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Court documents show that the Financial Conduct Authority (FCA) successfully influenced an independent reviewer to dilute criticisms of its handling of a banking scandal linked to compensation for the mis-selling of interest rate swaps. The original finding, which stated that the FCA breached its "regulatory mandate" by excluding thousands of companies from compensation, was removed from John Swift's report after the FCA objected. The review, published in December 2021, focused on the FCA's agreement with high street banks, which resulted in £2.2bn in redress for SMEs. Mr Swift said he could find "no explanation" for the introduction of an eligibility cap that excluded one in three companies from compensation. He publicly criticised the FCA’s predecessor, the Financial Services Authority, for giving a "free pass" to banking misconduct by "wrongly" excluding a swathe of businesses from redress. A judicial review into the matter is due to go to trial next year. It comes after an application by the All-Party Parliamentary Group on Fair Business Banking.

 

The Times

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The European Union is considering expanding its cybersecurity labelling rules to include not only tech giants like Amazon, Google, and Microsoft, but also banks and airlines. The proposed EU certification scheme (EUCS) aims to ensure the cybersecurity of cloud services and determine how governments and companies in the bloc select a vendor. The latest draft retains provisions such as requiring U.S. tech giants to form joint ventures with EU-based companies to qualify for the EU cybersecurity label. It also mandates that cloud services must be operated and maintained from the EU, with customer data stored and processed within the EU. The European Commission will adopt a final scheme after EU countries review the draft. The broadening of the scope would impact various industries, including banks, airlines, utility companies, and heavily regulated sectors. The European Banking Federation and other financial associations have criticized the sovereignty requirements.

 

Reuters

One of Britain's largest conveyancing firms, O'Neill Patient Solicitors, has been hit by a cyberattack, causing a systems crash and leaving homebuyers unable to complete their moves. The firm completes about one in every 13 property transactions in Britain and the crash has left many buyers and sellers scrambling to make alternative arrangements. O'Neill Patient said that its network infrastructure provider, CTS, had suffered a shutdown due to a cyber-incident. The company is actively working to resolve the issue, but there is no timeline for restoration.

 

The Times

The Times

Emmeline Taylor, a professor of criminology at City, University of London, says she agrees with comments by Marks & Spencer chairman Archie Norman that the middle-classes were partly to blame for the rise in shoplifting. Norman said high earners were walking out of shops without paying if items were not scanned properly by self-checkouts. Taylor said: "He is definitely right. The number of middle-class shoplifters is growing and has been since the introduction of self-service checkouts. They would not steal using any other technique - they're not interested in putting chocolate down their pants or a piece of steak in their coat." Taylor said that stealing from self-checkouts was a slippery slope and described it as "a gateway crime." She said: "At some point the dial shifts and middle-class shoppers go from being opportunistic shoplifters to thinking, 'that felt quite good'. The next stage is they start becoming alert to the opportunities and then start seeking them out." She said so-called “swipers” (seemingly well-intentioned patrons engaging in regular shoplifting) were not afraid to play on the fact that they were middle-class if they got caught. "They will say, 'Oh gosh I'm sorry', and they've got all these excuses just ready to go."

 

The Times

The Times

Peers warn that the Bank of England's internal culture, governance and appointments processes need significant reform. Noting that the Bank’s powers have "expanded substantially" since it was made independent 25 years ago, the Lords' Economic Affairs Committee has called for an overhaul in the way in which the Bank is held to account. The committee, chaired by Lord Bridges of Headley, says public confidence in the Bank “has fallen dramatically as inflation has remained well above the Bank's target over the last two years." The Peers noted that an inquiry to assess how the operational independence of the Bank was working revealed concerns regarding its “expanding remit" and that a "democratic deficit" has emerged. Among recommendations, the committee suggests that parliament could conduct a review into the Bank's remit, operations and performance every five years. A Bank of England spokesperson said the recommendations will be given “careful consideration.”

 

Financial Times

The Times

HSBC customers faced disruption on Black Friday as the bank experienced an online banking outage. The bank's digital services were affected due to an issue with its internal systems.

 

Sky News

The UK will have paid nearly £24bn in post-Brexit payments to Brussels by April next year, according to the Office for Budget Responsibility (OBR). The OBR estimates that £8.3bn was sent to Brussels in 2021/22, with a further £8.8bn in 22/23 and £6.5bn in 2023/24. Payments will then fall to around £1bn a year on average for three years. Payments will continue until around 2064 for items like pensions. By then, the total settlement could exceed £40bn.

