Tag: Treasury

The press release issued by HM Treasury on 28 October 1999.

New research shows charities are losing out on tax benefits. Nearly 70 per cent of the UK population give to charity in a typical month but less than 10 per cent use the tax breaks for charitable giving.

The research published today looks into attitudes to giving to charity. It was carried out by the Inland Revenue, the Charities Aid Foundation and the National Council for Voluntary Organisations as part of the Government’s review of charity taxation.

Also published today was a summary of the 500 responses to the Government’s consultation document on how the tax system could do more to support charities.

Commenting, the Economic Secretary to the Treasury, Melanie Johnson said:

“The Government is committed to encouraging Britain to become a nation of givers. I believe that the tax system can do more to encourage greater giving to charity. But we need to make the tax incentives more attractive and up to date.

“We also need to raise awareness amongst donors, and the charities they support, about how they can benefit from those incentives. The research published today shows that there is still much to be done.”

Key findings show that only 43 per cent of the population are aware of the tax incentives for charitable giving. 13 per cent did not know how to use them and 11 per cent thought they would be too difficult to use.

There are issues for employers too. Less than 20 per cent said their employer offered a Payroll Giving scheme, even though giving through the pay packet is popular, especially with young people and those on lower incomes. Over 20 per cent of those whose employer did not offer this facility said they would give through their pay packet if they got the chance.

Turning to the Government’s current review of charities taxation, Miss Johnson said:

“I am very encouraged with the level and content of the responses to our consultation on modernising the charity taxation system and feel there is value in publishing a summary of the responses received. We will soon be announcing the changes to be made as a result of our review.”

The responses to the Government’s consultation document indicated a high level of consensus on key issues. There was strong support for proposals to encourage more people to give more to charity, including:

• reducing the maximum limit for Gift Aid donations to make the scheme accessible to more people;
• re-launching the Payroll Giving scheme with a promotional campaign.

The press release issued by HM Treasury on 28 October 1999.

Small companies will find it easier to access capital from ‘business angels’ under new proposals announced by the Chancellor Gordon Brown today.

In the second consultation document on Financial Promotion, under the new Financial Services and Markets Bill, the Government proposes to lighten the touch of regulation where companies are attempting to gain access to funding from sophisticated and high net worth private individuals – so called ‘business angels’.

Announcing the proposals at the UK Internet Summit, the Chancellor said:

“The City of London is one of the largest and highly regarded financial centres in the world. It is vital that we develop a regulatory regime to enable its continued growth and to promote innovation and development in an increasingly technological age.

“This paper demonstrates our commitment to helping start up companies in the information technology and other rapidly growing business sectors gain access to capital.”

The consultation document proposes an exemption for certain promotions to allow capital raising, in the form of shares or debentures, for small companies to individuals with:

• a minimum annual gross income of between £75,000 and £100,000 or;
• or minimum net assets (excluding principal residence) of between £200,000 and £300,000.

The UK has looked at the regulatory regimes in the US and Australia where ‘business angels’ have played an important part in financing business start-ups.

However, to ensure adequate protection for the ‘business angels’ the consultation document proposes that the promoter must disclose a number of important facts to potential investors including:

• an indication that the promotion has not been approved by an authorised person under the Financial Services and Markets Bill;
• the meaning of high net worth;
• a risk warning concerning the maximum amount which the investor could lose; and
• an indication that any investor who has any doubts should consult a suitably qualified adviser.

The Financial Promotion consultation paper proposes legislation which is designed to embrace the technological revolution and to keep up with increasing technological change in financial services, whilst maintaining appropriate levels of consumer protection and facilitating consumer choice. This paper is the second part of a two stage process begun in March this year. Today’s paper includes a draft statutory instrument for comment by interested parties.

The promotion rules proposed by the Government in this paper reflect new opportunities offered by the Internet. By including the exemptions in secondary legislation, the Government will be able to keep them up to date as technology develops, and to respond to EU and wider international developments.

The press release issued by HM Treasury on 26 October 1999.

Gordon Brown and Alistair Darling Launch the Disabled Person’s Tax Credit

Disabled men and women in work received a major boost in their wage packets with the official launch of the Disabled Person’s Tax Credit (DPTC) today by the Chancellor Gordon Brown and Social Security Secretary Alistair Darling.

DPTC will guarantee a minimum income of £230 for a family with someone in full-time work and with one child – at least £80 for couples and £120 for lone parents more than the family would get on benefits.

