Tag: Treasury

The press release issued by HM Treasury on 11 July 2000.

Increases of up to 30 per cent in their retirement nest egg and greater freedom in their working lives could be possible for some personal pension savers using the new individual pension account (IPA), Economic Secretary Melanie Johnson said today.

The new IPA will particularly benefit those on moderate incomes, including part time workers, and those taking family or educational career breaks. It will enable the millions of pensions savers to have better, more flexible pension arrangements, which will be ideal for use with stakeholder pension schemes.

Miss Johnson and Social Security Secretary Alistair Darling today published a joint paper outlining the key features of the IPA, and seeking views on a small number of issues remaining following earlier consultation with pension providers and pension savers’ representatives.

Welcoming the paper, Miss Johnson said:

“IPAs will offer many thousands of personal pensions savers new freedom to plan and diversify their working lives They can take time off work or change jobs, possibly several times, without losing out on retirement savings as a result.

“IPAs will be suitable for many people on moderate incomes. They may be particularly helpful to women, who are more likely to take part time employment or to take career breaks when starting a family, or for those returning to education or training courses. Both those individuals and the economy will gain from the benefits IPAs offer.

Pointing out their suitability for long term pensions planning and use with stakeholder pensions, Mr Darling said:

“We want more people to save for their retirement. The IPA complements other reforms such as the new stakeholder pensions. We wanted everyone to have the right options for them and the IPA gives more choice for saving.”

Both IPAs and stakeholder pensions will become available in April 2001. Case study examples of the potential to enhance the value of pensions for those seeking flexibility in their working career are attached.

The advantages of IPAs in pensions saving include a simple charging structure, spread investment risk, security, transparency, and better understanding and confidence in equity investment. The IPA concept was based in part on the popular and successful US s401(k) savings scheme, which has encouraged savings generally, and equity savings in particular.

The development of IPAs marks a key stage in delivering the Government objective of providing secure, flexible and value for money pensions. The paper published today shows how IPAs will work and the steps the Government will take to ensure their availability when stakeholder pensions are launched in April next year. The areas covered by the joint Treasury and DSS paper include:-

• the IPA concept
• how it works in practice
• moving pension scheme with IPAs
• using IPAs for stakeholder schemes
• the legislative framework
• points where further views would be welcome.

Movement of IPA investments between savings schemes will be made easier by the introduction of a relaxation of stamp duty reserve tax rules to put IPAs on the same footing as pension savings in life insurance based products.

The press release issued by HM Treasury on 11 July 2000.

A Treasury-led review published today by the Chief Secretary, Andrew Smith, says much more needs to be done to reduce the incidence of ill health retirement across around 4 million employees in the public sector.

Its 36 recommendations include:

• employers should have active procedures and measures for managing sickness absence bolstered by effective policies to promote health in the workplace
• redeployment is always considered when existing duties are contributing to an employees’ ill health
• ill health retirement should only be granted when an employee is incapable of working until normal pensionable age
• inability to carry out existing duties is too narrow a test for an ill health pension
• greater consistency and rigour is required in the medical assessment process
• Service Delivery Agreements agreed in the 2000 Spending Review should set targets for reductions in ill health retirement

  The report shows ill health retirement:

• costs the taxpayer £1 billion a year
• runs at 22,000 a year
• peaked in the mid – 1990’s at 40,000 a year, but is still at historically high levels
• varies widely both between the rates in different sectors and between employers in the same sector

Mr Smith said:

” Early retirement should be available on genuine medical grounds where there are good reasons, but levels are higher than they should be. We are determined to bring them down to deliver a fair deal for the taxpayer and the people who depend on public services.

“The overall rate of medical retirement is higher in the public sector than in the private sector. And the variations in rates between sectors, and between employers in the same sector, are so significant that there is clearly scope to bring the rate down. This will help employees as well by ensuring employers adopt best practice to protect their health.

“The report sets out thirty six recommendations for tackling this issue. It is important that they are followed through vigorously across the public sector. Ill health retirement costs the taxpayer £1 billion each year. We need to divert those resources which are used unnecessarily to fund medical retirements to front line services.

“I have asked Departments to draw up action plans for each sector implementing the recommendations. Targets will be set challenging the employers with the highest rates to reduce these to match those of the best in their sector.”

The press release issued by HM Treasury on 17 July 2000.

The Chancellor, Gordon Brown, today called for fast-track completion of the single European financial services market and called for a plan for a 2004 implementation date.

