Treasury Committee

Session 2002-03 No. 51                             14 November 2003


ANNOUNCEMENT OF TWO NEW INQUIRIES


1)MAIN COMMITTEE: RESTORING CONFIDENCE IN LONG-TERM SAVINGS

2)SUB COMMITTEE: ADMINISTRATIVE COSTS OF TAX COMPLIANCE

TREASURY COMMITTEE

1.RESTORING CONFIDENCE IN LONG-TERM SAVINGS

The Treasury Committee will be conducting an inquiry entitled "Restoring confidence in long-term savings".  A preparatory evidence session on these issues was held with savings/life insurance industry experts on November 11.  This evidence may be viewed shortly at www.parliament.uk/parliamentary_committees/treasury.committee.cfm.  Further public evidence sessions, likely to begin in January 2004, will be announced in due course.

The principal (interrelated) issues to be addressed in the inquiry include:

-The extent and nature of any 'savings gap' [i.e. insufficiency in personal savings for long-term security] in the UK, and the reasons for shortfalls in take-up of savings products.

-Marketing practices and costs in the long-term savings industry, including the provision of effective unbiased financial advice to the less well off; and the lessons to be learned from the launch of PEPs and ISAs, stakeholder pensions and the forthcoming Sandler products.

-Asset allocation policies in the life insurance industry (including the effects on returns to savers; the position of savers in closed funds; the openness of institutions about their asset allocation policies; the effects on the financial health of the life insurance industry).

-Issues relating to specific products (including endowment mortgages;   precipice bonds; with-profits policies and the Penrose Report into Equitable Life ).

-The role of the regulatory bodies in restoring and maintaining consumer confidence in the long-term savings industry, and the extent to which the industry and regulators have implemented lessons to be drawn from the Myners and Sandler reports and from the forthcoming Penrose report.

The Committee would welcome the submission of written evidence (which may include material not written specifically for the Committee).  If written evidence is very brief, it can be sent as a letter, but otherwise it is helpful for the evidence to be in the form of a self-contained memorandum.   If longer than one page, memoranda should have numbered paragraphs (if a memorandum is later printed, page numbers will change, so it is helpful to be able to refer to paragraph numbers). If long, a memorandum should include a one-page summary of the main points, and a table of contents.   It would be most helpful to the Committee to receive submissions in electronic format:  these should be sent either on disc to the Committee Office (address above) or by e-mail to [email protected] (with a covering letter confirming that it is evidence to be submitted to the Treasury Committee).

Submission of any material by 6 January 2004 would be helpful.

TREASURY SUB-COMMITTEE

2. ADMINISTRATIVE COSTS OF TAX COMPLIANCE

The Sub-committee has decided to undertake an inquiry into Administrative costs of tax compliance.  The terms of reference of the inquiry are to examine:

•the extent of the administrative cost of tax compliance placed on business;

•how this has changed over time; and

•what steps have been taken to reduce the administrative cost and whether they are working."

Written evidence on these issues is invited to be submitted to the Sub-committee by 6 January 2004.  Details of oral evidence sessions will be announced in due course.