Tag: Treasury

The press release issued by HM Treasury on 21 June 2001.

Today saw the publication of a consultation paper seeking to encourage innovation and strengthen further the UK’s science base by enhancing the supply of highly skilled scientists and engineers. The consultation paper, which seeks views on the key issues affecting the supply of scientists and engineers, is the first stage of an independent review led by Sir Gareth Roberts.

The aim of this review is to ensure that businesses, universities and the public sector can recruit and retain the highly skilled scientists and engineers necessary to underpin their research activities, and thereby enhance the UK’s already strong reputation for scientific and technical expertise.

Publishing the consultation document, “Review of the supply of scientists and engineers”, Sir Gareth Roberts said today:

“The science base and its continued development is key to UK economic growth and productivity in the 21st century. The consultation paper provides those in business and education with an opportunity to help shape the Government’s science and engineering education policy for the future. I hope that as many people as possible contribute their suggestions and ideas to the review.”

The consultation paper reflects issues identified in preliminary discussions with representatives of the business and education sectors. Key areas it identifies include:

• the range of skills acquired by top scientists and engineers at degree level and above;
• how these skills correlate to the needs of business;
• how effectively innovative businesses communicate their needs to higher education, and how well the education system is able to respond; and
• student motivation and incentives at all levels, including secondary school, undergraduate, and postgraduate.

The Chancellor of the Exchequer announced the independent review in Budget 2001 as part of the Government’s productivity strategy. The announcement reflected the Government’s belief that a strong connection between the scientific and business communities (and, in particular, a good supply of highly skilled scientists and engineers) is vital for research and development and innovation, and therefore important for the future productivity of the UK economy.

The preferred deadline for responses to the consultation paper is 31 July, although responses received after this point will still be welcomed. The final report will be submitted to the Chancellor, Secretary of State for Trade & Industry and the Secretary of State for Education and Skills by February 2002 – in time for its recommendations to feed into the 2002 Spending Review.

The press release issued by HM Treasury on 18 June 2001.

New measures to tackle the productivity gap with Britain’s major competitors were set out today by Chancellor Gordon Brown, Trade and Industry Secretary Patricia Hewitt, and Education and Skills Secretary Estelle Morris:

radical reform of the UK’s competition regime;
a Capital Gains Tax regime that is overall more favourable to enterprise than that of the USA;
modernisation of insolvency laws with abolition of Crown Preference;
better tax treatment for share options, extending Enterprise Management Incentives to larger companies;
a Green Paper, later this year, on reforming the planning system;
a review of the long-term retail savings industry led by Ron Sandler;
a major review of the role of enterprise and business in education led by Sir Howard Davies;
new measures to help small businesses grow including extension of the 10p corporation tax rate and help with VAT compliance;
a review of payroll services to small business;
an immediate review of DTI’s support to business, starting with industrial manufacturing;
targets for each of the English regional venture capital funds.

Speaking following a business breakfast held at No 11 Downing Street, the Chancellor said:

“Four years ago the Government began its mission to raise the economy’s sustainable rate of growth. In our first term this Government put stability in the macro-economy and work first. In our second term we must build on the platform of stability and employment. Today, we bring forward radical measures to tackle our productivity gap and create in Britain a true enterprise culture where the chance to start and succeed in business is genuinely open to all.”

Patricia Hewitt said:

“This Government will help UK firms get to the future first. Enterprise is key to our future prosperity. We must remove obstacles to innovation, and make competition work properly for the consumer, so that UK companies become the best at meeting consumer needs. We must back success and remove opportunities to break the rules.”

Estelle Morris said:

“It is vital for a healthy economy that young people understand the importance of enterprise and are given the support they need to succeed in their working lives. The Learning and Skills Council provides a very important link between the business community and young people. We are also making sure that schoolchildren get more chances to do work experience to help them prepare for the world of work. So I am pleased to announce today that, to encourage an enterprise culture, Sir Howard Davies has been commissioned to conduct a review of the role of enterprise and business in education.”

Today’s statement sets out a package of radical reforms to drive through improvements in the UK’s productivity performance.

These changes build on the reforms the Government made in its first term to improve competitive pressures in the economy, remove barriers to the effective operation of markets and ensure that our tax system properly incentivises enterprise and investment.