Proposing early implementation of priority measures, Gordon Brown said:

“A dynamic single financial market is key to achieving fundamental economic reform and prosperity across Europe.

“Businesses, including start-ups and SMEs, will benefit from deeper, more liquid capital markets, which in turn will deliver growth and jobs. And consumers and investors will benefit from more competition and innovation, driving down prices and delivering a wider and better choice of financial products.

“Today I have set out practical steps to reinforce the Financial Services Action Plan and deliver the strategic goal agreed at Lisbon – to become the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion.

“That is a goal worth striving for but there is a case to achieve it on an even faster track: with will and determination, we can have a genuine single capital market by 2003 and complete a single market in financial services by 2004, bringing economic prosperity to citizens and business across the EU.

“We must focus on measures which will deliver early benefits. And, in the spirit of our Lisbon goal, we must embrace competition, innovation and flexibility.”

Key proposals set out by the Chancellor in a paper published today include:

• fast-tracking priorities in the Financial Services Action Plan;
• bringing forward the target date by one year to 2004;
• speeding up the completion of the capital market – a new deadline of 2003;
• delivering a competitive financial services market based on mutual recognition of core standards to ensure the integrity of financial markets and protection of consumers;
• a framework which recognises diversity of regulatory approaches, is responsive to market developments and encourages co-operation and exchange of information between supervisors;
• developing clear indicators and measures of success – for example, of the depth and liquidity of capital markets and price differentials for standard financial services products.

The press release issued by HM Treasury on 24 July 2000.

Greater saver choice and more attractive, competitive savings products will be delivered more effectively as National Savings (NS) continues to modernise, Economic Secretary Melanie Johnson said today.

Welcoming the findings of the five-yearly review of the NS agency, Miss Johnson said:

“The review highlights the important part recent innovations in service delivery, have played in helping to make NS more efficient and more flexible. This includes the role played by outsourcing its operations.

“NS is now better placed than ever before to build on this achievement to modernise and adapt to the changing market it operates in. It now has the potential to match the best in the financial services market to the benefit of its millions of customers. But it will only realise that potential if it provides choice and good value products which savers want to buy in the very competitive savings market.

“I believe that NS now has an effective launching pad to develop and deliver those products. It must make best use of developing access technologies in e-commerce and telephone services, as well as by post and through Post Offices, to make sure that it remains an attractive option for savers.”

The review sees these developments as central to NS continuing to make a valuable contribution to the cost-effectiveness of the national debt by offering attractive products and services to members of the public. It will be set a clear and overarching objective to achieve cost-effective government debt management. NS, which will remain a government agency, funds a significant amount – over £62bn – of the national debt. Taxpayers will continue to see the benefit of the NS contribution, which is more cost-effective than comparable gilt-edged securities.

This is also good news for existing NS savers and for future customers. NS will be working to give its current and new customers more attractive, more up to date products and services. People will also get more choice on how they access those products. In addition to being able get NS products through the Post Office and by post as they do now customers will in future be able to choose from a wider range of channels.

The recommendations of the review will be taken forward in a new NS business strategy, and reflected in the framework document that governs the relationship between NS, the Treasury and Government. In taking forward its business plan, NS will give particularly close attention to the need to continue to modernise so that it remains relevant, efficient and cost-effective, and continues to develop new products as well as embracing new innovations and ideas.

Recognising the contribution of NS staff to recent developments, Miss Johnson added:

“This is an exciting vision of the future for NS, which the agency is now working to make a reality. All NS staff and those working with NS, can rightly be proud of the impressive transformation that has been achieved in recent years. The scene is now set for this spirit of improvement and innovation to continue building a modern, best-practice organisation that can succeed for many years to come.”

The press release issued by HM Treasury on 4 August 2000.

In accepting Don Cruickshank’s report Chancellor Gordon Brown announced a package of new measures to improve competition in the UK banking market and deliver benefits to consumers.

Announcing the Government’s detailed response to Don Cruickshank’s wide-ranging report on improving competition in UK banking markets, Gordon Brown said:

“Don Cruickshank’s report is a major milestone in improving competition and ensuring that consumer benefits are central to banking services. In accepting the report’s recommendations, we are determined to drive competition forward and deliver real improvements for personal and small business customers.

“Too often banks and other financial services providers have been slow to give consumers the information they need to make informed choices and make the most of developing competition, new technologies and new products.

