Tag: Treasury

The press release issued by HM Treasury on 14 September 1998.

Finance Ministers and Central Bank Governors of the G7 countries have been in close contact over the last few days to discuss developments in the world economy and global financial markets and to explore ways to respond to the challenges now facing the  international financial system.

In light of the exceptional pressures in financial markets and deteriorating prospects for growth in many parts of the world, the Ministers and Governors agreed on the following approach.

First, they agreed that inflation is low or falling in many parts of the world. They welcomed some encouraging developments as regards domestic demand growth in continental Europe. Nevertheless, in view of the slowdown in demand in a number of economies, especially among emerging market economies, the balance of risks in the world economy had shifted. They emphasised their commitment to preserve or create conditions for sustainable domestic growth and financial stability in their own economies. In this context, they noted the importance of close cooperation among them at this juncture.

Second, the Ministers and Governors welcomed the courageous measures taken in many emerging economies and the significant progress made in laying the foundation for stability and recovery. They agreed to explore ways to reinforce the existing programmes, in support of growth-orientated policies, with accelerated efforts to promote comprehensive programmes for corporate and financial sector restructuring, improved transparency of policy-making. In addition, they agreed to consider measures to alleviate the effects of the crisis on the poorest segments of society, including if necessary through the provision of augmented financial assistance centred in the multilateral development banks.

Third, the Ministers and Governors emphasised that the adverse developments in the external environment make it particularly important that countries take appropriate steps to strengthen policies and improve confidence. Countries that embrace unilateral action on debt as a substitute for reform and cooperation hurt the prospects for their own economies and the world system.

Fourth, the Ministers and Governors agreed to support a cooperative international approach to support those countries that have been adversely affected by recent developments in global markets and which are implementing strong economic programmes. They expressed concern about the extent of the general withdrawal of funds from emerging markets without respect to the diversity of prospects facing those countries and the significant progress that has been made in many countries in carrying out strong macroeconomic policies and structural reforms that enhance long-term growth prospects. They agreed on the urgency of the early implementation of the IMF quota increase and establishment of the New Arrangements to Borrow.

Finally, they agreed to continue to support the provision of financial assistance from the IMF, which will remain at the centre of the system, in support of strong policies, and including in parallel with the private sector. In this context, they drew attention to the possibility, if circumstances so warrant, of activating the General Arrangements to Borrow, in consultation with other participants in the arrangements. They also support an active role for the World Bank and the other MDBs in cooperating with and providing finance and technical assistance to support their member economies in this difficult time, with a particular focus on support for the vulnerable groups in society and for financial sector restructuring.

The Ministers and Governors will continue to consult closely among themselves and with the major financial institutions in their countries that have a key interest in the smooth and efficient operation of markets and promotion of financial stability.

The press release issued by HM Treasury on 14 September 1998.

Patricia Hewitt Welcomes Changes to the Banking Code Better information for savers about changes to savings accounts has been welcomed by the Economic Secretary Patricia Hewitt.

The welcome follows an announcement by the British Bankers’Association (BBA) and the Building Societies Association (BSA)that there will be changes to the Banking Code which will ensure customers get proper information on changes affecting savings accounts.

The main changes include:

• a guarantee of 30 days notice of changes in terms  and  conditions and a 60 day waiver of notice for customers  who do not like the changes;
• a 14 day cooling off period when customers open new  savings accounts;
• better written information for people with postal or
  telephone based accounts;
• an annual written summary of all available accounts, for  all customers; and
• an end to obsolete and superseded accounts.

Welcoming the changes, Ms Hewitt said:

“This is really good news for savers. It is only right and proper that customers have full and up to date information on the terms and conditions of their accounts.

“We want to ensure that customers are provided with clear and accurate information so they have confidence in the decisions they take when dealing with their bank or building society.

“I welcome in particular the new rules on periods of notice,
the introduction of cooling-off periods, and the abolition of
obsolete and superseded accounts.”

