Many may have noted that over the weekend it was reported that:
The government has called for a comprehensive review of Britain's auditing industry in what could herald huge changes to a sector dominated by the firms known as the big four.
According to the Guardian:
The business secretary, Greg Clark, said it was “right to learn the lessons and apply them without delay” as he ordered the inquiry into competition within the industry where Deloitte, PwC, Ernst & Young and KPMG audit 98% of the UK's largest listed companies.
They added:
The review will be led by Andrew Tyrie, the head of the Competition and Markets Authority.“The CMA has been considering for some time how best to contribute to the work being carried out to improve audit,” he said. A CMA spokesperson added: “We're actively considering what next steps are needed.”
I am, of course, delighted. But, as usual, I know that this happened because of the work of a few campaigners. I have played a small part. But I take my hat off to Prem Sikka, Tim Bush, Aul Shah, Paul Moore and Brian Little who have done much more. I know that countless emails have flowed; massive effort has been expended and considerable thought has gone into winning this review.
Now we have to hope it lives up to expectation.
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Andrew Tyrie…………………………..oh God help us. Slapped wrists all around then I suppose.
Noting this post and the post below I’m going to be cynical and suggest that making people aware that you are doing something might be seen as a way of manipulating the public and reassuring them whilst actually, you do nothing.
I’m not point scoring here or disagreeing with you or undermining the work of your esteemed colleagues , but the Tories have this sort of lying off to a fine art. It creates a false sense of security and the issue fades away in the public’s mind.
Normally, in response to an announcement such as this on the eve of the Tory party conference, I’d be just as cynical as you appear to be. (And I have no wish to denigrate the efforts of those who consistently and congently made the case for this review.) But I detect a subtle shift in the political weather. This time 5 years ago during the party conference season when Ed Miliband got the wind up the Tories about electricity and gas prices, the then government pfaffed around for a bit until it got a new chief exec for the energy regulator, Ofgem, and he got the nod to refer the electricity and gas supply industry to the Competition and Markets Authority. The subsequent inquiry took 2 and half years (which suited the then government perfectly) and didn’t generate much that was useful. However, the Daily Mail and the Sun kept banging the drum and we ended up instead with this silly price cap, because there isn’t enough intelligence on either side in the Commons to come up with anything sensible. However, it has marked the card of the rip-off merchants among the energy suppliers (i.e.,almost all of them).
I have a sense that Andy Tyrie is hungry for some work and wouldn’t mind putting the boot in to more of these rip-off merchants and con artists. So, in addition to this review of the auditors, he has a new super-complaint from the Citizens Advice Service about the suppliers and providers gouging loyal mobile, broadband, savings accounts, insurance and mortgage customers:
https://www.gov.uk/cma-cases/loyalty-penalty-super-complaint
(It was of course entirely typical of the Tories and the really useless Lib Dems to recognise in legislation a long-standing, non-statutory charity, Citizens Advice as the main consumer protection body – and to transfer some pathetically limited statutory powers from Consumer Focus/Futures to it. The intent was to weaken consumer protection and Labour allowed it through on the nod.)
It does appear that Lord Tyrie has received a plausibly deniable nod from the government to give these chancers a fairly thorough going over. The intent is to make the Tories look better in the eyes of the Mail and the Sun – and to blind-side Labour (even if this isn’t very difficult).
Really? An inquiry; in Britain? Would you care to list the successful British inquiry precedents, inspiring your optimism?
My hopes aren’t high
The lack of a useful reply facility means I have to respond as a reply to my own comment.
I can understand the scepticism, but there is quite a bit of evidence that many of the more sensible Tories (yes, there are some – they’re not all “vermin” as some commenters here seem to think) realise that they’ll have to make capitalism work a bit better for the masses.
The Monopolies and Mergers Commission, during the ’80s, the Competition Commission, from 1999, the CMA, from 2014, and the various sector regulators, under the Tories, New Labour and Tories plus Lib Dems all get a clear steer to just go through the motions and not to discombobulate the greedy economic rent-extracting corporate capitalists. There is increasing evidence that the Tories are prepared to rein in these rip-off merchants. The alternative is to allow McDonnell in to “ferment” the overthrow of capitalism.
Oh come on: listen to Proti Patel yesterday and you will realise that for far too many their understanding of capitalism is a) extremely limited and b) utterly naive
I’m looking at the more grown-up players in the cabinet and the up and coming players. I know the cabinet still has quite a few non-entities, but Fox and Grayling are probably the only truly incompetent remaining wingnuts. All the others, including your example of Ms. Patel, such as Davis, IDS, Patterson, Villiers, etc. have been removed or removed themselves. Never underestimate the Tories’ desire for power and their ability to adapt or adopt sensible policies that appeal to the middle-ground that prefers unshowy competent governance. Labour needs much better than what is currently on offer to provide that.
I’d suggest labour is winning on talent now
But it is not overwhelmed with it either
I agree. The continuing Brexit fiasco (and this applies to both parties – though obviously more to the Tories) prompted me to dip in to third volume of Skidelsky’s magnificent biography of Keynes – Fighting for Britain. The range and depth of the political and intellectual capabilities Britain brought to bear on the often fractious negotiations with the US in the 1940s highlights the woeful lack of these capabilities currently.
A return to real accounting would be a severe competitive disadvantage in a world allowing the bent to continue. Hence no hope at all on this one.