A REVIEW OF THE government's £400m fund to help victims of company pension scheme wind-ups is to be brought forward amid mounting anger over ministers' refusal to accept responsibility for the losses, reports The Financial Times .
According to the paper, John Hutton, the work and pensions secretary, will try to secure a boost to the Financial Assistance Scheme (FAS) within months rather than waiting until next year's spending review to find more money for tens of thousands of people who have lost pension benefits.
An announcement could be made alongside the government's white paper on pensions reform in early summer but unless billions of pounds are added it is unlikely to satisfy campaigners, who say the FAS is woefully inadequate.
The move follows a damning report by the parliamentary ombudsman, who found the government guilty of maladministration after it misled people into believing their pension benefits were safe. The government is refusing to bow to pressure from MPs from all parties, unions and pensions campaigners to accept liability for the fiasco.
Hutton will appear in the Commons today to defend his dismissal of Ann Abraham's conclusions and demands for full compensation for the victims. Tony Blair told MPs yesterday that accepting the ombudsman's recommendation of full compensation for the victims, plus damages, would cost £15bn and "set a precedent of extraordinary financial proportions".
THE BIG STAKES, big rewards hedge fund industry now manages more than $1,500bn of money worldwide, reveal figures obtained by The Daily Telegraph.
Hedge funds managed in Europe alone account for more than $300bn (£172bn) of investments, up almost 18% in the past year. Two thirds of European hedge funds are managed out of London, representing 12.5% of the 8,000 worldwide.
The figures have been compiled by HedgeFund Intelligence, which publishes EuroHedge, the industry bible for the European hedge fund markets. HFI's estimated figures, up from $1,000bn in 2004, will be finalised in the next issue of the magazine, but they were first revealed yesterday in Paris at an industry-leading summit organised by the magazine.
The jump in investment comes despite hedge funds losing favour in the past year as equity markets soared, and despite negative publicity from clampdowns on insider trading.
Hedge funds, which were once regularly described as loosely regulated vehicles, have been increasingly investing in tighter risk management and compliance systems as the industry faces closer scrutiny from both the Financial Services Authority and America's Securities Exchange Commission.
UNEMPLOYMENT JUMPED again last month, with the claimant count of numbers out of work showing its steepest increase for more than 13 years, reports The Times.
The leap of 14,400 in claimant unemployment in February marked its twelfth monthly rise in 13 months and was the largest since the aftermath of Britain’s last recession in December 1992.
The much worse than anticipated rise in the jobless total, nearly four times City forecasts, cast a shadow over Gordon Brown’s Budget next week and rekindled doubts over the Bank of England’s optimistic forecasts for strengthening economic conditions.
The latest increase took total unemployment on the claimant count to 919,700, the highest since October 2003. The bleak news came on the heels of a parallel surge in unemployment on the Government’s preferred, survey-based measure of numbers out of work.
In data published last month for the three months to the end of November, this jumped by 111,000, in another rise of a scale unseen since the early Nineties recession.
Yesterday, the gloomy trend continued, with a further rise of 37,000 in unemployment measured by the Labour Force Survey, to 1.53 million, or 5% of the workforce.
City economists suggested the rise in unemployment, coupled with weak growth in pay also shown by yesterday’s figures, could only add to qualms over the confidence of the Bank’s Monetary Policy Committee that the economy will be underpinned this year by a sustained resurgence in consumer spending.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
Acquisition completed earlier this month.
Changes to take place by next year
Launched 18 November
Investment Association to create new labels