NOTES TO EDITORS

1. On 7 May 1998, following a meeting with David Davis MP, the former Economic Secretary Helen Liddell asked Treasury officials to investigate press reports that banks were not dealing fairly with customers over changes to interest-bearing accounts.

Subsequently, Mrs Liddell asked the industry to tighten up the Banking Code.

2.  The BBA and BSA have now agreed the following changes to the Banking Code:

• better information to customers on how they will be informed of interest changes;
• a 14 day cooling off period when customers sign up to a new account;
• a guaranteed 30 days notice for changes in account termsand conditions;
• a 60 day waiver of notice, if customers do not like the changes to their account conditions;
• clear messages on interest changes to all customers,including written notices to those with postal and telephone accounts;
• an annual summary of all accounts offered, for all customers; and
• abolition of superseded and obsolete accounts.

The press release issued by HM Treasury on 9 September 1998.

Paymaster General Geoffrey Robinson today welcomed the long awaited publication of the ASB’s guidance on accounting for Private Finance Initiative (PFI) contracts.

Mr Robinson said:

“When we took office I was determined that the PFI  should be reinvigorated.   One of  the key problems spotlighted in the review I commissioned from Malcolm Bates was the absence of clear accounting guidance and in response the Treasury  published interim guidance on the accountancy treatment of  PFI  transactions last September”.

“Since then, we have worked closely and constructively with the ASB and there has been a convergence of views.  I welcome and accept the principles  published today by the ASB, giving greater clarification about how the asset underpinning the service to be delivered should be accounted for.”

“I am putting in hand the preparation of new guidance that will apply these principles in a way that will ensure consistency and cost effective compliance throughout the public sector.  We shall  be consulting widely with the Office for National Statistics, accounting profession, the public sector and contractors. The aim will be to make the new guidance effective from 1 January 1999.  Until then the existing Treasury guidance will continue to apply.”

“There will be  no  retrospective changes to signed deals and those out to “Best and Final Offers” will not be affected.  For newer projects, even with good procurement and delivery times, any changes following the new principles would not have a significant impact until after 2001 – 02 at the earliest.

“Above all, PFI is driven by value for money and not by the accounting treatment.”

The approach taken in the Application note is not dissimilar to that contained in the Treasury’s own guidance.  The main difference is that the ASB considers that judgements about capitalisation should  exclude those  stemming purely from the service.  During the period of consultation the Board has clarified its position to indicate  a broader view of the interaction between service risks and the design, construction and operation of the asset.

The Treasury’s initial view, given the broadening of view taken on asset related risks in the Application Note, is that substantially all the risks transferred to the private sector  will continue to be recognised in the determination of accounting treatment. While neither HM Treasury nor those drafting the Application note have worked out how their principles will be applied in practice, the Treasury does not expect capitalisation judgements to change greatly and that the  private sector contractor’s ownership of the asset will in most instances continue  to be recognised.

The press release issued by HM Treasury on 1 September 1998.

High profile TV advertising to alert 4.5 million UK small and medium size enterprises (SMEs) to what the introduction of the single currency on 1 January 1999 may mean for them begins today.

Launching the TV advertising phase of the Government’s campaign, Lord Simon, Minister for Trade and Competitiveness in Europe, said:

“On 1 January 1999 the introduction of the single currency – the euro – will change the economic landscape within which UK firms must compete and thrive. For many, the whole way they do business will change.

“Our research shows that too many small and medium sized businesses do not know enough about the euro or, in some cases, have wrongly assumed that because the UK is not joining the single currency on 1 January 1999, it will not affect them.

“It is true that many will not be affected initially, but unless they check they cannot be sure. They will be unable to take an informed decision and could risk losing competitive advantages or miss opportunities to improve their business position.

“All UK businesses, especially small and medium sized firms, must consider whether and how the euro will affect them and what to do to be ready for it.

“The TV advertisements starting today are a vital step in drawing attention to the challenges and the opportunities that lie ahead, underlining the importance of acting NOW to be ready for changes only four months away.

“They will alert them to a mail shot which will be sent to 1.6 million SMEs most likely to be affected by the euro, and show them where to go for the essential information they need to plan ahead.”

