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HM Treasury 1 9 November 1999 NEW AMBITIONS FOR STABILITY AND STEADY GROWTH
Chancellor Gordon Brown today set out the Government's strategy for
enterprise and fairness where everyone can share in the benefits of
economic success. Publishing the Pre-Budget Report today, the Chancellor set out four
new economic ambitions for the next decade, based on a platform of
stability:
The Pre-Budget Report updates forecasts on the economy and the public
finances, and sets out the direction of economic policy and further
measures that are under consideration in the run up to the 2000 Budget.
Stability and steady growth Since the Government took office, the new monetary and fiscal frameworks
have been delivering low inflation and sound public finances. The
Government is determined to avoid the mistakes of the past and not
return to boom and bust. The Government's latest economic forecast,
published today, shows:
Meeting the productivity challenge Britain's productivity levels lag behind those of other major economies.
Raising productivity performance is vital to meeting the Government's
objective of delivering high and stable levels of growth and employment.
Taking forward the Government's ambition to raise its productivity
faster than its competitors within the next decade, and building on Budget 99 measures, the Chancellor announced:
The PBR also outlines a package of measures focussing on improving
and extending IT skills, including a network of 1000 computer learning
centres and 80 per cent discounts on computer literacy courses for
holders of Individual Learning Accounts, and provision for 50,000
more people to study for basic qualifications in information technology.
Increasing employment opportunity for all The Government's strategy is to move people from welfare to work, make work pay and ease the often difficult transition into work. The provision of employment and opportunity for all goes hand in hand with responsibilities and, alongside new measures to increase New Deal support for those aged 25 and over, new technologies will provide a more intensive and proactive job brokering service. Building on the New Deal programme, the Government today announced:
The hidden economy is a significant problem. A review tackling this,
to be carried out by Lord Grabiner QC, was announced today. The review
will report by the time of the Budget. Fairness for families and communities The Government is committed to building a fairer and more inclusive
society. The Pre-Budget Report today sets out further measures to
support families and communities and deliver strong public services:
The Chancellor today announced a tough range of measures designed
to crack down on tobacco fraudsters, including the compulsory marking
of cigarette and tobacco packs to show that UK duty has been paid,
a national network of container x-ray scanners to help detect shipments
of smuggled tobacco hidden in commercial freight, and new offences
and tougher penalties for those caught with smuggled tobacco. There is a strong ongoing health case for year-on-year real terms
increases in the price of cigarettes and tobacco. The Chancellor will
in future form his Budget judgements on the appropriate level and
timing of any increases taking into account a wide range of factors,
including the Government's health objectives. Any additional revenue
raised from real increases in tobacco duties in future would be spent
on improved health care. For example, the extra revenue from a 5 per
cent real terms rise in tobacco duty next spring would raise £300
million that would go to a further additional investment in the National
Health Service from next April. Protecting the environment Today, the Chancellor announced further progress in meeting the Government's
environmental objectives.
HM TREASURY PRESS OFFICE Press enquiries to: 0171 270 5238 Non-media enquiries to: 0171 270 4558 If you have access to the Internet you can find this news release at http://www.hm-treasury.gov.uk. Other Treasury material can also be found at this address. |
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HM Treasury 2 9 November 1999 MAKING BRITAIN A MORE ENTREPRENEURIAL SOCIETY
Further steps aimed at raising Britain's productivity faster than
our competitors by making Britain more entrepreneurial and opening
enterprise to all were set out today by the Chancellor in his Pre-Budget
Report. The measures aim to: create the right environment and incentives for entrepreneurs; ensure that young people learn the skills to take advantage of a more entrepreneurial Britain; promote business and growth in deprived areas; ensure Britain is the best place to trade electronically by 2002; ensure UK research helps produce wealth-creating enterprises; and improve competition in the UK economy. The Chancellor said: "Raising productivity is one of the key conditions for meeting the
Government's objective of high and stable levels of growth and employment
and delivering sustained increases in living standards." Further detailed announcements will be made tomorrow by the Secretary
of State for Trade and Industry. The measures include: Enterprise Management Incentives The Chancellor has confirmed that a new Enterprise Management Incentives
(EMI) scheme will be included in the Finance Bill 2000. EMIs will
encourage high quality managers to join small higher-risk companies,
by offering access to tax-advantaged share options. Under this scheme,
such companies will be able to offer up to 10 key employees options
over shares worth up to £100,000 (at time of option grant), which
will be taxed under a favourable capital gains tax regime on sale
of the shares, rather than taxed as income at exercise of the options.
Employee Share Ownership Scheme The Government is introducing the most tax-advantaged all-employee
share scheme ever seen in the UK. It is a comprehensive scheme to
support firms' own efforts to foster a more enterprising productive
relationship with their employees. Corporate Venturing Tax Incentive The Chancellor will be introducing a tax incentive in next year's
Finance Bill to encourage UK companies to undertake corporate venturing.
Companies that make corporate venturing investments in small higher
risk trading companies will receive an up-front corporation tax relief
at 20 per cent. Corporate venturers who reinvest gains in new ventures
will be able to defer payment of tax on these gains. Making Enterprise open to all The Chancellor announced a £30 million programme to
promote better access to business support amongst disadvantaged
groups and in deprived areas. The package will help ensure that the
opportunities from a more entrepreneurial Britain are open to all,
and includes:
Improving enterprise in schools To ensure that young people acquire both the skills and the attitudes
necessary to have successful careers in a more enterprising economy,
the Chancellor announced:
The Chancellor announced yesterday that MIT has agreed to locate
its European partnership in the UK. Jointly with Cambridge University,
it will set up an Institute in the UK that will bring a new dimension
to education and research. The Institute will build on the 8 centres
of enterprise that will be created in the UK universities that won
the Government's Science Enterprise Challenge. The Institute will
also:
E-commerce The Chancellor announced measures to help the Government meet its
aim to make Britain the best place to trade electronically by 2002:
using £230 million from the Invest to Save Budget to fund new
innovative ways of delivering government services - many exploiting
the potential of the Internet; and
Clusters The Government wants to encourage the growth of clusters of innovative
firms. The Deputy Prime Minister will today be announcing changes
to the planning system that will ensure for the first time that the
growth and development of clusters is recognised and supported. R&D tax credit The Government will introduce an R&D tax credit, targeted on
small and medium-sized businesses, from April 2000. The tax credit
will increase the 100 per cent relief for R&D to 150 per cent.
When added to the existing relief, the cost of R&D to a company
benefiting from the small companies rate will be reduced by 30 per
cent. For companies not yet in taxable profit, the proposed credit will
reduce the immediate cash cost of R&D by up to 24 per cent. By
making the new tax credit payable to companies not yet in taxable
profit, the new tax relief recognises the greater cash constraints
that innovative, early-stage companies face and the extra assistance
that they need. Baker Report - commercialisation of Government science
The Government today welcomed the recent Baker report into the commercialisation
of science conducted in Government laboratories (PSREs) and accepted
the thrust of its recommendations. The Government will announce more
details in the new year. But today the Chancellor announced that:
there will be a much stronger drive to exploit PSRE research - with
more freedoms for PSREs; government scientists will be allowed new incentives and rewards,
subject to safeguards, for participating in exploitation - with changes
to be made to civil service conduct rules; the risk-avoidance culture in the PSREs will be tackled. The Government welcomes the statement issued today affirming that the National Audit Office will adopt an open-minded and supportive approach to commercialisation by PSREs; address the need of PSREs for advice to help them commercialise
their discoveries and inventions; the Government will consult on options,
including a role for Partnerships UK - the new public private partnership
which the Government is creating to replace the Treasury Taskforce.
Improving Competition The new Competition Act comes into force in March 2000 and will revolutionise
the enforcement of competition policy by enhancing the powers of the
Office of Fair Trading to tackle anti-competitive practices. NOTES TO EDITORS 1. Further details on the Government's plans to open enterprise to
all see HM Treasury news release 5. 2. Further details on: Enterprise Management Incentive scheme; Employee Share Ownership Scheme; Corporate Venturing; and R & D tax credits will be announced by the Secretary of State for Trade and Industry
tomorrow. 3. Details on the MIT-Cambridge University partnership were announced
by the Chancellor on Monday 8 November. Please refer to Treasury news
release 186/99. 4. Further details on the Government's strategy on clusters will
be announced by Lord Sainsbury, Minister for Science and Innovation
at the DTI on 18 November. HM TREASURY PRESS OFFICE Press enquiries to: 0171 270 5238 Non-media enquiries to: 0171 270 4558 If you have access to the Internet you can find this news
release and other Treasury information at http://www.hm-treasury.gov.uk
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HM Treasury 3 9 November 1999 CHANCELLOR ANNOUNCES FURTHER MEASURES TO INCREASE
EMPLOYMENT OPPORTUNITIES AND SUPPORT FAMILIES Delivering employment opportunity for all, ending child poverty and
ensuring fairness for families and communities was at the heart of
the Pre-Budget Report published today by the Chancellor Gordon Brown.
The Chancellor said: "This Government's central aim is employment opportunity for all,
the modern definition of full employment. Our long term economic ambition
over the next decade, for employment, is to achieve a higher percentage
of people in work than ever before. " Building on the New Deal measures already implemented, the Chancellor
set out further measures designed to increase employment opportunities.
These are: The Government intends to intensify and extend New Deal 25+ on a
national basis from April 2001, building on the principles of the
New Deal for the under 25s, bringing rights and responsibilities for
the 25+ into line with those for young people. This will include the
offer of a job with a private sector employer; or self employment;
work-based training or work preparation programmes; In preparation, the New Deal for over 25s will be strengthened from
April 2000. It will provide more support for job search and to enhance
links with employers. Extra support will be available to those who
do not manage to find a job to address their basic skills needs, including
'soft' skills with access to careers guidance and mentors, and specialist
support for those with deep-rooted problems such as alcohol or drug
dependency; There will be tougher implementation of responsibilities for the
long term unemployed. New Deal Personal Advisers will identify a number
of suitable vacancies and jobseekers will be expected to apply for
them. If candidates are unsuccessful advisers will try to establish
why and use this feedback to help candidates enhance their employability;
building on the internet jobs bank, using new technologies to deliver
an improved service: expanding the nationwide network of touch-screen
Job Points and developing links with the BBC and other potential partners
to harness the potential of interactive digital television; For the New Deal for Young People a nationwide expansion of the
intensive gateway approach currently being piloted, from Spring 2000,
taking into account the lessons learnt from the evaluation of these
pilots. In, addition, an extension of the New Deal Innovation Fund,
to develop new approaches to help people into jobs; enhancement to the New Deal for Lone Parents: including inviting
lone parents on Income Support with children between the age of three
and five to participate; outreach to lone parents with children aged
14 and 15; and the long term aim of extending the principle of the Working Families
Tax Credit (WFTC) to working households without children through an
Employment Tax Credit. The Chancellor announced the Government's aim to reduce child poverty
by half within a decade as the Government moves forward with its commitment
to end all child poverty in Britain within the next twenty years.
Building on the measures announced in Budget 98 and 99 (increases
in Child Benefit, introduction of WFTC, new Children's Tax Credit
from April 2001, and increases in Income Support), which will together
lift 1.25 million people out of poverty (including 800,000 children),
the Chancellor announced:
Alongside the Pre Budget Report the Treasury has today published
a new paper - "Supporting Children Through the Tax and Benefits System".
The paper describes the increasing prevalence of low incomes amongst
families with children, details the latest research on child poverty
and explains how the evidence has informed the Government's policy
approach. NOTES TO EDITORS 1. For further information on the more intensive New Deal for long
term unemployed over 25 and the enhanced package for jobseekers see
HM Treasury news release 6. 2. Since May 1997, youth and long-term unemployment have been halved.
