The Week in Review: 16-20 Sept 2002

Of the 501 chief executives questioned, 29% said membership of the euro should be ruled out all together, while 12% were in favour of joining at some stage, with 39% preferring to keep their options open.

Chancellor Gordon Brown launched two new tax credits which, he claims, would benefit nine out of ten families with children. Backed by a multi-million pound advertising campaign, the child tax credit and working tax credit will replace a number of separate schemes, and for the first time will see money going directly to the carer, usually the mother.

On Tuesday, management consultancy Atos KPMG Consulting announced cuts of 15% to its workforce after what it called a ‘significant deterioration of market conditions over the past year’.

Members of business lobbying group, the Institute of Directors, expressed concern over the ‘rising taxation burden’ which they say will hit economic growth. While supporting the Bank of England’s monetary policy, the IoD said the Treasury needed to change the direction of its fiscal policy. A majority of IoD members thought the Treasury’s conduct of fiscal policy was ‘unfavourable’ towards business.

Wednesday saw the Confederation of British Industry demand an annual performance review for all board directors to ensure they are able to make a full contribution to the running of their company. The move would flush out directors with too many non-executive positions making them unable to cope with the demands of individual companies.

The Big Four’s grip on PFI advisory work came under the spotlight with a Trades Union Congress demand for a full investigation into possible conflicts of interest.

Delegates at the TUC’s conference had called on the Congress to launch an enquiry into how Big Four firms were simultaneously advising the government on PFI deals while auditing companies that were bidding for the very same deals. Dave Prentis, Unison general secretary, described the relationship between the government and private sector advisers as ‘a web of deceit bordering on corruption’.

Thursday’s Accountancy Age revealed the plight of 800 UK asbestosis sufferers being denied payouts because of the complexity of the bankruptcy process. Auto industry giant Federal Mogul’s Chapter 11 bankruptcy in the US in October 2001, facing asbestosis claims totalling £1.2bn, included many against UK subsidiary Turner & Newell. The subsidiary manufactured automotive parts, many of which contained asbestos. Because the US and British insolvency procedures affecting the company are ‘inextricably linked’, British payouts are being stopped until a plan can be agreed in the US.

Friday revealed The Financial Reporting Review Panel would take on new investigatory powers along the lines of the US Securities and Exchange Commission under new proposals to be passed to ministers by the end of the year.

The spectre of over-regulation was raised by Angela Knight, chief executive of the Association of Private Client Investment Managers, who described the unbearable strains on being placed on ‘innocent’ private client managers. No amount of regulation would prevent the ‘mad, bad and seriously stupid,’ she said.

Also on Friday, it was widely reported that bankrupt telecom WorldCom would restate its accounts to the tune of £3bn, the third time it has done so.

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