Seven television advertisements (three 40 second and two pairs of  20 second at the beginning and end of advertising breaks) will be broadcast nationally during September. These and parallel radio and print ads will draw the attention of SMEs to the mail shot, which will reach businesses in the target group from early September.

The advertisements feature the character of “Martin Skinner”, owner and manager of an SME,  in a range of scenarios reminding staff and business contacts of the starting date of the single currency and ways in which it may affect their business, and alerting business viewers to the mail shot.

The TV campaign was developed by HM Treasury Euro Preparations Unit (EPU), advertising agency TBWA GGT Simons Palmer, with the assistance of the Central Office of Information (COI).

The press release issued by HM Treasury on 30 October 1998.

Significant reforms to strengthen the international financial system were announced today by Chancellor of the Exchequer Gordon Brown in the UK’s role as Presidency of the G7 leading industrial nations.

The statement, agreed by all G7 Finance Ministers and Central Bank Governors, reflects the shared determination of the UK and G7 to modernise the financial system and to put in place new rules and procedures that will promote stability and growth. It affirms that the G7 commit themselves to :

create or sustain conditions for strong, domestic demand-led growth
develop improved procedures for managing crises and preventing them from spreading, including an enhanced IMF financing mechanism supported by private and bilateral finance as appropriate
develop and implement international principles and codes of best practice on: fiscal policy, financial and monetary policy, corporate governance and accounting; and to work to ensure that private sector institutions comply with new standards of disclosure
improve global regulation through co-operation and co-ordination of the activities of key international institutions and national authorities in the management and development of policies to foster stability and reduce systemic risk in the international financial system and better exchanges of information support reforms to improve the effectiveness of the IMF, including transparency and accountability and changes in lending policies and terms of lending.

The agreement follows intensive discussions between G7 countries. As G7 President, Gordon Brown has led this process of negotiation, following agreement at the IMF meetings in Washington earlier this month to develop quickly proposals for reform.

G7 Finance Ministers and Governors will monitor progress and report to Heads of Government before the Cologne Summit on the impact of the measures they have taken today, and their proposals for further action.

Key Points

The agreement reflects the shared determination of the UK and G7 to modernise the financial system and to put in place new rules and procedures that will promote stability and growth. The key points are that the G7 :

agree that the balance of risks in the world economy has shifted from high inflation to concerns about low growth, and commit themselves to create or sustain conditions for strong, domestic demand-led growth;
agree to implement new arrangements for finance to deal with contagion, including an enhanced IMF financing mechanism supported by private sector involvement, and by bilateral finance as appropriate;
commit to develop and implement international principles and codes of best practice on fiscal policy, financial and monetary policy, corporate governance and accounting; and to work to ensure that private sector institutions comply with new standards of disclosure;
agree to encourage all countries to meet these standards, and call on the IMF to monitor and report on countries compliance;
agree to establish a new process for surveillance of supervisory regimes, and to bring together the international institutions and national regulators to cooperate, coordinate, and exchange information;
commit to develop better procedures for crisis management,including more orderly workouts of debt, effective insolvency and debtor-creditor regimes, lending into arrears by the IMF, and innovative financing techniques by the private sector;
commit to a presumption in favour of openness at the IMF and World Bank and to establish a formal mechanism for evaluation of IMF policies and operations;
undertake to do further work on strengthening prudential regulation, maintaining sustainable exchange rate regimes, developing new structures for coordinating official finance, and strengthening the Interim Committee and the Development Committee at the IMF and World Bank.

The press release issued by HM Treasury on 29 October 1998.

Charities will soon be able to get VAT relief for a wider range of welfare services, such as cooking and cleaning, announced Economic Secretary Patricia Hewitt today.

Speaking at the Charities Aid Foundation conference in London, Ms Hewitt said:

“A number of welfare services – including bathing, dressing and feeding – are provided on a not-for-profit basis to the elderly, sick, distressed or disabled people, and are eligible for VAT exemption. A recent VAT Tribunal decision extended the definition of welfare services to include daily living tasks such as cooking, cleaning and laundry.  In the light of this, Customs are reviewing existing policy with a view to extending exemption to these additional services.

