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Friday's Business and Politics round-up

21 Sep 2018

Person reading the IoD's news round up with breakfast

Good morning and happy Friday!

Labour party annual conference will commence on Sunday in Liverpool. Ahead of the event, Shadow Chancellor John McDonnell said the party is considering breaking up the big four accounting firms – Deloitte, EY, KPMG and PwC – if Labour is elected to government.

Mr McDonnell described the sector as a “cartel” and said a major overhaul of the accounting sector was needed. Some of the other proposed reforms include banning companies from taking consulting work from the companies they audit and setting a maximum audit market share for each firm.

In other Labour news, party leader Jeremy Corbyn has said that he is not ruling out allowing a second Scottish independence referendum if he becomes prime minister.

Watch this space as more announcements of what Labour would do if in government start rolling in over the weekend. 

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EU'll never get this

Prime Minister Theresa May headed to the EU leaders summit in Salzburg yesterday hoping to win their support for her Brexit plan. However, Mrs May would have travelled home disappointed, as leaders of EU nations declared her economic plan for Brexit “will not work.”

European Council President Donald Tusk objected setting up an EU-UK free trade area covering goods and agriculture – a key part of Mrs May’s proposal. The EU fears that giving UK access to the single market for goods while cutting back on other principles, including the free movement of people, would pose a threat to the integrity of the single market.

“Brexit shows us one thing: it’s not that easy to exit the European Union. It’s not without cost. It’s not without consequences,” commented France’s President Emmanuel Macron.

This will be a boost to Tory Brexiteers who have been critical of Mrs May’s plan and have launched a “chuck Chequers” campaign.

Mrs May has nevertheless insisted that her plan is the only credible way to avoid a hard border on the island of Ireland.

Mr Tusk added that the EU October summit would be the “moment of truth” for reaching a deal and only if progress is made then, he would convene another summit in mid-November to finalise the agreement.

Enterprising women

The Government has launched a review into the barriers faced by women in business, as research shows that women are half as likely as men to start a business. Women currently make up just a third of UK’s entrepreneurs and only a fifth of smaller firms in the country are led by females.

Earlier this year Unilever carried out a study of company founders, which revealed that there are a number of barriers stopping women from starting their own business.

Alison Rose, head of RBS commercial and private banking, will be leading the review, which will consider ways to increase female engagement in entrepreneurship. The conclusions are expected to be published next spring.

The review is part of the Government’s wider plan to increase female representation at senior levels of the business community. It has recently set a target which would see one-third of boards and executive committees of FTSE 350 companies made up by women by 2020.

Reach for the Sky 

Sky takeover will be settled by an auction, the Takeover Panel has announced in a move to end the battle between 21st Century Fox and US conglomerate Comcast for the ownership of the broadcaster. Bidding will start on Friday night and the winner will be announced before the markets open on Monday morning.

Rupert Murdoch’s Fox already owns 39% of Sky, but in December 2016 the company began attempts to purchase the remaining shares. Comcast entered the competition for Fox in February and the battle intensified in July with both sides upping their offers for the broadcaster. 

There have been concerns over media plurality and Mr Murdoch’s influence over UK’s media landscape if Fox got full ownership of Sky, which have slowed down the takeover process.

The bidding process will have a maximum of three rounds and all offers must be cash-only.

Sky has nearly 23 million pay-TV subscribers in Europe, with scope for expansion in the US, in addition to its broadband business. The broadcaster’s pre-tax profits increased by 7.5% over the 12 months to June. 

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