The claimant count measure of unemployment, at 1.2 million, is the
lowest for nearly 20 years and there are nearly one million unfilled
vacancies in the economy. 3. The New Deal for people aged 18-24 aims to help young people who
have been unemployed and claiming Job Seekers Allowance (JSA) for
six months or more to find work. It includes: gateway provisions,
help with job search, careers advice and guidance; for those who do
not find unsubsidised employment, mandatory activity after four months,
to help improve their employment prospects; and follow-through to
ensure clients are helped to build on their experience and move into
employment. More intensive gateway provision is currently being trailblazed
in 12 areas, and will be rolled out from April 2000. So far,, nearly
350,000 young people have joined the New Deal and 145,000 have found
jobs. 4. The New Deal for Lone Parents is a voluntary programme providing
a personalised service combining job search help, advice and training
to all lone parents on income Support. As part of a package of enhancement,
invitations to participate will be extended to lone parents with children
under 5. 5. The 10p rate of income tax was introduced in April 1999. From
2000-01, the basic rate of income tax will be cut to 22p. The point
at which employees start to pay national Insurance contributions will
be increased by 25% over the next two years so that it will be aligned
with income tax personal allowance in April 2001. The National Minimum
Wage was introduced in April 1999. 6. Working Families Tax Credit (WFTC) was launched in October 1999.
It replaces Family Credit with a more generous tax credit, which will
generally be payable to employees through the pay packet from April
2000. By 2001, about 1.4 million working families will be receiving
WFTC, around 500,000 more than would receive Family Credit. 7. The Children's Fund will be worked up to the same timetable as
the forthcoming spending review and the size of the Fund will be decided
as part of this, with a view to it being up and running in April 2001.
The Fund will complement how the Government already works with and
supports the children's voluntary sector. The review process will
be cross-departmental and decisions on how the Fund will be organised
within Government is still to be decided. Throughout the process,
the Government will engage in active consultation with voluntary and
community organisations, particularly on how the voluntary sector
can deliver the Government strategic objectives on child poverty,
and also on the best way to support the sector without adding unnecessary
red tape. 8. The children's paper published today includes: a survey of the latest research in particular showing the growth
in child poverty in the UK and that work is the best route out of
poverty; and
an explanation of how measures already announced in Budgets 98 and
99 will provide an extra £6 billion a year for children by the
end of this Parliament, lifting 800,000 out of poverty. These include
the largest increases in Child Benefit, the introduction of the Working
Families Tax Credit, the new Children's tax Credit, and increases
in Income Support. 9. "Supporting Children Through the Tax and Benefits System" is the
fifth paper in the Treasury's "Modernisation of Britain's Tax and
Benefit System" series. Media copies are available from the Treasury
Press Office on 0171 270 5238. Non media copies are available from
the Treasury Public Enquiry Unit on 0171 270 4558. HM TREASURY PRESS OFFICE Press enquiries to: 0171 270 5238 Non-media enquiries to: 0171 270 4558 If you have access to the Internet you can find this news
release, children's paper and other Treasury information on http://www.hm-treasury.gov.uk
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HM Treasury 4 9 November 1999 CHANCELLOR ANNOUNCES FURTHER PROGRESS ON MEETING
THE UK'S ENVIRONMENTAL COMMITMENTS Further measures towards integrating the effective protection of
the environment and the prudent use of natural resources into the
heart of economic decision making in Government were announced today
by the Chancellor Gordon Brown. The Chancellor said: "The Government wants to ensure that economic growth takes place
in a way which ensures the effective protection of the environment
and the prudent use of natural resources. Our strategy is to ensure
that the environment is protected for current and future generations.
Climate change levy The Chancellor announced further details on the design of the climate
change levy today, following an extensive consultation exercise. The environmental effectiveness of the levy will be increased by:
an exemption from the levy for electricity generated from 'new'
renewable sources of energy and 'good quality' combined heat and power
plants; and a trebling of support for energy efficiency measures under the levy
package to around £150m in 2001-02, to allow for the introduction
of a system of enhanced capital allowances for energy saving investments.
To help protect competitiveness, the overall size of the levy will
be reduced from £1.75bn to £1bn and there will be an 80
per cent discount for energy intensive sectors that sign energy efficiency
agreements. The levy will be revenue neutral for the private
sector since all the revenues raised will be recycled to business
via a 0.3 percentage point cut in employers' National Insurance Contributions
and the additional support for energy efficiency schemes. Overall, the levy package is expected to deliver bigger carbon savings
than those envisaged at Budget time. Fuel duties The Chancellor said today that the fuel duty escalator has played an important role. Increases in fuel duties since 1996 are estimated to produce carbon savings of between 1 and 2.5 million tonnes of carbon by 2010. The Government is committed to meeting its environmental targets.
The time has now come to review the way that any increases in the
fuel duty are determined. The Chancellor has, therefore, decided that
the appropriate level of fuel duties will be set on a Budget by Budget
basis, taking account of the Government's economic and social objectives
as well as the UK's environmental commitments. The Chancellor has decided that revenues from any real terms increases
in fuel duties will, in future, go straight in to a ring-fenced fund
for improving public transport and modernising the road network. Land use and pesticides Further progress was announced by the Chancellor: The Government welcomes the enhanced package of voluntary measures
from the Quarry Products Association, but is concerned that it does
not go far enough to address the environmental impacts of quarrying.
The Government is minded to introduce an aggregates tax unless further
negotiation with the quarrying industry can deliver an improved package
of voluntary measures; Further discussions will be held with the agrochemical industry
prior to the next Budget, on ways to meet the Governments's objectives
to minimise the environmental impacts of pesticide use; and The forthcoming Urban White Paper will consider the 105 recommendations
in the Lord Rogers' Urban Task Force report, aimed at reversing the
legacy of neglect and decline that has scarred our towns and cities.
NOTES TO EDITORS 1. Budget 99 contained the biggest ever package of tax reforms to
help protect the environment. This built on the principles set out
in the Statement of Intent on environmental taxation in July 1997,
where it was stated that the Government would explore the scope for
using the tax system to deliver environmental objectives, and that
over time the Government would aim to shift the burden of taxation
from 'goods' such as work, saving and investments to 'bads' such as
pollution. 2. For further details on the climate change levy see HM Treasury
news release 7. 3. Since 1997, the Government has maintained and increased the fuel duty escalator introduced by the previous Government in 1993. This has given a clear signal to motorists and manufacturers to design more fuel efficient vehicles, avoid unnecessary journeys and consider alternatives to the car.