Measures include:

1. Reform of the competition regime. A White Paper will be published in July setting out proposals for early legislation:

modernising “complex monopoly” powers allowing the competition authorities independence to investigate sectoral markets under clear competition principles;
a strong legal basis for competition authorities to promote competition across the economy;
full independence backed by additional resources for the competition authorities; and
consultation on introduction of criminal penalties for those involved in cartels.

2. A new Capital Gains Tax regime that is overall more favourable to enterprise than that of the US. From April 2002 effective CGT rates for business assets will be reduced to 20 per cent after one year and 10 per cent after two and all subsequent years. The Government will also consider whether, during the lifetime of this Parliament, further changes to the non-business asset regime are necessary to improve incentives to invest and help businesses attract finance.

3. Major reforms to modernise UK insolvency laws to reduce the penalties for honest failure and to create a modern and fair commercial system. A White Paper in July will propose:

removing the Crown’s preferential right to recover unpaid taxes ahead of other creditors; and
ensuring collective procedures are used instead of administrative receivership, which allows just one creditor to have control. (Special arrangements will be considered for securitisation).

4. Improvements to the tax treatment of share options with a consultation on doubling the size of company that can qualify for Enterprise Management Incentives (EMI) to assets of £30 million.

5. Publication later this year of a Green Paper on Reform of the Planning System to set out proposals for significant improvements in the processes for determining planning applications, to ensure that the system strikes the right balance between economic and environmental considerations and is flexible and well-adapted for the diverse needs of the regions.

6. The appointment of Mr Ron Sandler, former CEO of Lloyd’s of London and Chief Operating Officer of Nat West, to conduct an independent review into the long-term retail savings industry including life-insurance. Working with the FSA, the review’s purpose will be to identify the competitive forces and incentives that drive the industries concerned, in particular in relation to their approaches to investment, and, where necessary, to suggest policy responses to ensure that consumers and the investment needs of the economy are well served.

7. A major review of the awareness of business, enterprise and the economy across schools and further education, led by Sir Howard Davies, chairman of the Financial Services Authority, to create a strong enterprise culture for the future. This will report to Gordon Brown, Estelle Morris and Patricia Hewitt in January 2002.

8. New measures to help small businesses start-up, grow and prosper:

The extension, in Budget 2002, of the 10 per cent corporation tax band to reduce the tax bills of more small businesses;
help for up to half a million businesses with the removal of automatic fines for late payment of VAT for firms with a turnover of less than £100,000. In future fines will only be levied after a written communication is first sent offering help and advice to sort out problems;
publication today of proposals for a flat rate VAT scheme which will mean hundreds of thousands of small companies paying less tax and facing lower compliance costs.

9. A review of payroll services for small firms, to make the system more effective and less costly. This will be led by Mr Patrick Carter, a member of the Public Services Productivity Panel. The review will focus on how payroll can be done more efficiently, with better support and use of technology. He has been asked to report by the end of September 2001.

10. A review of DTI’s business support, in consultation with stakeholders and customers. The review will start by examining support to industrial manufacturing, and its initial findings will be reported to the Secretary of State for Trade and Industry in September.

11. Announcement of progress on new Regional Venture Capital Funds for each English Region. Following the state-aids clearance the Government is announcing:

agreement in principle to invest up to £60 million by the European Investment Bank’s venture capital arm, the European Investment Fund;
seed funding by Government of up to £80 million;

indicative targets for each region:

£30 million for the North West

£20 million for the East of England

£30 million for the South East

£25 million for the South West

£25 million for Yorkshire and Humberside

£15 million for the North East

£20 million for the West Midlands

£20 million for the East Midlands

£50 million for London

12. As announced in Budget 2001, publication shortly of a consultation document to ensure that Britain has a corporate tax regime that helps create the best possible environment for long-term business investment, both in and from the UK.

13. A consultation paper “Radio Spectrum Management Review” published today by the Radiocommunications Agency is part of an independent review headed by Professor Martin Cave. The paper raises a number of areas for debate, including the best regulatory framework for the management of the spectrum; and pricing and auctions of the spectrum.

The press release issued by HM Treasury on 15 June 2001.

A new approach to the involvement of certain ancillary staff in PFI schemes in the NHS is to be trialled, Alan Milburn, Health Secretary, and Andrew Smith, Chief Secretary to the Treasury, announced today.

If successfully piloted, the new initiative would mean ancillary staff in areas such as catering, cleaning, laundry and portering staff remaining employees of the NHS but being managed by the private sector PFI partner, who would continue to assume responsibility for delivering such services to NHS/PFI hospitals. Where new ancillary staff are required for the delivery of facilities management services they would be recruited by the NHS under the same terms as existing staff.

