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Business Secretary Kwasi Kwarteng has written to insolvency and restructuring practitioners promising HMRC would take “a cautious approach to enforcement of debt owed to government that will have accrued” during the pandemic. The move comes after business groups including the Institute of Directors and restructuring body R3 warned ministers last month that there could be an influx of insolvencies this summer if the reduced emergency Covid support measures were coupled with an aggressive approach from HMRC. Kwarteng said using insolvency to enforce payment will remain a “last resort.” He added the “path back to full trading will be difficult for many companies, particularly those with accrued debt and low cash reserves.”

 

City A.M.

Financial Times

68% of FTSE finance professionals call for UK’s proposed audit reforms to be delayed

Audit reform, long in the works by The UK Department for Business, Energy and Industrial Strategy (BEIS), is fast becoming a tangible reality, with the Department’s March announcement of a consultation into reforms to modernise the country’s audit and corporate governance regime. In this research document commissioned by Galvanize, Censuswide surveyed 250 CFOs, finance directors, heads of risk, and audit managers, within UK-listed companies. Download the report and infographic to see what they had to say about audit reform in the UK.
Read the report now >>

 

The Competition and Markets Authority (CMA) has issued a formal warning to Monzo, NatWest, Virgin Money and Bank of Ireland for failing to send bank statements to 150,000 former customers. Competition rules require lenders to send customers a history of their current account banking activity within 40 days of closing their accounts. Adam Land, CMA senior director of remedies business and financial analysis, said: “Nearly 150,000 people were affected by these banks’ breaches, with the majority being former Monzo customers. This may have made things harder for people trying to borrow money or apply for a mortgage.”

 

Daily Mail

The Financial Conduct Authority (FCA) has outlined plans to extend climate reporting requirements to most UK listed companies as well as money managers, life insurers and pension providers in an attempt to appease investor demand for disclosure. Sheldon Mills, FCA executive director of consumer and competition, said: “The new rules will help markets, investors and ultimately consumers better understand the impact of climate change and make more informed decisions.”

 

City A.M.

Financial Times

The Telegraph says EU financial services commissioner Mairead McGuinness has admitted that Brussels is attempting to hold back the City of London while Europe’s infrastructure is improved. Ms McGuinness told the City Week conference that Brexit had “laid bare” vulnerabilities in Europe’s financial system by exposing its dependence on the City and that the EU needed to “reinforce its capacity” so the concentration of critical infrastructures located outside of the bloc could be limited. She added: “Our goal is not to move or steal business away from London but rather to build our own infrastructures, and that’s an important nuance.” McGuinness went on to say that future decisions on equivalence will be made gradually and political relations would also determine the EU’s financial services policy.

 

The Daily Telegraph

MPs were left frustrated after the CFO of Liberty Steel UK, Anton Krull, who has only been in the job two months, was unable to answer detailed questions about the viability of the company’s operations.

 

Financial Times

A London-based hedge fund that suffered losses betting against US retailer GameStop during the first meme stock rally in January is shutting its doors. White Square Capital, which at its peak managed about $440m in assets, had bet against GameStop, say people familiar with its positioning, and suffered double-digit per cent losses in January. The move marks one of the first closures of a hedge fund hit by the huge surges in so-called meme stocks. 

 

Financial Times

Reuters

Judges have backed Google-owned YouTube in Europe’s top court. They said online platforms were not liable for uploaded videos that broke copyright. Platforms were only liable if they failed to remove or block access to the content once they were notified of a copyright breach, the European Court of Justice (ECJ) said. As things stand, online platforms “do not, in principle, themselves make a communication to the public of copyright-protected content illegally posted online by users of those platforms,” the ECJ observed. “YouTube is a leader in copyright and supports rights holders being paid their fair share,” a YouTube spokesperson said. “That’s why we’ve invested in state of the art copyright tools which have created an entirely new revenue stream for the industry.” The Telegraph notes that Google faces further investigations in the UK and US. The Competition and Markets Authority is examining its app store practices, while US regulators are investigating whether Google should be broken up due to its huge power over digital advertising and online search.

 

CNBC

Reuters

The Daily Telegraph

German police have raided the home and office of former Wirecard chair Wulf Matthias, suspecting he might have aided embezzlement by Wirecard’s management. Meanwhile, German lawmakers examining the collapse of the payment processing company have accused the country's finance minister Olaf Scholz of oversight failings and heavily criticised auditors EY for repeatedly approving Wirecard's annual accounts.

