The press release issued by HM Treasury on 28 February 2001.

The IMF has “commended” the UK Government “for the continued strong performance of the UK economy”.

At a discussion in Washington on 23 February, the IMF said that “plans to increase public investment in infrastructure and human capital are justified in light of the evidence” and welcomed the Government’s efforts “to enhance competition, innovation and entrepreneurship”.

The Directors agreed that “sound fiscal and monetary policies, underpinned by transparent medium-term policy frameworks as well as sustained implementation of structural reforms” have contributed to the strength of the economy in recent years. They also “expected output growth would remain robust” while “prospects for inflation remain benign”.

Against this benign inflation outlook, the Directors noted that “even after taking into account recent spending decisions, the fiscal position remains sound and fully consistent with the authorities medium-term fiscal framework”.  The Chancellor agrees entirely with the Directors’ conclusion that “additional fiscal stimulus would limit the room for further interest rate cuts”. That is why he has made clear that he intends in the Budget to lock in the tough fiscal stance set out in the pre-Budget report and Budget 2000.

Commenting on the IMF’s report, the Chancellor, Gordon Brown, said:

“I welcome the IMF’s report. It outlines the importance of economic stability and the contribution of the Government’s macroeconomic framework to the ongoing success of the UK economy.  Moreover, it highlights the contribution of our prudent and cautious approach to managing the public finances to these successes in recent years.

I agree with the IMF that boosting UK productivity performance is a key priority to achieving higher long-term growth and sustained increases in living standards.  Our approach recognises the importance of economic stability and strong policy frameworks, combined with microeconomic reforms and policies to enhance competition, innovation and entrepreneurship, for building long-term economic strength, high levels of productivity growth and rising living standards for all.”

As was the case last year, at the request of the UK Government the IMF is today publishing its Article IV staff report on the UK economy in full, along with the record of the IMF board discussion, and the UK’s statement in the board meeting.

Commenting on publication of the Article IV and associated papers, the Chancellor said:

“The publication of the IMF’s report on the UK economy clearly demonstrates our commitment to open up the IMF’s scrutiny process.  Making available clear independent information on policy is an essential part of the new international financial architecture.”

The press release issued by HM Treasury on 6 March 2001.

Paul Myners today published his report on institutional investment, commissioned by Chancellor of the Exchequer Gordon Brown in his Budget speech on 21 March 2000.

In response, the Treasury said :

“This is an important report. The Chancellor will respond in tomorrow’s Budget. The Government will also publish a joint DSS/HMT document on the future of the MFR.”

HM Treasury and DSS announced the publication of a consultation document and joint review of the future of the minimum funding requirement (MFR), which applies to most occupational pension schemes, on 14 September 2000.

Paul Myners published his views on the MFR ahead of his main report on institutional investment in a letter to Gordon Brown and Social Security Secretary Alistair Darling on 8 November 2000. This was to enable respondents to the joint review to take account of Mr Myners’ views during this consultation, which closed on 31 January 2001. The Treasury and DSS will take account of all views received in its announcement on the outcome of the joint review.

The press release issued by HM Treasury on 12 March 2001.

Help with debt and easier access to mortgages for the financially excluded will be available from 1 April under measures to boost credit unions, Economic Secretary Melanie Johnson announced today.

Savers, including young people, will also benefit from steps towards deregulation of credit unions. These include :

• increasing the savings limits for young people to £5000 – the fixed limit for adults.
• enabling all credit unions to offer secured loans for seven years and unsecured loans for three years, helping members with debt problems.
• enabling credit unions meeting stricter regulatory requirements to offer secured loans for 12 years and unsecured loans for five years, helping members seeking longer loans, eg for house purchase.

More flexible loan periods permit credit unions to offer easier repayment arrangements to their members. This should assist some of the larger credit unions to offer more substantial loans and increase their capacity to offer mortgages.

Welcoming implementation of the proposals on 1 April, Miss Johnson said :

“This is good news for everyone, but particularly the financially excluded, for whom credit unions offer alternative access to financial services. These measures mark an important step towards improving the service which credit unions are able to offer savers and borrowers.