4. In August 1998, DETR commissioned London Economics to carry out
research to value the external environmental costs and benefits associated
with the supply of aggregates for the UK construction industry using
Contingent Valuation surveys and building on the first phase of this
project, which was published in April 1998. The second phase report
was published in July 1999. 5. It was announced in Budget 99 that the Government accepted that
there was a case in principle for a tax on the extraction of aggregates,
but that before coming to a final decision, the Government would first
pursue the possibility of an enhanced package of voluntary measures
with the quarrying industry. The Quarry Products Association submitted
a revised package on 21 July 1999. 6. DETR commissioned ECOTEC to conduct a research project to design
a possible tax on pesticides, and investigate its potential impact
on manufacturers, farmers and the environment. This research was published
on 24 March, and was followed by a three month consultation. A summary
of the consultation responses has been published today on the Treasury
website. Hard copies are available from HM Treasury Public Enquiries
Unit on 0171 270 4558. HM TREASURY PRESS OFFICE Press enquiries to: 0171 270 5238 Non-media enquiries to: 0171 270 4558 If you have access to the Internet you can find this news release and other Treasury material on http://www.hm-treasury.gov.uk
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HM Treasury 5 9 November 1999 CHANCELLOR OPENS ENTERPRISE TO ALL
Strengthening the UK's enterprise culture and ensuring enterprise
was open to all were central themes of the Pre-Budget Report published
today by the Chancellor Gordon Brown. The Chancellor announced a package of measures to provide enterprise
opportunities in deprived areas and boost enterprise skills in schools.
He said: "This Government wants to open up enterprise to all. We need more
new and successful businesses in our least well-off communities. And
we need to involve as many schools and businesses in developing a
new spirit of enterprise among young people. "Strengthening the UK's enterprise culture is a long term challenge,
requiring partnership between Government, business and educators.
That is why we are currently working with the British Chambers of
Commerce on developing the forthcoming National Campaign for Enterprise."
The Chancellor announced a £30 million programme to
promote better access to business support and finance in deprived
areas. This includes: a development fund to promote innovative enterprise
support in deprived areas, such as incubator units; funding for Community Finance Initiatives (CFIs)
- local intermediaries serving locally based SMEs - by running a challenge
fund to help resource CFIs, and provide loan guarantees to help co-finance
commercial lending to CFIs; and a national network of mentors to business start-ups
through a new Business Volunteer Mentoring Association. These measures address many of the issues raised in the report of
the Treasury led Policy Action Team 3 on enterprise and social exclusion,
published on 2 November. The Government is also considering the case
for a start-up grant to act as an income bridge between benefits and
business, as recommended by PAT 3. The Government will also consider creating scholarships specifically
targeted at entrepreneurs from deprived areas, which would provide
these individuals with the skills they need to turn their ideas into
thriving businesses. The Chancellor also announced a £10 million package of measures
to boost enterprise skills in schools. This includes:
£5 million to improve the quality of the existing national
network of bodies that bring together schools and businesses;
£3 million to enhance teachers' professional development
and improve the quality of work experience for students;
and
£2 million to help double the scale of enterprise programmes
with a proven track record of success, such as those provided
by Understanding Industry and Young Enterprise (including Junior Achievement
in primary schools). The Government will also be supporting the National
Campaign for Enterprise, due to be launched in spring 2000.
The Campaign will help to create a more entrepreneurial culture in
the UK by transforming attitudes, developing skills and encouraging
the formation of new and successful companies. The Campaign will be spearheaded by a network of entrepreneurial
Ambassadors, who will promote and encourage enterprise throughout
the UK. Alan Sugar, who for the last two years has toured schools
and universities speaking about the importance of enterprise to young
people, will add his weight to the Campaign. As will Richard Branson,
who is to launch the new Virgin Business Schools in the new year.
Other Ambassadors will include Reuben Singh, Simon Woodruffe, Prue
Leith and Dr Chris Evans. The Campaign will help to develop the enterprise skills of young
people in the UK, promoting the existing range of enterprise programmes
such as Young Enterprise and Understanding Industry. And the Campaign
will launch an 'Enterprise for All' book in the new year, with a foreword
by the Chancellor - it will showcase successful entrepreneurs and
aim to inspire young people to go into business. NOTES TO EDITORS 1. The two packages of measures will be implemented in 2000-01. 2. The £30 million programme of measures to promote enterprise
amongst disadvantaged groups and in deprived areas, includes £20
million of additional money from the Windfall Tax. 3. The enterprise support development fund will promote innovative
ways of supporting enterprise in deprived areas, such as business
incubator units. Business incubators typically consist of managed
workspace combined with business support services, such as training,
advice and help with finance. 4. Community Finance Initiatives are local finance intermediaries
that act as lenders of last resort - providing finance for businesses
that cannot gain access to mainstream finance. 5. Patricia Hewitt, Minister for Small Firms, DTI, announced on 20
September the setting up of the Business Volunteer Mentoring Association,
a mentoring scheme for people looking to start up their own business.
6. The report of Policy Action Team 3, "Enterprise and Social Exclusion",
was published on 2 November. The report is available on the HM Treasury
website - http://www.hm-treasury.gov.uk. For a hard copy of the report
please contact HM Treasury Public Enquiry Unit (tel: 0171 270 4558).