Speaking about the initiative, Alan Milburn said:

“In line with the incoming Government’s manifesto, we are keen to ensure a new fairer deal for NHS staff so they can continue employment within the NHS.”

Andrew Smith commented:

“PFI and our wider PPP programmes are essential to revitalise the nation’s infrastructure. These pilots build on our reforms – increased transparency and consultation, improved treatment over staff transfers and a fair deal for staff over pensions – which go to the very heart of the public sector ethos that this Government has been keen to develop.

“We will continue to improve the standards of service for patients and all other citizens who rely on effective public services and take what further steps are required to guarantee fair treatment to staff.”

The pilots will be taken forward with hospital schemes that are sufficiently far advanced to allow early insight into its effectiveness. The results should be known before the end of the year. It is such building blocks that would underpin the projects and give us a high level of confidence in their viability.

This government has already put into place three initiatives for PFI/PPP deals including:

• transparency and consultations with staff allowing unions more access to procurement details;
• improvement in the treatment of staff rights under TUPE;
• a fair deal for pensions to protect staff pension rights.

This new approach is fully consistent with existing guidance that there is no requirement to transfer ancillary staff to the private sector where this is compatible with achieving value for money.

The press release issued by HM Treasury on 30 July 2001.

The Government welcomed the launch by the independent Sandler review of its consultation document, which was published today.

Gordon Brown MP, Chancellor of the Exchequer said:

“UK institutional investors control more than £1.5 trillion in assets, including half the quoted equity markets. Following on from Paul Myners’ review, the work that Ron Sandler is undertaking is the next important stage, in the process of reviewing the efficiency and flexibility of the savings and investment industries.

“Working closely with the FSA, Ron will be examining the forces and incentives which drive the retail savings industry and its approach to investment to see whether resources are being allocated efficiently and whether consumers are being well served.”

Alistair Darling MP, Secretary of State for Work and Pensions said:

“The vast bulk of this investment comes from pension schemes. We want to encourage more people to save for their retirement and to ensure that they receive value for money and a fair deal. Ron Sandler will be looking at ways in which customers can make more informed choices by having greater transparency and openness and as competitive a market as possible.  Ron Sandler’s wide-ranging review will complement the measures I have taken so far such as the 1% cap on stakeholder pension charges to get a better deal for the public.”

The press release issued by HM Treasury on 27 July 2001.

HM Treasury today set out proposals to bring clarity and accountability to the payment of broking services by pension funds and other investors.

The proposals are:

• The Government has set out objectives for how the market needs to change. Progress towards these will be reviewed in two years? time.
• Under amended Myners principles of investment, pension funds will have to understand and manage pension fund costs better, and soft commission arrangements will be tackled.
• Paul Myners will be asked to develop a set of questions to assist pension fund trustees in requiring better disclosure and clearer incentives for their managers and brokers.
• The FSA study of Best Execution will be widened to examine soft commission and the bundling of services provided by brokers.

Announcing the proposals today Ruth Kelly, Economic Secretary said:

“The challenge for the industry is to develop much clearer structures and incentives. The Government hopes this can continue to be achieved on a voluntary basis. But, if in two years time, there remain competition concerns, the Government will consider what further action is necessary to ensure that a sufficiently competitive environment exists.”

The Government will publish its final response to the Myners review in September, together with a revised set of principles of investment. This revised set will include the following amendment in place of the final sentence of principle 6:

Trustees, or those to whom they have delegated the task, should have a full understanding of the transaction-related costs they incur, including commissions.  They should understand all the options open to them in respect of these costs, and should have an active strategy – whether through direct financial incentives or otherwise – for ensuring that these costs are properly controlled without jeopardising the fund’s other objectives.

Pension funds should not without good reason permit ‘soft’ commissions to be paid in respect of their transactions.

The press release issued by HM Treasury on 27 July 2001.

A joint HM Treasury/DTI consultation on the European Commission proposal to create a European Co-operative Society was published today.

The proposal consists of a Regulation setting out the framework for a new pan-European institution, which could operate across Member States on the basis of registration in one Member State, and a draft Directive concerning employee involvement in each institution.

Welcoming the publication of the consultation document, Economic Secretary Ruth Kelly said:

“We are seeking comments on all aspects of the draft proposals for a European Co-operative Society, to inform the policymaking process going forward.  The co-operative movement is known for its diversity, so I hope that a wide range of consultees will respond, to enable Government to take account of all the different perspectives and needs.”

