Global power play

Global power play

Here's a game. Get a piece of paper and draw an equilateral triangle. At one corner write 'London'.

At another scribble ‘Brussels’. At the third put ‘Washington’. Then gather some of your closest financial friends and prepare to play Seat of Power.

At this stage pick an issue – tax, for instance. Put the piece of paper on the table and if you believe most decisions that affect UK taxpayers are taken in, say, Brussels, you move that point of the triangle to the apex. Then move through the subjects.

With an issue like corporate governance or audit regulation you and your friends might all put Washington at the apex. And so on.

The winner is the person who picks an issue where everyone agrees that London should be at the apex. Why? Well if someone is able to identify an issue where all the members of any financially informed group can agree that the power rests in London, it’s an unlikely event worthy of recognition.

That may not quite be the reality today, but it’s not far from it. And it’s certainly where we are heading.

On many issues the US Securities and Exchange Commission wields more power than the UK’s Financial Services Authority (or any other London-based regulator for that matter). That’s why the Big Four is devoting so much time to persuading the SEC not to require registration of European auditors.

On other topics, it is not domestic tax law that is changing the tax practices (and tax bills) of many UK companies, it is the European Court of Justice.

Ask Marks & Spencer.

And we haven’t even touched on international accounting standards yet.

Will they work effectively without Washington’s buy-in? Maybe. It’s just hard to imagine how, that’s all.

So do we accept the disempowering inevitability of our lot and just get on with it? Or do we fight back and seek to recover our lost sovereignty? Well there’s certainly no easy answer and there’s probably no single answer.

But picking our fights carefully is essential – we won’t win all the arguments.

The first step to adjusting to the new financial world order is to recognise the reality, however. And a quick game of Seat of Power might help with that.

Email your views to [email protected].

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource