Tag: Treasury

The press release issued by HM Treasury on 24 November 1999.

“The performance of the UK economy in recent years has been remarkable” according to the latest assessment by experts from the International Monetary Fund.

On the Government’s progress to delivering its central economic objective of high and stable levels of growth and employment, the IMF report that “growth has been high, unemployment has declined steadily to very low levels, and inflation has remained subdued”.

The Fund conclude that “this strong performance is in good part owing to the improved policy framework which has fostered sound monetary and fiscal policies and significant structural reforms.”

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

“I welcome today’s assessment of the UK economy by the IMF. It clearly supports the Government’s new framework for economic policy, and our continued prudent and cautious approach to managing the public finances.”

Other major points in the IMF’s report include:

• “the new monetary policy framework is working well”;
• the continued need for “a cautious approach” in managing the public finances, and the importance of avoiding the mistakes of the past, which led to gains being frittered away. They say “there is no case for relaxing fiscal policy”. In particular they “welcome the prudent approach espoused in the PBR”;
• plaudits for the UK’s “enviable” record on transparency in policy-making;
• praise for the Government’s policies to move people off welfare and into work, and to make work pay. They note “the Government’s welfare reforms, including the New Deals and the WFTC…hold great promise for combatting poverty and reducing the number of jobless households”;
• commendation of the Government’s efforts to put the issue of debt relief for the poorest countries at the top of the international agenda, and for “their commitment to increasing UK overseas aid spending”.

The IMF’s report comes shortly after the OECD, another major international organisation, also praised the Government’s management of the UK economy. In it’s Economic Outlook, published last week, the OECD issued projections for the UK economy which are closely similar to the Government’s PBR forecasts, and singled out for special mention the UK’s “markedly improved labour market performance as well as skilful management of monetary policy”

The press release issued by HM Treasury on 16 November 1999.

Moves to boost credit unions, announced by Economic Secretary Melanie Johnson today, will provide a new central services organisation and changes to the regulation of credit unions to help them to deliver a more consistent and flexible service to members.

The announcement accepts recommendations in two reports published today, by the Credit Unions Taskforce, under the chairmanship of Fred Goodwin, and by the Policy Action Team looking at ways to improve individual access to financial services. These found that credit unions can provide safe, low cost loans, which are of particular help to those in disadvantaged communities who have problems gaining access to mainstream credit sources.

Welcoming these changes Miss Johnson said:

“As Fred Goodwin’s report on credit unions shows, the way in which they have previously operated has delivered benefits to members, but now needs to be updated to face today’s challenges.

“Taken together, these measures should ensure an enhanced role for the future. Members should benefit from the improved and cheaper services which the central services organisation can provide, from the greater freedoms proposed, and from greater protection for their savings.

“These changes follow widespread consultation with the movement and will, together with other initiatives also announced today, help them to play a part in tackling the problems of financial exclusion. The establishment of a central services organisation will, by spreading best practice and drawing on the expertise and resources of banks and building societies, help credit unions to improve the delivery of their services.”

“The Government expects banks and building societies to play their full part, but in the end it is for the credit union movement – the hundreds of hard working and dedicated volunteers throughout the country – to take advantage of these opportunities.”

Commenting on the Taskforce report, Fred Goodwin said:

“Credit unions have proved their worth around the world as financial institutions for those of modest means. The time is right for them to make a substantial contribution to reducing financial exclusion. There is much that banks and building societies can do to help them achieve this goal, and I am confident that they will rise to this challenge.”

The measures to improve the regulatory framework within which credit unions operate are:

• increases in the maximum repayment periods for loans
• greater flexibility in the common bond requirements
• aligning the maximum amount that can be held in youth accounts with that for adults
• removal of the maximum membership limit
• allowing credit unions to charge for ancillary services
• greater flexibility on disposing of re-possessed collateral
• further consultation on increasing the sources from which credit unions can obtain credit, and greater flexibility on dividend accounts an improved regulatory framework.