“This is a very welcome and sensible step forward, and we will be consulting charities on the exact circumstances in which such services will be exempt.”

Ms Hewitt stressed the importance of the growing partnership between the Government and the voluntary sector:

“The Government values highly the contribution that the voluntary sector makes to society, and the Compact between Government and this sector, due to be launched in November, will further cement the strong relationship we are building.

Turning to the Review of Charities’ Taxation,  Ms Hewitt assured delegates that the Review was making good progress:

“It is important that we give this initiative the time it needs. We received over 3000 responses from our request for ideas for the review, and we have been carefully evaluating them.”

The press release issued by HM Treasury on 29 October 1998.

A three-year action plan to improve Government performance in procuring major construction projects is being developed, Paymaster General Geoffrey Robinson announced today.

Mr Robinson was speaking at the launch of two reports highlighting areas for improvement in the procurement and performance of Government construction contracts. These were prepared by Professor Andrew Graves of the Bath University Agile Construction Initiative for HM Treasury and the Government Construction Client Panel (GCCP).

Mr Robinson said :

“These reports provide the building blocks for a step change in Government performance in dealing with the construction industry.

“The public sector accounts for 40 per cent of construction industry contracts in the UK. As such a significant client, the Government is excellently placed to provide both a lead for other client sectors to improve their performance and the motivation for the industry itself to change. The industry tells us regularly that change will only occur when Government is seen to be improving itself. We are committed to doing exactly that.

“We shall build on the findings of these two valuable reports in five ways, through :

an action plan to implement the Client Improvement Study recommendations within three years developing better performance measurement and benchmarking, taking account of time, cost and quality criteria applied in the pilot study improved training and skill development for project sponsors, building on a successful scheme developed with the Civil Service College and Reading College of Estate Management six further guidance documents on key aspects of client performance, in addition to three already issued working with all Government Departments and the National Audit Office to develop a strategy to deliver and monitor improvements identified in the Client Improvement Study.

“These reports are entirely complementary to the findings and recommendations of Sir John Egan’s Task Force and ensure that improving Government client performance will be implemented within the framework of Sir John’s work.

“Our actions in response to the reports show our commitment to better client performance. As a construction industry client, the Government has the profile, critical mass and size of business to lead change. That is what we are determined to do.”

The first of Professor Graves’ reports, “The Government Client Improvement Study”, compares Government client and supply side performance against UK and, for the first time, international best practice. It provides directions for Government client improvement in four areas : project management; measurement; standardisation; and integration.

The report highlights a number of areas for improvement:

empowerment of the project sponsor role
flexible use of rules and regulations
need for greater integration in the procurement process
early involvement of all parties in the planning and design of projects; and
use wherever possible of standard processes, components and integrated information technology systems.
The action plan set out today will seek to implement the recommendations of the report in all these areas.

The second report, the “Pilot Benchmarking Study”, examines some 60 projects completed in the last five years, with a combined value in excess of £500 million. It shows, for the first time on Government construction projects, that high level data can be used to demonstrate relationships between project characteristics and project success. This will enable Government to identify and focus on factors which will provide the best basis for the successful delivery of construction projects.

The press release issued by HM Treasury on 26 October 1998.

A workshop aimed at making better use of  government assets by developing joint projects between the public and private sector and selling them into a wider market is being opened today in London by Paymaster General Geoffrey Robinson.

The new initiative allows the private sector to use its entrepreneurial skills in developing joint ventures as part of a move to ensure that the public sector is getting full value for  its many and varied assets.

Speaking at the Treasury’s Wider Markets workshop, Geoffrey Robinson said:

“Wider Markets is a marvellous opportunity and a challenge for us all.  This Government believes that both the public and private sectors have key roles to play in delivering public services and encouraging  investment.  We need public private partnerships to get the best out of the assets  – physical and intellectual – that we have.