Enabling them to save more will encourage young people to join credit unions and get used to planning and managing their finances sooner. Greater loan flexibility will make it easier for credit unions to help members overcome personal debt problems and to compete for mortgage business.

Credit unions are an effective way of widening access to affordable credit and savings opportunities to those who cannot or do not want to deal with mainstream financial services providers. The movement is growing and there are now around 700 credit unions in Britain with assets of over £200 million.

We wish to see the movement grow and to realise its potential. But individual credit unions must be effectively managed and offer appropriate safeguards to make them attractive to those looking for better ways to manage their money and financial affairs.

The measures which will come into force next month will ease the regulatory burden and help the credit union movement to grow further and faster and attract more members.”

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

Trustees of occupational pension schemes will benefit from the removal of a barrier to investment in venture capital later this year, Economic Secretary Melanie Johnson announced today.

The measure implements one of Paul Myners’ recommendations, as part of his review of institutional investment in the UK, to reform the law on investment in limited partnerships whose purpose is to undertake investments in private equity.

Miss Johnson said :

“This is a change which will be welcomed by the occupational pensions industry. It is a significant and useful measure that will make it easier for pension funds to consider investment in private equity.

It is fully in line with the Government objective of encouraging greater investment in private equity as part of the drive to increasing UK productivity.”

The change will be implemented at the same time as other key provisions of the Financial Services and Markets Act 2000 (FSMA).

Miss Johnson also announced today that the target date for the commencement of these provisions, known as N2, will be no later than the end of November 2001. The actual date will be confirmed as soon as it is possible to do so.

The press release issued by HM Treasury on 22 March 2001.

The radio spectrum is a key resource for many new and developing high-tech industries. The management and development of the spectrum will play an important role in creating a knowledge driven economy.

The Chancellor announced in Budget 2001 that Professor Martin Cave, Vice Principal at Brunel University, will lead the independent review of spectrum management.

The review will publish an issues paper in May 2001, setting out initial areas of interest.

Professor Cave said:

“The radio spectrum is a key resource for many new and developing high-tech industries that are important to the future growth and productivity of the UK. Ensuring spectrum is managed in the best interests of the economy will mean we fully benefit from these new technologies. Consultation by the review will be wide and extensive, and involve many interested parties in industry, academia and government.”

The review will ensure that the spectrum management framework is at the forefront of change. It will advise on the principles that should govern spectrum management and what more needs to be done to ensure that all users, including non-commercial users, are focussed on using their spectrum as efficiently as possible. The review will consider the use of spectrum management tools such as spectrum valuation, trading and pricing.

The review will report to the Chancellor and the Secretary of State for Trade and Industry by the end of the year. It will address issues early where its advice will be relevant to the institutional framework for spectrum management proposed in the Communications White Paper.

The press release issued by HM Treasury on 28 March 2001.

A new Framework to improve the quality of performance information in the public sector was launched today. This will help to provide the good quality information essential for the public, Parliament and other bodies scrutinising public services and seeking continuing improvement in their delivery.

‘Choosing the Right FABRIC:  a Framework for Performance Information’, sets out principles for good performance information agreed between the Treasury, Cabinet Office, National Audit Office, Audit Commission and Office for National Statistics. All five bodies were represented at the launch of this significant collaborative initiative.

Welcoming the new Framework, Chief Secretary Andrew Smith said:

“To ensure that programmes are working as effectively as possible – and to identify opportunities for further improvement – we need high quality, reliable information about how public sector bodies perform.

The new Framework for Performance Information sets out agreed principles that will make it easier to set clear, transparent targets for their organisations to deliver public service improvements that we all want to see.”

Cabinet Office Minister Ian McCartney said:

“This Government has launched the biggest investment programme in public services in modern times.

But resource must be matched with reform and a responsibility to use those resources effectively and listen to what customers want.  The initiative launched today will help us do just that.”

Sir John Bourn, Comptroller and Auditor General said:

“Good performance information is a crucial component of better management and improved accountability to Parliament and the public.  The Framework for Performance Information provides a set of criteria for the coherent development of better performance information across government, and hence better public services.”

Andrew Foster, Controller of the Audit Commission said:

“Performance measurement is a vital tool in helping to improve public services and the Audit Commission is very pleased to be bringing its experience in this area to the table.

“It ensures that poor performance is challenged and best practice shared. But it also ensures that the providers of public services are accountable by making information available to the public in an accessible and meaningful way.”

Len Cook, National Statistician said:

“For the public to have confidence in government statements about its objectives and targets, trusted information is critical. I have been pleased to play a role in this Framework, which recognises the importance of high quality National Statistics.

My job, under this Framework, is to help meet the objective Sir Winston Churchill set when he established the Central Statistical Agency in 1941 – that arguments should be about what should be done, not about what are the right figures.”

Also launched today is the Government Strategy for Performance Information. This was developed in response to the Performance and Innovation Unit’s ‘Wiring It Up’ report on the management of cross-cutting issues. The Strategy outlines a number of initiatives, including both existing and new work, such as the Framework, that are helping the public sector to improve the way it produces and uses performance information.

The press release issued by HM Treasury on 3 April 2001.

Andrew Smith, Chief Secretary to the Treasury, today announced that the drive for better value for money in government procurement has produced its latest ‘quick win’, in the area of hotel accommodation and conferencing, with the Office of Government Commerce (OGC) delivering £18million savings to the taxpayer over three years.

The OGC initiative under which the Department of Social Security (DSS) took the lead on behalf of Government in the tendering exercise and award of contract to Expotel, provides a single contract to Government at competitive rates to drive down the cost of hotel rooms and external conferences, minimising paper based transaction charges and eliminating government re-tendering costs.

Speaking in London at Public Sector Expo, OGC’s ‘One Year On’ conference, Andrew Smith said: “This latest quick win initiative for hotel accommodation and conferencing is another example of how the OGC is working with departments to make a real difference in the way Government does business.  The £18 million savings demonstrate what can be achieved by optimising the purchasing power of government.

There are clear benefits for Government in entering strategic partnerships with major private sector providers of government services and products.

This is excellent news for the taxpayer because for every pound saved in procurement an extra pound can be spent on front line public services.”

Peter Gershon, Chief Executive of the OGC said:

“One year on, OGC’s pursuit of value for money improvements and our strategic approach to the purchase of key procurement commodities and services is making a real difference to the way the Government and its departments are able to develop their commercial activities.

This innovative DSS led contract is available to the whole of the public sector and is further proof that the OGC is making a real difference both in disseminating best practice and in delivering value for money improvements.”

The main features of the contract with Expotel include:

• A Guaranteed Average Room Rate, dependent upon subsistence rates, which equates to a saving of approx £5.50 per night to the DSS;
• A booking agent rebate of 63 per cent equivalent to approx £3.50 per room;
• A £30 process cost reduction through on-line booking;
• £30,000 savings for each department from unnecessary re-tendering.

The potential annual spend in hotel accommodation and conferencing costs across central civil government averages around £60m each year and the contract provides scope delivering further savings on conference facilities.  The newly negotiated DSS contract with Expotel gives a high priority to reducing transaction costs in the booking service by establishing an on-line booking facility in the drive to meet Government’s commitment to do business on line.

Currently Departments operate individually negotiated contracts for hotel accommodation.  By using the Expotel contract, negotiated by DSS, the need for Departments to incur further tendering costs is negated.

The contract with Expotel will run for three years and there is the scope for the contract to be extended for a further two years if there is clear evidence that further savings can be achieved.

The agreement is another in a series of initiatives arranged by the OGC following up its ‘quick wins’ on the Vodafone and Watermark contracts, the introduction of the Gateway Review process and introduction of best practice procurement guidance.

The press release issued by HM Treasury on 5 April 2001.

Chancellor launches campaign to encourage others to apply

New leaflets produced for every MP to distribute to local schools

Chancellor Gordon Brown is launching a campaign to encourage families who have yet to claim the Children’s Tax Credit to apply for the Government’s family tax cut, which comes into effect tomorrow (Friday) with the beginning of the new tax year.