Announcing the new regulatory regime, Miss Johnson added:

“We have decided to give the Financial Services Authority the power to make rules for the regulation of credit unions, which will mean in future credit union members will have protection similar to that for bank and building society customers, including membership of a share protection scheme.

“The FSA has assured the Government that it will supervise credit unions in a way which takes account of the needs of small, voluntary organisations, including their ability to pay fees.

“The FSA will discuss with other financial institutions the problems which credit unions would face in meeting the costs of regulation, including compensation and Ombudsman schemes. The Government hopes that the financial industry will respond positively and constructively to these discussions. The FSA will also establish a taskforce which will work closely with the sector to ensure a smooth transition.”

The press release issued by HM Treasury on 16 November 1999.

Six initiatives to help people in disadvantaged communities excluded from key financial services were announced by Economic Secretary Melanie Johnson as the initial response to proposals in a Treasury Policy Action Team (PAT) 14 report published today.

These are:

an improved regulatory framework for credit unions
a new central service organisation to support and enhance the role of credit unions
support for more widespread introduction of insurance with rent schemes for home contents insurance
exploring the possibilities for widening the role of the Social Fund to help those in low-paid employment
better access to counselling and refinancing for those in debt
greater disclosure by banks of their provision of services to the socially excluded.

Welcoming the report, commissioned as part of the initiative to tackle social exclusion in poor neighbourhoods announced by the Prime Minister last year, Miss Johnson said:

“Financial exclusion limits the ability of many of the poorest in society to have the benefits of the ever increasing range of financial services, eg bank and building society accounts, access to affordable credit and insurance, that the rest of us take for granted.

“Two million adults in the UK do not use financial services. It means that they pay more for meeting household bills, do not have home contents insurance or save effectively. We need to spread these benefits as widely as possible, and to look for new ways to do so.

“The Government will announce its full response to the report next year as part of its national strategy for neighbourhood renewal, but we are already looking forward to making progress in three areas.

“Credit Unions offer people access to cheap small loans, but their impact in Britain so far is much less than in other countries. We will encourage their growth through a new central services organisation which can support new and existing credit unions, and changes to their regulatory arrangements.

“Home insurance is also a problem. We will look at ways of improving access to insurance services, particularly through insurance with rent schemes, to help more people get, effective and affordable insurance services. We will work with the industry and public sector agencies to develop challenging targets to improve access to insurance services.

“We want to improve access to affordable credit. One possible development could be the use of the DSS Social Fund to help those in low-paid employment keep out of the hands of high-cost moneylenders. We shall also promote wider access to debt counselling and refinancing for those who already have debt problems.”

The general theme of the report is that the way forward in tackling financial exclusion is the development of new ways to access and deliver financial services.

Among the other alternatives identified are: exploring ways in which the network of post offices could contribute to additional delivery channels; greater use of Pay Point bill payment and Money Advice Centres; greater involvement for housing associations and local authorities; and best use of available and developing technologies by all agencies, including banks and building societies, to ensure easier and more open access.

The report also calls for better designed financial services for those unfamiliar or uncomfortable with existing services, including basic bank accounts – which allow people to pay their essential bills more cheaply without risk of an overdraft, and more attractive household and savings insurance products tailored specifically to their needs.

Miss Johnson added :

“The report recognises that there is no single or simple solution. The way forward lies in developing new and alternative means to deliver and provide access to financial services as well as ensuring that those existing services can reach the whole community. It also means ensuring that communities themselves can contribute to progress in helping their members share the access to and use of financial services that the rest of us see as essential and take for granted.

“It recognises that banks, building societies, credit unions, and local agencies are already working in partnership with Government to achieve practical changes – ways to develop existing and alternative services, seeing commercial as well as social benefit in doing so.

“The PAT 14 report is against compulsion. It emphasises instead removal of unnecessary barriers, development of the right products, opening up of new delivery channels and consumer education, and the provision of better information about banking services.

