museums, galleries and libraries are records of our history. All over the country they offer amazing opportunities for learning and enjoyment. In recent years it has been harder and harder for them to compete to buy essential works of art and culture. The most expensive objects, some of them likely to be exported, are often out of reach.

“We must find ways of encouraging more gifts from private owners and donors. In the United States private giving to public collections, with some encouragement from tax reliefs, is part of the country’s culture. I want more people in the U.K. to discover the pleasure of giving in this way.”

In his review, entitled ‘Securing the Best for our Museums: Private Giving and Government Support’ , which was commissioned by HM Treasury, Sir Nicholas argues the cultural and economic case for new acquisitions by museums and other public collections. He discusses the threat of continuing sales of important objects from private collections and their possible export, the sources of public funding available to museums, the need for a new look at the care of collections, and the difficulties that museums have in providing money for acquisitions. He analyses the various fiscal measures that help to keep important objects publicly accessible in private collections and that encourage private owners to sell to public collections rather than on the open market. He makes a number of recommendations to secure public access to works.

Sir Nicholas places particular emphasis on the strengthening of regional collections and their curatorial skills, and increasing the availability of important cultural objects in the regions, in order to widen people’s opportunities for enjoyment and learning.

Sir Nicholas added:

“A museum’s acquisition policy should reflect a well thought out policy of strengthening its collection to ensure excellence and to inspire its local community and its visitors.”

His chief recommendations are:

• New tax reliefs to tempt owners to donate works of pre-eminent importance to public collections during their lifetimes. If adopted, a donor would be able to set the gross value of the object against income before the assessment of income tax, and any capital taxes due on sale would be eliminated. The donor would be able to spread the income tax saving over a number of years.
• Changes to the Acceptance in Lieu system that will (1) enable executors to offer objects of pre-eminent importance against not just inheritance tax but all forms of tax liability due on a deceased estate, and (2) enable owners of objects, during their lifetimes, to arrange offers in lieu of tax liabilities following their deaths.
• A new one-stop shop for museums and owners to get impartial advice and guidance on buying and selling works of art.  Resource (the Council for Museums, Archives and Libraries) could house an executive function to deal with most of the programmes to do with the retention of works of art and other cultural objects. This will enable Resource to provide a much needed professional advice and guidance service to owners and their representatives, and to strengthen its advice and guidance services to museums, in particular regional and smaller museums who don’t have specialised knowledge in this area. It will bring greater consistency into the present varied and (to owners) confusing programmes. The service would include a comprehensive and clear written guide to the many options available to the owner of an object, which would be distributed to owners, professional advisers and museums.
• Raising the annual grant to the National Heritage Memorial Fund to at least £20million.

The press release issued by HM Treasury on 20 January 2004.

The commitment and achievements of the staff and volunteers at the Fersands Family Centre in Aberdeen were praised by Paymaster General Dawn Primarolo on a visit today.

The Family Centre was created to provide educational, training, social and recreational facilities and resources to local families.

Ms Primarolo commented:

“The Fersands Family Centre provides a first-rate service to families in a wide range of areas, ensuring parents in the community receive the support and advice they need.

“Through providing high quality childcare and training opportunities, the centre also offers parents a real opportunity to fulfil their potential in the workplace and to develop their skills. I am also pleased that so many of parents using the nursery are taking advantage of the new tax credits which are currently benefiting more than 5.9 million families across the UK and give extra support for children and help parents meet their childcare costs.

“It has been a pleasure to meet staff, volunteers and families using the centre today and I would like to congratulate the centre on its ongoing success.”

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

Speaking at a conference in York of over 100 owner-managers and representatives from schools and local government tonight (Monday 8th March), John Healey, Economic Secretary to the Treasury and MP for Wentworth in Rotherham, said:

“For too long the world of the entrepreneur has seemed closed to all but the lucky few.  What we need is a dynamic business culture right across the country. Enterprise must be open to all in the UK and we cannot accept ‘no-go’ areas for successful companies.

“More than 148,000 extra jobs have been created in Yorkshire and Humber since 1997.  However, with all its potential, the region still punches below its weight economically. In a Britain enjoying the benefits of hard-won macro-economic stability, the challenge facing the region is to build on this success through a shared commitment to enterprise and wealth creation.”

Mr Healey argued that the region’s inner cities, towns and old industrial areas in parts of Sheffield, Rotherham and Leeds should be seen as new markets with competitive advantages – such as their strategic locations, their often untapped retail markets, and the potential of their work force.

The potential has already been demonstrated by the 11 firms from Yorkshire represented in the Inner City 100 index in 2003. This index celebrates the 100 fastest growing firms in urban areas. Yorkshire and Humber had the third highest regional representation, with four businesses in the top twenty and the second fastest growing firm – Action 4 Employment Ltd, based in Sheffield.

Mr Healey added:

“Our goal is that no one is left out on the margins of enterprise, no one excluded from the mainstream of economic prosperity.

“We are putting in place the right incentives to stimulate business-led growth in our inner cities and estates, and encourage much bigger flows of private investment. Our aim is to make the market work in places where it is failing. That is why we designated the 2000 most deprived wards in the country as Enterprise Areas.