Around 4 million families on PAYE are estimated to be eligible. The latest figures show that 3.4 million forms have already been returned, but the Government is launching a campaign – supported by voluntary organisations – to encourage the remainder to complete their application forms.

As part of the new campaign, the Chancellor has:

Written to all 659 MPs and provided copies of a Government leaflet (attached) which he is urging them to distribute to local schools and via community organisations encouraging parents to apply

Made sure publicity material about the Children’s Tax Credit will be available in hospitals via the ?Bounty Packs? provided to new mothers, and through information distributed to GPs

Ensured the Government’s special hotline – 0845 300 1036 – will be opened specially from 7.00 am until midnight this Friday. The hotline will also be available during the weekend and all of next week.

Mr Brown said:

“Our Family Tax Cut is introduced tomorrow. 3.4 million families have already returned their forms. That’s a major success, but there are others who could still benefit.

It means a tax cut of up to £10-a-week for 5 million families and it means that around 9 out of 10 taxpaying households with children now qualify for a tax cut.

4 million out of the 5 million who get the Children’s Tax Credit will receive the maximum amount of £520 a year on top of their Child Benefit. But all 5 million will receive additional money.

Main earners with income of £41,000 a year or less will benefit from the new Family Tax Cut. For a family on £30,000 a year, the Children’s Tax Credit is the equivalent of over 2 pence off the basic rate of tax.

For a family on average earnings of £25,000, it’s the equivalent of over 2½p. And for a family on £15,000, it’s equivalent to 6p off the basic rate.

As a result of our personal tax and benefit reforms, by October families with children will be on average £1,000 a year better off. Our Children’s Tax Credit is a key part of a better system of financial support for families.

£15.50 a week – £800 a year – for the first child in every family.

between £15.50 and £25.50 a week – up to £1,320 pounds a year – for 5 million families receiving the new Children’s Tax Credit.

over £50.00 a week – £2,600 a year – for the poorest families.

People who applied by the end of February should get the Children’s Tax Credit in their April pay packet.

But I want all eligible families to claim it and to receive it. That’s why I am launching today’s campaign and asking every Member of Parliament from every political party to publicise the Children’s Tax Credit in the communities they represent. We have made new publicity material available to MPs and I am urging them to distribute it via schools and community organisations in the areas they represent.

Between 1979 and 1997, total child support for a family on average earnings with two children actually fell by 6 per cent as the previous government froze Child Benefit. At the same time the direct tax burden on a family with two children on average earnings rose from 19 per cent to 21 per cent.

The result was that by 1996, families with children were 30 per cent worse off than families without children. For a family on average earnings, the direct tax burden will fall next year to its lowest level since 1972.

Child Benefit for the first child was only £11.05 a week when we came to power and had been frozen in successive years. As a result of all our changes, Child Benefit will in April be £15.50 a week – a 40 per cent cash rise and a 25 per cent real terms rise.

Our new system acknowledges the costs of bringing up children and the tax and benefit system reflects those costs better. Every family with children should have more support. Family prosperity will be improved and child poverty reduced.”

Mary MacLeod, Chief Executive of the National Family and Parenting Institute, said the Children’s Tax Credit would benefit families:

“Financial support is vital for families with growing children if society is to thrive. Parents can face real hardships in trying to provide for their children, especially in the early years, and this recognition of their special needs is very welcome.”

Mary Marsh, Director of the NSPCC, said:

“This is an important step to recognising the financial needs of families with children. It will help all working parents get the income necessary to ensure the health and wellbeing of their children.”

The press release issued by HM Treasury on 9 April 2001.

A £300m boost to tackle the evil of drugs in Britain and to mobilise communities against drugs was announced today by Chancellor Gordon Brown, Home Secretary Jack Straw and Cabinet Office Minister Ian McCartney.

Backed by Manchester United manager Sir Alex Ferguson, the Communities Against Drugs package will target resources at those areas that need it most, reducing crime, creating safer neighbourhoods and giving young people a positive alternative to drug misuse.