“Banking services, like every other sector of the economy, need to be exposed to the full rigours of competition. We aim to achieve this through reforming regulation, opening up payment networks and eliminating any special treatment.”

The Chancellor and Don Cruickshank have discussed the Government response in some detail. Don Cruickshank welcomes the Government’s plans for action across a wide range of the recommendations.

Measures announced today include:

• CAT standards for credit cards together with emphasis on disclosure of key terms and conditions
• Consultation on extending CAT standards to other financial services products
• review of self-regulatory mechanisms such as the Banking Code to ensure they deliver sufficient consumer benefits
• encouraging comparative tables of banking products and complaints against financial services firms.

The Government Response to the Cruickshank Report also includes announcements on progress in a number of key areas to meet the aim of improving competition in banking services.

Payments

– work is continuing to introduce a payments regulator through primary legislation to open up networks and oversee access charges for bank customers.

– consultation on detailed proposals to establish a licensing system for payment systems.

– a payments strategy for all Government Departments to ensure a coordinated approach in modernising government and responding to developments in and the introduction of e-commerce.

The Response also summarises significant progress in reforming charges and access to the cash machine network (LINK), including opening up the ATM network to non-bank providers, banning double charging for ATM withdrawals, and reform of wholesale charging structures. It outlines further work in progress, including OFT review of the LINK and MasterCard schemes.

Regulation

– a wide-ranging review of the Financial Services and Markets Act two years after implementation to monitor its impact on competition in financial services.

– the review will also monitor the effects of regulation and policies introduced by the Government.

– steps to improve transparency and disclosure in the supervision of financial institutions.

– ensuring that the Government is not seen as giving special treatment to financial institutions in the development of Government initiatives.

– ensuring that Government, consumers and financial services providers are in the best position to take advantage of the opportunities presented by e-commerce.

– review of money laundering regulations to ensure that these are proportionate and minimise distortions to competition.

The Treasury has already acted by announcing an amended objective to ensure that competition issues will be central in its dealing with financial services. This is set out in the White Paper Public Service Agreements 2001 – 2004 published on 28 July.

Small and medium sized businesses

– ensuring that small businesses’ access to the financial services ombudsman is not restricted by the number of staff employed but determined by turnover.

– review of the proposed Banking Code for small businesses to ensure that it delivers sufficiently strong benefits to customers.

– encouraging the FSA to ensure that small businesses benefit from its work on comparative information and complaint handling.

– developing government information services to aid new entrants bringing competition to the small business market.

The Chancellor and Trade Secretary Stephen Byers announced referral of the supply of banking services to small businesses to the Competition Commission immediately on publication of the Cruickshank Report on 20 March. This work is already under way and the Competition Commission has been asked to report by June next year.

Thanking Don Cruickshank for his report, the Chancellor said:

“I very much welcome the hard work Don and his team put into the report. There is no doubt of the interest it has generated both here and abroad.

“The report lays firm foundations for the Government and the financial services industry to build on to develop one of the most competitive, dynamic and efficient financial services markets in the world.”

The press release issued by HM Treasury on 25 August 2000.

Promoting conservation and funding research into more sustainable construction practices are amongst the wide-ranging proposals announced today by Treasury Minister Stephen Timms to help reduce the environmental impacts of quarrying.

A consultation into proposals for the ‘Sustainability Fund’ launched today sets out possible approaches to delivering environmental benefits to local communities affected by sand, gravel and crushed rock quarrying.

Announcing the consultation, Stephen Timms, Financial Secretary to the Treasury said:

“This new Fund provides an excellent opportunity to deliver real environmental benefits – not only to local communities affected by the impact of quarrying – but also for the future of construction design and aggregates recycling.”

Revenue for the Fund will be recycled from the aggregates levy due to be introduced from April 2002.

The consultation document invites views from all interested parties on how the objective of the Fund – to deliver environmental benefits to areas subject to the environmental costs of quarrying – can best be achieved, and suggests a number of options for discussion. They include:

• overcoming market barriers and promoting increased use of alternative materials as aggregates;
• funding research into more sustainable construction and demolition practices;
• promoting conservation and increased biodiversity;
• restoring the natural landscape;
• promoting environmentally friendly quarrying practices; and
• local community projects.

Responses to the consultation document are requested by 6 October 2000.

The press release issued by HM Treasury on 30 August 2000.

Andrew Smith, Chief Secretary to the Treasury , today announced that the Office of Government Commerce (OGC) has agreed a strategic partnership with Vodafone for the provision of mobile telephone services to Government bringing over £38m of savings to the taxpayer.