“This benefits the property market, with abolition of stamp duty for domestic properties up to a value of £150,000 and all commercial properties. Breaking down barriers to enterprise in our most disadvantaged communities in North Yorkshire will tackle remaining barriers to local job and wealth creation and will help us realize the full economic potential of our region.”

“Other advantages enjoyed by Enterprise Areas include: the Phoenix Fund (which has helped in the creation of 330 new businesses and supported almost 1200 existing ones in Yorkshire) and the Bridges community venture capital fund; and new powers for planning authorities that will cut red tape for growing businesses by removing the need for them to apply for planning permission.”

Cllr Paul Blanchard, who organised the event, said:

“As Chair of Young Enterprise in York, we’re really pleased that Mr Healey has agreed to speak at our event.  Creating a dynamic business culture in this country must start within our education system – showing the adults of the future the benefits to themselves and their community that entrepreneurism can bring.

“Young Enterprise is at the heart of this – founded in 1963, and a national business education charity, in this region we run six programmes for over 6,500 young people in schools, colleges and universities; with guidance from local business volunteers, teachers and tutors. Usually programmes are class-based, and three involve students running their own real company, developing entrepreneurial skills for personal success and enhancing their employability.”

The press release issued by HM Treasury on 20 January 2004.

Exploration in North Sea oil and gas was given a further boost by proposals announced today by Paymaster General Dawn Primarolo.

Building on an announcement in the Pre-Budget Report, the Government is introducing a new Exploration Expenditure Supplement, effective from 1 January 2004, to help promote exploration and investment in the North Sea.

The supplement will be available for up to 6 years, at an annual rate of 6 per cent compound interest on unused allowances. This will maintain the value of existing 100 percent allowances for new entrants unable to make immediate use of them.  As a result of the supplement, the overall tax relief available to these companies could increase by up to 41 per cent.

Speaking to representatives of the oil and gas industry in Aberdeen, Dawn Primarolo said:

“The North Sea oil and gas industry is a vital contributor to the UK economy. The new Exploration Expenditure Supplement will ensure new entrants get support for the important early stages of investment. This builds on the existing 100 per cent first year capital allowances introduced in 2002 for investment in the North Sea and will help to ensure a sustainable future for the UK’s oil and gas industry.”

The press release issued by HM Treasury on 23 January 2004.

John Healey, Economic Secretary to the Treasury and Rotherham MP, today congratulated the South Yorkshire Key Fund (SYKF) for its success in receiving the largest ever lump sum award from the Phoenix Fund1 for boosting enterprise in deprived areas, and on passing the £3 million mark in distribution of funds to voluntary and community groups.

With over £10 million available for the region’s communities, the Key Fund is providing an innovative and dynamic approach to economic development, helping promote and stimulate regeneration throughout South Yorkshire.

Speaking at the annual general meeting of the fund in Sheffield, John Healey said: “Boosting levels of enterprise is central to the future of South Yorkshire. This record award and the £3 million already distributed by the South Yorkshire Key Fund represent a major step forward for the region”.

The work of the SYKF, as a community development finance institution, contributes to the government’s social enterprise agenda by providing support to social enterprises and contributing to the economic regeneration of the region.

It provides a custom-made grants and loans scheme for social economy organisations. This ranges from funding for feasibility and start-up activity, through development finance, to large scale, ‘venture capital’ type investments.

The SYKF also works alongside other projects which provide financial support to the social economy, including the South Yorkshire Investment Fund for larger investments and a Global Grants scheme to support smaller, local community based initiatives.

John Healey added: “Disadvantaged communities should not be seen as ‘no-go’ areas for business and enterprise. They should be seen as new markets with competitive advantages such as strategic locations, workforce potential and untapped retail markets. The SYKF is consistently achieving this in the local area.”

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

Innovative schemes to deliver joined-up care for victims and witnesses, developing visitor centres in prisons and reducing the number of children entering the Criminal Justice System, are just some of the winning projects across England to receive a total of £46 million under the ‘Invest To Save’ initiative, announced the Treasury and Cabinet Office today.

The ‘Invest to Save’ initiative provides support for projects that involve joined up public bodies working together to deliver services that are innovative, responsive to local needs and more efficient.  This, the sixth round of the Invest to Save Budget, continues to include partnership bids from central government, local authorities and the voluntary sector.

Chief Secretary to the Treasury, Paul Boateng said:

“Since 1999, the Invest to Save Budget has invested £370 million in some 400 projects across the United Kingdom to deliver reform and enhanced levels of service to local people.  This investment has helped develop new ways of working – for example, partnerships between voluntary organisations and the public sector as well as better outcomes such as more effective teaching of citizenship and reductions in crime and the fear of crime.

“The  Invest to Save Budget has been a catalyst for change across the public and voluntary sector – sharing lessons learned and best practice across regions and departments and so helping to improve service delivery.”

Douglas Alexander, Minister for the Cabinet Office said;

“Improving the delivery of services to the public is a key objective for  Government. The ISB programme funds projects that have identified innovative ways to transform the way public services are delivered through multi-agency partnerships. There are other benefits too, which include improvements to the quality and cost effectiveness of the services themselves.”

The new projects receiving funding are: