Tag: Treasury

The press release by HM Treasury on 11 August 1998.

The total remuneration of major privatised utility company boards has increased by around 18 per cent over the last year, Treasury analysis of a Utility Week survey showed today.

The survey, which showed total utility boardroom remuneration growth of 15 per cent, shows a rise of  around 18 per cent for major privatised utility companies. The figures also show some individual chief executives receiving pay increases of over 40 per cent.

Chief Secretary Stephen Byers said today:

“The Government has said time and time again that pay responsibility must be shown from the boardroom down to the shop floor.

” People must recognise that today’s excessive pay increase could be tomorrow’s interest rate rise or mortgage increase. That is why the Government warned, in response to the consultation on the Utility Green Paper, that it would consider taking action to increase shareholder control over directors’ pay unless there is a more positive approach by all companies. For the price regulated utilities, we  believe that regulators should write an open letter to the remuneration committee setting out how well service standards have been achieved.

“Today’s figures give cause for concern. Where performance has not been outstanding, it should not be rewarded. The Government wants to see boardroom pay linked to the achievement of rigorous, long-term performance standards. Consumers expect and deserve high standards of service, and the Government has set out steps to develop a clearer link between the setting of boardroom pay and the achievement of demanding service standards. There is a particular concern where consumers do not have an effective choice of supplier. The interests of customers should be set firmly on the boardroom agenda; these figures suggest this is not the case.”

The press release issued by HM Treasury on 19 December 2022.

• Alcohol duty freeze extended six months from 1 February to 1 August 2023.
• Part of government’s responsible management of UK economy, plan aims to reassure and provide certainty to pubs, breweries and distilleries facing tough challenges ahead.
• End date aligns with new simpler alcohol tax system taking effect, with Chancellor reserving decision on future duty rates for Spring Budget 2023.

In a statement to the House of Commons, Exchequer Secretary to the Treasury James Cartlidge laid out a plan designed to provide certainty and reassure pubs, distilleries, and breweries as they face a challenging period ahead.

While new duty rates usually come in on the 1 February each year, Mr Cartlidge set out that this year the duty rates decision will be held until the Chancellor Jeremy Hunt delivers his Spring Budget on the 15 March 2023.

Further, the Minister made clear that if any changes to duty are announced then, they will not take effect until 1 August 2023. This is to align with the date historic reforms for the alcohol duty system come in, and amounts to an effective six month extension to the current duty freeze.

As part of the government’s commitment to responsible management of the UK economy, these changes will provide pubs, breweries, distilleries and other alcohol-related businesses with increased certainty to plan and make investment decisions more effectively.

Exchequer Secretary to the Treasury James Cartlidge said:

“Today’s announcement reflects this government’s commitment to responsible management of the UK economy and supporting hospitality through a challenging winter.

“The alcohol sector is vital to our country’s social fabric and supports thousands of jobs – we have listened to pubs, breweries and industry reps concerned about their future as they get ready for the new, simpler, alcohol tax system taking effect from August.

“That’s why we have acted now to give maximum certainty to industry and confirmed there will be just one set of industry-wide changes next summer.”

The current alcohol duty freeze was announced at Autumn Budget 2021, saving consumers over £3 billion over five years. It was expected to come to an end on 1 February 2023, following the Chancellor’s reversal of most of September’s Growth Plan to restore trust in the economy and strengthen public finances.

At Autumn Budget 2021 the government announced the biggest reforms to alcohol duty in 140 years. The changes overhaul the UK’s outdates rules following exiting the EU by radically simplifying the entire system and slashing red-tape. To give industry more time to prepare, September’s Growth Plan set out that the reforms would take effect from 1 August 2023.

The new alcohol tax system will adopt a common-sense approach, where the higher a drink’s strength the higher the duty, whilst new reliefs will be made available to help pubs and small producers thrive.

New Draught Relief will be worth £100 million a year and will ensure smaller craft producers can benefit, the threshold for qualifying containers will be 20 litres.

Small Brewers Relief will be renamed Small Producer Relief, reformed and expanded. Until the revamp, a cliff-edge existed when relief is withdrawn for brewers who make more than 5,000 hectolitres a year. This will be addressed, there will instead be a gradual taper to the removal of relief, which will empower small breweries to grow, after they had made clear through consultation that the current design was acting as a barrier. Further, the expansion of the relief means that all producers that make drinks below 8.5% – mostly craft brewers and cidermakers – will be able to get relief on their products.

