NEWS – MONDAY 29TH JUNE 2020

NEWS ROUNDUP

TAX NEWS – MONDAY 29TH JUNE 2020

Support grows for tax rises over austerity

A YouGov poll shows a reversal in public support for cutting back services to repair public finances, with 47% of respondents backing tax rises as a means to reduce the gap between government spending and what it raises in tax, up from 30% in December 2009. The poll saw 63% of people say they would support increased tax to fund the NHS, up from 48% in a 2014 poll. Support for tackling the deficit mainly through spending cuts has fallen from 52% to 27%. This comes with Institute for Fiscal Studies analysis suggesting that borrowing could this year exceed £300bn.

The Times, Page: 10

VAT cut call

Ruth Sunderland in the Mail suggests Chancellor Rishi Sunak should heed the advice of predecessors Sajid Javid and Alistair Darling and cut VAT, saying it would be “a bold move and send a powerful signal from the Government that it wants people to shop for Britain”. She adds that VAT at 20% is too high and a “regressive tax, in that it hits the less well-off hardest”.

Daily Mail, Page: 64

REGULATION NEWS – MONDAY 29TH JUNE 2020

City chiefs call for red tape cuts

City bosses have called on Chancellor Rishi Sunak to lower capital requirements, cut red tape and ease financial reporting requirements after the Brexit transition in an effort to boost to economy post-coronavirus. With the Treasury conducting a review designed to streamline and tailor financial services regulations once the Brexit transition expires in December, City minister John Glen has signalled changes to regulations but insists any new rules would maintain or enhance the strict standards that had helped the UK become a global financial hub. John Liver at EY said changes “represent an assertion of UK sovereignty… but do not presage a widespread abandonment of European standards, many of which the UK has played a major role in designing.” Andrew Gray at PwC says firms will want some rule changes but would only aim to make them in a way that protected equivalence.

The Daily Telegraph

City executives lead push to improve corporate governance in wake of virus

The Institute of Directors has asked a group of City of London executives to lead an independent body that will seek to ensure corporate governance is improved across British boardrooms.

Financial Times, Page: 11

EMPLOYMENT NEWS – MONDAY 29TH JUNE 2020

Think-tank calls for job protection scheme

T he Resolution Foundation says a broad job creation package is needed to prevent the worst unemployment crisis in Britain for a generation, urging ministers to subsidise wages of workers in the sectors hardest hit by the coronavirus crisis until at least the end of next year. The think-tank says the coronavirus job retention scheme should be turned into a job protection scheme that would be kept in place throughout 2021. Nye Cominetti, senior economist at the Resolution Foundation, said: “Britain is slowly emerging from the lockdown that brought the economy to a halt and sent employment tumbling. But we are a long way off returning to business as usual, and its jobs crisis is far from over.”

The Guardian, Page: 4

Miliband in unemployment warning

Shadow business secretary Ed Miliband has warned of a jump in unemployment if the Government does not deliver support for jobs in businesses which have been shuttered during lockdown. Mr Miliband says analysis suggests that up to a million people could fall into unemployment, adding to the 2.8m who are currently jobless. He told BBC One’s Andrew Marr Show he fears “Thatcher levels of unemployment” if sectors which cannot fully reopen, such as hospitality, do not receive continued help, saying: “You’ve got to have a bridge between the end of the furlough and a proper job creation programme.”

The Independent

SMEs NEWS – MONDAY 29TH JUNE 2020

Late payment crisis deepens through lockdown

The Federation of Small Businesses (FSB) has called for the Government to bring an end to the late payment crisis which has been worsened by the coronavirus crisis, saying large corporations that have received help from the Government amid the pandemic should be forced to pay their suppliers within a month. A new report from the FSB reveals that 62% of small businesses have been subject to late or frozen payments in the wake of the COVID-19 outbreak, despite only 10% agreeing to altered payment terms with clients. The study also shows that there is no discernible difference in late payment activity between public and private sector supply chains. Late payments due across the country rose 80% to £23.4bn at the end of last year. The FSB says now is the time for the long-awaited review of the Prompt Payment Code, with national chairman Mike Cherry saying: “The Government promised to act a year ago. Time is running out – we need to see delivery.”

