News Roundup Wednesday 2nd October 2019

NEWS ROUNDUP

TAX NEWS

Trust could save £300m in life insurance payouts

Almost 8,000 life insurance policies with payouts worth £774m fell into the IHT net in 2016-17, HMRC figures show, triggering the 40% duty and an average bill of £37,500. The Daily Telegraph reports that people could have avoided paying £300m of this by simply ticking one box on their insurance policy paperwork. Sean McCann of insurers NFU Mutual said: “The latest numbers show more and more people are being caught out. But by contacting their provider and completing a trust form, families can potentially remove the threat of their loved ones facing a costly and unexpected bill.” The paper notes that a recent report by the independent Office of Tax Simplification, commissioned by the former chancellor Philip Hammond, said all policies should automatically pass into trust.

The Daily Telegraph, Page: 2

PENSIONS NEWS ROUNDUP WEDNESDAY

New rules force pension funds to consider ESG factors

New rules that come into force today require all defined-contribution schemes with more than 100 members to set out how they are addressing environmental, social and governance factors (ESG) when investing members’ cash. Pensions minister Guy Opperman said: “I believe that the changes coming this week will have a bigger effect on tackling climate change than almost any other decision by government.” Royal London policy director Steve Webb said: “If you’re investing billions of pounds of people’s money in companies, you actually want to know if they’re well governed and you want to know what the environmental impact is. This is a small step in a long journey… But it’s pretty clear which way the tide is flowing.”

City AM

Attempt to ease cap on pension fees is rejected

The Government has rejected a call from the British Business Bank to dilute UK workplace pension protections so savers can invest in riskier and more expensive venture capital. The Times’s Patrick Hosking says being able to invest in venture capital and private equity would not be a “panacea” for savers. He assumes a flood of fresh cash would reduce returns and describes as “deluded” the presupposition that there “is a vast supply of entrepreneurs with credible and viable ideas who can’t get funding at all.”

Financial Times The Times, Page: 43

BREXIT NEWS ROUNDUP WEDNESDAY

City warns no-deal not an option

Optimism within the financial services sector has fallen at its fastest pace since the global financial crisis, with 62% of the 83 companies surveyed by the CBI and PwC less optimistic about the business situation compared with three months ago, and only 5% more upbeat. Rain Newton-Smith, the CBI’s chief economist, commented: “The Government cannot ignore the voice of this bellwether of the domestic economy and one of the UK’s most important globally competitive sectors. No ifs, no buts, the government must heed the call to avoid a no-deal Brexit and secure an ambitious deal with our largest trading partner.” Andrew Kail, PWC’s head of financial services, added: “The deep concerns across the financial services industry cannot be downplayed.”

The Times, Page: 42 Daily Express, Page: 49 The Scotsman, Page: 32

Households well-placed to handle Brexit

The saving ratio for UK households rose to 6.8% between April and June and averaged more than 6% over the previous four quarters – two percentage points higher than last estimated. The figures have gone some way to allaying fears British consumers would be forced to slash their spending inf the economy tightened after Brexit. Samuel Tombs at Pantheon Macroeconomics in London said the figures highlighted “the scope to absorb future income shocks without cutting spending.”

Bloomberg

Treasury planning to mitigate no-deal Brexit

Sajid Javid revealed that the Treasury was drawing up plans to pump billions of pounds into the economy to mitigate the effects of a no-deal Brexit. In interviews before his speech at the Conservative Party conference, the Chancellor said that the Government was preparing a “significant economic policy response” to help businesses affected by the disruption.

The Times, Page: 8 Financial Times

EMPLOYMENT NEWS

Chancellor to increase National Living Wage

Sajid Javid has pledged to increase the National Living Wage to £10.50 per hour. Speaking at the Conservative Party conference, the Chancellor also promised to lower the age at which people are eligible to be paid it – from 25 to 21. The change would be phased in by 2024. “It’s clear it’s the Conservatives who are the real party of labour,” Mr Javid told the conference in Manchester. “We are the workers’ party.” However, the FSB said that higher staff costs could mark a breaking point for some companies while the British Chambers of Commerce warned of a risk to productivity and competitiveness.

Financial Times, Page: 3 The Times, Page: 8 The Times, Page: 39 Daily Mail, Page: 10 Daily Express, Page: 4 The Daily Telegraph, Business, Page: 3

CORPORATE NEWS ROUNDUP WEDNESDAY

Jamie Oliver took a £5.2m from business prior to collapse

Jamie Oliver and his wife took £5.2m in dividends from his food and media empire last year – just months before the collapse of Jamie’s Italian resulted in 1,000 job losses. The collapse of Jamie’s Italian left creditors facing losses of up to £83m, according to the most recent administrators report. Accounts for the Jamie Oliver Group which exclude the collapsed UK restaurant business, show pre-tax profits slipped 57.4% to £4.8m in the year to December 2018.

Financial Times The Daily Telegraph Daily Mail City AM

Black hole at Goals could be higher

Bosses at Goals Soccer Centres have admitted that the £12m black hole in their accounts could be far higher than expected. The announcement came as the five-a-side pitch operator was delisted from the stock exchange after the accounting issues – relating to unpaid VAT – could not be resolved before yesterday’s deadline.

The Times, Page: 45 The I, Page: 36 Yorkshire Post, Business, Page: 5 The Sun, Page: 43 The Daily Telegraph, Business, Page: 3 Daily Mail, Page: 70

INDUSTRY NEWS

High street continues to face insolvency challenge

The latest research from insolvency and restructuring trade body R3 has found that the percentage of shops in Yorkshire deemed to be at elevated risk of insolvency in the next 12 months was 42.5% compared with the national average of 40.6%. Nearly 4,400 of the 10,300-plus shops in Yorkshire were deemed to be at higher than normal risk of insolvency. Nationally, more than 59,700 of the 147,200-plus physical retail businesses were considered to be in the enhanced risk category.

Yorkshire Post, Business, Page: 1

ECONOMY NEWS

Economy beats expectations, credit growth slows

The economy beat expectations in the first quarter of the year, according to Office for National Statistics (ONS) figures, with UK GDP up 1.3% in the year to the second quarter of 2019, 0.1 percentage point above economists’ predictions. The April to June period however saw the biggest fall in production output since 2012 as Brexit stockpiling was relaxed – a downwardly-revised fall of 1.8%. Separately, figures from the Bank of England show consumers increased their borrowing at the slowest rate since 2014 in August – down to 5.4% from its peak of 10.9% in November 2016. Britons also borrowed less to buy houses, the BoE noted, with net mortgage borrowing by households weakening to £3.9bn in August.

City AM, Page: 6 The Times, Page: 42

OTHER NEWS

Cash will virtually die out by 2028

A report by UK Finance has suggested that fewer than one in ten purchases will involve cash by the year 2028. The rise of contactless payments means many consumers no longer carry notes and coins and only 4% mainly use cash. The report also found that 6,240 cash machines were removed during 2018, taking the total down to 63,360.

Daily Mail, Page: 4

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