“The Government continues to have high expectations of banks and other financial service providers, including a greater degree of disclosure of services provided to those in deprived neighbourhoods. We will work with the banks on developments in response to this report. We do not want to have to legislate, as some have urged, to compel banks to serve all sections of the community; but if voluntary action is unproductive and monitoring shows insufficient progress, it may be necessary to consider other options.”

The press release issued by HM Treasury on 19 November 1999.

The biggest reform and modernisation programme in the management of the country’s public finances since the Gladstone era was announced today by Chief Secretary to the Treasury, Andrew Smith.

The Government Resources and Accounts Bill (RAB), published today, is part of the government’s fiscal framework aimed at its modernising agenda and is to apply the financial reporting practices of the private sector and much of the public sector to central government.

Welcoming the Bill, Andrew Smith said:

“Resource Accounting and Budgeting is a vital part of our modernising agenda and this Bill marks a major milestone on our way to full implementation. It demonstrates this Government’s commitment to introducing best-practice accounting methods in line with the Code for Fiscal Stability.

“Through Partnerships UK, the Bill will also give the public sector access to private sector skills. I want to see the progression of well-structured Private Finance Initiative (PFI) and Public Private Partnership (PPP) projects delivered in all sectors of the economy. This will bring about improved front line services to the public, increased deal flow togther with a reduction in the cost, delay and uncertainty by bidders for PFI projects.”

The main purposes of the Bill are:

• to introduce Resource Accounting and Budgeting into Government accounts and to modernise the operation of other aspects of the Exchequer and Audit Departments Acts;
• to provide enabling legislation for the preparation and audit of consolidated accounts for the whole public sector;
• to spend the money required to set up Partnerships UK to facilitate a new body designed to make the public sector a better client in PFI/PPPs.

The Resource Accounting and Budgeting Bill will improve the way Parliament votes and scrutinises public spending. Objectives and outputs will be costed through RAB, underpinning the Public Service Agreements. There will also be better information on buying and using assets with improved comparisons between PFI/PPP projects and government capital spending.

The press release issued by HM Treasury on 9 November 1999.

Don Cruickshank today welcomed the Government’s response to his Banking Review Team interim report, ‘Competition and Regulation in Financial Services: Striking the Right Balance’, published on 22 July.

Commenting on Economic Secretary Melanie Johnson’s announcement of the Government response to recommendations in his interim report, he said:

“I welcome the changes the Government proposes to make to the Bill to ensure that markets in financial services are subject to effective competition scrutiny, and that the right balance is struck between the FSA’s regulatory objectives and effective competition.

“I made six, quite detailed, recommendations in my Interim Report. For five of them the Government’s proposed changes to the Bill meet the substance of my recommendations. In its proposals for external scrutiny the Government has gone further, and proposed a reporting procedure which will make the FSA’s assessment of competition transparent.

“My sixth recommendation was that the FSA should be responsible for making the trade off between regulatory and competition outcomes in financial services. I proposed that this should be achieved by giving the FSA a primary competition objective to minimise the anti-competitive effects of its regulatory activity.

“The Government believes that this outcome can be achieved without giving the FSA a primary competition objective in addition to its regulatory objectives. My concern has always been that the outcome should be as Ministers intend. I am not wedded to any particular means of achieving this, and I will welcome any changes to the Bill which deliver the outcome in practice.”

“Work on the review of banking services is continuing and I look forward to reporting to the Chancellor early next year.”

The press release issued by HM Treasury on 5 November 1999.

The choice of London as the location for NASDAQ-Europe is excellent news for the City of London and for the wider economy said the Chancellor Gordon Brown today.

The Chancellor was speaking this morning following a meeting with NASDAQ and its partners where they told him of their decision to launch a joint venture to create a pan-European securities market.

The Chancellor said:

“The City of London is one of the largest and most highly regarded financial centres in the world. It thrives on competition and innovation and offers an extremely attractive environment for internationally mobile financial services businesses.