The Times, Page: 39 The Scotsman, Page: 34 Press Release

CORPORATE NEWS – MONDAY 29TH JUNE 2020

Azzurri on the menu as bidders line up

Azzurri Group, the casual dining chain behind the Ask Italian and Zizzi chains, has attracted bids from five private equity and investment firms, with Towerbrook Capital Partners and Epiris among those reportedly interested. KPMG is advising Azzurri on its options, with the business hit by the coronavirus shutdown. The Times notes that while rivals including Chiquito and Carluccio’s have fallen into administration since the lockdown, they were struggling before the crisis, whereas Azzurri had been trading positively.

The Times, Page: 36

Firms in green pledge

Some of Britain’s biggest businesses have committed to cut their carbon emissions to net zero by 2040, with Deloitte among almost 50 public and private companies making the pledge ahead of a meeting between ministers and business leaders to discuss how businesses can help protect the environment. Chairmen and chief executives from more than half the FTSE 100 are expected to attend an online meeting where issues will be discussed with Business Secretary Alok Sharma and George Eustice, the Environment Secretary.

The Daily Telegraph, Business, Page: 3

FINANCIAL SERVICES NEWS – MONDAY 29TH JUNE 2020

China overtakes UK to become world’s fifth-largest fund hub

China has become the world’s fifth-largest fund domicile, overtaking the UK. China is the third largest asset management market, with Deloitte consultancy Casey Quirk predicting it will overtake the UK by 2021.

Financial Times, FT Fm, Page: 1

PROPERTY NEWS – MONDAY 29TH JUNE 2020

One in seven borrowers fail to pay on time

Research by the Institute for Fiscal Studies (IFS) shows that one in seven households are falling behind on repaying their mortgages due to the coronavirus pandemic. The study found that 1.4m homeowners, or 14%, had failed to pay their mortgages last month. The IFS said both lower income households and higher earners were struggling to keep up with payments, saying: “Poorer households seem to be falling behind by more on council tax and utility bills but non-payment of mortgages is spread more evenly across the income distribution.”

The Daily Telegraph, Page: 9

INTERNATIONAL NEWS – MONDAY 29TH JUNE 2020

Germany to overhaul accounting regulation

Germany is set to overhaul its accounting industry in the wake of issues which saw the collapse of payments fintech Wirecard, which filed for insolvency after auditor EY found a €1.9bn black hole in its accounts and a special audit by KPMG could not verify that €1bn on its books actually existed. The German government has announced plans to terminate its contract with the country’s accounting watchdog, the Financial Reporting Enforcement Panel, and is set to transfer power to investigate financial reporting to BaFin, the financial regulator. Germany’s deputy finance minister Jorg Kukies says the Wirecard affair shows “self-regulation by the auditors doesn’t work properly”.

The Daily Telegraph, Business, Page: 3 Financial Times, Page: 1 City AM

ECONOMY NEWS – MONDAY 29TH JUNE 2020

Firms call for fairer economy

Business and trade union leaders have called on the Government to deliver a “stronger, fairer and greener” economy in the wake of the COVID-19 crisis. Organisations including the Federation of Small Businesses and leaders including Confederation of British Industry director-general Dame Carolyn Fairbairn and TUC general secretary Frances O’Grady have signed a petition setting out areas they want ministers to prioritise over the coming months and years, including improvements to public services, the creation of sustainable jobs and further investment in renewable energy sources. Dame Carolyn comments: “The last few months have taken a heavy toll on the economy and it’s now more important than ever that the country finds a way through COVID-19 which priorities jobs and training.”

The Times, Page: 34

OTHER NEWS – MONDAY 29TH JUNE 2020

The future arrives early

Bhanu Baweja, chief strategist at UBS, believes the future is “arriving early” thanks to the coronavirus crisis and expects e-commerce, artificial intelligence, health tech, cloud computing and automation to all “take a quantum leap” as a result of COVID-19. John Gathergood, professor of economics at the University of Nottingham, suggests: “Any jobs where you sit in front of a computer for 95% of the day is now a job that can be moved out of the city into the suburbs … Think about accountants, lawyers, health administration, head offices, the finance departments of any firm.”

The Daily Telegraph, Business, Page: 5

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Paul Southward