 

Daily Mail

Huw Pill, the Bank of England’s chief economist, has warned that while growth is slowing, it is not slowing inflation as fast as the central bank would have hoped. He said that while there is slower growth in activity and employment, because it appears to be “more supply-driven rather than demand-driven, the weakening of activity is not as associated with easing of inflationary pressures.” Looking at data on pay growth and services inflation, Pill said he saw “more evidence of the sort of stubborn, high level rates of inflation or growth that are stronger than we would really see as compatible with price stability, 2% inflation, over the medium term.”

 

City AM

HS2 will not reach central London unless the government finds the billions of pounds needed to build the tunnel linking the rail link to Euston, according to Sir John Armitt, the Government's infrastructure chief adviser. Prime Minister Rishi Sunak had previously stated that the link from HS2's terminus at Old Oak station to Euston station would be financed by private developers. However, Sir John stated that developers would not fund the tunnel needed to connect to Euston, and the government would need to be ready to fund the core civil engineering for the final miles of the project. If HS2 does not reach Euston, it would require changes to Old Oak Common and put pressure on the Elizabeth Line Tube.

 

Financial Times

The i

British investment managers have been given the go-ahead to develop tokenised funds, allowing assets to be split into smaller tokens backed by blockchain technology, according to the Investment Association. Tokenisation of funds will enable cheaper and more transparent trading of assets, as well as providing investors with access to a wider range of assets. The Financial Conduct Authority has authorised funds to take the initial steps towards offering tokenised funds, as long as the investments are in mainstream assets and valuation and settlement arrangements remain unchanged. The move has the potential to revolutionise the industry by increasing efficiency, liquidity, risk management, and the creation of bespoke portfolios. Michelle Scrimgeour, CEO of Legal & General Investment Management, said that fund tokenisation has great potential to transform the industry. A working group, chaired by Scrimgeour, is collaborating with the FCA and the UK finance ministry to explore opportunities for tokenised funds. Other members of the group include BlackRock, M&G, and Schroders. Tokenised funds have already been offered by investment managers and exchanges in the US, Europe, and Asia.

 

Reuters

Credit insurer Allianz Trade says global climate investment needs to rise to £2.9trn by 2026 and £3.5trn by 2046, warning that the next 10 years are “the decisive decade.” Allianz analysts argue that net-zero emissions is “no longer even a viable goal,” with the “window of opportunity” to hit the 1.5C target via mitigation having “already closed.” Chief economist Ludovic Subran said: “The global economy has made alarmingly slow progress towards achieving the promises of the Paris agreement,” noting that the global economy would need to cut carbon emissions by almost 13% a year from 2025 to 2033.

 

City AM

Hedge funds have ramped up bets against Metro Bank ahead of a shareholder vote on a £925m rescue plan. The plan would hand control of the lender to billionaire Jaime Gilinski, who is pumping £102m into Metro and raising his stake to 52.9%. While bondholders have already given their backing to the rescue deal, Metro must still secure majority support from its equity investors. The lender has warned it may be deemed unviable by the Bank of England and put into a process for managing failed banks if the funding package is rejected. Analysis shows that 6.4% of Metro's shares are on loan to hedge funds led by Caius and Kite Lake Capital. Financial Conduct Authority data shows that the bank is the second most shorted stock on the London market.

 

City AM

Daily Mail

A law firm litigating against Neil Woodford’s collapsed investment fund has advised investors to reject the “bad deal” tabled by the Financial Conduct Authority (FCA) and instead pursue their own compensation. Investors in the fund, which collapsed in 2019 amid a flood of withdrawals, have been chasing compensation from the fund’s administrator, Link Fund Solutions. While the FCA has backed a £235m proposed payout, law firm Harcus Parker says investors should reject the proposal as it is less generous than has been described. Harcus Parker believes that the vast majority of private investors would be better off claiming through the Financial Services Compensation Scheme, under which they could earn up to four times the amount proposed by the FCA.

 

City AM

Emily Shepperd, chief operating officer at the Financial Conduct Authority (FCA), says firms should consider how their culture can help to “drive better outcomes,” saying flexible proposals on diversity and inclusion will help businesses drive beneficial changes. Quizzed on how to deliver a healthy culture, Ms Shepperd pointed to diversity and inclusion as a starting point. Noting that the FCA is proposing guidance to “make clear” that misconduct such as bullying and sexual harassment pose a risk to healthy firm cultures, she said: “A healthy culture on its own may not equal profit, but a poor culture can certainly lead to calamity.”