“NASDAQ’s decision to locate its European exchange here represents a massive vote of confidence in the City. NASDAQ-Europe will strengthen the UK financial services industry and reinforce London’s position as one of the world’s top international financial centres.

“And NASDAQ’s presence here will be good for the wider economy too, not just in the UK but Europe as a whole. Job creation and economic growth depend on efficient capital markets channelling funds to businesses to finance their expansion. This is more than ever true in the Internet economy.

“NASDAQ has a tremendous record of raising capital for growth companies as well as being an innovative and entrepreneurial business in its own right. I therefore very much welcome NASDAQ’s decision to set up its pan-European stock exchange in London.”

The press release issued by HM Treasury on 3 November 1999.

The London Stock Exchange’s new technology market – Techmark was launched today by the Chancellor Gordon Brown.

Techmark will be the London Stock Exchange’s ‘market within a market’ for innovative technological companies. It aims to meet the investment requirements of technological companies already listed on the LSE main market and those who may be thinking about flotation.

Welcoming the launch of Techmark, the Chancellor said:

“I welcome the launch of Techmark – a new market for the new generation of dynamic entrepreneurs whose success depends on innovation. It is designed to meet the unique needs of technology companies – from those already listed on London’s markets to those thinking about a flotation.

“Bringing together companies with a shared commitment to technological innovation, Techmark emphasises the importance of new technology. And by including FTSE fledgling companies alongside FTSE 100 companies, it recognises that the new companies of today can be the leading companies of tomorrow.

“So with the launch of Techmark, new growing companies have a quicker route to the main market and wider access to the investors on which their growth and success depends.”

The press release issued by HM Treasury on 2 November 1999.

Important amendments to achieve greater clarity and certainty in the definition of market abuse in the Financial Services and Markets Bill currently before Parliament were announced by Economic Secretary Melanie Johnson today.

The government amendments, agreed by the Standing Committee on the Bill, will :

• introduce additional protections for those who:
• take care not to commit market abuse
• reasonably believe that their behaviour is not abusive
• act in conformity with FSA rules, eg on price stabilisation.
• make it clear that behaviour can only be penalised if it is not in accordance with what a regular user of the market would reasonably expect.

Miss Johnson said:

“Market abuse is bad for the markets and bad for the UK economy. We are determined to be tough on abusers. The action we are taking in the Financial Services and Markets Bill is essential to protect the integrity of UK financial markets. This is in all our interests.

“We have listened carefully to concerns about the need for the Bill to be as clear and as fair as possible, including the views of the Joint Committee under Lord Burns. These amendments reflect close consultation with the industry and market experts and also the recommendations of the Joint Committee. The changes make sure that people can only be penalised for market abuse when their behaviour fails to meet what a regular user of the market would consider to be expected market standards.”

The press release issued by HM Treasury on 2 November 1999.

Encouraging enterprise has got a vital role to play in generating jobs and helping to build stronger communities, Stephen Timms and Patricia Hewitt said today.

They were speaking at the launch of a new report, Enterprise and Social Exclusion, produced by Policy Action Team 3, in response to the Social Exclusion Unit’s publication last year on deprived neighbourhoods.

The report sets out a new agenda for Government, banks, business support agencies and others to link enterprise and regeneration – through better advice and access to finance, and more support for a culture of enterprise.

Stephen Timms, Financial Secretary to the Treasury and Champion Minister for the PAT, said:

“We need more new and successful businesses in our least well off communities. People who have a business idea, and want to make a go of it, need to get the right support to give them the best chance of success. And existing firms need to be able to get advice and finance to help them prosper.

“This report sets out an ambitious agenda to promote enterprise as a force against social exclusion. It recognises that not everyone will have the skills or aptitude to run a business. But everyone with the potential to succeed needs to be given the opportunity to do so.

