LONDON’S BUSINESS NEWSPAPER
DAVID HAREWOOD A SIT DOWN WITH THE HOMELAND STAR P25
CRYPTO’S BEST GATHER TO KICK OFF OUR SUMMIT P18
TREASURY DITCHES CALLIN POWERS
THURSDAY 24 NOVEMBER 2022
ISSUE 3,868
CITYAM.COM
FREE
CITY REGULATORS PROTECT INDEPENDENCE FOR NOW JACK BARNETT, CHARLIE CONCHIE AND STEFAN BOSCIA THE GOVERNMENT late last night confirmed it has scrapped controversial plans to allow MPs to “call in” City regulators as part of a post-Brexit Big Bang 2.0 blueprint. The decision to ditch the plans marked a victory for the Bank of England and the Financial Conduct Authority (FCA), who have both previously warned that introducing the so-called call-in powers would undermine their independence. Andrew Griffith, economic secretary to the Treasury, said last night the government was dropping the proposals in order to retain “the operational independence of the financial services regulators”. A Treasury source told City A.M. that while there were previously concerns that regulators were not promoting economic growth and that such powers were necessary, the move to scrap EU-era Solvency II rules and potentially unlock a wave of investment
from insurers has helped put ministers at ease. However, City A.M. understands the Treasury is still keeping the power on the table, despite not pressing ahead with it for now. The FCA declined to comment on the decision, while the Bank didn’t immediately respond to a request for comment. Until recently, Tory MPs were planning to introduce the powers via an amendment to the original Financial Services and Markets Bill tabled earlier this year. Under the so-called call-in powers, lawmakers would have been able to summon the FCA, Prudential Regulation Authority and other financial watchdogs if they judged their proposed rewriting of post-Brexit laws were not up to scratch. Giving the government ultimate oversight of reshaping Britain’s regulatory regime after Brexit was first proposed by Rishi Sunak when he was chancellor, back in November last year.
But Square Mile overseers have roundly batted away the plans as a material risk to watering down regulators’ ability to protect consumers and ensure the financial system runs smoothly. Governor of the Bank of England Andrew Bailey told the Treasury select committee last week “we must not threaten” UK regulators’ sovereignty. The FCA also sounded the alarm over the measures to the Treasury, with interim chair Richard Lloyd recently warning that even if used “sparingly”, the powers were of “great concern” to the regulator. One senior Tory MP welcomed the move, adding the government will “now be able to maintain the line that the UK has the best independent regulators in the world”. But Labour shadow City minister Tulip Siddiq said Sunak’s government “should never have been threatening the independence of the financial services regulators in the first place.” “This U-turn is more evidence of his weakness,” she said.
EBAY FIGHTS BACK Ebay stands up for firms hit by postal strikes LEAH MONTEBELLO EBAY’s UK chief has slammed posties’ strike action, saying small businesses are being caught in the “crosshairs at the very time they most need support”. Writing in City A.M. today, Murray Lambell said smaller e-commerce firms were the “lifeblood” of the economy and must be protected during this festive season. “The last two festive trading periods were overshadowed by Covid-19 restrictions and lockdowns, and this year firms have inflationary pressures and supply chain issues to contend with too,” he said. “We now have no choice but to come
out fighting for small businesses up and down the country who will be devastated by this interruption of service,” he added. His comments come as the Communication Workers Union , which represents 115,000 Royal Mail workers, confirmed that postal strikes will go ahead today and on Black Friday, after snubbing Royal Mail’s “final and best” offer yesterday. The Federation of Small Businesses told City A.M. that both sides must find a “landing zone for compromise”, warning that further action will cause more damage to small businesses. £ READ MURRAY LAMBELL IN HIS OWN WORDS ON PAGE 22
Home REIT shares tank after short seller report claims firm misled investors CHARLIE CONCHIE SHARES in property investor Home REIT tanked nearly 25 per cent yesterday after it came under attack from short seller Viceroy Research, who questioned the financial strength of the charity tenants in its property portfolio.
Viceroy said in a report that the property investor’s tenants in many cases cannot afford rent, are simply not paying or run by bad actors. FTSE-250 Home REIT buys up property and leases it to social housing organisations and charities to provide accommodation for homeless people.
However, Viceroy said its tenants are not in a position to service 25year leases offered by the firm and were lured into signing contracts with the promise of financial incentives and properties. “If the management were running an ethical and decent business, why was there a need to give incentives to
charities – that are newly formed – in [the form of] £3m or properties,” Fraser Perring, who runs Viceroy, told City A.M. He claimed his investment firm was now preparing to file a complaint with the police on the grounds it “fundamentally misled investors” and there were
“suspicions it may be fraudulent”. Home REIT said the report was “inaccurate and misleading” and based on “mistaken assumptions, misinformed comments, and disputable allegations”. The firm added it was preparing a “full and detailed response” to disprove allegations.
INSIDE CREDIT SUISSE ROCKED P3 BOOHOO REPORTS A ‘WAKE-UP CALL’ P4 SUPREME COURT BLOCKS SCOTTISH REFERENDUM P6 MARKETS P21 OPINION P22 SPORT P26