News Roundup Wednesday 25th September 2019
News Roundup Wednesday 25th September 2019
Johnson looks to tax reforms to boost post-Brexit investment
Boris Johnson is expected to outline how the UK will “roll out the red carpet” for US businesses after Brexit by offering “the most competitive tax rates and the best skilled workforce in the hemisphere”. Speaking in New York, the PM will say: “As we come out of the EU, we are going up a gear. We are going to take advantage of all the freedoms that Brexit can give, whether that is new tax allowances for investment or speeding up public procurement contracts, or creating free ports and new enterprise zones, or devising better regulation for the sectors in which the UK leads the world.” Mr Johnson on Monday pointed to examples where the UK could diverge from EU regulations in the future, such as financial services or biotechnology.
Financial Times, Page: 3 The Guardian The Times, Page: 14 Daily Mail, Page: 23 The Sun, Page: 6
Thomas Cook management faces probe over collapse
Andrea Leadsom, the business secretary, has asked the Insolvency Service to launch an investigation into the collapse of Thomas Cook, specifically “the conduct of directors immediately prior to and at insolvency, but also whether any action by directors has caused detriment to creditors or to the pension schemes.” Elsewhere, speaking in New York, Boris Johnson has said high pay and bonuses for directors who send companies “down the tubes” must be questioned. Meanwhile, FCA filings show nearly 11% of Thomas Cook’s shares were being shorted by hedge funds ahead of its collapse. The FT points out that some bondholders also held credit-default swaps (CDS) (there were $250m of CDS bets on Thomas Cook’s outstanding debt in mid-August) adding complexity to Thomas Cook’s restructuring talks. The Mail reports that Cliff Weight, director of investors group Sharesoc, said it was “early days&rdquo ; but the body was looking at the role of auditors EY. Mr Weight said: “We are concerned at the disconnect between management rhetoric and reality, and we question the role of auditors in reviewing trading updates.” The Times notes that EY warned the company to “strengthen the process over the identification and approval of separately disclosed items”. As well as one-offs, goodwill is likely to be a focus in any examination of Thomas Cook’s accounting.
Audit issues leave sweetener firm’s investors with sour taste
Sweetener firm PureCircle saw another day of share price falls on Monday, after it surprised the City late last week by postponing its annual results amid the discovery of auditing issues – which could cost it up to $30m (£24.15m). PureCircle auditor PwC identified “a potential issue relating to the classification and valuation of certain inventory items,” sending shares down by almost a third on Friday and a further 10% on Monday to their lowest level in more than seven years.
Sports Direct weighs £3.7m buyout of Goals Soccer Centres
Sports Direct has made a 5p per share offer for the 81% of Goals Soccer Centres it doesn’t already own, valuing the firm at £3.76m. The five-a-side football company put itself up for sale last month following an accounting scandal that has left it owing £12m in unpaid taxes.
Daily Mail, Page: 71 Daily Express, Page: 51 The Guardian, Page: 37
Labour promises a four-day week for same pay
Labour would introduce a 32-hour week for workers without a cut in pay within the next decade, the shadow chancellor has vowed. John McDonnell said the UK had some of the longest working hours in Europe and there had been little progress in cutting average hours since the 1970s. However, the CBI said the policy would push many businesses into loss if there were no productivity gains to compensate. The business group’s director general Carolyn Fairbairn added: “Add these ideas to mass renationalisation, rising business taxes and ongoing Brexit uncertainty, and we risk hanging a ‘closed’ sign on the door of our open economy.” Elsewhere, Mike Cherry, national chairman of the Federation of Small Businesses, said: “Forcing a shorter working week on small firms is not feasible. Increasing productivity starts with a proper plan for investing in infrastructure and skills, while simultaneously reducing the costs of doing business .”
Legal fight hears of corruption claims
Property firm Ventra Investments claims that Grainger, the management firm hired by its bank, Bank of Scotland, a subsidiary of Lloyds Banking Group, mishandled the sale of properties that were subject to insolvency proceedings. Ventra is arguing that it was damaged by loans that it claims it was mis-sold by the bank. Speaking during a pre-trial hearing, Stephen Davies, QC, acting for Ventra’s liquidators, said that there were “surprising discrepancies” in property completion details sent to BDO, Ventra’s insolvency practitioner, compared with official transaction records “either at the Land Registry or elsewhere”, in terms of both price and identity of purchaser. A Grainger spokesman said that it had acted on behalf of insolvency professionals rather than the bank: “They took all final decisions.” A spokesman for BDO, which is not a party to the litigation, said: “We took all decisions we were required to under our duties.”
Carney calls for comprehensive climate disclosure
Mark Carney told a United Nations climate summit on Monday that the financial sector must transform its management of climate risk, declaring that global warming would prompt reassessments of the value of every single financial asset. The Bank of England Governor said that mandatory disclosures of climate risk would be essential in supporting efforts to transition economies to net-zero carbon emissions by 2050.
UK small companies hit by Brexit fatigue and confusion
The FT reports on how small businesses remain uncertain over whether the UK will leave the EU on October 31st; whether further delay is worse than no-deal, and how to prepare.
Confidence in household finances hits six-year low
UK households are the least confident they have been about their financial outlook since November 2013, according to IHS Markit’s latest UK Household Finance Index, which suggests that job security perceptions are also fading. Overall, perceptions of financial wellbeing fell to a four-month low of 43.1 in September – down from 43.6 in August.
The professions will not escape rise of the robots
The Telegraph talks to Daniel Susskind about the threat to the professions from technology and how future generations will have to either design robots or learn to do things they can’t. One difficult task of the future will be figuring out how those people who don’t have a job can earn money, says Susskind. “Technological progress makes us more prosperous than ever before, but I guess it does create imbalances that we need to think about how we can resolve.”
The Daily Telegraph, Business, Page: 4
Contact Paul Southward.