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European Edition
14th September 2021
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MPs call for independent insolvency regulator
MPs on the All-Party Parliamentary Group on Fair Business Banking have voiced concern over the insolvency profession after an inquiry found evidence of alleged widespread misconduct, saying it has received "startling" evidence about the sector. Kevin Hollinrake, co-chairman of the parliamentary group, said that sections of the insolvency industry were "operating in a manner that it is more akin to the Wild West than a developed western economy.” He warned that insolvency practitioners “often prioritise the interests of their bank panel paymasters at the expense of other creditors and shareholders,” describing this as “totally unacceptable” and a “clear breach of their duty of care.” The behaviour “is not being addressed by the membership organisations whose responsibility it is to regulate them," he added. With the industry overseen by recognised professional bodies such as the ICAEW and Insolvency Practitioners Association, MPs are calling for an independent regulator with an ombudsman. Colin Haig, president of R3, the trade body for insolvency professionals, said: "The UK's insolvency and restructuring profession is one of the most regulated and well-regarded in the world.”
Supply chain crisis will leave permanent scar, UPS warns
The supply chain crisis unleashed by the pandemic will inflict lasting damage on the globalisation driven by multinationals, according to a top executive at UPS. Sharp swings in consumer demand, a battered airline industry and disruptions to global shipping have created the severest crisis in years, warned Scott Price, president of UPS International. “A lot of companies are coming to us saying ‘where is the best place to put manufacturing and assembly?’” he said. “There’s an understanding that reliance on stretched supply chains puts you at risk.” He added that the damage wrought on the aviation industry had laid bare the vulnerability companies face in moving large amounts of cargo in the belly of passenger aircraft. Industry estimates suggest it will take until 2025 for air travel to fully recover on long-distance routes.

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Post-Brexit customs checks may be delayed
Boris Johnson is reportedly set to delay the introduction of some post-Brexit checks on EU imports. The move comes amid fears the checks could cause food shortages. While the UK is due to roll out a new band of checks and requirements on imports of animal origin and certain foods from next month, sources believe this could be pushed back by six months. If the introduction of the latest wave of checks is delayed, it would mark the second time they have been pushed back. While the EU has imposed post-Brexit checks on UK imports from January, Britain has opted for a gradual shift to the new arrangements for goods coming from the continent. The Mail reports that business leaders fear added red tape could hit firms already struggling with lorry driver shortages and result in food shortages, and concerns that the issues could also drive up prices for consumers.
Regulator to crack down on fraud involving authorised firms
Financial Conduct Authority (FCA) chief executive Nikhil Rathi has said the watchdog will crack down harder on fraud risks that are outside the perimeter of regulation but involve authorised firms. In the regulator's response to a Treasury Committee report into its handling of the London Capital & Finance scandal, Mr Rathi said the FCA is “taking forward wider changes in our structure, culture and strategic investment programme to ensure that we are able to identify and assertively tackle misconduct in the financial services sector." Mr Rathi also said that the City watchdog will seek to improve its partnerships with government and law enforcement, commenting: “We need law enforcement partners to step in and step up. They have the necessary jurisdiction, and need to be supported with adequate resources if we are to work effectively together.”
Treasury Committee seeks ban on fraudulent online ads
The Treasury Select Committee has urged the Government to address fraudulent advertising for investment products in the upcoming Online Safety Bill. Committee chair Mel Stride said that while the Treasury and Financial Conduct Authority (FCA) are engaging with most of the recommendations MPs made following the collapse of London Capital & Finance, ministers have yet to detail what will be done to stop investment companies issuing fraudulent ads online. While the FCA has backed the call for a ban on the ads, Mr Stride said it is “not yet clear whether the Government will include fraudulent advertisements within the scope of the Online Safety Bill,” adding “To prevent fraud in the future, this is an issue which must be addressed.”
Impersonation fraudsters steal £130m in first half of year
A report from UK Finance shows that in the first six months of 2021, losses from impersonation fraud more than doubled to £129.4m compared to the same period last year. Impersonation fraud sees scammers contact victims while pretending to be from trusted organisations, such as banks and building societies. They often claim the victim has to verify a payment or action a refund, tricking the customer into transferring money or handing over personal details. UK Finance said there were 33,115 impersonation fraud cases in the first six months of this year - more than twice the 14,947 reported over the same period in 2020 when £57.9m was stolen. Philip Robinson, retail fraud prevention director at Lloyds Bank, said: "Fraudsters are sending phishing texts and emails to trick people into entering their banking details, then using them to get in touch and pretend to be their bank … It's easy for scammers to put a fake logo to make you believe it's a genuine organisation, so never ever click on links or fill in your banking and personal details - this is walking into a trap.” Research commissioned by Lloyds earlier this year found that an estimated 3.6m people have been scammed since the start of the pandemic.