The alcohol duty reforms will help create a simpler, fairer and healthier duty system. Higher rate for sparkling wines will come to an end, meaning they will pay the same rate as still wine. Liqueurs will be put on the same footing as fortified wine, meaning a sherry and Irish Cream will now pay the same duty, and super-strength ‘white cider’ will rise to address public health concerns.

The wine industry will also be supported as they adapt to the new system. All wine between 11.5-14.5% alcohol by volume (ABV) to calculate duty as if it were 12.5% ABV for 18 months from the implementation of the new system.

The press release issued by HM Treasury on 24 September 1998.

“Our reforms of the financial services regulatory regime will enhance our reputation as a clean and attractive place to do business, and increase the public’s confidence in the industry,” said Chief Secretary Stephen Byers today. He was speaking to a Financial Services Authority (FSA) conference in London where he also gave examples of the type of behaviour which will be covered by a new code of conduct.

He also emphasised the importance of having a robust regulatory structure in place to maintain London’s pre-eminence in the financial services area at a time of global economic turmoil elsewhere;

“Recent events in Japan and elsewhere have shown that highly developed economies require highly developed and transparent systems for supervising financial services. Where supervision is ineffective and fails to command confidence the health and growth prospects of the whole economy can be threatened. London and the UK generally has an excellent reputation. The creation of the FSA is an opportunity to enhance that reputation further.

One area which will contribute to enhanced confidence is our new measures to deal with market abuse. These fill a gap that currently exists. A new code of market conduct will underpin this regime. It will detail the type of abuses which we are seeking to deter and set out safe harbours. Examples of the kind of behaviour include:

• artificial transactions which give the market the wrong impression as to the real supply and demand for an investment;
• abusive squeezes whereby the position of one player in the market, who has temporary control over the supply of a product, results in arbitrary prices; and
• misuse of privileged information which is not available to the rest of the market.

These measures, linked to our proposals to deliver greater consumer protection, are all aimed at making sure that the UK has a fair and balanced regime fit for the future.”

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

“Improving skill levels is critical to improving UK productivity and therefore to growth and higher living standards for all.” This was the message from the seventh in the series of seminars aimed at boosting UK productivity.

The seminar was hosted by the Chancellor Gordon Brown, the Secretary of State for Education and Employment, David Blunkett, and Secretary of State for Trade and Industry, Peter Mandelson.

It was addressed by Larry Katz, the distinguished US economist and former chief economist to the US Department of Labor and looked at how the generation and utilisation of skills affects UK productivity performance.

Commenting, the Chancellor said:

“Improving skill levels is critical to improving UK productivity. To keep pace with the rapidly advancing needs of technology we need more and better skilled people. This means that we need training that is flexible, innovative and responsive to the needs of business and employees. Public and private sectors must work together to ensure that we have an education and training system that delivers.”

Mr Blunkett said:

“Raising the skill levels of the workforce is one of the government’s central economic objectives. Skills are the key to our future economic prosperity, bringing better jobs and higher living standards. We have made a good start in raising standards in our schools and in developing lifelong learning. But I want us to continue to improve, working with employers and employees. The Skills Task Force, which produced its first report this month, will help us identify where the main skills gaps are and how they can be bridged.”

Mr Mandelson said:

“Peoples’ knowledge and the ability to share and exploit it will become increasingly important, as we move towards a knowledge driven economy. To meet the demands that this will place on both the workforce of today and of tomorrow, we have to place a higher value on skills and the acquisition of knowledge than we currently do. It is only by building on and using people’s skills that we will be able to compete effectively.”

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

There has been further progress in dealing with priority cases among the firms, involved in personal pensions mis-selling, monitored by the Treasury, Economic Secretary Patricia Hewitt said today.

Of the 29 firms, whose results to the end of August are published today, only seven have resolved less than 75 per cent of their priority cases. Four of the those seven are networks of independent financial advisers. In March only 7 of the firms monitored by the Treasury had resolved over 75 per cent of their cases.