7. Young Enterprise and Understanding Industry are the two leading
providers of enterprise education in the UK. Together, they provide
enterprise skills training to 90,000 young people. From April 2000,
this package will help increase that number to 200,000. 8. In July, Peter Davies (Managing Director of Business in the Community)
completed a report on school-enterprise activities. His recommendations
were to:
set up an improved infrastructure linked to the Learning and Skills Council;
rejuvenate the teacher placement scheme and review the provisions of work experience;
integrate enterprise education in the National Curriculum and link it to teacher development; and
raise awareness through the National Campaign for Enterprise. 9. This package builds on the revised National Curriculum, announced
by David Blunkett in September, which will include enterprise skills,
financial literacy, consumer education and key skills. The new Curriculum
will be introduced in September 2000. 10. This package implements the rest of the Davies recommendations. It will help ensure that:
more young people - particularly the disadvantaged - are better prepared for the changing world of work;
more teachers have better quality professional development; more schools - particularly those in Education Action Zones and those already covered by the "Excellence in Cities" initiative - have an effective partnership with business; and
more businesses are aware of the benefits of investing in their
local schools and communities. HM TREASURY PRESS OFFICE Press enquiries to: 0171 270 5238 Non-media enquiries to: 0171 270 4558 If you have access to the Internet, you can find this news release and other Treasury information at http://www.hm-treasury.gov.uk
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HM Treasury 6 9 November 1999 NEW MEASURES TO HELP UNEMPLOYED ADULTS INTO
WORK New measures to increase the support available to unemployed people
aged 25 and over to move into work were announced today by the Chancellor
Gordon Brown. The Government intends to intensify and extend New Deal 25+ on a
national basis from April 2001, building on the principles of the
New Deal for under 25s, bringing rights and responsibilities for the
25+ into line with those for young people. The package, outlined in the Pre-Budget Report, will be backed by
extra steps to advertise the support and advice available for job
seekers aged 25 and over. The Chancellor said: "There are almost one million vacancies in economy at the moment,
spread over the country. We want better matching of the unemployed
to these jobs. And we want people to take up the opportunities available.
Rights and responsibilities go hand in hand. "As a first step we will increase the amount of information available
to job-seekers on local vacancies and strengthen the New Deal 25+
to give those who need it extra help to move into work. "We will expect job-seekers to take up this extra support to move
into employment or to enhance their employability. It will not be
an option for long-term unemployed people to do nothing." The measures, for those unemployed for 6 months or more, include:
more intensive and pro-active job broking, including
the creation of a jobs and learning bank, which will put jobs, jobseekers'
CVs and information about careers and learning opportunities on the
Internet; a national network of job-broking call centres; expansion
of a nationwide network of touch-screen job points in job centres
and developing links with the BBC and other possible partners to harness
the potential of interactive TV; access to basic skills help, and more use of worktrials,
to give unemployed people the chance to try out jobs and prove their
suitability to employers; and using this structured approach to reinforce the JSA regime - including
the requirements to widen jobsearch both occupationally
and geographically - with tougher implementation of sanctions. JSA
claims will be disallowed if jobseekers do not take up the available
opportunities without good reason. In preparation for the nationwide intensification of the New Deal
25+, from April 2000 the support available for those unemployed for
2 years or more from New Deal 25+ into line with those for young people
by: a more intensive gateway advisory process, with
participants actively submitted for interview for appropriate jobs,
together will follow-up for unsuccessful candidates; more structured support to develop an Action Plan, including access
to careers advice and mentoring support as well as
support for job search techniques and help with basic skills and soft
skills development (eg communications skills) and access to specialist
support for the hard to help, including homeless people or those with
drug or alcohol problems; and backed up with tougher implementation of sanctions -
JSA claims will be disallowed if jobseekers do not meet their obligations
or take up the support on offer. NOTES TO EDITORS 1. These measures will be available for all those who have been claiming
Job Seekers' Allowance (JSA) for either 6 or 24 months. People claiming
JSA are required to be available for and actively seeking work. 2. The New Deal 25+ was launched nationally in June 1998. Those aged
25 and over and unemployed for 2 years or more have had access to
a Personal Adviser and, alongside a range of options for the long-term
unemployed, a £75 a week wage subsidy and opportunities to undertake
full-time education. 3. New Deal 25+ pilots were launched in November 1998 to test a range
of innovative approaches to helping people unemployed for 18, or in
some cases, 12 months or more. There are 28 pilots in Great Britain;
and the whole of Northern Ireland is covered by a pilot. 4. Unemployed people aged 50 or more who have been claiming JSA for
at least 6 months will be eligible for Personal Adviser support and
an employment credit under the New Deal 50+ announced in Budget 99,
currently available in 12 pathfinder areas and available nationally
from Spring 2000. The New Deal 50+ was launched by the Chancellor
and David Blunkett, Secretary for State for Education and Employment
on 4 November 1999. HM TREASURY PRESS OFFICE Press enquiries to: 0171 270 5238 Non-media enquiries to: 0171 270 4558 If you have access to the Internet, you can find this news
release and other Treasury information at http://www.hm-treasury.gov.uk
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HM Treasury 7 9 November 1999 FURTHER DETAILS ANNOUNCED ON THE CLIMATE CHANGE
LEVY Further details on the design of the climate change levy (CCL) were
announced today by the Chancellor Gordon Brown, following an extensive
consultation exercise with business and other interested parties.
The levy is to be introduced on the business use of energy from April
2001. Its aim is to encourage energy efficiency, and help meet the
UK's legally-binding target for reducing greenhouse gas emissions
set under the Kyoto Protocol. The Chancellor said: "We have consulted widely on the design of the levy and listened
closely to the views of industry, environmental groups and other interested
parties. The changes to the design of the levy that we have announced
reflect the representations we have received. They will increase the
environmental effectiveness of the levy." The further details on the design of the levy announced today will:
Increase its environmental effectiveness, by:
Safeguard competitiveness, by:
The Government will also be:
Exempting from the levy traction electricity used by railfreight
locomotives; and Publishing later this month draft legislative clauses for consultation. NOTES TO EDITORS 1. The climate change levy was first announced in the March 1999
Budget. The design of the climate change levy reflects closely the
recommendations made by Lord Marshall in his report, Economic
instruments and the business use of energy, in November 1998.
2. Following the Budget announcement, HM Customs and Excise carried
out an extensive consultation exercise with business and other interested
parties, on the detailed design and administrative issues relating
to the levy. 3. Negotiations are underway with the main energy intensive sectors,
to agree targets for improving energy efficiency. The deadline for
target offers to be made and Heads of Agreement to be signed has been
extended to 20 December 1999. Smaller trade associations will be expected
to sign up to target offers and Heads of Agreement in early 2000.
