THE GOVERNMENT'S CASH shortfall is going to be exacerbated in coming years because of falling compan...
THE GOVERNMENT'S CASH shortfall is going to be exacerbated in coming years because of falling company tax revenues caused by money being diverted to prop up ailing pension schemes, The Times reports today.
Up to £2bn a year will be diverted away from the Treasury in this way, adding to the deficit spending caused by political commitments to health, transport and education.
The level of cash diverted could even be more than this in the next year as many schemes undergo their triennial valuation, which determine levels of employer contributions.
BE AFRAID, be very afraid: the Revenue and Customs & Excise are moving in together to the Treasury building, The Daily Telegraph reports, as part of a move to bring the two bodies under tighter Treasury control.
This will raise questions of corporate governance and conflicts of interest, the paper adds, not least because it mirrors similar moves in the City, which in the past have led to problems - e.g. the proximity of equity analysts to investment bankers.
Opposition MPs and others are concerned that the proximity of Revenue and Customs & Excise computers to ministers and special advisers could lead to illegal snooping of tax records.
It also undermines government moves to make the country's finances more independent of political motives - as per the decision to give the Bank of England sole powers to set interest rates.
UK FINANCIAL services did get a shot in the arm from the so-called Baghdad Bounce, according to a new CBI report, the FT says.
The report, jointly produced by PricewaterhouseCoopers, says business confidence and volumes gained in the three months to June in the financial services sector.
However, the CBI continues to warn about further job cuts and lower investment levels in the industry, despite also forecasting a sustained turnaround.
Another 7,000 jobs are predicted to be lost in the current quarter, mimicking the loss recorded in the second quarter, and adding to the 20,000 lost in the past 12 months.
PwC says that new-found confidence in the sector is also due to the lack of a housing market collapse, which many companies and individuals had predicted would be the case by now in the current economic cycle.
IN FURTHER SIGNS that a turnaround is imminent, there is new talk of a merger involving insurance broker Heath Lambert.
Last year it tried to merge with Benfield, but failed, and the latter went on to a successful float, which last month valued the company at a shade under £600m.
Heath Lambert could now fall to Marsh in a deal valued at up to £350m, the FT says.
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