News in Brief: Budget advice, E.On annual loss, BoE governor, ICAEW comment

News in Brief

Dare to be boring, accountancy body advises chancellor

ACCA (the Association of Chartered Certified Accountants) is urging the chancellor to break from his usual delivery of a budget with surprises, and keep the steady pace of UK recovery going.

Chas Roy-Chowdhury, ACCA head of taxation, said: “George Osborne is six years into his tenure as chancellor; he has set in motion many mechanisms to improve the UK economy for both individuals and businesses. He should not risk that progress by chasing headlines in Thursday’s papers.”

Roy-Chowdhury added: “We already have a review of business taxes and business rates underway, as well as a review of the entire tax system by the OTS (Office of Tax Simplification). In past budgets he has circumnavigated their work by announcing surprise changes before the OTS has had chance to complete their review and report back.”

“During Osborne’s time at No.11 Downing Street he has made many pledges to make the tax system simpler, now he has the chance to make good on those promises. Let the reviews happen and take time to study the recommendations.”

ACCA is pleased that Osborne has headed the previous pleas of ACCA, his back benchers and many other business organisations, and decided against another ‘once in a lifetime’ chance to the pensions system.

Energy firm E.On reports £5.4bn annual loss

German energy firm E.On has said its annual net losses more than doubled in 2015 to £5.4bn (€7bn) after it wrote down the value of its loss making power plants by £6.7bn (€8.8bn).

The company, which is one of the "big six" energy firms in the UK, blamed record low wholesale electricity prices.

The German government's move towards renewable energy also hurt profits, reported the BBC.

It is the second year that E.On has reported a loss.

In 2014, the energy firm reported a loss of £2.44bn (€3.16bn).

Rival German energy firm RWE reported annual losses of £493m (€637m) blaming the collapse in commodity prices and, in particular, the continuing depression in the price of coal that has caused German wholesale electricity prices to plummet.

Tory MP: Mark Carney should consider position

The political storm swirling over Bank of England (BoE) governor Mark Carney has intensified this morning (9 March 2016), with one MP suggesting he should consider resigning.

Carney has irked the government’s eurosceptic wing by warning that Britain’s economy could suffer if it left the EU. He suggested some banks could move jobs overseas, while consumer spending and house prices could be hit.

The governor insisted that the BoE wasn’t making any recommendation about Brexit, but that has not convinced Sir Peter Bone, reported the Guardian.

Banking Standards Board progress is underwhelming, says ICAEW

Iain Coke, head of ICAEW’s financial services faculty, has responded to the publication of the Banking Standards Board’s (BSB) first annual review.

Coke said: “It takes time to establish a new organisation and to devise a framework of standards. It is very positive that the Banking Standards Board has increased its membership. Nonetheless, overall progress is a little underwhelming."

He added: “The objective is to restore public trust. Useful as it may be to provide private feedback to banks on how they compare to their peers, this is unlikely to inspire public confidence.”

Coke advises: “The BSB should have two priority objectives; to start the process of setting standards and to demonstrate it is willing to properly hold banks to account for meeting these. Banks who are not BSB members should be expected to explain why they are not. One challenge is that the BSB itself seems to have little experience of professional standard setting either on the board or on its small executive group – they should look to address this if they are to make real progress.”