GOVERNMENT OFFICIALS will spurn policyholder calls for government-sponsored compensation later this afternoon, suggests the FT, which appears to have seen an advance copy of the long-awaited Penrose report into the near-collapse of Equitable Life.
The FT says the judge's Treasury-commissioned inquiry will criticise government regulators as well as Equitable's former directors, however, Ruth Kelly MP, financial secretary to the Treasury, is already predicted to argue the fault was due more to a "hands off" regulatory framework put in place by the Tories.
THE SCOTSMAN adds Equitable Life could be placed in administration if Lord Penrose has found evidence of extensive mismanagement and fraud.
Paul Weir, of the Equitable Action Groups Combined (E7), has also suggested the report is likely to let Equitable policyholders "go hang" this time, but the FSA will ensure it has tightened its regime to try and prevent any future problems.
THE CONSERVATIVE PARTY presents a rather obvious line on the matter, as Oliver Letwin, shadow Chancellor, suggests the case for compensation will depend on the contents of the Penrose report.
The Times suggests he will today will call for a cross-party consensus to compensate Equitable Life policyholders for their losses, in the hope it will fend off a wave of litigation against the Government and the stricken insurer.
BUT THE GUARDIAN suggests Equitable Life’s board of directors will “snub” the report by refusing to give a detailed response to criticisms, and blame the government for the failure of the firm.
It seems the government’s decision to withhold publication of the whole report to the board has generated the bad feeling, so the board has turned down the opportunity to both the report and go to the Treasury this morning until its publication.
Instead, only the board's legal and financial advisers will examine the document, as senior management has refused arguing the conditions "impugn the integrity of the board".
SIX OF THE FINANCIAL services industry’s most important institutions will publish their own Savers Budget ahead of next week’s Budget report by Chancellor Gordon Brown, adds the Scotsman.
The Association of IFAs (AIFA), the Association of Investment Trust Companies (AITC), the Association of Private Client Investment Managers and Stockbrokers (APCIMS), the Building Societies Association (BSA), the PEP and ISA Managers Association (PIMA), and ProShare will all present a campaign of small targeted measures which they believe offer the solution to the UK’s savings problem.
AND INFLUENTIAL employers’ organisations the Institute of Directors (IoD) and the British Chambers of Commerce (BCC) have called for the scrapping of national insurance and its amalgamation into the PAYE tax system, adds the Times.
Both organisations claim NI - introduced in 1946 as a contributory welfare fund – is increasingly being used to finance current spending and is therefore merely another tax.
George Cox, Director-General of the IoD, suggests the income lost should be replaced by altering bandings or rates of existing taxes "rather than (God forbid) the introduction of some new tax".IFAonline
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