A family with two young children earning £13,000 will be £2,500 – £45 a week – better off. The introduction of DPTC will not only make work pay but increase employment opportunities for disabled men and women.

Launching DPTC at the Leonard Cheshire Foundation in London, the Chancellor said:

“Today with the introduction of the Disabled Person’s Tax Credit, we are seeking to re-establish the right to work that disabled men and women should have.

“We know that there are one million disabled men and women who want to work.

“DPTC is one of a number of measures that will make work easier and worthwhile for disabled men and women.”

At the launch Social Security Secretary Alistair Darling said:

“The DPTC provides a major boost to those disabled people who in the past have been excluded from the workplace. We are determined to do everything we can to help disabled people who want work to do so – and make sure that it pays to work.

“We are also doing far more to help people who can’t work – helping those who need help most. That’s why we have introduced more help for young severely disabled children and a disability income guarantee. We’re doing more to help people who want to work – and more for those who can’t.”

The DPTC is part of a package of measures that will make work worthwhile and easier. As well as DPTC the package includes:

• the £195 million New Deal for Disabled People which provides personal advice and support to 250,000 disabled people who wish to move into work and £5 million set aside for innovative pilots to test new ways to help;
• through the Job Introduction Scheme, employers can receive a 6 week subsidy (13 weeks in exceptional circumstances) to take on disabled employees. Together with the Access to Work support, this is an additional £30 million package for specialist disability services;
• the linking rule, which allows a disabled man or woman on longer term incapacity benefits to return to the same level of benefit within 12 months if the job does not work out; and
• the setting up of a Disability Rights Commission to work towards the elimination of discrimination against disabled people.

DPTC will be paid through the wage packet from April 2000 and should reduce the stigma of claiming in-work support as well as showing the reward of work over welfare.

From October 2000, there will be a new fast track gateway which will help people who become disabled while working to remain in work, by widening access to DPTC to people who have been sick for 20 weeks, if their condition is likely to last another six months, and their earnings are to be reduced by 20%. People who become disabled while working are most likely to find work with their existing employer, and the longer someone is out of the labour market the less likely they are to return to work.

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

Economic Secretary Melanie Johnson today welcomed the European Commission’s proposal for an up-to-date directive on Money Laundering. She said:

“Money laundering is a very serious offence, with the capacity to undermine financial markets and to corrupt professional advisers. While police forces and regulators respect national borders, criminals do not. We therefore support a pan-European approach to crack down on the illicit profits of all serious crime as part of a wider agenda to enforce anti-money laundering standards world-wide.”

The European Commission’s Second Money Laundering Directive aims to strengthen existing rules for financial institutions and other business across the EU in the fight against serious crime. It would extend the current regulations to a wider range of underlying offences, bringing Europe as a whole closer to the UK approach. It also extends the obligation to maintain effective anti-money laundering systems to professionals – such as lawyers and accountants.

Commenting on these proposals, Melanie Johnson said:

“The UK will push for a tough directive to bring Europe more into line with the UK. The Commission’s proposals are an excellent starting point. But in some areas they do not go far enough. We want to see the scope of the directive extended to the proceeds of all serious crimes. And we will work with other member states to ensure that – where money laundering is involved – financial sector professionals cannot hide behind excessive professional secrecy.

“We also welcome this because the new proposal would oblige Member States to combat laundering of the proceeds of organised crime and fraud against the budget of the EU. The 1991 directive applies only to the proceeds of drugs offences.

“We shall be considering the directive carefully over the coming months, and welcome the views of interested parties. We will pay close attention to ensuring that the costs of compliance do not exceed the likely benefits. And we shall be working closely with our European partners to close down opportunities currently exploited by criminals. We will fight to ensure that Europe’s financial markets offer no sanctuary to dirty money.”

The press release issued by HM Treasury on 4 October 1999.

Responsibility for the Competent Authority for Listing, which regulates access to and standards in the public equities markets, will be transferred from the London Stock Exchange to the Financial Services Authority next year the Chancellor, Gordon Brown, announced today.

The decision follows the London Stock Exchange’s proposal to demutualise and turn itself into a commercial company.

Commenting, Gordon Brown said.

“The London Stock Exchange has done a very good job as the UK’s Listing Authority and I would like to express my appreciation to the Exchange and the Listing Department staff for their work.

“But, in the light of its proposal to demutualise and turn itself into a commercial company, the Exchange has suggested that it would no longer be appropriate for it to continue to exercise its Listing Authority function. I share this view and accordingly I am planning that this function should be transferred to the Financial Services Authority.

