Labour promises to regulate audit firms’ offshore links
LABOUR has vowed to rewrite the rules of the British economy – including forcing audit firms to provide information about their offshore links.
Amid the imminent publication of the party’s manifesto, shadow chancellor John McDonnell said a new regulatory system would be put in place if Labour wins the general election on 12 December.
He particularly focused on audit firms, saying Labour would establish a new statutory body to conduct audits – and would require firms in the sector to provide a slew of information from their offshore links to captive insurance companies.
Guernsey is well known as a specialist in captive insurance.
A captive is essentially a company established by its owners primarily to insure the risks of its parent and or subsidiaries.
More than a fifth of the UK FTSE 100 have captives domiciled in Guernsey – in addition to firms from around the world which see a range of benefits from doing so.
Mr McDonnell said: ‘We will regulate to ensure auditing firms provide socially useful information about their operations, including information about their offshore links, captive insurance companies, political links, audit failures, cooperation with regulators, regulatory action, lawsuits and profits from practices that would be deemed unfair.’
The shadow chancellor also promised to sweep away a host of existing UK regulators covering the finance sector and establish a Business Commission containing a Companies Commission, Finance Commission and Enforcement Commission.
‘This will close the gaps in regulation and establish a more robust and independent regulatory system,’ said Mr McDonnell. ‘The Business Commission will integrate the accounting, auditing, insolvency, and financial sector regulators.’
He also said: ‘Labour will rewrite the rules of our economy. It’s all about treating people fairly and with the respect they deserve.
‘Today’s business model of shareholder domination is increasingly proving to be incompatible with not just the fair and respectful treatment of workers but also with the responsibilities associated with any organisation operating within a democracy.
‘Labour’s reforms to how our large businesses and public utilities are governed, owned and regulated and how both workers and consumers are represented will genuinely enable them to take back control.’