The press release issued by HM Treasury on 25 July 2001.

The first stage of the Green Technology Challenge to offer tax relief to businesses investing in environmentally friendly technologies was today launched by Financial Secretary Paul Boateng.

Following the announcements made in this year’s Budget about reductions in fuel duty for greener fuels, the Government is also inviting further proposals for pilot projects under the Green Fuel Challenge.

The Green Technology Challenge

Many environmental improvements by businesses require investment in technology. In recognition of this and in line with its aim to protect the environment, the Government today published a consultation document inviting businesses and environmental groups to suggest specific environmental objectives, together with technologies to help achieve these, that should be considered for enhanced capital allowances.

The Government has already introduced enhanced capital allowances for energy-efficient investments, helping businesses to directly reduce their energy use, as part of the package of measures made available alongside the climate change levy, and the consultation document launched today builds on this.

The Green Fuel Challenge

The Green Fuel Challenge aims to help and encourage industry to develop practical alternative environmentally-friendly fuels.  Building on the reductions in duty rates for road fuel gases announced in the Budget, the Government is now inviting applications from those seeking exemptions or reductions from excise duty so that pilot  projects can be established to assess the benefits of new, greener fuels such as hydrogen, methanol, bioethanol and biogas.

Together, these initiatives represent an important response by the Government to work with business to help them tackle, and reduce, the environmental challenges facing modern society.

Financial Secretary Paul Boateng said:

“As the Prime Minister said in his speech to World Wildlife Fund Confederation earlier this year, the interests of business, technology and environmental protection go hand-in-hand.

The Green Technology Challenge aims to encourage, promote and reward green action and facilitate the diffusion of new technologies. It is not just about making the most of the best technologies available today, but about helping industry to develop the next generation of environmentally friendly technologies. 

Allied closely to the GTC, the Green Fuel Challenge builds on the shift to greener fuels encouraged by this Government. Virtually all of the petrol market is now taken by ultra-low sulphur petrol thanks to our policy of duty incentives, and there is a growing market for road fuel gases, again encouraged by duty differentials and helped by companies such as Safeway which are converting their lorry fleets and providing real local air quality benefits as a result. The prospect of securing the environmental benefits of a further move towards greener fuels is very exciting, and the Government is ready and eager to help accelerate that process.

I am delighted today to launch our invitation to business and environmental groups to participate in these Green Challenges. I strongly encourage all those with innovative ideas in this area to come back to us with imaginative proposals.”

The press release issued by HM Treasury on 24 July 2001.

The Treasury has awarded the Office for National Statistics £28.2 million to develop a statistics service to improve neighbourhood renewal, it announced today. The Neighbourhood Statistics Service will provide more localised data necessary to implement the Government’s strategy for combating social exclusion.

A cross-Government ministerial group will be established to act as the driving force for delivery of the information service.  Ruth Kelly MP, Economic Secretary to the Treasury, will chair the ministerial group. She said:

“Combating social exclusion is a major priority for the Government. To be effective in this we must have the most accurate and detailed information possible. Comprehensive local information is essential for pinpointing employment, drug and housing blackspots. This will enable us to identify disadvantaged neighbourhoods within relatively small areas, allowing us to target our efforts where they are most needed.

“The service will also track socio-economic trends and changes over time.  With improved data, national and local government and other service providers will be better able to design and to target policies, and to identify potential problems early.”

Len Cook, National Statistician and Head of the Office for National Statistics said:

“This resource will enable me to put into action plans to improve significantly the provision and availability of information for small areas in a way that has not been possible up to now.  Working with many partners across the public and private sector, we will put in place a range of developments which will transform the information infrastructure of this country.”

Lord Falconer, Minister responsible for the Neighbourhood Renewal Strategy said:

“To deliver the right solutions for a neighbourhood’s specific problems, it is vital that we have accurate and detailed information at our disposal. By funding a comprehensive new data system, which seeks to improve both the statistics available and ensure their consistency, we will produce an effective tool to underpin the renewal work going on across the Government – bridging the gap between the poorest places and the rest of the country.”

The press release issued by HM Treasury on 23 July 2001.

More than £45 million worth of value for money improvements is expected to be achieved in the next 18 months as take up of the Government  Procurement Card  (GPC) increases across central Government, Andrew Smith, Chief Secretary to the Treasury announced today.