 

FT Adviser

Disgruntled employees of Recharge UK, the buyer of the Britishvolt gigafactory battery project, are planning a petition to the Pensions Ombudsman in a bid to recoup missing pensions payments. Staff are awaiting the outcome of a statutory demand for unpaid wages, which must be met this month. If it is not, it will trigger a winding-up petition and a likely appeal to the ombudsman for redress. Recharge acquired Britishvolt in February but failed to pay administrators at EY the full £8.6m it had agreed.

 

The Sunday Times

The Sunday Times

Entain, the owner of Coral and Ladbrokes, will pay £585m in penalties after a probe into alleged bribery at a former subsidiary. Under the agreement with HMRC, the business will also give £20m to charity and cover HMRC’s costs with an additional payment of £10m. Entain set aside £585m in August to cover the potential penalties. The HMRC probe centred on activities at a Turkish subsidiary which Entain sold in 2017. Entain chairman Barry Gibson said: “This legacy matter concerns a business which was sold by a former management team six years ago.” He added that the business “has changed immeasurably since these events took place.”

 

Sky News

City AM

Daily Mail

The Guardian

Barclays plans to cut as many as 2,000 jobs as part of a £1bn cost-cutting drive. The redundancies at the bank are set to focus on back-office roles in its compliance, human resources and legal departments. Chief executive CS Venkatakrishnan recently said the bank is looking for “efficiencies” as it seeks to reduce “structural costs.” When asked about potential job losses, he said: “We always modulate the size of our workforce everywhere in the world in which we are and that's what we will continue to do.”

 

Daily Mail

More than 2,500 jobs are at risk at Lloyds Banking Group, with Britain’s largest high street lender reportedly considering cutting a series of middle-management roles, including analyst and product management posts. Sources says that while 2,500 roles are being reviewed, the bank’s management hope the number of total job losses will end up being lower. A source familiar with the consultation said the bank expected to create a net 120 UK jobs at the end of the process and is changing the focus of certain roles.

 

The Guardian

Council employees with second jobs are being investigated by a government fraud squad after staff were caught "moonlighting" while working from home. The National Fraud Initiative (NFI) is assessing the scale of the problem after several local authorities warned that hybrid working has exacerbated the practice of "multiple contract working." At least three councils - Wakefield, Enfield, and Kensington and Chelsea - claim to have caught staff members in the deception. This year, the NFI, in collaboration with the London Borough Fraud Investigators Group, launched a pilot scheme to establish the extent of the issue at London councils, having identified cases at local authorities in the past. Separately, the FT’s Pilita Clark reports on growing concern that remote workers are offering their services elsewhere: half of HR bosses polled say their business had punitive policies for workers who flouted hybrid rules.

 

Financial Times

The Daily Telegraph

A rising number of law firms are using recruiters to get rid of employees by the backdoor after over-hiring during the pandemic. This practice, known as reverse hiring, involves external recruiters "headhunting" employees out of the business and placing them elsewhere. Evan Jowers, city recruiter and partner at Lateral Link, said a slowdown in business since the start of last year and over-hiring has led some corporate firms to increase the pace at which they get rid of staff. "There has been a rise in reverse hiring in major law firms because of layoffs in the industry since the third quarter of 2022 up until now," he said. However, Jeremy Coy, employment senior associate at firm Russell-Cooke, said a significant legal risk for employers is being found to be in breach of the employee's "trust and confidence."

 

The Daily Telegraph

The Daily Telegraph

More than 600,000 workers are missing out on income tax rebates due to HMRC's outdated system. Over five million workers mistakenly overpay income tax each year, resulting from changes in benefits or a drop in profits for self-employed individuals. HMRC sends a P800 letter to explain how to request a rebate, but if the refund is not claimed within 21 days, a cheque is sent to the address on file. As of November, 615,383 cheques worth £217m remained uncashed. Tax experts attribute the high number of unclaimed rebates to HMRC's reliance on cheques and outdated practices. They suggest a more digital approach and automatic refunds to resolve the issue. It is noted that HMRC advises customers to request direct payment to their bank account for a quicker and more secure repayment.

 

The Daily Telegraph