 

Financial Times

The Independent

The government has announced that former OECD chief economist, Catherine Mann, has been appointed as an external member of the Bank of England’s Monetary Policy Committee. Ms Mann, a former White House adviser to George Bush Snr, will replace Gertjan Vlieghe in September. She quit her role as global chief economist at investment bank Citi last month and her most recent research on global post-Covid prospects signal a dovish policy outlook. George Buckley, chief economist at Nomura, said: “The departure of both Vlieghe and most obviously Andy Haldane definitely leaves the MPC with a more dovish bias.” Meanwhile, analysts think the BoE is unlikely to change its view on the risk of inflation this week but would need to demonstrate concern so as to not appear complacent about the threat.

 

Financial Times

Financial Times

The Daily Telegraph

The government has confirmed that the UK's new infrastructure bank will be a permanent fixture to help tackle climate change and to support local and regional economic growth. Britain's first national infrastructure bank, which aims to unlock over £40bn of investment, was opened by the Chancellor in Leeds last week.

 

The Daily Telegraph

The Independent

Jesse Norman, the Financial Secretary to the Treasury, writes in City A.M. on the importance of the G7 global tax agreement, outlining how its announcement comes after years of leadership on the issue by the UK. He says it was a “vital breakthrough in the fair and effective taxation of multinationals” and he berates Labour politicians in particular for playing down the achievement. Norman concludes: “While there are still plenty of details to be fleshed out, there has been a wide-range of support for the agreements made, ranging from the CBI to Silicon Valley. But we should not underestimate the historical weight of what was agreed earlier this month, and what we will continue to take forward at the G20 in July.”

 

City A.M.

MPs have demanded a meeting with Amazon’s UK boss John Boumphrey after an ITV News report showed the company destroying thousands of unsold products, including laptops, TVs, headphones and books and sending them to waste facilities. Three Labour MPs, Julie Elliott, Siobhain McDonagh and Darren Jones said in a letter that the “wanton” destruction of laptops and tablets was incredibly damaging for the environment but also a “missed opportunity to help millions of people in the UK who do not have a device to connect to the internet.” Boris Johnson has promised the government will look into the company’s conduct and on Tuesday the Department for the Environment, Food and Rural Affairs (Defra) issued a statement, saying it was imperative to end a “throwaway culture and recycle more of our waste” in the UK.

 

The Guardian

Morgan Stanley's staff and clients will be barred from entering the lender’s New York offices if they are not fully vaccinated against Covid. Unvaccinated employees will need to work remotely, according to a person familiar with the matter. The policy comes into effect next month, in a move designed to allow the lifting of other Covid-related rules. Last week, the investment bank's chief executive called on workers to return to the office. An internal memo said: "Starting July 12 all employees, contingent workforce, clients and visitors will be required to attest to being fully vaccinated to access Morgan Stanley buildings in New York City and Westchester." The BBC understands the move will allow the company to remove restrictions in offices on face coverings and social distancing. The policy currently operates on an honour system, but the bank may later decide to require proof of vaccination status. Morgan Stanley had already implemented so-called "vaccine-only" workspaces in some departments, including institutional securities and wealth management.

 

BBC News

Financial Times

An anonymous messaging app called Blind is encouraging a change in management attitudes towards staff at some of South Korea's biggest organisations. The app is increasingly popular among workers who want to air grievances – and Reuters notes several instances in recent weeks of companies changing course on salary decisions and other issues after criticism on Blind from employees. About 70% of Blind users come from organisations in South Korea, including American tech companies headquartered there, although the firm is based in the US. "When starting our service, we thought [it] would have more value when our HQ is in the United States – where the concept of freedom of speech is well established and valued," Blind co-founder Kyum Kim said of the deliberate decision to be based outside Korea.

 

Reuters

Andrew Carter, chief executive of Centre for Cities, says in a piece for City A.M. that as older workers with more established careers embrace hybrid working models post-pandemic, younger workers face having their professional development stunted. During the course of the Covid lockdowns they “have been robbed of the chance to mix with colleagues and forge the friendships and networks that will stand them in good stead for the rest of their careers,” asserts Carter. But the big picture not only sees the future career of young workers harmed, but the prospects for companies too as they “will end up with a less impressive cohort of workers as a result.”

 

City A.M.

The FT reports on how higher-income households are most at risk of being victims of fraud, mostly because technology enables sophisticated scams to be conducted from half a world away with little risk of being caught.

 

Financial Times

A report from Credit Suisse reveals that the pandemic has been a boon for the rich, with aggregate global household wealth rising by about $28.7trn to $418.3trn after cheap money inflated asset prices. While many poor people became poorer, the number of millionaires increased by 5.2m to 56.1m globally. In 2020 more than 1% of adults worldwide were millionaires for the first time. Anthony Shorrocks, economist and author of the Global Wealth Report, explained that if asset price increases, such as house price rises, were removed from the analysis, "then global household wealth may well have fallen," adding "In the lower wealth bands where financial assets are less prevalent, wealth has tended to stand still, or, in many cases, regressed."

 

BBC News

Financial Times

The Guardian