1.1 On 21 December 1976 I received the following memorandum from Mr A. E. Tinckler, who was then the Actuary of my Company. It read:

1.2. “We have been discussing recently some of the effects on the Life Fund of a significant fall in interest rates, and I think we agree that the time has now come to set up a formal study to analyse the problem and to make recommendations.

1.3. “There is no doubt that interest rates in the United Kingdom are very much higher at the present time than in other comparable countries. There are good reasons for this state of affairs, but it is most unlikely to continue over more than a few years, unless the country is to descend to very low levels indeed in the international league. In spite of many pessimistic assertions to the contrary, there are good grounds for thinking that the present rates will come down very substantially indeed over the next few years.