The partnership gives Vodafone access to over 100,000 mobile phone users across government for two years bringing a more streamlined approach to the government market.

Speaking about the new strategic partnership Andrew Smith said:

“We live in a fast moving technological age where the growth in the mobile phone usage is immense.

“This agreement is the first in a series of initiatives streamlined by the Office of Government Commerce and demonstrates the savings that can be achieved with a co-ordinated approach to procurement across Government. The strategic partnership with Vodafone will deliver savings on both service costs and administration totalling at least £38 million over the next two years. This is excellent news for the taxpayer.

” There are clear benefits for Government to enter into strategic partnerships with major private sector providers, particularly where they involve initiatives that optimise the purchasing power of all government departments and demonstrate their ability to improve services and reduce costs. The agreement makes available Vodafone’s best value for government to the whole of the public sector, including local authorities and the NHS, on government contractual terms and without the need for further local competitions.”

Peter Gershon, Chief Executive of the Office of Government Commerce said:

“This is a quick win deal and demonstrates the OGC’s strategic approach to the purchase of a key procurement commodity across Government. Over the next two years we will gain a better understanding of the Government’s needs in this dynamic field and return to the market as a more intelligent customer. I encourage all public sector organisations to make use of these arrangements as soon as they are able.

“There are real benefits to the taxpayer on this agreement as the joint arrangement with Vodafone includes process savings, tariff reductions and access to new technology. This should be seen as a catalyst for other private sector partners to come forward and work to streamline contract processes with Government. Such systems optimise the purchasing power of all government departments and demonstrates the real scope for improving services and reducing costs.”

The agreement with Vodafone is based on the Government Telecommunications Mobile contract, one of the Central Computer and Telecommunications Agency’s (CCTA) managed services. This agreement potentially encompasses over 100,000 users across government and caters for the varying usage requirements of the public sector on a range of tariffs specifically designed for the government marketplace.

The press release issued by HM Treasury on 15 September 2000.

The membership of a new, expanded team of top private and public sector experts to help departments and agencies find fresh, practical ways to improve the performance and delivery of public services was announced today by the Chief Secretary, Andrew Smith.

The Public Services Productivity Panel, which originally became fully operational in 1999 under the Chairmanship of the Chief Secretary, was such a success that it has been decided to renew and expand it. Panel members are freely giving up their time to work with him to improve the quality of public services for everyone. The new Panel’s first meeting was held yesterday at No 11 Downing Street.

The Government’s 2000 spending review pledged a massive increase of £43 billion in funding for public services, but also set demanding targets for improved service delivery through new Public Service Agreements. A key role of the Panel is to help the government deliver and preferably outperform the PSA targets.

Andrew Smith commented:

“The Government is determined to make the very best use of the added investment it is providing for Britain’s key public services.

“I am very grateful for all the hard work and imaginative ideas that the original Panel members contributed to help improve performance across the public sector. I am also very pleased to be able to announce the new membership of an expanded Panel to build on this work. I believe that we will be able to draw on the wealth of experience of the new Panel to drive forward further improvements.”

The members of the Panel are:

Andrew Smith (Chair),  Chief Secretary to the Treasury
Lynton Barker,  Head of Management Consultancy Services, Pricewaterhouse Coopers
Keith Burgess,  Former Global Managing Partner, Andersen Consulting
Caroline Burton,  Board member, London Pension Fund Authority and Investment Panel member for various pension funds
Sir Ian Byatt,  Former Director General, OFWAT
Pat Carter,  Direct investor in US & European healthcare and technology businesses
Fiona Driscoll,  Director/Marketing, Defence Evaluation Research Agency
Michael Frye,  Chairman, Lynara (Management) Ltd
Andrew Foster,  Controller, Audit Commission
Sir Michael Lyons,  Chief Executive, Birmingham City Council
John Miskelly,  Chairman of JM and Director of Blueprint Group Ltd
Greg Parston, Chief Executive, Office for Public Management
Lord Simon, Advisor to the Cabinet Office
Lord Sainsbury, Minister of State, DTI
Clare Spottiswoode,  Former Associate Partner of PA Consulting Group
John Smith,  Director of Finance, BBC
David Varney,  Chief Executive, BG Group
Professor Sir Adrian Webb,  Vice Chancellor, University of Glamorgan

The Government intends to supplement the skills and experience of the Panel by appointing a person with a trade union background as soon as possible.