4. The rates of the levy are expected to be 0.15 p/kWh for gas and
coal, and 0.43 p/kWh for electricity. These compare to the illustrative
rates given in the March Budget of 0.21 p/kWh for gas and coal, and
0.60 p/kWh for electricity. 5. The Government will be consulting business on exactly which energy
efficient products and technologies might qualify for the enhanced
capital allowances scheme. 6. HM Customs and Excise will be making available an analysis of
the responses to the consultation document and a number of technical
briefs giving more detail on the exemptions. Later this month, Customs
and Excise will also be publishing draft legislation for consultation.
These will be placed on the internet at http://www.hmce.gov.uk, or
can be obtained by e-mail from helpdesk.ccl@hmce.gov.uk, and by post
by faxing 0161 827 0356. HM TREASURY PRESS OFFICE Press enquiries to: 0171 270 5238 Non-media enquiries to: 0171 270 4558 If you have access to the Internet you can find this news
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HM Treasury 8 9 November 1999 GETTING BRITAIN GIVING IN THE 21ST
CENTURY Modernising and simplifying the tax system to boost charity giving
in Britain are at the heart of a major new package of tax incentives
announced today by the Chancellor, Gordon Brown. Announcing the package of measures entitled Getting Britain Giving
in the 21st Century, the Economic Secretary, Melanie
Johnson said: "The package of measures announced by the Chancellor today is the
result of the Government's extensive consultation on its review of
charity taxation. "We have listened to what charities and others have told us, and
the measures we are introducing go well beyond the proposals set out
in the consultation document. "Getting Britain Giving delivers a modernised charity tax
system that will make tax breaks more extensive, easier to understand
and therefore more attractive to more people. "We are helping charities to help themselves. The extension of the
Gift Aid scheme is a major incentive to help boost giving in Britain.
It will help charities to make much more out of their donations."
The abolition of the £250 minimum limit for
donations in the new Gift Aid scheme means that, in future, tax relief
will apply to any donation whether large or small,
regular or one-off. Donors will also be able to join the scheme by phone or Internet,
removing the need for them to sign a form. Other new measures to help boost individual and business giving include:
More measures to simplify and modernise the tax system for charities
include:
Work continues on improving the service provided by Inland Revenue
and HM Customs & Excise to charities. For example, developing
a new telephone help-line, a directory for charities, new tax guidance
and better use of the Internet. All of the changes in Getting Britain Giving are due to
start from April 2000. NOTES TO EDITORS 1. The review of charity taxation was launched in July 1997. During
the first phase of the open consultation, over 3,000 charities and
other interested parties sent in their views on a wide range of subjects.
A consultation document was published on Budget Day this year containing
the Government's options for further consultation. Some 500 responses
were received before the consultation closed on 31 August. A summary
of the consultation responses was published on 28 October (see Press
Notice 174/99). 2. Information sheets containing details of all the measures announced
today are being sent to those organisations that responded to the
consultation document. Copies of
are available on the HM Treasury, Inland Revenue and Customs & Excise websites: http://www.hm-treasury.gov.uk http://www.inlandrevenue.gov.uk http://open.gov.uk/customs/c&ehome.htm or from: Clare Reilly, Room 120 New Wing, Inland Revenue, Somerset
House, Strand, London WC2R 1LB. Tel: 0207 438 6742, Fax: 0207 438
7134; E-mail: clare.reilly@ir.gsi.gov.uk/ HM TREASURY PRESS OFFICE Press enquiries to: 0171 270 5238 Non-media enquiries to: 0171 270 4558 If you have access to the Internet, you can find this news release and other Treasury information at http://www.hm-treasury.gov.uk |
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HM Treasury 9 9 November 1999 FREE TV LICENCES FOR OLDER PENSIONERS
Free TV licences will be available to pensioners aged 75 and over
from Autumn 2000, the Chancellor Gordon Brown announced today. The measure will benefit over 3 million households. Almost 50% of
such households, set to benefit, are the poorest in the country. The Chancellor said: "From autumn, at a cost of £300 million, every year, every
pensioner who is over 75 will receive their TV licence absolutely
free of charge. For three million households with pensioners over
75 - a £101 saving a year." Other measures which have been announced to help pensioners include:
the £100 Winter Allowance - due to be paid for the first time
from this month; and the Minimum Income Guarantee for poorer pensioners. NOTES TO EDITORS 1. This measure will cost the Government around £300 million
in a full year. 2. A colour TV licence costs £101 and a black and white licence
£33.50 a year. 3. The BBC's funding will not be affected by this measure. Central
Government funding will make up the difference so there will be no
increase in the licence fee for others. 4. Existing concessionary schemes - such as the reduction in the
licence fee for blind people and for people in residential and sheltered
accommodation - will remain in force for people not affected by the
new change. Anyone currently qualifying for these concessions who
also meets the age criterion will now qualify for the free TV licence.
5. The Government will also consider its response to the Review of
the Future Funding of the BBC in due course, and in the light of responses
to consultation. HM TREASURY PRESS OFFICE Press enquiries to: 0171 270 5238 Non-media enquiries to: 0171 270 4558 If you have access to the Internet, you can find this news
release and other Treasury information at http://www.hm-treasury.gov.uk
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HM Treasury 10 9 November 1999 IMPROVEMENTS TO THE COMPETITION REGIME IN
THE FINANCIAL SERVICES AND MARKETS BILL The Government today announced that it would make important improvements
to the competition regime in the Financial Services and Markets Bill
to take account of recommendations made in Don Cruickshank's interim
report. Amendments will be brought forward to the Bill in due course aimed
at: - ensuring the Financial Services Authority (FSA) gives full weight
to competition concerns and takes account of the effect of its rules
on competition in the light of market developments; and - strengthening the existing arrangements for competition scrutiny
by giving the Competition Commission a central role in deciding whether
anti-competitive rules are justified in order to protect consumers
and the markets. Economic Secretary, Melanie Johnson, commented: "I am very grateful to Don Cruickshank and his team for their interim
report. "While the Bill already requires the FSA to take account of competition
in the way it regulates and provides for external scrutiny in this
area, this report has helped us to identify some significant improvements
which can be made to the current proposals. These will help ensure
that competition concerns are given their full weight by the FSA.