Ms Hewitt said:

“These results show what can be accomplished when real effort is put in by the firms. Every one of these firms must now focus on the deadline of the end of the year for completing their priority reviews. I want all these firms to demonstrate to their customers, in the most practical way possible, that they are putting things right.”

The Treasury’s published figures mainly relate to cases involving older investors, including those who have retired. In August the Financial Services Authority (FSA) published guidelines on how firms should review cases of younger investors.

Commenting on the FSA’s initiative, the Minister said:

“It is now time for firms to start gearing up for the second phase of work on remedying mis-selling of personal pensions. I want to see all firms prepared and ready to go at the start of next year. There must be no return to the foot dragging which accompanied the start of the phase I review.

“And frankly I am appalled at the attitude of some independent financial advisers to the task ahead. Their campaign to stop the phase 2 review shows a total disregard for their customers’ welfare and does them no credit.”

The press release issued by HM Treasury on 19 December 2022.

Self-employed individuals and landlords will have more time to prepare for Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA), following a government announcement today (19 December 2022).

Understanding that self-employed individuals and landlords are currently facing a challenging economic environment, and the transition to Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) represents a significant change to taxpayers and HMRC for how self-employment and property income is reported, the government is giving a longer period to prepare for MTD. The mandatory use of software is therefore being phased in from April 2026, rather than April 2024.

From April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software. Those with an income of between £30,000 and £50,000 will need to do this from April 2027. Most customers will be able to join voluntarily beforehand meaning they can eliminate common errors and save time managing their tax affairs.

The government has also announced a review into the needs of smaller businesses, and particularly those under the £30,000 income threshold. The review will consider how MTD for ITSA can be shaped to meet the needs of these smaller businesses and the best way for them to fulfil their Income Tax obligations. It will also inform the approach for any further roll out of MTD for ITSA after April 2027.

Mandation of MTD for ITSA will not be extended to general partnerships in 2025 as previously announced. The government remains committed to introducing MTD for ITSA to partnerships in line with its vision set out in the government’s tax administration strategy.

Victoria Atkins, Financial Secretary to the Treasury, said:

It is right to take the time to work together to maximise the benefits of Making Tax Digital for small businesses by implementing the change gradually. It is important to ensure this works for everyone: taxpayers, tax agents, software developers, as well as HMRC.

Smaller businesses in particular should be able to experience the benefits of increased digitalisation of Income Tax in a way which meets their needs. That is why we are also today announcing a review to establish the best way to achieve this.

Jim Harra, Chief Executive and First Permanent Secretary, HM Revenue and Customs, said:

HMRC remains committed to the delivery of Making Tax Digital as a critical part of our strategy for digitalising and modernising the tax system, but we want to make sure we get this right and deliver it effectively.

A phased approach to mandating MTD for Income Tax will allow us to work together with our partners to make sure that our self-employed and landlord customers can make the most of the opportunities this will bring.

The announcement relates to MTD for ITSA only. Making Tax Digital for VAT has already been implemented and is demonstrating the benefits to businesses and the tax system of digital ways of working.

The press release issued by HM Treasury on 17 September 1998.

Up to date independent analysis showing Britain’s low levels of productivity was highlighted today by Chief Secretary Stephen Byers. Speaking to a New Statesman conference on the “Radical Century” he said:

“Tackling Britain’s productivity gap is an important national challenge. In meeting this challenge, we are confronting one of the most fundamental longstanding weaknesses of the British economy.

“The Government’s productivity agenda is a key part of modernising our economy. It is not about working harder but about working better.

“The present productivity gap means that our prosperity and living standards are being held back. Increased productivity is fundamental to the improvement of our living standards in the UK and our ability to build a decent and fair society for all.”

The figures from independent management consultants McKinsey confirm that:

•  Britain has a productivity gap of 40% with the USA and 20% with both Germany and France
• the problem effects both manufacturing and services.  Britain’s productivity is 50% behind Japan in car manufacturing but also 50% behind the USA in industries like hotels and telecoms.
• there is very low physical investment – UK capital intensity is 20% behind the USA.
• over the last international economic cycle for every 100 Pounds per worker invested by the UK the USA invested 140 Pounds  and France 150 Pounds.

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.