The Panel will be developing a new work programme, in consultation with public services, over the next month. Details of the programme will be announced at that time.

The press release issued by HM Treasury on 20 September 2000.

Speaking at the Commonwealth Finance Ministers’ Meeting today, the Chancellor of the Exchequer, Gordon Brown said:

“The IMF and World Bank Annual Meetings in Prague this week offer us a crucial opportunity to strengthen the international financial system and to ensure that all countries are able to participate fully in the world economy and share in the benefits of rising global prosperity.

“When the next country is faced by turbulence, and when the next challenge confronts the global financial system, people will not ask who was at which meeting. People will ask whether we have learnt the lessons of Mexico, Korea, Russia and Brazil, and whether we have put in place measures – from early warning procedures to framework for crisis resolution – to create greater stability and economic growth.

“The founders of the Bretton Woods institutions knew that prosperity is indivisible. This is even more the case in today’s world of instantaneous global markets. Today, instability anywhere has repercussions everywhere. The new world economy has brought greater risks of insecurity as well as opportunity. So it is the duty of the international community through economic co-operation to put in place measures to spot potential problems early, to prevent these problems where possible and where problems do occur, to minimise the disruption and real damage they can cause.

“While the path of open trade and open capital markets that we have travelled in the last 30 or 40 years has brought unprecedented growth, greater opportunity and the prospect of better lives for millions across the world, we must not forget there is still massive poverty. Globalisation must work for the poor as well.

“The message from Prague for us all – Governments, Institutions, demonstrators – must be that in the new world of open capital markets the proper course is not to retreat from global co-operation or globalisation. The way forward is to enhance international economic co-operation.

“So we reject those that say the instability of recent years and argue we should turn our back on globalisation, in effect a return to the protectionism of the 1930s and tightly controlled capital markets of the 1940s. Those that look at the expansion of private capital flows and argue there is no longer a need for the IMF and World Bank, that in effect we should return to the discredited laissez-faire of the 1920s. Globalisation has the potential to be the key to greater prosperity. Greater international co-operation is the best hope for eradicating poverty and of delivering growth and opportunity to all.

“The case for global economic co-operation is being made every day. The IMF, under the new leadership of Horst Kohler, and the World Bank, under Jim Wolfensohn, have agreed and are implementing reforms – including greater co-operation between the two institutions. There are four further steps we can and must agree in Prague:

co-operation in surveillance to deliver effective early warning;
co-operation in crisis prevention;
co-operation in crisis resolution;
and above all co-operation to break the vicious circle of debt, poverty and economic decline in which so many countries are still trapped, and create a virtuous circle of debt relief, poverty reduction and economic growth.

Surveillance

“Over the past two years the international community has made great progress in agreeing a framework of codes and standards covering the key areas that all countries need to address if they are to achieve stability and participate in the international financial system – transparency in fiscal and monetary policy, financial supervision and corporate governance.

“And because sound economies depend not simply on robust and transparent economic and financial systems, but on welfare and social systems that build social cohesion and trust, the World Bank and UN are also developing principles of good practice in social policy.

“But the codes of conduct will only work if there is an effective and authoritative surveillance mechanism, to monitor their implementation, so that the public have confidence in the transparency on which stability depends.

“The building block is already present in the IMF’s Article IV process. The new international architecture, however, requires a step change in the IMF’s surveillance under Article IV. It must become broader encompassing not just macro economic policy but the implementation of the codes and standards on which stability depends. It must become inclusive, drawing on the work and expertise of the World Bank and other bodies to deliver broader surveillance under the Article IV umbrella.

“It must become transparent so that the public and the markets get the information they need and have confidence in the process which produces it. Indeed we must ensure the private sector is aware of the codes and standards, and the information they provide. Evidence shows that where the private sector can see that a country has strong economic policies in place, that there is macroeconomic stability and a greater openness to trade, they are more likely to invest in that country. But we still have further to go. Strong foreign investment flows should be linked to strong economic policies.

“Crucially, the surveillance system must be authoritative, independent and of the highest quality. It is important to ensure the IMF has the authority and credibility it needs: we need surveillance of the IMF as well as by the IMF. This is one of the reasons why we welcome Horst Kohler’s agreement to establish an independent evaluation unit at the IMF. This should cover the full range of the IMF’s activities.