"It is vital that in fulfilling its statutory objectives the FSA
continues to regulate in a way which does not unnecessarily distort
competition. A healthy and competitive market is in the interests
of consumers and practitioners, providing greater choice, innovation
and opportunities for growth." The changes will:
require the FSA to consult on the economic costs of its rules. The
FSA will also be expected to report annually on the effects of regulation
on competition in the financial services market in the light of market
developments;
provide that the Competition Commission, rather than Ministers, will take the final decision on whether a rule or practice is anti-competitive, and reach a view on whether the rules or practices are nevertheless justified;
narrow the exclusion from general competition law so that the conduct
of financial services businesses is only excluded if it is required,
urged or legitimised by FSA rules or practices; and
allow the Office of Fair Trading and the Competition Commission,
when investigating complex monopolies, to consider and comment on
any part played by FSA rules. Miss Johnson added : "This is an important package of changes, in particular we place
great importance on the new role for the Competition Commission alongside
the Office of Fair Trading. The Competition Commission, as well as
taking the final decision on whether a rule or practice is anti-competitive,
will also come to a view on whether an anti-competitive rule or practice
is justified on regulatory grounds, with a Ministerial override which
would only be used in exceptional circumstances." NOTES TO EDITORS
The review is being undertaken by a team of Treasury officials
under Mr Cruickshank's direction, and calls on the advice of outside
experts. 2. On 13 April 1999 Mr Cruickshank announced that electronic commerce
and money transmission issues would be added to the scope of the
review, in response to consultation (HMT press release 62/99).
3. The Banking Review Team's interim report, 'Competition and
Regulation in Financial Services: Striking the Right Balance',
was published on 22 July 1999. The interim report, the initial consultation
document, responses to it, and banking review press releases are
available on the Bank Review website at www.bankreview.org.uk.
4. Mr Cruickshank was Managing Director of the Virgin Group Plc (1984-89); Chief Executive of the NHS in Scotland (1989-93); and Director-General of OFTEL (1993-98). He is Chairman of the Government's Action 2000 Millennium Bug campaign and Chairman of Scottish Media Group plc. 5. The Financial Services and Markets Bill (FSMB), was introduced
to Parliament on 17 June 1999 (HMT news releases 98/99
and 99/99). It establishes a single regulatory
system in place of the existing separate arrangements for different
sectors. 6. Media enquiries should be addressed to Charles Keseru or Deborah
Done in the Treasury Press office on 0171 270 5188
and 0171 270 5222. HM TREASURY PRESS OFFICE Press enquiries to: 0171 270 5238 Non-media enquiries to: 0171 270 4558 If you have access to the Internet, you can find this news
release and other Treasury information at www.hm-treasury.gov.uk
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Inland Revenue 1 9 November 1999 CAPITAL GAINS TAX: INCENTIVES FOR ENTREPRENEURIAL INVESTMENT
The Chancellor today announced plans to make capital gains tax (CGT)
taper relief for business assets more generous. This relief creates
incentives for investment in assets which generate sustained growth,
with particular support for entrepreneurial investment. In particular,
the Government will:
DETAILS Subject to detailed consultation, the Government intends to introduce
a 5 year taper for business assets which reduces the equivalent CGT
rate for a higher rate taxpayer from 40 per cent for assets held for
less than 1 year, reducing in 6 per cent steps to 10 per cent for
assets held for more than 5 years. A business asset includes substantial shareholdings in a trading
company. The Government will assess the case for substantial reductions
in the thresholds of 5 per cent and 25 per cent at which these shareholdings
qualify. NOTES FOR EDITORS
Richard J. Thomas Capital and Savings Division New Wing Somerset House Strand London WC2R 1LB. Media enquiries to: Jane Ashton Clare Merrills on 0171 438 6692/6706/7327 (Out of hours: 0860 359544) Non-media enquiries to: 0171 438 4260/6425 (Office hours only) Inland Revenue press releases are on the Internet: www.inlandrevenue.gov.uk
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Inland Revenue 2 9 November 1999 CAPITAL GAINS TAX - COUNTERING AVOIDANCE
As part of the Government's drive to counter tax avoidance, the Chancellor
has today announced a change to capital gains tax gifts relief. Legislation will be introduced in next year's Finance Bill to end
business assets gifts relief on the transfer of shares or securities
to companies. Any such transfers made on or after today will no longer
qualify for relief. DETAILS 1. Where gifts relief is allowed :
3. The main purpose of the relief is to prevent erosion of business
capital when a business is handed down within the family and to prevent
the break-up of small businesses. However, the relief is also available
where assets used in an unincorporated trade are transferred to a
company. 4. There is considerable evidence that this relief is being widely
abused where shares or securities, rather than assets used in a trade,
are involved. The relief is being exploited in schemes where the primary
purpose is to avoid a CGT liability on an anticipated sale, rather
than simply defer the liability on a bona fide gift. Some of the schemes
involve the direct transfer of shares or securities to companies so
that a tax exemption or other tax shelter can be taken advantage of.
Others employ the relief as part of a complex series of transactions
where the sole purpose is to shift gains outside United Kingdom tax
jurisdiction. 5. The tax being lost through these arrangements is currently estimated
as in excess of £50 million per annum. 6. Legislation to be introduced in next year's Finance Bill will
end the relief for transfers of shares or securities to a company
made on or after today. Media enquiries to: Janis Eate 0171 438 6692/6706/7327 (Our of hours: 0860 359544) Non-media enquiries to: 0171 438 6420/6425 (office hours only) Inland Revenue press releases are on the Internet: www.inlandrevenue.gov.uk
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Inland Revenue 3 9 November 1999 ENCOURAGING SAVINGS TO BENEFIT MILLIONS
Over 2.5 million individuals will pay up to £150 less tax as
the Chancellor announced today that the 10p starting rate of income
tax will be extended to savings income from April 1999. The change
will particularly benefit pensioners where up to 1.5 million will
gain an average of £65. The new rate will also apply for capital gains tax from April 2000.