Building on the 10-year anti-drugs strategy, the cross-Government initiative includes:

• £220m over three years for police and local communities in England and Wales to disrupt local drug markets and drug-related crime;
• £15m over three years to help Drug Action Teams work effectively in their local communities;
• £5m over two years to increase the involvement of sports stars as role models and develop Positive Futures, a scheme to steer young people away from drug misuse through sport;
• £50m to accelerate the drug testing programme within the criminal justice scheme; and

A new web-based Communities Against Drugs toolkit at and information from a confidential drugs hotline on 0800 776600.

Chancellor Gordon Brown said:

“Today’s initiative starts from the only place where the fight against drugs can be won, in our communities.

It is a fight that cannot be won by Government alone, by legislation alone or even by cash alone – to win the fight against drugs we must dig deeper into the very core of our communities, giving power to community organisations and drawing strength from each other as we organise against the dealer and the pusher.

And when hardly a family is unaffected by the evil of drugs, it is time to build on the best in our communities to drive out the worst in our communities.”

The £220m will be spent on a new campaign to reduce drug-related crime. Funding will be directed through the 376 Crime and Disorder Reduction Partnerships and used to deliver community-backed strategies including:

• High visibility policing of drug hotspots;
• Increase in neighbourhood wardens;
• Support to parents and residents groups;
• Improved security including CCTV and street lighting; and
• Extra truancy sweeps.

The money will be directed across the country with particular emphasis on the worst affected communities.

Home Secretary Jack Straw said:

“Drug-related crime blights our communities. It destroys families and young lives and fuels a wide range of criminal activity, including burglary and robbery.

I want this money to make sure that police and local communities have the tools and resources they need to take control of their neighbourhoods and drive out the drug dealers.”

Sir Alex Ferguson, Andy Cole, Trevor Brooking, Tanni Grey-Thompson, Martin Offiah, Bobby Goulding and other sporting heroes joined the Chancellor and Ian McCartney later in the day at the Salford Reds Rugby League ground to meet young people choosing sport over drugs.

Welcoming the additional money, Sir Alex Ferguson said:

“Young people are our future and should be offered every opportunity to aim high and reach their goals.   I know from experience that nurturing talent from an early age and investing time in individuals can pay dividends for everyone.

That is why I am giving my full support to Communities Against Drugs and to Positive Futures in particular. Drugs ruin the potential of too many of our children and sport provides a valuable alternative to the dangerous diversion they can create.”

Ian McCartney, Cabinet Office Minister, said:

“We won’t tolerate the menace of drugs in our communities – it causes misery and costs lives. We have made good progress in breaking the link between drug and crime and are on track to deliver our targets.

This new money will enable agencies to step up their fight against drugs and the crime it breeds. It will get drug dealers off our kids? backs and into prison and help safeguard our communities.”

Lord Norman Warner, Chairman of the Youth Justice Board said,

“We welcome this boost of funds to our partnership with Sport England and the UK Anti-Drug’s Unit.  Positive Futures is encouraging alternatives to anti-social lifestyles for youngsters who are at risk of offending as well as drug misuse”.

The press release issued by HM Treasury on 10 April 2001.

Speaking in London today at the launch of the new End Child Poverty Coalition, Chancellor Gordon Brown said:

“As a result of measures introduced during this Parliament we have taken more than one million children out of poverty.

The next step is to take the second million out of poverty. And this will be a commitment of the next Parliament as we meet our goal of reducing child poverty by half in 10 years and abolishing it in a generation.

But we know child poverty cannot be abolished by Government alone, but by working with parents, voluntary, charitable and community organisations. That is why the new £450 million Children’s Fund is so vital to the task of tackling child poverty and social exclusion, with practical day-to-day support for parents, children and young people, and support of local projects run by local organisations.

I hope this coalition will become a new, powerful force  – an alliance of community and voluntary organisations, faith groups, parents – all those who share the ambition, of ending child poverty in our country and ensuring every child has the best start in life.”