“There’s more that can be done by all the parties with a stake here to
give enterprise in deprived areas the attention it deserves – and the report makes some clear proposals. Some recommendations have already been implemented, and we’ll be looking closely at the rest. Much of the work going forward will fall to DTI, and I know Patricia Hewitt is relishing the task.

“I see this report as a contribution not just to the debate on social exclusion but also to the Government’s broad agenda for an enterprise society. Enterprise is an outlook, an attitude of mind, that needs to be encouraged right across society, and the proposals here are about one facet of that broader task.”

Patricia Hewitt, Minister for Small Business at the DTI, said:

“The job of the SBS is to provide top class support to start-ups and SMEs right across the country. That must include our most disadvantaged communities.

“There is just as much entrepreneurial potential in the poorest council estates as in the wealthiest suburbs.”

The key recommendations are:

Better support for enterprise

• the new Small Business Service should promote enterprise in deprived areas, as part of its remit to promote small business;
• Business Links should develop plans with others to support enterprise and business growth in deprived areas;
• incubators should be encouraged – they can add real value in building successful businesses;
• Regional Development Agencies should advise the SBS on regional priorities, and ensure regeneration programmes give real weight to developing enterprise.

Better access to finance

Steps to promote innovation in getting finance to enterprise in deprived communities:

• a national challenge fund to provide capital to community finance initiatives – who act as a bridge between mainstream institutions and entrepreneurs in deprived communities
• access to the Government’s loan guarantee scheme, on an experimental basis, to encourage commercial lending to community finance initiatives

Removing barriers

• social enterprises to be recognised as a group of businesses deserving support
• self-employment is a valid route from benefits to work, and should be recognised as such
• Government to promote involvement of mainstream businesses in deprived communities.

Two recommendations have already been agreed:

• Patricia Hewitt announced on 20 September the creation of a national network of volunteer business mentors, funded by DTI;
• the Bank of England has agreed to monitor the provision of finance for business in deprived groups and communities, and to report regularly on this.

The press release issued by HM Treasury on 21 December 1999.

The Government is to lift the burden of debt owed to the UK by the world’s poorest countries, the Chancellor Gordon Brown and International Development Secretary Clare Short announced today.

The commitment covers all debt owed to the Government’s Export Credit Guarantee Department (ECGD) by the 41 Heavily Indebted Poor Countries (HIPCs), including debt which falls outside the terms of the multilateral debt agreements. Britain’s debt relief package to the world’s poorest countries now totals over £5 billion.

The Chancellor, speaking at a Downing Street seminar attended by religious leaders and heads of non-governmental organisations, said:

“For too long these countries have been weighed down by the shackles of an unsustainable debt burden. I want these countries to go into the new millennium free from these shackles and able to invest for the good of their people – in health and education.

“The UK has played a leading part in securing a multilateral deal on debt relief that will reduce the debts of these countries by two-thirds. The time is now right to take the extra step on our own and to lift the burden of the remaining debt owed to us. I have therefore taken the decision that we will remove the burden of debt to the UK government of all countries that come through the HIPC process.

“The Government is satisfied that the conditions of debt relief applied under HIPC are sufficient to guarantee that monies freed up will be spent on social programmes and poverty reduction.”

The Chancellor said that he hoped other countries would match the UK’s commitment and enable the world community to make even further progress on debt relief before the end of the millennium.

Stressing the link between debt relief and poverty relief, Clare Short said:

“Debt relief is crucial if we are to achieve the levels of poverty reduction to which we and the whole international community are committed. Through this new action Britain is continuing to lead international efforts to reduce the debt burden of the poorest countries and to ensure that the money saved will be spent on health and education services for some of the poorest people in the world.”

The Chancellor also said that he expected the Boards of the International Monetary Fund (IMF) and the World Bank to be announcing later that day a timetable of the first countries to receive debt relief under the enhanced HIPC initiative early in the new year. The timetable, he hoped, would include early relief for countries such as Uganda, Bolivia and Mauritania and up to seven more countries to be brought forward before the IMF’s Spring Meetings in April.