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Crisis prevention and private sector involvement

“In setting up new mechanisms for surveillance and crisis prevention, we must also ensure that we provide the right incentives. We must ensure that all the main participants, public and private, in the international financial system accept their responsibilities and play their part in maintaining stability.

“All economies need not only to be transparent in their activities: they also need to forge regular contacts and lasting relationships with their private investors.

“Countries which are prepared to make the efforts to implement internationally-agreed codes and standards, and to establish closer and more secure relationships with their private sector creditors – through establishing investor networks, debt monitoring systems, private sector contingent credit lines, and collective action bond clauses – will find that these efforts will help contribute to building less crisis-prone economies.

“It is also important that the private sector works with the IMF on surveillance issues. We welcome the action the fund has taken in this area and its establishment of a capital markets group.

“And countries that adopt the right policies need to be sure that they have support from the official sector as well as the private sector. That is why the UK supported the development of the preventative contingent credit facility (CCL) at the IMF for these countries. We welcome the agreement at the IMF which we will finalise in Prague to develop further the CCL to make it more attractive to countries and to ensure that it offers real protection.

Crisis resolution

“However successful we aim to be at avoiding crises, we should recognise that shocks will occur. We need to ensure there are effective methods in place for crisis resolution – in a way that ensures that the burden of adjustment is not placed on the poor and the most vulnerable people.

“There will continue to be a role for the official sector, particularly the Fund, in resolving them. But we need also to recognise that the way we resolve crises may have significant implications for the behaviour of public and private sectors in the future.

“Following the events of 1997 and 1998, the international community has now developed a new framework for private sector involvement in crisis resolution. The handling of a number of recent cases has demonstrated the ways in which the private sector can be involved.

“But we need to go further in fleshing out this framework with a clear set of presumptions for appropriate private sector involvement concerning the range of potential crises, moving further away from the old ad hoc model, while still retaining the necessary flexibility to deal with the specifics of individual cases.

World Bank and IMF co-operation

“As we build a platform of stability, we must ensure that more countries share the benefits of the global economy.

“This requires close co-operation between the IMF and the world bank and I welcome Horst Kohler and Jim Wolfensohn’s statement earlier this month of an enhanced partnership between the two institutions.

“The focus of the World Bank is poverty reduction, structural reform and social development. Yet this matters not only in the poorest countries. As the crises of the 1990’s have demonstrated, it is important to put in place strong social systems and mechanisms for helping the most vulnerable in all countries participating in the international financial system.

“The IMF’s prime responsibility is stability and surveillance. But stability and surveillance matter in all countries. And the Asian financial crisis has shown that structural problems can lead to financial and macroeconomic instability.

“So in many countries the interests and activities of the IMF and World Bank are interdependent. They both have vital roles to play in surveillance and lending in emerging market and developing countries alike.

“Above all the Bretton Woods institutions have a crucial role to play in forging the new consensus that I believe we need. A consensus that recognises that enhanced international co-operation is the key to prosperity.

Development

“The need to develop a new approach is clearest for the poorest countries.

“To achieve our goal – halving by 2015 the proportion of people living in extreme poverty – we need to move beyond the economic and social assumptions of the past two decades. A new world requires a new understanding of what makes for sustainable economic development – how we break the vicious circle of debt, poverty and economic decline and create a virtuous circle of debt relief, poverty reduction and economic growth.

“So what we need is a new approach that recognises the links that form the virtuous circle:

first we need to deliver the enhanced debt relief;
second, we need to build the link between debt relief and poverty reduction strategies;
third, we need to create the new conditions for economic; development- stability and a recognition of the roles of the public and private sector – that will allow the participation of all poor countries in the global economy.

First, the importance of debt relief.

“The Commonwealth has played a crucial role in the drive for debt relief, starting with the Mauritius Mandate. Last year we were able to go further and secure a commitment to a major reform of the HIPC to deliver wider, deeper, faster debt relief. We are all anxious to see this implemented.

“Some progress has been made. We now have 10 countries through to decision point who will receive $21bn in total debt relief. But we need to go further. We need to make sure that any HIPC country that can make the necessary commitments to poverty reduction qualifies quickly for decision point and the flow of debt relief to achieve our aim of 20 countries qualifying for debt relief by the end of the year.

“I welcome the Fund and Bank’s statements earlier this month outlining new ways to speed up the process:

first, much greater flexibility on track record with the focus on achievement, not on a fixed number of years;

second, a recognition that the development of full PRSPs should not hold up debt relief and that to reach the decision point countries should produce interim PRSPs;

third a streamlining of conditionality so that it focuses on what is essential to achieve poverty reduction and growth; and

fourth, the Fund and Bank working more intensively through the joint implementation committee to drive the process more proactively.