“We will be bringing forward the necessary amendments to the Financial Services and Markets Bill to effect this transfer of responsibilities. We hope the Bill will be enacted by the Spring and the transfer will be made as soon as possible thereafter.

“The FSA, the London Stock Exchange and the Treasury will all be working together to ensure a smooth and seamless transition. I am confident that the FSA will ensure the Listing Authority responsibilities continue to be carried out efficiently and effectively, meeting the needs of issuers and investors alike.”

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

The Government has decided to increase from 6 to 13 the number of cross Departmental spending studies in the forthcoming 2000 Spending Review, the Chief Secretary Andrew Smith announced today. This follows clear evidence that cross Departmental work is making a real difference, allowing service providers to find new and better ways of responding to the needs of local people.

Andrew Smith commented:

“We want to see a step change in the quality of public services. We have shown our commitment already with extra resources for key areas like Health and Education, but we want to go further in ensuring that policies and services are designed and delivered in a more integrated, flexible and customer-centred way. The cross Departmental work in the original Comprehensive Spending Review has proved to be a success. We want to build on this in next year’s Review to ensure a more coherent approach to the delivery of services . I am grateful to Departments for the innovative and practical way they have responded to this initiative.”

The proposed new cross Departmental studies will cover:

• rural and countryside programmes
• young people at risk
• crime reduction
• support for older people
• drugs
• Government intervention in deprived areas
• science and research
• Welfare to Work and ONE
• the criminal justice system
• Sure Start and services for the under 5s
• conflict prevention
• nuclear safety in the former Soviet Union
• Local Government finance

The Government is determined to ensure that public spending is directed to delivering high quality public services. This means:

• raising the standards of front line service delivery
  focussing on outcomes – what counts is what works
• accountability for performance
• effective teamwork to achieve shared goals

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

A five point action plan to tackle variations in performance throughout the public sector and raise standards to the levels of the best was drawn up by 20 top experts at a meeting in Downing Street today, hosted by the Chief Secretary Andrew Smith, and attended by the Prime Minister Tony Blair.

Experts from a wide range of services, including the Cancer Tsar Prof Mike Richards and Sir Peter Davis from the New Deal Task Force, as well as top businessmen Mike Harris from Egg and Michael Wemms from Tescos agreed a five point plan that will mean:

• targets to raise performance within the public services to the levels of the best will be set in the 2000 Spending Review
• comparisons within services, as well as with other public services, the private sector and other countries, will be encouraged
• league tables will be increasingly used to bring home the potential that there is to improve performance, applying best practice on measurement and design
• techniques for raising performance, such as Beacon Schemes and the Excellence Model, will be promoted
• the Government will involve staff, especially those at the front line, through local seminars and other means, to communicate its vision and find out what works

Commenting today Andrew Smith said:

” We are stepping up our drive for modernisation in key public services so they provide high quality services for everyone throughout the country. Whilst visible improvements are already coming through from the extra investment we have put in progress is uneven and there are still too many unacceptable variations in performance across the public services. Shining the spotlight on these variations, finding innovative solutions and spreading good practice is intended to raise standards to the levels of the best so that everyone can benefit. We want to see the worst learning from the best. We want to tackle failure and reward success. I am grateful to all those attending this seminar today for their commitment to making this work.”

The Government values the public services and those that work in them. There are already many examples of good practice and the publication of league tables in a number of areas, including Health, Education and the Criminal Justice System is already underway. However the public sector is a large organisation and it is important innovative ideas and solutions are spread throughout the sector so that everyone can learn what works best.

Today’s seminar is an opportunity to look at what can be learned from the action taken so far, see what else can be done in the future and decide what further help the centre can give to identifying good practice and spread it in a way that encourages take up.

Data from a variety of sources (Departments, public bodies, Audit Commission etc) shows some of the considerable variations that do occur:

• the percentage of drugs prescribed generically varies from below 50% to over 70%. Lincolnshire is worst on 47% whereas Newcastle and
• N Tyneside managed 72%
• in further education students at Hackney Community College only achieve 33% of the qualifications they set out to achieve whereas in Newham they achieve 77%
• in bin collection, 1996-97, the average authority missed 53 bins out of every 100,000 they were supposed to collect whereas Liverpool missed 6,244 and Newcastle 36
• Dyfed-Powys police force detected 55% of crimes in 1997-98 whereas Gloucestershire detected under 20%. The average was 26%.

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.”