News Roundup Wednesday 9th May 2018

NEWS ROUNDUP

TAX NEWS

Lower taxes and scrap regulations to boost productivity, says Taxpayers’ Alliance

The Taxpayers’ Alliance has called for a raft of policy changes to stimulate UK productivity. The campaign group says easing planning restrictions, scrapping stamp duty, reducing taxes for both the lowest and highest-paid workers and devolving more tax powers to the regions would provide “huge gains” and “give the nation a pay rise”. The Alliance also called for CGT to be scrapped to boost entrepreneurship and investment and for it to be made harder for zombie firms to raise finance. The group also said being outside the customs union would boost productivity as it ultimately protects unproductive firms. John O’Connell, chief executive of the Taxpayers’ Alliance, said: “By scrapping burdensome regulations and lowering the tax burden on families and businesses, the UK could significantly increase productivity and give everyone a much-deserved pay rise.”

The Times, Page: 2

EU to beef up legal protection for corporate whistleblowers

The EU is set to boost legal protection for corporate whistleblowers, with plans to shield workers from being penalised for disclosing information in the public interest, including tax avoidance ruses.

Financial Times, Page: 4

INDUSTRY NEWS

Those in power have failed to empower the FRC

Robert Lea says in the Times that Britain’s regulators are in an “unholy mess” but to blame the Financial Reporting Council alone for its failures is to misunderstand that ministers and politicians have failed to properly empower the regulator, whose powers of enforcement are limited. That said, Lea admits that if the FRC’s regulation had been a success, “we wouldn’t still be talking about KPMG” and its role both in the 2008 HBOS scandal and Carillion’s failure. Lea says the fact that multiple agencies are looking at Carillion “is a failure not of the FRC but of government” and the irony of the state’s review into the efficacy of the FRC is that it comes just as it is “finally shaking up the City Code.” However, the FRC’s resistance to creating a regime in which all listed companies are subject to prudential regulation is wrong in Lea’s view, with the collapse of Carillion illustrating the point.

The Times, Page: 35

Fox: Liberal trade policies will bring post-Brexit agility

Liam Fox has pledged to cut “bureaucracy and red tape” in a bid to promote free trade post-Brexit. The International Trade Secretary will make a speech to leading policymakers as part of City Week in London, stating that: “Liberalising the trade in services is at the heart of DIT’s offer to the finance industry. We will work with old allies and new partners across the world, utilising the UK’s economic strength and diplomatic prowess to forge new trading relationships. Ultimately, our task is to remove the unnecessary regulation, bureaucracy and red tape that inhibit the free trade in services.” He will add: “The robust performance of the UK economy continues to defy the gloomier forecasts. Official figures show that inflation fell last month to its lowest level in a year. As recognised by the ONS, wages are now outpacing inflation, meaning more money in people’s pockets.”

Daily Express, Page: 44

IMF to target financial corruption as part of health check

The IMF is to ask member countries to open up their legal and institutional frameworks for assessment by the fund to see whether they have effective mechanisms to prevent bribery and money laundering. Penny Mordaunt, the international development secretary, commented: “The UK is working with international partners to end impunity for those engaged in corruption, to recover assets stolen from developing countries and to empower citizens to stand up to and report corruption.”

The Guardian, Page: 24

SMEs NEWS

SMEs trading internationally more than double official estimates

Research compiled by specialist lender Wyelands Bank indicates that the number of SMEs trading internationally is more than double official estimates, with almost one in three companies exporting or importing compared with Government estimates of slightly more than one in ten. Iain Hunter, chief executive at Wyelands Bank, said: “This reinforces our belief that small and medium-sized companies are vital to UK trade. Smaller, more innovative companies, especially in manufacturing, play an important part in the UK’s capacity to form a part of global supply chains.”

The Times, Page: 41

Late payment commissioner off to slow start

The Federation of Small Businesses questioned the effectiveness of the government’s small business commissioner after officials revealed Paul Uppal is currently only investigating two cases of late payment to small businesses. The commissioner had “entered into dialogue” with companies on 14 occasions, officials said, but the FSB warned that with late payment costing the economy an estimated £2.5bn every year: “Things have to change, and fast.”

The Times, Page: 33

Aim ventures need to take blinkers off on good governance

The FT’s Kate Burgess explains how new rules requiring AIM-listed companies to sign up to the Quoted Companies Alliance or the Financial Reporting Council’s Code will bring a sea change for many.

Financial Times, Page: 19

WEALTH MANAGEMENT NEWS

Wealth firms wary of failing women

New research by wealth management tech firm Orbium has found that the needs of high-net-worth and billionaire women are not being met because wealth firms have been caught out by the speed of their growing numbers. Orbium’s Ian Woodhouse, a former PwC director, says: “Wealth managers were telling us that women have slightly different needs. They’re more likely to go for a goals-based approach when investing, looking at what are they are trying to achieve, whereas men will be more focused on investment performance.”

City AM, Page: 11

REPORTING NEWS

UK set to force companies to reveal ratio of CEO pay to workers

Legislation due in May will require companies to publish the ratio of what they pay their chief executive compared to the average worker’s salary, as part of changes to corporate governance standards in the UK.

Financial Times

PROPERTY NEWS

Hunt saved £100,000 in tax through bulk purchase

Jeremy Hunt’s bulk purchase of seven flats in Southampton saved him nearly £100,000 in stamp duty, the Telegraph reports. The second home or buy-to-let surcharge introduced in 2016 is waived on the purchase of six or more properties in a single transaction.

The Daily Telegraph, Page: 4

ECONOMY NEWS

Consumer confidence rises

New figures from Deloitte show consumer confidence rose in the first quarter of 2018. The group’s latest Consumer Tracker report suggests the economic pressures facing Britons over the past year may be starting to relent, with confidence rising to -6% in the first quarter, up from -7% in the previous quarter. Although still in negative territory, consumer confidence is at the highest level since the end of 2016 and is up sharply from a score of -10% in the second quarter of 2017. Ian Stewart, chief economist at Deloitte, said: “Confidence has crept up against a backdrop of consumer-friendly economic conditions. Unemployment has hit a 43-year low and is stoking wage pressures, while falling inflation will boost consumer spending power and has eased the pressure for rate rises.” He added: “The consumer picture mirrors that of the business landscape, with chief financial officers also reporting an uptick in confidence following the announcement of the Brexit transition deal.”

The Times, Page: 36 The Independent, Page: 7 The Sun, Page: 19 City AM, Page: 10 Daily Express, Page: 44 Yorkshire Post, Page: 17

OTHER NEWS

New tools needed to combat recession

The Institute for Public Policy Research (IPPR) says the Bank of England is “dangerously ill-equipped” to avert the next recession and remains mired in fighting the last downturn. A report from the IPPR says radical new policy tools are required, including a new national investment bank that could drive economically and socially productive lending during downturns. Interest rate adjustments and QE would not be sufficient means to protect the economy in the future, the IPPR said, with the report’s author, Alfie Stirling, stating: “We are heading for a car crash if nothing is changed.”

The Guardian, Page: 24

US corporation takes out Corbyn hedge

A senior derivatives banker has revealed a US client asked for a hedging strategy against a Labour government – thought to be the first move of its kind. The American corporation’s hedge involved a short position on the pound, the banker said, as protection against Labour winning the next election.

The Times, Page: 14

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Paul Southward