“This is one – but only one – of the contributions government itself can make to meet the productivity challenge the Chancellor has set us all.

“This initiative is also about changing the culture in Whitehall.  It’s about giving departments incentives to operate efficiently rather than just telling them to do so. It’s about the Treasury giving guidance and support. A partnership in government as well as between government and the private sector.”

Government has many assets which it believes could be used more intensively – not just to physical assets: land, property and equipment, but also to non-physical assets such as software, databases, know-how and other intellectual property.

Wider markets policy allows Departments to retain the receipts from selling services they have developed from using spare capacity.  This can be achieved by developing commercial services based on public assets in partnership with the private sector.

The press release issued by HM Treasury on 22 October 1998.

Attached is an extract from the speech given by the Chancellor of the Exchequer, Gordon Brown today to the European Investment Bank Forum.

Just as we are working for stability internationally, so in this uncertain and unstable world where growth forecasts for the world and for national economics are being downgraded by national and international authorities alike, the government is steering a course of stability for Britain.

It because we created a new monetary framework, by making the Bank of England independent, and tackled the inflation problem – that is at the root of the boom bust cycle of the past – that we are better placed to withstand the uncertainties of the global economy.

Inflation has been brought down and is at its target of 2.5 per cent.  And the bank of England has now been able to reduce interest rates while setting policy to meet that target.

And it is because we tackled the fiscal deficit -the 28 billion pounds deficit we inherited – that we are better placed.  In our first year we took the difficult decision to work within the public spending plans we inherited and to tighten fiscal policy – with a reduction in borrowing of 20 billion pounds last year, amounting to 3.5 per cent of GDP from financial year 1996-97 to financial year 1999-2000.

And just as we have consistently taken a prudent and cautious approach to managing the public finances, we will continue to do so.  I will of course be delivering the Pre-Budget report on 3 November, with the half yearly assessment of the economy and the public finances which every chancellor gives.  But I can say – as I said last July – that our plans and projections have been based on cautious assumptions which have been audited by the independent national audit office, including a cautious and realistic assumption about trend growth – one quarter per cent a year lower than the conservative assumption.

It is one of the central features of our new spending regime that we built in margins to cover uncertainties, including the risk of slower growth and its effect on revenues.  And we have laid out, as our new code for fiscal stability requires, clear fiscal rules which we will achieve over the economic cycle and which explicitly allow the automatic stabilisers to operate in periods of more moderate activity.

The Pre-Budget statement I will make to the house of commons in ten days time will show that in an uncertain and unstable global economy we in Britain are steering a stable course for both our national economy and our public finances.  It would not be in the national economic interest for us to be diverted by opportunist calls for emergency cuts in public investment which are not justified on economic grounds.

For it is because of our prudent management of public finances – including last years 20 billion pounds cut in the deficit – that we remain on track to meet our strict fiscal rules over the economic cycle while maintaining our commitment to an additional 40 billion pounds for improvements in health and education.

The press release issued by HM Treasury on 21 October 1998.

New Treasury Taskforce guidelines highlighting staff consultation will lead to greater openness in PFI projects, Paymaster General Geoffrey Robinson announced today.

The procedures outlined today – which have the full support of the CBI and TUC – are designed to encourage transparency and openness during the consultation with staff and other interested parties.  Calling for greater trust and cooperation between Departments, bidders and trade unions, Geoffrey Robinson said:

“The quality of the service which PFI projects deliver depends on the skills and commitment of its staff.   Openness between bidders,  trade unions and staff is an essential part of  any well run procurement process.

“By working closely with staff representatives and acting positively, and by taking on the responsibility for retraining affected staff, the private sector can deliver a good deal for
the public as well as creating valuable alternative employment opportunities. Trade unions know this too. Applied sensibly, these guidelines will ensure that their concerns are listened to.  I want to see trade unions use it in that way.

“I also look to other Departments and public bodies to remove the cloak of secrecy surrounding PFI and allow the free flow of information on PFI projects. Hiding behind the empty phrase “commercial confidentiality” will no longer be the easy option.”