“But just getting 20 countries to decision point by the end of 2000 is not enough. We must also face the next challenge of dealing with countries that are not able to make the commitment to poverty reduction, many of which are affected by conflict. We need to help these countries move to a position where debt relief leads clearly to poverty reduction.

This is an issue we need to address proactively – in following up the g7 declaration in Okinawa, and in the work of the bank’s post conflict unit. We will seek to move this agenda forward in Prague.

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Second, poverty relief

“Next we need to build the link between debt relief, development and poverty reduction strategies.

“The last year has seen a major and decisive shift away from the old Washington consensus and towards a new year 2000 consensus where anti-poverty policy and economic policy will in future go hand in hand in recognition that social justice and economic growth are intertwined.

“It is now widely agreed that anti-poverty strategies are be not only be country-driven but community driven – developed transparently with broad participation of civil society, key donors and regional institutions. And that economic and social strategies must be clearly linked to the international development goals of halving world poverty by 2015.

“Poverty Reduction Strategies are not however intended to hold up debt relief. Which is why I am glad the IMF and Bank have re-emphasised that only outline, or interim poverty reduction strategy papers are needed to reach decision point.

“But full PRSPs are vital to achieving our goals. The countries concerned must and the international community must together ensure that PRSPs do reflect the new year 2000 consensus. And the Bank and Fund’s programmes must support the PRSPs designed by the countries.

Securing the benefits of globalisation

“Aid and debt matter but in order to grow out of poverty, the poorest countries need to have access to the global economic system.

“We need to make this opportunity real for all the citizens of the world by ensuring the conditions, the capacity and the means to enable them to participate in the global economy in a manner that can benefit rather than harm them.

“There are several major issues that Clare Short and I will to continue to work on in the next 12 months:

the first is in trade talks to create liberalisation that does not disadvantage the world’s poorest. The EU has been working to persuade other industrialised countries to sign to its pledge of duty-free and quota free access to “essentially all” imports from developing countries. The prime minister, Clare and I have all gone further than this – calling for duty-free and quota-free access for all imports from developing countries.

secondly, we have called for the reform of WTO in a manner that ensures a true voice for developing countries; and

thirdly, we recognise in a new knowledge based global economy we need to ensure that the world’s poorest get access to technology, knowledge and skills that enable them to exploit opportunities rather than be exploited by them.

“A lasting exit from poverty will also need all countries to have access to private investment capital. Now it is true, as we saw in recent years, that short-term capital flows can be destabilising when investors are insufficiently informed and when countries lack open and transparent policy making procedures, strong financial systems, and the necessary institutional capacity.

“But, as I have said, the answer is not for the countries to turn their backs on globalisation but for us to join together to build a solution that meets the needs of developing countries.

“To do this we need to provide countries with road-maps for opening up their capital accounts – with guidance on the speed and desirability liberalisation. On attracting more stable direct investment not just portfolio flows.

“There are many issues to cover, from reforms to strengthen the financial sector, including banking supervision, bankruptcy laws, property rights and an independent judicial system; and on creating infrastructure and conditions to enable investment and using private sector finance and skills.

“We must offer developing countries a practical programme of advice and assistance that will help them on the path, not overloading their capacity, but also not losing sight of the ultimate goal.

“At present only 3 per cent of foreign direct investment goes to low income countries and only 1 per cent goes to the heavily indebted poor countries. We must change this so that developing countries receive stable, productive foreign direct investment. Investment which brings not just capital, but transfers skills.

“All countries, rich and poor, need stable oil prices. When the price trebles in only 20 months, every economy is affected, but the poorest disproportionately. I therefore welcome OPEC’s commitment to increase the supply of crude oil by 800,000 barrels per day from 1 October. But the price remains unsustainably high. So we call upon OPEC to raise supply and to take additional measures to bring down the price of oil as they have promised to do.

Conclusion

“So we should not turn our backs on globalisation. We must continue to build an improved international financial system fit for the twenty first century that will enable all countries to participate in the new world economy and to share in rising prosperity. Enhanced international economic co-operation is the best hope of eradicating poverty and of delivering growth and opportunity to all.”

The press release issued by HM Treasury on 9 October 2000.