Equality watchdog urges renewed gender pay gap focus
The Chartered Management Institute (CMI) and the Equality and Human Rights Commission (EHRC) have offered guidance on tackling the gender pay gap, with a report showing that women have been disproportionately disadvantaged during the pandemic. The analysis shows women are more likely to be in sectors shut down by coronavirus, lost their job or been furloughed. While it is mandatory for organisations with 250 or more employees to publish their gender pay gap every year, enforcement has been suspended due to the pandemic. Mandatory reporting is due to resume next month but there is concern that action around the gender pay gap could be de-prioritised by businesses. The CMI and EHRC have urged firms to anonymise CVs and promote shared parental leave, and have also called on firms to advertise jobs at all levels as open to flexible working.
Office air quality affects workers' cognitive function, study shows
A US study has found that air quality inside an office can have a significant impact on workers' cognitive function, including their response times and ability to focus. "We have a huge body of research on the exposure to outdoor pollution, but we spend 90 percent of our time indoors," observed Jose Guillermo Cedeno Laurent, a research fellow at Harvard University and lead author of the paper published in Environmental Research Letters. He and his colleagues studied 302 office workers in six countries (China, India, Mexico, Thailand, the US and the UK) over a period of a year. Workspaces were fitted with an environmental sensor to monitor real time concentrations of fine particulate matter 2.5 micrometres and smaller, PM2.5, as well as carbon dioxide, temperature, and relative humidity. The study ended in March 2020 when the pandemic precipitated global lockdowns.
We are creeping towards a continuous working week
The FT’s Sarah O’Connor says society’s shared rhythms of daytime work and weekend rest are disintegrating as a “continuous working week” takes hold amid a decline of the traditional 9 to 5.
Legal challenge to care worker vaccine mandate
Two care workers are seeking a judicial review over the Government's mandate that care home staff be vaccinated against COVID-19. The legal challenge, which is supported by crowdfunding and campaigner Simon Dolan, argues that the vaccine mandate is an "unlawful and unnecessary restriction." Mr Dolan says that if successful, the review "will protect the livelihoods and freedoms" of thousands of care workers, and that it "should not be the case that the Government can intervene into the lives of the general public and dictate what medical procedures they do or do not have."
Morgan Stanley to launch crypto research team
Morgan Stanley has announced that currency analyst Sheena Shah, a currency strategist lead for Europe, will head up a new team that researches crypto assets. The unit will be based in London and research cryptocurrencies’ impact on both equities and fixed income worldwide. A leaked memo said: “The launch of dedicated crypto research is in recognition of the growing significance of crypto currencies and other digital assets in global markets.” Morgan Stanley earlier this year became the first major bank to offer its wealth management clients access to bitcoin funds on the back of growing investor demand.
KPMG spin-off hires four bosses
Interpath Advisory, the restructuring practice created when private equity group HIG Capital snapped up KPMG’s restructuring unit in March, has hired four new executives. Neil Sumner, a mergers and acquisitions advisor from PwC, and Russell Worrall, a former PwC partner, will lead its deals advisory and transaction services. Dominic Wreford, a forensic specialist who founded Duff & Phelps’ EMEA disputes practice, and Steve Taylor, who ran EY’s UK valuation practice before running his own venture, St James Valuations, will serve as managing directors.
Government urged not to increase business rates
Ministers have been urged not to increase the tax burden on high street shops, pubs and restaurants, with experts warning that the Government could deliver a £700m rise in business rates in England next April unless it changes the property tax system. While rates levels have been frozen since the start of the pandemic, with a rates holiday for the previous financial year, property tax experts at Altus Group say rates could increase by inflation when the new financial year starts in April. While inflation hit 2% in the 12 months to July, analysts have predicted this will rise further. Analysis shows that a 2% increase in business rates would see the gross business rates bills for 2022/23 rise by £667.81m, with the retail sector accounting for £162.08m of this. Robert Hayton, UK president at Altus Group, described the policy of annually increasing the tax rates as “ridiculous,” saying “focusing on growth is a far better way for councils to increase their local taxation revenues.”

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