DETAILS The 10p rate of income tax was announced by the Chancellor in his
last Budget. It came into effect from 6 April 1999. It applies to
the first £1,500 of an individual's non-savings income, and has
improved work incentives by allowing individuals to keep more of what
they earn. To give further help and encouragement to savers, the 10p rate will
be extended to savings income such as bank and building society interest,
with effect from 6 April 1999. As a result, whether an individual
has income from earnings, a pension or savings they will enjoy the
benefit of the 10p rate on the first £1,500 of their income.
Savings income above the limit for the starting rate but within the
basic rate band will continue to be taxed at 20 per cent. Corresponding changes will be made to the capital gains tax from
April 2000. (The existing structure for taxing dividends
at 10 per cent and 32.5 per cent will remain unchanged.) NOTES FOR EDITORS 1. The 10p rate of income tax was announced by the Chancellor
in his last Budget. The relevant legislation is in sections 22 and
23 of Finance Act 1999. Finance Bill 2000 will include provisions
which apply the 10p rate to individuals' savings income from April
1999 and to capital gains from April 2000. The rate at which tax is
deducted from bank and building society interest will remain at 20
per cent. 2. For individuals within Self Assessment, or those who make annual claims to the Inland Revenue for a repayment of tax, their savings income will be taxed at the 10p rate if appropriate when calculating their next tax bill or a final repayment. Some individuals who have had untaxed interest taken into account in their PAYE code may need their code adjusted. 3. Taxpayers who think they may benefit from the 10p rate on their
savings income, but are not within Self Assessment or already making
annual claims, may now be able to make an annual claim for repayment
of tax. An Inland Revenue helpline is available to advise individuals
about what they need to do. The helpline number is 0845 307
5555. (Calls are charged at local rates.) 4. Individuals who have already received a final repayment of tax
for the current tax year (starting 6 April 1999) who think they may
benefit from the 10p rate on their savings income should also ring
the same Helpline number. 5. For individuals, capital gains tax is calculated by treating the
gains, in excess of the annual exempt amount, as though they were
the top slice of income and taxing them at the appropriate marginal
rate, which will include the 10p rate from April 2000. Media enquiries to: Paul Franklin 0171 438 6692/6706/7327 (Out of hours: 0860 359 544) Non-media enquiries to: 0171 438 6420/6425 (Office hours only) Inland Revenue information is on the Internet: www.inlandrevenue.gov.uk
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Inland Revenue 4 9 November 1999 RISE IN INCOME TAX PERSONAL ALLOWANCE, WORKING FAMILIES' TAX CREDIT AND DISABLED PERSON'S TAX CREDIT The Chancellor today announced that the income tax personal allowance
would be increased in line with indexation to £4,385 from April
2000. This means that all taxpayers will be able to have income of
at least £84 a week in the tax year 2000-01 before they have
to pay any income tax. Other changes to income tax rates and allowances
will be announced in the Budget in the usual way. The Government has
already announced a cut in the basic rate of tax by a penny, to 22p,
from next April, to be legislated for in the 2000 Finance Bill. As part of a package of National Insurance reform designed to improve
work incentives for employees and reduce burdens on employers, the
starting point for employers' National Insurance contributions (NICs)
has been aligned with the income tax personal allowance since April
this year. This means that the starting point for employers' NICs
in 2000-01 will also be £84 a week. A statement covering NICs
changes will be made by the Paymaster General shortly. The Chancellor also announced that Working Families' Tax Credit (WFTC)
and Disabled Person's Tax Credit (DPTC) rates and thresholds would
be increased by 1.6 per cent from April 2000. And, in line with a
commitment made in his last Budget, the child credit for under-11s
will be increased by an extra £1.10 from the same date. These
increases will boost the incomes of 1.4 million low-income working
families and disabled people. DETAILS The income tax personal allowance will rise by £50 in 2000-01, in line with the increase in the Retail Prices Index for the year ending in September.
Changes to income tax rates and allowances are normally announced in the Budget each year. However, the alignment of the income tax personal allowance and the starting point for employers' NICs means that, in practice, the level of both now needs to be announced in the Autumn, to give employers time to implement the threshold. WFTC and DPTC rates and thresholds will rise from April 2000 in line with the increase in the Rossi index in the year to September. (The Rossi index is broadly the Retail Prices Index, less certain housing costs.) In addition, from April 2000, the under-11 child credit will rise by £1.10 over and above indexation, to align it with the 11 - 16 child credit. This will provide yet further help to families with young children. From April 2000 the WFTC and DPTC rates will be as attached. These rates will provide a minimum income guarantee of £202 a week for a family with one child in receipt of WFTC, £157 for a single person on DPTC and £234 for a family with one child on DPTC. (These figures are based on one earner in full-time work, receiving the national minimum wage of £3.60 an hour, and include the effects of indexing the personal allowance). NOTES FOR EDITORS 1. The announcement today confirms that the basic personal allowance
will be increased next year in line with statutory indexation. Income
tax allowances are uprated each year in line with statutory indexation
unless legislation is passed to override its effects. Statutory indexation
is based on changes to the Retail Prices Index in the year to September,
so this early announcement does not affect the amount of the increase.
A statutory instrument has been made today in the usual way, confirming
that the effect of indexation on the basic personal allowance is to
increase it to £4,385 for 2000-01. 2. WFTC and DPTC were introduced on 5 October 1999 and are administered
by the Inland Revenue. Ministers decide whether to change the rates
and thresholds each year. From April 2000, they will be increased
in line with the Rossi index. Media enquiries to: Paul Franklin 0171 438 6692/6706/7327 (Out of hours: 0860 359 544) Non-media enquiries to: 0171 438 6420/6425 (Office hours only) Inland Revenue press releases can be found on the Internet: www.inlandrevenue.gov.uk
Note: The 11-16 and 16-18 child credits are paid from the September
following the 11th birthday and 16th birthday
respectively.
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