Gordon Brown today launched his Pre-Budget Report Consultation Tour by announcing a ‘new world of opportunity and choice for lone parents’ and setting an ambitious target to get the number of lone parents in work in the UK up to the levels of other countries.

He outlined new figures showing that:

• 100,000 lone parents have moved from welfare to work since 1997;
• after decades of rising numbers of lone parents on benefit, the numbers have fallen from 1,015,000 in May 1997 to 910,000 in May 2000 with further falls expected this year taking the proportion of lone parents in work to 50 per cent;
• 150,000 lone parents have received help through the NDLP, with over 55,000 moving into work directly through the New Deal for Lone Parents;
• 228,000 childcare places have already been established. With the planned and new money announced today by Margaret Hodge, new places will cater for 1.6 million children by 2004;
• there are 100,000 (25 per cent) more lone parents claiming WFTC than claimed Family Credit, the benefit it replaced. And 90,000 lone parents receive the childcare element of WFTC, compared with 47,000 who claimed the childcare element of Family Credit.

But the Chancellor said that there is much more to do, since lone parents in the UK are much more likely to be out of paid work and in poverty than elsewhere. Whilst the new figures show an increase in the proportion of lone parents in work from 44 per cent in 1997 to almost 50 per cent today, the UK still lags behind other countries in the ?league table? of international comparisons of the numbers of lone parents in work:

Furthermore, the figures show the UK has:

• low overall lone parent employment rates;
• relatively low full-time employment rates (about 20 per cent compared to around 70 per cent in France and 50 per cent in the US);
• a large, and negative, difference between the employment rates of lone mothers and couple mothers. (Latest figures show almost two-thirds of married mothers are in work in the UK).

More recent figures have shown the UK employment rate climb toward 50 per cent and the US figure is now around 70 per cent.

The Chancellor stressed that the biggest changes are yet to come, with:

• today’s launch by Margaret Hodge of an expansion of child care places to match the already announced expansion;
• second, new and improved arrangements for the Working Families Tax Credit ; the under-16s child credit in WFTC increased from £21.25 to £25.60 in June this year.  With this change the maximum WFTC available for a lone parent with two children increased by £450 a year. A new £4.2m advertising campaign is to be launched this month;
• third, the new £1.5bn Children’s Tax Credit for up to 5 million families; and
• fourth, new pilots for the new Choices programme. This new programme, supported by the National Council for One Parent Families, was announced in Budget 2000 in recognition of the fact that for some lone parents moving into work is a process, not an overnight event.  Under this scheme, which is being piloted this month and will be available nationwide from April 2001, lone parents can choose between:
• going into education or training, where they will receive an extra premium of £15 per week to help with the cost of studying;
• taking a ?mini-job? of less than 16 hours, with help to pay childcare costs in  the first year and a being able to keep the first £20 of their wages without affecting their Income Support;
• taking a job of 16 hours a week or more, and applying for the Working Families Tax Credit, which will give them a guaranteed income of £155 per week for 16 hours or more and £214 for 35 hours or more. They will also get help with childcare costs through the Childcare Tax Credit.

There is no requirement to take up work or undertake training, though lone parents whose children are over 5 will be required to come in for a discussion about the possibilities.  Those with younger children can volunteer for the programme if they wish.

The Chancellor said:

“We want to see a sea change in the opportunities available to lone parents. We want a new world of opportunity and choice for lone parents.

We want to give lone parents real choices, enable them to move from welfare to work and get them and their children off benefits and out of poverty. Our new package of help with child care, extra support through the Working Families Tax Credit and initiatives like Sure Start will help more lone parents combine a job with the vital work of bringing up children and get the number of lone parents in work up to US levels.

This Government is on the side of working mothers and working families, helping them to combine paid work with the vital job of bringing up children.  We are working to give them a real choice, helping them with record increases in child benefit, the Working Families Tax Credit and the new Children’s Tax Credit, a £1.5 billion tax cut for up to 5 million families. We’re tackling child poverty, giving families and mothers genuine choice by making work – the best route out of poverty – pay.

We have looked at alternative proposals for a transferable tax allowance. Under such a scheme, a family with two children on £15,000 a year would receive £965 a year. With the Working Families Tax Credit, the same couple would receive not £965 but £2,200 a year.

Scrapping the WFTC and the New Deal for Lone Parents would deny lone parents the choice of whether to work and would leave millions of children and their parents in poverty.

Over a million low and middle income families would lose more than £24 a week if the WFTC were scrapped.”