Tag: Finance

NI rise won’t pay for social care reforms

I keep reading that the government is planning to increase National Insurance contributions “to fund social care reform”. I really don’t think that’s correct. I don’t doubt that the government is planning to increase NI contributions. And that it is also planning to improve social care. But I question the idea that the one can really be said to be paying for the other.

Submission to BEIS

In 2016, the Financial Reporting Council (FRC) issued a regulation known as TAS 100, which governs certain activities that are open to anyone to undertake. But the regulation applies only when the activity is carried out by an actuary. This has created the anomalous position that:

Marx out of ten for the attack on price caps?

When the Thatcher government privatised British Telecom in the 1980s, they created a regulator to cap prices. They did the same with the privatisation of water, electricity and gas. No one suggested then that Thatcher’s policy was Marxist or State intervention. So is there any justification for such accusations now that Theresa May is proposing that the energy regulator should reintroduce a cap?

A horse. A zebra. Or maybe it’s a fish?

Until a few days ago, I had never heard the expression: “When you hear hoofbeats, think of horses not zebras”. A visiting US professor used it in conversation with me. Then I heard it again, last night. This time spoken by Patterson, an FBI agent (sort of).

Regulatory dreams and economic nightmares

In the early days of my career, I occasionally dreamed that I had failed my professional exams and was being summoned back for a re-sit. Since I never actually practised in the discipline in which I qualified, I’m not sure what game my subconscious was playing with me. But last week I dreamed I was back at university… only to wake up and find that I was.

Accountants in a tangle with Webb

Regular readers of this blog must be sick to death by now of me repeating how much damage accounting standards are doing to pension schemes (here, here, here and, even on video, here). So I’ll be brief this time – very, very brief. There is finally light at the end of the accounting tunnel.

You mean we’re NOT supposed to avoid tax?

Tax avoidance has become a hot topic. The Times newspaper has recently unmasked a scheme in which income tax is avoided by the ludicrously simple means of saying the salary is only a loan which might have to be repaid (but never actually is). One of the newspaper’s columnists, David Aaronovitch, has been writing about the immorality of tax avoidance (both links behind a paywall).

I used to think it was easy to spot the moral dividing line when it came to tax avoidance. If our government had created the exemption, that meant they positively wanted us to take advantage of it. Anything else was almost certainly a loophole and morally objectionable, even if it was legal. But does that distinction still apply?

Shoot the messenger!

Financial accounts are supposed to enable readers to understand the financial position of the entity under review. But, yesterday, the National Association of Pension Funds published a report attacking the notion that accounts provide neutral and reliable information about an employer’s pension scheme liabilities. The critique, written for the NAPF by Dr Iain Clacher and Professor Peter Moizer of Leeds University Business School, is pretty damning of the standard setters.

What equal pay teaches us about the Human Rights Act

The European courts have been causing controversy (again). Judgements handed down in Brussels and Strasbourg have left conservatives (small “c”) aghast and Liberals (big and small “L”) defending the rights-based approach. But scratch beneath the surface and, often, it’s not the rights that objectors object to. The problem is that, so often, the rights awarded in Europe aren’t what we were led to expect when those rights were introduced.

Bankers cooking with Gas?

The separation of retail and investment banks is back in the news following the Chancellor’s recent Mansion House speech. Ever since the Government bail-out of Royal Bank of Scotland and Lloyds in 2008, there has been a pressing desire to ensure that tax-payers are never again called upon to rescue the financial system. The Independent Commission on Banking, chaired by Sir John Vickers, is looking at alternatives. The Chancellor has endorsed their interim report and awaits the final report in September.

Compulsory separation of business entities is not new. It has been used as a solution to behavioural business problems in many contexts, usually after a period of fierce debate during which the business(es) argue that separation is unnecessary and unworkable, or a combination of both. We are certainly seeing those arguments advanced in the case of the banks. Not just from the bankers: many commentators are unconvinced, too.