This is in addition to the £25m saved in its first three years of operation, using the GPC for processing low-value transactions and putting in place a new impetus to encourage a switch from paper-based systems to electronic processing.

The Government also announced plans today to widen the scope of the GPC as part of its commitment to e.commerce, by allowing higher value capital items and service transactions to be paid for by GPC.

Andrew Smith, Chief Secretary to the Treasury said:

“The Government Procurement Card is thriving and making a real difference to the way Government is doing business. The increased take-up in the use of the Card makes good business and environmental sense.”

Peter Gershon, Chief Executive of the OGC, tasked with driving forward the use of the GPC within civil central Government, said:

“Huge strides have already been made by government in adapting to new electronic techniques.  Use of the GPC is entirely consistent with this vision.  and increases efficiency both for Government and for its suppliers.”

The GPC, managed by the OGC in conjunction with VISA and its member banks, is seen as a catalyst for change among Government buying professionals as it challenges the status quo and encourages suppliers to operate in a more efficient and cost effective way.

The Government is keen to meet its environmental objectives. Environmental benefits have also continued to grow as the GPC has eliminated the use of paper requisition forms.  This has saved 13 tonnes of paper in the first three years of the programme, increasing to 50 tonnes during the next 18 months.

The drive towards greater efficiency eliminates the costs incurred in traditional paper transactions and moves forward the Government’s electronic agenda.

Most suppliers of low value goods and services to Government now accept payment via GPC.  This is good news for Departments who are looking to ramp up their GPC programmes.  Since its launch in 1997, civil servants using the GPC have conducted more than 923,000 low-value transactions

The GPC Card is used by Government Departments to purchase a wide range of goods and services including lower value goods and services including office stationery, building maintenance and repairs, IT consumables and temporary staffing requirements.

The GPC is a Government-branded VISA card. It is similar in its use and features as the card in most people’s wallet or purse and is designed for ease of use by the cardholder.

Current spend on the GPC is over £100m and is expected to reach a cumulative figure of £300m by the end of 2002. This represents over 2.4m transactions per year.

The press release issued by HM Treasury on 23 July 2001.

Estimated savings of £100 million have been realised as a result of central Government applying electronic techniques to the processing and payment of procurement goods and services, Andrew Smith, Chief Secretary to the Treasury announced today.

The savings have been secured following the switch to electronic methods used in raising process orders through telephone, fax and e-mail, and through invoices paid through BACS system and the Government’s own procurement card.

Speaking about the savings, Andrew Smith said:

“The savings achieved from the government’s electronic agenda alone shows that scope within the Government’s procurement business is huge.

Doing business electronically makes practical commonsense and demonstrates the high level efficiency gains that can be achieved by encouraging Departments to adapt to the new developing ways of doing business, the electronic way.”

Peter Gershon, Chief Executive of the Office of Government Commerce, whose Department was tasked to drive forward the use of the Government Procurement Card in central Government said:

“As a catalyst for change, the OGC is demonstrating that it can make a real difference in the way the civil central Government moves forward in driving efficiency in Government procurement. 

It is no longer acceptable to keep faith with old manual systems and processes. Instead we must apply modern and electronic techniques to procurement activities where it adds best value. There is scope for adding real value here.”

The savings represent the latest developments in the Government’s commitment to increase the use of electronic methods of procurement within central Government for raising and payment of transaction orders.

In answer to a Parliamentary Question from Barbara Follett MP (Stevenage) on 20 July 2001, Andrew Smith said:

“There have been £100 million in value for money gains over the last three years as a result of applying modern electronic techniques to central civil Government procurement. 

Our objective was to purchase ninety per cent of low value goods and services electronically by March 2001. Recent measurements by the Office of Government Commerce indicate that at present approximately half of low value transactions are conducted electronically.  Work is continuing to realise additional benefits through means such as increased use of the Government Procurement Card and the replacement of antiquated IT systems with more modern ones.”

Auto-fax, email, EDI, web-enabled online ordering and payment, electronic cataloguing and the use of purchase cards make up the types of transactions that have led to savings.

On a basis of a survey of Heads of Procurement, there are seventy five per cent more electronic transactions now than three years ago.  Savings were calculated on the basis of this percentage increase in electronic transactions and the resulting savings from reduced process costs.  Industry benchmarks indicate a process cost saving of £65 per end-end-procurement transaction.  Government procurement savings are derived from the GPC data.